Shares in Lloyds Banking Group PLC (LON:LLOY) (LSE:LLOY.L), Barclays PLC (LON:BARC) (LSE:BARC.L), Standard Chartered PLC (LON:STAN) (LSE:STAN.L) and HSBC Holdings plc (LON:HSBA) (LSE:HSBA.L) are all up so far in 2017. Lloyds shares have gained 9%, Standard Chartered is 11% higher, HSBC shares are up 2% and Barclays has risen 1.5% year-to-date.
In my view, Lloyds has further share price growth potential in the long run. I think it has become relatively efficient and financially strong when compared to sector peers. I believe this will help it to cope with any difficulties posed by Brexit. I also feel Lloyds could become a relatively appealing share to own for dividend investors. It is forecast to raise dividends next year and this could make it one of the higher yielding large-cap shares around.
Barclays could also make further share price gains in 2017 in my view. I think its strategy is not only logical, it could help to improve investor sentiment. I think if Barclays is able to become more efficient and reduce its cost/income ratio while strengthening its capital ratios, its share price performance could benefit. I also feel it has income potential, with dividends per share forecast to more than double in 2018.
HSBC has turnaround potential in my view. It has a cost savings plan which could positively catalyse its financial performance as well as its share price in my opinion. Its exposure to Asia may also benefit earnings per share, since wealth levels across the region are forecast to rise over the medium term. Although HSBC shares have made a reasonable start to 2017, I think there could be more to come over the medium term on a relative basis.
Standard Chartered also has exposure to Asia and as we saw with Prudential’s results, the region remains one of great potential for financial services stocks. As well as favourable geographic exposure, Standard Chartered is also taking the right steps in my opinion to improve its financial position and develop a more streamlined and efficient business model. I think this could lead to more share price gains after its strong start to the year.