Bank of America Securities issued a research report stating that HSBC Holdings (00005) is one of its preferred investment targets this year. The bank anticipates significant growth in Hong Kong deposit operations and Asian wealth management businesses, areas where HSBC already holds substantial competitive advantages. Management has committed to increasing investment in these segments. The report maintains a price target of HK$149.6 and a "Buy" rating.

HSBC recently completed the privatization of Hang Seng Bank, with estimated pre-tax total synergies of approximately $8 to $9 billion, encompassing both cost and revenue synergies. Bank of America expects about 20% of Hang Seng Bank's cost base to contribute to synergy benefits, noting that Hang Seng already operates efficiently. It will continue to run under its independent brand and retain its own branch network.

Additionally, Bank of America sees potential for revenue synergies, particularly in wealth management, wholesale banking, and fee income from transaction banking. Currently, Hang Seng Bank's revenue structure leans more heavily toward net interest income. Given its strong customer relationships, the report identifies significant cross-selling opportunities, which are expected to become increasingly important as local business expands.