Have Q1 results changed the outlook for prospective HSBC investors? This leading

Barclays Capital has lifted its price target on shares in PLC (), but has kept its call at ‘underweight’.

It said the stock is worth 480p (up from 470p) but added that at 10.7-time 2022 EPS the current valuation looks “full”.

“The revenue and asset quality outlook is improving; however, delivering on ambitious cost control will be challenging, and we now see relatively limited surplus capital,” Barclays said in a short note to clients.

On Tuesday HSBC said a recovering UK economy helped profits rebound 79% to US$5.8bn in the first quarter of 2021.

All regions improved, but the UK was the standout with profits of more than US$1bn as bad debts were lower than expected, the Asia-focused bank said.

HSBC added it wrote back US$400mln of previous impairments across the group due to the improved economic backdrop compared with a charge of US$3bn a year ago.

Lending rose by US$2bn on a reported business and by US$6bn in local currencies, though margins were lower with a reduction of 0.33% from a year ago.

HSBC said mortgage demand in the UK and Hong Kong was strong alongside a recovery in commercial loans.

The good performance was reflected in pay and bonuses with expenses overall up by 9% which included a 3% rise in performance-related pay.

Revenues were the one weak spot, dropping 5% to US$13bn due to lower global interest rates.

Going forward, HSBC said the economic outlook had improved sufficiently for it to lower its bad debt expectations for the year.

Lending is also expected to grow by mid-single-digits though both this and impairment forecasts depend on how quickly countries recover from Coronavirus (COVID-19).

The bank had already said there will be no quarterly dividends in 2021 and added it will decide on the level of interim payment with the half-year results in August.