The two banks — whose post-crisis pre-tax profits were a combined $66B through 2011 — may now fall behind the curve as their exposure to Asia becomes a drag amid tighter credit conditions and an acceleration in sour debt.
Rising rates in the U.S. and other Western economies may reduce the incentive for investors to hunt for yield, exacerbating slowdowns in emerging markets.
HSBC may be better hedged given its U.S. businesses. As for StanChart, here's Bernstein's Chirantan Barua: "When you have naked exposure, you get the best of times and the worst of times."
See also: HSBC H1 results