2 Global Financial Giants That Add Geographic Diversification

UBS and HSBC can help Canadians diversify beyond domestic banks by adding global wealth management and Asia-linked trade finance exposure.

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Canadian investors still tend to stay close to home. Vanguard has found that Canadian equity portfolios hold about 50% in domestic stocks even though Canada makes up only about 2.6% of the global equity market. That leaves a lot of geographic and sector concentration in place. Global financial giants can help fix that because they give investors exposure to wealth management, international lending, trade finance, and capital markets well beyond Canada’s borders, all while still offering the familiarity of big, established banks.

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UBS

UBS Group (XSWX: UBSG) is one of the clearest ways to add that kind of diversification. The Swiss bank is a global wealth-management powerhouse with investment banking, asset management, and Swiss domestic banking operations. That mix gives investors exposure to wealthy clients, cross-border capital flows, and European financial markets rather than just another North American banking story.

Over the last year, UBS has kept moving deeper into its post-Credit Suisse era. The big story has been integration, cost control, and capital returns. In early 2026, it also found itself dealing with the risk of tougher Swiss capital rules, which could require roughly US$22 billion in additional CET1 capital. That sounds heavy, but it also shows how systemically important UBS has become.

Earnings have been strong. UBS reported 2025 net profit of US$7.8 billion, up 53% year over year, with an underlying return on CET1 capital of 13.7%. It also said revenues rose 8% in its core businesses and committed to a US$1.10 ordinary dividend per share for 2025, up 22%, alongside US$3 billion of buybacks completed in 2025. Recently trading at 16 times earnings, it’s not cheap, but it still looks attractive for a bank generating stronger profitability while returning more capital. The main risk is regulatory pressure, but for long-term investors, UBS fits well as a globally diversified financial name with a lot of operating momentum.

HSBC

HSBC Holdings (LSE: HSBA) brings a different flavour of diversification. It is based in London, but it earns much of its money in Asia and increasingly leans into the Asia-Middle East corridor. That makes it especially interesting for Canadians who want a global financial stock that is not just another play on Europe or the U.S. HSBC stock has major businesses in wealth, commercial banking, trade finance, and international payments, all tied to some of the busiest economic regions in the world.

The last year has been busy here, too. New CEO Georges Elhedery has been cutting costs, simplifying the group, and sharpening HSBC stock’s strategic focus on higher-return markets. The bank stock aims to cut US$1.8 billion in costs by the end of 2026, while other recent developments included taking Hang Seng private and reviewing its Singapore insurance business. In other words, HSBC stock is still trimming and reshaping, not just coasting.

The earnings story still looks very solid. HSBC stock reported 2025 revenue of US$68.3 billion and reported profit before tax of US$29.9 billion. Excluding notable items, profit before tax rose 7% to US$36.6 billion. It also posted a CET1 ratio of 14.9%, completed US$6 billion of buybacks tied to 2025, and declared total 2025 dividends of US$0.75 per share. The bank’s market value topped US$300 billion for the first time in January 2026, while the shares recently traded at 13.4 times earnings. That is not screamingly cheap, but it does show investors are rewarding the strategy.

Foolish takeaway

Put the two together and the diversification case is pretty easy to like. UBS adds Swiss wealth management and European exposure. HSBC adds Asia, the U.K., and global trade finance. For Canadians who want to expand beyond a home-heavy portfolio without venturing into tiny unknown names, these two financial giants offer a pretty sturdy way to do it.

HSBC Holdings is an advertising partner of Motley Fool Money. Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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