The following is from a research note published yesterday evening by analysts at Nomura. "We remain positive on HSBC post results. We saw two principal take-aways from the 1H numbers. Firstly, the group is controlling costs, which suggests positive operating leverage into 2013, with the potential for upgrades to underlying estimates as management deliver on targets; few banks are likely to be able to show this in the current macro-political environment. "Secondly, although various litigation/compliance issues remain, the charges taken in Q2 were relatively manageable in a group context. HSBC offers a strong balance sheet in capital and funding terms, with exposure to developing markets. Estimated 2013 RoTE is running near 12%, with potential for this to increase. The shares stand at 1.1x tangible book vaue and offer a 5.0% yield.Delivery on costs crucial in face of revenue headwinds "With revenues for the half below consensus expectations, delivery on cost targets will be crucial for the group to deliver earnings upgrades. HSBC's presentation hints at underlying costs at USD 36bn, which is better than our and consensus expectations. While there are a number of notable items which cause downgrades on reported numbers this year, delivery in 2013 could more than offset future revenue downgrades on consensus estimates."With strong capital position, a geographically advantaged balance sheet, strong funding and liquidity position, HSBC doesn't face the restructuring risks other banks have in the sector. "HSBC reported a close to 90basis point improvement in their Basel III core Tier 1 capital ratio."We upgrade our 2013 EPS by 3c to 102c as revenue headwinds are offset by lower costs. We downgrade 2012 EPS due to notable items."Nomura has retained its buy rating on shares of HSBC.AB