JPM Projects Divergent Earnings Trends for HK Banks in 2025, Preferring HSBC and Standard Chartered
FY2025 Results Outlook: Hong Kong-listed banks will begin releasing their FY2025 results in mid-February, with JP Morgan predicting varied earnings due to NIM migration and credit cost fluctuations, while dividend policies are expected to remain stable.
Performance Projections: Standard Chartered and Dah Sing Banking are anticipated to show strong profit growth exceeding 30%, while Bank of East Asia is expected to experience a profit decline, with the former two likely to deliver better total shareholder returns.
Market Sentiment: JP Morgan notes that while bank managements are cautious about asset quality, they are becoming more optimistic about revenue prospects, favoring Standard Chartered and HSBC Holdings over BOC Hong Kong.
Stock Ratings and Short Selling: Various banks have received different ratings, with Standard Chartered and HSBC Holdings rated as "Overweight," while Bank of East Asia is rated "Underweight," reflecting differing market sentiments and short selling ratios.
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HSI Closes 465 Points Lower; AIA and Stanchart Drop 4%; Commodity Stocks Decline
Market Overview: The DJIA fell 1.3% as tech stocks were sold off, leading to a similar decline in the Hong Kong stock market, where the HSI ended down 1.7% at 26,567.
Financial Sector Performance: Major financial stocks like HSBC and HKEX dropped by 2.7% and 2.1%, respectively, while Bank of East Asia plunged 11% after reporting a significant profit drop and dividend cut.
Commodity and Gold Prices: Gold prices fell below USD 5,000/oz, impacting gold mining stocks, which saw declines of 5.9-7.6%. Oil prices also dropped nearly 3%, affecting major oil companies.
Tech Sector Decline: The tech sector experienced minor declines, with Tencent and Alibaba seeing drops of around 0.7% to 2.0%, while other tech stocks like Meituan and Baidu fell over 3%.
M Stanley and Barclays Project HSBC HOLDINGS' 2025 Performance (Table)
Morgan Stanley's 2025 Earnings Forecast for HSBC: The report predicts a flat net interest income of $32.7 billion, an 11.5% decrease in reported profit before tax to $28.583 billion, and a 10.9% drop in profit attributable to ordinary shareholders to $20.4 billion.
Barclays' Forecast for HSBC's Performance: Barclays anticipates a 1.6% increase in operating expenses to $33.324 billion, a 9.5% decline in reported profit before tax to $29.235 billion, and a 14.9% reduction in annual dividends per share to $0.74.
Key Financial Metrics: Both reports highlight changes in core return on tangible equity (ROTE), with Morgan Stanley forecasting a 17.2% ROTE (+154 bps) and Barclays estimating a 12.8% ROTE (-1.8%).
Short Selling and Market Activity: HSBC's stock is experiencing significant short selling, with a ratio of 23.750% and a short selling value of $157.76 million, indicating market skepticism about its future performance.
Brokers Anticipate HSBC HOLDINGS' 2025 Profit Before Tax to Decrease by Approximately 11%; Emphasis on RoTE and Shareholder Return Projections
HSBC Holdings 2025 Results Announcement: HSBC Holdings will announce its 2025 results on February 25, with expectations of non-recurring items and potential impairment losses affecting the outcomes.
Profit Forecasts: Analysts predict HSBC's reported profit before tax for 2025 will range from $28.466 billion to $30.135 billion, reflecting a year-over-year decline of 6.7% to 11.9% from 2024.
Investor Focus on Return Metrics: Investors are particularly interested in whether HSBC can achieve an average return on tangible equity (RoTE) of approximately 15% or higher for 2025, excluding items requiring attention.
Market Conditions and Guidance: The market is awaiting guidance from HSBC's management on mid-term net interest margins and RoTE, especially in light of potential interest rate cuts by the Federal Reserve in the second half of 2026.
HSI Drops 484 Points at Midday Amid Weakness in Chinese Insurers and Commodity Stocks; AI Large Model Stocks Surge
Market Performance: The HSI dropped 484 points (1.8%) to 26,547, with significant declines in financial stocks like HSBC and HKEX, while total half-day turnover reached $128.406 billion.
Chinese Inflation: China's inflation rate for January was reported at 0.2%, lower than the previous 0.8% and below the forecast of 0.4%.
Gold Prices Decline: Gold prices fell below $5,000 per ounce, negatively impacting several gold-related stocks, which saw declines ranging from 3.6% to 5.2%.
AI Stocks Surge: AI-related stocks experienced significant gains, with MINIMAX-WP rising 9.4% and KNOWLEDGE ATLAS surging 11.9% following the launch of new programming models.
HSBC HOLDINGS Scheduled to Hold Board Meeting on February 25 to Discuss Final Results and Fourth Interim Dividend
Board Meeting Announcement: HSBC Holdings will hold a Board meeting on 25 February to discuss the final results for the year ending 31 December 2025 and the potential payment of a fourth interim dividend for 2025.
Dividend Payment Details: If approved, the dividend will be payable on 30 April to shareholders recorded by 13 March across various registers, including the UK, Hong Kong, Bermuda, and for American Depositary Shares in New York.
Citi Raises Price Targets for BOC Hong Kong and Bank of East Asia, Selects HSBC Holdings as Preferred Choice
Hong Kong Banks' 2H25 Results: Hong Kong banks are expected to announce their 2H25 results in mid-February, with Citi Research predicting results will align with expectations despite potential revenue upside being offset by higher impairment charges.
Interest Income and Fee Growth: The normalization of HIBOR is anticipated to support net interest income in 4Q25, although growth in fee income may slow due to a high base.
Citi Research's Preferences: Citi Research favors international banks, particularly HSBC HOLDINGS, which is expected to provide positive updates on its 2026 targets and benefit from improved non-interest income.
Target Price Adjustments: Citi Research has raised target prices for BOC HONG KONG and BANK OF E ASIA, reflecting an increase in full-year dividend payout ratios, with ratings set at Buy and Neutral, respectively.
HSI Closes 465 Points Lower; AIA and Stanchart Drop 4%; Commodity Stocks Decline
Market Overview: The DJIA fell 1.3% as tech stocks were sold off, leading to a similar decline in the Hong Kong stock market, where the HSI ended down 1.7% at 26,567.
Financial Sector Performance: Major financial stocks like HSBC and HKEX dropped by 2.7% and 2.1%, respectively, while Bank of East Asia plunged 11% after reporting a significant profit drop and dividend cut.
Commodity and Gold Prices: Gold prices fell below USD 5,000/oz, impacting gold mining stocks, which saw declines of 5.9-7.6%. Oil prices also dropped nearly 3%, affecting major oil companies.
Tech Sector Decline: The tech sector experienced minor declines, with Tencent and Alibaba seeing drops of around 0.7% to 2.0%, while other tech stocks like Meituan and Baidu fell over 3%.
M Stanley and Barclays Project HSBC HOLDINGS' 2025 Performance (Table)
Morgan Stanley's 2025 Earnings Forecast for HSBC: The report predicts a flat net interest income of $32.7 billion, an 11.5% decrease in reported profit before tax to $28.583 billion, and a 10.9% drop in profit attributable to ordinary shareholders to $20.4 billion.
Barclays' Forecast for HSBC's Performance: Barclays anticipates a 1.6% increase in operating expenses to $33.324 billion, a 9.5% decline in reported profit before tax to $29.235 billion, and a 14.9% reduction in annual dividends per share to $0.74.
Key Financial Metrics: Both reports highlight changes in core return on tangible equity (ROTE), with Morgan Stanley forecasting a 17.2% ROTE (+154 bps) and Barclays estimating a 12.8% ROTE (-1.8%).
Short Selling and Market Activity: HSBC's stock is experiencing significant short selling, with a ratio of 23.750% and a short selling value of $157.76 million, indicating market skepticism about its future performance.
Brokers Anticipate HSBC HOLDINGS' 2025 Profit Before Tax to Decrease by Approximately 11%; Emphasis on RoTE and Shareholder Return Projections
HSBC Holdings 2025 Results Announcement: HSBC Holdings will announce its 2025 results on February 25, with expectations of non-recurring items and potential impairment losses affecting the outcomes.
Profit Forecasts: Analysts predict HSBC's reported profit before tax for 2025 will range from $28.466 billion to $30.135 billion, reflecting a year-over-year decline of 6.7% to 11.9% from 2024.
Investor Focus on Return Metrics: Investors are particularly interested in whether HSBC can achieve an average return on tangible equity (RoTE) of approximately 15% or higher for 2025, excluding items requiring attention.
Market Conditions and Guidance: The market is awaiting guidance from HSBC's management on mid-term net interest margins and RoTE, especially in light of potential interest rate cuts by the Federal Reserve in the second half of 2026.
HSI Drops 484 Points at Midday Amid Weakness in Chinese Insurers and Commodity Stocks; AI Large Model Stocks Surge
Market Performance: The HSI dropped 484 points (1.8%) to 26,547, with significant declines in financial stocks like HSBC and HKEX, while total half-day turnover reached $128.406 billion.
Chinese Inflation: China's inflation rate for January was reported at 0.2%, lower than the previous 0.8% and below the forecast of 0.4%.
Gold Prices Decline: Gold prices fell below $5,000 per ounce, negatively impacting several gold-related stocks, which saw declines ranging from 3.6% to 5.2%.
AI Stocks Surge: AI-related stocks experienced significant gains, with MINIMAX-WP rising 9.4% and KNOWLEDGE ATLAS surging 11.9% following the launch of new programming models.
HSBC HOLDINGS Scheduled to Hold Board Meeting on February 25 to Discuss Final Results and Fourth Interim Dividend
Board Meeting Announcement: HSBC Holdings will hold a Board meeting on 25 February to discuss the final results for the year ending 31 December 2025 and the potential payment of a fourth interim dividend for 2025.
Dividend Payment Details: If approved, the dividend will be payable on 30 April to shareholders recorded by 13 March across various registers, including the UK, Hong Kong, Bermuda, and for American Depositary Shares in New York.
Citi Raises Price Targets for BOC Hong Kong and Bank of East Asia, Selects HSBC Holdings as Preferred Choice
Hong Kong Banks' 2H25 Results: Hong Kong banks are expected to announce their 2H25 results in mid-February, with Citi Research predicting results will align with expectations despite potential revenue upside being offset by higher impairment charges.
Interest Income and Fee Growth: The normalization of HIBOR is anticipated to support net interest income in 4Q25, although growth in fee income may slow due to a high base.
Citi Research's Preferences: Citi Research favors international banks, particularly HSBC HOLDINGS, which is expected to provide positive updates on its 2026 targets and benefit from improved non-interest income.
Target Price Adjustments: Citi Research has raised target prices for BOC HONG KONG and BANK OF E ASIA, reflecting an increase in full-year dividend payout ratios, with ratings set at Buy and Neutral, respectively.
