UBS: HSBC Holdings (00005) maintains a “neutral” rating with profit falling short of expectations before preparations for the third quarter

The Zhitong Finance App learned that UBS released a research report saying that the profit of HSBC Holdings (00005) fell short of expectations before preparation for the third quarter, and the bank maintained a “neutral” rating.

HSBC Holdings' profit before provision for the third quarter was 3% lower than market expectations, mainly hampered by the decline in revenue. Among them, the bank's net interest income was 2% lower than expected, processing fees and other revenue were also 1% lower, and operating expenses were in line with expectations. The provision for impairment during the period was 21% lower than market expectations. Profit before tax is in line with expectations.

According to UBS, the Group's common equity Tier 1 capital ratio for the third quarter was 13.9%, 20 basis points lower than expected, mainly affected by a 0.4% decline in the common equity Tier 1 capital ratio and a 1% increase in risk-weighted assets. The Group announced that it would pay a third interim interest rate of US$0.1 per share, in line with expectations, and initiated a share repurchase of up to US$1 billion, which is in line with the reservation's expectations.

HSBC's 2026 guidelines remain unchanged, including banks' net interest income of at least US$46 billion, an increase in operating expenses of about 1% to US$33.9 billion according to the target benchmark, expected credit loss provision of about 45 basis points, and a common equity Tier 1 capital ratio remaining in the range of 14% to 14.5%.