occurrences
HSBC Holdings (5.HK) released its fourth quarter results report for 2023.
reviews
23Q4 revenue and profit fell short of expectations:
The year-on-year revenue growth rate was -10.6%, lower than Bloomberg's agreed forecast of -7.0%, mainly because the net interest revenue growth rate fell short of expectations. Among them:
Net interest income was -7.8% YoY, lower than Bloomberg's agreed forecast of +1.4%.
Non-interest income was -15.1% YoY, higher than Bloomberg's agreed forecast of -20.4%.
The cost-revenue ratio increased 6.4 pcts year over year to 66.4%, which is worse than Bloomberg's agreed estimate of 60.3%.
Profit before tax was -80.6% YoY, lower than Bloomberg's agreed forecast of -5.9%; net profit attributable to common shareholders was -103.3% YoY, lower than Bloomberg's agreed forecast of -26.8%.
23Q4 net interest fell short of expectations, and deposit and loan growth was better than expected:
NIM fell 18 bps to 1.52% month-on-month, below Bloomberg's agreed forecast of 1.69%.
The return on interest-bearing assets was 4.90%, +135 bps year over month, -10 bps month on month; the cost ratio of interest-bearing debt was 3.83%, +162 bps year over year, +3 bps month on month? Total customer loans were +1.6% year over year, higher than Bloomberg's agreed forecast of +0.8%? Total deposits were +2.6% year over year, higher than Bloomberg's agreed forecast of -0.4%.
Accumulated credit losses of $1,031 million fell short of Bloomberg's unanimous estimate of $11.18 billion.
The NPL ratio was -25bps to 2.06% month-on-month, higher than Bloomberg's agreed forecast of 2.03%.
23Q4 Revenue split by business line:
Wealth and personal banking revenue was -39.1% year-on-year, lower than Bloomberg's agreed forecast of -33.1%.
Commercial finance revenue was +11.9% YoY, lower than Bloomberg's agreed forecast of +14.4%.
Global banking and capital markets revenue was +7.7% year-on-year, higher than Bloomberg's agreed forecast of +5.1%.
23Q4 CET1 Adequacy Ratio and ROE:
The core Tier 1 capital (CET1) adequacy ratio increased 0.6 pct year over year to 14.8%, higher than Bloomberg's agreed forecast of 14.6%.
The return on net assets (ROE) was -11.7pct year over year to -0.4%, lower than Bloomberg's agreed forecast of 7.7%.
Company Guidelines:
ROTE in 2024 was in the middle double digits, in line with Q3. The banking NII was 41 billion. It was cautious about 24H1 loan growth, and medium- to long-term loan growth was a medium single-digit percentage increase. Expenses increased by around 5% in 2024, not including the cost of selling some projects. CET1's guidance is between 14% and 14.5%, the dividend ratio is 50%, and 2 billion share repurchases were announced.
risks
Global economic growth is high/below expectations; interest rate hikes are high/below expectations, and asset quality exceeds/falls short of expectations.