The Zhitong Finance App learned that Societe Generale Securities released a research report stating that maintaining the “increase in shares” rating of HSBC Holdings (00005), the company aims to achieve an average return on tangible share capital of about 15% in 2024. According to the company's earnings release date, net interest income from banking business is expected to reach at least US$41 billion in 2024. The company maintains its target dividend payout ratio of 50% in 2024. At the same time, the company announced the launch of a further share repurchase of up to 2 billion US dollars, and investors are advised to pay attention.

Societe Generale Securities's main views are as follows:

Net interest yield increased, and net revenue and profit both increased:

As of December 31, 2023, benefiting from rising interest rates, the company's net interest yield was 1.66%, an increase of 24 basis points over the previous year. In 2023, the company's revenue increased by US$15.4 billion to US$66.1 billion, an increase of 30%; of these, net interest income increased by US$5.4 billion; non-interest income increased by US$10 billion (the increase in transaction and fair value income of US$6.4 billion was mainly due to global banking and capital markets operations).

On a fixed exchange rate basis, in 2023, the company's profit before tax increased by 13.8 billion US dollars to 30.3 billion US dollars; profit after tax increased by 8.3 billion US dollars to 24.6 billion US dollars. The company's profit before tax in 2023 includes a favorable year-on-year impact of US$2.5 billion relating to the sale of French retail banking business (completed on January 1, 2024), and a provisional increase of US$1.6 billion confirmed by the acquisition of Bank of Silicon Valley of England Limited in 2023.

Increased return on average tangible equity:

In 2023, the company's average return on tangible equity increased from 10.0% in 2022 to 14.6%. In 2023, HSBC's liquidity coverage ratio was 136%; total capital ratio was 20.0%; leverage ratio was 5.6%. In 2023, the company's average return on common shareholders' equity was 13.6%.

2024 outlook:

The company remains cautious about loan growth prospects for the first half of 2024, but in the medium to long term, it still expects the percentage of year-on-year increase in customer loans to reach the middle single digits. Given that future economic prospects remain uncertain, the company expects credit loss disbursements as a percentage of the average value of total loans in 2024 to be about 40 basis points (including customer loan balances converted to sales). The company has set a target of a cost increase of about 5% in 2024 (not taking into account the impact of the sale of the French retail banking business and the planned sale of the Canadian banking business from 2023) to reflect the increase in employee compensation, increased investment in the technology sector, and investment in business growth and efficiency.

Risk warning: 1) Interest spreads have narrowed due to global economic downturn or geographical conflict; 2) Business development in the Asia-Pacific region falls short of expectations; 3) European and North American business has declined sharply; 4) the quality of the company's assets in Europe has declined sharply; 5) The company's operating risk.