Glonghui, Feb. 28 | According to a report published by DBS, HSBC Holdings' performance last year fell short of expectations. Due to an unexpected impairment loss of US$3 billion, core profit was generally in line with expectations, and the company maintained a steady dividend rate for the 2024/2025 fiscal year. Furthermore, the bank expects the US federal funds rate to begin a downward cycle in the second half of this year, and it is expected that the Bank of Hong Kong (including foreign exchange control) will face downward pressure on net interest spreads this year and next. At the same time, the bank expects a stronger increase in loan volume when interest rates are lowered. The overall cost of credit is expected to be similar to last year, at around 36 to 37 basis points of the total loan amount. Overall, the bank expects that adjusted earnings for this year and next two years will have limited upside compared to last year. The bank estimates that Foreign Exchange Control is expected to achieve the tangible return on equity (ROte) target of about 15%, and expects ROTE of about 14% to 16% for the 2024/2025 fiscal year. The bank lowered FOC's profit forecast for this year and next two years by 7% and 11%, reaffirming its “buy” rating. The target price was raised from HK$71.7 to HK$74.6, believing that FOC was a share with stable dividend returns during the interest reduction cycle.