Morgan Stanley has released a research report stating that the target price of HSBC Holdings (00005) has been lowered from HK$78.4 to HK$76.8, with a 'shareholding' rating. HSBC Holdings, Standard Chartered (02888), and BOC Hong Kong (02388) will announce their performance in October and November respectively. For the 2025 fiscal year, the net interest margin (NIM) outlook and Standard Chartered's future capital return plan will be key. Morgan Stanley also mentioned a preference for international banks over local banks. Overall, Standard Chartered is currently Morgan Stanley's top choice.

The bank stated that lower quarterly average HIBOR and soft loan growth will lead to sustained low net interest income (NII), with the main impact expected to be the interest rate decline in the 2025 fiscal year. The bank also noted that non-interest income is expected to remain strong, supported by continued strong wealth and market income.

Morgan Stanley expects good control of banking costs and maintenance within the expected range. If capital market revenues remain unchanged, performance-related compensation may be higher. The bank expects no unexpected credit losses, but non-performing loans in Hong Kong's commercial real estate sector may still rise.

Furthermore, Morgan Stanley expects HSBC Holdings to repurchase $3 billion of stocks again; as for Stanchart, the latest information on its 2024 to 2026 $5 billion capital return plan may exceed $8 billion, according to the latest market consensus.