occurrences

HSBC Holdings (5.HK) announced its results report for the third quarter of 2024.

reviews

24Q3 revenue and profit exceeded expectations:

Revenue was +5.2% year over year, higher than BBG's agreed forecast of -0.1%, mainly due to the expected growth rate of non-interest revenue, of which:

Net interest income was -17.4% YoY, lower than the agreed forecast of -12.0%.

Non-interest income was +35.4% YoY, higher than the consensus estimate of +9.5%.

The cost-revenue ratio decreased by 1.4 pct to 47.9% year over year, better than the agreed forecast of 51.1%.

Net profit attributable to common shareholders was +9.2% YoY, better than the agreed forecast of -2.4%.

24Q3 net interest spread, deposit and loan growth and asset quality:

Total customer loans were +3.5% YoY, higher than the consensus estimate of +0.8%.

Total deposits were +6.2% year over year, higher than the consensus estimate of +2.5%.

Accrued credit losses of $0.986 billion, -7.9% YoY, higher than the consensus estimate of $0.864 billion (-19.3% YoY). Accruals reduce lower accrual charges in the commercial real estate industry in mainland China stemming from commercial and commercial finance business (CMB) and global banking and capital markets business (GBM). The 24Q3 calculation includes USD 0.1 billion for local commercial real estate in Hong Kong and USD 0.1 billion for commercial real estate in mainland China.

24Q3 NIM fell 16 bps to 1.46% month-on-month, below the consensus forecast of 1.57%.

The non-performing loan ratio increased 4 bps month-on-month to 2.47%, higher than the agreed forecast of 2.45%.

24Q3 revenue across all business lines exceeded consistent expectations:

Wealth and personal banking revenue was +10.3% year-on-year, higher than the consensus estimate of +2.8%.

Commercial finance revenue was -0.7% year-on-year, higher than the agreed forecast of -2.0%.

Global banking and capital markets revenue was +13.5% year over year, higher than the agreed forecast of +3.7%.

24Q3 CET1 Adequacy Ratio and ROE:

The core Tier 1 capital (CET1) adequacy ratio increased 0.3 pct year over year to 15.2%, higher than the 14.9% forecast by HSBC analysts.

The return on net assets (ROE) rose 0.9 pct year over year to 14.4%, higher than the agreed forecast of 13.5%.

risks

Global economic growth is high/below expectations; interest rate hikes are high/below expectations, and asset quality exceeds/falls short of expectations.