Goldman Sachs has issued a research report stating that HSBC Holdings PLC (00005) will announce its second-quarter 2026 results on August 4. The firm anticipates underlying pre-tax profit to reach $10.2 billion, a 25% year-on-year increase and a 2% sequential rise, which is 4% above market consensus.
The report notes that the quarterly growth is primarily attributed to a reduction in credit costs to 40 basis points. It is expected that no additional provisions related to the Middle East conflict will be required, with the elevated provisions in the first quarter being influenced by one-off credit-related charges. Furthermore, driven by a slight increase in the Hong Kong Interbank Offered Rate (HIBOR), the bank's net interest income is projected to grow by 3% quarter-on-quarter. Goldman Sachs has raised its 12-month target price for HSBC from HK$165 to HK$181, while maintaining its "Buy" rating.
The report further indicates that beyond quarterly performance, market focus will continue to center on the wealth management business, particularly the latest developments in China's cross-border regulatory policies and their impact on wealth fund inflows. Regarding capital and shareholder returns, following a three-quarter pause due to the acquisition of Hang Seng, HSBC is expected to resume share buybacks this quarter. The firm forecasts that the second-quarter results will announce a $1.5 billion share repurchase program, upon completion of which the Common Equity Tier 1 (CET1) ratio is expected to remain at a robust level of approximately 14%. Goldman Sachs has increased its earnings per share (EPS) forecasts for HSBC for fiscal years 2026 to 2029 by up to 1.6%, primarily reflecting a more favorable interest rate outlook.
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