31 July 2024
If you are covering HSBC’s H1 2024 results, please see a comment below from Will Howlett, financials analyst at Quilter Cheviot:
“HSBC has delivered a solid performance, beating expectations and providing improved guidance. The bank’s new mid-teens Return on Tangible Equity (RoTE) target for 2025 and a significant capital return of $4.8 billion (3% of market cap) are particularly impressive. While HSBC benefits from the higher for longer interest rate environment, there are potentially more attractive options like Standard Chartered and Barclays.
“HSBC’s underlying profit before tax of $9.1 billion is up 1% year-over-year and 16% ahead of consensus, with strong results across revenues, costs, and loan losses. Underlying revenues, excluding disposals, increased by 2% at constant currency, also 2% ahead of consensus. Banking net interest income remained flat quarter-on-quarter at $10.5 billion, while loans and deposits saw modest growth.
“HSBC announced a further $4.8 billion capital return, including a $0.10 ordinary dividend and up to $3 billion in share buybacks, exceeding consensus expectations. HSBC maintained its mid-teens RoTE guidance for FY24 and upgraded its net interest income guidance to around $43 billion. The bank also improved its loan loss charge guidance slightly and reiterated mid-single-digit loan growth over the medium term.
“Overall, HSBC’s results highlight its strong performance and strategic positioning, though investors may find more discounted opportunities elsewhere.”
