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2026-10-28 11:30:16 Goldman Sachs published a research report stating that after HSBC HOLDINGS (00005.HK) announced its third-quarter results, the broker updated its forecasts with a focus on deposit competition and lowered its earnings estimates. The broker cut its TP by 2% from HKD192 to HKD188 and maintained a "Buy" rating. The broker said HSBC HOLDINGS' underlying profit before tax for the third quarter was USD10 billion, 4% below its forecast and in line with market expectations. Weaker-than-expected banking and non-banking net interest income was offset by lower provisions. HSBC HOLDINGS' share price closed down 5.6% yesterday (27 Oct), with investor discussions focusing on trends in banking net interest income, as deposit beta was higher than expected and management mentioned intensified deposit competition and a shift from current deposits to time deposits, particularly in Hong Kong. The broker believes further migration remains possible if market conditions stay weak. However, part of the pressure may be company-specific, as the bank aims to defend or gain deposit market share in Hong Kong to support stronger loan growth and reposition itself after the privatization of Hang Seng Bank. The broker mainly lowered its earnings forecasts due to a more cautious view on the trajectory of net interest income. It reduced its banking net interest income forecasts by as much as 3.2% and cut non-banking net interest income forecasts by around 2% at most, resulting in Goldman Sachs' forecasts for HSBC HOLDINGS' underlying profit before tax for 2026 to 2029 being as much as around 3% below market expectations. The broker said HSBC HOLDINGS' share price has already corrected by about 14% over the past month, and it believes concerns over higher deposit beta and potentially weaker banking net interest income have been fully reflected. It continues to view HSBC HOLDINGS as a bank benefiting from structural growth in Asian deposits and wealth management. (ad/da)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |