CCB Results: Again, Little Bad News For HSBC, StanChart

China Construction Bank (939 HK) 4Q23 results are a low-quality consensus hit but do show improvements in credit losses and stable non-performers. Overall, another failure to show negative implications for HSBC and StanChart, we feel.

• Key credit metrics: the CET1 ratio is 13.2% (consensus: 12.9% and flat vs. Sep-23) and non-performers are 1.37% (in line with consensus and Sep-23). Loan loss charges are less than half of 3Q23 but over 50% above expectations – highlighting the rather more geared nature of CCB’s business model.
• Operational metrics: revenues look like a miss, largely from net interest income, but operating costs and taxes are significantly better than expected which mean net income hit expectations. This is a low quality consensus hit, however.
• Outlook: again, there is little detail here. What seems important to us is that loan losses are running at about half the average rate of the last two full years, indicative of a business that is clearly not seeing front-book deterioration.