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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
FINANCIALS
HSBC (HSBA LN) reports 4Q23 on 21-Feb where asset quality, especially in Greater China, will likely be the key focus, alongside news on revenues and capital return.
- Revenues are expected to slow to 4% y/y growth (from c.20% in prior three quarters) as rate tailwinds abate. This is common for most banks though HIBOR strength may drive a minor revenue upgrade here. Barclays reports tomorrow and any inv bank surprises could read through to HSBC, too.
- Asset quality is likely to be the real focus, loan losses are seen as accelerating again from 3Q23 levels and any outlook statements here will be key. China real estate is the obvious stress point, including HK spillover effects but HSBC remains tied US consumers and CRE there via its markets businesses. This could be the key delta for credit investors.
- Capital return – a special dividend on the completion of the Canada sale has already been indicated. Further to this, with a CET1 ratio around the top end of management’s target range, views on incremental equity payouts will have the usual impact on spread performance.
- HSBC’s CDS spread has tightened with the Euro peers, sometimes trading inside that group, so there’s a lot of positive expectation built into the credit. Conversely, the equity still trades (marginally) below Oct-23 levels and has underperformed Euro peers by near-10pp over that time.
Results released 0400 London time (midday in HK) with conf call at 0745, available at https://hsbc.zoom.us/webinar/register/WN_XkdyUWl9T8uW1u4va_QPXw#/
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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