By Sherry Qin
HSBC Holdings is scheduled to report results for the fourth quarter on Wednesday. Here’s what you need to know:
NET INCOME FORECAST: The Asia-focused bank is expected to post net income of $2.94 billion, compared with $4.62 billion in the same quarter of the previous year, according to Dow Jones calculations of the difference between consensus analyst estimates for full-year earnings provided by HSBC and actual nine-month results. HSBC’s pretax profit, its preferred profit measure, may drop to $4.75 billion, according to the calculations, from $5.21 billion in the fourth quarter last year.
NET INTEREST INCOME FORECAST: The bank’s net interest income is expected to fall slightly to $9.11 billion from $9.58 billion in the year-earlier period, according to the calculations.
HSBC’s London-listed shares fell 1.5% over the fourth quarter, but have gained 0.4% since the start of this year. The Asia-focused bank’s shares recently rose in response to Chinese state-backed efforts to boost interest in the country’s stock market.
WHAT TO WATCH:
–2024 OUTLOOK: Keefe, Bruyette & Woods expects 2024 to be a challenging year for U.K. banks. As the benefits from higher interest rates are expected to taper off with upcoming rate cuts, investors will focus on the bank’s 2024 NIM outlook. While net interest income will likely come under pressure, activity levels should improve in a lower rate environment.
–DIVESTMENT & CASH RETURNS: Canada approved Royal Bank of Canada’s proposed $10.1 billion deal for HSBC’s Canadian unit in December. HSBC Chief Executive Noel Quinn had said the bank would consider a special dividend in 2024 once the sale was complete. JPMorgan analysts expect HSBC to announce a $10.5 billion share buyback plan in 2024 and a $0.21 special dividend in 2Q. Investors will look for updates on the deal and capital return potential.
Write to Sherry Qin at [email protected]
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