HSBC: exceeds expectations, attractive forecasts

(CercleFinance.com) - On Wednesday, HSBC has reported a H1 net profit that is slightly down, although ahead of expectations, notably boosted by its dynamic wealth management activities.


Europe's largest bank in terms of assets, ahead of BNP Paribas, posted a taxable profit of $21.55bn for H1, compared with $21.65bn a year earlier.

In Q2, however, pre-tax profit rose 2% to $8.9bn, ahead of the consensus of $7.8bn.

In a press release, outgoing CEO Noel Quinn hailed a "solid" performance after a record 2023, which he said was proof that the group's strategy was working.

Our investments in wealth management are generating larger and more diversified revenues, while we continue to grow our international core business, he said.

HSBC announced two weeks ago that CFO Georges Elhedery would replace Noel Quinn as CEO from September.

The group said this morning that Jonathan Bingham, Head of Controlling, would succeed Georges Elhedery as CFO in September.

In its press release, HSBC points out that its net banking income rose by 1% to $37.3bn in H1, while its operating expenses increased by 5% to $16.3bn as a result of its investments in technology and wage pressures.

Importantly for analysts, HSBC said it now expects return on tangible equity (RoTE), excluding exceptional items, to be around 15% for both 2024 and 2025, compared with a consensus target of 12.5% for the next financial year.

Following this announcement, HSBC shares gained over 3% on the London Stock Exchange on Wednesday morning, making them one of the strongest performers on the FTSE 100 index.


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