HSBC expected to report 33 per cent Q3 profit rise, buyback and net interest income in focus
Analysts forecast HSBC's third-quarter pre-tax profit to rise 32.9 per cent year on year to US$9.7 billion. Net interest income is expected to increase 32.23 per cent, while Goldman Sachs predicts a US$500 million share buyback, down from US$1 billion in the second quarter.
Investors are focusing on HSBC's net interest income and buyback policy ahead of its third-quarter results due on Tuesday, with analysts forecasting pre-tax profit to rise 32.9 per cent year on year to US$9.7 billion (HK$75.66 billion).
According to consensus forecasts from multiple brokerages, HSBC's third-quarter revenue will reach US$18.93 billion, up 6.34 per cent. Net interest income is expected to increase 32.23 per cent to US$11.9 billion. Operating expenses are forecast to fall 12.38 per cent to US$8.85 billion, while expected credit losses are anticipated to reach US$1.05 billion, up 5 per cent.
Third-quarter earnings per share are expected to be 42 US cents, with shareholders likely to receive a quarterly dividend of 10 US cents, unchanged from the previous year. On the buyback policy, Goldman Sachs expects HSBC to announce a US$500 million share buyback in the third quarter, down from US$1 billion in the second quarter, reflecting negative impacts on other comprehensive income from continued loan growth, rising rates, and a steeper yield curve.
Goldman Sachs said HSBC's net interest income from banking operations will be the market's focus, expecting it to rise 3 per cent quarter on quarter, supported by higher rates at quarter-end, increased calendar days in the period, and continued balance sheet growth. After the recent Federal Reserve rate hike, the rate outlook has become increasingly constructive, Goldman Sachs said, adding that a steeper yield curve should support structural hedge reinvestment yields and balance sheet repricing. The bank raised its 2026-2028 banking net interest income forecasts for HSBC by 0.3 per cent, 1 per cent, and 1 per cent, respectively, above market expectations. Goldman Sachs lowered HSBC's target price from HK$193 to HK$192, maintained the London target price at 1,860 pence, and rated it 'Buy'.
JPMorgan forecasts HSBC's third-quarter revenue to grow 7 per cent, and adjusted profit before tax to grow 11 per cent. It expects another strong quarter for the wealth management business, although risk sentiment is softer, noting that HSBC has said it has not seen any significant impact from China's tightening measures on client fund flows or new client acquisition. Looking ahead, JPMorgan said higher rates should support net interest income, and it expects sustainable business volume growth and asset quality. HSBC may also see growth in earnings per share in the medium term, benefiting from structural growth themes such as Asian wealth management, capital market activity, and yuan internationalisation.