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RTNominal down32.800 -0.700 (-2.090%)

03/07/2020 17:47

{I-bank focus}Morgan cautious on HK banks into 2Q results

[ET Net News Agency, 3 July 2020] Standard Chartered (02888) reports its 2Q earnings on
30 July, and HSBC Holdings (00005) on 3 August. Morgan Stanley thinks their top lines will
remain under pressure.
The research house sees lower rates driving lower NIM for both banks as a key pressure
point and the Fed futures imply that rates will keep at current levels till at least the
end of 2021.
In addition to lower NIMs, Morgan sees softer fees driven by lower activity levels in
retail and wealth management. On the positive side, trading income should have held up
well and Morgan expects some reversal of the insurance losses HSBC experienced in 1Q. For
STAN, Morgan expects QoQ non-interest income to fall, driven by the partial reversal of
the DVA plus softer wealth management sales.
Morgan cut STAN's 2020 earnings forecast by 33% on higher loan loss charges. It stays
"equal-weight" on Standard Chartered and "underweight" on HSBC, with a price target of
HK$46 and HK$42 respectively. (KL)

Remark: Real time quote last updated: 07/08/2020 17:58
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