HSBC: guidance raised amid Madoff noise
Matt Britzman, senior equity analyst, Hargreaves Lansdown: “HSBC’s headline numbers might look disappointing at first glance, but dig a little deeper and the story flips. Strip out the hefty $1.1bn Madoff-related provision and other one-offs, and profit before tax rose 3% year-on-year to $9.1bn – a good clip ahead of expectations. That strength came entirely from the top line: net interest income edged up to $11bn, helped by deposit growth and structural hedging, while wealth fees surged as client activity picked up. Costs and credit charges were broadly as expected, so the operational engine is clearly firing.
Guidance was the real kicker. Management lifted its 2025 banking net interest income target to $43bn or better, ahead of the $42.5bn that analysts had in their numbers. Yet with Hong Kong rates trending higher and deposit momentum intact, that feels conservative and leaves plenty of room to overshoot.“