HSBC, StanChart, Singapore Banks Held Back by Lukewarm Loan Growth
HSBC, Standard Chartered, and Singapore banks are facing slow loan growth, impacting their net interest margins. The incoming CEO of HSBC will need to find ways to increase revenue in a falling rate environment. Standard Chartered expects to meet its net interest income guidance in 2024 and both banks are expected to announce buybacks. Singapore banks may see lending pick up in the second half. ICICI Bank is expected to have slow profit growth due to higher deposit costs. Standard Chartered may announce a $1 billion share buyback. HSBC's margins were supported by easing deposit competition. UOB's net income was likely pressured by property cooling measures. OCBC's revenue growth was held back by low loan growth.
HSBC Holdings Plc and Standard Chartered Plc, along with Singapore lenders, will report earnings against a backdrop of slow loan growth.
Net interest margins for Hong Kong banks probably remained under pressure from falling Hibor rates in the second quarter, which could impact HSBC and Standard Chartered, according to Morgan Stanley.
HSBC’s incoming Chief Executive Officer will face the challenge of increasing revenue as rates fall and is expected to step up cost efforts, said. Standard Chartered is set to meet the higher end of the net interest income guidance in 2024, thanks to a supportive rate environment, BI . Both banks are expected to announce fresh buybacks.
Singapore banks Oversea-Chinese Banking Corp. and United Overseas Bank Ltd. might see overall lending pick up in the second half, although weak business demand could drag on for a few more months, BI . Singapore’s central bank its tight monetary policy settings unchanged even as a resilient local currency tempers price pressures.
Highlights to look out for:
Saturday: ICICI Bank (ICICIBC IN) should post its slowest quarterly profit growth since fiscal 2020 as a higher cost of deposits crimps margins. It has one of the lowest credit-deposit ratios among private sector lenders — 82% as of the end of March. This leaves it among the few banks that can comfortably expand loans by more than the industry average of 16%, Nomura said.
Tuesday: Standard Chartered (STAN LN) is expected to announce another $1 billion share buyback, according to analysts at Jefferies and Morgan Stanley. Margins were probably steady versus a quarter earlier, and net interest income may have jumped 28%, estimates show.
Wednesday: HSBC’s (HSBA LN) margins were likely supported by easing deposit competition in Hong Kong and relatively stable Hibor rates, BI . The focus will be on potential revenue-boosting that may come in late 2024 under the new CEO.
Thursday: UOB’s (UOB SP) second-quarter net income was likely pressured by amid Singapore’s property cooling measures and margin pressure, BI .
Friday: OCBC’s (OCBC SP) revenue growth may have been held back as loan growth remained low, while strong fee income, led by the wealth business, provided a boost, said.
