HSBC Raises Profitability Outlook Amid Mixed Signals

about 2 months ago

Khloe Mele

"And speaking of the bank earnings and credit as well, the top red story for HSBC on the terminal at the moment is that it's reviewing its ties to hedge funds with credit fears on the rise. But lots of different lines out of HSBC this morning and the shares up. Yeah, the shares are actually up. It's quite an interesting story. It actually raised its profitability outlook, which is probably why the shares are up, even though there was a fall in third quarter profit due to a big provision. It had to set aside $1.1 billion to cover litigation by investors who lost money in the fraud case dating back years. Despite the mixed bag, investors continue to put their trust in the CEO, who has overseen the largest revamp in at least a decade with major job cuts and strategic bets in Hong Kong. However, some analysts remain cautious given issues like falling rates, muted loan growth, and impairments in the commercial real estate market."

The discussion on HSBC focuses on its raised profitability outlook, which has supported share gains despite a significant provision and ongoing headwinds. While the CEO's revamp is noted positively, concerns remain regarding falling rates, slow loan growth, and elevated property impairments.

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