JP Morgan: UK's proposal to relax bank capital requirements tightening expected to be manageable, HSBC Holdings (00005) expected to announce further buybacks when reporting Q3 earnings.

JPMorgan Chase released a research report stating that the disclosure of Part 2 of Basel III by British banks has a more manageable overall impact on UK banks, with primary capital requirements increasing by less than 1% by 2030, compared to 3% last year. The bank believes that the upside risk to shareholder returns for HSBC HOLDINGS (00005) and STANCHART (02888) is moderate, while policy changes around commercial real estate (CRE) have a moderately positive impact on CK Hutchison, as its CRE accounts for 8.3% of total loans, and Standard Chartered benefits from the reduction in off-balance sheet loan conversion ratios. Although the bank expects the proposed direction to be helpful, it still needs to await the exact impact of these changes on the banks and may provide updates in the upcoming third-quarter earnings. The bank continues to expect resilience in buyback prospects for CK Hutchison and Standard Chartered, with CK Hutchison likely announcing further buybacks in the third quarter earnings. Despite recent news about the repricing of mainland mortgage loans potentially weakening the dividend yield prospects of Chinese banks, the bank estimates that CK Hutchison is likely to see inflows of funds.