Goldman Sachs: HSBC Holdings (00005) reported strong revenue in the last quarter, raising the net interest income guidance for this year.

Goldman Sachs released a research report stating that HSBC HOLDINGS (00005) announced its third quarter performance at noon, with pre-tax profit before excluding exceptional items and fixed exchange rates reaching $9.1 billion, 7% higher than the bank's original forecast and 9% higher than market consensus, mainly driven by better-than-expected revenue performance. Revenue growth was propelled by both banking net interest income and non-banking net interest income exceeding expectations. Costs and credit provisions were roughly in line with expectations. In addition, the common equity tier 1 ratio (CET 1) was 14.5%, in line with market expectations. The bank mentioned that HSBC has raised its return on tangible equity (ROTE) for the fiscal year 2025 to "mid teens" (14%-16%) or higher (market consensus is 16%), and maintained the outlook of "mid teens" ROTE for fiscal years 2025 to 2027 (market average expectation for 2026-2027 fiscal years is 15.7%); HSBC also raised the net interest income guidance for the fiscal year 2025 to $43 billion or above, previously around $42 billion (market consensus is $42.5 billion). HSBC maintained its cost growth target for the fiscal year 2025 at around 3%, with total operating expenses reaching $33.5 billion (market consensus is $33.3 billion), and plans to achieve cost savings of $1.5 billion by the end of 2026, with expected credit costs for the fiscal year 2025 at around 40 basis points (market consensus slightly higher than 40 basis points), and mid-term credit cost guidance remaining at 30 to 40 basis points. Goldman Sachs stated that there is currently no investment rating on HSBC. HSBC announced earlier this month plans to privatize HANG SENG BANK (00011), with Goldman Sachs as one of the joint financial advisors for this transaction.