Citigroup: HSBC Holdings (00005) first quarter pre-tax profit in line with expectations, but provisions higher than expected by 9%.

Citibank released a research report stating that HSBC HOLDINGS (00005) achieved a pre-tax profit of $10.1 billion in the first quarter (excluding special items), in line with market expectations. Revenue was 2% higher than expected, mainly driven by non-interest income, which was 6% higher than expected, while the performance of the bank's net interest income was in line with expectations. The reported benchmark pre-tax profit was $9.4 billion, 2% lower than market expectations, mainly due to losses recorded in two disposal transactions. The CET1 ratio was 14%, in line with market expectations. The report pointed out that HSBC has updated its full-year 2026 guidance, with the net interest income guidance revised upwards, but offset by higher loan loss guidance. It is worth noting that HSBC achieved a tangible return on equity of 18.7% this quarter, significantly higher than the mid-term guidance of over 17%. Citibank stated that HSBC's first quarter expected credit losses were $1.3 billion, 9% higher than market consensus. The $300 million increase due to the Middle East conflict was basically in line with expectations, mainly through management's judgmental adjustments.