Goldman Sachs: HSBC Holdings (00005) first quarter performance in line with expectations, wealth management driving strong non-interest income.

Goldman Sachs released a research report stating that HSBC HOLDINGS (00005) recorded a first quarter underlying pre-tax profit of 10.1 billion US dollars, which is 3% higher than the bank's expectations. This was mainly due to the better-than-expected performance of non-banking net interest income, while banking net interest income met expectations. However, the positive factors were offset by higher-than-expected costs and provisions. Goldman Sachs now has a target price of 160 Hong Kong dollars and a "buy" rating. In addition, non-interest income performed strongly, primarily driven by wealth management, with fee income increasing by 15% year-on-year. Net new money (NNM) totaled 39 billion US dollars, with Asia contributing 34 billion US dollars, outperforming the previous quarter and the same period last year. Credit costs for the period were 52 basis points, better than expected, including 300 million US dollars in Middle East provisions and 400 million US dollars in UK fraud-related losses. Commercial real estate (CRE) loans in Hong Kong remained stable. The company currently expects full-year credit costs to be 45 basis points, higher than the original guidance of 40 basis points.