Daiwa: Hong Kong banking may face income pressure in the second half, lowering targets for HSBC and Standard Chartered.

Morgan Stanley released a research report stating that the decline in deposit costs, coupled with strong wealth management and corporate activities, will drive fee income growth, leading to a strong performance in the first quarter of the year for Hong Kong banks. However, due to existing macroeconomic risks, investors are expected to focus more on the prospects for the remaining three quarters of the year. It is forecasted that Hong Kong banks may face pressure on future income due to deteriorating interest rate prospects, slowdown in wealth management and corporate activities, which may affect fee income. Morgan Stanley has lowered the after-tax net profit forecast for Standard Chartered Group by 9% and 10% for the next two years, and lowered the after-tax net profit forecast for HSBC Holdings by 9%. It is expected that HSBC will announce a further share buyback of $3 billion when announcing its first quarter results. Morgan Stanley has given a "hold" rating to the H-shares of the two banks, with a target price of HK$83 for HSBC, down from HK$92.3, and a target price of HK$112 for Standard Chartered, down from HK$128.3.