Market Overview - The Hong Kong stock market failed to maintain its previous day's gains, with the Hang Seng Index closing down 0.33% at 26,346.14 points and a total turnover of HKD 242.7 billion [1] - The Hang Seng China Enterprises Index fell by 0.97% to 9,375.79 points, while the Hang Seng Tech Index dropped 1.26% to 6,093.44 points [1] Blue-Chip Performance - HSBC Holdings (00005) led the blue-chip stocks, rising 4.41% to HKD 106.5, contributing 92 points to the Hang Seng Index [2] - HSBC reported a pre-tax profit of USD 7.3 billion for Q3 2025, a decrease of USD 1.2 billion year-on-year, but a fixed-rate pre-tax profit of USD 9.1 billion, up 3% year-on-year [2][6] - Other notable blue-chip movements included Xinyi Solar (00968) up 4.27% and AIA Group (01299) up 3.4%, while Zijin Mining (02899) fell 5.59% [2] Sector Performance - Large tech stocks generally declined, with Tencent and Alibaba both dropping over 1% [3] - Gold stocks experienced significant declines, with Chifeng Jilong Gold Mining (06693) down over 6% [3] - Hong Kong banking stocks rose against the trend, with HSBC's strong Q3 performance boosting investor confidence [5][6] New Listings - Four new stocks debuted positively, with Dipo Technology (01384) surging 150.56% and Baima Tea (06980) rising 86.7% [4][5] - Dipo Technology's IPO was highly sought after, with a subscription rate of 7,590 times, attracting approximately 239,000 investors [5] Gaming and Gambling Sector - Macau's gaming revenue showed signs of recovery, with October's revenue potentially reaching MOP 23 billion, the highest in 71 months [6] - Notable gains were seen in gaming stocks, with Sands China (01928) up 2.46% and Melco International Development (00200) up 1.24% [6] Notable Stock Movements - Fuyao Glass (06865) saw a strong performance, rising 12.29% after reporting a 21% year-on-year revenue increase [7] - Bilibili (09626) gained 5.31% following the successful launch of its new game, which sold over 200,000 copies shortly after release [8] - China Southern Airlines (01055) rose 3.01% after reporting a 2.23% increase in revenue for the first three quarters of 2025 [10]

Financial Data and Key Metrics Changes - Total revenues increased by $500 million to $17.9 billion, with a year-over-year revenue growth of 3% [4][11] - Annualized Return on Tangible Equity (RoTE) was 16.4% in Q3 and 17.6% year to date, both excluding notable items [11][31] - Customer deposits grew by $86 billion over the last twelve months, reaching $1.7 trillion [4][25] Business Line Data and Key Metrics Changes - Banking Net Interest Income (NII) returned to growth at $11 billion for the quarter, driven by deposit volumes, with full-year guidance raised to $43 billion or better [12][13] - Wealth management saw a 29% growth in fee and other income, totaling $2.7 billion, with net new invested assets of $29 billion [16][17] - Wholesale transaction banking reported strong customer engagement, with trade and payments continuing to grow [14] Market Data and Key Metrics Changes - In Hong Kong, the composite deposit rate decreased significantly in Q3, but HIBOR is expected to provide a tailwind for NII in Q4 [48][51] - The UK business experienced a 5% year-over-year growth in the lending book, with a focus on mortgages and commercial lending [26][88] - The commercial real estate sector in Hong Kong showed a slight increase in the Stage 3 loan ratio, but impairment charges were lower than the previous quarter [50][56] Company Strategy and Development Direction - The company announced plans to privatize Hang Seng Bank, viewing it as a compelling growth opportunity in a familiar market [5][7] - The strategy includes exiting non-strategic activities, with 11 exits announced so far this year, allowing for reinvestment in priority growth areas [9][30] - The company aims for a disciplined approach to capital allocation, targeting a 50% dividend payout ratio for 2025 [11][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook for Hong Kong and the overall growth strategy, emphasizing the importance of operational efficiencies and alignment [6][7] - The company remains cautious about the credit cycle but believes in strong organic capital generation [28][60] - Management highlighted the positive momentum in customer deposits and the potential for continued growth in various markets [25][37] Other Important Information - The company is on track to achieve around 3% cost growth in 2025 compared to 2024, with simplification savings ahead of expectations [21][29] - Legal provisions of $1.4 billion were recorded for historical matters, which do not impact ongoing business operations [22][60] Q&A Session Summary Question: Expectations for Banking NII in Q4 - Management confirmed that banking NII is expected to be no less than $10.6 billion in Q4, driven by deposit strength and structural hedges [36][37] Question: Sustainability of Deposit Growth - Management expressed confidence in the sustainability of the current 5% underlying deposit growth, particularly in Hong Kong [38] Question: Drivers Behind Wealth Management Revenue Growth - Management noted strong investment distribution and equity volumes as key drivers of wealth management revenue growth, with a medium-term guidance of double-digit growth in fees [73][74] Question: Concerns Regarding Credit Risk - Management reassured that direct exposure to private credit is minimal, with strong credit underwriting principles applied [76][77] Question: Update on Madoff Litigation - Management provided insights on the ongoing litigation, confirming that the provision reflects their best judgment based on legal advice [59][90]

Core Viewpoint - HSBC Holdings reported a strong performance in Q3 with a revenue of $17.8 billion, reflecting a 5% year-on-year increase, driven by a significant rise in net interest income [1] Financial Performance - Q3 revenue reached $17.8 billion, up 5% year-on-year [1] - Net interest income for the quarter was $8.8 billion, marking a 15% increase compared to the previous year [1] - The board has approved a third interim dividend of $0.10 per share for 2025 [1] Future Outlook - HSBC expects net interest income from banking operations to reach $43 billion for the year, an increase from the mid-year forecast of $42 billion, indicating confidence in recent policy rate trends in key markets like Hong Kong and the UK [1]

Financial Industry Risk Assessment - HSBC is reviewing its exposure to smaller banks with large private credit businesses [1] - HSBC is reviewing its exposure to hedge funds with large private credit businesses [1]

Core Viewpoint - Goldman Sachs reported that HSBC Holdings (00005) announced its third-quarter performance, with a pre-tax profit of $9.1 billion, exceeding both Goldman Sachs' original forecast and market consensus by 7% and 9% respectively, primarily driven by better-than-expected revenue performance [1] Group 1: Financial Performance - HSBC's pre-tax profit, adjusted for certain items, reached $9.1 billion, benefiting from stronger-than-expected net interest income from both banking and non-banking sectors [1] - The Common Equity Tier 1 (CET 1) capital ratio stood at 14.5%, aligning with market expectations [1] Group 2: Future Guidance - HSBC raised its return on tangible equity (ROTE) forecast for the fiscal year 2025 to a "mid-teens" range (14%-16%) or higher, compared to the market consensus of 16% [1] - The bank also increased its net interest income guidance for banking operations in fiscal year 2025 to $43 billion or more, up from the previous estimate of $42 billion, with market consensus at $42.5 billion [1] Group 3: Cost Management - HSBC maintained its cost growth target for fiscal year 2025 at approximately 3%, with total operating expenses expected to reach $33.5 billion, slightly above market consensus of $33.3 billion [2] - The bank plans to achieve cost savings of $1.5 billion by the end of 2026, with expected credit costs for fiscal year 2025 around 40 basis points, slightly lower than market consensus [2]

Group 1 - Goldman Sachs reported that HSBC Holdings (00005) announced its third-quarter results, with a pre-tax profit of $9.1 billion, exceeding both Goldman Sachs' forecast and market consensus by 7% and 9% respectively, driven by better-than-expected revenue performance [1] - Revenue growth was propelled by both net interest income from banking and non-banking sectors surpassing expectations, while costs and credit provisions were largely in line with expectations [1] - The Common Equity Tier 1 (CET1) capital ratio stood at 14.5%, which also met market expectations [1] Group 2 - HSBC raised its return on tangible equity (ROTE) guidance for the fiscal year 2025 to a "mid-teens" range (14%-16%) or higher, with market consensus at 16%, and maintained a "mid-teens" outlook for ROTE from 2025 to 2027, with the average market expectation for 2026-2027 at 15.7% [1] - The bank also increased its net interest income guidance for banking operations in fiscal year 2025 to $43 billion or more, up from approximately $42 billion, with market consensus at $42.5 billion [1] - HSBC maintained its cost growth target for fiscal year 2025 at around 3%, with total operating expenses expected to reach $33.5 billion, slightly above market consensus of $33.3 billion, and plans to achieve cost savings of $1.5 billion by the end of 2026 [2] Group 3 - The expected credit cost for fiscal year 2025 is approximately 40 basis points, slightly below market consensus, while the medium-term credit cost guidance remains at 30 to 40 basis points [2] - Goldman Sachs currently has no investment rating for HSBC, which recently announced plans to privatize Hang Seng Bank (00011), with Goldman Sachs acting as a joint financial advisor for this transaction [2]

Financial Performance - HSBC's revenue excluding notable items increased by $0.5 billion year-over-year, a 3% increase[4,7] - Profit Before Tax (PBT) excluding notable items increased by $0.3 billion year-over-year, also a 3% increase[7] - Customer deposits grew by $86 billion year-over-year, reaching $1,737 billion, which includes $19 billion held-for-sale balances for 3Q25 and $6 billion for 3Q24[4,7] - The Return on Tangible Equity (RoTE) increased by 0.9 percentage points year-over-year to 17.6%[7] Business Segments - Banking Net Interest Income (NII) guidance for FY25 was upgraded to $43 billion or better[12,14] - Wealth fee and other income grew by 29% year-over-year[4] - Securities Services fee and other income increased by 15% due to higher asset balances[16,17] Costs and Credit - Costs increased by $1.9 billion year-over-year, a 23% increase, including $1.4 billion of legal provisions related to historical matters[7] - The Expected Credit Losses (ECL) charge was $(1.0) billion, representing ~(40)bps of gross loans and advances[7,24,25] Capital and Strategy - The CET1 ratio was 14.5%[7] - The company is on track for ~3% target basis cost growth in FY25[5,28] - HSBC announced 11 exits Year-To-Date (YTD), including HSBC Malta and Sri Lanka retail banking during Q3[5,29]

Core Viewpoint - HSBC Holdings reported a strong third-quarter performance with a pre-tax profit of $9.1 billion, exceeding market consensus by 9% [1] Financial Performance - Revenue surpassed expectations by 5%, driven by net interest income exceeding forecasts by 4% and non-net interest income exceeding forecasts by 6% [1] - The bank raised its guidance for net interest yield and tangible equity return for the year [1] Market Reaction - The report is seen as a strong fundamental performance, which may provide confidence support after recent stock price weakness due to news related to Hang Seng Bank and litigation announcements [1] - Citi reiterated a "Buy" rating on HSBC with a target price of £11.6 (approximately HKD 120.29), considering HSBC as one of its preferred stocks [1]

HSBC, the largest bank in Hong Kong, warned that the city’s commercial property sector continues to face “downward pressure” after bad loan provisions jumped this year https://t.co/wMBMWhGOvZ ...

Market Overview - European stocks are expected to open flat to higher, with the U.K.'s FTSE index slightly up, Germany's DAX and France's CAC 40 down by 0.2%, and Italy's FTSE MIB just below the flatline [1] Federal Reserve Meeting - The U.S. Federal Reserve's two-day meeting begins on Tuesday, with a 96% chance of a 25 basis-point rate cut anticipated by the market [2] - Traders are looking for signals from Fed Chair Jerome Powell regarding another potential rate cut at the final meeting of the year in December due to concerns about a weakening labor market [2] Economic Data and Geopolitical Concerns - The Fed is facing an economic data blackout due to the ongoing U.S. government shutdown, with limited recent data available, including last week's inflation report [3] - Geopolitical issues, particularly the U.S.-China trade dispute, are also significant for investors, with a meeting scheduled between President Trump and President Xi Jinping in South Korea to address trade tensions [3] Trade Negotiations - Both the U.S. and China appear to be in a conciliatory mood, having agreed on a framework for a potential trade deal that includes topics such as rare earths export restrictions, soybean purchases, and TikTok [4] - President Trump expressed optimism about reaching a deal with President Xi during their upcoming meeting at the APEC Summit [4] Earnings Reports - Key earnings reports in Europe on Tuesday include Novartis, BNP Paribas, Capgemini, Air Liquide, Iberdrola, ASM International, and Logitech [5] - HSBC, Europe's largest lender, reported third-quarter profits that exceeded expectations [5]