HSBC HOLDINGS(HK:00005) Ge Long Hui·2026-01-07 02:25Core Viewpoint - DBS maintains an optimistic outlook on HSBC Holdings' revenue and profit growth for the fiscal year 2026, driven by three main factors [1] Group 1: Revenue and Profit Growth - The downward risk to net interest income will be offset by structural hedges and favorable factors such as reduced funding costs [1] - Non-interest income is expected to maintain strong growth momentum [1] - The Hong Kong capital market is anticipated to remain robust in fiscal year 2026 [1] Group 2: Credit Costs and Forecast Adjustments - Credit costs are expected to be manageable, as there are no significant signs of deterioration in commercial real estate credit risk in Hong Kong [1] - DBS has raised its profit forecasts for fiscal years 2026 and 2027 by 2% and 7% respectively [1] - The forecast for net interest income for fiscal years 2025-2027 has been increased to over $43 billion [1] Group 3: Market Conditions and Ratings - The headwinds facing the bank's net interest income in fiscal year 2026 are smaller compared to the previous year, due to a reduced rate of interest cuts in the U.S. and a recovery in Hong Kong interbank offered rates from historical lows in Q2 2025 [1] - DBS reaffirms a "Buy" rating for HSBC, raising the target price from HKD 113.7 to HKD 139.2, which corresponds to a projected price-to-book ratio of 1.47 times for fiscal year 2026 [1]