Group 1 - Goldman Sachs reported that East Asia Bank's (00023) first-half revenue met expectations, but net interest income and fee income were below forecasts, offset by trading gains [1] - Earnings per share exceeded Goldman Sachs' expectations by 14%, with a dividend payout ratio of 45%, slightly below the forecast of 47% [1] - The interim dividend was set at 39 HKD cents, approximately 10% higher than Goldman Sachs' estimate of 35 HKD cents [1] Group 2 - Goldman Sachs raised its earnings per share estimates for East Asia Bank for the fiscal years 2025 to 2027 by 8%, 11%, and 24%, respectively, and increased the target price by 12% from 10.5 HKD to 11.8 HKD, maintaining a "sell" rating [1] - The management of East Asia Bank anticipates headwinds for net interest margin in the second half of 2025 and maintains a conservative outlook on loan growth [1] - Loan growth is projected to be 2.1%, 2.8%, and 4% year-on-year for the fiscal years 2025 to 2027, with deposit growth estimates adjusted to 5.5%, 3.9%, and 2.9% [1] Group 3 - Goldman Sachs assumes a net interest margin sensitivity (NIM beta) of 0.16 for the current interest rate cut cycle, slightly lower than the previous period [2] - Net interest margin forecasts for East Asia Bank for fiscal years 2025, 2026, and 2027 are 1.78%, 1.8%, and 1.75%, with corresponding net interest income expected to decline by 15%, increase by 5%, and increase by 0.4% [2] - Non-interest income estimates for fiscal years 2025 to 2027 have been raised by 11%, 8%, and 6% due to better-than-expected trading income performance [2] Group 4 - Credit costs for East Asia Bank are expected to be 97 basis points this year, normalizing to 80 and 55 basis points in 2026 and 2027, respectively [2] - Projected dividend payout ratios for fiscal years 2025, 2026, and 2027 are 46%, 49%, and 51%, indicating an average payout ratio of 49% over the next three years, compared to an average of about 40% over the past five years [2]

Core Viewpoint - Goldman Sachs reported that HSBC Holdings (00005) exceeded both the bank's and market's expectations for core earnings in Q2 by 9% and 10% respectively, driven by strong pre-provision profit (PPOP) and better-than-expected non-bank net interest income performance [1] Financial Performance - HSBC's revenue surpassed expectations, primarily due to robust non-bank net interest income [1] - The target price was slightly raised from HKD 109 to HKD 110, maintaining a "Buy" rating [1] Management Guidance - Management reiterated guidance for bank net interest income to reach approximately USD 42 billion by 2025, with cost growth around 3% and a return on tangible equity (ROTE) of 14% to 16% from 2025 to 2027 [1] - The annual credit cost guidance was adjusted upwards to approximately 40 basis points [1] Interest Rate Impact - HSBC management anticipates that if the HIBOR remains at the current level of about 1%, it will negatively impact bank net interest income by approximately USD 1 million per month [1] Earnings Forecast Adjustments - Goldman Sachs slightly raised its bank net interest income forecasts for 2025 to 2027 to USD 41.9 billion, USD 43 billion, and USD 44.1 billion, exceeding market expectations by up to 4% [1] - Earnings per share forecasts for 2025 to 2029 were adjusted upwards by 6%, 5%, 4%, 3%, and 2% respectively based on the revised profit forecasts [1]

Core Viewpoint - Citigroup's report indicates that higher-than-expected credit costs may bring short-term uncertainty to Hang Seng Bank (00011), although the HKD 3 billion share buyback is likely to be well-received by the market, with focus shifting to credit cost outlook [1] Financial Performance Summary - Hang Seng Bank's net profit for the first half of 2025 is projected at HKD 6.3 billion, representing a 22% decrease from the previous half and a 35% year-on-year decline [1] - Operating profit is expected to be HKD 8.5 billion, down 16% from the previous half and 25% year-on-year, which is 14% lower than consensus expectations, primarily due to increased provisions [1] - Total revenue is forecasted to decline by 1% from the previous half but increase by 3% year-on-year, exceeding market expectations by 2%, driven by strong non-interest income [1] - Operating expenses are anticipated to be HKD 7.6 billion, down 1% from the previous half and up 1% year-on-year, which is 2% lower than consensus expectations [1] Provision and Credit Cost Analysis - Provision expenses have risen to HKD 4.9 billion, marking a 49% increase from the previous half and a staggering 224% year-on-year increase, mainly due to increased provisions for Hong Kong commercial real estate (CRE) [2] - The expected credit loss (ECL) model adjustments have led to an additional expense of HKD 640 million [2] - The non-performing loan (NPL) ratio has increased by 0.6 percentage points to 6.7% compared to the end of last year, with the NPL ratio for Hong Kong commercial real estate rising by 5 percentage points to 20% [2]