机构:德意志银行
评级:Hold
目标价:78港币
Results due on 20 February 2018
HSBC is reporting 4Q17 results on 20 February 2018 at 4am UK time - the last set of results under CEO Stuart Gulliver. We forecast underlying PBT of US$3,636m which is down QoQ driven by lower QoQ revenues in GBM, higher costs (UK bank levy at c.US$1bn) and higher impairments (we have assumed an uptick in Commercial Banking on Steinhoff-related exposures). We expect capital to print at 14.5%, down 10bps QoQ driven in part by the US tax changes and associated DTA write-off. Our forecasts vs. consensus are shown overleaf: we are lower on an underlying basis for 4Q17, 1% ahead in 2018, and broadly in Iine for 2019.
Key issues for 4Q17 results:
US Tax impact: we estimate a c.10bps impact on CET1 from the US tax changes, and around US$1.9bn impact to TNAV. At this stage we have not changed our tax rate assumption (24%) and consensus appears similar (23-24% in 2018/19), however we expect questions on the call on the potential impact longer term. Another area of focus is likely to be BEAT, given HSBC's Holding Company structure typically issues debt and downstreams to local subsidiaries. It is unclear whether HSBC USA will be impacted by this.
Equity movements in the quarter: with USD weakening in the quarter (and in 1Q18) this should provide some tailwinds from non-USD earnings and also in structural FX movements for the quarter (we estimate c.US $900m positive impact on TNAV this quarter). Meanwhile 3Q17 scrip dividend takeup was lower than we had forecast (12%) which represents a small headwind on CET1 in the quarter.
Rate sensitivity: as noted in our last HSBC report, rate sensitivity has increased over the last 2 years, particularly in sterling block. We expect some focus at results on any changes to the rate sensitivity guidance (currently US$2.1bn annualised for a 100bps rise across USD + HKD currency blocks). Our forecasts assume 4x US rate hikes this year, and 1x GBP rate hike.
Cost jaws: at 3Q17 results, management said they remained committed to positive cost jaws for FY17, even after a planned increase in investment of US$400m in 2H17. Despite some revenue headwinds in 4Q17 in the IB, we expect overall cost jaws of c.2% for FY17. Looking longer term, we expect higher cost jaws in FY18 (due to benefits of rising rates on revenues in FY18), but c.2% in 2019/20. Management guidance is for.