HSBC will continue to pay the dividends to its shareholders, as it holds a comfortable capital buffer of $14 billion in outstanding threshold deductions.
HSBC Bank appears to be exceeding expectations with its performance, as JPMorgan analysts have already raised the bank’s share price target twice since July. Analysts are now expecting the Hong Kong bank to retain the highest return to shareholders among lenders in the Greater China region.
After changing its price target from HK$118 on July 22 to HK$122 on August 1, JPMorgan predicted that the bank’s shares may hit HK$122 by the end of 2026. HSBC’s Hong Kong-listed shares ended Wednesday’s trading session at HK$97, up 0.7%.
This year, HSBC is expected to return between 9% and 11% to its shareholders, the highest yield among banks across Greater China. The Bank reported on July 30 that its pre-tax earnings for the second quarter were $6.33 billion, a 29% decrease from the previous year, due to a one-time loss of $2.1 billion from its reduced holding in Bank of Communications (Bocom).
In the six months that ended in June, the intermediate pre-tax profit dropped 26.5% to $15.8 billion. HSBC second-quarter dividends are also 10 cents a share, and the Bank will buy back its own shares over the next three months, having set aside $3 billion for that purpose.
The bank will continue to pay the dividends to its shareholders, as it holds a comfortable capital buffer of $14 billion in outstanding threshold deductions. Bocom, on the other hand, maintains a $21 billion carrying value for this year’s first half. Analysts have concluded that unless Bocom fares below a dismal $14 billion, any other snags are unlikely to hurt HSBC’s capital, dividend payment ability or share buy-backs.
In March, it was reported that Bocom planned to raise $8.90 billion through a private placement of shares. HSBC’s H1 revenue fell by 9%, reaching a total of $34.1 billion. However, it held out strongly on tangible equity for the same period, at 14.7%.
JPMorgan attributed declining revenue to asset disposals, interest rate cuts and slowing loan growth. However, analysts did highlight that the Bank’s fee income was strong and that it performed well in transaction banking and wealth management.
The Bank expects that bad debt provisions will be on an upward incline this year amid Hong Kong’s commercial real estate challenges, tariff wars and global interest rate changes. However, the JPMorgan report also affirmed that HSBC’s exposure to risks from the Hong Kong commercial real estate market was controllable, although an overabundance of office space was a persistent issue.
In July, news broke that the UK-based lender made a total of $500 million in provisions on office and commercial properties across Hong Kong city in 2025’s first six months, which is five times more than last year’s figures.
HSBC also plans to become an alternative stablecoin wallet rather than an issuer, after Hong Kong’s new crypto regulations became law on August 01. According to this regulation, established financial institutions can now issue fiat reserve-backed stablecoins. The Hong Kong Monetary Authority (HKMA) has stated that no stablecoin license has been granted yet, but those institutions interested in becoming issuers should approach the HKMA by the end of this month.
HSBC began its tokenised deposit services in May of this year. This service allows wholesale clients to make round-the-clock cross-border transactions in Hong Kong and Singapore. These services are likely to extend to clients across the UK and Europe next month and will be available in the US and the UAE next year.
