HSBC to keep highest yield among Greater China’s banks: JPMorgan

HSBC will retain the highest return to shareholders among lenders in the Greater China region, according to JPMorgan analysts, who have raised their price target for the bank’s shares twice since July.

The Hong Kong bank’s shares may advance to HK$122 by the end of 2026, JPMorgan said after raising its price target on August 1 from a July 22 revision of HK$118. The stock rose 0.2 per cent in a declining market to HK$96.50 in Hong Kong on Wednesday.

The 160-year-old bank, which traces its roots to Hong Kong and Shanghai, was likely to return between 9 per cent and 11 per cent to shareholders this year, the highest yield among banks in the region, said JPMorgan analysts Katherine Lei, Lincoln Yu, Chen Haomin, Kian Abouhossein, Sheel Shah and Benkat Madasu.

The bank booked a one-off loss of US$2.1 billion from its diluted stake in Bank of Communications (Bocom), which drove its second-quarter pre-tax profit to slide 29 per cent from a year earlier to US$6.33 billion, HSBC said on July 30. Interim pre-tax profit fell 26.5 per cent to US$15.8 billion in the six months ended June.

A general view of HSBC Building in Central on July 30, 2025. Photo: Eugene Lee

It announced a second-quarter dividend of 10 US cents per share and set aside US$3 billion to buy back its own stock over the next three months.

The dividend will not be derailed because HSBC retains a capital buffer by carrying US$14 billion in outstanding threshold deductions, compared to Bocom’s US$21 billion carrying value in the first half of the year. Any further impairment on Bocom below US$14 billion is expected to have a muted impact on HSBC’s capital, dividend payments or share buy-backs, according to JPMorgan.

South China Morning Post