DBS Bank's Lu Previews HSBC Earnings

The transcript discusses the earnings outlook for the second quarter, focusing on NIM recovery and potential changes in HSBC's royalty targets. It also covers the ongoing discussion between HSBC and Ping An regarding shareholder approval and the potential spinoff of the Asia business. The outlook for interest rates and NIM is analyzed, with expectations of a downward trend. The valuation of Chinese banks is examined, highlighting the impact of COVID policies and property sector issues. Finally, the potential risks to dividend payouts are discussed, with an emphasis on government intervention to manage worst-case scenarios.

What is the expected trend for Hong Kong's NIM in the second quarter?

• A slight recovery

• A significant decline

• A major increase

• No change

What is the expected dividend payout policy for HSBC for FY23 to FY24?

• 40% payout

• 70% payout

• 50% payout

• 60% payout

What is a major challenge for Ping An in achieving their goals with HSBC?

• High operational costs

• Lack of shareholder approval

• Regulatory restrictions

• Insufficient market presence

What is the current target price for the stock mentioned in the discussion?

• 68.9

• 60.2

• 64.8

• 70.5

What is a key factor driving the share price outperformance?

• Dividend policy

• Cost reduction

• Royalty improvement

• Market expansion

At what valuation level are the major SOE banks in China trading?

• 0.5 * P/B

• 0.3 * P/B

• 0.9 * P/B

• 0.7 * P/B

What is the expected impact on China Bank's profit in the base case scenario?

• 8% decrease

• 10% decrease

• 6% decrease

• 4% decrease