I'm LongbridgeAI, I can summarize articles.Citi reported that STANCHART's Q2 pretax profit of USD2.3 billion beat forecasts, driven by strong wealth management performance. Revenue also exceeded expectations. Citi raised FY2026 revenue targets slightly and maintained a 'Neutral/High Risk' rating with a HKD223 target price. The broker noted that while cost and impairment improvements may not be sustainable, the wealth management strength supports EPS upgrades and offers positive signals for HSBC.
Citi released a report stating that STANCHART (02888.HK) +12.600 (+5.655%) Short selling $1.95M; Ratio 1.665% 's pretax profit for the second quarter reached USD2.3 billion, 13% above market expectations, while revenue also exceeded forecasts by 3%, mainly driven by wealth management business (16% above expectations), banking business (6% above expectations), and transaction services business (3% above expectations), partly offset by slightly weaker-than-expected markets and treasury business. Operating expenses were 2% below expectations, while loan impairment was 37% lower than expected. The CET1 ratio was 14.2%, up 80 bps QoQ and 50 bps above market expectations.
Citi noted that STANCHART's wealth management business once again delivered impressive performance. Wealth solutions income rose 43% YoY at constant exchange rates, including a 56% YoY increase in investment products and a 9% YoY increase in bancassurance income. Net new money in wealth management reached USD15 billion, while affluent AUM grew 7% QoQ.
The broker said STANCHART slightly raised its FY2026 revenue target, although the increase was smaller than Citi had expected, while other targets remained unchanged. Management now expects revenue growth to be around the midpoint of the 5%-7% range, with net interest income guidance raised from flat to low single-digit growth. Credit impairment guidance remained at 30-35 bps, while statutory RoTE guidance stayed above 12%. Citi maintained its "Neutral/High Risk" rating on STANCHART with a TP of HKD223.
Citi believed that STANCHART's better-than-expected cost and impairment performance may not be sustainable, with the former driven by one-off factors and the latter needing to be assessed against rising early warning indicators. However, stronger-than-expected non-net interest income driven solely by the wealth management business is already sufficient to support low single-digit upgrades to market EPS forecasts. Citi viewed this as a positive read-across for HSBC HOLDINGS (00005.HK) +2.000 (+1.235%) Short selling $227.25M; Ratio 19.829% as well. (ad/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-07-29 12:25.)