"Large Banks" Research: BOC HONG KONG has the potential to enhance shareholder returns and cross-border service capabilities, maintaining a "Buy" rating

HSBC Research published a report indicating optimism for BOC Hong Kong (02388.HK), highlighting its potential to enhance shareholder returns and its leading cross-border service capabilities. The bank maintains a "Buy" rating for BOC Hong Kong, with a target price of HKD 51.

The bank stated that the board of BOC Hong Kong has approved the shareholder return plan framework for the fiscal years 2026 to 2028, with final details pending approval from external regulatory bodies and internal governance procedures, expected to be implemented when the first half performance is announced.

The bank also anticipates that BOC Hong Kong's net interest margin in the first quarter will be pressured by the high base from the fourth quarter of last year, along with the decline in the Hong Kong Interbank Offered Rate (HIBOR) and the lagging effect of repricing time deposits, which may drag down the net interest margin. Additionally, wealth management income is likely to become a major driver of revenue growth in the next 3 to 5 years