JP Morgan says Hong Kong banks' 1H26 results broadly beat expectations,
supported by non-interest income and stronger-than-expected pre-provision
operating profit. Small banks still face elevated credit costs; large banks
fared better. HSBC, Standard Chartered and Bank of China Hong Kong reported
shareholder total‑return metrics slightly below JP Morgan's expectations. JP
Morgan sees scope for upward revisions to consensus EPS and notes that firmer
market odds of further Fed hikes could help sentiment. The firm remains
constructive on the sector, ranking large-cap banks Standard Chartered > HSBC >
Bank of China Hong Kong with price targets of HK$310, HK$205 and HK$53.3, all
Overweight. JP Morgan's coverage universe posted average 1H26 profit growth of
33% YoY versus 4% in 2025, driven by an ~50% rebound at HSBC/Hang Seng from
sharply lower credit costs and improved non-operating items; other banks showed
high-single to low-double-digit growth led by resilient pre-provision operating
profit.
