LONDON - Analysts at the securities unit of HSBC Holdings PLC lowered their earnings estimates and share price target for their own parent company after citing weakness in profit margins and lower-than-expected noninterest income.
HSBC is one of a small number of banking companies, including Deutsche Bank AG, whose analysts issue reports on their parent companies. Analysts at Credit Suisse Group, BNP Paribas SA, and Commerzbank don't advise clients on their own firms.
In a research note dated March 6, Michael Lever and his associates lowered their estimate for HSBC's pretax cash profit for this year, excluding one-time items, by 13%, to $11.4 billion. (Earnings reported on a cash basis exclude the amortization of goodwill.)
Last month HSBC, Europe's most valuable banking company, said that its pretax cash profit for last year rose 28% from a year earlier, to $10.3 billion, and per-share earnings rose 23%, to 81 cents. The earnings were less than many analysts, including its own, were expecting.
Mr. Lever attributed the "weakness" in HSBC's earnings last year to a "lower-than-expected group margin" in the second half; "lower-than-expected noninterest income in Europe, North America," and Asia outside Hong Kong; and the weakness of the British pound and the euro compared with the dollar.
HSBC shares have declined 18% since their record closing price on Jan. 24. On Wednesday morning they were trading at $13.09.