The impact of the trade war is not obvious, only 500 million

The global economy is overcast, especially the Sino-US trade war is dragging the world at any time. HSBC’s (00005) third-quarter results have not been as large as expected. The management said that there is no trade war for the customer asset quality. With a major impact, only an additional $71 million (approximately HK$554 million) was provided for trade disputes and tariffs.

Customer investment is cautious

Fan Ning, CEO of HSBC, pointed out in an analyst conference call that most of the customers are still optimistic about the prospects. The confidence of customers in Asia is particularly high. So far, no Sino-US trade war has caused adverse effects on the Group. Finance Director Mai Rongen is more cautious, referring to the early provision of the new accounting standards (IFRS-9) from the beginning of this year, but did not reflect the factors of the full start of the trade war.

The investment community expects that the impact of the Sino-US trade war on the economy will not emerge until the end of this year or early next year. Mai Rongen said that at this stage, there is no intention to make any speculations, and there are no relevant factors worthy of making large pre-early provisions. The internal macroeconomic forecast also did not take into account the factors that markedly worsened the trade war.

The HSBC Performance Report mentioned that there were concerns about continued escalation of tariffs and other trade restrictions in the third quarter, especially for Hong Kong Retail Banking and Wealth Management (RBWM), Industrial and Commercial Finance (CMB), Global Banking and Capital Markets (GBM). The impact of making an extra provision.

In terms of actual operations, Mr. Mai Rongen stressed that there has been no significant adverse development in global trade activities. I saw that the client’s investment attitude is more prudent than before. At present, HSBC’s credit quality is still in the retail banking, corporate banking, global banking and capital markets. Good, not expected to deteriorate significantly in the short term, and the early provision of $71 million is the preparation of management for the potential risks of trade warfare.

Some analysts believe that HSBC manages a huge balance sheet and should not make large pre-early provisions in one quarter. As the provision for quarterly impairment has risen significantly, it is believed that the future will increase quarter by quarter.