Results from HSBC Holdings PLC (LSE:HSBA) were described as "messy" and "noisy" by analysts, but overall the City's reaction was not as bad as the 7% fall in share price suggests.
While full-year profits were up around 80%, those for the fourth quarter were down by the same percentage.
UBS and Bank of America both said the Q4 results reflected a "noisy quarter", hit by a whopping US$5.8 billion of one-time charges that reduced pre-tax profit to just US$1 billion.
Of this, US$3 billion was an impairment to a large stake in China's Bank of Communications, a US$2 billion France disposal and US$0.5 billion from Argentina hyperinflation.
Guidance for 2024 from the board for a "mid-teens" percentage return on tangible equity (ROTE) was reiterated, which if 14% is taken as a low-end mid-teens figure, is in line with the current City consensus.
Underlying pre-tax profit, excluding notables, came to $6.775 billion, UBS calculated, 3% below company consensus.
It was a "messy" quarter in the opinion of analysts at Jefferies, calculating that 'clean' Q4 results excluding things like the China impairment and Argentina, showed pre-provision profit that was 4% ahead of estimates driven by better revenue (+5%) and disappointing costs (6% higher than consensus) as well as 8% better credit costs.
The ROTE commitment was "what matters for the shares today", the Jefferies team said, adding this was "at worst, in-line consensus expectations", and the $2 billion share buyback re-load.
Some guidance was "unclear", they added, and the numbers provided "do not paint the complete picture, in our view, and are thus subject to wide degrees of interpretation by investors".
Cost growth guidance of 5% in 2024, was higher than consensus forecasts, BofA noted, with investment for growth creating a "cost strain" for earnings that led to earnings per share forecasts being trimmed by a couple of cents.
Shareholder distributions impressed BofA though, with a US$0.31 final dividend, for a total 2023 dividend of US$0.61, also soon to be followed by a US$0.21 special payout.
"We expect three more quarterly US$2 billion buybacks, for a total US$8 billion and then a 2024E dividend stable at US$0.61 on a reconfirmed 50% payout," BofA said, which adds up to US$30 billion for shareholders in the coming 13 months.
"But we think investment and franchise sets the bank apart from peers with 5% sustainable top-line momentum over time. In the near term, a 6x PE and 8% ordinary dividend yield are complemented by additional distributions," said BofA, reiterating its 'buy' rating and 760p price objective.
Jefferies also has a 'buy' stance.
UBS, which is 'neutral' on the shares, said the "key issue" is that the company-compiled consensus forecast "appears to still have no rate cuts" in estimates for 2025.
The company's reports a market expectation of 2025 net interest income (NII) falling just 1% year on year to $34.7 billion despite wide expectations for substantial rate cuts.
"Whether these reductions occur in April or June 2024 doesn't matter much for the 2025 maths... Banking NII will contract this year and, given a curve which has the Fed Funds rate at 4.3% and 3.7% in one and two years from now vs. 5.4% at present, it seems clear NII forecasts for the outer years are too high."