HSBC costs limit forecasts as DBS raises 2026 income guidance
The private-equity proposals for Bodycote from CVC and Veritas are each worth about 1.56 billion pounds, according to the roundup. The offers follow a previous 1.52 billion-pound proposal from Apollo. Berenberg analysts said Bodycote’s value could exceed 1,000 pence a share, or 1.7 billion pounds, in a “blue-sky scenario.”
Berenberg also said the bidders could raise their prices and still earn strong returns over five years because of Bodycote’s growth, margin and cash-flow potential. Bodycote shares fell 0.8% to 915.5 pence in London in that market update.
RBC Capital Markets analyst Mark Fielding described the offers as insufficiently generous and cited what he called a harsh market for U.K. industrial stocks. The proposals value Bodycote at 907.8 pence a share from CVC and 906.8 pence from Veritas, excluding a 7.2 pence interim dividend. Each represents a 21% premium to Bodycote’s last closing price before takeover interest became public.
Bodycote’s board said it would likely recommend both proposals to shareholders. Fielding wrote that bids for Dowlais and recently Rotork had also undervalued industrial assets. Bodycote shares were down 1% at 914 pence in the update from RBC Capital Markets.
Fitch Ratings said the credit profiles of Malaysia’s six largest banks should remain resilient, supported by the operating environment, asset quality, profitability and capitalization. Fitch expects economic growth to moderate in 2026 but said domestic demand and stable inflation could continue to support underlying conditions.
Fitch said low nonperforming loans and fewer loans showing heightened credit risk should support asset quality. It expects stable profitability as strong deposit bases and balance-sheet management cushion pressure from lower interest rates and competition for deposits. The ratings agency said material deterioration in risk profiles, asset quality or capitalization could create downward ratings pressure.
DBS Group raised its 2026 guidance for total income growth after previously expecting income to remain stable. The Singapore lender also expects mid-teen percentage growth in commercial-book noninterest income, compared with its earlier expectation of high-single-digit growth.
Citi analyst Tan Yong Hong said the updated guidance appeared largely in line with expectations. Tan said the commercial-book figure could imply slower growth in the second half because first-half growth was 20%. DBS’s second-quarter profit exceeded consensus estimates, although Tan said the result was helped by volatile items, including a repayment-driven general-provisions writeback and lower-than-expected total provisions. Citi maintained its buy rating and S$73.50 target price. DBS shares rose 1.8% to 74.86 Singapore dollars.
AmInvestment Bank analyst Chan Jit Hoong downgraded Public Bank to hold from buy after the stock’s recent rally. Public Bank’s share price had gained 18% year to date, compressing its dividend yield to about 5%, broadly in line with peers, Chan said. He also said the bank’s 3.5 billion ringgit capital-management plan appeared largely reflected in the price.
Chan said Public Bank had limited balance-sheet levers to drive returns because its loan-to-deposit and loan-to-fund ratios were already high. He also said higher information-technology spending could support digitalization and commercial-banking growth while putting pressure on the bank’s sector-leading cost-to-income ratio. AmInvestment Bank kept a 5.60 ringgit target price. Public Bank shares fell 0.4% to 5.25 ringgit.
UBS analysts said HSBC Holdings’ cost guidance limited the scope for raising forecasts and that wealth management remained important to the market’s view of the bank. HSBC’s wealth segment produced a 21% increase in noninterest income and 8% annualized net-new-money growth in the second quarter, according to UBS.
The analysts said banking net interest income remained the larger revenue driver. They also identified HSBC’s signal that it might invest in revenue opportunities in 2027 as important. UBS said profit margins could be tighter than previously expected and left its 2026 through 2028 earnings-per-share estimates largely unchanged as higher income was offset by additional costs. HSBC shares fell 4.6% in London.