Hong Kong banks are scheduled to announce their first-quarter 2026 results between late April and May 5. Net interest income is anticipated to decline quarter-on-quarter, though this is expected to be offset by robust revenue from wealth management and market operations. Macroeconomic uncertainty persists, with credit quality emerging as a key focus for the market. The firm expresses a more favorable outlook toward international banks. It maintains an "overweight" rating on HSBC HOLDINGS (00005) and STANCHART (02888), while keeping a "underweight" rating on BOC HONG KONG (02388). The report indicates that a key feature of the Hong Kong banks' Q1 2026 results will be quarter-on-quarter pressure on net interest income, attributable to a 66 basis point drop in HIBOR. However, this impact is projected to be counterbalanced by strong wealth management and market revenues, coupled with effective cost control. Credit quality will remain a market focal point, encompassing factors such as early provisioning by HSBC HOLDINGS and STANCHART, BOC HONG KONG's exposure to Hong Kong commercial real estate risks, and management commentary on geopolitical influences. The capital positions of all three banks are expected to remain stable. HSBC HOLDINGS is anticipated to distribute a quarterly dividend of $0.10 per share, while BOC HONG KONG is expected to pay a quarterly dividend of HK$0.29 per share. The firm has raised its profit forecast for BOC HONG KONG, reflecting an expectation for one fewer interest rate cut in 2026.