JPMorgan has released a research report stating that it expects HSBC Holdings (00005) and Standard Chartered (02888) to report third-quarter revenue growth of 7% and 8% year-on-year respectively, with adjusted pre-tax profit rising 11% and 7% year-on-year respectively.

The bank believes that both banks will sustain their revenue growth momentum, but it prefers Standard Chartered, mainly due to its stronger ROTE and EPS growth over the forecast period, lower valuation requirements, and lower downside risk from buybacks.

JPMorgan noted that both banks have indicated they have not seen any significant impact from China's tightening measures on client fund flows or new client acquisition, and therefore it expects another strong quarter for wealth management businesses, although risk sentiment remains relatively weak.

The bank pointed out that looking ahead, higher interest rates should provide support for net interest income, and it expects business volume growth and asset quality to remain solid.

Both banks benefit from structural growth themes such as Asian wealth management, capital market activities, and RMB internationalization, which could provide upside potential for earnings per share in the medium term.

Additionally, book value compounding and capital distributions, including dividends and buybacks, should support annual returns of 13% and 14% for HSBC and Standard Chartered respectively.