HSBC Holdings, the world's third-largest bank by market value, is forecast to report a 27 percent rise in pre-tax profit to about US $7.75 billion, according to the median of a Reuters poll.
However optimism has been soured by lower-than-expected first-half net profit posted by the Bank of East Asia (BEA) on Friday. Investors had been expecting higher earnings by most banks as they had put aside less money for bad debt provisions.
"Investors were let down by BEA's results so they are likely to be more cautious on entering the market this week until a clearer earnings trend emerges," said Kenny Tang, a director at Tung Tai Securities.
The Hang Seng Index, which groups the city's 33 blue chip stocks, lost 0.93 percent last week, to close at 12,238.03 on Friday.
US blue chips, which often influence the direction of Hong Kong stocks because of close trade ties between the two markets, climbed for the fourth day in a row on Friday but gains were capped by another surge in oil prices.
A slew of economic data hitting the US market also sent conflicting messages on the US economy's strength.
HSBC's earnings are expected to be helped by its acquisition of US consumer finance company Household International last year for US $14.8 billion.
But the focus will be on HSBC's bad debt charge as the purchase of Household has exposed the traditionally conservative bank to high-margin lending to people with patchy credit records in the United States, analysts said.
The bank's subsidiary unit, Hang Seng Bank Ltd, is scheduled to report its first-half results on the same day. The city's third-largest lender is expected to report flat earnings for the period due to low interest rates, analysts said.