Annual Financial Report - 10 of 48

2012

Retail Banking and WealthManagement US$m

Commercial

Banking US$m

Global Bankingand Markets US$m

GlobalPrivate Banking US$m

Other73

US$m

Inter- segment

elimination85

US$m

Total US$m

Profit before tax

Net interest income/(expense)

20,298

10,361

6,960

1,294

(730)

(511)

37,672

Net fee income ......................

7,205

4,470

3,329

1,232

194

-

16,430

Trading income/(expense) excluding net interestincome ...............................

276

617

3,588

476

(549)

-

4,408

Net interest income ontrading activities .................

28

16

2,102

14

12

511

2,683

Net trading income/(expense)78

304

633

5,690

490

(537)

511

7,091

Changes in fair value of long-term debt issued and related derivatives ..........................

-

-

-

-

(4,327)

-

(4,327)

Net income/(expense) fromother financial instrumentsdesignated at fair value .......

1,893

250

1,094

-

(1,136)

-

2,101

Net income/(expense) from financial instrumentsdesignated at fair value .......

1,893

250

1,094

-

(5,463)

-

(2,226)

Gains less losses fromfinancial investments .........

96

22

730

(3)

344

-

1,189

Dividend income ....................

24

18

148

6

25

-

221

Net earned insurance premiums

11,191

1,786

25

42

-

-

13,044

Gains on disposal of US branch network, US cards businessand Ping An .......................

3,735

277

-

-

3,012

-

7,024

Other operating income .........

1,472

536

313

151

5,487

(5,859)

2,100

Total operating income ......

46,218

18,353

18,289

3,212

2,332

(5,859)

82,545

Net insurance claims86 ............

(12,357)

(1,802)

(16)

(40)

-

-

(14,215)

Net operating income21 ......

33,861

16,551

18,273

3,172

2,332

(5,859)

68,330

Loan impairment charges and other credit risk provisions .

(5,515)

(2,099)

(670)

(27)

-

-

(8,311)

Net operating income .........

28,346

14,452

17,603

3,145

2,332

(5,859)

60,019

Employee expenses87 .............

(5,532)

(2,247)

(3,764)

(915)

(8,033)

-

(20,491)

Other operating expenses .......

(14,237)

(5,351)

(6,143)

(1,228)

(1,336)

5,859

(22,436)

Total operating expenses .......

(19,769)

(7,598)

(9,907)

(2,143)

(9,369)

5,859

(42,927)

Operating profit/(loss) .......

8,577

6,854

7,696

1,002

(7,037)

-

17,092

Share of profit in associatesand joint ventures ...............

998

1,681

824

7

47

-

3,557

Profit/(loss) before tax .......

9,575

8,535

8,520

1,009

(6,990)

-

20,649

%

%

%

%

%

%

Share of HSBC's profitbefore tax ...........................

46.4

41.3

41.3

4.9

(33.9)

100.0

Cost efficiency ratio ..............

58.4

45.9

54.2

67.6

-

62.8

Balance sheet data74

US$m

US$m

US$m

US$m

US$m

US$m

Loans and advances tocustomers (net) ..................

378,040

288,033

283,842

45,213

2,495

997,623

Total assets ...........................

536,244

363,659

1,942,470

118,440

201,741

(470,016)

2,692,538

Customer accounts .................

562,151

338,405

332,115

105,772

1,571

1,340,014

2011

Retail Bankingand WealthManagement US$m

Commercial

Banking US$m

Global Bankingand Markets US$m

GlobalPrivate Banking US$m

Other73

US$m

Inter- segment

elimination85

US$m

Total US$m

Profit before tax

Net interest income/(expense)

24,101

9,931

7,263

1,439

(911)

(1,161)

40,662

Net fee income ......................

8,226

4,291

3,227

1,382

34

-

17,160

Trading income/(expense) excluding net interestincome ...............................

(562)

565

3,306

415

(441)

-

3,283

Net interest income ontrading activities .................

43

19

1,898

16

86

1,161

3,223

Net trading income/(expense)78

(519)

584

5,204

431

(355)

1,161

6,506

Changes in fair value of long-term debt issued and related derivatives ..........................

-

-

-

-

4,161

-

4,161

Net income/(expense) fromother financial instrumentsdesignated at fair value .......

(761)

33

(72)

-

78

-

(722)

Net income/(expense) from financial instrumentsdesignated at fair value .......

(761)

33

(72)

-

4,239

-

3,439

Gains less losses fromfinancial investments .........

124

20

761

3

(1)

-

907

Dividend income ....................

27

15

75

7

25

-

149

Net earned insurance premiums

10,882

1,956

47

-

(13)

-

12,872

Other operating income .........

907

483

577

30

6,127

(6,358)

1,766

Total operating income .........

42,987

17,313

17,082

3,292

9,145

(6,358)

83,461

Net insurance claims86 ............

(9,454)

(1,702)

(25)

-

-

-

(11,181)

Net operating income21 ..........

33,533

15,611

17,057

3,292

9,145

(6,358)

72,280

Loan impairment charges and other credit risk provisions .

(9,319)

(1,738)

(984)

(86)

-

-

(12,127)

Net operating income ............

24,214

13,873

16,073

3,206

9,145

(6,358)

60,153

Employee expenses87 .............

(6,538)

(2,184)

(4,196)

(1,351)

(6,897)

-

(21,166)

Other operating expenses .......

(14,664)

(5,037)

(5,526)

(915)

(595)

6,358

(20,379)

Total operating expenses .......

(21,202)

(7,221)

(9,722)

(2,266)

(7,492)

6,358

(41,545)

Operating profit .....................

3,012

6,652

6,351

940

1,653

-

18,608

Share of profit in associatesand joint ventures ...............

1,258

1,295

698

4

9

-

3,264

Profit before tax ....................

4,270

7,947

7,049

944

1,662

-

21,872

%

%

%

%

%

%

Share of HSBC's profitbefore tax ...........................

19.6

36.3

32.2

4.3

7.6

100.0

Cost efficiency ratio ..............

63.2

46.3

57.0

68.8

81.9

57.5

Balance sheet data74

US$m

US$m

US$m

US$m

US$m

US$m

Loans and advances tocustomers (net) ..................

357,907

262,039

276,463

41,856

2,164

940,429

Total assets ...........................

540,548

334,966

1,877,627

119,839

180,126

(497,527)

2,555,579

Customer accounts .................

529,017

306,174

306,454

111,814

466

1,253,925