Annual Financial Report - 17 of 44

2011

Retail Bankingand WealthManagement US$m

Commercial

Banking US$m

Global Bankingand Markets US$m

Global

Private Banking US$m

Other

US$m

Inter- segment

elimination64

US$m

Total US$m

Profit/(loss) before tax

Net interest income ...............

8,931

1,528

893

187

9

(68)

11,480

Net fee income/(expense) ......

1,836

551

773

149

(1)

-

3,308

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

(946)

34

261

17

(26)

-

(660)

Net interest income/(expense)on trading activities ............

25

1

205

-

(1)

68

298

Net trading income/(expense)56

(921)

35

466

17

(27)

68

(362)

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

-

-

-

-

967

-

967

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

-

-

(5)

-

2

-

(3)

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

-

-

(5)

-

969

-

964

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

58

7

195

-

2

-

262

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

15

9

13

3

-

-

40

Net earned insurance premiums

236

-

-

-

-

-

236

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

(125)

110

193

11

2,244

(2,207)

226

Total operating income ......

10,030

2,240

2,528

367

3,196

(2,207)

16,154

Net insurance claims65 ............

(154)

-

-

-

-

-

(154)

Net operating income52 ......

9,876

2,240

2,528

367

3,196

(2,207)

16,000

Loan impairment (charges)/ recoveries and othercredit risk provisions ..........

(6,929)

(105)

(11)

30

(1)

-

(7,016)

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

2,947

2,135

2,517

397

3,195

(2,207)

8,984

Total operating expenses .......

(5,615)

(1,166)

(1,642)

(307)

(2,396)

2,207

(8,919)

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

(2,668)

969

875

90

799

-

65

Share of profit/(loss) inassociates and joint ventures

3

33

-

-

(1)

-

35

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

(2,665)

1,002

875

90

798

-

100

%

%

%

%

%

%

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

(12.2)

4.6

4.0

0.4

3.7

0.5

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

56.9

52.1

65.0

83.7

75.0

55.7

Balance sheet data49

US$m

US$m

US$m

US$m

US$m

US$m

Loans and advances to customers (net) reported in:

- loans and advances to customers (net) ................

86,490

32,215

19,289

4,753

-

142,747

- assets held for sale(disposal groups) ..............

31,058

520

-

-

-

31,578

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

144,278

43,747

320,783

7,138

10,378

(22,022)

504,302

Customer accounts reported in:

- customer accounts ...........

63,558

47,003

30,465

14,862

94

155,982

- liabilities of disposalgroups held for sale ..........

10,104

5,040

-

-

-

15,144

2010

Retail Bankingand Wealth Manage-

ment17

US$m

Commercial

Banking US$m

Global Banking and

Markets17

US$m

Global

Private Banking US$m

Other

US$m

Inter- segment

elimination64

US$m

Total US$m

Profit/(loss) before tax

Net interest income/(expense)

9,912

1,525

952

190

(71)

(69)

12,439

Net fee income/(expense) ......

2,142

534

845

149

(6)

-

3,664

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

(472)

17

563

13

(12)

-

109

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

24

2

93

-

17

69

205

Net trading income/(expense)56

(448)

19

656

13

5

69

314

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

-

-

-

-

111

-

111

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

6

-

(2)

-

(4)

-

-

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

6

-

(2)

-

107

-

111

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

5

(6)

141

-

3

-

143

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

18

7

12

3

2

-

42

Net earned insurance premiums

245

-

-

-

-

-

245

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

(250)

242

71

15

2,351

(2,196)

233

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

11,630

2,321

2,675

370

2,391

(2,196)

17,191

Net insurance claims65 ............

(148)

-

-

-

4

-

(144)

Net operating income52 ..........

11,482

2,321

2,675

370

2,395

(2,196)

17,047

Loan impairment (charges)/ recoveries and othercredit risk provisions ..........

(8,194)

(323)

184

38

-

-

(8,295)

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

3,288

1,998

2,859

408

2,395

(2,196)

8,752

Total operating expenses .......

(5,408)

(1,081)

(1,310)

(297)

(2,422)

2,196

(8,322)

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

(2,120)

917

1,549

111

(27)

-

430

Share of profit/(loss) inassociates and joint ventures

4

22

-

-

(2)

-

24

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

(2,116)

939

1,549

111

(29)

-

454

%

%

%

%

%

%

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

(11.1)

5.0

8.1

0.6

(0.2)

2.4

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

47.1

46.6

49.0

80.3

101.1

48.8

Balance sheet data49

US$m

US$m

US$m

US$m

US$m

US$m

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

131,194

30,277

24,338

4,723

-

190,532

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

154,204

39,213

306,298

5,824

9,373

(22,425)

492,487

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

76,817

46,425

22,324

12,812

108

158,486

2011

2010

Card and RetailServices US$m

Run-offportfolios US$m

Rest of RBWM US$m

NorthAmerica RBWM

US$m

Card and Retail Services US$m

Run-offportfolios US$m

Rest of RBWM US$m

North America RBWM US$m

Profit/(loss) before tax

Net interest income ....

4,128

2,990

1,813

8,931

4,727

3,404

1,781

9,912

Net fee income/(expense) ....

1,273

(49)

612

1,836

1,333

55

754

2,142

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

-

(1,145)

199

(946)

-

(377)

(95)

(472)

Net interest income ontrading activities ......

-

-

25

25

-

-

24

24

Net trading income/(expense)56..

-

(1,145)

224

(921)

-

(377)

(71)

(448)

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

-

-

-

-

-

-

-

-

Net income from otherfinancial instruments designated at fair value .......................

-

-

-

-

-

-

6

6

Net income from financial instruments designatedat fair value .............

-

-

-

-

-

-

6

6

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

-

55

3

58

-

5

-

5

Dividend income .........

-

5

10

15

3

3

12

18

Net earned insurance premiums.................

-

230

6

236

-

236

9

245

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

61

(185)

(1)

(125)

52

(253)

(49)

(250)

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

5,462

1,901

2,667

10,030

6,115

3,073

2,442

11,630

Net insurance claims65 .

-

(156)

2

(154)

-

(152)

4

(148)

Net operating income52 ................

5,462

1,745

2,669

9,876

6,115

2,921

2,446

11,482

Loan impairment charges and other credit risk provisions ................................ ................................

(1,600)

(4,982)

(347)

(6,929)

(2,174)

(5,811)

(209)

(8,194)

Net operating income/(expense) .

3,862

(3,237)

2,322

2,947

3,941

(2,890)

2,237

3,288

Total operating expenses ..................

(1,801)

(1,238)

(2,576)

(5,615)

(1,962)

(1,190)

(2,256)

(5,408)

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

2,061

(4,475)

(254)

(2,668)

1,979

(4,080)

(19)

(2,120)

Share of profit in associatesand joint ventures ....

-

3

-

3

-

4

-

4

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

2,061

(4,472)

(254)

(2,665)

1,979

(4,076)

(19)

(2,116)

%

%

%

%

%

%

%

%

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

9.4

(20.4)

(1.2)

(12.2)

10.4

(21.4)

(0.1)

(11.1)

Cost efficiency ratio ...

33.0

70.9

96.5

56.9

32.1

40.7

92.2

47.1

Balance sheet data49

US$m

US$m

US$m

US$m

US$m

US$m

US$m

US$m

Loans and advances to customers (net) reported in:

- loans and advances tocustomers.............

-

43,543

42,947

86,490

30,710

55,010

45,474

131,194

- assets held for sale(disposal groups) ..

29,137

-

1,921

31,058

-

-

-

-

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

30,635

56,830

56,813

144,278

32,044

70,587

51,573

154,204

Customer accounts reported in:

- customer accounts ............................

-

-

63,558

63,558

-

-

76,817

76,817

- liabilities of disposalgroups held for sale ............................

-

-

10,104

10,104

-

-

-

-