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Annual Financial Report - 34 of 41

30th Mar 2011 16:49

RNS Number : 8706D

HSBC Holdings PLC

30 March 2011

Profit/(loss) for the year

	2010
	Europe	Hong Kong	Rest of Asia- Pacific	Middle East	North America	Latin America	Intra- HSBC items	Total
	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m

Interest income ......................	17,550	5,102	6,432	2,003	16,781	11,590	(1,113)	58,345
Interest expense .....................	(6,300)	(856)	(2,604)	(636)	(4,342)	(5,279)	1,113	(18,904)

Net interest income ...............	11,250	4,246	3,828	1,367	12,439	6,311	-	39,441

Fee income ............................	8,334	3,460	2,399	737	4,524	2,366	(703)	21,117
Fee expense ...........................	(1,963)	(498)	(467)	(60)	(860)	(617)	703	(3,762)

Net fee income ......................	6,371	2,962	1,932	677	3,664	1,749	-	17,355

Trading income excluding net interest income ...........	1,461	1,107	1,207	343	109	453	-	4,680
Net interest incomeon trading activities ............	1,402	205	411	27	205	280	-	2,530

Net trading income ................	2,863	1,312	1,618	370	314	733	-	7,210

Changes in fair value of long-term debt issued and related derivatives ..........................	(365)	(2)	(2)	-	111	-	-	(258)
Net income from otherfinancial instruments designated at fair value .......	647	380	26	-	-	425	-	1,478

Net income from financial instruments designated atfair value ............................	282	378	24	-	111	425	-	1,220
Gains less losses from financial investments ........................	486	98	146	(3)	143	98	-	968
Dividend income ....................	20	30	1	7	42	12	-	112
Net earned insurance premiums ...........................................	4,067	4,332	448	-	245	2,054	-	11,146
Other operating income/(expense) ...........................	2,117	1,606	1,598	(8)	233	141	(3,125)	2,562

Total operating income ......	27,456	14,964	9,595	2,410	17,191	11,523	(3,125)	80,014

Net insurance claims incurredand movement in liabilities to policyholders .................	(4,706)	(4,762)	(363)	-	(144)	(1,792)	-	(11,767)

Net operating income before loan impairment chargesand other credit risk provisions .........................	22,750	10,202	9,232	2,410	17,047	9,731	(3,125)	68,247

Loan impairment charges and other credit risk provisions .	(3,020)	(114)	(439)	(627)	(8,295)	(1,544)	-	(14,039)

Net operating income .........	19,730	10,088	8,793	1,783	8,752	8,187	(3,125)	54,208

Employee compensation and benefits .............................	(7,875)	(2,341)	(2,719)	(579)	(3,672)	(2,650)	-	(19,836)
General and administrative expenses .............................	(6,499)	(1,686)	(2,181)	(450)	(4,179)	(3,286)	3,125	(15,156)
Depreciation and impairment of property, plant and equipment	(719)	(237)	(189)	(42)	(288)	(238)	-	(1,713)
Amortisation and impairment of intangible assets .............	(352)	(167)	(54)	(7)	(183)	(220)	-	(983)

Total operating expenses ...	(15,445)	(4,431)	(5,143)	(1,078)	(8,322)	(6,394)	3,125	(37,688)

Operating profit .................	4,285	5,657	3,650	705	430	1,793	-	16,520

Share of profit in associatesand joint ventures ...............	17	35	2,252	187	24	2	-	2,517

Profit before tax ..................	4,302	5,692	5,902	892	454	1,795	-	19,037

Tax expense ..........................	(1,006)	(987)	(962)	(138)	(1,180)	(573)	-	(4,846)

Profit/(loss) for the year ....	3,296	4,705	4,940	754	(726)	1,222	-	14,191

	2009
	Europe	Hong Kong	Rest of Asia- Pacific	Middle East	North America	Latin America	Intra- HSBC items	Total
	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m

Interest income ......................	20,283	5,327	5,877	2,260	19,526	10,091	(1,268)	62,096
Interest expense .....................	(8,015)	(1,132)	(2,338)	(775)	(5,856)	(4,518)	1,268	(21,366)

Net interest income ...............	12,268	4,195	3,539	1,485	13,670	5,573	-	40,730

Fee income ............................	8,576	3,099	1,972	682	5,496	2,230	(652)	21,403
Fee expense ...........................	(2,309)	(430)	(415)	(57)	(679)	(501)	652	(3,739)

Net fee income ......................	6,267	2,669	1,557	625	4,817	1,729	-	17,664

Trading income excluding net interest income ...........	2,861	1,068	1,264	369	35	639	-	6,236
Net interest incomeon trading activities ............	2,598	157	342	25	296	209	-	3,627

Net trading income ................	5,459	1,225	1,606	394	331	848	-	9,863

Changes in fair value of long-term debt issued and related derivatives ..........................	(2,746)	(3)	(1)	-	(3,497)	-	-	(6,247)
Net income from otherfinancial instruments designated at fair value .......	1,321	788	111	-	1	495	-	2,716

Net income/(expense) from financial instruments designated at fair value .......	(1,425)	785	110	-	(3,496)	495	-	(3,531)
Gains less losses from financial investments ........................	50	9	(19)	16	296	168	-	520
Dividend income ....................	29	28	2	3	53	11	-	126
Net earned insurance premiums ...........................................	4,223	3,674	365	-	309	1,900	-	10,471
Other operating income .........	2,262	1,274	1,238	71	566	133	(2,756)	2,788

Total operating income .........	29,133	13,859	8,398	2,594	16,546	10,857	(2,756)	78,631

Net insurance claims incurredand movement in liabilities to policyholders .................	(5,589)	(4,392)	(395)	-	(241)	(1,833)	-	(12,450)

Net operating income beforeloan impairment chargesand other credit riskprovisions ..........................	23,544	9,467	8,003	2,594	16,305	9,024	(2,756)	66,181

Loan impairment charges and other credit risk provisions .	(5,568)	(500)	(896)	(1,334)	(15,664)	(2,526)	-	(26,488)

Net operating income ............	17,976	8,967	7,107	1,260	641	6,498	(2,756)	39,693

Employee compensation and benefits .............................	(7,174)	(2,102)	(2,363)	(545)	(4,085)	(2,199)	-	(18,468)
General and administrative expenses .............................	(5,775)	(1,502)	(1,872)	(419)	(3,794)	(2,786)	2,756	(13,392)
Depreciation and impairment of property, plant and equipment	(762)	(224)	(172)	(31)	(329)	(207)	-	(1,725)
Amortisation and impairment of intangible assets .............	(277)	(118)	(43)	(6)	(183)	(183)	-	(810)

Total operating expenses .......	(13,988)	(3,946)	(4,450)	(1,001)	(8,391)	(5,375)	2,756	(34,395)

Operating profit/(loss) ...........	3,988	5,021	2,657	259	(7,750)	1,123	-	5,298

Share of profit in associatesand joint ventures ...............	21	8	1,543	196	12	1	-	1,781

Profit/(loss) before tax ...........	4,009	5,029	4,200	455	(7,738)	1,124	-	7,079

Tax income/(expense) ...........	(776)	(869)	(753)	(94)	2,285	(178)	-	(385)

Profit/(loss) for the year ........	3,233	4,160	3,447	361	(5,453)	946	-	6,694

Profit/(loss) for the year (continued)

	2008
	Europe	Hong Kong	Rest of Asia- Pacific	Middle East	North America	Latin America	Intra- HSBC items	Total
	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m

Interest income ......................	35,117	9,530	9,066	2,451	25,897	11,632	(2,392)	91,301
Interest expense .....................	(25,421)	(3,832)	(5,129)	(895)	(10,679)	(5,174)	2,392	(48,738)

Net interest income ...............	9,696	5,698	3,937	1,556	15,218	6,458	-	42,563

Fee income ............................	10,225	3,062	2,414	740	6,292	2,716	(685)	24,764
Fee expense ...........................	(2,733)	(482)	(547)	(49)	(1,065)	(549)	685	(4,740)

Net fee income ......................	7,492	2,580	1,867	691	5,227	2,167	-	20,024

Trading income/(expense) excluding net interest income ...........................................	1,691	856	1,443	380	(3,879)	356	-	847
Net interest incomeon trading activities ............	3,666	337	599	22	744	345	-	5,713

Net trading income/(expense)	5,357	1,193	2,042	402	(3,135)	701	-	6,560

Changes in fair value of long-term debt issued and related derivatives ..........................	2,939	3	1	-	3,736	-	-	6,679
Net income/(expense) fromother financial instruments designated at fair value .......	(1,826)	(1,194)	(172)	-	1	364	-	(2,827)

Net income/(expense) from financial instruments designated at fair value .......	1,113	(1,191)	(171)	-	3,737	364	-	3,852
Gains less losses from financial investments ........................	418	(309)	24	8	(120)	176	-	197
Dividend income ....................	130	41	2	2	77	20	-	272
Net earned insurance premiums ...........................................	5,299	3,247	197	-	390	1,717	-	10,850
Gains on disposal of French regional banks ....................	2,445	-	-	-	-	-	-	2,445
Other operating income .........	2,096	817	1,055	9	23	300	(2,492)	1,808

Total operating income .........	34,046	12,076	8,953	2,668	21,417	11,903	(2,492)	88,571

Net insurance claims incurredand movement in liabilities to policyholders .................	(3,367)	(1,922)	28	-	(238)	(1,390)	-	(6,889)

Net operating income beforeloan impairment chargesand other credit risk provisions	30,679	10,154	8,981	2,668	21,179	10,513	(2,492)	81,682

Loan impairment charges and other credit risk provisions .	(3,754)	(765)	(852)	(279)	(16,795)	(2,492)	-	(24,937)

Net operating income ............	26,925	9,389	8,129	2,389	4,384	8,021	(2,492)	56,745

Employee compensation and benefits ..............................	(8,551)	(2,069)	(2,475)	(544)	(4,609)	(2,544)	-	(20,792)
General and administrative expenses .............................	(6,428)	(1,562)	(2,037)	(384)	(4,282)	(3,059)	2,492	(15,260)
Depreciation and impairment of property, plant and equipment	(865)	(209)	(163)	(25)	(265)	(223)	-	(1,750)
Amortisation and impairment of intangible assets .............	(228)	(103)	(29)	(6)	(203)	(164)	-	(733)
Goodwill impairment ..............	-	-	-	-	(10,564)	-	-	(10,564)

Total operating expenses .......	(16,072)	(3,943)	(4,704)	(959)	(19,923)	(5,990)	2,492	(49,099)

Operating profit/(loss) ...........	10,853	5,446	3,425	1,430	(15,539)	2,031	-	7,646

Share of profit in associatesand joint ventures ...............	16	15	1,297	316	11	6	-	1,661

Profit/(loss) before tax ...........	10,869	5,461	4,722	1,746	(15,528)	2,037	-	9,307

Tax income/(expense) ...........	(2,199)	(899)	(928)	(245)	1,715	(253)	-	(2,809)

Profit/(loss) for the year ........	8,670	4,562	3,794	1,501	(13,813)	1,784	-	6,498

Other information about the profit/(loss) for the year

	Europe	Hong Kong	Rest of Asia- Pacific	Middle East	North America	Latin America	Intra- HSBC items	Total
	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m
2010
Net operating income ............	19,730	10,088	8,793	1,783	8,752	8,187	(3,125)	54,208
External .............................	18,881	9,170	7,728	1,774	8,504	8,151	-	54,208
Inter-segment .....................	849	918	1,065	9	248	36	(3,125)	-

Profit/(loss) for the year includes the following significant non-cash items:
Depreciation, amortisationand impairment ..............	1,071	404	243	49	471	458	-	2,696
Loan impairment losses grossof recoveries and othercredit risk provisions ......	3,303	169	615	684	8,476	1,812	-	15,059
Impairment of financial investments ....................	35	41	4	5	21	1	-	107

2009
Net operating income ............	17,976	8,967	7,107	1,260	641	6,498	(2,756)	39,693
External .............................	16,734	8,352	6,056	1,283	767	6,501	-	39,693
Inter-segment .....................	1,242	615	1,051	(23)	(126)	(3)	(2,756)	-

Profit/(loss) for the year includes the following significant non-cash items:
Depreciation, amortisationand impairment ..............	1,039	342	215	37	515	390	-	2,538
Loan impairment losses grossof recoveries and othercredit risk provisions ......	5,833	534	1,028	1,361	15,757	2,865	-	27,378
Impairment of financial investments ....................	137	129	50	4	38	-	-	358

2008
Net operating income ............	26,925	9,389	8,129	2,389	4,384	8,021	(2,492)	56,745
External .............................	25,887	8,205	7,010	2,386	5,236	8,021	-	56,745
Inter-segment .....................	1,038	1,184	1,119	3	(852)	-	(2,492)	-

Profit/(loss) for the year includes the following significant non-cash items:
Depreciation, amortisationand impairment ..............	1,093	312	192	31	11,352	387	-	13,367
Loan impairment losses grossof recoveries and othercredit risk provisions ......	4,050	803	960	309	16,892	2,757	-	25,771
Impairment of financial investments ....................	278	535	-	-	229	-	-	1,042

Performance ratios

	Europe	Hong Kong	Rest of Asia- Pacific	Middle East	North America	Latin America	Total
	%	%	%	%	%	%	%
2010
Share of HSBC's profit beforetax .....................................	22.6	29.9	31.0	4.7	2.4	9.4	100.0
Cost efficiency ratio ..............	67.9	43.4	55.7	44.7	48.8	65.7	55.2

2009
Share of HSBC's profit/(loss) before tax ...........................	56.7	71.0	59.3	6.4	(109.3)	15.9	100.0
Cost efficiency ratio ..............	59.4	41.7	55.6	38.6	51.5	59.6	52.0

2008
Share of HSBC's profit/(loss) before tax ...........................	116.7	58.7	50.7	18.8	(166.8)	21.9	100.0
Cost efficiency ratio ..............	52.4	38.8	52.4	35.9	94.1	57.0	60.1

Balance sheet information

	Europe	Hong Kong	Rest of Asia- Pacific	Middle East	North America	Latin America	Intra- HSBC items	Total
	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m
At 31 December 2010
Loans and advances tocustomers (net) ..................	435,799	140,691	108,731	24,626	190,532	57,987	-	958,366
Interests in associates andjoint ventures .....................	186	207	15,035	1,661	104	5	-	17,198
Total assets ............................	1,249,527	429,565	278,062	52,757	492,487	139,938	(187,647)	2,454,689
Customer accounts .................	491,563	297,484	158,155	33,511	158,486	88,526	-	1,227,725
Total liabilities .......................	1,189,996	422,101	246,989	45,379	459,301	123,655	(187,647)	2,299,774

Capital expenditure incurred1 .	865	836	168	46	774	788	-	3,477

At 31 December 2009
Loans and advances tocustomers (net) ..................	439,481	99,381	80,043	22,844	206,853	47,629	-	896,231
Interests in associates andjoint ventures .....................	147	157	11,083	1,573	42	9	-	13,011
Total assets ............................	1,268,600	399,243	222,139	48,107	475,014	115,967	(164,618)	2,364,452
Customer accounts .................	495,019	275,441	133,999	32,529	149,157	72,889	-	1,159,034
Total liabilities .......................	1,213,907	384,912	203,243	42,325	447,530	101,492	(164,618)	2,228,791

Capital expenditure incurred1 .	983	290	159	102	658	540	-	2,732

At 31 December 2008
Loans and advances tocustomers (net) ..................	426,191	100,220	80,661	27,295	256,214	42,287	-	932,868
Interests in associates andjoint ventures .....................	137	153	9,728	1,383	128	8	-	11,537
Total assets ............................	1,392,049	414,484	225,573	50,952	596,302	102,946	(254,841)	2,527,465
Customer accounts .................	502,476	250,517	124,194	35,165	143,532	59,443	-	1,115,327
Total liabilities .......................	1,361,960	400,637	210,478	45,416	571,657	91,929	(254,841)	2,427,236

Capital expenditure incurred1 .	2,078	440	426	85	726	617	-	4,372

1 Expenditure incurred on property, plant and equipment and other intangible assets. Excludes assets acquired as part of business combinations and goodwill.

Other financial information

Net operating income by customer group and global business

	Personal Financial Services	Commercial Banking		Global Banking & Markets	Global Private Banking	Other1	Intra- HSBC items	Total
	US$m		US$m	US$m	US$m	US$m	US$m	US$m

2010
Net operating income ............	21,317		12,029	18,957	3,105	4,663	(5,863)	54,208
External .............................	19,529		11,419	22,090	2,194	(1,024)	-	54,208
Internal ..............................	1,788		610	(3,133)	911	5,687	(5,863)	-

2009
Net operating income ............	15,513		9,571	18,652	2,984	(2,031)	(4,996)	39,693
External .............................	13,804		9,285	21,383	2,275	(7,054)	-	39,693
Internal ..............................	1,709		286	(2,731)	709	5,023	(4,996)	-

2008
Net operating income ............	20,269		13,144	12,047	3,563	12,290	(4,568)	56,745
External .............................	15,023		13,080	17,739	2,231	8,672	-	56,745
Internal ..............................	5,246		64	(5,692)	1,332	3,618	(4,568)	-

1 The main items reported in the 'Other' category are certain property activities, unallocated investment activities, centrally held investment companies, movements in fair value of own debt and HSBC's holding company and financing operations. The 'Other' category also includes gains and losses on the disposal of certain significant subsidiaries or business units.

Information by country

	2010		2009		2008
	External net operating income1	Non- current assets2	External net operating income1	Non- current assets2	External net operating income1	Non- current assets2
	US$m	US$m	US$m	US$m	US$m	US$m

UK ..............................................................	11,467	19,661	9,958	19,704	15,789	12,491
Hong Kong ..................................................	9,170	4,630	8,352	3,374	8,205	3,527
USA ............................................................	6,098	6,669	(1,042)	5,499	2,862	4,660
France .........................................................	3,185	10,914	3,322	11,782	6,457	11,862
Brazil ..........................................................	4,506	2,025	3,368	1,868	3,886	1,421
Other countries ...........................................	19,782	29,747	15,735	25,557	19,546	23,020

	54,208	73,646	39,693	67,784	56,745	56,981

1 External net operating income is attributed to countries on the basis of the location of the branch responsible for reporting the results or advancing the funds.

2 Non-current assets consist of property, plant and equipment, goodwill, other intangible assets, interests in associates and joint ventures and certain other assets expected to be recovered more than twelve months after the reporting period.

14 Analysis of financial assets and liabilities by measurement basis

Financial assets and financial liabilities are measured on an ongoing basis either at fair value or at amortised cost. The summary of significant accounting policies in Note 2 describes how the classes of financial instruments are measured, and how income and expenses, including fair value gains and losses, are recognised. The following table analyses the carrying amounts of the financial assets and liabilities by category as defined in IAS 39 and by balance sheet heading.

This information is provided by RNS

The company news service from the London Stock Exchange

END

ACSUKAWRABAOUAR

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