Annual Financial Report - 7 of 41

2010

Personal Financial Services US$m

Commercial

Banking US$m

Global Banking & Markets US$m

GlobalPrivate Banking US$m

Other44

US$m

Inter- segment

elimination56

US$m

Total US$m

Profit/(loss) before tax

Net interest income/(expense)

24,161

8,487

7,348

1,345

(998)

(902)

39,441

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

7,336

3,964

4,725

1,299

31

-

17,355

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

(107)

427

4,327

391

(358)

-

4,680

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

28

28

1,504

21

47

902

2,530

Net trading income/(expense)49

(79)

455

5,831

412

(311)

902

7,210

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

-

-

-

-

(258)

-

(258)

Net income from otherfinancial instrumentsdesignated at fair value .......

1,210

190

36

-

42

-

1,478

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

1,210

190

36

-

(216)

-

1,220

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

42

(1)

797

(6)

136

-

968

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

27

12

48

5

20

-

112

Net earned insurance premiums

9,737

1,379

41

-

(11)

-

11,146

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

650

585

1,147

38

6,005

(5,863)

2,562

Total operating income ......

43,084

15,071

19,973

3,093

4,656

(5,863)

80,014

Net insurance claims57 ............

(10,508)

(1,237)

(26)

-

4

-

(11,767)

Net operating income46 ......

32,576

13,834

19,947

3,093

4,660

(5,863)

68,247

Loan impairment (charges)/recoveries and other creditrisk provisions ....................

(11,259)

(1,805)

(990)

12

3

-

(14,039)

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

21,317

12,029

18,957

3,105

4,663

(5,863)

54,208

Employee expenses58 .............

(5,388)

(2,153)

(4,735)

(1,237)

(6,323)

-

(19,836)

Other operating expenses .......

(13,417)

(4,678)

(5,227)

(798)

405

5,863

(17,852)

Total operating expenses .......

(18,805)

(6,831)

(9,962)

(2,035)

(5,918)

5,863

(37,688)

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

2,512

5,198

8,995

1,070

(1,255)

-

16,520

Share of profit/(loss) inassociates and joint ventures

1,006

892

541

(16)

94

-

2,517

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

3,518

6,090

9,536

1,054

(1,161)

-

19,037

%

%

%

%

%

%

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

18.5

32.0

50.1

5.5

(6.1)

100.0

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

57.7

49.4

49.9

65.8

127.0

55.2

Balance sheet data45

US$m

US$m

US$m

US$m

US$m

US$m

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

390,957

239,286

284,503

40,665

2,955

958,366

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

527,698

296,797

1,758,315

116,846

161,458

(406,425)

2,454,689

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

525,184

286,007

308,453

107,130

951

1,227,725

2009

PersonalFinancialServicesUS$m

Commercial

BankingUS$m

GlobalBanking & MarketsUS$m

GlobalPrivate Banking US$m

Other44

US$m

Inter- segment

elimination56

US$m

Total US$m

Profit/(loss) before tax

Net interest income/(expense)

25,107

7,883

8,610

1,474

(1,035)

(1,309)

40,730

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

8,238

3,702

4,363

1,236

125

-

17,664

Trading income excluding net interest income ..................

637

332

4,701

322

244

-

6,236

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

65

22

2,174

22

35

1,309

3,627

Net trading income49 ..............

702

354

6,875

344

279

1,309

9,863

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

-

-

-

-

(6,247)

-

(6,247)

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

2,339

100

473

-

(196)

-

2,716

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

2,339

100

473

-

(6,443)

-

(3,531)

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

224

23

265

5

3

-

520

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

33

8

68

5

12

-

126

Net earned insurance premiums

9,534

886

54

-

(3)

-

10,471

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

809

739

1,146

48

5,042

(4,996)

2,788

Total operating income/(expense) ...........................

46,986

13,695

21,854

3,112

(2,020)

(4,996)

78,631

Net insurance claims57 ............

(11,571)

(842)

(34)

-

(3)

-

(12,450)

Net operating income/(expense)46 .........................

35,415

12,853

21,820

3,112

(2,023)

(4,996)

66,181

Loan impairment charges and other credit risk provisions .

(19,902)

(3,282)

(3,168)

(128)

(8)

-

(26,488)

Net operating income/(expense) ...........................

15,513

9,571

18,652

2,984

(2,031)

(4,996)

39,693

Employee expenses58 .............

(6,069)

(2,072)

(4,335)

(1,198)

(4,790)

-

(18,464)

Other operating expenses .......

(12,223)

(3,891)

(4,202)

(686)

75

4,996

(15,931)

Total operating expenses .......

(18,292)

(5,963)

(8,537)

(1,884)

(4,715)

4,996

(34,395)

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

(2,779)

3,608

10,115

1,100

(6,746)

-

5,298

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

714

667

366

8

26

-

1,781

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

(2,065)

4,275

10,481

1,108

(6,720)

-

7,079

%

%

%

%

%

%

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

(29.2)

60.4

148.1

15.6

(94.9)

100.0

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

51.7

46.4

39.1

60.5

(233.1)

52.0

Balance sheet data45

US$m

US$m

US$m

US$m

US$m

US$m

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

399,460

199,674

256,956

37,031

3,110

-

896,231

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

554,074

251,143

1,683,672

116,148

150,983

(391,568)

2,364,452

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

499,109

267,388

284,727

106,533

1,277

-

1,159,034