Annual Financial Report - 7 of 44

2011

Retail Banking and WealthManagement US$m

Commercial

Banking US$m

Global Bankingand Markets US$m

GlobalPrivate Banking US$m

Other48

US$m

Inter- segment

elimination64

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)56

(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 claims65 ............

(9,454)

(1,702)

(25)

-

-

-

(11,181)

Net operating income52 ......

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 expenses66..............

(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 data49

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

2010

Retail

Banking

and Wealth

Manage-

ment17

US$m

Commercial

Banking US$m

Global

Banking

and

Markets17

US$m

GlobalPrivate Banking US$m

Other48

US$m

Inter- segment

elimination64

US$m

Total US$m

Profit/(loss) before tax

Net interest income/(expense)

24,166

8,487

7,343

1,345

(998)

(902)

39,441

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

8,397

3,964

3,664

1,299

31

-

17,355

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

(106)

427

4,326

391

(358)

-

4,680

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

28

28

1,504

21

47

902

2,530

Net trading income/(expense)56

(78)

455

5,830

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 .........

(24)

(1)

863

(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 .........

684

585

1,113

38

6,005

(5,863)

2,562

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

44,119

15,071

18,938

3,093

4,656

(5,863)

80,014

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

(10,508)

(1,237)

(26)

-

4

-

(11,767)

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

33,611

13,834

18,912

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 ............

22,352

12,029

17,922

3,105

4,663

(5,863)

54,208

Employee expenses66 .............

(5,770)

(2,153)

(4,353)

(1,237)

(6,323)

-

(19,836)

Other operating expenses .......

(13,769)

(4,678)

(4,875)

(798)

405

5,863

(17,852)

Total operating expenses .......

(19,539)

(6,831)

(9,228)

(2,035)

(5,918)

5,863

(37,688)

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

2,813

5,198

8,694

1,070

(1,255)

-

16,520

Share of profit/(loss) inassociates and joint ventures

1,026

892

521

(16)

94

-

2,517

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

3,839

6,090

9,215

1,054

(1,161)

-

19,037

%

%

%

%

%

%

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

20.2

32.0

48.4

5.5

(6.1)

100.0

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

58.1

49.4

48.8

65.8

127.0

55.2

Balance sheet data49

US$m

US$m

US$m

US$m

US$m

US$m

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

390,963

239,286

284,497

40,665

2,955

958,366

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

530,970

296,797

1,755,043

116,846

161,458

(406,425)

2,454,689

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

525,221

286,007

308,416

107,130

951

1,227,725