6th Mar 2006 08:15
HSBC Holdings PLC06 March 2006 3. Earnings and dividends per share Year ended 31Dec05 31Dec04 Basic earnings per share 1.36 1.18 Diluted earnings per share 1.35 1.17 Dividends per share 0.69 0.63 Dividend pay out ratio^ 51% 53% ^ Dividends per share expressed as a percentage of earnings per share. Basic earnings per ordinary share was calculated by dividing the earnings ofUS$15,060 million by the weighted average number of ordinary shares outstanding,excluding own shares held, of 11,038 million shares (2004: earnings of US$12,918million and 10,907 million shares). Year endedFigures in US$m 31Dec05 31Dec04 Profit attributable to shareholders of the parent company 15,081 12,918Dividend payable on preference shares classified as equity (21) -Profit attributable to the ordinary shareholders of the parent company 15,060 12,918 Diluted earnings per share was calculated by dividing the basic earnings, whichrequire no adjustment for the effects of dilutive potential ordinary shares(including share options outstanding not yet exercised), by the weighted averagenumber of ordinary shares outstanding, excluding own shares held, plus theweighted average number of ordinary shares that would be issued on ordinaryconversion of all the dilutive potential ordinary shares in 2005 of 11,171million shares (2004: 11,054 million shares). 4. Taxation Year endedFigures in US$m 31Dec05 31Dec04 UK corporation tax charge 692 716 Overseas taxation 3,993 2,856 Current taxation 4,685 3,572 Deferred taxation 408 1,113 Total charge for taxation 5,093 4,685 Effective tax rate 24.3% 24.7% HSBC Holdings and its subsidiaries in the United Kingdom provided forUK corporation tax at 30 per cent (2004: 30 per cent). Overseas tax includedHong Kong profits tax of US$639 million (2004: US$539 million) provided at therate of 17.5 per cent (2004: 17.5 per cent) on the profits assessable in HongKong. Other overseas subsidiaries and overseas branches provided fortaxation at the appropriate rates in the countries in which they operate. Analysis of overall tax expense Year endedFigures in US$m 31Dec05 31Dec04 Taxation at UK corporate tax rate of 30% (2004: 30 per cent) 6,290 5,683 Impact of overseas profits in principal locations taxed at different rates (342) (347)Tax-free gains (220) (64)Adjustments in respect of prior period liabilities (187) (229)Deductible innovative tier 1 capital expense presented below pre-tax profit - (192)Low income housing credits (110) (95)Other items (145) 9Impact of profits from associates and joint ventures (193) (80)Overall tax charge 5,093 4,685 5. Capital resources At 31Dec05 At 31Dec04Capital ratios (%) Total capital ratio 12.8 12.0Tier 1 capital ratio 9.0 8.9 Composition of capital Figures in US$m Tier 1: Shareholders' funds 92,432 86,623 Minority interests and preference shares 6,741 4,253 Innovative tier 1 securities 9,383 10,077 Less: Goodwill capitalised and intangible assets (32,821) (31,190) Other regulatory adjustments^ (1,332) (2,504)Total qualifying tier 1 capital 74,403 67,259 Tier 2: Reserves arising from revaluation of property and unrealised gains in AFS equities 1,593 2,660 Collective impairment allowances 8,749 - General provisions - 2,624 Perpetual subordinated debt 3,640 3,670 Term subordinated debt 24,519 21,373 Minority and other interests in tier 2 capital 425 519Total qualifying tier 2 capital 38,926 30,846 Unconsolidated investments (6,437) (6,361)Investments in other banks (1,147) (799)Other deductions (296) (165)Total capital 105,449 90,780 Total risk-weighted assets 827,164 759,210 The above figures were computed in accordance with the EU Banking ConsolidationDirective and the FSA policy statement PS05/5 ('Implications of a ChangingAccounting Framework'). The comparative figures as at 31 December 2004 have notbeen restated to reflect the implementation of IFRSs and FSA policy statementPS05/5. ^ Other regulatory adjustments mainly arise from the implementation of IFRSs in conjunction with the FSA's policy statement PS05/5. 6. Notes on cash flow statement Year ended Figures in US$m 31Dec05 31Dec04 (a) Non-cash items included in net profitDepreciation and amortisation 2,213 2,225Revaluations on investment property (201) -Loan impairment losses 7,801 6,191Loans written off net of recoveries (8,549) (7,931)Provisions 327 1,181Provisions utilised (327) (1,018)Impairment of financial investments - (105)Accretion of discounts and amortisation of premiums (446) (175)Issue of share options 540 - 1,358 368 (b) Change in operating assetsChange in prepayments and accrued income 7,121 (5,329)Change in net trading securities and net derivatives 4,940 2,695Change in loans and advances to banks 307 10,825Change in loans and advances to customers (71,107) (130,228)Change in financial assets designated at fair value (15,048) -Change in other assets (8,923) (2,262) (82,710) (124,299) (c) Change in operating liabilitiesChange in accruals and deferred income (3,810) 2,578Change in deposits by banks (14,328) 12,187Change in customer accounts 46,394 104,877Change in debt securities in issue (19,047) 52,256Change in financial liabilities designated at fair value 61,837 -Change in other liabilities (113) 6,116 70,933 178,014 (d) Cash and cash equivalents compriseCash and balances at central banks 13,712 9,944Items in the course of collection from other banks 11,300 6,338Loans and advances to banks of one month or less 100,527 117,658Treasury bills, other bills and certificates of deposit less than three months 22,790 32,317Less: items in the course of transmission to other banks (7,022) (5,301) 141,307 160,956 7. Loan impairment charges 2005 Half-year ended 2004 Half-year endedFigures in US$m 30Jun 31Dec 2005 30Jun 31Dec 2004By category: Loan impairment charge Individually assessed impairment allowances: - New allowances 810 922 1,732 - - - - Releases and recoveries (648) (541) (1,189) - - - 162 381 543 - - -Collectively assessed impairment allowances: - New allowances 3,594 4,814 8,408 - - - - Releases and recoveries (469) (622) (1,091) - - - 3,125 4,192 7,317 - - -Specific provisions: - New allowances - - - 4,134 4,739 8,873 - Releases and recoveries - - - (1,136) (1,044) (2,180) - - - 2,998 3,695 6,693 General provisions - - - (290) (208) (498) Total charge for impairment losses 3,287 4,573 7,860 2,708 3,487 6,195 Customers 3,291 4,576 7,867 2,713 3,492 6,205Banks (4) (3) (7) (5) (5) (10) 8. Analysis of net fee income 2005 Half-year ended 2004 Half-year endedFigures in US$m 30Jun 31Dec 2005 30Jun 31Dec 2004 Account services 1,522 1,610 3,132 1,336 1,443 2,779Credit facilities 504 376 880 579 600 1,179Remittances 193 203 396 166 187 353Cards 1,955 2,744 4,699 1,826 2,161 3,987Imports/Exports 357 365 722 332 360 692Underwriting 147 127 274 117 117 234Insurance 558 524 1,082 499 502 1,001Mortgage servicing rights 37 39 76 39 41 80Trust income 108 91 199 98 105 203Broking income 529 575 1,104 517 426 943Global custody 310 346 656 279 285 564Maintenance income on operating leases 99 81 180 95 95 190Funds under management 874 957 1,831 792 687 1,479Unit trusts 223 165 388 296 202 498Corporate finance 124 87 211 100 93 193Other 888 768 1,656 775 752 1,527Total fee income 8,428 9,058 17,486 7,846 8,056 15,902Less: fees expense (1,376) (1,654) (3,030) (1,422) (1,532) (2,954)Net fee income 7,052 7,404 14,456 6,424 6,524 12,948 9. Geographical distribution of results HSBC European Operations 2005 Half-year ended 2004 Half-year endedFigures in US$m 30Jun 31Dec 2005 30Jun 31Dec 2004Interest income 10,792 10,231 21,023 8,451 9,909 18,360Interest expense (6,059) (6,743) (12,802) (4,144) (5,118) (9,262)Net interest income 4,733 3,488 8,221 4,307 4,791 9,098Fee income 4,087 3,994 8,081 3,711 3,835 7,546Fee expense (844) (938) (1,782) (809) (757) (1,566)Net fee income 3,243 3,056 6,299 2,902 3,078 5,980Trading income 1,068 1,968 3,036 508 489 997Net income from financial instruments designated at fair value (136) 498 362 - - -Net investment income on assets backing policyholder liabilities - - - 130 441 571Gains less losses from financial investments 209 230 439 153 1 154Dividend income 42 21 63 304 254 558Net earned insurance premiums 786 813 1,599 931 944 1,875Other operating income 731 872 1,603 541 634 1,175Total operating income 10,676 10,946 21,622 9,776 10,632 20,408Net insurance claims incurred and movement in policyholder's liabilities (502) (316) (818) (642) (986) (1,628)Net operating income before loan impairment charges and other credit risk provisions 10,174 10,630 20,804 9,134 9,646 18,780Loan impairment charges and other credit risk provisions (933) (996) (1,929) (454) (579) (1,033)Net operating income 9,241 9,634 18,875 8,680 9,067 17,747Total operating expenses (6,364) (6,275) (12,639) (5,728) (6,300) (12,028)Operating profit 2,877 3,359 6,236 2,952 2,767 5,719Share of profit in associates and joint ventures 9 111 120 17 20 37Profit before tax 2,886 3,470 6,356 2,969 2,787 5,756 HSBC Hong Kong Operations 2005 Half-year ended 2004 Half-year endedFigures in US$m 30Jun 31Dec 2005 30Jun 31Dec 2004Interest income 3,168 4,251 7,419 2,424 2,709 5,133Interest expense (1,149) (2,206) (3,355) (643) (852) (1,495)Net interest income 2,019 2,045 4,064 1,781 1,857 3,638Fee income 976 991 1,967 1,006 958 1,964Fee expense (134) (159) (293) (118) (143) (261)Net fee income 842 832 1,674 888 815 1,703Trading income 380 166 546 380 279 659Net income from financial instruments designated at fair value (21) 15 (6) - - -Net investment income on assets backing policyholder liabilities - - - 24 290 314Gains less losses from financial investments 65 43 108 110 65 175Dividend income 29 12 41 17 10 27Net earned insurance premiums 866 1,468 2,334 1,063 1,184 2,247Other operating income 423 382 805 259 277 536Total operating income 4,603 4,963 9,566 4,522 4,777 9,299Net insurance claims incurred and movement in policyholder's liabilities (751) (1,308) (2,059) (897) (1,257) (2,154)Net operating income before loan impairment charges and other credit risk provisions 3,852 3,655 7,507 3,625 3,520 7,145Loan impairment charges and other credit risk provisions (56) (90) (146) 222 (2) 220Net operating income 3,796 3,565 7,361 3,847 3,518 7,365Total operating expenses (1,381) (1,486) (2,867) (1,241) (1,317) (2,558)Operating profit 2,415 2,079 4,494 2,606 2,201 4,807Share of profit in associates and joint ventures 4 19 23 3 20 23Profit before tax 2,419 2,098 4,517 2,609 2,221 4,830 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
HSBC Holdings