Interim Management Statement - 3Q 2013

HSBC Holdings plc ('HSBC') will be conducting a trading update conference call with analysts and investors today to coincide with the release of its Interim Management Statement. The trading update call will take place at 11.00am GMT, and details of how to participate in the call and the live audio webcast can be found below and at Investor Relations on www.hsbc.com.

Conference call details

Date: Monday, 4 November 2013

Time: 6.00am EST

11.00am GMT

7.00pm HKT

Audio webcast: Please follow this link for the webcast: http://www.hsbc.com/1/2/investor-relations/financial-info

Speakers: Stuart Gulliver, Group Chief Executive

Iain Mackay, Group Finance Director

Conference details for investors and analysts: Passcode: HSBC

Replay conference call details (available until 4 December 2013): Passcode: 45344522#

Table of contents

Note to editors

HSBC Holdings plc

HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 6,600 offices in 80 countries and territories in Europe, Hong Kong, Rest of Asia‑Pacific, North and Latin America, and the Middle East and North Africa. With assets of US$2,723bn at 30 September 2013, HSBC is one of the world's largest banking and financial services organisations.

· Reported profit before tax ('PBT') up 30% in the third quarter of 2013 ('3Q13') at US$4,530m compared with US$3,481m in the same period in 2012 ('3Q12').

· Underlying PBT was US$5,056m, up 10% in 3Q13, compared with US$4,603m in 3Q12.

· Reported PBT for nine months to 30 September 2013 up 15% at US$18,601m, US$2,383m higher than in the same period in 2012.

· Underlying PBT for the nine months to 30 September 2013 up 34% at US$18,145m, US$4,640m higher than the prior year period.

· Earnings per share and dividends per share for the nine months to 30 September 2013 were US$0.71 and US$0.30, respectively, compared with US$0.58 and US$0.27 for the equivalent period in 2012.

· Annualised return on equity 1.5 ppt higher - nine months to 30 September 2013 annualised return on average ordinary shareholders' equity ('RoE') was 10.4% compared with 8.9% in the equivalent period in 2012.

· Our home markets of UK and Hong Kong contributed more than half of the Group's underlying PBT in the quarter and year to date. We expect both to see GDP growth in 2014 over 2013.

· Stable revenue - 3Q13 underlying revenue of US$15,588m was broadly unchanged compared with US$15,661m in 3Q12. Notwithstanding this, we achieved broad-based revenue growth in Hong Kong.

· Lower 3Q13 underlying operating expenses - 3Q13 underlying operating expenses were US$9,572m, down 4% from US$9,952m in 3Q12. Excluding notable items, operating expenses increased reflecting higher investment expenditure, wage inflation and litigation and regulatory-related costs.

· Maintained momentum in sustainable savings - during 3Q13 we achieved US$0.4bn of additional sustainable cost savings across all regions, taking the annualised total to US$4.5bn since the start of 2011. This exceeds our target for the end of 2013.

· Further progress on capital generation but regulatory uncertainty remains - our core tier 1 ratio was 13.3% and our common equity tier 1 ratio was 10.6% in 3Q13.

1 All on a reported basis, unless otherwise stated. Underlying basis eliminates effects of foreign currency translation differences, acquisitions, disposals and changes in ownership levels of subsidiaries, associates, joint ventures and businesses, and changes in fair value ('FV') due to movements in credit spread on own long-term debt issued by the Group and designated at fair value. A reconciliation of reported results to underlying results is shown on page 6.

2 The CET1 ratio presented for 31 December 2012 has changed from the presentation in the Annual Report and Accounts 2012 and is shown post future management action to mitigate capital deductions for non-significant holdings of financial sector entities, as detailed on page 16.

1 Net operating income before loan impairment charges, also referred to as 'revenue'.

2 The gain of US$553m represents the net impact of the disposal of available-for-sale investments in Ping An offset by adverse changes in fair value of the contingent forward sale contract to the point of delivery of the shares.

Group Chief Executive, Stuart Gulliver, commented:

Business performance

Revenue was stable in the third quarter, influenced by the mixed global macroeconomic picture set against a backdrop of our continuing implementation of Global Standards and ongoing regulatory uncertainty.

Our home markets of the UK and Hong Kong contributed more than half of the Group's underlying profit before tax. Hong Kong performed well in the quarter, reflecting broad-based revenue growth. Hong Kong continues to benefit from its close economic relationship with mainland China. We remain well positioned to capitalise on improving economic conditions in these markets.

In addition, we continued to remodel our business in North America to improve profitability and growth. The ongoing recovery of the US housing market and increased investor appetite may provide further opportunities to accelerate the run-down of our US Consumer Mortgage and Lending portfolio.

Global Banking and Markets performed resiliently, notwithstanding a challenging environment over recent months. This reflects our distinctive business model with its broad international focus, emphasis on customer connectivity, product capability and balance sheet strength.

We continued to focus on managing our cost base, generating an additional US$0.4bn of sustainable savings over the quarter and bringing the total annualised sustainable savings achieved since the start of 2011 to US$4.5bn. This is well in excess of the target we set out to achieve by the end of 2013. We re-invested part of these savings in risk and compliance, increasing headcount by 1,600 since December 2012.

We grew underlying revenue 9% faster than costs for the first nine months.

We also made further progress towards simplifying and restructuring HSBC. In particular, we recently completed the sale of our Panama business in October.

Our capital position has strengthened during the quarter with an improvement in the core tier 1 ratio to 13.3%. Our estimated CRD IV end point basis common equity tier 1 ratio also improved to 10.6%. There continues to be significant regulatory uncertainty on the horizon.

Outlook

We see reasons for optimism with some evidence of a broadening recovery. Indications are that economic growth in mainland China is stabilising with positive implications for Hong Kong and the rest of Asia-Pacific. The US should continue to grow, albeit at a low rate by historical standards. The UK should see positive growth and outperform the eurozone. We expect GDP growth in Latin America to remain slow, although the Mexican economy should strengthen in 2014. Our forecasts for global growth remain constant at 2.0% in 2013 and 2.6% in 2014.

We remain focused on delivering organic growth, streamlining the businesses and implementing Global Standards, and so supporting a progressive dividend.

Underlying performance

Underlying performance:

· adjusts for the period-on-period effects of foreign currency translation;

· eliminates the fair value movements on our long-term debt attributable to credit spread ('own credit spread') where the net result of such movements will be zero upon maturity of the debt (see footnote 2 on page 7); and

· adjusts for acquisitions, disposals and changes of ownership levels of subsidiaries, associates, joint ventures and businesses.

For acquisitions, disposals and changes of ownership levels of subsidiaries, associates, joint ventures and businesses, we eliminate the gain or loss on disposal or dilution and any associated gain or loss on reclassification or impairment recognised in the period incurred, and remove the operating profit or loss of the acquired, disposed of or diluted subsidiaries, associates, joint ventures and businesses from all the periods presented so we can view results on a like-for-like basis. Disposal of investments other than those included in the above definition do not lead to underlying adjustments.

Reconciliation of reported and underlying revenue

Reconciliation of reported and underlying loan impairment charges and other credit risk provisions ('LIC's)

Reconciliation of reported and underlying operating expenses

Reconciliation of reported and underlying profit before tax

1 'Currency translation adjustment' is the effect of translating the results of subsidiaries and associates for the previous period at the average rates of exchange applicable in the current period.

2 Changes in fair value due to movements in own credit spread on long-term debt issued. This does not include the fair value changes due to own credit risk in respect of trading liabilities or derivative liabilities.

Financial performance commentary

Nine months ended 30 September 2013 compared with nine months ended 30 September 2012

· Reported profit before tax of US$18.6bn for the first nine months of 2013 was US$2.4bn or 15% higher than in the same period in 2012. This was primarily due to lower adverse fair value movements of US$3.3bn on our own debt designated at fair value resulting from changes in credit spreads, and decreases in both loan impairment charges and other credit risk provisions ('LIC's) of US$1.8bn and operating expenses of US$3.5bn. These factors were partially offset by lower gains (net of losses) from disposals and reclassifications of US$1.2bn compared with US$4.4bn in the same period in 2012. This mainly reflected the gain on disposal of the Card and Retail Services ('CRS') business in North America in May 2012, which more than offset the accounting gain arising in the first quarter of 2013 from the reclassification of Industrial Bank Co., Ltd ('Industrial Bank') as a financial investment following its issue of additional share capital to third parties.

· On an underlying basis, profit before tax rose by 34% to US$18.1bn, primarily due to higher revenue and lower LICs and operating expenses.

· Reported revenue was US$49.4bn in the nine months or 3.9% lower than in the same period in 2012, primarily reflecting lower gains (net of losses) from disposals and reclassifications. On an underlying basis, revenue of US$48.9bn, was US$1.1bn or 2.4% higher reflecting:

- favourable fair value movements on non-qualifying hedges of US$461m compared with adverse movements of US$365m in the same period in 2012;

- a net gain recognised on completion of the disposal of our investment in Ping An of US$553m;

- a favourable debit valuation adjustment ('DVA') of US$300m in Global Banking and Markets ('GB&M') on derivative contracts;

- foreign exchange gains on sterling debt issued by HSBC Holdings of US$442m;

- a loss of US$279m following the write-off of goodwill relating to our Global Private Banking ('GPB') business in Monaco; and

- a loss of US$138m on the sale of an HFC Bank UK secured loan portfolio.

Excluding these items, the main drivers of revenue movements in our global businesses were as follows:

- in GB&M, revenue increased marginally with growth in the majority of our customer-facing businesses. Revenue increased in Financing and Equity Capital Markets reflecting a rise in lending spreads. It also rose due to increased customer activity in Credit in both primary and secondary markets, and in Equities and Payments and Cash Management. By contrast, revenue from Rates decreased compared with strong results in 2012 which benefited from tightening spreads following the European Central Bank liquidity intervention. This reduction was partly offset by minimal fair value movements on structured liabilities in 2013 (reported within Rates and Equities) compared with significant adverse movements in 2012. As expected, revenues from Balance Sheet Management also decreased;

- in Commercial Banking ('CMB') revenue was marginally higher, driven by our home markets of Hong Kong and the UK. An increase in net interest income reflected average balance sheet growth which was partially offset by spread compression. Revenue also benefited from an increase in lending fees and from collaboration with GB&M;

- in Retail Banking and Wealth Management ('RBWM') revenue decreased, primarily in our Consumer Mortgage and Lending ('CML') portfolio, reflecting lower average lending balances, losses on the sale of the non-real estate portfolio and the early termination of cash flow hedges. In RBWM excluding the CRS business and the US run-off portfolio ('the Rest of RBWM') revenue increased, driven by a rise in fee income from higher investment product sales in Hong Kong, notably unit trusts and retail brokerage, and from current account and card fees in Brazil. In addition, net interest income rose from improved mortgage spreads and higher average mortgage balances, primarily in Hong Kong and the UK; and

- in GPB, net interest income decreased as higher yielding positions matured and opportunities for reinvestment were limited by prevailing rates, lending and deposit spreads narrowed and average deposit balances fell. Revenue was also adversely affected by negative net new money as we continued to reposition the GPB client base.

· Reported LICs of US$4.7bn were 28% lower than the same period in 2012. On an underlying basis, LICs fell in the majority of our regions, notably by US$1.6bn in North America and by US$0.2bn in the Middle East and North Africa.

- In North America the decrease was, in part, due to improvements in housing market conditions. In addition, the decrease reflected lower lending balances, reduced new impaired loans and lower delinquency levels in the CML portfolio.

- The Middle East and North Africa benefited from releases of charges raised in previous periods. This reflected an improvement in the financial position of certain customers.

- By contrast, LICs were higher in Latin America by US$0.5bn, principally in Mexico, due to higher collective impairments in RBWM and specific impairments in CMB relating to homebuilders. In Brazil LICs increased, reflecting impairment model changes and assumption revisions for restructured loan account portfolios in RBWM and Business Banking in CMB. This was partly offset by improvements in the quality of the portfolio in Brazil as credit strategies were modified in previous periods to mitigate rising delinquency rates.

· Reported operating expenses for the nine months of US$28.0bn were 11% lower than in the same period in 2012. On an underlying basis, operating expenses fell by US$2.0bn, primarily due to the non-recurrence of a provision for US anti-money laundering, Bank Secrecy Act ('BSA') and Office of Foreign Asset Control ('OFAC') investigations of US$1.5bn, a reduction in charges relating to UK customer redress of US$0.9bn and a decrease in restructuring and related costs of US$0.3bn. UK customer redress charges for the period included additional estimated redress for possible mis-selling in previous years of US$514m in respect of payment protection insurance ('PPI'), US$132m in respect of interest rate protection products and US$149m in respect of wealth management products. Excluding these items, operating expenses were US$0.6bn higher, mainly due to increased Madoff-related litigation costs in GB&M Europe, a provision in respect of regulatory investigations in GPB, a customer remediation provision connected to our former CRS business, and investment in strategic initiatives, risk and compliance. Wage inflation also contributed to the increase in operating expenses. These factors were partially offset by additional sustainable cost savings, an accounting gain arising from a change in the basis of delivering ill-health benefits to certain employees in the UK and lower performance-related costs.

We achieved an additional US$1.2bn of sustainable cost savings across all of our regions, taking our total annualised cost savings to US$4.5bn as we continued with our organisational effectiveness programmes.

· The reported cost efficiency ratio improved from 61.2% for the first nine months of 2012 to 56.6% in 2013 while, on an underlying basis, it improved from 62.5% to 57.0%.

Full-time equivalent staff numbers ('FTE's) at the end of the quarter were 259,300, broadly unchanged compared with 30 June 2013.

·  The effective tax rate for the nine months of 20.3% was lower than the UK corporation tax rate of 23.25%. The lower tax rate was driven by the geographical distribution of the Group's profit and non-taxable gains from the reclassification of Industrial Bank as a financial investment and the disposal of our investment in Ping An. These factors were offset in part by a reduction in deferred tax assets recognised in Mexico following clarification of the tax law by the Mexican fiscal authority and a write-down of the UK deferred tax asset arising from the reduction in the future UK tax rate to 20% from 1 April 2015.

· On 7 October 2013, the Board announced a third interim dividend for 2013 of US$0.10 per ordinary share.

3Q13 compared with 3Q12

· Reported profit before tax of US$4.5bn for 3Q13 was US$1.0bn or 30% higher than in 3Q12, primarily due to higher revenue from lower adverse fair value movements of US$1.2bn on our own debt designated at fair value resulting from changes in credit spreads, and lower operating expenses.

· Reported revenue was US$15.1bn in the quarter, 3.5% higher than in the same period in 2012. On an underlying basis, revenue was US$15.6bn in the quarter, broadly in line with 3Q12 notwithstanding an adverse DVA movement in GB&M of US$0.2bn. Excluding this, revenue in GB&M was marginally higher. It was also marginally higher in CMB, in line with trends seen throughout the first nine months of 2013. By contrast, revenue in RBWM decreased, primarily reflecting lower average balances in the CML portfolio and a fall in insurance revenues. These factors were partly offset by higher net interest income in Hong Kong, mainly due to improved mortgage spreads and higher average mortgage balances. In GPB, the trends driving performance in the first nine months of 2013 contributed to a fall in revenue in the quarter.

· LICs of US$1.6bn were US$0.1bn lower than in 3Q12, on both a reported and underlying basis. The movement in underlying LICs was driven by a decrease in North America of US$0.4bn (to US$0.3bn) reflecting improvements in housing market conditions, lower lending balances, lower levels of new impaired loans and reduced delinquency levels in our CML portfolio. This was largely offset by higher LICs in Latin America of US$0.2bn (to US$0.6bn) and in Europe of US$0.1bn (to US$0.5bn). In Latin America, the higher LICs reflected an increase in specific impairments in CMB, notably in Mexico due to further deterioration of recoverability on exposures to homebuilders and in Brazil across a number of corporate exposures. In Europe, the rise in LICs reflected specific customer impairments in GB&M partially offset by provision releases.

· Reported operating expenses of US$9.6bn were 7% lower than in the same period in 2012. On an underlying basis, operating expenses fell by US$0.4bn, primarily reflecting the non-recurrence of the provision of US$0.8bn booked in 3Q12 in respect of US anti-money laundering, BSA and OFAC investigations which was partially offset by higher UK customer redress charges of US$0.1bn and restructuring and related costs of US$0.1bn. Excluding these items, operating expenses rose by US$0.3bn, reflecting increased strategy and investment costs, wage inflation and litigation and regulatory-related costs including a provision in respect of regulatory investigations in GPB. These factors were partly offset by additional sustainable costs savings of US$0.4bn.

·  The reported cost efficiency ratio improved from 70.6% in 3Q12 to 63.6% in 3Q13 while, on an underlying basis, it improved from 63.5% to 61.4%.

·  The effective tax rate for the three months was 23.1%, similar to the UK corporation tax rate of 23.25%. The tax for the quarter included a write-down of the UK deferred tax asset arising from a reduction in the future UK tax rate to 20% from 1 April 2015.

Balance sheet commentary compared with 30 June 2013

· Reported loans and advances to customers increased by US$47.8bn during 3Q13. This resulted from foreign exchange differences of US$23.5bn coupled with a rise of US$7.8bn in reverse repo balances and an increase in customer lending of US$16.5bn. The latter included the reclassification of assets previously included in 'Assets held for sale' following the strategic review of our Monaco business in GPB. Excluding this, loans and advances were marginally higher, driven by increases in Hong Kong from term lending to CMB and Global Banking customers, particularly commercial real estate related, together with an increase in corporate overdraft balances in the UK, notably in GB&M, which did not meet the netting criteria.

· Reported customer accounts increased by US$66.6bn in the quarter, largely resulting from foreign exchange differences of US$28.9bn, an increase in repo balances of US$14.5bn and a rise in customer deposits of US$23.2bn. The latter included the reclassification of customer deposits previously included in 'Liabilities of disposal groups held for sale' arising from the strategic review noted above. Excluding these factors, customer deposits were marginally higher, driven by RBWM in Hong Kong, where customers adopted a more conservative approach to managing assets and, to a lesser extent, by CMB. In addition, there was an increase in the UK of customer deposit balances which did not meet the netting criteria.

· Other significant balance sheet movements in the quarter included an increase in cash and balances at central banks, mainly in Europe and, to a lesser degree, in Hong Kong and Rest of Asia-Pacific as surplus liquidity was redeployed. In addition, there was a decline in derivative assets and liabilities, reflecting continued shifts in major yield curves.

Net interest margin

· Net interest margin decreased in the nine months to 30 September 2013 compared with the same period in 2012 as a result of significantly lower gross yields on customer lending, including balances within 'Assets held for sale'. This was driven by the effect of disposals, notably of the higher-yielding CRS and non-real estate portfolios in the US, and downward trends in interest rates in a small number of countries, particularly Brazil. Yields on our own surplus liquidity also fell, notably in Latin America and Europe, as proceeds from maturing investments and disposals were reinvested at lower prevailing rates. These factors were partly offset by a reduction in the cost of funds on customer accounts in the majority of our regions, especially in Latin America, in line with the declining interest rate trends noted above. In addition, the cost of funds on debt issued by the Group decreased, as debt issued at higher coupons in the US matured and was repaid.

Capital and risk-weighted assets 

·  The core tier 1 capital ratio strengthened to 13.3% from 12.7% at 30 June 2013. Internal capital generation of US$2.6bn and favourable foreign exchange movements of US$2.4bn contributed to a total increase of US$4.8bn in core tier 1 capital.

· Risk-weighted assets ('RWA's) decreased by US$5.9bn in the quarter, mainly due to a US$7.7bn reduction in market risk and reductions in other risk types, partially offset by the effect of foreign exchange movements. The lower market risk RWAs reflected a lesser incremental risk charge from falls in sovereign exposures.

·  The estimated CRD IV end point basis common equity tier 1 capital ratio increased to 10.6%, from 10.1% at 30 June 2013, reflecting internal capital generation, favourable foreign exchange movements and a reduction in RWAs.

Trading conditions since 30 September 2013 and outlook

Our results in October included an estimated gain of US$1.1bn on the disposal of our operations in Panama. Excluding this, our performance was in line with the trends we experienced during the first nine months of the year.

The Financial Conduct Authority is conducting investigations alongside several other agencies in various countries into a number of firms, including HSBC, relating to trading on the foreign exchange market. We are cooperating with the investigations which are at an early stage.

Notes

· Income statement comparisons, unless stated otherwise, are between the quarter ended 30 September 2013 and the quarter ended 30 September 2012, or between the nine months ended 30 September 2013 and the corresponding nine months in 2012. Balance sheet comparisons, unless otherwise stated, are between balances at 30 September 2013 and the corresponding balances at 30 June 2013.

· The financial information on which this Interim Management Statement is based and the data set out in the appendix to this statement are unaudited and have been prepared in accordance with HSBC's significant accounting policies as described in the Annual Report and Accounts 2012, with the exception of the adoption of the following new or revised standards: IFRS 10 'Consolidated Financial Statements', IFRS 11 'Joint Arrangements', IFRS 13 'Fair Value Measurement' and IAS 19 'Employee Benefits'. These new standards took effect from 1 January 2013 and their adoption had an insignificant effect on the consolidated financial statements of HSBC. A further description of the adoption of these standards and revisions to standards is provided in the Interim Report 2013. A glossary of terms is also provided in the Annual Report and Accounts 2012.

· The Board has adopted a policy of paying quarterly interim dividends on the ordinary shares. Under this policy, it is intended to have a pattern of three equal interim dividends with a variable fourth interim dividend. Dividends are declared in US dollars and, at the election of the shareholder, paid in cash in one of, or in a combination of, US dollars, sterling and Hong Kong dollars or, subject to the Board's determination that a scrip dividend is to be offered in respect of that dividend, may be satisfied in whole or in part by the issue of new shares in lieu of a cash dividend.

· The proposed timetable for the fourth interim dividend is as follows:

Cautionary statement regarding forward-looking statements

The Interim Management Statement contains certain forward-looking statements with respect to HSBC's financial condition, results of operations, capital position and business.

Statements that are not historical facts, including statements about HSBC's beliefs and expectations, are forward-looking statements. Words such as 'expects', 'anticipates', 'intends', 'plans', 'believes', 'seeks', 'estimates', 'potential' and 'reasonably possible', variations of these words and similar expressions are intended to identify forward-looking statements. These statements are based on current plans, estimates and projections, and therefore undue reliance should not be placed on them. Forward-looking statements speak only as of the date they are made. HSBC makes no commitment to revise or update any forward-looking statements to reflect events or circumstances occurring or existing after the date of any forward-looking statements.

Written and/or oral forward-looking statements may also be made in the periodic reports to the US Securities and Exchange Commission, summary financial statements to shareholders, proxy statements, offering circulars and prospectuses, press releases and other written materials, and in oral statements made by HSBC's Directors, officers or employees to third parties, including financial analysts.

Forward-looking statements involve inherent risks and uncertainties. Readers are cautioned that a number of factors could cause actual results to differ, in some instances materially, from those anticipated or implied in any forward-looking statement. These include, but are not limited to:

· changes in general economic conditions in the markets in which we operate, such as continuing or deepening recessions and fluctuations in employment beyond those factored into consensus forecasts; changes in foreign exchange rates and interest rates; volatility in equity markets; lack of liquidity in wholesale funding markets; illiquidity and downward price pressure in national real estate markets; adverse changes in central banks' policies with respect to the provision of liquidity support to financial markets; heightened market concerns over sovereign creditworthiness in over-indebted countries; adverse changes in the funding status of public or private defined benefit pensions; and consumer perception as to the continuing availability of credit and price competition in the market segments we serve;

· changes in government policy and regulation, including the monetary, interest rate and other policies of central banks and other regulatory authorities; initiatives to change the size, scope of activities and interconnectedness of financial institutions in connection with the implementation of stricter regulation of financial institutions in key markets worldwide; revised capital and liquidity benchmarks which could serve to deleverage bank balance sheets and lower returns available from the current business model and portfolio mix; imposition of levies or taxes designed to change business mix and risk appetite; the conduct of business of financial institutions in serving their retail customers, corporate clients and counterparties; the standards of market conduct; the costs, effects and outcomes of product regulatory reviews, actions or litigation, including any additional compliance requirements; expropriation, nationalisation, confiscation of assets and changes in legislation relating to foreign ownership; changes in bankruptcy legislation in the principal markets in which we operate and the consequences thereof; general changes in government policy that may significantly influence investor decisions; extraordinary government actions as a result of current market turmoil; other unfavourable political or diplomatic developments producing social instability or legal uncertainty which in turn may affect demand for our products and services; and the effects of competition in the markets where we operate including increased competition from non-bank financial services companies, including securities firms; and

· factors specific to HSBC, including our success in adequately identifying the risks we face, such as the incidence of loan losses or delinquency, and managing those risks (through account management, hedging and other techniques). Effective risk management depends on, among other things, our ability through stress testing and other techniques to prepare for events that cannot be captured by the statistical models we use; and our success in addressing operational, legal and regulatory, and litigation challenges, notably compliance with the Deferred Prosecution Agreements with US authorities.

Summary consolidated income statement

Summary consolidated balance sheet

Capital

Capital structure

Risk-weighted assets

RWAs by risk type

RWAs by global businesses

RWAs by geographical regions1

1 RWAs are non-additive across geographical regions due to market risk diversification effects within the Group.

RWA movement by key driverCredit risk - internal ratings-based ('IRB') only