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Interim Report - 21 of 26

12th Aug 2011 16:36

RNS Number : 1378M

HSBC Holdings PLC

12 August 2011

Consolidated income statement for the half-year to 30 June 2011

		Half-year to
		30 June 2011	30 June 2010	31 December 2010
	Notes	US$m	US$m	US$m

Interest income ................................................................................		31,046	28,686	29,659
Interest expense ...............................................................................		(10,811)	(8,929)	(9,975)

Net interest income .........................................................................		20,235	19,757	19,684

Fee income ........................................................................................		10,944	10,405	10,712
Fee expense .......................................................................................		(2,137)	(1,887)	(1,875)

Net fee income ..................................................................................		8,807	8,518	8,837

Trading income excluding net interest income .....................................		3,231	2,309	2,371
Net interest income on trading activities .............................................		1,581	1,243	1,287

Net trading income ..............................................................................		4,812	3,552	3,658

Changes in fair value of long-term debt issued and related derivatives ...		(494)	1,125	(1,383)
Net income/(expense) from other financial instruments designated at fair value .........................................................................................		394	(40)	1,518

Net income/(expense) from financial instruments designated atfair value .........................................................................................		(100)	1,085	135
Gains less losses from financial investments .........................................		485	557	411
Dividend income ..................................................................................		87	59	53
Net earned insurance premiums ............................................................		6,700	5,666	5,480
Other operating income .......................................................................		1,285	1,478	1,084

Total operating income ....................................................................		42,311	40,672	39,342

Net insurance claims incurred and movement in liabilitiesto policyholders ..............................................................................		(6,617)	(5,121)	(6,646)

Net operating income before loan impairment charges andother credit risk provisions ........................................................		35,694	35,551	32,696

Loan impairment charges and other credit risk provisions ...................		(5,266)	(7,523)	(6,516)

Net operating income ......................................................................		30,428	28,028	26,180

Employee compensation and benefits ..................................................		(10,521)	(9,806)	(10,030)
General and administrative expenses ....................................................		(8,419)	(7,014)	(8,142)
Depreciation and impairment of property, plant and equipment ..........		(805)	(834)	(879)
Amortisation and impairment of intangible assets ................................		(765)	(457)	(526)

Total operating expenses .................................................................		(20,510)	(18,111)	(19,577)

Operating profit ...............................................................................		9,918	9,917	6,603

Share of profit in associates and joint ventures ....................................		1,556	1,187	1,330

Profit before tax ...............................................................................		11,474	11,104	7,933

Tax expense ........................................................................................	6	(1,712)	(3,856)	(990)

Profit for the period .........................................................................		9,762	7,248	6,943

Profit attributable to shareholders of the parent company ...................		9,215	6,763	6,396
Profit attributable to non-controlling interests ....................................		547	485	547

		US$	US$	US$

Basic earnings per ordinary share .........................................................	4	0.51	0.38	0.35
Diluted earnings per ordinary share ......................................................	4	0.50	0.38	0.34

The accompanying notes on pages 179 to 218 form an integral part of these financial statements1.

For footnote, see page 178.

Consolidated statement of comprehensive income for the half-year to 30 June 2011

	Half-year to
	30 June	30 June	31 December
	2011	2010	2010
	US$m	US$m	US$m
		,
Profit for the period .....................................................................................	9,762	7,248	6,943

Other comprehensive income/(expense)
Available-for-sale investments .....................................................................	1,136	4,206	1,629
- fair value gains/(losses) .........................................................................	1,378	4,698	1,670
- fair value (gains)/losses transferred to income statement on disposal .....	(529)	(574)	(600)
- amounts transferred to the income statement in respect of impairment losses ..............................................................................	287	678	440
- income taxes ........................................................................................	-	(596)	119

Cash flow hedges ..........................................................................................	40	(45)	(226)
- fair value gains/(losses) .........................................................................	231	(1,687)	1,509
- fair value (gains)/losses transferred to income statement .......................	(196)	1,644	(1,808)
- income taxes ........................................................................................	5	(2)	73

Actuarial gains/(losses) on defined benefit plans ............................................	(19)	(60)	(1)
- before income taxes ..............................................................................	(18)	(82)	22
- income taxes ........................................................................................	(1)	22	(23)

Share of other comprehensive income of associates and joint ventures .........	(146)	73	34
Exchange differences ....................................................................................	4,404	(6,128)	5,561
Income tax attributable to exchange differences ...........................................	165	-	-

Other comprehensive income/(expense) for the period, net of tax ...............	5,580	(1,954)	6,997

Total comprehensive income for the period .................................................	15,342	5,294	13,940

Total comprehensive income for the period attributable to:
- shareholders of the parent company .....................................................	14,728	4,901	13,186
- non-controlling interests ......................................................................	614	393	754

	15,342	5,294	13,940

The accompanying notes on pages 179 to 218 form an integral part of these financial statements1.

For footnote, see page 178.

Consolidated balance sheet at 30 June 2011

		At 30 June	At 30 June	At 31 December
		2011	2010	2010
	Notes	US$m	US$m	US$m
Assets

Cash and balances at central banks ......................................................		68,218	71,576	57,383
Items in the course of collection from other banks .............................		15,058	11,195	6,072
Hong Kong Government certificates of indebtedness ..........................		19,745	18,364	19,057
Trading assets .....................................................................................	7	474,950	403,800	385,052
Financial assets designated at fair value ...............................................	11	39,565	32,243	37,011
Derivatives .........................................................................................	12	260,672	288,279	260,757
Loans and advances to banks ..............................................................		226,043	196,296	208,271
Loans and advances to customers .......................................................		1,037,888	893,337	958,366
Financial investments .........................................................................	13	416,857	385,471	400,755
Other assets ........................................................................................		47,503	42,140	43,251
Current tax assets ...............................................................................		1,487	1,070	1,096
Prepayments and accrued income .......................................................		12,556	11,586	11,966
Interests in associates and joint ventures ............................................		18,882	15,701	17,198
Goodwill and intangible assets .............................................................		32,028	27,859	29,922
Property, plant and equipment ...........................................................		11,594	13,291	11,521
Deferred tax assets .............................................................................		7,941	6,246	7,011

Total assets ........................................................................................		2,690,987	2,418,454	2,454,689

Liabilities and equity

Liabilities
Hong Kong currency notes in circulation ............................................		19,745	18,364	19,057
Deposits by banks ...............................................................................		125,479	127,316	110,584
Customer accounts .............................................................................		1,318,987	1,147,321	1,227,725
Items in the course of transmission to other banks .............................		16,317	11,976	6,663
Trading liabilities ................................................................................	15	385,824	274,836	300,703
Financial liabilities designated at fair value ..........................................	16	98,280	80,436	88,133
Derivatives .........................................................................................	12	257,025	287,014	258,665
Debt securities in issue ........................................................................		149,803	153,600	145,401
Other liabilities ...................................................................................		31,583	71,732	28,050
Current tax liabilities ..........................................................................		2,629	2,558	1,804
Liabilities under insurance contracts ...................................................		64,451	52,516	58,609
Accruals and deferred income .............................................................		13,432	12,174	13,906
Provisions ..........................................................................................	17	3,027	1,828	2,138
Deferred tax liabilities ........................................................................		1,157	1,264	1,093
Retirement benefit liabilities ...............................................................		2,958	3,949	3,856
Subordinated liabilities ........................................................................		32,753	28,247	33,387

Total liabilities ...................................................................................		2,523,450	2,275,131	2,299,774

Equity
Called up share capital ........................................................................		8,909	8,755	8,843
Share premium account ......................................................................		8,401	8,423	8,454
Other equity instruments ....................................................................		5,851	5,851	5,851
Other reserves ....................................................................................		31,085	18,721	25,414
Retained earnings ...............................................................................		106,004	94,193	99,105

Total shareholders' equity ..................................................................		160,250	135,943	147,667
Non-controlling interests ...................................................................		7,287	7,380	7,248

Total equity .......................................................................................		167,537	143,323	154,915

Total equity and liabilities ..................................................................		2,690,987	2,418,454	2,454,689

The accompanying notes on pages 179 to 218 form an integral part of these financial statements1.

For footnote, see page 178.

Consolidated statement of cash flows for the half-year to 30 June 2011

		Half-year to
	Notes	30 June 2011	30 June 2010	31 December 2010
		US$m	US$m	US$m

Cash flows from operating activities
Profit before tax ................................................................................		11,474	11,104	7,933

Adjustments for:
- net gain from investing activities ................................................		(544)	(1,111)	(587)
- share of profit in associates and joint ventures ............................		(1,556)	(1,187)	(1,330)
- other non-cash items included in profit before tax ......................	19	8,825	9,553	9,334
- change in operating assets ...........................................................	19	(92,560)	14,130	(27,397)
- change in operating liabilities ......................................................	19	130,301	(1,389)	43,661
- elimination of exchange differences2 ..........................................		(16,046)	17,993	(19,792)
- dividends received from associates ..............................................		246	198	243
- contributions paid to defined benefit plans ..................................		(588)	(2,899)	(422)
- tax paid ......................................................................................		(1,709)	(247)	(2,046)

Net cash generated from operating activities ......................................		37,843	46,145	9,597

Cash flows from investing activities
Purchase of financial investments ......................................................		(156,596)	(199,567)	(141,635)
Proceeds from the sale and maturity of financial investments ............		153,407	178,272	143,574
Purchase of property, plant and equipment ........................................		(665)	(739)	(1,794)
Proceeds from the sale of property, plant and equipment ...................		194	3,338	1,035
Proceeds from the sale of loan portfolios ...........................................		-	929	3,314
Net purchase of intangible assets ........................................................		(893)	(521)	(658)
Net cash outflow from acquisition of subsidiaries ................................		-	(34)	(52)
Net cash inflow from disposal of subsidiaries .......................................		5	191	275
Net cash outflow from acquisition of or increase in stake of associates ........................................................................................................		(39)	(563)	(1,026)
Net cash outflow from the deconsolidation of funds ...........................		-	-	(19,566)
Proceeds from disposal of associates and joint ventures ......................		11	171	83

Net cash used in investing activities ....................................................		(4,576)	(18,523)	(16,450)

Cash flows from financing activities
Issue of ordinary share capital ............................................................		13	-	180
Issue of other equity instruments.........................................................		-	3,718	-
Net sales of own shares for market-making and investment purposes .		27	61	102
(Purchases)/sales of own shares to meet share awards and shareoption awards .................................................................................		(27)	19	(8)
On exercise of share options ..............................................................		-	61	(59)
Subordinated loan capital issued ..........................................................		-	1,329	3,152
Subordinated loan capital repaid ..........................................................		(2,574)	(2,408)	(67)
Net cash outflow from change in stake in subsidiaries .........................		-	-	(229)
Dividends paid to ordinary shareholders of the parent company .........		(2,192)	(2,126)	(1,315)
Dividends paid to non-controlling interests ........................................		(321)	(329)	(266)
Dividends paid to holders of other equity instruments .........................		(286)	(134)	(279)

Net cash generated from/(used in) financing activities ........................		(5,360)	191	1,211

Net increase/(decrease) in cash and cash equivalents ................		27,907	27,813	(5,642)

Cash and cash equivalents at the beginning of the period ....................		274,076	250,766	265,910
Exchange differences in respect of cash and cash equivalents ..............		10,368	(12,669)	13,808

Cash and cash equivalents at the end of the period ..............................	19	312,351	265,910	274,076

The accompanying notes on pages 179 to 218 form an integral part of these financial statements1.

For footnotes, see page 178.

Consolidated statement of changes in equity for the half-year to 30 June 2011

	Half-year to 30 June 2011
					Other reserves3
	Called up share capital	Share premium4	Other equity instru- ments	Retained earnings 3,5,6	Available- for-sale fair value reserve	Cash flow hedging reserve7	Foreign exchange reserve	Merger reserve5,8	Total share- holders' equity	Non- controlling interests	Total equity
	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m

At 1 January 2011 ...........................................	8,843	8,454	5,851	99,105	(4,077)	(285)	2,468	27,308	147,667	7,248	154,915
Profit for the period ........................................	-	-	-	9,215	-	-	-	-	9,215	547	9,762

Other comprehensive income (net of tax) .......	-	-	-	(144)	1,146	40	4,471	-	5,513	67	5,580
Available-for-sale investments .........................	-	-	-	-	1,146	-	-	-	1,146	(10)	1,136
Cash flow hedges ..............................................	-	-	-	-	-	40	-	-	40	-	40
Actuarial gains/(losses) on defined benefit plans .....................................................................	-	-	-	2	-	-	-	-	2	(21)	(19)
Share of other comprehensive income of associatesand joint ventures ........................................	-	-	-	(146)	-	-	-	-	(146)	-	(146)
Exchange differences .......................................	-	-	-	-	-	-	4,471	-	4,471	98	4,569


Total comprehensive income for the period ....	-	-	-	9,071	1,146	40	4,471	-	14,728	614	15,342

Shares issued under employee share plans .........	1	12	-	-	-	-	-	-	13	-	13
Shares issued in lieu of dividends and amounts arisingthereon4 .......................................................	65	(65)	-	1,334	-	-	-	-	1,334	-	1,334
Dividends to shareholders ................................	-	-	-	(4,006)	-	-	-	-	(4,006)	(413)	(4,419)
Tax credits on dividends ..................................	-	-	-	64	-	-	-	-	64	-	64
Own shares adjustment .....................................	-	-	-	(225)	-	-	-	-	(225)	-	(225)
Cost of share-based payment arrangements ......	-	-	-	588	-	-	-	-	588	-	588
Income taxes on share-based payments ............	-	-	-	36	-	-	-	-	36	-	36
Other movements ............................................	-	-	-	37	14	-	-	-	51	1	52
Acquisition and disposal of subsidiaries .............	-	-	-	-	-	-	-	-	-	(261)	(261)
Changes in ownership interests in subsidiaries that didnot result in loss of control ..........................	-	-	-	-	-	-	-	-	-	98	98

At 30 June 2011 ..............................................	8,909	8,401	5,851	106,004	(2,917)	(245)	6,939	27,308	160,250	7,287	167,537

Consolidated statement of changes in equity for the half-year to 30 June 2011 (continued)

	Half-year to 30 June 2010
					Other reserves3
	Called up share capital	Share premium4	Other equity instru- ments	Retained earnings 3,5,6	Available- for-sale fair value reserve	Cash flow hedging reserve7	Foreign exchange reserve	Merger reserve5,8	Total share- holders' equity	Non- controlling interests	Total equity
	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m

At 1 January 2010 .....................................	8,705	8,413	2,133	88,737	(9,965)	(26)	2,994	27,308	128,299	7,362	135,661
Profit for the period ..................................	-	-	-	6,763	-	-	-	-	6,763	485	7,248

Other comprehensive income (net of tax) .	-	-	-	28	4,151	(39)	(6,002)	-	(1,862)	(92)	(1,954)
Available-for-sale investments ...................	-	-	-	-	4,151	-	-	-	4,151	55	4,206
Cash flow hedges ........................................	-	-	-	-	-	(39)	-	-	(39)	(6)	(45)
Actuarial losses on defined benefit plans .....	-	-	-	(45)	-	-	-	-	(45)	(15)	(60)
Share of other comprehensive income of associatesand joint ventures ...................................	-	-	-	73	-	-	-	-	73	-	73
Exchange differences .................................	-	-	-	-	-	-	(6,002)	-	(6,002)	(126)	(6,128)


Total comprehensive income for the period ...............................................................	-	-	-	6,791	4,151	(39)	(6,002)	-	4,901	393	5,294

Shares issued under employee share plans ...	3	58	-	-	-	-	-	-	61	-	61
Shares issued in lieu of dividends and amountsarising thereon4 ......................................	47	(48)	-	1,584	-	-	-	-	1,583	-	1,583
Capital securities issued during the period9 ..	-	-	3,718	-	-	-	-	-	3,718	-	3,718
Dividends to shareholders ...........................	-	-	-	(3,261)	-	-	-	-	(3,261)	(409)	(3,670)
Tax credits on dividends .............................	-	-	-	54	-	-	-	-	54	-	54
Own shares adjustment ...............................	-	-	-	80	-	-	-	-	80	-	80
Exercise and lapse of share options and vesting ofshare awards ...........................................	-	-	-	(119)	-	-	-	-	(119)	-	(119)
Cost of share-based payment arrangements	-	-	-	371	-	-	-	-	371	-	371
Income taxes on share-based payments ......	-	-	-	(14)	-	-	-	-	(14)	-	(14)
Other movements ......................................	-	-	-	(30)	294	8	(2)	-	270	(1)	269
Changes in ownership interests in subsidiaries that didnot result in loss of control ....................	-	-	-	-	-	-	-	-	-	35	35

At 30 June 2010 ........................................	8,755	8,423	5,851	94,193	(5,520)	(57)	(3,010)	27,308	135,943	7,380	143,323

	Half-year to 31 December 2010
					Other reserves3
	Called up share capital	Share premium4	Other equity instru- ments	Retained earnings 3,5,6	Available- for-sale fair value reserve	Cash flow hedging reserve7	Foreign exchange reserve	Merger reserve5,8	Total share- holders' equity	Non- controlling interests	Total equity
	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m

At 1 July 2010 ...........................................	8,755	8,423	5,851	94,193	(5,520)	(57)	(3,010)	27,308	135,943	7,380	143,323
Profit for the period ..................................	-	-	-	6,396	-	-	-	-	6,396	547	6,943

Other comprehensive income (net of tax) .	-	-	-	21	1,520	(227)	5,476	-	6,790	207	6,997
Available-for-sale investments ...................	-	-	-	-	1,520	-	-	-	1,520	109	1,629
Cash flow hedges ........................................	-	-	-	-	-	(227)	-	-	(227)	1	(226)
Actuarial losses on defined benefit plans .....	-	-	-	(13)	-	-	-	-	(13)	12	(1)
Share of other comprehensive income of associatesand joint ventures ...................................	-	-	-	34	-	-	-	-	34	-	34
Exchange differences .................................	-	-	-	-	-	-	5,476	-	5,476	85	5,561


Total comprehensive income for period ....	-	-	-	6,417	1,520	(227)	5,476	-	13,186	754	13,940

Shares issued under employee share plans ...	9	110	-	-	-	-	-	-	119	-	119
Shares issued in lieu of dividends and amountsarising thereon4 ......................................	79	(79)	-	940	-	-	-	-	940	-	940
Dividends to shareholders............................	-	-	-	(3,089)	-	-	-	-	(3,089)	(316)	(3,405)
Tax credits on dividends .............................	-	-	-	68	-	-	-	-	68	-	68
Own shares adjustment ...............................	-	-	-	94	-	-	-	-	94	-	94
Exercise and lapse of share options and vesting ofshare awards ...........................................	-	-	-	119	-	-	-	-	119	-	119
Cost of share-based payment arrangements	-	-	-	441	-	-	-	-	441	-	441
Other movements ......................................	-	-	-	(28)	(77)	(1)	2	-	(104)	4	(100)
Acquisition and disposal of subsidiaries .......	-	-	-	-	-	-	-	-	-	(436)	(436)
Changes in ownership interests in subsidiaries that didnot result in loss of control ....................	-	-	-	(50)	-	-	-	-	(50)	(138)	(188)

At 31 December 2010 ................................	8,843	8,454	5,851	99,105	(4,077)	(285)	2,468	27,308	147,667	7,248	154,915

Dividends per ordinary share at 30 June 2011 were US$0.21 (30 June 2010: US$0.18; 31 December 2010: US$0.16).

The accompanying notes on pages 179 to 218 form an integral part of these financial statements1.

For footnotes, see page 178.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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