13th Aug 2010 16:34
Customer groups and global businesses
Summary
HSBC's senior management reviews operating activity on a number of bases, including by geographical region and by customer group and global business. Capital resources are allocated and performance is assessed primarily by geographical region, as presented on page 46.
In addition to utilising information by geographical region, management assesses performance through two customer groups, Personal Financial Services and Commercial Banking, and two global businesses, Global Banking and Markets and Private Banking. Personal Financial Services incorporates the Group's consumer finance businesses.
The commentaries below present customer groups and global businesses followed by geographical regions. Performance is discussed in this order because certain strategic themes, business initiatives and trends affect more than one geographical region. All commentaries are on an underlying basis (see page 11) unless stated otherwise.
Profit/(loss) before tax
|
|
|
|
Half-year to |
|
|
||||||
|
|
30 June 2010 |
|
30 June 2009 |
|
31 December 2009 |
||||||
|
|
US$m |
|
% |
|
US$m |
|
% |
|
US$m |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal Financial Services ......................................... |
1,171 |
|
10.5 |
|
(1,249) |
|
(24.9) |
|
(816) |
|
(39.6) |
|
Commercial Banking .................................................. |
3,204 |
|
28.9 |
|
2,432 |
|
48.5 |
|
1,843 |
|
89.5 |
|
Global Banking and Markets ....................................... |
5,633 |
|
50.7 |
|
6,298 |
|
125.5 |
|
4,183 |
|
203.0 |
|
Private Banking ......................................................... |
556 |
|
5.0 |
|
632 |
|
12.6 |
|
476 |
|
23.1 |
|
Other22 .......................................................................
|
540 |
|
4.9 |
|
(3,094) |
|
(61.7) |
|
(3,626) |
|
(176.0) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,104 |
|
100.0 |
|
5,019 |
|
100.0 |
|
2,060 |
|
100.0 |
Total assets23
|
|
At 30 June 2010 |
|
At 30 June 2009 |
|
At 31 December 2009 |
||||||
|
|
US$m |
|
% |
|
US$m |
|
% |
|
US$m |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal Financial Services ...................................... |
507,088 |
|
21.0 |
|
547,084 |
|
22.6 |
|
554,074 |
|
23.4 |
|
Commercial Banking ................................................ |
264,077 |
|
10.9 |
|
249,030 |
|
10.3 |
|
251,143 |
|
10.6 |
|
Global Banking and Markets ..................................... |
1,777,643 |
|
73.5 |
|
1,770,618 |
|
73.1 |
|
1,683,672 |
|
71.2 |
|
Private Banking ....................................................... |
108,499 |
|
4.5 |
|
117,468 |
|
4.9 |
|
116,148 |
|
4.9 |
|
Other ....................................................................... |
189,153 |
|
7.8 |
|
170,414 |
|
7.0 |
|
150,983 |
|
6.4 |
|
Intra-HSBC items ..................................................... |
(428,006) |
|
(17.7) |
|
(432,771) |
|
(17.9) |
|
(391,568) |
|
(16.5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,418,454 |
|
100.0 |
|
2,421,843 |
|
100.0 |
|
2,364,452 |
|
100.0 |
For footnotes, see page 95.
Basis of preparation
The results of customer groups and global businesses are presented in accordance with the accounting policies used in the preparation of HSBC's consolidated financial statements. HSBC's operations are closely integrated and, accordingly, the presentation of customer group data includes internal allocations of certain items of income and expense. These allocations include the costs of certain support services and Group Management
Office ('GMO') functions, to the extent that these can be meaningfully attributed to operational business lines. While such allocations have been made on a systematic and consistent basis, they necessarily involve a degree of subjectivity.
Where relevant, income and expense amounts presented include the results of inter-segment funding as well as inter-company and inter-business line transactions. All such transactions are undertaken on arm's length terms.
Personal Financial Services
|
Profit/(loss) before tax |
|||||
|
|
Half-year to |
||||
|
|
30 June 2010 |
|
30 June 2009 |
31 December 2009 |
|
|
|
US$m |
|
US$m |
|
US$m |
|
|
|
|
|
|
|
|
Net interest income ...... |
12,198 |
|
12,650 |
|
12,457 |
|
|
|
|
|
|
|
|
Net fee income ............. |
3,560 |
|
4,045 |
|
4,193 |
|
|
|
|
|
|
|
|
Trading income/(expense) excluding net interest income |
(392) |
|
450 |
|
187 |
|
Net interest income on trading activities ... |
15 |
|
39 |
|
26 |
|
|
|
|
|
|
|
|
Net trading income/ (expense)25 |
(377) |
|
489 |
|
213 |
|
Net income/(expense) from financial instruments designated at fair value |
(127) |
|
744 |
|
1,595 |
|
Gains less losses from financial investments |
3 |
|
195 |
|
29 |
|
Dividend income ........... |
14 |
|
17 |
|
16 |
|
Net earned insurance premiums |
4,953 |
|
4,585 |
|
4,949 |
|
Other operating income. |
387 |
|
302 |
|
507 |
|
|
|
|
|
|
|
|
Total operating income |
20,611 |
|
23,027 |
|
23,959 |
|
|
|
|
|
|
|
|
Net insurance claims26 ... |
(4,572) |
|
(5,144) |
|
(6,427) |
|
|
|
|
|
|
|
|
Net operating income7 |
16,039 |
|
17,883 |
|
17,532 |
|
|
|
|
|
|
|
|
Loan impairment charges and other credit risk provisions |
(6,317) |
|
(10,673) |
|
(9,229) |
|
|
|
|
|
|
|
|
Net operating income |
9,722 |
|
7,210 |
|
8,303 |
|
|
|
|
|
|
|
|
Employee expenses27 .... |
(2,584) |
|
(2,876) |
|
(3,193) |
|
Other operating expenses |
(6,425) |
|
(5,898) |
|
(6,325) |
|
|
|
|
|
|
|
|
Total operating expenses ....... |
(9,009) |
|
(8,774) |
|
(9,518) |
|
|
|
|
|
|
|
|
Operating profit/(loss) ....... |
713 |
|
(1,564) |
|
(1,215) |
|
|
|
|
|
|
|
|
Share of profit in associates and joint ventures |
458 |
|
315 |
|
399 |
|
|
|
|
|
|
|
|
Profit/(loss) before tax |
1,171 |
|
(1,249) |
|
(816) |
|
|
|
|
|
|
|
|
By geographical region |
|
|
|
|
|
|
Europe .......................... |
562 |
|
212 |
|
100 |
|
Hong Kong ................... |
1,422 |
|
1,337 |
|
1,391 |
|
Rest of Asia-Pacific ...... |
476 |
|
135 |
|
328 |
|
Middle East ................... |
58 |
|
35 |
|
(161) |
|
North America .............. |
(1,484) |
|
(2,843) |
|
(2,383) |
|
Latin America ............... |
137 |
|
(125) |
|
(91) |
|
|
|
|
|
|
|
|
|
1,171 |
|
(1,249) |
|
(816) |
|
|
|
|
|
|
|
|
|
% |
|
% |
|
% |
|
Share of HSBC's profit before tax |
10.5 |
|
(24.9) |
|
(39.6) |
|
Cost efficiency ratio ..... |
56.2 |
|
49.1 |
|
54.3 |
|
|
|
|
|
|
|
|
Balance sheet data23
|
|
|
|
|
|
|
|
US$m |
|
US$m |
|
US$m |
|
Loans and advances to customers (net) |
377,467 |
|
400,692 |
|
399,460 |
|
Total assets ................... |
507,088 |
|
547,084 |
|
554,074 |
|
Customer accounts ........ |
488,249 |
|
482,935 |
|
499,109 |
|
For footnotes, see page 95. |
|
|
|
|
|
Financial and business highlights
·; Personal Financial Services reported a profit before tax of US$1.2 billion, compared with reported and underlying losses of US$1.2 billion and US$1.3 billion, respectively, in the first half of 2009. Loan impairment charges fell in line with the managed reduction of the run-off portfolios and as global economic conditions improved, the latter also creating opportunities to expand insurance and wealth management revenues. This was partly offset by fair value losses on non-qualifying hedges in the US due to a decline in long-term interest rates, compared with fair value gains in 2009 (see page 82).
·; Net interest income was constrained by lower asset balances in the run-off portfolios in the US, Latin America and the Middle East, and significant deposit spread compression in the Group's major deposit-taking entities due to the effect of continuing low interest rates. This was partly offset by higher secured lending volumes and spreads in Europe.
·; Net fee income benefited from higher investment income as market sentiment improved, most notably in Asia. However, this was more than offset by a decrease in credit card fees in the US from lower volumes and delinquency levels and the impact on charging practices of the Credit Card Accountability, Responsibility and Disclosure Act ('CARD Act').
·; Net earned insurance premiums rose as a result of strong life insurance sales in Hong Kong, Brazil and France, partly offset by the closure of the UK motor insurance business in 2009.
·; The decrease in costs was primarily due to a reduction in staff numbers and a US$113 million pension curtailment accounting gain in the US. This was partly offset by the non‑recurrence of an accounting gain relating to a change in the delivery of certain staff benefits in the main UK pension scheme in 2009 and continuing investment in the branch networks in mainland China and Taiwan. The cost efficiency ratio increased as revenues were lower in the period.
·; Loan impairment charges and other credit risk provisions fell in all regions, most notably in the US, due to the continued reduction of the run-off portfolios, the improvement in economic conditions, enhanced collection processes and tightened lending criteria.
·; Customer accounts were broadly in line with December 2009 levels, reflecting the strength of the HSBC brand and efforts to maintain strong
liquidity levels. Loans and advances to customers decreased as the reduction in balances in the run-off portfolios overshadowed growth in secured lending in the UK and Hong Kong.
·; HSBC Premier ('Premier'), the Group's flagship global customer proposition, attracted 469,000 net new customers in the first half of 2010, of whom 51 per cent were new to the bank. Asia exceeded the one million customer milestone in the period, extending HSBC's global reach to 3.9 million customers in 46 markets.
·; A second global proposition, HSBC Advance ('Advance'), for emerging mass affluent customers,
had a customer base of 3.6 million at 30 June 2010 and is now offered in 22 markets.
·; The Group's World Selection global investment offering is now available in 21 countries and increased its total assets under management to US$4.1 billion at 30 June 2010.
·; HSBC won a number of awards in the UK for its range of mortgages in the 2010 Moneyfacts awards. HSBC also won awards in various markets in Asia, including the best foreign retail bank in mainland China for the second year in a row from the Asian Banker Excellence in Retail Financial Services Awards 2010.
Reconciliation of reported and underlying profit/(loss) before tax
|
|
Half-year to 30 June 2010 ('1H10') compared with half-year to 30 June 2009 ('1H09') |
||||||||||||||||
|
Personal Financial Services |
1H09 as reported US$m |
1H09 adjust- ments1 US$m |
|
Currency translation2 US$m |
|
1H09 at 1H10 exchange rates3 US$m |
1H10 as reported US$m |
|
1H10 adjust- ments1 US$m |
|
1H10 under- lying US$m |
|
Re- ported change4 % |
|
Under- lying change4 % |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income .... |
12,650 |
|
- |
|
425 |
|
13,075 |
|
12,198 |
|
(8) |
|
12,190 |
|
(4) |
|
(7) |
|
Net fee income ........... |
4,045 |
|
(4) |
|
121 |
|
4,162 |
|
3,560 |
|
(1) |
|
3,559 |
|
(12) |
|
(14) |
|
Other income6 ............ |
1,188 |
|
- |
|
71 |
|
1,259 |
|
281 |
|
(5) |
|
276 |
|
(76) |
|
(78) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income7 ................. |
17,883 |
|
(4) |
|
617 |
|
18,496 |
|
16,039 |
|
(14) |
|
16,025 |
|
(10) |
|
(13) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan impairment charges and other credit risk provisions ................................ |
(10,673) |
|
- |
|
(252) |
|
(10,925) |
|
(6,317) |
|
- |
|
(6,317) |
|
41 |
|
42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income .................. |
7,210 |
|
(4) |
|
365 |
|
7,571 |
|
9,722 |
|
(14) |
|
9,708 |
|
35 |
|
28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses ..... |
(8,774) |
|
2 |
|
(426) |
|
(9,198) |
|
(9,009) |
|
4 |
|
(9,005) |
|
(3) |
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) ........... |
(1,564) |
|
(2) |
|
(61) |
|
(1,627) |
|
713 |
|
(10) |
|
703 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from associates |
315 |
|
- |
|
(1) |
|
314 |
|
458 |
|
- |
|
458 |
|
45 |
|
46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) before tax .......................... |
(1,249) |
|
(2) |
|
(62) |
|
(1,313) |
|
1,171 |
|
(10) |
|
1,161 |
|
|
|
|
|
|
Half-year to 30 June 2010 ('1H10') compared with half-year to 31 December 2009 ('2H09') |
||||||||||||||||
|
Personal Financial Services |
2H09 as reported US$m |
2H09 adjust- ments1 US$m |
|
Currency translation2 US$m |
|
2H09 at 1H10 exchange Rates8 US$m |
1H10 as reported US$m |
|
1H10 adjust- ments1 US$m |
|
1H10 under- lying US$m |
|
Re- ported change4 % |
|
Under- lying change4 % |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income ..... |
12,457 |
|
- |
|
(144) |
|
12,313 |
|
12,198 |
|
- |
|
12,198 |
|
(2) |
|
(1) |
|
Net fee income ............ |
4,193 |
|
(2) |
|
(51) |
|
4,140 |
|
3,560 |
|
- |
|
3,560 |
|
(15) |
|
(14) |
|
Other income6 ............. |
882 |
|
- |
|
12 |
|
894 |
|
281 |
|
(3) |
|
278 |
|
(68) |
|
(69) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income7 . |
17,532 |
|
(2) |
|
(183) |
|
17,347 |
|
16,039 |
|
(3) |
|
16,036 |
|
(9) |
|
(8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan impairment charges and other credit risk provisions |
(9,229) |
|
- |
|
37 |
|
(9,192) |
|
(6,317) |
|
- |
|
(6,317) |
|
32 |
|
31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income .. |
8,303 |
|
(2) |
|
(146) |
|
8,155 |
|
9,722 |
|
(3) |
|
9,719 |
|
17 |
|
19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses ...... |
(9,518) |
|
1 |
|
133 |
|
(9,384) |
|
(9,009) |
|
- |
|
(9,009) |
|
5 |
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) . |
(1,215) |
|
(1) |
|
(13) |
|
(1,229) |
|
713 |
|
(3) |
|
710 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from associates |
399 |
|
- |
|
(1) |
|
398 |
|
458 |
|
- |
|
458 |
|
15 |
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) before tax |
(816) |
|
(1) |
|
(14) |
|
(831) |
|
1,171 |
|
(3) |
|
1,168 |
|
|
|
|
For footnotes, see page 95.
Commercial Banking
|
Profit before tax |
||||||
|
|
Half-year to |
|||||
|
|
30 June 2010 |
|
30 June 2009 |
31 December 2009 |
||
|
|
US$m |
|
US$m |
|
US$m |
|
|
|
|
|
|
|
|
|
|
Net interest income ........ |
4,024 |
|
3,809 |
|
4,074 |
|
|
|
|
|
|
|
|
|
|
Net fee income ............... |
1,935 |
|
1,749 |
|
1,953 |
|
|
|
|
|
|
|
|
|
|
Trading income excluding net interest income |
222 |
|
183 |
|
149 |
|
|
Net interest income on trading activities |
11 |
|
11 |
|
11 |
|
|
|
|
|
|
|
|
|
|
Net trading income25 ...... |
233 |
|
194 |
|
160 |
|
|
Net income/(expense) from financial instruments designated at fair value |
26 |
|
(17) |
|
117 |
|
|
Gains less losses from financial investments |
3 |
|
25 |
|
(2) |
|
|
Dividend income ............ |
5 |
|
3 |
|
5 |
|
|
Net earned insurance premiums |
696 |
|
390 |
|
496 |
|
|
Other operating income . |
355 |
|
519 |
|
220 |
|
|
|
|
|
|
|
|
|
|
Total operating income |
7,277 |
|
6,672 |
|
7,023 |
|
|
|
|
|
|
|
|
|
|
Net insurance claims26 .... |
(537) |
|
(328) |
|
(514) |
|
|
|
|
|
|
|
|
|
|
Net operating income7 |
6,740 |
|
6,344 |
|
6,509 |
|
|
|
|
|
|
|
|
|
|
Loan impairment charges and other credit risk provisions |
(705) |
|
(1,509) |
|
(1,773) |
|
|
|
|
|
|
|
|
|
|
Net operating income . |
6,035 |
|
4,835 |
|
4,736 |
|
|
|
|
|
|
|
|
|
|
Employee expenses27 .... |
(1,063) |
|
(876) |
|
(1,196) |
|
|
Other operating expenses |
(2,203) |
|
(1,864) |
|
(2,027) |
|
|
|
|
|
|
|
|
|
|
Total operating expenses ....... |
(3,266) |
|
(2,740) |
|
(3,223) |
|
|
|
|
|
|
|
|
|
|
Operating profit .......... |
2,769 |
|
2,095 |
|
1,513 |
|
|
|
|
|
|
|
|
|
|
Share of profit in associates and joint ventures |
435 |
|
337 |
|
330 |
|
|
|
|
|
|
|
|
|
|
Profit before tax .......... |
3,204 |
|
2,432 |
|
1,843 |
|
|
|
|
|
|
|
|
|
|
By geographical region |
|
|
|
|
|
|
|
Europe ........................... |
709 |
|
852 |
|
440 |
|
|
Hong Kong ..................... |
672 |
|
424 |
|
532 |
|
|
Rest of Asia-Pacific ........ |
757 |
|
459 |
|
605 |
|
|
Middle East .................... |
258 |
|
252 |
|
(231) |
|
|
North America ............... |
572 |
|
224 |
|
319 |
|
|
Latin America ................ |
236 |
|
221 |
|
178 |
|
|
|
|
|
|
|
|
|
|
|
3,204 |
|
2,432 |
|
1,843 |
|
|
|
|
|
|
|
|
|
|
|
% |
|
% |
|
% |
|
|
Share of HSBC's profit before tax |
28.9 |
|
48.5 |
|
89.5 |
|
|
Cost efficiency ratio ....... |
48.5 |
|
43.2 |
|
49.5 |
|
|
|
|
|
|
|
|
|
|
Balance sheet data23
|
|
|
|
|
|
|
|
|
US$m |
|
US$m |
|
US$m |
|
|
Loans and advances to customers (net) |
207,763 |
|
198,903 |
|
199,674 |
|
|
Total assets .................... |
264,077 |
|
249,030 |
|
251,143 |
|
|
Customer accounts ......... |
263,616 |
|
239,933 |
|
267,388 |
|
|
For footnotes, see page 95. |
|
|
|
|
||
Financial and business highlights
·; The reported profit before tax in the first half of 2010 was US$3.2 billion, 32 per cent higher than in the first half of 2009. Revenue included gains from the sale of HSBC Insurance Brokers and the Group's stake in the Wells Fargo HSBC Trade Bank (see page 20). On an underlying basis, profit before tax increased by 40 per cent as credit quality improved, trade levels increased and 2009 repricing fed through into higher revenue.
·; HSBC's broad geographic presence allowed it to capitalise on growing levels of international trade flows. Revenue increased by 5 per cent to US$6.6 billion, mainly due to growth in trade-related fee income and an increase in insurance sales in Hong Kong. Reflecting the faster rate of economic growth, customers within emerging markets contributed 50 per cent of revenue, and 63 per cent of profit before tax.
·; Loan impairment charges were 56 per cent lower with declines across all regions as higher risk portfolios were actively managed down and the economic environment improved. The percentage of overall loan impairment charges to customer advances was broadly in line with historically low levels at less than 1 per cent.
·; Excluding the non-recurrence of a 2009 accounting gain related to a change in the delivery of certain staff benefits in the UK pension scheme, operating expenses increased by 8 per cent to US$3.3 billion. Costs grew as the business expanded, mainly in emerging markets, and HSBC invested in technology and front-line staff. On a reported basis, the cost efficiency ratio rose to 48.5 per cent.
·; Despite the low interest rate environment, deposit balances increased by 2 per cent, while customer advances, which had declined markedly during the financial crisis, increased by 9 per cent, with the strongest growth in Hong Kong, mainland China, Brazil and France.
·; In the first half of 2010, Business Banking customer numbers increased by 3 per cent to over 3.3 million, with 84 per cent of this growth generated in emerging markets. Business Banking represented 55 per cent of total deposit balances at 30 June 2010. HSBC was awarded the best SME's Partner award for the fifth
consecutive year by the Hong Kong Chamber of Small and Medium Business.
·; The number of successful cross-border referrals doubled compared with the first half of 2009, with 13 per cent of referral flow generated from developed markets into emerging markets. The total transaction value of cross-border referrals exceeded US$6.8 billion.
·; In Hong Kong, HSBC's renminbi-denominated trade settlement volume was over US$450 million in the first half of 2010, representing a significant share of the cross-border clearance business. With its strong foothold in Hong Kong and mainland China, HSBC is well positioned to build its market position and support businesses needing renminbi.
Reconciliation of reported and underlying profit before tax
|
|
Half-year to 30 June 2010 ('1H10') compared with half-year to 30 June 2009 ('1H09') |
||||||||||||||||
|
Commercial Banking |
1H09 as reported US$m |
1H09 adjust- ments1 US$m |
|
Currency translation2 US$m |
|
1H09 at 1H10 exchange rates3 US$m |
1H10 as reported US$m |
|
1H10 adjust- ments1 US$m |
|
1H10 under- lying US$m |
|
Re- ported change4 % |
|
Under- lying change4 % |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income .... |
3,809 |
|
- |
|
207 |
|
4,016 |
|
4,024 |
|
(20) |
|
4,004 |
|
6 |
|
- |
|
Net fee income ........... |
1,749 |
|
(57) |
|
71 |
|
1,763 |
|
1,935 |
|
(2) |
|
1,933 |
|
11 |
|
10 |
|
Other income6 ............ |
786 |
|
(281) |
|
5 |
|
510 |
|
781 |
|
(121) |
|
660 |
|
- |
|
29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income7 .................
|
6,344 |
|
(338) |
|
283 |
|
6,289 |
|
6,740 |
|
(143) |
|
6,597 |
|
6 |
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan impairment charges and other credit risk provisions ................................ |
(1,509) |
|
- |
|
(81) |
|
(1,590) |
|
(705) |
|
- |
|
(705) |
|
53 |
|
56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income .................. |
4,835 |
|
(338) |
|
202 |
|
4,699 |
|
6,035 |
|
(143) |
|
5,892 |
|
25 |
|
25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses ..... |
(2,740) |
|
50 |
|
(143) |
|
(2,833) |
|
(3,266) |
|
13 |
|
(3,253) |
|
(19) |
|
(15) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit ...... |
2,095 |
|
(288) |
|
59 |
|
1,866 |
|
2,769 |
|
(130) |
|
2,639 |
|
32 |
|
41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from associates |
337 |
|
(1) |
|
- |
|
336 |
|
435 |
|
- |
|
435 |
|
29 |
|
29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before tax ...... |
2,432 |
|
(289) |
|
59 |
|
2,202 |
|
3,204 |
|
(130) |
|
3,074 |
|
32 |
|
40 |
|
|
Half-year to 30 June 2010 ('1H10') compared with half-year to 31 December 2009 ('2H09') |
||||||||||||||||
|
Commercial Banking |
2H09 as reported US$m |
2H09 adjust- ments1 US$m |
|
Currency translation2 US$m |
|
2H09 at 1H10 exchange Rates8 US$m |
1H10 as reported US$m |
|
1H10 adjust- ments1 US$m |
|
1H10 under- lying US$m |
|
Re- ported change4 % |
|
Under- lying change4 % |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income ..... |
4,074 |
|
- |
|
(74) |
|
4,000 |
|
4,024 |
|
- |
|
4,024 |
|
(1) |
|
1 |
|
Net fee income ............ |
1,953 |
|
(71) |
|
(50) |
|
1,832 |
|
1,935 |
|
- |
|
1,935 |
|
(1) |
|
6 |
|
Other income6 ............. |
482 |
|
(2) |
|
(2) |
|
478 |
|
781 |
|
(114) |
|
667 |
|
62 |
|
40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income7 . |
6,509 |
|
(73) |
|
(126) |
|
6,310 |
|
6,740 |
|
(114) |
|
6,626 |
|
4 |
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan impairment charges and other credit risk provisions |
(1,773) |
|
- |
|
38 |
|
(1,735) |
|
(705) |
|
- |
|
(705) |
|
60 |
|
59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income .. |
4,736 |
|
(73) |
|
(88) |
|
4,575 |
|
6,035 |
|
(114) |
|
5,921 |
|
27 |
|
29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses ...... |
(3,223) |
|
64 |
|
67 |
|
(3,092) |
|
(3,266) |
|
- |
|
(3,266) |
|
(1) |
|
(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit .......... |
1,513 |
|
(9) |
|
(21) |
|
1,483 |
|
2,769 |
|
(114) |
|
2,655 |
|
83 |
|
79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from associates |
330 |
|
- |
|
2 |
|
332 |
|
435 |
|
- |
|
435 |
|
32 |
|
31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before tax .......... |
1,843 |
|
(9) |
|
(19) |
|
1,815 |
|
3,204 |
|
(114) |
|
3,090 |
|
74 |
|
70 |
For footnotes, see page 95.
Global Banking and Markets
|
Profit before tax |
|||||
|
|
Half-year to |
||||
|
|
30 June 2010 |
|
30 June 2009 |
31 December 2009 |
|
|
|
US$m |
|
US$m |
|
US$m |
|
|
|
|
|
|
|
|
Net interest income ........ |
3,720 |
|
4,667 |
|
3,943 |
|
|
|
|
|
|
|
|
Net fee income ............... |
2,379 |
|
1,968 |
|
2,395 |
|
|
|
|
|
|
|
|
Trading income excluding net interest income |
2,867 |
|
3,422 |
|
1,279 |
|
Net interest income on trading activities |
888 |
|
1,056 |
|
1,118 |
|
|
|
|
|
|
|
|
Net trading income25 ...... |
3,755 |
|
4,478 |
|
2,397 |
|
Net income from financial instruments designated at fair value ................ |
8 |
|
329 |
|
144 |
|
Gains less losses from financial investments |
505 |
|
158 |
|
107 |
|
Dividend income ............ |
22 |
|
23 |
|
45 |
|
Net earned insurance premiums |
22 |
|
40 |
|
14 |
|
Other operating income . |
438 |
|
603 |
|
543 |
|
|
|
|
|
|
|
|
Total operating income |
10,849 |
|
12,266 |
|
9,588 |
|
|
|
|
|
|
|
|
Net insurance claims26 .... |
(15) |
|
(35) |
|
1 |
|
|
|
|
|
|
|
|
Net operating income7 |
10,834 |
|
12,231 |
|
9,589 |
|
|
|
|
|
|
|
|
Loan impairment charges and other credit risk provisions |
(500) |
|
(1,732) |
|
(1,436) |
|
|
|
|
|
|
|
|
Net operating income . |
10,334 |
|
10,499 |
|
8,153 |
|
|
|
|
|
|
|
|
Employee expenses27 ..... |
(2,520) |
|
(2,492) |
|
(1,843) |
|
Other operating expenses |
(2,427) |
|
(1,913) |
|
(2,289) |
|
|
|
|
|
|
|
|
Total operating expenses ....... |
(4,947) |
|
(4,405) |
|
(4,132) |
|
|
|
|
|
|
|
|
Operating profit .......... |
5,387 |
|
6,094 |
|
4,021 |
|
|
|
|
|
|
|
|
Share of profit in associates and joint ventures |
246 |
|
204 |
|
162 |
|
|
|
|
|
|
|
|
Profit before tax .......... |
5,633 |
|
6,298 |
|
4,183 |
|
|
|
|
|
|
|
|
By geographical region |
|
|
|
|
|
|
Europe ........................... |
2,085 |
|
2,891 |
|
1,654 |
|
Hong Kong ..................... |
730 |
|
907 |
|
600 |
|
Rest of Asia-Pacific ........ |
1,306 |
|
1,239 |
|
1,080 |
|
Middle East .................... |
49 |
|
304 |
|
163 |
|
North America ............... |
998 |
|
477 |
|
235 |
|
Latin America ................ |
465 |
|
480 |
|
451 |
|
|
|
|
|
|
|
|
|
5,633 |
|
6,298 |
|
4,183 |
|
|
|
|
|
|
|
|
|
% |
|
% |
|
% |
|
Share of HSBC's profit before tax |
50.7 |
|
125.5 |
|
203.0 |
|
Cost efficiency ratio ....... |
45.7 |
|
36.0 |
|
43.1 |
For footnotes, see page 95.
Financial and business highlights
·; Global Banking and Markets delivered its second highest ever half-year performance with pre-tax profits of US$5.6 billion, below the record results of the first half of 2009 which benefited from exceptional market conditions. On an underlying basis, profit before tax fell by 13 per cent. Notably, market share gains captured in 2009 were broadly maintained and performance significantly exceeded the second half of 2009 with stronger revenues and lower loan impairment charges and other credit risk provisions. Operating results remained well diversified with a strong contribution from emerging markets and no single business contributing much more than a fifth of total revenues. The breadth of this performance demonstrated the continuing benefit of Global Banking and Markets' emerging markets-led and financing-focused strategy.
·; Revenues slowed in the second quarter of 2010, as European sovereign debt concerns and widening credit spreads were reflected in less client activity and reduced debt and equity issuance in the market. Operating expenses included initial costs of a number of strategic investments to drive future revenue growth, including the development of Prime Services and equity capital markets capabilities with increased focus on emerging markets and the expansion of the foreign exchange and Rates e‑commerce platform. Additionally, a charge of US$350 million was taken in respect of UK and French payroll taxes levied on certain 2009 bonus payments. The cost efficiency ratio, at 45.7 per cent, was 10 percentage points higher than in the first half of 2009.
·; There was an overall improvement in asset-backed securities ('ABS's) prices and a significant reduction in write-downs following a return of liquidity to financial markets. This was reflected in a net release of US$362 million relating to legacy positions in credit trading, leveraged and acquisition financing and monoline Credit exposures. 2009's results included a reported net charge of US$602 million in the first half and a US$271 million release in the second half. A fair value gain of US$255 million resulting from widening credit spreads on structured liabilities was reported during the first half of 2010 (losses of US$127 million and US$317 million were reported in the first and second halves of 2009, respectively).
·;
Management view of total operating income
|
|
Half-year to |
||||
|
|
30 June 2010 |
|
30 June 2009 |
31 December 2009 |
|
|
|
US$m |
|
US$m |
|
US$m |
|
|
|
|
|
|
|
|
Global Markets28 ............ |
5,542 |
|
5,991 |
|
4,373 |
|
Credit ......................... |
1,043 |
|
1,066 |
|
1,264 |
|
Rates .......................... |
1,529 |
|
1,964 |
|
684 |
|
Foreign exchange ........ |
1,513 |
|
1,797 |
|
1,182 |
|
Equities ....................... |
479 |
|
315 |
|
326 |
|
Securities services29 ..... |
718 |
|
712 |
|
708 |
|
Asset and structured finance |
260 |
|
137 |
|
209 |
|
|
|
|
|
|
|
|
Global Banking ............... |
2,288 |
|
2,403 |
|
2,227 |
|
Financing and equity capital markets |
1,420 |
|
1,609 |
|
1,461 |
|
Payments and cash management30 |
542 |
|
535 |
|
518 |
|
Other transaction services31................. |
326 |
|
259 |
|
248 |
|
|
|
|
|
|
|
|
Balance Sheet Management ............... |
2,269 |
|
3,350 |
|
2,040 |
|
Global Asset Management |
540 |
|
414 |
|
525 |
|
Principal Investments .... |
126 |
|
(38) |
|
80 |
|
Other32 ........................... |
84 |
|
146 |
|
343 |
|
|
|
|
|
|
|
|
Total operating income .. |
10,849 |
|
12,266 |
|
9,588 |
For footnotes, see page 95.
·; Loan impairment charges and other credit risk provisions decreased by US$1.3 billion. Loan impairment charges of US$0.2 billion fell by US$0.9 billion and US$0.3 billion against the first and second halves of 2009, respectively. This reflected improving credit conditions which strengthened the credit quality of the portfolio. The significant impairments taken in relation to a small number of clients in both halves of 2009 did not recur.
·; The available-for-sale portfolio continued to track the impairment and loss expectations contained within the parameters of the stress tests described on page 156 of the Annual Report and Accounts 2009. Credit risk provisions were US$0.3 billion compared with US$0.6 billion and US$0.8 billion in the first and second halves of 2009, respectively. ABSs accounted for US$256 million of this charge; the expected cash flow impairment on which was US$122 million. A further US$488 million impairment was absorbed by income note holders who take the first loss on positions within the securities investment conduits ('SIC's) now consolidated in HSBC's accounts; details of the SICs are provided on page 126. The available-for-sale reserves in respect of these securities continued to fall, standing at US$8.1 billion at 30 June 2010 as a result of improved prices and continued amortisations and maturities in the portfolio.
·;
·; HSBC was recognised in a number of key industry awards which highlighted the strength of Global Banking and Market's core businesses and its strategy. This included being awardedEuromoney's 'Best Global Emerging Markets Bank' and 'Best Global Emerging Markets Debt House'. Regionally, achievements were recognised through the attainment of 'Best Investment Bank in the Middle East' and 'Best Debt House' in Asia and in Central and Eastern Europe.
·; Global Markets recorded its second highest half-year performance with revenues exceeding US$5 billion, delivered through enhanced sales coverage and greater alignment across regions and with other customer groups. Revenues rose significantly on the second half of 2009, but were lower than in the record first half as the exceptional market conditions did not recur. Higher economic uncertainty and subdued market conditions resulted in lower demand for foreign exchange, Credit and Rates products in the second quarter of 2010. In credit trading, a net release of write-downs on legacy positions was more than offset by the non-recurrence of gains in other parts of the business due to the events described above.
·; The securities services business benefited from greater transaction volumes and an 8.9 per cent increase in assets under custody compared with the first half of 2009. However, this performance was offset in part by the continuation of spread compression, as interest rates in major economies remained at historical lows.
·; In Global Banking, revenues from financing and equity capital markets declined from the highs recorded in the latter part of 2008 and early 2009 due to lower client activity, while reduced credit and lending revenues reflected tighter spreads and a reduction in overall lending balances as clients repaid debt in order to strengthen their balance sheets. Compared with the second half of 2009, overall revenues were stable with well diversified income streams. Payments and cash management income was broadly in line with the first half of 2009.
·; As expected, Balance Sheet Management revenues fell compared with the record first half of 2009, as interest rates remained low and major yield curves flattened. Although revenues improved on the second half of 2009, the declining revenue trend is expected to resume in the second half of 2010 as a result of lower-yielding reinvestment opportunities with flatter yield curves in the major currencies.
·; Results in Global Asset Management reflected continuation of the momentum achieved in the second half of 2009. Management fees increased significantly with a notable growth in the contribution from emerging markets. Average funds under management at US$421 billion were 15 per cent higher than in the first half of 2009, assisted by net inflows in the first six months of 2010 of
US$12 billion. On 30 June 2010, HSBC announced the single brand of HSBC Global Asset Management, to reflect better the breadth, strength and expertise of its specialist global asset management businesses.
·; Principal Investments reported an increase in profits on the first half of 2009, due to higher realisations and lower impairments.
Reconciliation of reported and underlying profit before tax
|
|
Half-year to 30 June 2010 ('1H10') compared with half-year to 30 June 2009 ('1H09') |
||||||||||||||||
|
Global Banking and Markets |
1H09 as reported US$m |
1H09 adjust- ments1 US$m |
|
Currency translation2 US$m |
|
1H09 at 1H10 exchange rates3 US$m |
1H10 as reported US$m |
|
1H10 adjust- ments1 US$m |
|
1H10 under- lying US$m |
|
Re- ported change4 % |
|
Under- lying change4 % |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income .... |
4,667 |
|
- |
|
124 |
|
4,791 |
|
3,720 |
|
(3) |
|
3,717 |
|
(20) |
|
(22) |
|
Net fee income ...........
|
1,968 |
|
(10) |
|
51 |
|
2,009 |
|
2,379 |
|
- |
|
2,379 |
|
21 |
|
18 |
|
Other income6 ............ |
5,596 |
|
- |
|
153 |
|
5,749 |
|
4,735 |
|
(9) |
|
4,726 |
|
(15) |
|
(18) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income7 ................. |
12,231 |
|
(10) |
|
328 |
|
12,549 |
|
10,834 |
|
(12) |
|
10,822 |
|
(11) |
|
(14) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan impairment charges and other credit risk provisions ................................ |
(1,732) |
|
- |
|
(32) |
|
(1,764) |
|
(500) |
|
- |
|
(500) |
|
71 |
|
72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income .................. |
10,499 |
|
(10) |
|
296 |
|
10,785 |
|
10,334 |
|
(12) |
|
10,322 |
|
(2) |
|
(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses .... |
(4,405) |
|
18 |
|
(116) |
|
(4,503) |
|
(4,947) |
|
2 |
|
(4,945) |
|
(12) |
|
(10) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit ...... |
6,094 |
|
8 |
|
180 |
|
6,282 |
|
5,387 |
|
(10) |
|
5,377 |
|
(12) |
|
(14) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from associates |
204 |
|
- |
|
(1) |
|
203 |
|
246 |
|
- |
|
246 |
|
21 |
|
21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before tax ...... |
6,298 |
|
8 |
|
179 |
|
6,485 |
|
5,633 |
|
(10) |
|
5,623 |
|
(11) |
|
(13) |
|
|
Half-year to 30 June 2010 ('1H10') compared with half-year to 31 December 2009 ('2H09') |
||||||||||||||||
|
Global Banking and Markets |
2H09 as reported US$m |
2H09 adjust- ments1 US$m |
|
Currency translation2 US$m |
|
2H09 at 1H10 exchange Rates8 US$m |
1H10 as reported US$m |
|
1H10 adjust- ments1 US$m |
|
1H10 under- lying US$m |
|
Re- ported change4 % |
|
Under- lying change4 % |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income ..... |
3,943 |
|
- |
|
(115) |
|
3,828 |
|
3,720 |
|
- |
|
3,720 |
|
(6) |
|
(3) |
|
Net fee income ............ |
2,395 |
|
(32) |
|
(60) |
|
2,303 |
|
2,379 |
|
- |
|
2,379 |
|
(1) |
|
3 |
|
Other income6 ............. |
3,251 |
|
- |
|
(68) |
|
3,183 |
|
4,735 |
|
(9) |
|
4,726 |
|
46 |
|
48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income7 . |
9,589 |
|
(32) |
|
(243) |
|
9,314 |
|
10,834 |
|
(9) |
|
10,825 |
|
13 |
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan impairment charges and other credit risk provisions |
(1,436) |
|
- |
|
64 |
|
(1,372) |
|
(500) |
|
- |
|
(500) |
|
65 |
|
64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income .. |
8,153 |
|
(32) |
|
(179) |
|
7,942 |
|
10,334 |
|
(9) |
|
10,325 |
|
27 |
|
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses ...... |
(4,132) |
|
34 |
|
131 |
|
(3,967) |
|
(4,947) |
|
- |
|
(4,947) |
|
(20) |
|
(25) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit .......... |
4,021 |
|
2 |
|
(48) |
|
3,975 |
|
5,387 |
|
(9) |
|
5,378 |
|
34 |
|
35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from associates |
162 |
|
- |
|
1 |
|
163 |
|
246 |
|
- |
|
246 |
|
52 |
|
51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before tax .......... |
4,183 |
|
2 |
|
(47) |
|
4,138 |
|
5,633 |
|
(9) |
|
5,624 |
|
35 |
|
36 |
For footnotes, see page 95.
Balance sheet data significant to Global Banking and Markets
|
|
Europe |
|
Hong Kong |
|
Rest of Asia- Pacific |
|
Middle East |
|
North America |
|
Latin America |
|
Total |
|
|
US$m |
|
US$m |
|
US$m |
|
US$m |
|
US$m |
|
US$m |
|
US$m |
|
At 30 June 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading assets33 ...................... |
265,958 |
|
26,406 |
|
19,976 |
|
733 |
|
76,015 |
|
6,786 |
|
395,874 |
|
Derivative assets34 ................. |
227,337 |
|
18,858 |
|
17,268 |
|
827 |
|
71,490 |
|
3,268 |
|
339,048 |
|
Loans and advances to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- customers (net) ............... |
163,031 |
|
25,501 |
|
30,718 |
|
6,389 |
|
32,861 |
|
10,006 |
|
268,506 |
|
- banks (net) ...................... |
77,976 |
|
25,428 |
|
28,108 |
|
6,583 |
|
16,606 |
|
15,932 |
|
170,633 |
|
Financial investments33 .......... |
91,468 |
|
83,284 |
|
36,576 |
|
10,066 |
|
59,244 |
|
17,426 |
|
298,064 |
|
Total assets23 ......................... |
1,021,875 |
|
214,091 |
|
153,877 |
|
29,106 |
|
299,345 |
|
59,349 |
|
1,777,643 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits by banks .................. |
74,808 |
|
10,181 |
|
14,642 |
|
1,623 |
|
16,327 |
|
3,246 |
|
120,827 |
|
Customer accounts ................. |
170,697 |
|
26,142 |
|
46,089 |
|
5,359 |
|
19,229 |
|
23,158 |
|
290,674 |
|
Trading liabilities ................... |
162,471 |
|
9,838 |
|
5,131 |
|
48 |
|
81,118 |
|
4,616 |
|
263,222 |
|
Derivative liabilities34 ............ |
227,156 |
|
19,159 |
|
16,744 |
|
849 |
|
71,874 |
|
3,545 |
|
339,327 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 30 June 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading assets33 ...................... |
287,752 |
|
24,818 |
|
15,812 |
|
500 |
|
68,707 |
|
7,600 |
|
405,189 |
|
Derivative assets34 ................. |
227,424 |
|
20,034 |
|
19,355 |
|
682 |
|
84,307 |
|
3,921 |
|
355,723 |
|
Loans and advances to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- customers (net) ............... |
198,290 |
|
23,182 |
|
21,682 |
|
6,799 |
|
28,320 |
|
9,055 |
|
287,328 |
|
- banks (net) ...................... |
66,639 |
|
33,833 |
|
27,487 |
|
4,470 |
|
8,703 |
|
15,572 |
|
156,704 |
|
Financial investments33 .......... |
95,658 |
|
76,095 |
|
33,532 |
|
9,479 |
|
49,878 |
|
10,700 |
|
275,342 |
|
Total assets23 ......................... |
1,060,344 |
|
221,196 |
|
138,266 |
|
27,423 |
|
269,492 |
|
53,897 |
|
1,770,618 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits by banks .................. |
84,262 |
|
10,006 |
|
12,394 |
|
974 |
|
11,297 |
|
3,959 |
|
122,892 |
|
Customer accounts ................. |
208,792 |
|
34,875 |
|
42,712 |
|
7,312 |
|
19,268 |
|
18,003 |
|
330,962 |
|
Trading liabilities ................... |
161,294 |
|
11,019 |
|
3,747 |
|
39 |
|
66,308 |
|
5,737 |
|
248,144 |
|
Derivative liabilities34 ............ |
222,408 |
|
20,200 |
|
18,606 |
|
678 |
|
80,583 |
|
3,680 |
|
346,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading assets33 ...................... |
294,951 |
|
25,742 |
|
15,960 |
|
511 |
|
67,466 |
|
6,283 |
|
410,913 |
|
Derivative assets34 ................. |
190,900 |
|
16,937 |
|
15,660 |
|
668 |
|
61,192 |
|
2,820 |
|
288,177 |
|
Loans and advances to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- customers (net) ............... |
176,123 |
|
21,991 |
|
23,989 |
|
6,554 |
|
18,654 |
|
9,645 |
|
256,956 |
|
- banks (net) ...................... |
59,171 |
|
27,789 |
|
29,388 |
|
6,385 |
|
14,403 |
|
16,638 |
|
153,774 |
|
Financial investments33 .......... |
83,715 |
|
92,181 |
|
36,355 |
|
9,688 |
|
49,386 |
|
14,659 |
|
285,984 |
|
Total assets23 ......................... |
981,831 |
|
217,146 |
|
138,884 |
|
28,189 |
|
260,131 |
|
57,491 |
|
1,683,672 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits by banks .................. |
88,043 |
|
5,824 |
|
7,874 |
|
1,357 |
|
13,229 |
|
3,948 |
|
120,275 |
|
Customer accounts ................. |
169,390 |
|
26,650 |
|
43,698 |
|
5,752 |
|
19,095 |
|
20,142 |
|
284,727 |
|
Trading liabilities ................... |
169,814 |
|
10,720 |
|
3,040 |
|
13 |
|
69,302 |
|
2,875 |
|
255,764 |
|
Derivative liabilities34 ............ |
191,480 |
|
16,619 |
|
15,500 |
|
651 |
|
60,178 |
|
3,270 |
|
287,698 |
For footnotes, see page 95.
Private Banking
|
Profit before tax |
|||||
|
|
Half-year to |
||||
|
|
30 June 2010 |
|
30 June 2009 |
31 December 2009 |
|
|
|
US$m |
|
US$m |
|
US$m |
|
|
|
|
|
|
|
|
Net interest income ........ |
646 |
|
784 |
|
690 |
|
|
|
|
|
|
|
|
Net fee income ............... |
643 |
|
602 |
|
634 |
|
|
|
|
|
|
|
|
Trading income excluding net interest income |
209 |
|
154 |
|
168 |
|
Net interest income on trading activities |
10 |
|
9 |
|
13 |
|
|
|
|
|
|
|
|
Net trading income25 ...... |
219 |
|
163 |
|
181 |
|
Gains less losses from financial investments |
11 |
|
(2) |
|
7 |
|
Dividend income ............ |
3 |
|
2 |
|
3 |
|
Other operating income . |
21 |
|
40 |
|
8 |
|
|
|
|
|
|
|
|
Total operating income |
1,543 |
|
1,589 |
|
1,523 |
|
|
|
|
|
|
|
|
Net insurance claims26 .... |
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
Net operating income7 |
1,543 |
|
1,589 |
|
1,523 |
|
|
|
|
|
|
|
|
Loan impairment charges and other credit risk provisions |
- |
|
(14) |
|
(114) |
|
|
|
|
|
|
|
|
Net operating income . |
1,543 |
|
1,575 |
|
1,409 |
|
|
|
|
|
|
|
|
Employee expenses27 ..... |
(609) |
|
(604) |
|
(594) |
|
Other operating expenses |
(358) |
|
(345) |
|
(341) |
|
|
|
|
|
|
|
|
Total operating expenses ....... |
(967) |
|
(949) |
|
(935) |
|
|
|
|
|
|
|
|
Operating profit .......... |
576 |
|
626 |
|
474 |
|
|
|
|
|
|
|
|
Share of profit/(loss) in associates and joint ventures |
(20) |
|
6 |
|
2 |
|
|
|
|
|
|
|
|
Profit before tax .......... |
556 |
|
632 |
|
476 |
|
|
|
|
|
|
|
|
By geographical region |
|
|
|
|
|
|
Europe ........................... |
359 |
|
447 |
|
407 |
|
Hong Kong ..................... |
119 |
|
106 |
|
91 |
|
Rest of Asia-Pacific ........ |
43 |
|
47 |
|
43 |
|
Middle East .................... |
(23) |
|
5 |
|
1 |
|
North America ............... |
54 |
|
23 |
|
(73) |
|
Latin America ................ |
4 |
|
4 |
|
7 |
|
|
|
|
|
|
|
|
|
556 |
|
632 |
|
476 |
|
|
|
|
|
|
|
|
|
% |
|
% |
|
% |
|
Share of HSBC's profit before tax |
5.0 |
|
12.6 |
|
23.1 |
|
Cost efficiency ratio ....... |
62.7 |
|
59.7 |
|
61.4 |
|
|
|
|
|
|
|
|
Balance sheet data23
|
|
|
|
|
|
|
|
US$m |
|
US$m |
|
US$m |
|
Loans and advances to customers (net) |
36,590 |
|
34,282 |
|
37,031 |
|
Total assets .................... |
108,499 |
|
117,468 |
|
116,148 |
|
Customer accounts ......... |
104,025 |
|
108,278 |
|
106,533 |
For footnotes, see page 95.
Financial and business highlights
·; Profit before tax of US$556 million was 12 per cent lower than reported in the first half of 2009, 13 per cent lower on an underlying basis. This was primarily due to lower net interest income and a loss from associates. Fee income and trading income rose and costs were broadly in line with the first half of 2009.
·; Net interest income fell as continued low interest rates adversely affected customer deposit spreads. However, fee income grew as an improvement in market sentiment drove a rise in client activity levels and an increase in average client assets under management compared with the same period in 2009. Net trading income also rose, driven by higher client transaction volumes as client risk appetite returned, particularly in foreign exchange and debt securities trading.
·; Loan impairment charges were lower than in the first half of 2009, with a net recovery in North America, compared with a small charge in the first half of 2009.
·; Operating expenses were broadly in line with the comparable period in 2009 despite recruitment in faster-growing markets. The cost efficiency ratio deteriorated by 3 percentage points as revenue declined.
·; The share of profit from associates fell due to an increase in loan impairment charges in The Saudi British Bank.
Client assets
|
|
Half-year to |
||||
|
|
30 June 2010 |
|
30 June 2009 |
31 December 2009 |
|
|
|
US$bn |
|
US$bn |
|
US$bn |
|
At beginning of period ............ |
367 |
|
352 |
|
345 |
|
Net new money |
7 |
|
(7) |
|
- |
|
Value change .... |
(4) |
|
7 |
|
20 |
|
Exchange/other |
(16) |
|
(7) |
|
2 |
|
|
|
|
|
|
|
|
At end of period ....................... |
354 |
|
345 |
|
367 |
·; Reported client assets of US$354 billion were marginally lower than at 31 December 2009, as net inflows were more than offset by negative market and foreign exchange movements. Net new money amounted to US$7 billion and resulted from increased client leverage and strong inflows in a number of regions, particularly from Asia and other emerging markets. In Switzerland, HSBC reported net inflows as management reinforced their relationships with the core customer base as part of the communication initiatives around the local data theft incident reported in March.
·; Reported total client assets decreased to US$445 billion from US$460 billion at 31 December 2009. 'Total client assets' is equivalent to many industry definitions of assets under management and includes some non-financial assets held in client trusts.
·; Cross-business referrals continued to result in good inflows with over US$2 billion raised during the first half of 2010.
·; Hedge fund inflows into HSBC Alternative Investments Limited returned to levels last seen prior to the global financial crisis.
·; A Family Office Partnership initiative was launched with Global Banking and Markets, targeting ultra high net worth clients and family offices seeking quasi-institutional client services.
·; HSBC Private Bank was named the 'Best Global Wealth Manager' in the Euromoney Awards for Excellence 2010 and FT Money and Investors Chronicle Magazine voted HSBC Private Bank as 'Best Wealth Manager for Alternative Investments'.
Reconciliation of reported and underlying profit before tax
|
|
Half-year to 30 June 2010 ('1H10') compared with half-year to 30 June 2009 ('1H09') |
||||||||||||||||
|
Private Banking |
1H09 as reported US$m |
1H09 adjust- ments1 US$m |
|
Currency translation2 US$m |
|
1H09 at 1H10 exchange rates3 US$m |
1H10 as reported US$m |
|
1H10 adjust- ments1 US$m |
|
1H10 under- lying US$m |
|
Re- ported change4 % |
|
Under-lying change4 % |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income . |
784 |
|
- |
|
3 |
|
787 |
|
646 |
|
- |
|
646 |
|
(18) |
|
(18) |
|
Net fee income . |
602 |
|
- |
|
5 |
|
607 |
|
643 |
|
- |
|
643 |
|
7 |
|
6 |
|
Other income6 |
203 |
|
- |
|
2 |
|
205 |
|
254 |
|
- |
|
254 |
|
25 |
|
24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income7 .............. |
1,589 |
|
- |
|
10 |
|
1,599 |
|
1,543 |
|
- |
|
1,543 |
|
(3) |
|
(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan impairment charges and other credit risk provisions ........... |
(14) |
|
- |
|
- |
|
(14) |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income |
1,575 |
|
- |
|
10 |
|
1,585 |
|
1,543 |
|
- |
|
1,543 |
|
(2) |
|
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses .............. |
(949) |
|
- |
|
(6) |
|
(955) |
|
(967) |
|
- |
|
(967) |
|
(2) |
|
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit ... |
626 |
|
- |
|
4 |
|
630 |
|
576 |
|
- |
|
576 |
|
(8) |
|
(9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from associates |
6 |
|
- |
|
- |
|
6 |
|
(20) |
|
- |
|
(20) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before tax ....... |
632 |
|
- |
|
4 |
|
636 |
|
556 |
|
- |
|
556 |
|
(12) |
|
(13) |
|
|
Half-year to 30 June 2010 ('1H10') compared with half-year to 31 December 2009 ('2H09') |
||||||||||||||||
|
Private Banking |
2H09 as reported US$m |
2H09 adjust- ments1 US$m |
|
Currency translation2 US$m |
|
2H09 at 1H10 exchange Rates8 US$m |
1H10 as reported US$m |
|
1H10 adjust- ments1 US$m |
|
1H10 under- lying US$m |
|
Re- ported change4 % |
|
Under-lying change4 % |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income ..... |
690 |
|
- |
|
(11) |
|
679 |
|
646 |
|
- |
|
646 |
|
(6) |
|
(5) |
|
Net fee income ..... |
634 |
|
- |
|
(14) |
|
620 |
|
643 |
|
- |
|
643 |
|
1 |
|
4 |
|
Other income6 ... |
199 |
|
- |
|
(3) |
|
196 |
|
254 |
|
- |
|
254 |
|
28 |
|
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income7 ... |
1,523 |
|
- |
|
(28) |
|
1,495 |
|
1,543 |
|
- |
|
1,543 |
|
1 |
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan impairment charges and other credit risk provisions |
(114) |
|
- |
|
2 |
|
(112) |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income ..... |
1,409 |
|
- |
|
(26) |
|
1,383 |
|
1,543 |
|
- |
|
1,543 |
|
10 |
|
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses .. |
(935) |
|
- |
|
15 |
|
(920) |
|
(967) |
|
- |
|
(967) |
|
(3) |
|
(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit ....... |
474 |
|
- |
|
(11) |
|
463 |
|
576 |
|
- |
|
576 |
|
22 |
|
24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from associates |
2 |
|
- |
|
- |
|
2 |
|
(20) |
|
- |
|
(20) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before tax ........... |
476 |
|
- |
|
(11) |
|
465 |
|
556 |
|
- |
|
556 |
|
17 |
|
20 |
For footnotes, see page 95.
Other
|
Profit/(loss) before tax |
||||||
|
|
Half-year to |
|||||
|
|
30 June 2010 |
|
30 June 2009 |
31 December 2009 |
||
|
|
US$m |
|
US$m |
|
US$m |
|
|
|
|
|
|
|
|
|
|
Net interest expense ....... |
(537) |
|
(551) |
|
(484) |
|
|
|
|
|
|
|
|
|
|
Net fee income ............... |
1 |
|
64 |
|
61 |
|
|
|
|
|
|
|
|
|
|
Trading income/(expense) excluding net interest income |
(597) |
|
92 |
|
152 |
|
|
Net interest income on trading activities |
25 |
|
18 |
|
17 |
|
|
|
|
|
|
|
|
|
|
Net trading income/ (expense)25 |
(572) |
|
110 |
|
169 |
|
|
Net income/(expense) from financial instruments designated at fair value |
1,178 |
|
(2,579) |
|
(3,864) |
|
|
Gains less losses from financial investments |
35 |
|
(53) |
|
56 |
|
|
Dividend income ............ |
15 |
|
12 |
|
- |
|
|
Net earned insurance premiums |
(5) |
|
(3) |
|
- |
|
|
Other operating income . |
3,114 |
|
2,172 |
|
2,870 |
|
|
|
|
|
|
|
|
|
|
Total operating income/ (expense) |
3,229 |
|
(828) |
|
(1,192) |
|
|
|
|
|
|
|
|
|
|
Net insurance claims26 .... |
3 |
|
- |
|
(3) |
|
|
|
|
|
|
|
|
|
|
Net operating income/ (expense)7 |
3,232 |
|
(828) |
|
(1,195) |
|
|
|
|
|
|
|
|
|
|
Loan impairment charges and other credit risk provisions |
(1) |
|
(3) |
|
(5) |
|
|
|
|
|
|
|
|
|
|
Net operating income/ (expense)
|
3,231 |
|
(831) |
|
(1,200) |
|
|
|
|
|
|
|
|
|
|
Employee expenses27 ..... |
(3,030) |
|
(2,358) |
|
(2,432) |
|
|
Other operating income/ (expenses) |
271 |
|
90 |
|
(15) |
|
|
|
|
|
|
|
|
|
|
Total operating expenses ....... |
(2,759) |
|
(2,268) |
|
(2,447) |
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) ....... |
472 |
|
(3,099) |
|
(3,647) |
|
|
|
|
|
|
|
|
|
|
Share of profit in associates and joint ventures |
68 |
|
5 |
|
21 |
|
|
|
|
|
|
|
|
|
|
Proft/(loss) before tax . |
540 |
|
(3,094) |
|
(3,626) |
|
|
|
|
|
|
|
|
|
|
By geographical region |
|
|
|
|
|
|
|
Europe ........................... |
(194) |
|
(1,426) |
|
(1,568) |
|
|
Hong Kong ..................... |
(66) |
|
(273) |
|
(86) |
|
|
Rest of Asia-Pacific ........ |
403 |
|
142 |
|
122 |
|
|
Middle East .................... |
4 |
|
47 |
|
40 |
|
|
North America ............... |
352 |
|
(1,584) |
|
(2,133) |
|
|
Latin America ................ |
41 |
|
- |
|
(1) |
|
|
|
|
|
|
|
|
|
|
|
540 |
|
(3,094) |
|
(3,626) |
|
|
|
|
|
|
|
|
|
|
|
% |
|
% |
|
% |
|
|
Share of HSBC's profit before tax |
4.9 |
|
(61.7) |
|
(176.0) |
|
|
Cost efficiency ratio ....... |
85.4 |
|
(273.9) |
|
(204.8) |
|
For footnotes, see page 95.
Balance sheet data23
|
|
At 30 June 2010 |
|
At 30 June 2009 |
At 31 December 2009 |
|
|
|
US$m |
|
US$m |
|
US$m |
|
Loans and advances to customers (net) ........................... |
3,011 |
|
3,478 |
|
3,110 |
|
Total assets ........... |
189,153 |
|
170,414 |
|
150,983 |
|
Customer accounts . |
757 |
|
1,235 |
|
1,277 |
Notes
·; Reported profit before tax of US$540 million compared with a loss of US$3.1 billion in the first half of 2009. This included gains of US$1.1 billion on the fair value of HSBC's own debt attributable to movements in credit spreads, compared with losses of US$2.5 billion in the first half of 2009. In addition, the first half of 2010 included gains of US$188 million following the dilution of HSBC's Holding in Ping An Insurance and US$62 million on the reclassification of Bao Viet to an associate following the purchase of an additional 8 per cent stake. On an underlying basis, loss before tax increased by 25 per cent to US$784 million. For a description of the main items reported under 'Other', see footnote 22 on page 95.
·; Net interest expense of US$537 million substantially comprised interest expense on long‑term debt issued by HSBC Holdings.
·; Net trading expense of US$572 million compared with reported net income of US$110 million. This was largely attributable to fair value losses on non-qualifying hedges, mainly cross-currency swaps used to economically hedge fixed rate long-term debt issued by HSBC Holdings. The fair value losses, which were driven by a decline in long-term US interest rates relative to sterling and euro interest rates, compared with fair value gains on these instruments in the first half of 2009; they were partly offset by the non-recurrence of a loss of US$344 million on forward foreign exchange contracts associated with the Group's rights issue in 2009, which were accounted as derivatives with fair value taken to profit or loss.
·; Net income from financial instruments designated at fair value was US$104 million compared with a net expense in the first half of 2009 due to fair value gains from interest and exchange rate ineffectiveness in the economic hedging of long-term debt designated at fair value which was issued by HSBC Holdings and
its North American and European subsidiaries. This compared with losses on the ineffectiveness in the economic hedging of long-term debt designated at fair value in the first half of 2009.
·; HSBC recognised gains of US$194 million and US$56 million, respectively, from the sale and leaseback of its headquarters buildings in Paris and New York.
·; Operating expenses increased by 20 per cent to US$2.8 billion as an increasing number of activities were centralised, notably in the US. These costs were previously incurred directly by customer groups, but are now recorded in 'Other' and charged to customer groups through a recharge mechanism with income reported as 'Other operating income'.
Reconciliation of reported and underlying profit/(loss) before tax
|
|
Half-year to 30 June 2010 ('1H10') compared with half-year to 30 June 2009 ('1H09') |
||||||||||||||||
|
Other |
1H09 as reported US$m |
1H09 adjust- ments1 US$m |
|
Currency translation2 US$m |
|
1H09 at 1H10 exchange rates3 US$m |
1H10 as reported US$m |
|
1H10 adjust- ments1 US$m |
|
1H10 under- lying US$m |
|
Re- ported change4 % |
|
Under- lying change4 % |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest expense ... |
(551) |
|
- |
|
20 |
|
(531) |
|
(537) |
|
- |
|
(537) |
|
3 |
|
(1) |
|
Net fee income ........... |
64 |
|
- |
|
- |
|
64 |
|
1 |
|
- |
|
1 |
|
(98) |
|
(98) |
|
Changes in fair value5 . |
(2,457) |
|
2,457 |
|
- |
|
- |
|
1,074 |
|
(1,074) |
|
- |
|
|
|
- |
|
Other income6 ............ |
2,116 |
|
- |
|
12 |
|
2,128 |
|
2,694 |
|
(250) |
|
2,444 |
|
27 |
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income/ (expense)7 .............
|
(828) |
|
2,457 |
|
32 |
|
1,661 |
|
3,232 |
|
(1,324) |
|
1,908 |
|
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan impairment charges and other credit risk provisions ................................ |
(3) |
|
- |
|
2 |
|
(1) |
|
(1) |
|
- |
|
(1) |
|
67 |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income/ (expense) |
(831) |
|
2,457 |
|
34 |
|
1,660 |
|
3,231 |
|
(1,324) |
|
1,907 |
|
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses ..... |
(2,268) |
|
- |
|
(23) |
|
(2,291) |
|
(2,759) |
|
- |
|
(2,759) |
|
(22) |
|
(20) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) ........... |
(3,099) |
|
2,457 |
|
11 |
|
(631) |
|
472 |
|
(1,324) |
|
(852) |
|
|
|
(35) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from associates |
5 |
|
- |
|
1 |
|
6 |
|
68 |
|
- |
|
68 |
|
1,260 |
|
1,033 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) before tax .......................... |
(3,094) |
|
2,457 |
|
12 |
|
(625) |
|
540 |
|
(1,324) |
|
(784) |
|
|
|
(25) |
|
|
Half-year to 30 June 2010 ('1H10') compared with half-year to 31 December 2009 ('2H09') |
||||||||||||||||
|
Other |
2H09 as reported US$m |
2H09 adjust- ments1 US$m |
|
Currency translation2 US$m |
|
2H09 at 1H10 exchange Rates8 US$m |
1H10 as reported US$m |
|
1H10 adjust- ments1 US$m |
|
1H10 under- lying US$m |
|
Re- ported change4 % |
|
Under- lying change4 % |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest expense .... |
(484) |
|
- |
|
27 |
|
(457) |
|
(537) |
|
- |
|
(537) |
|
(11) |
|
(18) |
|
Net fee income ............ |
61 |
|
- |
|
(2) |
|
59 |
|
1 |
|
- |
|
1 |
|
(98) |
|
(98) |
|
Changes in fair value5 .. |
(4,076) |
|
4,076 |
|
- |
|
- |
|
1,074 |
|
(1,074) |
|
- |
|
|
|
- |
|
Other income6 ............. |
3,304 |
|
- |
|
(58) |
|
3,246 |
|
2,694 |
|
(250) |
|
2,444 |
|
(18) |
|
(25) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income/ (expense)7 ................ |
(1,195) |
|
4,076 |
|
(33) |
|
2,848 |
|
3,232 |
|
(1,324) |
|
1,908 |
|
|
|
(33) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan impairment charges and other credit risk provisions |
(5) |
|
- |
|
- |
|
(5) |
|
(1) |
|
- |
|
(1) |
|
80 |
|
80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income/ (expense) ................. |
(1,200) |
|
4,076 |
|
(33) |
|
2,843 |
|
3,231 |
|
(1,324) |
|
1,907 |
|
|
|
(33) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses ...... |
(2,447) |
|
- |
|
(7) |
|
(2,454) |
|
(2,759) |
|
- |
|
(2,759) |
|
(13) |
|
(12) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) . |
(3,647) |
|
4,076 |
|
(40) |
|
389 |
|
472 |
|
(1,324) |
|
(852) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from associates |
21 |
|
- |
|
(1) |
|
20 |
|
68 |
|
- |
|
68 |
|
224 |
|
240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) before tax |
(3,626) |
|
4,076 |
|
(41) |
|
409 |
|
540 |
|
(1,324) |
|
(784) |
|
|
|
|
For footnotes, see page 95.
Related Shares:
HSBC Holdings