Hsbc Holdings Plc · LSE:HSBA
Hsbc — Q1 2022 Earnings Presentation
32 slides from Hsbc's earnings presentation, Apr 26, 2022
Slide 1: HSBC Holdings plc 1Q22 Results
HSBC Holdings plc 1Q22 Results Presentation to Investors and Analysts 0
Slide 2: Our purpose, values and ambition support the execution of our strategy
1Q22 results Appendix Our purpose, values and ambition support the execution of our strategy Our purpose Opening up a world of opportunity Our ambition To be the preferred international financial partner for our clients Our values We value difference We succeed together We take responsibility We get
Slide 3: 1Q22 highlights
1Q22 results Appendix 1Q22 highlights 1Q22 reported revenue of $12.5bn, down $0.5bn (4%) vs. 1Q21; reported PBT of $4.2bn 1 down $1.6bn (28%) vs. 1Q21, with the positive impact from higher rates more than offset by lower non-NII and higher ECL More normalised ECL, with a charge of $0.6bn (25bps of a
Slide 4: Business highlights
1Q22 results Appendix Business highlights Global business highlights Geographic highlights Sustainability Strong Insurance performance excluding adverse Profitable in all regions Per our announcement on 16 March 223, we market impacts; VNB up 25% vs. 1Q21 have committed to: HSBC UK PBT up $0.2
Slide 5: Hong Kong and mainland China
1Q22 results Appendix Hong Kong and mainland China Hong Kong adjusted performance Hong Kong digital highlights Mainland China adjusted performance $m 1Q21 4Q21 1Q22 $m 1Q21 4Q21 1Q22 96% of WPB transactions completed NII 1,815 1,838 1,896 digitally5 in FY21 NII 410 433 433 Non-NII 2,163 1,255 1,342
Slide 6: 1Q22 results summary
1Q22 results Appendix 1Q22 results summary $m 1Q22 1Q21 Δ NII 6,999 6,338 10 % 1Q22 reported PBT of $4.2bn; adjusted PBT of $4.7bn Non-NII 5,550 6,624 (16)% NII of $7.0bn, up vs. 1Q21 reflecting interest rate rises and Revenue 12,549 12,962 (3)% lending growth ECL (642) 420 >(100)% Costs Non-N
Slide 7: Adjusted revenue performance
1Q22 results Appendix Adjusted revenue performance Revenue by global business*, $m Net fee income by global business, $m 12,962 (8)% (335) (164) 1% 284 3,391 (198) 3,084 3,126 12,549 924 Includes $(342)m of 818 788 insurance market impacts GBM 868 922 979 CMB WPB Corporate Centre 1,601 1,349 1,365 1
Slide 8: Net interest income and margin
1Q22 results Appendix Net interest income and margin Reported NIM progression, bps (6) 126 119 12 1 1Q22 reported NII of $7.0bn was up $0.5bn (7%) vs. 1Q21 due to the impact of rising global interest rates. Reported AIEAs increased $80bn 4Q21 Asset yields Liability costs Funding mix 1Q22 (4%) Repo
Slide 9: Credit performance
1Q22 results Appendix Credit performance Adjusted ECL release/(charge) trend ECL, $m 1Q22 ECL net charge of $642m included: 639 420 ECL release / Net charges relating to Russian 270 (charge) as a % counterparties of c.$250m (Stage 2) and (451) of average c.$160m relating to China CRE (Stage (642
Slide 10: Adjusted costs
1Q22 results Appendix Adjusted costs Operating expenses trend, $m 8,296 7,998 7,794 116 7,857 7,445 1,543 1,540 1Q22 costs of $7.9bn, down $0.1bn (2%) vs. 1Q21, as cost saves and 1,438 1,649 1,424 lower performance-related pay (PRP) was offset by higher technology spend, investment, volume growth
Slide 11: Capital adequacy
1Q22 results Appendix Capital adequacy CET1 ratio, % CET1 ratio of 14.1%, down 1.7ppts vs. 4Q21. CET1 15.8 capital decreased by $11.2bn, mainly due to: (0.8) 15.0 (0.1) 0.1 (0.0) (0.4) Negative after-tax OCI movements: $3.1bn (0.5) 14.1 Software capitalisation benefit reversal: $2.9bn Net of $
Slide 12: Conclusion
1Q22 results Appendix Conclusion Good set of results, with negative insurance market impacts and weakness in Investment 1 Distribution balanced by strong Personal Banking, CMB and GBM performance 2 Costs well under control; firmly on track to meet our FY22 cost target 3 Broader loan growth beginning
Slide 13: Appendix
Section title Appendix Que everisque iminvendis et accusdam ipsa volesto tatemod ioribus et eum qui resti aute volupta cum apit quatisquunt quate volorepel is incium assi ilibere ssitat. 12
Slide 14: Russia exposures
1Q22 results Appendix Russia exposures Russian entity balance sheet detail and Russia exposures At 31 March 2022 Our exposures booked in Russia were $1.3bn at 1Q22, including $0.9bn Wholesale exposures booked outside of Russia were $0.4bn, primarily of local currency deposits with banks Russian
Slide 15: Key financial metrics
1Q22 results Appendix Key financial metrics Reported results, $m 1Q22 4Q21 1Q21 Alternative performance measures, $m 1Q22 4Q21 1Q21 NII 6,997 6,781 6,514 Adjusted NII 6,999 6,745 6,338 Other Income 5,467 5,208 6,472 Adjusted other income 5,550 5,275 6,624 Revenue 12,464 11,989 12,986 Adjusted revenu
Slide 16: Reconciliation of reported and adjusted PBT
1Q22 results Appendix Reconciliation of reported and adjusted PBT $m 1Q22 4Q21 1Q21 Reported PBT 4,166 2,664 5,779 Revenue Currency translation — (71) (309) Customer redress programmes 2 7 (18) Fair value movements on financial instruments 162 (16) 239 Restructuring and other related costs* (79) 112
Slide 17: Certain items included in adjusted revenue
1Q22 results Appendix Certain items included in adjusted revenue Certain items included in adjusted revenue highlighted 1Q22 4Q21 3Q21 2Q21 1Q21 in management commentary, $m Insurance manufacturing market impacts in WPB (275) 129 (41) 331 67 of which: Asia WPB insurance manufacturing market impacts
Slide 18: 1Q22 adjusted revenue performance
1Q22 results Appendix 1Q22 adjusted revenue performance 1Q22 revenue 1Q22 vs. 1Q21 Revenue by global business, $bn o/w insurance market Wealth $1,927m (443) impacts: $(342)m (3)% WPB $5,231m (6)% Personal Banking $3,180m 216 13.0 12.5 12.0 Other $124m (108) GTRF $542m 97 4.2 4.0 3.5 Credit and Lendi
Slide 19: Net interest margin supporting information
1Q22 results Appendix Net interest margin supporting information Market-implied path of overnight interest rates12, bps Quarterly NIM by key legal entity % of 1Q22 % of 1Q22 1Q21 2Q21 3Q21 4Q21 1Q22 Group NII Group AIEA GBP USD 334 The Hongkong and Shanghai Banking 1.40% 1.37% 1.35% 1.35% 1.39% 47%
Slide 20: Wealth and Personal Banking
1Q22 results Appendix Wealth and Personal Banking 1Q22 financial highlights Balance sheet, $bn 1Q22 vs. 1Q21 Revenue $5.2bn (6)% 5% Revenue down $335m (6%). Personal banking up $216m (7%) (1Q21: $5.6bn) 5% from interest rate rises and balance sheet growth. Wealth down 824 848 861 $443m, primarily
Slide 21: Commercial Banking
1Q22 results Appendix Commercial Banking 1Q22 financial highlights Balance sheet, $bn 1Q22 vs. 1Q21 Revenue $3.5bn 9% Revenue up $284m (9%) across all regions and core CMB (1Q21: $3.2bn) Customer lending products, notably in GLCM and GTRF (up over 20% each) 6% reflecting higher volumes at improved
Slide 22: Global Banking and Markets
1Q22 results Appendix Global Banking and Markets 1Q22 financial highlights View of adjusted revenue 1Q22 vs. 1Q21 Revenue $4.0bn (4)% $m 1Q22 ∆1Q21 Revenue down 4% vs. 1Q21: (1Q21: $4.2bn) MSS 2,371 (2)% • Global FX and Equities benefitted from strong trading >(100)% Securities Services 489 11 % p
Slide 23: Corporate Centre
1Q22 results Appendix Corporate Centre 1Q22 financial highlights Revenue performance, $m Revenue $(227)m >(100)% (1Q21: $(29)m) 1Q21 2Q21 3Q21 4Q21 1Q22 —% Central Treasury (28) (27) (35) (10) 5 ECL $(2)m (1Q21: $(2)m) Legacy Credit 9 6 (34) (14) (21) Costs $110m >100% (1Q21: $(114)m) Other (10) (57
Slide 24: 1Q22 vs. 4Q21 equity drivers
1Q22 results Appendix 1Q22 vs. 4Q21 equity drivers Shareholders’ Basic number of ordinary Tangible Equity, $bn TNAV per share, $ Equity, $bn shares, million As at 31 December 2021 198.3 158.2 7.88 20,073 Profit attributable to: 3.3 2.9 0.15 — Ordinary shareholders17 2.8 2.9 0.15 — Other equity holde
Slide 25: Total shareholders' equity to CET1 capital
1Q22 results Appendix Total shareholders’ equity to CET1 capital Total equity to CET1 capital, at 31 March 2022, $m Total equity to CET1 capital walk, $m 1Q22 4Q21 Total equity 204,658 204,658 206,777 Total equity (per balance sheet) Non-controlling interests (8,365) (8,527) Non-controlling interest
Slide 26: Impacts of financial investments
1Q22 results Appendix Impacts of financial investments Financial investments measured at fair value through OCI Debt instruments at FVOCI by product19 At 31 December 2021 As part of our interest rate hedging strategy, we hold a portfolio of financial investments Corporate debt measured at fair val
Slide 27: Balance sheet – customer lending
1Q22 results Appendix Balance sheet – customer lending Balances by global business, $bn Balances by region, $bn Growth since 4Q21 4% 2% $10bn Europe $396bn 3% o/w: mortgages 1,034 1,055 1,017 1 0 $11bn 1 o/w: UK $308bn 3 4% 205 213 Adjusted customer lending of 217 $7bn $1,055bn, up $21bn (2%) vs. 4Q
Slide 28: Balance sheet – customer accounts
1Q22 results Appendix Balance sheet – customer accounts Balances by global business, $bn Balances by region, $bn Growth since 4Q21 6% 1% $16bn Europe $666bn 3% 1,689 1,710 1,611 1 1 $15bn 1 o/w: UK $535bn 3% 339 348 Adjusted customer accounts of 327 $1,710bn, up $21bn (1%) vs. 4Q21 $6bn Asia $795bn
Slide 29: Glossary
1Q22 results Appendix Glossary AIEA Average interest earning assets LCR Liquidity coverage ratio AT1 Additional Tier 1 A portfolio of assets including securities investment conduits, asset-backed securities, trading Legacy credit portfolios, credit correlation portfolios and derivative transactions
Slide 30: Footnotes
1Q22 results Appendix Footnotes 1. Unless otherwise stated, regulatory capital ratios and requirements are based on the transitional arrangements of the Capital Requirements Regulation in force at the time. These include the regulatory transitional arrangements for IFRS 9 ‘Financial Instruments’. Th
Slide 31: Disclaimer
1Q22 results Appendix Disclaimer Important notice The information, statements and opinions set out in this presentation and accompanying discussion (“this Presentation”) are for informational and reference purposes only and do not constitute a public offer for the purposes of any applicable law or a
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