Hsbc Holdings Plc · LSE:HSBA
Hsbc — Q1 2021 Earnings Presentation
30 slides from Hsbc's earnings presentation, Apr 27, 2021
Slide 1: HSBC Holdings plc 1Q21 Results
HSBC Holdings plc 1Q21 Results Presentation to Investors and Analysts
Slide 2: Our purpose, values and ambition support the execution of our strategy
1Q21 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
Slide 3: 1Q21 highlights
1Q21 results Appendix 1Q21 highlights Reported PBT of $5.8bn up 79% vs. 1Q20; adjusted PBT of $6.4bn up 109% vs. 1Q20 1 due to net ECL releases, offset by lower adjusted NII (down $1.3bn) 2 Good performance supported by $0.4bn net release of ECL; modest Stage 3 charges of $0.3bn incurred in the quar
Slide 4: Business highlights
1Q21 results Appendix Business highlights WPB Wholesale Geographies Hong Kong card spend up 12% vs. 1Q20; Hong Strong CMB pipeline of lending in place as Good performance across all regions Kong mortgage drawdowns up 37% vs. 1Q20; UK we support clients in positioning themselves for mortgage dr
Slide 5: Delivery against our strategy
1Q21 results Appendix Delivery against our strategy Focus on our strengths Energise for growth Transformation continues at pace with cumulative gross RWA reductions New ways of working being piloted across the Group, increasing flexibility of $61bn and $1.5bn of cumulative cost saves to date for
Slide 6: 1Q21 results summary
1Q21 results Appendix 1Q21 results summary $m 1Q21 1Q20 Δ NII 6,496 7,817 (17)% Adjusted PBT of $6.4bn up $3.3bn (109%) vs. 1Q20, primarily due to favourable ECL performance Non interest income 6,777 5,896 15 % Revenue 13,273 13,713 (3)% Revenue of $13.3bn down $0.4bn (3%) vs. 1Q20 due to the im
Slide 7: 1Q21 adjusted revenue performance
1Q21 results Appendix 1Q21 adjusted revenue performance 1Q21 revenue 1Q21 vs. 1Q20 Revenue by global business, $bn o/w insurance market Wealth $2,382m impacts: $790m 934 (3)% 13.7 WPB $5,694m (1)% Personal Banking $3,051m (890) 13.3 0.2 Other $261m (122) 12.0 3.9 GTRF $455m (27) 4.3 3.6 Credit and L
Slide 8: Net interest income
1Q21 results Appendix Net interest income Reported NIM progression, bps 122 121 (3) 2 (1) 1Q21 reported NII of $6.5bn down $1.1bn 4Q20 Asset yields Liability Change in mix 1Q21 (14%) vs. 1Q20 from lower global interest costs rates, partially offset by increased AIEAs; 1Q21 Totals may not cast due
Slide 9: Non interest income
1Q21 results Appendix Non interest income WPB, $m Net fees Other income 2,188 WPB non-NII up $894m (69%) vs. 1Q20, primarily from 208 (30) (51) 1,294 767 positive movement in market impacts in Insurance 1,629 ($0.8bn total), and also supported by strong equity and 1,507 mutual fund sales in Wealth
Slide 10: Credit performance
1Q21 results Appendix Credit performance Adjusted ECL charge/(release) trend 0.81 ECL as a % of 1.51 average gross 1Q21 net ECL release of $0.4bn; Stage 1.15 loans and advances Net release (annualised) 3 charge of $0.3bn, with Stage 1 – 2 0.30 0.45 releases of $0.7bn (0.17) ECL, $m 4,134 FY ECL as
Slide 11: Adjusted costs
1Q21 results Appendix Adjusted costs Operating expenses trend, $m 1Q21 costs of $8.2bn up $0.2bn (3%) vs. 1Q20. Cost saves were offset 9,255 primarily by increased performance-related pay (PRP) (+$0.5bn, of which 7,983 802 8,203 7,689 7,663 $0.4bn is due to a change in the quarterly phasing of the
Slide 12: Capital adequacy
1Q21 results Appendix Capital adequacy CET1 ratio, % 0.1 (0.0) (0.4) 15.9 0.4 15.9 (0.1) CET1 ratio of 15.9% was stable vs. 4Q20, with retained profits offset by fair value movements and other deductions 4Q20 Capital Change FX translation Other Dividend 1Q21 generation in RWAs differences deductio
Slide 13: Summary
1Q21 results Appendix Summary A strong quarter, given the persistence of ultra-low interest rates; net release of ECL 1 reserves supported improved profitability vs. 1Q20 We saw good business growth in areas of strategic focus and continue to deliver 2 against our strategic ambitions 3 Strong lendin
Slide 14: Appendix
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Slide 15: Key financial metrics
1Q21 results Appendix Key financial metrics Reported results, $m 1Q21 4Q20 1Q20 Balance sheet, $m 1Q21 4Q20 1Q20 NII 6,514 6,619 7,612 Total assets 2,958,629 2,984,164 2,917,810 Other Income 6,472 5,138 6,074 Net loans and advances to customers 1,040,207 1,037,987 1,040,282 Revenue 12,986 11,757 13,
Slide 16: Reconciliation of reported and adjusted PBT
1Q21 results Appendix Reconciliation of reported and adjusted PBT $m 1Q21 4Q20 1Q20 Reported PBT 5,779 1,385 3,229 Revenue Currency translation — 204 393 Customer redress programmes (18) (1) — Disposals, acquisitions and investment in new businesses — 2 7 Fair value movements on financial instrument
Slide 17: Certain items included in adjusted revenue
1Q21 results Appendix Certain items included in adjusted revenue Certain items included in adjusted revenue highlighted in 1Q21 4Q20 3Q20 2Q20 1Q20 management commentary, $m Insurance manufacturing market impacts in WPB 76 299 126 364 (714) Credit and funding valuation adjustments in GBM 33 72 35 (1
Slide 18: Global business management view of adjusted revenue
1Q21 results Appendix Global business management view of adjusted revenue Group, $m 1Q20 2Q20 3Q20 4Q20 1Q21 ∆1Q20 GBM18, $m 1Q20 2Q20 3Q20 4Q20 1Q21 ∆1Q20 Total Group revenue 13,713 13,838 12,453 12,025 13,273 (3)% Markets and Securities Services 2,349 2,676 2,082 1,945 2,492 6% Adjusted revenue re
Slide 19: Wealth and Personal Banking
1Q21 results Appendix Wealth and Personal Banking 1Q21 financial highlights Balance sheet, $bn 1Q21 vs. 1Q20 Revenue $5.7bn (1)% 8% Revenue down $78m (1%) driven by lower Personal Banking (down (1Q20: $5.8bn) 4% $890m) following interest rate cuts, partially offset by favourable 833 843 insurance
Slide 20: Commercial Banking
1Q21 results Appendix Commercial Banking 1Q21 financial highlights Balance sheet, $bn 1Q21 vs. 1Q20 Revenue $3.3bn (14)% Revenue down $527m (14%), reflecting the impact of lower global (1Q20: $3.9bn) Customer lending interest rates in GLCM and other products partially offset by higher (7)% deposit
Slide 21: Global Banking and Markets
1Q21 results Appendix Global Banking and Markets 1Q21 financial highlights View of adjusted revenue 1Q21 vs. 1Q20 Revenue $4.3bn 10% $m 1Q21 ∆1Q20 Revenue up $396m (10%): (1Q20: $3.9bn) MSS 2,492 6% • Markets and Securities Services up $143m (6%) against an >100% Securities Services 452 (14)% exce
Slide 22: Corporate Centre
1Q21 results Appendix Corporate Centre 1Q21 financial highlights Revenue performance, $m Revenue $(44)m >(100)% 1Q20 2Q20 3Q20 4Q20 1Q21 (1Q20: $187m) Central Treasury 265 (64) (32) (12) (28) ECL $(3)m >(100)% Of which: (1Q20: $2m) Valuation differences on long-term debt and >(100)% 259 (64) (32) (1
Slide 23: Net interest margin supporting information
1Q21 results Appendix Net interest margin supporting information NII sensitivity to instantaneous change in yield curves (12 months) Quarterly NIM by key legal entity At 31 December 2020 % of 1Q21 % of 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21 Group NII Group AIEA Currency Change in Jan The Hongkong and 2021 to
Slide 24: 1Q21 vs. 4Q20 equity drivers
1Q21 results Appendix 1Q21 vs. 4Q20 equity drivers Shareholders’ Tangible Equity, TNAV per share, Basic number of ordinary Equity, $bn $bn $ shares, million As at 31 December 2020 196.4 156.4 7.75 20,184 Profit attributable to: 4.3 4.2 0.21 — Ordinary shareholders22 3.9 4.2 0.21 — Other equity holde
Slide 25: Balance sheet – customer lending
1Q21 results Appendix Balance sheet – customer lending Balances by global business, $bn Balances by region, $bn Growth since 4Q20 Europe $405bn $(2)bn Adjusted customer lending of (6)% (1)% o/w: mortgages $1,040bn increased by $6bn (1%) 1% $(3)bn vs. 4Q20 1,101 o/w: UK $315bn (1)% 2 1 1,034 1,040
Slide 26: Balance sheet – customer accounts
1Q21 results Appendix Balance sheet – customer accounts Balances by global business, $bn Balances by region, $bn Growth since 4Q20 9% $14bn Europe $643bn 2% 1% 1,638 1,650 o/w: UK $514bn $5bn 1% 1,516 1 1 0 336 $(1)bn 335 Asia $756bn (0)% 331 Adjusted customer accounts of o/w: Hong $(3)bn $1,650bn i
Slide 27: Glossary
1Q21 results Appendix Glossary AIEA Average interest earning assets LATAM Latin America BAU Business as usual LCR Liquidity coverage ratio BoCom Bank of Communications Co. Limited, an associate of HSBC A portfolio of assets including securities investment conduits, asset-backed securities, trading p
Slide 28: Footnotes
1Q21 results Appendix Footnotes 1. Cumulative RWA saves under our transformation programme as measured from 1 January 2020 to 31 March 2021. In addition, we made $9.6bn of accelerated RWA saves over 4Q19 2. Unless otherwise stated, regulatory capital ratios and requirements are based on the transiti
Slide 29: Disclaimer
1Q21 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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