Hsbc Holdings Plc · LSE:HSBA
Hsbc — 1H15 Earnings Presentation
20 slides from Hsbc's earnings presentation, 2015
Slide 1: Actions to capture value from our global presence in a changed world
Actions to capture value from our global presence in a changed world 11. Reduce Group RWA by at least 25% and re-deploy towards higher performing businesses; return GB&M to Group target profitability 22. Sell operations in Turkey and Brazil; continued application of six filter process 33. Rebuild NA
Slide 2: Key messages
Key messages Highlights Reported and adjusted PBT (USDm) 1H15 reported PBT of USD13,628m up 10% compared with 1H14 Increase in adjusted revenue of USD1,316m or 4% and an increase in 12,340 6,340 13,628 adjusted PBT of USD280m or 2% driven by a strong performance in Asia Growth in adjusted reve
Slide 3: 1H15 Financial Highlights
1H15 Financial Highlights Financial Highlights (USDbn) 1H14 2H14 1H15 1H15 vs 1H14 1H15 vs 2H14 Reported PBT 12.3 6.3 13.6 1.3 7.3 Adjusted PBT 12.7 9.4 13.0 0.3 3.6 1H14 2H14 1H15 Target (if applicable) Return on average ordinary shareholders’ equity2 10.7% 4.0% 10.6% > 10% Return on average tangib
Slide 4: Profit before tax
Profit before tax Increase in adjusted PBT driven by Asia, which contributed over 60% of Group adjusted PBT Reported and adjusted PBT (USDm) Adjusted PBT growth by global business Adjusted PBT growth by region 1H15 vs. 1H14 (USDm) 1H15 vs. 1H14 (USDm) Adv Fav Adv Fav 12,340 6,340 13,628 RBWM 23 1% E
Slide 5: Revenue
Revenue Higher adjusted revenue in Client-facing GB&M, Principal RBWM and CMB Reported and adjusted revenue (USDm) Adjusted revenue by global business 1H15 vs. 1H14 (USDm) Adv Fav Adv Fav Personal 31,167 30,081 32,943 lending Principal RBWM 472 4% Current account, Principal savings and deposits +4%
Slide 6: Balance sheet
Balance sheet Growth in customer lending of USD22bn since 4Q14 Loans and advances to customers (USDbn) Customer accounts (USDbn) Constant currency basis4 Constant currency basis4 USD28.8bn increase USD22.4bn increase 1,349.5 1,336.7 1,349.6 1,335.8 1,326.1 1,291.5 991.2 980.0 975.1 962.2 949.5 954.0
Slide 7: Operating expenses
Operating expenses Operating expenses in line with 2H14 Reported and adjusted operating expenses (USDm) Key cost reduction actions launched 256.1 257.6 259.8 Target savings, USDbn 18,266 22,983 19,187 16,436 18,652 17,642 Digital investment and productivity improvement 0.9 – 1.0 4,331 1,108 1,545 1,
Slide 8: Loan impairment charges
Loan impairment charges Loan impairments remain low reflecting strategic actions to manage risk within our credit portfolio Reported and adjusted Loan impairment charges and other credit risk provisions (LICs) – (USDm) 1,841 2,010 1,439 LICs / average gross loans and advances to customers (%) 0.33 0
Slide 9: Capital Adequacy
Capital Adequacy Strong capital base with a common equity tier 1 ratio of 11.6% CRD IV End-point7 Common equity tier 1 ratio movement % Movement in common equity tier 1 capital (USDbn) At 31 December 2014 136.0 0.1 Capital generation from profit 5.6 Profit for the period (including regulatory adjust
Slide 10: Risk-weighted assets
Risk-weighted assets Net fall in RWAs driven by RWA initiatives of $50bn together with $22bn business growth RWAs by global business, Reported RWAs (USDbn) Movement excl. associates (USDbn) Excl. associates (USDbn) -3% Dec-14 1,220 Industrial Bank US CML run-off GB&M and CMB portfolio 1,060 1,025 Re
Slide 11: Return metrics
Return metrics Group ROE and ROTE2 Group RoRWA11 (%) Reported ROE 2.1 2.3 12.6 12.0 ROTE 10.7 10.6 4.0 4.7 1H14 1H15 Adjusted12 1H14 2H14 1H15 2.2 2.2 Adjusted RoRWA by global business (ex associates) 1H14 1H15 5.1 5.1 Adjusted excl. associates and run-off 3.1 3.1 portfolios13 2.7 2.3 2.1 2.3 1H14 1
Slide 12: Actions to capture value from our global presence in a changed world
Actions to capture value from our global presence in a changed world Group financial targets 1. 1 Reduce Group RWA by at least 25% and re-deploy towards higher performing businesses; return GB&M to Group target profitability 2 Sell operations in Turkey and Brazil1; continued application of six filte
Slide 13: Slide 13
Slide 14: Appendix: Important notice and forward-looking statements
Appendix Important notice and forward-looking statements Important notice The information set out in this presentation and subsequent discussion does not constitute a public offer for the purposes of any applicable law or an offer to sell or solicitation of any offer to purchase any securities or ot
Slide 15: Appendix: Footnotes
Appendix Footnotes 1. We plan to maintain a corporate presence in Brazil to serve our international clients 2. Return on average ordinary shareholders’ equity (ROE) and Return on average tangible equity (ROTE) are calculated on an annualised basis 3. Includes revenue recorded in Intersegment 4. Comp
Slide 16: Appendix: Currency translation and significant items
Appendix Currency translation and significant items USDm 1H14 2H14 1H15 Currency translation 586 134 - Significant items: Revenue (Loss) / gain on sale of several tranches of real estate secured accounts in the US (15) 183 17 Gain on the partial sale of shareholding in Industrial Bank - - 1,372 Favo
Slide 17: Appendix: Reported Consolidated Income statement
Appendix Reported Consolidated Income statement USDm 1H14 2H14 1H15 Net interest income 17,405 17,300 16,444 Net fee income 8,177 7,780 7,725 Net trading income 3,275 3,485 4,573 Net income from financial instruments designated at fair value 1,660 813 2,666 Gains less losses from financial investmen
Slide 18: Appendix: Reported Consolidated Balance Sheet
Appendix Reported Consolidated Balance Sheet USDm At 30 Jun 2014 At 31 Dec 2014 At 30 Jun 2015 Assets Cash and balances at central banks 132,137 129,957 144,324 Trading assets 347,106 304,193 283,138 Financial assets designated at fair value 31,823 29,037 25,168 Derivatives 269,839 345,008 296,942 L
Slide 19: Appendix: Brazil Reported Financials
Appendix Brazil Reported Financials USDm 1H14 2H14 1H15 Revenue 2,473 2,346 2,042 Loan impairment charges and other credit risk provisions (684) (815) (498) Total operating expenses (1,734) (1,833) (1,353) Share of profit in associates and joint ventures - - - Profit / (Loss) before tax 55 (302) 191
Slide 20: Cover images: HSBC – then and now
Cover images: HSBC – then and now It is 150 years since HSBC was founded in Hong Kong to finance trade between Asia and Europe. Much has changed since then, as our cover photos demonstrate. The top photo shows Hong Kong harbour, with the HSBC office (extreme left) a few years after it was establishe