HSBC Holdings PLC · LSE:HSBA
HSBC — HSBC USA — Non-Deal Roadshow (March 2008)
35 slides from HSBC's roadshow presentation, Mar 11, 2008
Slide 1: HSBC USA Inc Investor Roadshow
HSBC USA Inc Investor Roadshow 11 March 2008
Slide 2: Disclosure Statement
Investor Presentation Disclosure Statement This presentation, including the accompanying slides and subsequent discussion, contains certain forward- looking information with respect to the financial condition, results of operations and business of HSBC Holdings plc and HSBC USA Inc. This information
Slide 3: Table of contents
Investor Presentation Table of contents Strategic overview ……………………………….…............................................ Paul Lawrence Financial overview ……………………………….….......................................... Michael Doherty Business overview Personal Financial Services ..............................
Slide 4: Strategic Overview
Strategic Overview Paul Lawrence President and CEO HSBC Bank USA NA
Slide 5: HSBC Group – Record results
Strategic Overview HSBC Group – Record results Revenue Profit before tax Strong capital US$79bn US$24.2bn 9.3% (up 21%) (up 10%) (Tier 1) Revenue growth Cost efficiency Earnings per share Double-digit (fifth year running) 49.4% (improved ratio) US$1.65 (up 18%) Dividend growth Dividends Total assets
Slide 6: HSBC Group – Results by Geography
Strategic Overview HSBC Group – Results by Geography 2007 Pre-tax Profit by Geography IFRS (US$) US$24.212bn 25 2006 2007 20 15 US$13.348bn 10 US$8.595bn 5 US$2.178bn US$91m 0 Asia Latin America Europe North America Group Total % Change +53% +26% +23% -98% +10% US$24.212bn 2.02
Slide 7: HSBC Group Strategy
Strategic Overview HSBC Group Strategy • An emphasis on fast-growing emerging markets – Asia, Middle East and Latin America • In mature markets, focus on areas where we can build on our unique global franchise and benefit from long-term global interconnectivity • Build businesses that support our cu
Slide 8: HSBC USA Inc. – Strategic Objectives
Strategic Overview HSBC USA Inc. – Strategic Objectives • Right-sized and joined up • Establish legitimate and credible competitive positioning • Leverage Group advantages with focus on international requirements of customers • Define clear business propositions and strategies • Align business initi
Slide 9: Looking Forward
Strategic Overview Looking Forward • US economy may well get worse before it gets better • In order to accomplish the strategic objectives we must… • Maintain a disciplined approach to financial and resource management • Simplify our organizational structures and processes • Leverage Group internati
Slide 10: Legal Entity Structure
Strategic Overview Legal Entity Structure HSBC Holdings plc HSBC North America Holdings Inc HSBC Finance Corporation HSBC USA Inc * HSBC Markets (USA) Inc HSBC Bank Canada HSBC Bank USA NA HSBC Securities (USA) Inc *HSBC USA Inc will be referred to as ‘HUSI’ throughout this presentation. This is the
Slide 11: Financial Overview
Financial Overview Michael Doherty Executive Vice President Asset & Liability Management
Slide 12: HSBC USA Inc – Key Performance Metrics
Financial Overview HSBC USA Inc – Key Performance Metrics Full year Variance on 2006 2007 2006 $ % Profit Before Tax (IFRS) (US$m) 497 1,511 (1,014) (67.1) Net Income (IFRS Profit After Tax) (US$m) 386 982 (596) (60.7) Cost Efficiency Ratio (IFRS) (%) 60.4 54.7 (5.7) Return on Average Assets (US GAA
Slide 13: HSBC USA Inc – Income Statement
Financial Overview HSBC USA Inc – Income Statement IFRS, US$m Full year Variance on 2006 2007 2006 $ % Net interest income 2,722 2,453 269 11.0 Other revenues 2,317 2,681 (364) (13.6) Total revenues 5,039 5,134 (95) (1.9) Loan impairment charges (1,497) (815) (682) (83.7) Net operating income 3,542
Slide 14: HSBC USA Inc – Profit Before Tax by Customer Group
Financial Overview HSBC USA Inc – Profit Before Tax by Customer Group IFRS, US$m Full year Variance on 2006 2007 2006 $ % Personal Financial Services* 245 567 (322) (56.8) Commercial Banking 389 446 (57) (12.8) Global Banking and Markets (471) 398 (869) (218.3) Private Banking 134 158 (24) (15.2) Ot
Slide 15: HSBC USA Inc – Period End Balance Sheet
Financial Overview HSBC USA Inc – Period End Balance Sheet US GAAP, US$bn Current Prior Variance on 2006 31 Dec 07 31 Dec 06 Actual Actual Inc/(Dec) % Cash and due from banks 3.6 3.4 0.2 5.9 Interest bearing deposits with banks 5.6 1.9 3.7 194.7 Fed funds 13.7 13.8 (0.1) (0.7) Trading assets 37.0 23
Slide 16: HSBC USA Inc – Loans Outstanding
Financial Overview HSBC USA Inc – Loans Outstanding US GAAP, US$bn Full year Variance on 2006 2007 2006 $ % Total commercial loans 37.9 29.5 8.4 28.5 Consumer loans: Residential mortgages 35.4 39.8 (4.4) (11.1) Credit card receivables: Private label 17.4 16.9 0.5 3.0 MasterCard/Visa 2.0 1.3 0.7 53.8
Slide 17: HSBC USA Inc – Deposits
Financial Overview HSBC USA Inc – Deposits IFRS, US$bn Full year Variance on 2006 2007 2006 $ % Personal Financial Services* 42.7 37.5 5.2 13.8 Commercial Banking 18.2 15.7 2.5 15.9 Global Banking and Markets 42.0 31.9 10.1 31.7 Private Banking 12.2 10.7 1.5 14.0 Total deposits 115.1 95.8 19.3 20.1
Slide 18: HSBC USA Inc – Credit Quality
Financial Overview HSBC USA Inc – Credit Quality US GAAP, US$m Full year Variance on 2006 2007 2006 $ % Provision for Credit Losses Commercial 205 136 69 50.7 Consumer: Residential mortgages 126 32 94 293.8 Credit card receivables 1,108 592 516 87.2 Other consumer 83 63 20 31.7 Total consumer 1,317
Slide 19: Business Overview
Business Overview
Slide 20: Personal Financial Services
Personal Financial Services Kevin Newman Head of PFS, North America Group General Manager and Senior Executive Vice President
Slide 21: Clear Client Propositions Based on Our 'Right to Win'
Business Overview Personal Financial Services Clear Client Propositions Based on Our ‘Right to Win’ Fully leveraging the HSBC global footprint, platforms and brand. • Internationally oriented mass affluent • Global solutions • Globally connected platforms • Integrated ‘independent’ Wealth Management
Slide 22: To deliver unrivalled global offer for affluent international people
Business Overview Personal Financial Services To deliver unrivalled global offer for affluent international people • Leveraging our global presence across 35 countries and territories with a network of over 280 international flagship Premier centers • Aiming to have six million HSBC Premier customer
Slide 23: Tailored Approach to Serving our Four Markets
Business Overview Personal Financial Services Tailored Approach to Serving our Four Markets Premium and Expansion and Traditional Direct Business Niche • ‘Upstate NY’ • ‘Metro NY’ • NJ CT CA FL DC • No demographic • 204 branches • 185 branches • 68 new branches boundaries • US$13.2bn deposits • US$2
Slide 24: Commercial Banking
Commercial Banking Chris Davies Head of CMB, North America Senior Executive Vice President
Slide 25: Commercial Banking
Business Overview Commercial Banking • Diversification from core geographies to major financial centers nationwide via organic office expansion • 2007: MME coverage provided by dedicated offices in 18 of the top 25 business centers ranked by CMB prospects (Source: Dun & Bradstreet), 2004: MME covera
Slide 26: Commercial Banking – Financial Performance
Business Overview Commercial Banking Financial Performance • Consistent revenue growth via organic growth and network expansion • Focus on further development of sector specialisms • Balance sheet growth from US geographic expansion and more effective deposit-raising drove revenues • Impairment char
Slide 27: Commercial Banking – Strategic Focus
Business Overview Commercial Banking Strategic Focus • To be the leading international business bank • Focus on pool of internationalising US MME companies nationwide • Grow customer base selectively • Sector specialisms to be spread across national footprint • Joining up with the rest of the Group
Slide 28: Global Banking and Markets
Global Banking and Markets Jose-Luis Guerrero Co-Head of Global Markets, Americas
Slide 29: Strong performance against difficult market conditions
Business Overview Global Banking and Markets Strong performance against difficult market conditions Contribution to Group PBT 2007 PBT US$m 6,121 Global Banking and Markets +5% 25% Commercial Banking 5,806 30% 5,163 Private Banking 6% Personal Financial Services Other 24% 15% 2005 2006 2007 The info
Slide 30: Emerging Markets-Led/Financing Focused
Business Overview Global Banking and Markets Emerging Markets-Led/Financing Focused • Positioned for next wave of global growth Europe • Achieve global product scale North America • Leverage strength of group The Middle East balance sheet Asia-Pacific Latin America 2007 2008 Mature economies Fast-gr
Slide 31: Global Banking and Markets US – Strategic Focus
Business Overview Global Banking and Markets US – Strategic Focus Local Presence/Global Reach • Global Banking and Markets is a client driven business that seeks to leverage Group relationships and footprint • US platform positioned to market US capabilities to non-US Clients and international capab
Slide 32: HSBC's Strategic Investment in Latin America
Business Overview Global Banking and Markets US HSBC’s Strategic Investment in Latin America HSBC Bank Mexico Mexico Market Highlights • 4th largest bank in Mexico • HSBC ranks 7th in domestic FX league tables1 • HSBC ranks 6th in domestic HSBC Bank plc – Venezuela Rates league tables2 HSBC acquires
Slide 33: Private Banking
Private Banking
Slide 34: Private Banking
Business Overview Private Banking • US Strategic Focus • Leverage HSBC Group’s competitive advantage and footprint with a focus on Latin America with the USA as a natural hub for the Americas • Establish a targeted platform with focus on international requirements of customers • Accomplishments • Eu
Slide 35: HSBC
HSBC