Hsbc Holdings Plc · LSE:HSBA
Hsbc — Investor Day (April 2018)
75 slides from Hsbc's investor day presentation, Apr 10, 2018
Slide 1: HSBC Asia Seminar for Investors and Analysts Day 2 presentations
HSBC Asia Seminar for Investors and Analysts Day 2 presentations Date: 10 April 2018
Slide 2: Important notice and forward-looking statements
HSBC Asia Seminar for Investors and Analysts Important notice and forward-looking statements Important notice The information, statements and opinions set out in this presentation and subsequent discussion do not constitute a public offer for the purposes of any applicable law or an offer to sell or
Slide 3: Day 2 presentations
Day 2 presentations RBWM Intro 03 RBWM Asia 06 Wealth 22 Insurance 37 Private Bank Asia 46 Digital 53 Appendix 65 Glossary 68
Slide 4: RBWM Intro
RBWM Intro 10 April 2018 Charlie Nunn Chief Executive Officer, RBWM
Slide 5: RBWM serves 37 million active customers across more than 30 markets
RBWM intro RBWM serves 37 million active customers across more than 30 markets RBWM present across more than 30 markets with 18 priority markets, including 2 home markets Active customers Latin America by region (m) North America Europe MENA 37m Asia Latin America Revenue by 2.0 Europe Region1,2 ($b
Slide 6: Customer focus
RBWM intro Customer focus Customer Recommendation Index1 (2017 vs 2016) Drivers of customer satisfaction / dissatisfaction Hong Kong Malaysia Mexico UAE Singapore Rank =1st 1st 1st =2nd 4th STAFF KNOWLEDGE France Canada China UK USA Rank = 2nd =3rd =1st = 5th 5th (last) SUPPORTIVE RESOLUTION STAFF C
Slide 7: RBWM Asia
RBWM Asia 10 April 2018 Kevin Martin Regional Head of RBWM, Asia-Pacific
Slide 8: Agenda
RBWM Asia Agenda Business coverage in Asia Financial performance Key achievements Strategic priorities Key markets
Slide 9: A glimpse of our strategy and footprint in Asia
RBWM Asia: Business coverage in Asia A glimpse of our strategy and footprint in Asia HSBC RBWM footprint in Asia Greater China – defend leadership in Hong Kong, invest to build up scale for the future • Hong Kong (incl. Hang Seng), mainland China / China Pearl River Delta, Taiwan Bangladesh Taiwan I
Slide 10: RBWM Asia generated USD5.4bn PBT in 2017
RBWM Asia: Financial performance RBWM Asia generated USD5.4bn PBT in 2017 RBWM Asia financials (Reported view) Key performance drivers Reported PBT FY17 up 31% Y-o-Y USDbn 2016 2017 Y-o-Y Strong revenue growth driven by Revenue 8.6 10.1 18% balance sheet growth, insurance performance (including
Slide 11: Growth across key metrics
RBWM Asia: Financial performance Growth across key metrics RBWM Asia – Quarterly trend1 Revenue, USDbn Customer accounts, USDbn Active customers (‘k) 345.7 2.6 2.5 342.2 12,464 2.5 2.5 12,386 338.2 2.3 333.8 12,276 326.5 327.1 12,120 12,112 2.1 2.1 2.1 315.4 311.8 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17
Slide 12: Key achievements over 2016-17
RBWM Asia: Key achievements Key achievements over 2016-17 Wealth Digital – foundational Retail Banking Other Wealth Distribution Insurance banking capabilities Wealth revenue (Asia) Insurance ANP (Asia) Mortgage balances Mobile X2: up from Retail Business growth of 24% Y-o-Y growth of 8% Y
Slide 13: RBWM Asia strategic priorities: continuing growth momentum
RBWM Asia: Strategic priorities RBWM Asia strategic priorities: continuing growth momentum Focus on the customer experience and profitable, accelerated growth in market share Enhance Wealth advisory and Insurance capabilities Continue to drive growth in Jade, Premier and International customers Cont
Slide 14: Customers at the heart of our strategy
RBWM Asia: Strategic priorities Customers at the heart of our strategy Leading customer recommendation in key markets – 2017 (year end)1 Customer Recommendation Index (CRI) survey score, based on % of surveyed customers responding to “How likely is it you would recommend this brand for their product
Slide 15: Wealth and Insurance
RBWM Asia: Strategic priorities Wealth and Insurance Focus on growth and market share gains Wealth Insurance RBWM Asia Wealth FUM growth1, USDbn Revenue growth, USDbn Asia manufacturing revenue Asia distribution revenue - HSBC Products Asia distribution revenue - 3rd party products 24% 24% 0.2 0.2 0
Slide 16: Jade, Premier and International customers
RBWM Asia: Strategic priorities Jade, Premier and International customers Continue to deepen relationship and drive customer growth Sizeable contributor to RBWM Asia Growth Priorities FY17 Jade: expanded eligibility, differentiated 12.5m USD10.1bn wealth solutions and services Premier (including J
Slide 17: Digital
RBWM Asia: Strategic priorities Digital Delivering digital capabilities to enhance customer experiences 1 2 3 4 5 6 Put customers first Solidify digital Create innovation Build great Identify partnership Broaden agile by creating capabilities in key through digitally-led originations approaches to c
Slide 18: Advance, Personal Banking and Retail Business Banking
RBWM Asia: Strategic priorities Advance, Personal Banking and Retail Business Banking Continue to drive customer growth Advance Personal Banking Retail Business Banking 1.4m customers; 10% Y-o-Y revenue 6.6m customers3; 2% Y-o-Y revenue New proposition launched in 2017 – growth1 growth1 live i
Slide 19: Borrowing-First customers
RBWM Asia: Strategic priorities Borrowing-First customers Re-energise growth with digital enablement Unsecured lending growth1 Building capabilities to support customer needs New cards issued, 000s 2017 1H 2018 2H 2018 Cards Cards Loans 48% 3% Singapore (Phase 1), Singapore (Phase 2), Singapore, Tai
Slide 20: Hong Kong
RBWM Asia: Key markets Hong Kong Maintain leadership position 2017 financial highlights Leading position Reported Asset Credit cards Mortgages and other 37.2% mortgage market Management and others personal share1, #1 market rank USDbn 2017 Y-o-Y lending Life 16.4% insurance market Revenue 7.7 18
Slide 21: Mainland China and ASEAN
RBWM Asia: Key markets Mainland China and ASEAN Invest for growth (mainland China) and deepen penetration of mass affluent (ASEAN) Mainland China ASEAN 2017 Mainland China reported revenue of USD0.5bn 2017 ASEAN reported revenue of USD0.8bn Expand the International Wealth Centre (RBWM Pearl River
Slide 22: In summary – key opportunities focused on capturing quality growth
RBWM Asia: Conclusion In summary – key opportunities focused on capturing quality growth HSBC RBWM Asia strategic priorities 1 Deliver Wealth and Insurance growth via enhanced capabilities and solutions Focussed on capturing quality growth 2 Strong growth Expand distinctive Jade, Premier and Inter
Slide 23: Wealth
Wealth 10 April 2018 Guilherme Lima Group Head of Wealth Management
Slide 24: Key messages
Wealth: Key messages Key messages Wealth Management key messages Market opportunity drivers 1 Our Wealth and Premier propositions are highly profitable and major Asia with significant growth in mass contributors to RBWM’s results affluent segments and Wealth opportunity 2 Asia is a large attractive
Slide 25: Our Wealth propositions and solutions are tailored to the needs of affluent customers
Wealth 1 Our Wealth propositions and solutions are tailored to the needs of affluent customers Wealth focus areas Propositions Solutions Exclusive member- RBWM Wealth Wealth Retail ship proposition International Distribution Manufacturing Banking offering the best of HSBC Solutions and Wealth prod
Slide 26: Wealth is a key contributor with potential for growth in penetration
Wealth 1 Wealth is a key contributor with potential for growth in penetration Group RBWM revenue1 Composition of Wealth revenue 2017 USDbn Distribution Manufacturing 20.3 9% 100% = USD3.3bn 100% = USD2.9bn 18.8 18.5 Asset Other Management 6.2 18% Unit FX trusts 5.7 5.3 36% 64% Insurance Insurance di
Slide 27: Jade and Premier are key contributors to RBWM
Wealth 1 Jade and Premier are key contributors to RBWM Significant share of RBWM’s total portfolio … … with high revenues per customer … USDbn Average revenue per customer 36.6m 20.3 640 291 Jade c.10% ~8x Premier >30% >40% >50% ~3x Other RBWM … and a diversified business mix Jade and Premier revenu
Slide 28: Asia has shown significant growth in mass affluent segments
Wealth 2 Asia has shown significant growth in mass affluent segments and represents a significant wealth opportunity Mass affluent customers1 Private financial wealth2 Drivers of growth USD0.1-5m investable USDtn, % assets, millions, % Rising middle class CAGR CAGR The rising middle class has be
Slide 29: With our presence in Asia we are in a strong position to capitalise on the opportunity
Wealth 2 With our presence in Asia we are in a strong position to capitalise on the opportunity RBWM presence and capabilities Size of market opportunity 20171 Propositions Wealth Distribution Manufacturing Mass affluent Jade and Population, customers, Total Wealth, Premier # of Internet Mobile Asse
Slide 30: Wealth – strong track record of delivery
Wealth Wealth – strong track record of delivery X% 2017 actual (% of Range 2014-16 vs. CAGR 3A …% 2014-16 average) 2014-16 average (=100%) 2015 to 2017 Wealth revenue range 2014-16 vs. 2017 Year of highest Percent of 2014-16 average (=100%) revenue 2014-17 Growth in key Wealth metrics Wealth AuM1 (U
Slide 31: Market deep dive – Hong Kong
Wealth 3A Market deep dive – Hong Kong Highlights of market position Example initiative – “EasyInvest” Leading domestic and international bank with approx. 600k Standalone stock trading app launched OCT17 Premier and 60k Jade customers Features – intuitive user interface Quick Buy / Interactiv
Slide 32: Market deep dive – China
Wealth 3A Market deep dive – China Highlights of market position Example initiative – Online Structured Products (SP) Leading international bank in China Added new interface and full product range to China online SP USD3.4bn QDII1 quota (24% of aggregate quota among all platform beginning of 2
Slide 33: Continue strong growth in Jade as a key priority for 2018 and beyond
Wealth 3B Continue strong growth in Jade as a key priority for 2018 and beyond Jade launches to date What did we do to improve the quality of our franchise? 2016 2017 First launched in 2016 in Hong Kong, Singapore, and 2017 in China. Jade distinctiveness built around 4 pillars Wealth Solutions
Slide 34: Premier evolving to support customer needs beyond Wealth
Wealth 3C Premier evolving to support customer needs beyond Wealth What did we do to improve the quality of our franchise? Catering for different needs of our Premier customers Premier ‘archetypes’1, share of Premier2 Repositioned Premier proposition following customer insights Broaden focus fro
Slide 35: Leading position to capture the growing market opportunity in international
Wealth 3D Leading position to capture the growing market opportunity in international What did we do to improve the quality of the franchise? Example solution – International Education International Education Payment Solution (IEPS) Focus on international needs with highest potential and capturing
Slide 36: HSBC Asset Management (AMG) with strong footprint and growth trajectory in Asia
Wealth 3E HSBC Asset Management (AMG) with strong footprint and growth trajectory in Asia AMG globally AMG in Asia Asia AuM, USDbn Adjusted PBT, USDm 2016 2017 Y-o-Y 172 Revenue1 987 1,055 7% 145 116 129 +49% Costs (660) (691) (5)% PBT 327 364 11% AUM2, USDbn 410 462 13% 2014 2015 2016 2017 16 Man
Slide 37: Key messages
Wealth: Key messages Key messages Wealth Management key messages Market opportunity drivers 1 Our Wealth and Premier propositions are highly profitable and major Asia with significant growth in mass contributors to RBWM’s results affluent segments and Wealth opportunity 2 Asia is a large attractive
Slide 38: Insurance
Insurance 10 April 2018 Bryce Johns Group Head of Insurance
Slide 39: Agenda
Insurance Agenda Integrated bancassurance model Asia business mix Strengths and opportunities Conclusion
Slide 40: Integrated bancassurance model
Insurance Integrated bancassurance model Insurance is core to our universal banking approach HSBC Insurance: Who we are Leading global integrated bancassurer Serving customers across Retail, Wealth, Corporate and Private Bank Proprietary and complementary Partner product solutions Borrow Sel
Slide 41: HSBC Insurance overview
Insurance HSBC Insurance overview Manufacturing 2017 Manufacturing revenue1 10 Manufacturing markets Asia Europe Americas Hong Kong Other Asia HK: Hang HK: HSBC France Argentina Seng USD2.2bn China2 India2 UK Mexico Europe Singapore Malaysia2 Malta Americas Distribution 2017 Distribution revenue HSB
Slide 42: Scale and growth
Insurance Scale and growth 2017 financial highlights Asia growth trajectory (USDm) Asia Manufacturing PBT2,3 Embedded Value1 Global 13% Embedded 20% Manufacturing 1,516 10,137 Total Assets 8,738 Value1 PBT2 1,045 1,078 7,961 USD73bn USD10.1bn USD1.5bn 2015 2016 2017 2015 2016 2017 USD108bn USD12.2bn
Slide 43: Asia business mix
Insurance Asia business mix Manufactured product mix: ANP 2017 Manufactured product mix: VNB 2017 3rd party retail product mix: GWP 2017 Protection Par Savings Home & Motor Medical Par Savings Universal Life Protection USD2.4bn USD0.8bn Universal Life Unit Linked Travel Unit Linked Commercial Other
Slide 44: Manufacturing markets: HSBC Hong Kong
Insurance Manufacturing markets: HSBC Hong Kong Growing market share in 2017 Targeted investment Market share1 (12m trailing average) Sales specialists and Marketing Support roles spend 30% HSBC Hong Kong 28% 1.5x 4x Competitor 1 26% Competitor 2 24% Competitor 3 22% 20% 18% 16% 14% 2015 2016 2017 2
Slide 45: Manufacturing markets: Rest of Asia
Insurance Manufacturing markets: Rest of Asia Singapore China India Diversified multi-channel distribution Accelerated growth Accelerated growth Manufactured ANP1 Manufactured ANP Retail ANP2 Tier 1 cities (USDm) (USDm) (USDm) Market CAGR: +26% BEIJING -4% (2011) TIANJIN 65 72 (set-up) CAGR 60 61 +4
Slide 46: Growth opportunities for Insurance through leveraging HSBC's scale
Insurance: Conclusion Growth opportunities for Insurance through leveraging HSBC’s scale Key strategic priorities Current strengths in Asia 1 Regain market leadership in Hong Kong: HSBC’s Global Brand: Continued investment in sales specialists, marketing and product innovation • 12.5m RBWM custome
Slide 47: Private Bank Asia
Private Bank Asia 10 April 2018 Siew Meng Tan Regional Head of Global Private Bank, Asia-Pacific
Slide 48: Agenda
Private Bank Asia Agenda Organisation Asia Conclusion
Slide 49: Integral part of HSBC's wealth franchise
Private Bank Asia Integral part of HSBC’s wealth franchise Vision To be the Private Bank of choice to the families of the owners and principals of the Group’s corporate clients and help them preserve their wealth from generation to generation Investment Management Private Trusts and succession plann
Slide 50: 11 strategic booking centres and 34 target markets globally
Private Bank Asia 11 strategic booking centres and 34 target markets globally 2017 Key financials1 (USDbn) Group priority markets Luxembourg Revenue 1.7 Other markets covered UK&CI Booking centre scale Germany PBT 0.3 Germany France Client assets2 330 Switzerland Lending 40 Net new money3 15 Revenue
Slide 51: Asia-Pacific – largest and fastest growing region for GPB
Private Bank Asia Asia-Pacific – largest and fastest growing region for GPB 2017 Key financials1 (USDbn) Revenue 0.7 PBT 0.3 Client Assets2 129 Lending 14.7 Net new money3 7.6 Annual wealth expansion in Asia-Pacific is projected to remain at nearly double-digit growth through 20214 Chinese marke
Slide 52: Asia-Pacific – building on strong growth in 2017
Private Bank Asia Asia-Pacific – building on strong growth in 2017 2017 Key financials1 Future priorities Revenue PBT USDm USDm Net new Deepen collaboration with all global money businesses and grow NNM from Group (NNM) relationships +15% +42% 665 305 Continue to increase penetration of 576 214
Slide 53: Key messages
Private Bank Asia: Key messages Key messages Priority areas Key priorities 1 Use HSBC’s international connectivity to serve Chinese HNWs’ international global needs Key growth markets Capture growth from existing Hong Kong book Work closely with CMB, GB&M and RBWM to grow ASEAN business Co
Slide 54: Digital: Building the future bank
Digital: Building the future bank 10th April 2018 Josh Bottomley Global Head of Digital, Data and Development, RBWM Andrew Connell Head of Digital, RBWM Asia-Pacific Global Head of Innovation and Partnerships, RBWM Digital
Slide 55: We shared with you our Digital ambition back in April 2016
Digital: Building the future bank We shared with you our Digital ambition back in April 2016 Organisational alignment On-going initiatives Investment 2016 2017 Build In 2017, we have Quick wins / building capabilities Innovation structuring Hong Kong new customer invested USD5.3bn tools in total
Slide 56: Build: we have delivered digital features to our customers across markets
Digital: Building the future bank Build: we have delivered digital features to our customers across markets 55
Slide 57: Partner: we have been actively building our digital ecosystem
Digital: Building the future bank Partner: we have been actively building our digital ecosystem 56
Slide 58: Incubate: we have transformed the way we do business
Digital: Building the future bank Incubate: we have transformed the way we do business 57
Slide 59: Financial Services market continues to evolve
Digital: Building the future bank Financial Services market continues to evolve USD16.6 billion VC-backed investment in FinTech companies Customer expectation FinTechs in 20171 Globally 25 FinTech unicorns2 are valued at USD75.9 billion in 20171 Tech giants (e.g. GAFA) exploring opportunities
Slide 60: We are committed to take advantage of these changes
Digital: Building the future bank We are committed to take advantage of these changes “The adoption of rapidly evolving digital technologies by our customers is arguably the most transformative force for the financial services industry” - Stuart Gulliver (2016 Annual Report, HSBC) 59
Slide 61: Mobile centred banking
Digital: Building the future bank Mobile centred banking: a potential mobile-only banking option for customers, who prefer mobile as exclusive banking channel 60
Slide 62: Personal and relevant customer experience
Digital: Building the future bank Personal and relevant customer experience: personalised communications to customers on HSBC products and services relevant to their life events / journeys Messaging via push notification, emails, SMS, etc. Integrated journeys (e.g. insurance) Capabilities Data
Slide 63: Leverage and contribute to HSBC's scale and ecosystem
Digital: Building the future bank Leverage and contribute to HSBC’s scale and ecosystem: deliver digital features at scale to customers Centralised product management Economies of Scale Local customisation Digital as a channel Market to market shared learnings • Organisational Transfer of Le
Slide 64: Apart from these three priorities, we are also working on a lot more this year
Digital: Building the future bank Apart from these three priorities, we are also working on a lot more this year 63
Slide 65: Discussion
Digital: Building the future bank Discussion 64
Slide 66: Appendix
Appendix
Slide 67: Global manufacturing: Sources of earnings
Appendix: Insurance reference data Global manufacturing: Sources of earnings Embedded value accounting Profit After Tax sensitivities2 (2017, USDbn) Economic risks 223 6.9 42 12.2 Present Value of In-Force (‘PVIF’)1 [Group overlay; capitalisation of expected profit (140) emergence] (225) 5.4 100bps
Slide 68: GPB Asia selected financial performance
Appendix: Global Private Banking GPB Asia selected financial performance USDm 2017 2016 Adjusted PBT 305 214 Significant items & foreign currency translation (19) 46 Reported PBT 286 260 67
Slide 69: Glossary
Glossary
Slide 70: Glossary of terms
Glossary Glossary of terms Term Definition Term Definition Ratio of loans and advances to customers to A/D ratio AUM Assets under management customer accounts ADB Asian Development Bank BARC Barclays Bank PLC Adjusted performance excludes the year-on- year effects of foreign currency translation BCG
Slide 71: Glossary of terms
Glossary Glossary of terms Term Definition Term Definition 1.Estimated Market share is calculated by Client revenue data sourced HSBC internal taking HSS’s Asia Pacific AUC (provided by client MI, which differs from reported revenue. HSS) divided by Total Asia Pacific AUC (using Client revenue Exclu
Slide 72: Glossary of terms
Glossary Glossary of terms Term Definition Term Definition GB Global Banking Industrial and Commercial Bank of China IDBC Limited GB&M Global Banking and Markets IMF International Monetary Fund GBA Greater Bay Area Client revenue booked in Country A where the Inbound revenue primary relationship is
Slide 73: Glossary of terms
Glossary Glossary of terms Term Definition Term Definition MENA Middle East and North Africa QFII Qualified Foreign Institutional Investor MLA Mandated Lead Arranger RBWM Retail Banking and Wealth Management MNCs Multi-national corporations RCF Revolving Credit Facility MS Morgan Stanley Reported vi
Slide 74: Glossary of terms
Glossary Glossary of terms Term Definition TLA Term Loan A tn trillion United Nations Conference on Trade and UNCTAD Development ULIP Unit linked insurance plan USD US Dollar VNB Value of new business Y-o-Y Year-on-year YTD Year-to-Date 73
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