Hsbc Holdings Plc · LSE:HSBA
Hsbc — FY2002 Earnings Presentation
33 slides from Hsbc's earnings presentation, 2003
Slide 1: HSBC Holdings plc 2002 Results
HSBC Holdings plc 2002 Results
Slide 2: Forward-looking statements
Forward-looking Forward-looking statements statements This This presentation and subsequent discussion may contain presentation and subsequent discussion may contain certain certain forward-looking forward-looking statements statements with respect to the financial condition, results of operations a
Slide 3: 2002 results
2002 results Cash Cash basis basis Reported Reported US$m % ch US$m % ch Operating profit before provisions 11,641 +3 10,787 +3 Pre-tax profit 10,513 +19 9,650 +21 Attributable profit 7,102 +22 6,239 +25 Earnings per share (US$) 0.76 +21 0.67 +24 Dividend per share (US$) 53.0 +10 Tier 1 ratio (%) 9.
Slide 4: 2002 results - movement in pre-tax profits
4 2002 Results 10,000 10,500 11,000 7,500 8,000 8,500 9,000 9,500 10,000 10,500 11,000 7,500 8,000 8,500 9,000 9,500 Pretax profits Pretax profits * cash basis 8,807 2001 2001 revenue 707 Total Total revenue Operating Operating -349 Costs Costs Group bad Group bad debt charge ex -43 debt charge ex A
Slide 5: Key achievements
Key achievements In a mixed and challenging environment ã Developed our core businesses ã Invested in the operating infrastructure ã Maintained stable credit quality ã Extended the global footprint of the Group ã Strengthened the HSBC brand 2002 Results 5 abc
Slide 6: Line of business analysis
Line of business analysis Operating Profit before Provisions* 2002 2001 US$m % of total US$m % of total % ch Personal Financial Services 4,431 38% 4,092 36% +8 Commercial Banking 3,212 28% 2,988 27% +8 Corporate, Investment Banking & Markets 3,632 31% 3,756 33% -3 Private Banking 433 4% 475 4% -9 Ot
Slide 7: Personal Financial Services
Personal Financial Services* US$m US$m 2002 2002 2001 2001 % % ch ch Income Income 11,404 11,404 10,569 10,569 +8 +8 Costs Costs 6,973 6,973 6,477 6,477 +8 +8 Operating Operating Profit Profit 4,431 4,431 4,092 4,092 +8 +8 Cost/Income Cost/Income ratio ratio 61.1% 61.1% 61.3% 61.3% * cash basis High
Slide 8: Commercial Banking
Commercial Banking* US$m US$m 2002 2002 2001 2001 % % ch ch Income Income 6,365 6,365 6,104 6,104 +4 +4 Costs Costs 3,153 3,153 3,116 3,116 +1 +1 Operating Operating Profit Profit 3,212 3,212 2,988 2,988 +8 +8 Cost/Income * cash basis Cost/Income ratio ratio 49.5% 49.5% 51.0% 51.0% Highlights Highli
Slide 9: Corporate, Investment Banking & Markets
Corporate, Investment Banking & Markets* US$m US$m 2002 2002 2001 2001 % % ch ch Income Income 7,533 7,533 7,676 7,676 -2 -2 Costs Costs 3,901 3,901 3,920 3,920 00 Operating Operating Profit Profit 3,632 3,632 3,756 3,756 -3 -3 Cost/Income * cash basis Cost/Income ratio ratio 51.8% 51.8% 51.1% 51.1%
Slide 10: Private Banking
Private Banking* US$m US$m 2002 2002 2001 2001 % % ch ch Income Income 1,420 1,420 1,394 1,394 +2 +2 Costs Costs 987 987 919 919 +7 +7 Operating Operating Profit Profit 433 433 475 475 -9 -9 Cost/Income Cost/Income ratio ratio 69.5% 69.5% 65.9% 65.9% * cash basis Highlights Highlights ã ã Period Per
Slide 11: Operating profit pre-provision geographical contribution
Operating profit pre-provision* Geographical Geographical contribution contribution -- 2002 2002 Geographical Geographical contribution contribution -- 2001 2001 1.6% 4.0% Europe Europe 13.4% 12.5% Hong Hong Kong Kong 10.8% 40.6% 38.3% 10.8% Rest Rest of of Asia Pacific Asia Pacific North North Amer
Slide 12: Operating margin and bad debt charge
Operating margin (Operating (Operating profit profit before before provisions, provisions, excluding excluding goodwill goodwill amortisation amortisation as as % % of of average average risk-weighted risk-weighted assets) assets) Bad Bad debt debt charge charge (Bad (Bad debt debt charge charge as
Slide 13: Loan growth
Loan growth* 2002 2001 2001 -- Loan Loan Mix Mix Residential Residential 2002 -- Loan Loan Mix Mix mortgages mortgages 10.1% 11.9% HK 27.2% HK Govt Govt home home 24.4% ownership ownership scheme scheme Other Other personal personal lending lending 2.4% 2.1% Commercial Commercial lending lending 12.
Slide 14: Dealing profits as % of revenue
Dealing profits 77 66 55 Revenue of Revenue 44 Other DP % of 33 % 22 FX DP % Revenues 11 00 1996 1996 1997 1997 1998 1998 1999 1999 2000 2000 2001 2001 2002 2002 2002 Results 14 abc
Slide 15: Market risk-related revenues
No. of days 15 10 12 14 16 18 20 0 2 4 8 10 12 14 16 18 20 0 2 4 666 8 -26 -26 to -25 to -25 2002 Results -23 -23 to -22 to -22 -20 -20 to -19 to -19 -17 -17 to -16 to -16 -14 -14 to -13 to -13 -11 -11 to -10 to -10 -8 -8 to -7 to -7 -5 -5 to -4 to -4 2001, US$13.9m 2002, US$14.6m -2 -2 to -1 to -1
Slide 16: Operating cost 2002
Operating cost 2002* 15,200 15,200 15,000 15,000 331 14,954 14,800 14,800 US$m 45 34 14,600 14,600 14,605 103 14,400 14,400 -160 76 -80 14,200 14,200 14,000 14,000 13,800 13,800 Operating Operating FX FX hsbc.com hsbc.com NHQ NHQ Bital Bital ML/HSBC ML/HSBC Group Group Underlying Underlying Operatin
Slide 17: Operating cost 2H02
Operating cost 2H02* 8,000 8,000 7,800 7,800 303 7,808 7,600 7,600 US$m 45 7,400 7,400 103 76 7,200 135 7,200 7,146 7,000 7,000 6,800 6,800 Operating Operating FX FX NHQ NHQ Bital Bital ML/HSBC ML/HSBC Underlying Underlying Operating Operating cost cost 1H02 1H02 cost cost growth growth cost cost 2H
Slide 18: Credit quality - Bad & doubtful debts charge
Credit quality - Bad & doubtful debts charge 2002 2002 2001 2001 2002 2002 2001 2001 US$m US$m As As aa % % of of average average Specific Specific Provisions Provisions advances advances New New-- Group Group ex ex Argentina Argentina 2,495 2,495 2,447 2,447 0.72 0.72 0.79 0.79 -- Argentina Argenti
Slide 19: Credit quality - Line of business
Credit Quality - Bad & doubtful debts charge - Line of business 2002 2002 2001 2001 US$m US$m As As aa % % US$m US$m As As aa % % of of advances advances of of advances advances Personal Personal Financial Financial Services Services 857 857 0.60 0.60 767 767 0.67 0.67 Commercial Commercial Banking
Slide 20: Argentina
Argentina US$m US$m 2002 2002 2001 2001 Total Total Assets Assets 1,618 1,618 3,803 3,803 Customer Customer lending lending (ex (ex Government) Government) 522 522 1,272 1,272 Provisions Provisions 317 317 808 808 Bad Bad debt debt charge charge (26) (26) 733 733 Provisions/customer Provisions/custo
Slide 21: Brazil
Brazil US$m US$m 2002 2002 2001 2001 Total Total Assets Assets 7,073 7,073 9,875 9,875 Customer Customer lending lending (ex (ex Government) Government) 2,347 2,347 2,957 2,957 Provisions Provisions 143 143 209 209 Bad Bad debt debt charge charge 139 139 182 182 Provisions/customer Provisions/custom
Slide 22: Operating in a deflationary environment in Hong Kong
Operating in a deflationary environment in Hong Kong US$m US$m % % change change 1998 1998 2002 2002 cagr cagr 1998 1998 -- 2002 2002 Income Income 5,045 5,045 6,050 6,050 4.6 4.6 Costs Costs 1,851 1,851 2,139 2,139 3.7 3.7 Operating Operating Profit Profit 3,194 3,194 3,911 3,911 5.2 5.2 Customer C
Slide 23: Pension Funding
Pension Funding ã Investment income covers 90% of pension payments ã £500m injected into scheme 2002 Results 23 abc
Slide 24: Investing in the business
Investing in the business ã IT spend at US$2.5 billion •• CRMS CRMS deployment deployment •• Internet Internet delivery delivery •• Group’s Group’s Retail Retail Processing Processing System System roll-out roll-out •• Consolidation Consolidation and and standardisation standardisation of of data da
Slide 25: Group Service Centres costs and staff
Group Service Centres 9 120 8 100 7 Staff No.s (000's) Costs US$m 6 80 5 60 4 3 40 2 20 1 0 0 2001 2002 2003 2001 2002 2003 2002 Results 25 abc
Slide 26: Extending the global footprint
Extending the global footprint ã Acquisitions completed: Ping An and Bital ã Agreed acquisition of Household will substantially rebalance the Group 2002 Results 26 abc
Slide 27: Growth opportunities for Bital
Growth opportunities for Bital Bital Bital in in Mexico Mexico Growth Growth Opportunities Opportunities ã ã 8% 8% share share of of performing performing ã ã High High growth growth in in consumer consumer loans loans credit credit ã ã 12% 12% share share of of MXP MXP deposits deposits ã ã Introdu
Slide 28: Household - Funding synergies
28 % basis points 2002 Results 100 200 300 400 500 600 700 00 100 200 300 400 500 600 700 Sep-01 Sep-01 Oct-01 Oct-01 Nov-01 Nov-01 Dec-01 Dec-01 Jan-02 Jan-02 Feb-02 Feb-02 Mar-02 Mar-02 Apr-02 Apr-02 May-02 May-02 Jun-02 Jun-02 Jul-02 Jul-02 Aug-02 Aug-02 5 Year Credit Default Swap Rates Sep-02 Se
Slide 29: Household - Cost synergies
Household - Cost synergies ã Credit card platform ã Consolidation of IT systems ã Purchasing economies 2002 Results 29 abc
Slide 30: Outlook
Outlook ã Some uncertain economic and political conditions ã Strategically well positioned •• For For geographic geographic and and demographic demographic opportunities opportunities •• Adding Adding asset asset generating generating capacity capacity with with Household Household •• Financial Fina
Slide 31: Growth opportunities
Growth opportunities GDP GDP per per capita capita (US$) (US$) US US 35,778 35,778 UK UK 25,562 25,562 France France 25.795 25.795 Hong Hong Kong Kong 22.959 22.959 Brazil Brazil 2,973 2,973 Mexico Mexico 6,072 6,072 China China 902 902 Middle Middle East East 2,120 2,120 2002 Results 31 abc
Slide 32: Outlook
Outlook ã Some uncertain economic and political conditions ã Strategically well positioned •• For For geographic geographic and and demographic demographic opportunities opportunities •• Adding Adding asset asset generating generating capacity capacity with with Household Household •• Financial Fina
Slide 33: HSBC Holdings plc
HSBC Holdings plc