Hsbc Holdings Plc · LSE:HSBA

Hsbc — Q3 2023 Earnings Presentation

33 slides from Hsbc's earnings presentation, Oct 30, 2023

  1. Slide 1: HSBC Holdings plc 3Q23 Results

    HSBC Holdings plc 3Q23 Results Presentation to Investors and Analysts

  2. Slide 2: Our purpose, values and ambition support the execution of our strategy

    Strategy 4Q22 results Summary 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 resp

  3. Slide 3: Business highlights

    3Q23 results Appendix Business highlights 9M23 financials and capital Wholesale transaction banking Hong Kong insurance Investment in Wealth distributions revenue2 manufacturing new business CSM5 Reported PBT +50% +40% $29.4bn $20.2bn $0.8bn $1.1bn 9M22: $12.0bn $13.5bn Acquired Citi’s 12.2 >100% Ro

  4. Slide 4: 3Q23 results summary

    3Q23 results Appendix 3Q23 results summary $m 3Q23 3Q22 Δ (%)  Revenue of $16.2bn, up $4.6bn (40%): NII 9,248 7,998 16 %  NII of $9.2bn, up $1.3bn vs. 3Q22 due to interest rate rises, stable Non-NII 6,913 3,577 93 % vs. 2Q23 Revenue 16,161 11,575 40 %  Non-NII of $6.9bn, up $3.3bn, primarily due

  5. Slide 5: Revenue performance

    3Q23 results Appendix Revenue performance 3Q23 revenue 3Q23 vs. 3Q22 Revenue by global business, $bn Wealth $1,894m 107 6% +40% WPB $6,719m 71% Personal Banking $5,282m 908 21 % Other $(457)m o/w Treasury disposal 16.6 16.2 losses $(253)m 1,770* 79 % GTRF $520m (7) (1)% 4.0 3.9 Credit and Lending $1

  6. Slide 6: Net interest income and margin

    3Q23 results Appendix Net interest income and margin NIM progression, bps 172 43 (33) 170 (12) 2Q23 Asset yields Liability costs Balance 3Q23  NII stable vs. 2Q23 on a constant currency basis sheet mix Reported NII analysis  Banking NII of $11.5bn, stable vs. 2Q23. (2)bps 2Q23 included $0.4bn favo

  7. Slide 7: Non-NII

    3Q23 results Appendix Non-NII Group non-NII, $bn vs. 3Q22 Constant currency non-NII: 3.6 7.4 6.9 93% Notable items and FX: (2.6) (0.2) (0.3)  Constant currency non-NII up $3.3bn (93%) vs. 3Q22: Offset from central costs of  $2.3bn favourable movement in notable items and FX. 3Q22 0.8 2.4* 2.4 fund

  8. Slide 8: Credit performance

    3Q23 results Appendix Credit performance ECL charge trend, $m 1,467 1,103 914 1,071 440 ECL charge as a % of average 3Q22 4Q22 1Q23 2Q23 3Q23 gross loans and advances10  $1.1bn charge, including $0.5bn relating Mainland China to mainland China CRE 0.42 0.57 0.18 0.36 0.42 CRE charge*  YTD mainland

  9. Slide 9: Mainland China commercial real estate update

    3Q23 results Appendix Mainland China commercial real estate update Mainland China CRE exposures by booking location and credit quality At 30 September 2023 Memo: Hong Hong Mainland Rest of  Total mainland China CRE exposure $13.6bn, down Total Kong at 2Q23 Kong China Group $0.6bn vs. 2Q23 mainly du

  10. Slide 10: Costs

    3Q23 results Appendix Costs Operating expenses trend, $m Reported costs:  9M23 costs of $23.4bn, down 2% vs. 9M22, primarily +1% due to lower restructuring costs +2%  9M23 cost-efficiency ratio of 44%, improved 22ppts vs. 9M22; 3Q23 CER of 49%, improved 18ppts vs. 3Q22 7,902 8,996 7,618 7,824 7,96

  11. Slide 11: Capital adequacy

    3Q23 results Appendix Capital adequacy CET1 ratio7, % 0.7  CET1 ratio up 0.2ppts as profit generation and lower 0.1 RWAs were offset by dividend accrual and the share (0.3) (0.0) 14.9 buyback announced at 2Q23 14.7 (0.3) (0.0)  Declared ordinary dividends of $0.30 per share ($5.9bn) in respect of

  12. Slide 12: Summary

    3Q23 results Appendix Summary 1 PBT of $7.7bn and annualised RoTE1 of 17.1% (excluding strategic transactions) Good Wealth performance, particularly in Hong Kong. Continued investment, including the acquisition of 2 Citi’s retail wealth business in mainland China $0.5bn ECL charge on our mainland Ch

  13. Slide 13: Appendix

    Appendix

  14. Slide 14: Group guidance summary

    3Q23 results Appendix Group guidance summary Updates to guidance Previous guidance Revised guidance Expect c.4% cost growth vs. FY22 on a target basis (reconciliation Targeting c.3% cost growth vs. FY22 on a target basis, plus c.1% for on slide 14). Costs relating to the acquisition of SVB UK and re

  15. Slide 15: Cost target basis reconciliation

    3Q23 results Appendix Cost target basis reconciliation $m 3Q23 2Q23 1Q23 4Q22 3Q22 9M23 9M22 FY22 Reported 7,968 7,871 7,586 8,781 7,793 23,425 23,920 32,701 Currency impact — (47) 32 215 109 — (486) (392) Constant currency 7,968 7,824 7,618 8,996 7,902 23,425 23,434 32,309 Notable items16 (48) (9)

  16. Slide 16: Key financial metrics

    3Q23 results Appendix Key financial metrics Reported results, $m 3Q23 2Q23 3Q22 Alternative performance measures, $m 3Q23 2Q23 3Q22 NII 9,248 9,305 8,006 Constant currency NII 9,248 9,208 7,998 Other Income 6,913 7,400 3,502 Constant currency other income 6,913 7,399 3,577 Revenue 16,161 16,705 11,5

  17. Slide 17: Notable items

    3Q23 results Appendix Notable items Notable items (reported basis), $m 3Q23 2Q23 1Q23 4Q22 3Q22 Revenue (268) (241) 3,577 (320) (2,691) o/w: Disposals, acquisitions and related costs* 310 (241) 3,562 (71) (2,378) o/w: Fair value movements on financial instruments — — 15 35 (282) o/w: Restructuring a

  18. Slide 18: Net interest margin

    3Q23 results Appendix Net interest margin Quarterly NIM by key legal entity Key rates (quarter averages), bps Source: Bloomberg * At 27 October 2023 % of 3Q23 526 516 533 % of 3Q23 525 3Q22 4Q22 1Q23 2Q23 3Q23 Group 499 482 497 Group NII 452 AIEA 445 The Hongkong and 368 392 385 400 Shanghai Banking

  19. Slide 19: Canada and France disposals

    3Q23 results Appendix Canada and France disposals Banking business in Canada HSBC Bank Canada selected financial information, $bn  Our banking business in Canada remains in held-for-sale. We expect the 9M23 transaction to complete in 1Q24 for a base cash consideration of CAD13.5bn for NII 1.0 the i

  20. Slide 20: Wealth and Personal Banking

    3Q23 results Appendix Wealth and Personal Banking 3Q23 financial highlights Balance sheet, $bn 3Q23 vs. 3Q22 Revenue $6.7bn 71% 828 830 825  Revenue up $2.8bn (71%). Excl. the $2.3bn France impairment in (3Q22: $3.9bn) 24 35 32 3Q22 and $0.3bn Treasury disposal losses, up $0.7bn (11%). 28% Personal

  21. Slide 21: Commercial Banking

    3Q23 results Appendix Commercial Banking 3Q23 financial highlights Balance sheet, $bn 3Q23 vs. 3Q22 22%  Revenue up $1bn (22%), primarily due to growth in Asia and the Revenue $5.4bn Customer lending (3Q22: $4.4bn) UK RFB. GPS up $1.2bn due to higher interest rates and business 1% 349 340 332 repri

  22. Slide 22: Global Banking and Markets

    3Q23 results Appendix Global Banking and Markets 3Q23 financial highlights Management view of revenue 3Q23 vs. 3Q22 2% $m 3Q23 ∆3Q22  Revenue of $3.9bn, up $0.1bn (2%), including $0.1bn Treasury Revenue $3.9bn (3Q22: $3.8bn) MSS 2,158 (6)% disposal losses Securities Services 615 18%  MSS revenue o

  23. Slide 23: Corporate Centre

    3Q23 results Appendix Corporate Centre 3Q23 financial highlights Revenue performance, $m Revenue $131m >100% 3Q22 4Q22 1Q23 2Q23 3Q23 (3Q22: $(594)m) Central Treasury (352) (12) 101 (21) 17 ECL $(1)m 100% Legacy Portfolios (7) (177) (2) (9) 7 (3Q22: $1m) Other (235) (223) (11) (87) 107 Costs $54m >1

  24. Slide 24: 3Q23 vs. 2Q23 equity drivers

    3Q23 results Appendix 3Q23 vs. 2Q23 equity drivers Shareholders’ Tangible equity, TNAV per share, Basic number of ordinary equity, $bn $bn $ shares, millions At 30 June 2023 184.2 153.2 7.84 19,534 Profit attributable to: 6.1 6.0 0.31 — Ordinary shareholders22 5.6 6.0 0.31 — Other equity holders 0.4

  25. Slide 25: Total shareholders' equity to CET1 capital

    3Q23 results Appendix Total shareholders’ equity to CET1 capital 3Q23 total equity to CET1 capital, $m Total equity to CET1 capital walk7, $m 3Q23 2Q23 1Q23 Total equity 189,840 Total equity (per balance sheet) 189,840 191,651 197,523 Non-controlling interests (7,120) (7,481) (7,428) Non-controlling

  26. Slide 26: Balance sheet – customer lending

    3Q23 results Appendix Balance sheet – customer lending Balances by global business, $bn Balances by entity Growth since 2Q23 Total incl.  Customer lending of $936bn, broadly HFS 1,025 999 992 Asia (HBAP) $453bn $(9)bn (2)% stable (down $5bn) vs. 2Q23 HFS 26 59 56 o/w: Hong $(7)bn  WPB up $2bn, gro

  27. Slide 27: Balance sheet – customer accounts

    3Q23 results Appendix Balance sheet – customer accounts Balances by global business, $bn Balances by entity Growth since 2Q23 Total incl. 1,647 1,630 1,622 $766bn $(6)bn HFS Asia (HBAP) (1)% HFS 26 65 59 o/w: Hong $(1)bn Kong $528bn (0)%  Customer accounts of $1,563bn, broadly 1,621 stable vs. 2Q23

  28. Slide 28: Global CRE exposures (1H23 and FY22 data)

    3Q23 results Appendix Global CRE exposures (1H23 and FY22 data) 1H23 Commercial real estate exposure, $m24 HBAP o/w HK HBUK HBEU HNAH HBMX HBME Other Total Gross loans and 59,560 44,068 14,805 5,045 4,643 976 1,604 928 87,561 advances  In more developed markets such as the UK and o/w stage 1 42,242

  29. Slide 29: EPS excluding material notable items and related impacts

    3Q23 results Appendix EPS excluding material notable items and related impacts $m 3Q23 2Q23 3Q22 YTD PAOS 5,619 6,639 2,002 22,585 Provisional gain on acquisition of SVB UK (86) 4 — (1,593) Impairment loss relating to France disposal (net of tax) — 7 1,852 (1,622) Impact of agreed Canada sale* (376)

  30. Slide 30: Glossary

    3Q23 results Appendix Glossary AIEA Average interest earning assets HFS Held-for-sale Banking net interest income is an alternative performance measure, and is defined as HQLA High-quality liquid assets Group net interest income after deducting: (1) the internal cost to fund trading and fair value n

  31. Slide 31: Footnotes

    3Q23 results Appendix Footnotes 1. RoTE excluding the impact of strategic transactions (the planned sale of our retail banking operations in France exclude HSBC Bank Canada‘s financial results from the 30 June 2022 net asset reference date until completion, and the acquisition of SVB UK), annualised

  32. Slide 32: Disclaimer

    3Q23 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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HSBC Holdings — Q3 2023 Earnings Presentation on 6ix