Hsbc Holdings Plc · LSE:HSBA

Hsbc — Investor Presentation (June 2013)

37 slides from Hsbc's investor presentation, June 2013

  1. Slide 1: Global Banking and Markets Investor update

    Global Banking and Markets Investor update Prepared by: Samir Assaf – Group Managing Director, Chief Executive, Global Banking and Markets Date: June 2013

  2. Slide 2: Forward-looking statements

    Forward-looking statements This presentation and subsequent discussion may contain certain forward-looking statements with respect to the financial condition, results of operations and business of the Group. These forward- looking statements represent the Group’s expectations or beliefs concerning f

  3. Slide 3: Introduction

    Introduction HSBC's Global Banking and Markets’ business model and strategy are well established:  We are emerging markets led, financing focused and internationally connected  By executing our strategy we are delivering strong financial results  We are positioned for future growth, thanks to our

  4. Slide 4: GBM core to HSBC strategy

    GBM core to HSBC strategy

  5. Slide 5: HSBC 1Q 2013 results financial highlights

    GBM core to HSBC strategy HSBC 1Q 2013 results financial highlights1 HSBC Group summary financial highlights 2011 2012 1Q 2013 Reported PBT (USDbn) 21.9 20.6 8.4 Underlying PBT (USDbn) 13.9 16.4 7.6 EPS (USD) 0.92 0.74 0.34 Dividends (USD)2 0.41 0.45 0.10 Key ratios % 2011 2012 1Q 2013 Return on ave

  6. Slide 6: Franchise of four global businesses offering an integrated service

    GBM core to HSBC strategy1 Franchise of four global businesses offering an integrated service Rest of Asia- Middle East and Europe Hong Kong North America Latin America Pacific North Africa RBWM 1Q13 PBT 1Q13 RWAs USD1,567m Retail Banking and Wealth Management (RBWM) USD264.2bn CMB 1Q13 PBT 1Q13 RWA

  7. Slide 7: Group strategy delivered through GBM

    GBM core to HSBC strategy Group strategy delivered through GBM Group strategy GBM strategy International  International network in markets Emerging  International network connecting emerging trade and that matter markets led and mature markets, covering key growth areas capital flows  Build on in

  8. Slide 8: Diverse range of products aligned with client need

    GBM core to HSBC strategy Diverse range of products aligned with client need Global Banking and Markets Coverage Groups Clients – more than 4,000 mastergroups1  FX  Credit and Lending  Payments and Cash  Balance Sheet Management (PCM) Management (BSM)  Credit  Equity Capital  Securities Servi

  9. Slide 9: Regional and product outlooks

    GBM core to HSBC strategy Regional and product outlooks Europe  We expect Eurozone contraction  We expect mainland Chinese economy to accelerate after a slower than expected start to the Asia year Regional  We expect US to continue to outperform its peers, however the pace of growth will be slow

  10. Slide 10: Delivering the strategy

    Delivering the strategy

  11. Slide 11: GBM 1Q13 results were USD3.6bn PBT with RoRWA of 3.6%

    Delivering the strategy GBM 1Q13 results were USD3.6bn PBT with RoRWA of 3.6%1 GBM Revenues2 (USDbn) GBM PBT (USDbn) 3.6 5.8 5.8 3.1 2.9 5.1 1Q 11 1Q 12 1Q 13 1Q 11 1Q 12 1Q 13 GBM CER% GBM RoRWA% 46.9 46.9 3.6 3.3 2.9 41.1 1Q 11 1Q 12 1Q 13 1Q 11 1Q 12 1Q 13 Notes: 1 All data on a reported basis 2

  12. Slide 12: Solid start to 2013 – 1Q13 Results

    Delivering the strategy Solid start to 2013 – 1Q13 Results1  PBT growth of 17% (incl. DVA of USD0.5bn) vs. 1Q12  RoRWA2 of 3.6% vs. 2.9% in 1Q12 Achieving growth  Global Banking revenues increased on higher lending spreads and underwriting fees & an increase in advisory fees  Momentum achieved w

  13. Slide 13: Stable and predictable performance, diversified by business line and geography

    Delivering the strategy Stable and predictable performance, diversified by business line and geography Management view of operating income1, 4, 6 Profit before tax2 % average 2010-2012 % average 2010-2012 Total: USD18.1bn Total: USD8.3bn FX (17%) PCM (8%) Europe (15%) Other Transaction Services (4%)

  14. Slide 14: Performance diversified by business line and geography

    Delivering the strategy Performance diversified by business line and geography Management view of operating income1 Profit before tax1 % 1Q 2013 % 1Q 2013 Total: USD5.8bn Total: USD3.6bn FX (15%) PCM (7%) Europe (37%) Other Transaction Services (3%) Securities Services (7%) Hong Kong (16%) Financing

  15. Slide 15: Financial institutions' revenues are well diversified

    Delivering the strategy Financial institutions’ revenues are well diversified Financial institutions relationship revenue – diversified by product1 Securities Services Payments and Cash Management FX Credit and Lending Financial Institutions Trade Governments Asset Management Corporates Equities Rat

  16. Slide 16: Focused on hitting targets

    Delivering the strategy Focused on hitting targets Strong revenue performance in faster growing regions1 RWAs being closely managed1 USDm USDbn 10,000 CAGR 8% 440 420 8,000 400 6,000 380 4,000 360 340 2,000 320 0 300 FY 10 FY 11 FY 12 FY 10 FY 11 FY 12 HongKong ROAP MENA LATAM FSA RWAs CER trend1 Ro

  17. Slide 17: Profits up, revenue up, cost-efficiency improved

    Delivering the strategy Profits up, revenue up, cost-efficiency improved1 GBM Profit Before Tax Metrics CVA estimation impact USDbn 2011 2012 USDm 2012 CER (%) 57.3 54.4 Credit (52) 8.4 Period-end RWAs3 (USDbn) Rates (837) GBM, ex. legacy credit portfolio 373 364 Foreign Exchange (7) 6.7 Legacy cred

  18. Slide 18: GBM legacy portfolio managed to protect shareholder value

    Delivering the strategy GBM legacy portfolio managed to protect shareholder value ABS portfolio carrying value1 (USDbn)  Portfolio reduced by USD15bn since 2010 47 -32%  Hold versus dispose decisions based on a clear economic framework (considering cost of capital and funding) 32  Strong capital

  19. Slide 19: Market leaders by both product and region

    Delivering the strategy Market leaders by both product and region Global Markets Transaction Banking Global Banking Trade and Project and Securities Receivable Export FX1 DCM2 Rates3 Credit4 Equities5 PCM6 Services7 Finance8 Finance9 ECM10 M&A11 Hong Kong #1 #1 #1 #8 #4 #1 #1 #2 RoAP ex Japan #3 #1

  20. Slide 20: GBM has a distinctive business model

    GBM has a distinctive business model

  21. Slide 21: Connecting clients to global growth opportunities

    A distinctive business model Connecting clients to global growth opportunities GBM competitive advantages Example areas of focus • Active in more than 60 markets Global FX and Rates Top 52 International network • Able to serve multi-national clients • Serve 89 of the Fortune 100 Global companies Glo

  22. Slide 22: Enabling a multiplicity of touchpoints on every transaction

    A distinctive business model Enabling a multiplicity of touchpoints on every transaction What has HSBC done? Client Examples of recent transactions Why HSBC?  100 year relationship, across 25+ countries Advised on increasing stake in Indian subsidiary to 72.5%, USD900m deal, second largest stake 

  23. Slide 23: Well equipped for regulatory changes

    A distinctive business model Well equipped for regulatory changes Impact Concerns Strengths  Precise composition of ring-  Leverage in ring-fenced bank fenced bank Structural  Geographic reach  Minimum loss absorbing capital  Ability to service customers Reform – ICB/Volcker requirements  Liqu

  24. Slide 24: Positioned for growth

    Positioned for growth

  25. Slide 25: GBM growth priorities

    Positioned for growth GBM growth priorities Connecting clients to global growth opportunities Growth priorities to 2016 2016 targets Well-positioned in products that will benefit from global trends  Debt Capital Markets – Corporates in Europe and Asia shifting financing Financial RoRWA1, % 2.0-2.2

  26. Slide 26: Leading position to capture capital market growth in Europe and Asia

    Positioned for growth Leading position to capture capital market growth in Europe and Asia Global variation in composition of debt financing1 Market trends % GDP  Bank balance sheet constraints will force corporates to replace bank financing 160 with capital markets debt financing 140 34 12  If We

  27. Slide 27: Market leader in fast-growing project finance sector

    Positioned for growth Market leader in fast-growing project finance sector Global Infrastructure Market Global project finance volumes2  Global annual spending on infrastructure continues at high levels (est. USDbn No. of deals USD2.4 trillion1) 450 1200 400  Project financing (est. USD0.4 trillio

  28. Slide 28: World's largest global trade finance bank, increasing market share

    Positioned for growth World’s largest global trade finance bank1, increasing market share Trade grows faster than GDP2 Globalisation drives trade 1,400  Between 1990 and 2010, the average annual growth rate in world trade was 1.9 times that of GDP2 1,200 1,000  Trade is predicted to continue to gr

  29. Slide 29: Number one cash management bank, growing faster than the market

    Positioned for growth Number one cash management bank1, growing faster than the market Foundation of the global economy Global payment volumes (m) growing rapidly2  Payments and Cash Management underpins the world’s financial system  It moves money around the globe for investment and trade CAGR +6

  30. Slide 30: The leading international bank for RMB products and services

    Positioned for growth The leading international bank for RMB products and services RMB usage is growing Global RMB trade settlement1  China initiated the internationalisation of RMB in July 2009 by permitting some RMB (bn) % cross-border transactions 10,000 35  RMB Qualified Foreign Institutional

  31. Slide 31: Continuing to target opportunities in Equities and Event business

    Positioned for growth Continuing to target opportunities in Equities and Event business Equities - business highlights Event products - business highlights  Cash Equities has been refocused on Emerging Markets where we are  Our Equity Capital Markets team transacted some of the largest IPOs and ga

  32. Slide 32: Increasing collaborative revenues by connecting HSBC's global businesses

    Positioned for growth Increasing collaborative revenues by connecting HSBC’s global businesses Potential upside Initiatives in the medium term  Aspiration: increase incremental CMB collaboration revenues in the medium term – Delivered nearly USD0.7bn in incremental gross revenue since 20101 Commerc

  33. Slide 33: Summary

    Summary

  34. Slide 34: Committed to delivering on our financial targets

    Summary Committed to delivering on our financial targets  GBM business model and strategy are well established  GBM is delivering strong results – Made good progress in 2012 – Good pipeline of sustainable cost saving opportunities  Well positioned for growth with a disciplined approach to cost an

  35. Slide 35: Why you should own HSBC

    Summary Why you should own HSBC The world is changing . . . HSBC’s distinctive position GBM’s competitive advantage Long-term trends 1. Privileged access to growth 1. International network  Increasing imbalances in opportunities (cohesive portfolio) concentrating 85-90% of international trade and c

  36. Slide 36: Appendix

    Appendix

  37. Slide 37: GBM financials

    GBM financials1 (USDm) FY 20115 FY 20124,5 1Q 125 1Q 135 Credit 335 779 305 409 Rates 1,341 1,771 1,194 814 Foreign Exchange 3,272 3,215 957 871 Equities 961 679 185 266 Securities Services 1,673 1,663 385 405 Asset and Structured Finance 516 626 107 83 Global Markets 8,098 8,733 3,133 2,848 Financi

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