Hsbc Holdings Plc · LSE:HSBA
Hsbc — Investor Day (April 2018)
59 slides from Hsbc's investor day presentation, Apr 11, 2018
Slide 1: HSBC Asia Seminar for Investors and Analysts Day 3 afternoon presentations
HSBC Asia Seminar for Investors and Analysts Day 3 afternoon presentations Date: 11 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 3 afternoon presentations
HSBC Asia Seminar for Investors and Analysts Day 3 afternoon presentations Business Corridors, Belt and Road 03 ASEAN introduction, panel discussion and Q&A 20 Sustainable finance 35 Closing remarks 46 Appendix 49 Glossary 52
Slide 4: Business Corridors, Belt and Road
Business Corridors, Belt and Road 11 April 2018 Mukhtar Hussain Chief Executive Officer, Malaysia
Slide 5: Agenda
Business Corridors, Belt and Road Agenda HSBC’s network – strength of the franchise Overview of the Belt and Road Initiative HSBC’s unique positioning as the “Go to Bank” for BRI
Slide 6: Our global presence allows us access to c.90% of global trade and capital flows
Business Corridors, Belt and Road: HSBC’s network – strength of the franchise Our global presence allows us access to c.90% of global trade and capital flows HSBC footprint Home Priority Network Rep office 67 countries and territories Our network covers 90 countries accounting for more than 90% of g
Slide 7: Trade flows increasingly centred around Asia, helped by BRI
Business Corridors, Belt and Road: HSBC’s network – strength of the franchise Trade flows increasingly centred around Asia, helped by BRI Global 20 top trade corridors1 Key takeaways 2010 2030E 3x Further integration in ASEAN, USD10.0tn RCEP2, as well as the Belt and Road initiative are expected t
Slide 8: Majority of Group priority corridors are related to Asia, especially China
Business Corridors, Belt and Road: HSBC’s network – strength of the franchise Majority of Group priority corridors are related to Asia, especially China Corridor performance in 2017 has grown three times the rate of GDP and Asia-Pacific growth HSBC Group priority corridors (not ranked in terms of re
Slide 9: BRI is a part of our execution of the business corridors strategy
Business Corridors, Belt and Road: HSBC’s network – strength of the franchise BRI is a part of our execution of the business corridors strategy Asia’s international revenue growth is led by mainland …with top growth areas of China outbound coming China…. from countries along the Belt and Road USDbn,
Slide 10: A business corridor offers multi-faceted opportunities: a case study – Australia and China
Business Corridors, Belt and Road: HSBC’s network – strength of the franchise A business corridor offers multi-faceted opportunities for a universal bank: a case study – Australia and China Business corridor: two-way flows Market trends HSBC response / action Mainland China is Australia’s top trad
Slide 11: Case study: HSBC's ability to support China outbound: Australia
Business Corridors, Belt and Road: HSBC’s network – strength of the franchise Case study: HSBC’s ability to support China outbound: Australia China Communications Construction Co. Ltd (CCCC) is a long-standing GB customer of more than HSBC demonstrated strong international 25 years. Key products p
Slide 12: HSBC is well-positioned to capture BRI opportunities
Business Corridors, Belt and Road: Overview of the Belt and Road Initiative HSBC is well-positioned to capture BRI opportunities Belt and Road Initiative is made up of “The Silk Road Economic Belt” and “The 21st Century Maritime Silk Road” Seek to connect > 65 countries across Asia, Middle East,
Slide 13: Initial opportunities arising from BRI will be focused on significant infrastructure investments
Business Corridors, Belt and Road: Overview of the Belt and Road Initiative Initial opportunities arising from BRI will be focused on significant infrastructure investments… USD26tn (USD1.7tn p.a.) of infra-structure investments forecasted to 20301 in Asia HSBC strengths in infrastructure projects I
Slide 14: HSBC infrastructure capabilities
Business Corridors, Belt and Road HSBC infrastructure capabilities HSBC provides a full suite of HSBC offers comprehensive infrastructure solutions Notable transactions investment banking services, Dec 2017 UK Jul 2017 France including advisory and Infrastructure Broad knowledge of the industry an
Slide 15: …the projects create further opportunities
Business Corridors, Belt and Road: Overview of the Belt and Road Initiative …the projects create further opportunities In addition to the immediate opportunities, there is tremendous potential for spillover benefits Financial services required by participants in the immediate supply chain associat
Slide 16: Using the international network and universal banking model, HSBC can help clients of all sizes
Business Corridors, Belt and Road: HSBC’s unique positioning as the “Go to Bank” for BRI Using the international network and universal banking model, HSBC can help clients of all sizes to participate in BRI opportunities Geographic spread Product breadth Customer depth • HSBC’ global coverage is ali
Slide 17: Increased trade flows from improved network connectivity and China's BRI
Business Corridors, Belt and Road: Overview of the Belt and Road Initiative Increased trade flows from improved network connectivity and China’s BRI policies will facilitate more RMB usage Improved network connectivity across Belt and Road (BR) routes and mainland China’s trade and investment focu
Slide 18: HSBC can reach all the business opportunities around a single BRI project proposal
Business Corridors, Belt and Road: HSBC’s unique positioning as the “Go to Bank” for BRI HSBC can reach all the business opportunities around a single BRI project proposal Clients’ needs / product opportunities over the Project’s life cycle Project Project t • Int’l & local Owner Ministry of Finance
Slide 19: Summary of recent examples of HSBC supporting Chinese clients going outbound
Business Corridors, Belt and Road Summary of recent examples of HSBC supporting Chinese clients going outbound Supply Initial Initial event Risk chain advisory financing management support China to Australia Mandated Lead Arranger for CCCC US$1.1bn bridge loan facility in support of its 100% acquisi
Slide 20: BRI is a significant long-term growth theme that will help trade, FDI and wealth
Business Corridors, Belt and Road BRI is a significant long-term growth theme that will help trade, FDI and wealth flows across the region (and globally) 1 BRI opportunities not limited to infrastructure, but also adjacent project opportunities, and downstream opportunities 2 2017 Asian loan growth
Slide 21: ASEAN
ASEAN 11 April 2018 Matthew Lobner Head of International, Asia-Pacific and Head of Strategy and Planning, Asia-Pacific Tony Cripps Chief Executive Officer, Singapore Mukhtar Hussain Chief Executive Officer, Malaysia Sumit Dutta Chief Executive Officer, Indonesia
Slide 22: Agenda
ASEAN Agenda ASEAN introduction Opportunities arising from ASEAN integration and HSBC’s position Singapore, Malaysia and Indonesia: Country overview and HSBC priorities Clients’ view of ASEAN and HSBC’s structure to support their needs Summary 21
Slide 23: Association of Southeast Asian Nations (ASEAN)
ASEAN: Introduction Association of Southeast Asian Nations (ASEAN) 10 Countries, Combined GDP of USD2.7tn1,2, population of c.650 Population1 GDP1,2 million1 and trade of USD2.2tn1,3 Trade1,3 Priority markets 68m Other presence Lao PDR4 Cambodia 95m USD423bn Myanmar USD223bn USD399bn USD372bn Thaila
Slide 24: ASEAN: Journey towards integration
ASEAN: Introduction ASEAN: Journey towards integration ASEAN established Announced creation ASEAN pushes ASEAN to grow at a rapid pace, to promote of ASEAN for deeper trade supported by planned initiatives to collaboration, Economic liberalisation increase connectivity / integration peace and stab
Slide 25: Opportunities arising from ASEAN integration
ASEAN: Opportunities arising from ASEAN integration and HSBC’s position Opportunities arising from ASEAN integration Integration to accelerate economic expansion and wealth creation across ASEAN Key opportunities Estimated infrastructure and real estate investment, Growth of investment and corporate
Slide 26: HSBC well-positioned to capture ASEAN opportunities
ASEAN: Opportunities arising from ASEAN integration and HSBC’s position HSBC well-positioned to capture ASEAN opportunities xx Year of establishing HSBC presence 200 Priority markets branches Other presence 10,000 For c.150 years, HSBC has corporate clients played an active role in development of ec
Slide 27: Country overview: Singapore (1/2)
ASEAN: Singapore, Malaysia and Indonesia: Country overview and HSBC priorities Country overview: Singapore (1/2) Country highlights Real GDP1, USDbn Strong fundamentals AAA credit rating from three ratings 2.1%2 2.3%2 agencies 323 One of world’s most connected economies6 289 302 USD0.7tn of Infr
Slide 28: Country overview: Singapore (2/2)
ASEAN: Singapore, Malaysia and Indonesia: Country overview and HSBC priorities Country overview: Singapore (2/2) HSBC performance highlights1, 2017 Contribution by global business Revenue PBT Loans and advances to USDm customers (net) Revenue 1,174 44% 42% 34% 12% 6% 7% 12% PBT 463 17% 20% 14% 20% 3
Slide 29: Country overview: Malaysia (1/2)
ASEAN: Singapore, Malaysia and Indonesia: Country overview and HSBC priorities Country overview: Malaysia (1/2) Country highlights Real GDP1, USDbn Strong and enduring economic fundamentals Forecast GDP growth at c.5% p.a. through to 4.7%2 20203 4.2%2 411 Middle and upper middle class expected t
Slide 30: Country overview: Malaysia (2/2)
ASEAN: Singapore, Malaysia and Indonesia: Country overview and HSBC priorities Country overview: Malaysia (2/2) HSBC performance highlights1, 2017 Contribution by global business Revenue PBT Loans and advances to customers (net) USDm 50% 27% 16% 34% Revenue 836 15% 9% 44% 17% 21% 40% PBT 325 26% RBW
Slide 31: Country overview: Indonesia (1/2)
ASEAN: Singapore, Malaysia and Indonesia: Country overview and HSBC priorities Country overview: Indonesia (1/2) Country highlights Real GDP1, USDbn Strong economic fundamentals and demographics 5.3%2 5.0%2 ASEAN’s largest economy. Expected to become 1,272 the 7th largest (by GDP) globally by 2030
Slide 32: Country overview: Indonesia (2/2)
ASEAN: Singapore, Malaysia and Indonesia: Country overview and HSBC priorities Country overview: Indonesia (2/2) HSBC performance highlights1, 2017 Contribution by global business Revenue PBT Loans and advances USDm to customers (net) 1% Revenue 564 7% 54% 8% 27% 19% 24% 17% PBT 180 -13% 72% 42% 42%
Slide 33: Client viewpoints: illustrating HSBC's ability to support MNCs expand into ASEAN
ASEAN Client viewpoints: illustrating HSBC’s ability to support MNCs expand into ASEAN and ASEAN clients expand within and outside ASEAN 1 2 3 Expansion opportunity beyond home An attractive location to set up a Strategic location for regional country in ASEAN manufacturing base business hubs Indone
Slide 34: Structure to enable focus on ASEAN opportunities
ASEAN Structure to enable focus on ASEAN opportunities Indonesia Malaysia Singapore Philippines Thailand Vietnam Strong onshore presence and coverage enhanced by regional capabilities International wealth centre in 1 Regional coverage 2 Product specialists 3 Singapore 1. Clients’ view of ASEAN andHS
Slide 35: HSBC well positioned to capture opportunities across ASEAN
ASEAN HSBC well positioned to capture opportunities across ASEAN Well positioned to capture opportunities across ASEAN… 1 Deep heritage across key ASEAN markets At scale / near-scale positions in three of the largest markets Well positioned to support strong economic Presence in other markets –
Slide 36: Sustainable finance
Sustainable finance 11 April 2018 Daniel Klier Group Head of Strategy and Global Head of Sustainable Finance
Slide 37: Sustainability and HSBC's approach to ESG
Sustainable Finance Sustainability and HSBC’s approach to ESG1 Sustainability at HSBC HSBC’s approach From climate change to Support the global transition to the low-carbon economy, wealth equality and job Environmental through our own sustainable operations and by supporting our security, the c
Slide 38: Pathway to achieve Paris Agreement is challenging; speed of change is accelerating
Sustainable Finance Pathway to achieve Paris Agreement is challenging; speed of change is accelerating Material reduction in carbon emissions required to deliver Paris Agreement1 …and stakeholders have already taken actions Carbon emissions Carbon budget to combat climate change France and UK to b
Slide 39: Over USD100tn investment in infrastructure in the next 15 years is required globally
Sustainable Finance Over USD100tn investment in infrastructure in the next 15 years is required globally under 2 degree scenario, c.50% will be in Asia Global infrastructure investment needed in the next 15 years for a 66% chance of 2°C1 USD trillion, 2016-2030 103.5 100% 16.5 c.50% of total inves
Slide 40: Asia is at the heart of the transition
Sustainable Finance Asia is at the heart of the transition and key countries from Asia are pioneering in this area Top 100 most Changes in Gross capacity Total investment Taking leadership populous cities1 electricity demand2 additions2 projected2 2016 PWh, 2016-40 TW, 2016-40 USDtn, 2016-40 China
Slide 41: The transition will affect many industries and create opportunities
Sustainable Finance The transition will affect many industries and create opportunities Transition Business opportunities Financing solutions Risk of stranded assets Portfolio diversification Corporate Lending Renewables will contribute at least 20% of • Transition from high-carbon to low-ca
Slide 42: HSBC is committed to leading the way to a sustainable future
Sustainable Finance HSBC is committed to leading the way to a sustainable future Our commitments Progress so far We are committed to financing clean USD10.5bn of GSS1 bonds facilitated in 2017 Provide USD100bn of energy, low carbon technologies and sustainable financing and projects, which will help
Slide 43: We are an industry leader in Sustainable Finance business
Sustainable Finance We are an industry leader in Sustainable Finance business Examples of our leadership Selected transactions Green, Social, Sustainability Bond League Table1 China Resources ICBC Swire Properties Ltd Issued 2017, USDbn % Market Share EUR500m HSBC Green Bond to support sustainable T
Slide 44: We have set up a global sustainable finance team
Sustainable Finance We have set up a global sustainable finance team to capture opportunities from various regions, segments and sectors Leadership Group Climate Business Council Geographic Working Groups Europe Asia North America Middle East UK Germany China HK US Canada UAE France Singapore India
Slide 45: Enhancing enablers to accelerate development of sustainable finance
Sustainable Finance Meanwhile, we are enhancing enablers to accelerate development of sustainable finance Enablers Internal External Governance / disclosure Risk management staff training thought leadership Empower frontlines to Be the leading research Ensure appropriate Develop industry bet
Slide 46: Key takeaways
Sustainable Finance Key takeaways 1 The transition to a low carbon economy represents one of the largest commercial opportunities as well as a fundamental risk to the financial services sector 2 c.USD100tn of investments are required over the next 15-20 years to enable this transition 3 The pace of
Slide 47: Closing remarks
Closing remarks 11 April 2018 Peter Wong Deputy Chairman and Chief Executive, The Hongkong and Shanghai Banking Corporation Limited
Slide 48: HSBC has a distinctive Asian franchise enabling our leading international bank strategy
Closing remarks HSBC has a distinctive Asian franchise enabling our leading international bank strategy HSBC Asia footprint HSBC Asia results Greater China1 Highly profitable franchise, disciplined investments Home market (Hong Kong) South Investing for future (PRD) 2017 CER 46% Korea Japan
Slide 49: Strategic priorities: continue to leverage HSBC's international connectivity
Closing remarks Strategic priorities: continue to leverage HSBC’s international connectivity to capture emerging opportunities Highly profitable, unrivalled footprint and heritage and uniquely positioned Leverage Present in top 14 global trade corridors with at least one leg in Asia Business Corri
Slide 50: Appendix
Appendix
Slide 51: External views on BRI
Appendix: Business Corridors, Belt and Road External views on BRI North America Europe Asia “I know the United States has been “After all, the ancient Silk Roads “Malaysia must certainly take among those countries apparently most were never only Chinese," "By advantage of the Belt and Road sce
Slide 52: Case study: ChemChina / Syngenta
Appendix: Business Corridors, Belt and Road Case study: ChemChina / Syngenta ChemChina’s recommended public takeover of Syngenta for USD46bn HSBC’s full service global offering proved critical in advising on this landmark transaction HSBC added value February 2016 Extensive analysis of changing ag
Slide 53: Glossary
Glossary
Slide 54: 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 55: Glossary of terms
Glossary Glossary of terms Term Definition Term Definition Client revenue data sourced HSBC internal 1.Estimated Market share is calculated by client MI, which differs from reported revenue. taking HSS’s Asia Pacific AUC (provided by Client revenue Excludes synergies with other global HSS) divided b
Slide 56: 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 57: 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 58: Glossary of terms
Glossary Glossary of terms Term Definition TLA Term Loan A tn trillion United Nations Conference on Trade and UNCTAD Development USD US Dollar VNB Value of new business Y-o-Y Year-on-year YTD Year-to-Date 57
Slide 59: Slide 59