Hsbc Holdings Plc · LSE:HSBA
Hsbc — Q3 2015 Earnings Presentation
21 slides from Hsbc's earnings presentation, 2015
Slide 1: Actions to capture value from our global presence in a changed world
Actions to capture value from our global presence in a changed world 11. Reduce Group RWA by at least 25% and re-deploy towards higher performing businesses; return GB&M to Group target profitability 22. Sell operations in Turkey and Brazil; continued application of six filter process 33. Rebuild NA
Slide 2: Highlights
Highlights Key messages Third quarter revenue down; progress on costs Adjusted (USDm) Reported (USDm) Reported PBT up due to net favourable movement in significant items vs. 3Q14 vs. 3Q14 3Q15 3Q15 % % Adjusted revenue down in Principal RBWM and GB&M Revenue 14,044 (4)% 15,085 (4)% Adjusted co
Slide 3: 2015 Financial Highlights
2015 Financial Highlights Financial highlights 3Q15 vs 3Q15 vs 9M15 vs 3Q14 2Q15 3Q15 9M14 9M15 3Q14 2Q15 9M14 Reported PBT, USDbn 4.6 6.6 6.1 1.5 (0.5) 16.9 19.7 2.8 Adjusted PBT, USDbn 6.4 6.0 5.5 (0.9) (0.5) 19.1 18.5 (0.6) Target (if 9M14 9M15 applicable) Return on average ordinary shareholders’
Slide 4: 3Q15 Revenue – quarterly performance
3Q15 Revenue – quarterly performance Lower revenue, notably from Wealth Management and Markets Reported and adjusted revenue (USDm) Adjusted revenue by global business 3Q15 vs. 3Q14 (USDm) Adv Fav Adjusted revenue Lower Wealth Management revenue decreased by Principal RBWM (283) (5)% USD657m in Ho
Slide 5: 3Q15 Operating expenses – quarterly performance
3Q15 Operating expenses – quarterly performance Adjusted costs up in regulatory programmes and compliance Reported and adjusted operating expenses Adjusted costs by type (USDm) Adjusted costs drivers 3Q15 vs. 3Q14 (USDm) (USDm) Adjusted operating expenses increased Adv Fav by USD191m 257.9 259.8 Reg
Slide 6: 3Q15 Operating expenses – quarterly performance
3Q15 Operating expenses – quarterly performance Lower adjusted costs vs. 2Q15; traction on cost programmes Investor Update 2015 target re-baselined (USDbn) Adjusted operating expenses (USDbn) Investor Update Cost to 0.2 achieve 37.9 (5.9) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 (2.3) FX translation4 UK b
Slide 7: 3Q15 Loan impairment charges – quarterly performance
3Q15 Loan impairment charges – quarterly performance LICS remain low reflecting strategic actions to manage risk within our credit portfolio Adjusted loan impairment charges and other credit risk provisions (LICs USDm) LICs / average gross loans and advances to customers (%) 0.30 0.26 0.25 0.20 0.19
Slide 8: 9M15 Profit before tax
9M15 Profit before tax Revenue growth more than offset by investment in growth initiatives and regulatory programmes and compliance Reported and adjusted PBT (USDm) Adjusted PBT growth by account line (USDm) Adjusted PBT growth by global business (USDm) RBWM (569) (10)% Adjusted PBT decreased by Rev
Slide 9: Capital Adequacy
Capital Adequacy Strong capital base with a common equity tier 1 ratio of 11.8% CRD IV End-point1 Common equity tier 1 ratio movement (%) Movement in common equity tier 1 capital (USDbn) At 30 June 2015 138.1 Capital generation from profit 1.9 (0.1) (0.2) 11.8 Profit for the period (including regula
Slide 10: RWAs
RWAs Continued reduction in RWAs from a series of initiatives Key movements in Group RWA (USDbn) RWA initiatives YTD vs. Investor Update target Dec-14 1,220 290 275 (15) FX translation (42) 3Q15 reduction 1H15 reduction 30% of 2017 RWA 3Q15 target achieved 1H15 (50) (32) (82) initiatives Investor FX
Slide 11: Return metrics
Return metrics Group ROE and ROTE2 Group RORWA11 ROE (%) ROTE (%) 3Q14 3Q15 9M14 9M15 Reported 1.5% 2.1% 1.9% 2.2% 10.9 10.7 12.2 12.1 Adjusted12 2.2% 1.9% 2.2% 2.1% 9.5 11.1 7.2 8.2 Adjusted excl. associates and run-off 2.4% 2.0% 2.5% 2.3% portfolios13 3Q14 3Q15 9M14 9M15 3Q14 3Q15 9M14 9M15 Adjust
Slide 12: Progress on our actions to capture value
Progress on our actions to capture value Actions Key achievements Highlights Reduce Group RWAs by USD32bn reduction during the third quarter, notably 1 RWAs reduced by USD32bn in the quarter; 1 c.USD290bn in GB&M USD82bn YTD 290 275 Disposal of our operations in Brazil14 on track (15) 2 Optimis
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Slide 14: Progress on our actions to capture value – YTD progress
Progress on our actions to capture value – YTD progress Actions Key metrics 30 Sept 2015 performance Investor Update Target 9M15, USDbn vs. Dec-14 1 Group RWA reduction RWA initiatives (82) (82) Reduce Group RWAs by USD290bn Business growth RWAs 27 27 c.USD290bn GB&M <1/3 of Group RWA Total RWAs a
Slide 15: Our business in mainland China
Our business in mainland China Exposure focused on leading international companies and selected Tier 1 banks Total assets in Asia16 as at 30 Sep 15 (USDbn) Loans and advances to customers and banks Asia – USD432bn Mainland China – USD53bn Of which: Total assets USD916bn Total assets in USD96bn in As
Slide 16: Currency translation and significant items
Appendix Currency translation and significant items USDm 9M14 9M15 3Q14 3Q15 Currency translation 828 215 Significant items: Revenue Gain / (Loss) on sale of several tranches of real estate secured accounts in the US 76 - 91 (17) Gain on the partial sale of shareholding in Industrial Bank - 1,372 -
Slide 17: Reported Consolidated Income statement
Appendix Reported Consolidated Income statement USDm 9M14 9M15 3Q14 3Q15 Net interest income 26,158 24,472 8,753 8,028 Net fee income 12,239 11,234 4,062 3,509 Net trading income 5,570 7,315 2,295 2,742 Net income from financial instruments designated at fair value 1,916 1,782 256 (884) Gains less l
Slide 18: Reported Consolidated Balance Sheet
Appendix Reported Consolidated Balance Sheet USDm At 31 Dec 2014 At 30 Jun 2015 At 30 Sep 2015 Assets Cash and balances at central banks 129,957 144,324 126,324 Trading assets 304,193 283,138 264,608 Financial assets designated at fair value 29,037 25,168 22,793 Derivatives 345,008 296,942 327,257 L
Slide 19: Footnotes
Appendix Footnotes 1. From 1 January 2015 the CRD IV transitional CET1 and end-point CET1 capital ratios became aligned for HSBC Holdings plc due to recognition of unrealised gains on investment property and available-for-sale securities 2. Return on average ordinary shareholders’ equity (ROE) and R
Slide 20: Important notice and forward-looking statements
Appendix Important notice and forward-looking statements Important notice The information set out in this presentation and subsequent discussion does not constitute a public offer for the purposes of any applicable law or an offer to sell or solicitation of any offer to purchase any securities or ot
Slide 21: Cover images: HSBC – then and now
Cover images: HSBC – then and now It is 150 years since HSBC was founded in Hong Kong to finance trade between Asia and Europe. Much has changed since then, as our cover photos demonstrate. The top left photo shows Hong Kong harbour, with the HSBC office (extreme left) a few years after it was estab