HSBC Holdings PLC · LSE:HSBA
HSBC — Morgan Stanley Conference 2009
16 slides from HSBC's conference presentation, Mar 31, 2009
Slide 1: HSBC Holdings plc: Strength, Diversity and Resilience
Morgan Stanley Conference HSBC Holdings plc Strength, Diversity and Resilience Michael Geoghegan, Group Chief Executive 31 March 2009
Slide 2: Forward-looking statements
Forward-looking statements ADVERTISEMENT This presentation is an advertisement and not a prospectus and investors should not acquire shares or interests in shares pursuant to the proposed 5 for 12 rights issue to ordinary shareholders of HSBC Holdings plc (the “Company”) (the “Rights Issue”) except
Slide 3: Strength, diversity and resilience
Strength, diversity and resilience Strength from diversified business model and financial position Strategy positions Group for long-term growth and attractive returns Rights issue – strengthen competitive positioning Managing capital allocation and balance sheet risk 3
Slide 4: Strength from diversified business model and financial position
Strength from diversified business model and financial position Profitable in all regions, except North America and all Customer groups, except Personal Financial Services Regions Customer groups Profit before tax % Profit before tax % US$m 2008 change US$m 2008 change Asia 11,929 -11 Personal Finan
Slide 5: Strength from diversified business model and financial position
Strength from diversified business model and financial position Funding and liquidity – improving the advances to deposits ratio US$bn 20071 2008 % change1 Customer loans and 857 933 +9 advances Customer accounts 958 1,115 +16 Advances to deposits 89.5% 83.6% ratio Note: (1) Adjusted for constant cu
Slide 6: Strategy positions Group for long-term growth and attractive returns
Strategy positions Group for long-term growth and attractive returns Concentrating on core emerging markets and faster growing businesses Benefiting from combination of world’s leading emerging market bank with extensive international network 6
Slide 7: Rights issue rationale – strengthen competitive positioning
Rights issue rationale – strengthen competitive positioning Raising tier 1 ratio target range to 7.5 - 10.0% to maintain signature financial strength 12% 9.8% 10% 1.3% 8.3% 8% 1.3% 6% US$17.7bn capital increase 8.5% 4% 7.0% 2% 0% Dec 2008 Pro forma Dec 2008 Core equity tier 1 Non-core equity tier 1
Slide 8: Strengthen competitive positioning
Strengthen competitive positioning Risk weighted assets by principal subsidiary, Return on ordinary shareholders’ funds1 % 31 Dec 2008 The Hongkong and Shanghai Banking Corporation 24 Other HSBC Brazil (5%) HSBC Bank Middle (3%) The Hong Kong and HSBC Bank plc 14 59.6 East (3%) Shanghai Banking 30 .
Slide 9: Strengthen competitive positioning
Strengthen competitive positioning Open for business in core markets for Personal Financial Services and Commercial Banking UK, US$bn Hong Kong, US$bn PFS and CMB balances1 PFS and CMB balances1 +17% +10% +12% 190 +11% 200 163 72 Customer loans and Customer accounts Customer loans and Customer accou
Slide 10: Strengthen competitive positioning
Strengthen competitive positioning Global Banking and Markets – successful focus on ‘emerging markets-led, financing focused’ strategy % chg Total operating income1, 2008 US$m 2008 v 2007 US$bn Total operating income 13,597 -11 Principal Investments -415 (-3%) Net insurance claim (79) +13 Other (8%)
Slide 11: Strengthen competitive positioning
Strengthen competitive positioning Private Banking – the world’s private bank % chg Regional mix – profit before tax, 2008 US$m 2008 v 2007 US$m Net operating income before North loan impairment charges 3,631 +2 America (6%) Loan impairment charges Asia (24%) 83 and other credit risk provisions (68)
Slide 12: Strengthen competitive positioning
Strengthen competitive positioning Insurance – resilience of bancassurance model PBT by region, 2008 & 2007 PBT by insurance business, 2008 1.5 Ping An (10%) 1.0 (US$bn) Distribution (27%) 0.5 Manufacturing (63%) 0.0 Asia Europe Latin America North America 2007 2008 12
Slide 13: Managing capital allocation and balance sheet risk
Managing capital allocation and balance sheet risk Run-off portfolio, US$100bn in HSBC Finance Corporation Customer loans1, US$bn 125.5 121.6 120.3 117.6 Run-off portfolio 114.2 109.9 18.6 18.6 104.3 100.4 18.5 18.1 17.5 16.8 16.2 15.7 47.6 48.8 49.9 50.2 49.9 49.0 47.3 46.2 12.6 12.7 12.9 12.9 12.8
Slide 14: Managing capital allocation and balance sheet risk
Managing capital allocation and balance sheet risk Available-for-sale (AFS) Asset-Backed Securities (ABS) Carrying AFS US$bn, 31 Dec 08 value reserve First loss protection Government agency 20.3 0.3 SICs US$2.2bn Structured Investment Conduits Sector (US$bn) Carrying value AFS reserve (SICs) 14.6 (7
Slide 15: Competitive position strengthened by rights issue to better deliver sustained value over time
Competitive position strengthened by rights issue to better deliver sustained value over time Target range Return on shareholders’ total equity 15 – 19% through the cycle Cost efficiency ratio 48 – 52% Tier 1 capital 7.5 – 10.0% Total shareholder return Above peer group average 15
Slide 16: Strength, diversity and resilience
Strength, diversity and resilience 16