Hsbc Holdings Plc · LSE:HSBA
Hsbc — Investor Presentation (March 2013)
34 slides from Hsbc's investor presentation, Mar 14, 2013
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: 14 March 2013
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 fu
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
Slide 4: GBM core to HSBC strategy
GBM core to HSBC strategy
Slide 5: HSBC 2012 results financial highlights
HSBC 2012 results financial highlights1 HSBC Group summary financial highlights 2011 2012 % Better/(worse) Reported PBT (USDbn) 21.9 20.6 (6) Underlying PBT (USDbn) 13.9 16.4 18 EPS (USD) 0.92 0.74 (20) Dividends (USD)2 0.41 0.45 10 Key ratios % 2011 2012 KPI Return on average ordinary shareholders’
Slide 6: GBM core to HSBC strategy: four global businesses
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 2012 PBT USD9,575m Retail Banking and Wealth Management (RBWM) 2012 RWAs USD276.6bn CMB 2012 PBT USD8,535m
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 trade and that matter markets led emerging and mature markets, capital flows covering key growth areas Build on in
Slide 8: Geared for future growth opportunities
GBM core to HSBC strategy Geared for future growth opportunities In the future, there will be no more In the future, it will take many In the future, even the smallest markets waiting to emerge imports to make an export business will be multinational By 2050, emerging market World trade is predi
Slide 9: 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 Markets (ECM) Se
Slide 10: Delivering the strategy
Delivering the strategy
Slide 11: Strong 2012 performance
Delivering the strategy Strong 2012 performance Achieving growth Underlying revenue growth for GBM, +10% Record reported revenues in Hong Kong, Rest of Asia-Pacific and Latin America Strong performance from Rates and Credit Record reported revenues from corporate and institutional debt issua
Slide 12: Stable and predictable performance, diversified by business line and geography (2010-2012 average)
Delivering the strategy Stable and predictable performance, diversified by business line and geography Managed view of operating income1, 4 Profit before tax2 % average 2010-2012 % average 2010-2012 Total: USD18.1bn Total: USD8.3bn FX (17%) Europe (15%) PCM (8%) Other Transaction Services (4%) Hong
Slide 13: Stable and predictable performance, diversified by business line and geography (FY 2012)
Delivering the strategy Stable and predictable performance, diversified by business line and geography Management view of operating income1, 4 Profit before tax2 % FY 2012 % FY 2012 Total: USD18.3bn Total: USD8.5bn FX (18%) 6 Europe (12%) PCM (10%) Other Transaction Services (4%) Hong Kong (18%) Sec
Slide 14: Financial institutions' revenues are well diversified
Delivering the strategy Financial institutions’ revenues are well diversified Financial institutions relationship revenue – diversified by product1 Security Services Payments and Cash Management Financial Institutions FX Credit and Lending Trade Governments Asset Management Equities Rates Asset and
Slide 15: Focused on hitting targets
Delivering the strategy Focused on hitting targets Strong revenue performance in faster growing regions1 RWAs being closely managed1 USDm CAGR 8% USDbn 10,000 440 420 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
Slide 16: 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
Slide 17: 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 #2 #1 #1 #1 #8 #4 #1 #1 #2 RoAP ex Japan #4
Slide 18: Positioned for growth
Positioned for growth
Slide 19: Business model will continue to deliver returns for shareholders
Positioned for growth Business model will continue to deliver returns for shareholders We are well equipped to respond to regulatory changes. We have a unique capacity to meet clients’ changing needs, including: – Broader and more diverse sources of funding – Services to underpin accelerating tr
Slide 20: Well equipped for regulatory changes
Positioned for growth Well equipped for regulatory changes Impact Concerns Strengths Structural Leverage in ring-fenced bank Precise composition of ring-fenced Ability to service customers from bank subsidiary balance sheets Reform – Minimum loss absorbing capital ICB/Volcker requirements
Slide 21: Wholesale banking industry is changing and facing profitability challenges
Positioned for growth Wholesale banking industry is changing and facing profitability challenges Industry changes in product profitability ROE (%) Pre-regulation Post-regulation and post-mitigation FX 30 c.19 Cash Equities 25 c.18 Struc Equity Derivs 27 c.12-13 Flow Rates 19 c.11-12 Prime Services 1
Slide 22: A well-diversified business means low exposure to regulatory challenged products
Positioned for growth A well-diversified business means low exposure to regulatory challenged products e.g. Rates and Credit GBM total operating income1 ex BSM and Other Minimum, maximum and average 2007– 2012 (USDm) Average (USDm) Share of 2012 total operating income (%) Foreign Exchange 3,040 22%
Slide 23: 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
Slide 24: 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
Slide 25: 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
Slide 26: 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
Slide 27: 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
Slide 28: 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
Slide 29: 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
Slide 30: Summary
Summary
Slide 31: 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
Slide 32: 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
Slide 33: Appendix
Appendix
Slide 34: GBM financials
Appendix GBM financials1 FY 2012 CVA/DVA (USDm) FY 20124 FY 2011 estimation change Credit 779 (52) 335 Rates 1,771 (837) 1,341 Foreign Exchange 3,215 (7) 3,272 Equities 679 (7) 961 Securities Services 1,663 1,673 Asset and Structured Finance 626 516 Global Markets 8,733 (903) 8,098 Financing and Equ