Hsbc Holdings Plc · LSE:HSBA
Hsbc — H1 1999 Earnings Presentation
25 slides from Hsbc's earnings presentation, 1999
Slide 1: Cautionary Statement regarding Forward-Looking Statements
Cautionary Statement regarding Forward-Looking Statements Statements in this presentation that are not historical facts, including statements about HSBC’s beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore u
Slide 2: HSBC Holdings plc 1999 Interim Results
HSBC Holdings plc 1999 Interim Results
Slide 3: Operating profit before provisions US$4,995m (up 5%)
Operating profit before provisions US$4,995m (up 5%) Pre-tax profit US$4,068 million, up 10% Attributable profit US$2,694 million, up 12% Capital ratios : Tier 1 11.4%, Total 15.3% Return on average shareholders’ funds 18.6% Shareholders’ funds US$31,642 million Dividend of US13.3 cents per share, u
Slide 4: The business environment in H1
The business environment in H1 99 Continuing strength of the Western economies and a degree of recovery in some emerging markets Solid progress in implementing strategy 3
Slide 5: Operating income stays over US$10 billion – Cost/income ratio falls to 52%
Operating income stays over US$10 billion – Cost/income ratio falls to 52% US$m 100% 10,000 80% 8,000 60% 6,000 4,000 40% 2,000 20% 0 0% H1 97 H2 97 H1 98 H2 98 H1 99 Operating income Cost : income ratio Bad debt charge US$409 million lower than H2 98, at US$1.1 billion 4
Slide 6: Operating income US$10.4bn
Operating income US$10.4bn up 4.4% on H1 98 and 3.2% on H2 98 Unfavourable Favourable Europe Hong Kong SAR Rest of Asia-Pacific North America Latin America -200 0 200 400 600 Change (US$m) on: H1 98 H2 98 5
Slide 7: Geographic distribution of Pre-tax profit
Geographic distribution of Pre-tax profit 6% 13% Europe 5% Hong Kong SAR Rest of Asia-Pacific 42% Latin America 34% North America H1 99 US$4,068 million 16% 4% 14% 3% 2% (1%) 35% 42% 45% 40% H1 98 H2 98 US$3,686 million US$2,885 million 6
Slide 8: Pre-tax profit US$4,068m
Pre-tax profit US$4,068m Unfavourable Favourable Net interest income Other operating income Operating expenses 180 Provisions for bad & doubtful debts Other -250 0 250 500 Change (US$m) on: H1 98 H2 98 7
Slide 9: Net interest income US$5.9bn
Net interest income US$5.9bn up 4.6% on H1 98 and 0.3% on H2 98 Unfavourable Favourable Europe Hong Kong SAR Rest of Asia-Pacific North America Latin America -150 -50 0 50 150 Change (US$m) on: H1 98 H2 98 8
Slide 10: Net interest income
Net interest income Net interest margin Net interest income per day % (average) US$m 3.00 35.0 2.95 2.90 30.0 2.85 2.80 25.0 H1 97 H2 97 H1 98 H2 98 H1 99 H1 97 H2 97 H1 98 H2 98 H1 99 9
Slide 11: Non-interest income US$4.5bn
Non - interest income US$4.5bn up 4.1% on H1 98 and 7.3% on H2 98 Unfavourable Favourable Europe Hong Kong SAR Rest of Asia-Pacific North America Latin America -150 -50 0 50 150 250 350 Change (US$m) on: H1 98 H2 98 10
Slide 12: UK Banking - Life, Pensions and Investment income
UK Banking - Life, Pensions and Investment income Up 18% £m on H1 98 250 200 150 100 50 0 H1 97 H2 97 H1 98 H2 98 H1 99 11
Slide 13: Market risk-related revenues averaged US$9.5m a day
Market risk-related revenues in H1 99 averaged US$9.5m a day Daily distribution of Market Risk Revenues 20 Group Treasury Centres Number of days 15 P&L frequency 10 5 0 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Revenues (in US$m) 12
Slide 14: Total costs US$5.4bn
Total costs US$5.4bn up 4.0% on H1 98 and down 6.6% on H2 98 Favourable Unfavourable Europe Hong Kong SAR Rest of Asia-Pacific North America Latin America -300 -200 -100 0 100 200 300 Change (US$m) on: H1 98 H2 98 13
Slide 15: Customers bad debt charge US$1.1bn
Customers bad debt charge US$1.1bn US$63m below H1 98 and US$397m below H2 98 Favourable Unfavourable New specific Recoveries & releases Net general -450 -350 -250 -150 -50 0 50 150 Change (US$m) on: H1 98 H2 98 14
Slide 16: Asia-Pacific
Asia-Pacific Bad debt charge and Provisions for contingent liabilities Other inc Indonesia & Thailand HK SAR 6% H1 99 34% US$747m Mainland China Malaysia 30% 30% Other inc Other inc Indonesia & Thailand HK SAR HK SAR 16% Malaysia 42% 56% 10% Malaysia Indonesia & Thailand Mainland 20% H1 98 H2 98 Chi
Slide 17: Operating margin / Bad debt charge
Operating margin Bad debt charge (Operating profit before (Bad debt charge as % of provisions as % of average average risk-weighted assets) risk-weighted assets) 4.00% 3.00% 2.00% 1.00% 0.00% H1 97 H2 97 H1 98 H2 98 H1 99 16
Slide 18: Non-performing customer loans US$9.8bn
Non-performing customer loans US$9.8bn US$1.0bn above Dec 98 Favourable Unfavourable Europe Hong Kong SAR Rest of Asia-Pacific North America Latin America -500 0 500 1000 1500 2000 Change (US$m) on: H1 98 H2 98 17
Slide 19: Non-performing customer loans in Asia-Pacific
Non-performing customer loans in Asia-Pacific US$m Hong Kong SAR Rest of Asia-Pacific 4,000 3,000 2,000 1,000 0 Jun-97 Dec-97 Jun-98 Dec-98 Jun-99 18
Slide 20: Distribution of customer loans
Distribution of customer loans Personal lending 38.4% of the Group’s customer loan portfolio at Jun 99 – of which Residential mortgages were 25% Personal lending 60% 50% 40% 30% 20% 10% 0% Europe Hong Kong Rest of Asia- North America Latin America SAR Pacific 1996 1997 1998 Jun-99 19
Slide 21: Movements in risk-weighted assets in H1
Movements in risk-weighted assets in H1 99 Other Debt & equity securities inc. t-bills Fixed assets Loans & advances to banks Loans & advances to customers Trading book -6 -5 -4 -3 -2 -1 0 1 2 Change (US$bn) on Dec 98 20
Slide 22: Generation of US$6bn of Tier 1 capital in H1 99
Generation of US$6bn of Tier 1 capital in H1 99 Released by reduced RWAs FX & other movements Scrip dividend Attributable profit Dividends Issue of capital -1.5 -1 -0.5 0 0.5 1 1.5 2 2.5 3 3.5 H1 99 (US$bn) 21
Slide 23: HSBC - the pursuit of profitable growth
HSBC - the pursuit of profitable growth During H1 99 we have – re-organised our share capital – listed in New York – agreed the prospective acquisition of Republic New York Corporation and Safra Republic Holdings Focus on wealth management – acquired control of our life and pension businesses in Arg
Slide 24: HSBC - the pursuit of profitable growth
HSBC - the pursuit of profitable growth The outlook for the rest of 1999 will be influenced by – the strength of the U.S. economy – the revival of demand in Asia, where the pace of recovery will be uneven – commitment to continuing market reform and corporate restructuring in Asia We are well positi
Slide 25: YOUR WORLD OF FINANCIAL SERVICES
YOUR WORLD OF FINANCIAL SERVICES