Hsbc Holdings Plc · LSE:HSBA
Hsbc — Investor Presentation (November 2016)
32 slides from Hsbc's investor presentation, November 2016
Slide 1: Commercial Banking (CMB)
November 2016 Commercial Banking (CMB) Noel Quinn Group Managing Director and Chief Executive Officer, Global Commercial Banking Paula McClelland Chief Financial Officer, Global Commercial Banking
Slide 2: Important notice and forward-looking statements
Important notice and forward-looking statements Commercial Banking (CMB) 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
Slide 3: Agenda
Agenda Commercial Banking (CMB) 1 Strategy is unchanged and is working 2 The value of the network 3 But we can do more… the path to growth 4 Summary and Outlook 3
Slide 4: Our network is key to being the leading international bank
Our network is key to being the leading international bank CMB’s footprint Core capabilities built over 150 years Entrepreneurial heartland of mid Relationship Banking Geographic Spread Breadth of Product market international corporates equates to Strong international competitive position delivering
Slide 5: CMB has significant breadth and depth of customers across our network
CMB has significant breadth and depth of customers across our network Turnover1 Number of customers Global Banking Large Corporate $500m-5bn c.7k Entrepreneurial Mid Market Corporate $50-500m c.36k heartland Business Banking Upper $5-50m c.1.8m2 Business Banking Mass $0-5m Retail Business Banking2 1
Slide 6: Our network supports deep customer relationships
Our network supports deep customer relationships Growing with our customers from Business Banking to International Corporates 18 year relationship Bank in 20 markets c.$1.4bn turnover 10 year relationship Bank in 4 markets c.$1bn turnover 8 year relationship Bank in 3 markets 7 yea
Slide 7: Broad product suite available across all corporate customers
Broad product suite available across all corporate customers Dedicated distribution model Securities Services Global Liquidity & Cash Management (GLCM) Mid Market Corporates offered the same treasury solutions as large Multi- Nationals Global Markets Synergy Products CMB Products Project & Export Fi
Slide 8: CMB has delivered revenue growth in a challenging environment
CMB has delivered revenue growth in a challenging environment 9M16 Key Highlights1 1 2% revenue growth Key awards and recognition World’s Best Bank for Corporates 2 Costs down 1% Best Trade Bank in the World 3 2.9% Jaws Best Supply-Chain Finance provider 4 Best Export Finance Bank in Asia Pa
Slide 9: The network effect
The network effect $297,000,000,000 loan book1 $114,000,000,000 payments authorised via HSBCnet Mobile2 application $2,100,000,000 revenue synergies from CMB clients using products from other Global Businesses2,3 12,000,000 payments processed every second on our International payments platform, HSBC
Slide 10: Agenda
Agenda Commercial Banking (CMB) 1 Strategy is unchanged and is working 2 The value of the network 3 But we can do more… the path to growth 4 Summary and Outlook 10
Slide 11: Each market plays a different but key role in our network
Each market plays a different but key role in our network Revenue by market type (adjusted basis) $bn, 9M16 Priority and International Market revenue UK 2.8 Support both international and 0.5 domestic customers 0.6 1.6 Full spectrum of clients served Hong Kong 2.5 15 countries1 0.9 Internati
Slide 12: Our network is leveraged by customers around the world
Our network is leveraged by customers around the world 33% of US customer value1 is booked overseas 56% of Chinese customer value1 is booked overseas US parent (In country) Chinese parent (In country) $704m $183m $126m $115m Overseas US subsidiary of Overseas subsidiary of overseas parent subsidiary
Slide 13: Half of CMB's revenue is from clients with an international presence
Half of CMB’s revenue is from clients with an international presence Revenue by customer type1 (% of total) Opportunity Banked in Deepen geographic and product penetration 70% 2+ markets2 International 51% Corporates Clients using 30% Extend geographic coverage Trade/ FX3 Domestic Support cust
Slide 14: Agenda
Agenda Commercial Banking (CMB) 1 Strategy is unchanged and is working 2 The value of the network 3 But we can do more… the path to growth 4 Summary and Outlook 14
Slide 15: Our strategy for growth in a low growth economy
Our strategy for growth in a low growth economy Illustrative revenue Number of Products relationship between Products and Markets1 1 2 3 4+ 1 1 3x 6x 13x 2 1x 7x 13x 28x Extend our Number of geographic Markets network 3 2x 9x 15x 33x 4+ 3x 5x 16x 55x Leverage our broad product suite “Revenue multipl
Slide 16: Customer example: capturing the network opportunity
Customer example: capturing the network opportunity Customer is headquartered in New York with 17 subsidiaries Parent HQ CMB banked subsidiary Non- CMB banked subsidiary CMB’s footprint Netherlands UK Canada Germany France South Korea China Japan HK Macau Taiwan Thailand Philippines Malaysia Singapo
Slide 17: Agenda
Agenda Commercial Banking (CMB) 1 Strategy is unchanged and is working 2 The value of the network 3 But we can do more… the path to growth 4 Summary and Outlook 17
Slide 18: Strategic resource allocation to maximise value of the network
Strategic resource allocation to maximise value of the network Mexico Customer segments: – Corporates – Business Banking Upper – Business Banking Mass Product suite: 3 Product – Lending – Transaction Banking $295bn RWAs1 – Capital Markets 1 India Countries Customer segments: – Corp
Slide 19: Capitalising on the network advantage will drive growth
Capitalising on the network advantage will drive growth 1 Strategic direction is sound and unchanged 2 Opportunity across multi product and geographic relationships 3 Disciplined resource allocation Our network can deliver growth faster than GDP 19
Slide 20: Appendix
Appendix Commercial Banking (CMB) 1 CEO and CFO, CMB Biographies 2 3Q16 Financial Results 20
Slide 21: Executive Biographies
Executive Biographies Noel Quinn, Group Managing Director and Chief Executive Officer, Global Commercial Banking Noel Quinn was appointed Chief Executive, Global Commercial Banking, in December 2015. He became a Group Managing Director in September 2016. Based in London, Mr Quinn is responsible for
Slide 22: Executive Biographies
Executive Biographies Paula McClelland, Chief Financial Officer, Global Commercial Banking Paula McClelland was appointed Chief Financial Officer, Global Commercial Banking in July 2016. Based in HSBC Group’s London offices, Ms McClelland is responsible for the financial management of HSBC’s Commerc
Slide 23: Commercial Banking Overview
Commercial Banking Overview Our network covers over 90% of global trade and capital flows1 Selected CMB sites CMB’s footprint Germany $3.4tn GDP $1.3tn exports $1.1tn imports 360 CMB FTE 36 year presence Guangdong $1.1tn GDP $1.0tn trade 11% China’s GDP2 26% China’s trade2 Qatar
Slide 24: Financial Overview
Financial Overview Focused on international growth and returns Key messages1 $bn (unless otherwise 9M15 9M16 vs. stated)1 9M15 - Despite a challenging environment, delivered 2% year-on- Revenue 10.2 10.3 2% year revenue growth in 9M16 – including growth in GLCM LICS (0.6) (0.8) (45)% (+4%) and C&L (
Slide 25: Revenue
Revenue Strong performance in GLCM, UK and Latin America 2% revenue growth to $10.3bn in challenging environment Revenue1 by Product 9M16 ($bn) vs. 9M15 Revenue1 by region 9M16 ($bn) vs. 9M15 (% growth) (% growth) UK 2.8 7% Global Liquidity & Cash 3.4 4% Management2 Hong Kong 2.5 (0)% Global Trade &
Slide 26: Risk Management
Risk Management Asset quality remains robust despite global economic challenges Adjusted Quarterly LICs1 ($m) Increase / (decrease) in adjusted LICs 9M16 YoY increase 45% 9M16 vs. 9M15 ($m) Key drivers 908 UK (Oil & Gas) Europe 222 Spain (Construction) Hong Kong 273 273 243 Asia 51 (Manufacturing) 2
Slide 27: Operating Expenses
Operating Expenses Cost growth stabilised while investing in Global Standards and digital platforms Costs well managed (adjusted operating expenses1) Overall FTE reduced by 9% ($m) 9M16 YoY reduction 1% 30k 1,478 1,477 1,470 -9% 1,444 1,375 1,406 1,398 20k 10k 0 SEP15 SEP16 Driving improvements in c
Slide 28: RWA Management
RWA Management Cumulative $41bn of RWA savings to date, 41% above targeted outcome of $29bn by 2017 RWAs excluding associates1 ($bn) RWA reduction since DEC14 through management initiatives (USDbn) 7 41 DEC15 311 9 29 +41% 23 2 RWA initiatives (18) 2015 1Q16 2Q16 3Q16 Total Target Book size 6 by 201
Slide 29: Universal Banking Model
Universal Banking Model CMB is central to the Group’s revenue synergies Collaboration with CMB accounted for CMB-enabled revenue synergies over half of the Group’s revenue synergies Revenue synergies 9M16 ($bn) Revenue synergies with CMB clients and products 9M16 ($bn) Revenue ($bn) Definition 7.9 G
Slide 30: CMB Quarterly trends
CMB Quarterly trends Reconciliation of Reported to Adjusted results $m 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 Reported Revenue 3,786 3,748 3,702 3,634 3,623 3,886 2,811 LICs (216) (295) (246) (1,013) (390) (443) (244) Operating expenses (1,639) (1,682) (1,676) (1,747) (1,524) (1,619) (1,415) Share of pr
Slide 31: Reconciliation of reported to adjusted results
Reconciliation of reported to adjusted results Reconciliation of reported to adjusted P&L, average RWAs and RoRWA $m 9M15 9M16 9M15 9M16 Reported Operating Profit1 $m Revenue 11,236 10,320 Reported 5,482 4,685 LICs (757) (1,077) Adjusted 5,224 5,206 Operating expenses (4,997) (4,558) Share of profit
Slide 32: Country List
Country List CMB’s footprint1 across 54 markets Home Markets International Markets Hong Kong Algeria Maldives United Kingdom Armenia Malta Priority Markets Argentina Mauritius Australia Bahrain Netherlands Canada Bangladesh New Zealand China Belgium Oman Egypt B
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