Hsbc Holdings Plc · LSE:HSBA

Hsbc — Q1 2023 Earnings Presentation

37 slides from Hsbc's earnings presentation, May 2, 2023

1. Slide 1: HSBC Holdings plc 1Q23 Results

   HSBC Holdings plc 1Q23 Results Presentation to Investors and Analysts

2. Slide 2: Summary of reporting changes from 1Q23

   1Q23 results Appendix Summary of reporting changes from 1Q23 IFRS 17 insurance contracts Secondary line of reporting by Constant currency performance reporting main legal entity  On 1st January 2023, the Group’s  We no longer recognise ‘significant  Our primary segmental reporting by treatment of

3. Slide 3: Strategic progress

   Strategic progress Noel Quinn Group Chief Executive

4. Slide 4: 1Q23 results update

   1Q23 results update Georges Elhedery Group Chief Financial Officer

5. Slide 5: Highlights

   1Q23 results Appendix Highlights Reported PBT of $12.9bn. PBT up $9.0bn vs. 1Q22 on a constant currency basis, driven by an $8.6bn 1 increase in revenue. 1Q23 included $3.6bn of revenue notable items* 2 $0.4bn ECL charge (18bps of gross loans & advances), reflecting improved economic assumptions On

6. Slide 6: 1Q23 results summary

   1Q23 results Appendix 1Q23 results summary $m 1Q23 1Q22 Δ  NII of $9.0bn, up $2.9bn (47%), primarily due to interest rate rises. NII 8,959 6,088 47% Stable vs. 4Q22 Non-NII 11,212 5,484 >100%  Non-NII of $11.2bn, up $5.7bn includes: o/w: notable items 3,577 (120) >100%  $3.6bn notable items which

7. Slide 7: Revenue performance

   1Q23 results Appendix Revenue performance 1Q23 revenue 1Q23 vs. 1Q22 Revenue by global business, $bn Wealth $1,961m 226 13% +74% WPB $8,983m 82% Personal Banking $4,967m 1,934 64% including $3.6bn o/w: France impairment notable items in 1Q23 Other $2,055m 1,875 reversal $2,021m* >100% GTRF $510m (8)

8. Slide 8: Net interest income and margin

   1Q23 results Appendix Net interest income and margin NIM progression, bps 168 64 (63) 169  Reported NII of $9.0bn, up $2.5bn vs. 1Q22 (38%) and stable vs. 4Q22, despite a lower day count  NIM up 2bps on a constant currency basis 4Q22 Asset yields Liability costs 1Q23 (4Q22 constant currency: 1.67%

9. Slide 9: Non-NII

   1Q23 results Appendix Non-NII Group non-NII, $m 11.2  Non-NII up $5.7bn vs. 1Q22, primarily due to:  Notable items of $3.6bn ($2.1bn part-reversal of France 3.6 impairment and $1.5bn provisional gain on acquisition of SVB UK) Gain on acquisition of SVB UK and France  Higher income from trading an

10. Slide 10: Credit performance

    1Q23 results Appendix Credit performance ECL charge trend, $m 1,455 1,083 ECL 632 ECL charge as a 430 432 % of average gross loans and 1Q22 2Q22 3Q22 4Q22 1Q23 advances7 Mainland China  $0.4bn charge includes a minimal stage 1- 0.25 0.17 0.41 0.56 0.17 CRE charge, $m* 2 charge, reflecting improved

11. Slide 11: Costs

    1Q23 results Appendix Costs Operating expenses trend, $m (2)% (15)% 7,712 7,751 7,864 8,958 7,586 1,200  1Q23 constant currency costs of $7.6bn, down 420 576 704 61 $0.1bn (2%) vs. 1Q22 due to the end of the CTA programme and the flow through of cost savings into FY23 1Q22 2Q22 3Q22 4Q22 1Q23  Tar

12. Slide 12: Customer deposits

    1Q23 results Appendix Customer deposits Customer deposits trend, $bn Deposits by global business, $bn 1,655 Other 1,583 1,604 GBM 1 322 $1,604bn 810 WPB deposits  $1.6tn deposits, stable vs. 4Q22 471 CMB  Group HQLA is equivalent to 51% of customer deposits 1Q22 4Q22 1Q23  Cash and cash equivalen

13. Slide 13: Capital adequacy

    1Q23 results Appendix Capital adequacy CET1 ratio, %11 1.0 0.3  CET1 ratio of 14.7%, up 0.5ppts vs. 4Q22, driven by 0.0 0.0* 14.7 profit generation and includes a 0.25ppts impact from the 14.2 (0.5) (0.2) part-reversal of France impairment (0.1)  CET1 capital increased by $6.4bn  RWAs up $14.7bn,

14. Slide 14: Summary

    1Q23 results Appendix Summary 1 Strong quarter with PBT of $12.9bn, including the effect of $3.6bn of revenue notable items 2 $9bn NII, stable vs. 4Q22, supported by our core global deposit franchises 3 Continued cost discipline with costs up 2% vs. 1Q22, relative to the FY23 3% cost target 4 Low EC

15. Slide 15: Appendix

    Appendix

16. Slide 16: Group guidance summary

    1Q23 results Appendix Group guidance summary Guidance (to be reviewed at 1H23) NII FY23 NII ≥$34bn on an IFRS 17 basis Lending Cautious outlook on loan growth in the short term; expect mid-single digit percentage annual loan growth in the medium to long term Approximately 3% cost growth in FY23 vs.

17. Slide 17: Key financial metrics

    1Q23 results Appendix Key financial metrics Reported results, $m 1Q23 4Q22 1Q22 Alternative performance measures, $m 1Q23 4Q22 1Q22 NII 8,959 8,986 6,475 Constant currency NII 8,959 9,086 6,088 Other Income 11,212 5,581 5,830 Constant currency other income 11,212 5,757 5,484 Revenue 20,171 14,567 12

18. Slide 18: Non-NII by business

    1Q23 results Appendix Non-NII by business 1Q23 4Q22 1Q22 $m Fees Other Total Fees Other Total Fees Other Total Personal Banking 293 15 308 316 10 326 298 13 311 Wealth Management 1,003 580 1,583 891 507 1,398 1,054 414 1,468 WPB o/w Life insurance 41 343 384 31 311 342 43 254 297 Other 19 2,082* 2,1

19. Slide 19: Financial investments

    1Q23 results Appendix Financial investments Debt financial investments revaluation movements*, $bn  Our Treasury debt securities portfolio has minimal unrealised Change in losses in the hold-to-collect (‘HTC’) book. Excluding holdings for 4Q22 1Q23 quarter our insurance business which have been pri

20. Slide 20: Notable items (reported basis)

    1Q23 results Appendix Notable items (reported basis) $m 1Q23 4Q22 3Q22 2Q22 1Q22 Revenue 3,577 (320) (2,691) (471) (120) o/w: Disposals, acquisitions and related costs 3,562 (71) (2,378) (288) — o/w: Fair value movements on financial instruments 15 35 (282) (171) (200) o/w: Restructuring and other r

21. Slide 21: NII/NIM supplementary information

    1Q23 results Appendix NII/NIM supplementary information Quarterly NIM by key legal entity Reported NII trend IFRS 4 and IFRS 17, $bn % of 1Q23 % of 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23 Group NII Group AIEA The Hongkong and Shanghai Banking 1.24% 1.32% 1.66% 1.94% 1.83% 47% 43% IFRS

22. Slide 22: Wealth and Personal Banking

    1Q23 results Appendix Wealth and Personal Banking 1Q23 financial highlights Balance sheet, $bn 1Q23 vs. 1Q22 Revenue $9.0bn 82% 841 844  Revenue up $4.0bn (82%), of which $2.0bn relates to the France 837 (1Q22: $4.9bn) 57 34 impairment part-reversal. Personal Banking up $1.9bn (64%) 27% primarily d

23. Slide 23: Commercial Banking

    1Q23 results Appendix Commercial Banking 1Q23 financial highlights Balance sheet, $bn 1Q23 vs. 1Q22 Revenue $6.7bn 99%  Revenue up $3.3bn (99%) with double digit growth across all (1Q22: $3.3bn) Customer lending our main legal entities, notably in the UK RFB and Asia. The key >(100)% 346 340 349 dr

24. Slide 24: Global Banking and Markets

    1Q23 results Appendix Global Banking and Markets 1Q23 financial highlights Management view of revenue 1Q23 vs. 1Q22 Revenue $4.4bn 20% $m 1Q23 ∆1Q22  Revenue of $4.4bn, up $0.7bn (20%) (1Q22: $3.7bn) MSS 2,558 12%  MSS revenue of $2.6bn, up $0.3bn (12%): 89% Securities Services 585 27% ECL $(0.0)b

25. Slide 25: Corporate Centre

    1Q23 results Appendix Corporate Centre 1Q23 financial highlights Revenue performance, $m Revenue $73m >100% (1Q22: $(426)m) 1Q22 2Q22 3Q22 4Q22 1Q23 (50)% Central Treasury (189) (189) (352) (12) 101 ECL $(3)m (1Q22: $(2)m) Legacy Portfolios (19) 24 (7) (170) (2) Costs $(23)m 89% (1Q22: $(206)m) Othe

26. Slide 26: Wealth and insurance

    1Q23 results Appendix Wealth and insurance Wealth revenue, $m Reported invested assets, $bn +13% Global Asia (HBAP) 1,735 1,774 1,794 1,961 1,637 +2% +8% 1,099 1,082 1,047 497 25 460 470 31 72 25 46 1Q22 2Q22 3Q22 4Q22 1Q23 322 376 340 143 141 150 Life insurance reported income statement, $m 338 312

27. Slide 27: Balance sheet – customer lending

    1Q23 results Appendix Balance sheet – customer lending Balances by global business, $bn Balances by entity Growth since 4Q22 $(3)bn Asia (HBAP) $469bn 1,013 1,019 (1)% HFS 81 56 o/w: Hong $(2)bn 0 $291bn  Customer lending of $963bn up $32bn Kong (1)% o/w: SVB UK (3%) vs 4Q22. Excluding the reclassi

28. Slide 28: Balance sheet – customer accounts

    1Q23 results Appendix Balance sheet – customer accounts Balances by global business, $bn Balances by entity Growth since 4Q22  Customer accounts of $1,604bn, up $(2)bn $21bn (1%) vs 4Q22. Excluding the Asia (HBAP) $779bn (0)% 1,669 1,666 reclassification of France balances from HFS and balances fro

29. Slide 29: 1Q23 vs. 4Q22 equity drivers

    1Q23 results Appendix 1Q23 vs. 4Q22 equity drivers Shareholders’ Tangible equity, TNAV per share, Basic number of ordinary equity, $bn $bn $ shares, millions IFRS 4 at 31 December 2022 187.5 149.4 7.57 19,739 IFRS 17 transition impact (9.7) (2.5) (0.13) — At 31 December 2022 177.8 146.9 7.44 19,739

30. Slide 30: Total shareholders' equity to CET1 capital

    1Q23 results Appendix Total shareholders’ equity to CET1 capital Total equity to CET1 capital, at 31 March 2023, $m Total equity to CET1 capital walk5, $m Total equity 197,523 1Q23 IFRS 17 4Q22 IFRS 17* 4Q22 IFRS 4 Total equity (per balance sheet) 197,523 185,197 196,028 Non-controlling interests (7

31. Slide 31: Reconciliations

    1Q23 results Appendix Reconciliations Reconciliation of reported costs to FY23 cost target basis FY22 IFRS 4 and IFRS 17 $m 1Q23 1Q22 FY22 $m FY22, IFRS 17 FY22, IFRS 4 adjustment IFRS 17 Reported 7,586 8,178 32,701 reported reported Currency impact* — (466) (480) NII 32,610 (2,233) 30,377 Constant

32. Slide 32: CRE exposures (data as at FY22)

    1Q23 results Appendix CRE exposures (data as at FY22) Commercial real estate exposure, $m26 Asia o/w HK Europe o/w UK NAM* LATAM MENA Total Gross loans and 66,433 50,103 21,888 16,044 5,415 978 1,765 96,479 advances  Exposure in North America of $5.4bn, down 25% o/w stage 1 46,757 35,963 17,318 12,

33. Slide 33: Supplementary information

    1Q23 results Appendix Supplementary information Reported PBT by legal entity, $m Middle East and North Africa 1Q23 4Q22 1Q22 The following tables show the results of our Middle East and North Africa business operations on a regional basis (including results of all the legal entities HSBC UK Bank plc

34. Slide 34: Glossary

    1Q23 results Appendix Glossary AGM Annual General Meeting IFRS 17 IFRS 17 ‘Insurance Contracts’ AIEA Average interest earning assets LTV Loan to value ANP Annualised new business premiums MENA Middle East and North Africa, including Türkiye AT1 Additional Tier 1 MSS Markets and Securities Services B

35. Slide 35: Footnotes

    1Q23 results Appendix Footnotes 1. Report on Transition to IFRS 17 ‘Insurance Contracts’, available at www.hsbc.com/investors 18. Included within held for sale at 4Q22 were balances associated our retail banking operations in 2. The impact of retranslating the 2022 results of hyperinflationary econo

36. Slide 36: Disclaimer

    1Q23 results Appendix Disclaimer Important notice The information, statements and opinions set out in this presentation and accompanying discussion (this “Presentation”) are for informational and reference purposes only and do not constitute a public offer for the purposes of any applicable law or a

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HSBC Holdings — Q1 2023 Earnings Presentation on 6ix