Hsbc Holdings Plc · LSE:HSBA

Hsbc — Q1 2024 Earnings Presentation

37 slides from Hsbc's earnings presentation, Apr 30, 2024

  1. Slide 1: HSBC Holdings plc 1Q24 Results

    HSBC Holdings plc 1Q24 Results Presentation to Investors and Analysts

  2. Slide 2: 1Q24 Results

    1Q24 Results Georges Elhedery Group Chief Financial Officer

  3. Slide 3: Summary

    1Q24 results Appendix Summary $12.7bn PBT, down $(0.3)bn vs. 1Q23 1 $9.0bn PBT excluding notable items, down $(0.4)bn vs. 1Q23 26.1% reported RoTE1 2 16.4% RoTE excluding notable items1 $2bn buyback completed ($9bn completed since YE22) 3 1.2bn of shares repurchased since 1 January 2023 (6% of YE22

  4. Slide 4: Financial performance

    1Q24 results Appendix Financial performance Constant currency, $bn 1Q23 1Q24 Δ, $ Δ, %  $12.7bn PBT included $3.7bn notable items, principally: Revenue 20.2 20.8 0.5 3%  $4.8bn gain on sale of Canada4 ECL (0.4) (0.7) (0.3) (68)%  $(1.1)bn impairment on classifying Argentina to held-for-sale Costs

  5. Slide 5: Revenue

    1Q24 results Appendix Revenue $20.8bn, up $0.5bn vs. 1Q23, primarily Banking NII $17.0bn excluding notable items, up $0.5bn vs. 1Q23 Constant currency, $bn 1Q23 1Q24 Δ 1Q23 Revenue 20.2 20.8 0.5 Primarily: Banking NII 10.1 11.3 1.2  $(0.3)bn Argentina, excluding the $(1.1)bn impairment Fee and othe

  6. Slide 6: Banking NII

    1Q24 results Appendix Banking NII Stable run-rate QoQ; reconfirming at least $41bn FY24 guidance1 Banking NII (reported FX), $bn Canada 11.6 11.5 0.3 11.3 1Q24 vs. 4Q23 Argentina 0.3 0.4 0.3 Canada 0.4 $11.3bn Banking NII, up $0.6bn, driven by: 10.7 0.5 Argentina 10.3 0.3  $0.5bn Argentina 0.0 0.3

  7. Slide 7: Fee and other income: Wholesale Transaction Banking and Wealth

    1Q24 results Appendix Fee and other income: Wholesale Transaction Banking and Wealth Strong growth in Wealth, particularly in Asia Wholesale Transaction Banking: down (9)%, primarily in FX Wealth up 14%: growth across all products $bn $bn (9)% +14% vs. 2.9 vs. 1.8 1Q23 2.7 2.6 2.6 1Q23 Asset 2.5 1.6

  8. Slide 8: Credit performance

    1Q24 results Appendix Credit performance Stable; mainland China CRE charge immaterial ECL charge trend, $bn (35)bps (41)bps (38)bps (30)bps (17)bps (0.9) (1.1) (1.0)  $(0.7)bn 1Q24 ECL charge: (0.7) (0.4)  $(0.3)bn Wholesale; immaterial mainland China CRE charge 1Q23 2Q23 3Q23 4Q23 1Q24  $(0.3)bn

  9. Slide 9: Costs

    1Q24 results Appendix Costs Reconfirming cost growth guidance of approximately (5)% vs. FY231 $bn 1Q23 1Q24 Constant currency costs (7.6) (8.2) Less: notable items 0.1 0.1  Target basis costs up (7)%, of which: Add: impact of retranslating results of (2)ppts from a change in the phasing of accrual

  10. Slide 10: Customer loans and deposits

    1Q24 results Appendix Customer loans and deposits Broadly stable vs. 4Q23 Customer loans, $bn +1%  Loans up $5bn / 1%. Reductions in Hong Kong were 933 offset by growth in other markets: 928  $(4)bn Hong Kong, primarily Wholesale, due to (1) 9 (4) lower market-wide demand 1  +$1bn mortgage growth

  11. Slide 11: Capital and distributions

    1Q24 results Appendix Capital and distributions Further $8.8bn of capital distributions; CET1 ratio up 0.4ppts vs. 4Q23 CET1 ratio, % Canada +0.8ppts  $8.8bn further capital distributions: +1.3  Up to $3bn share buyback announced (expected 2Q24 CET1 ratio impact c.(0.4)ppts) (0.5) +0.9  $0.10 ord

  12. Slide 12: Outlook

    1Q24 results Appendix Outlook Reconfirming 2024 guidance 1 RoTE in the mid-teens, excluding notable items 2 Banking NII of at least $41bn1 3 ECL charge of around (40)bps2 4 Cost growth of approximately (5)% vs. FY23 on a target basis3 5 50% dividend payout ratio, excluding material notable items and

  13. Slide 13: Appendix

    Appendix

  14. Slide 14: Group guidance summary

    1Q24 results Appendix Group guidance summary Banking NII At least $41bn in FY241 ECL FY24 ECL charge of around (40)bps2; through-the-cycle planning range of (30)-(40)bps3 Growth in FY24 of approximately (5)% vs. FY23 on a target basis, reflecting our current business plan for 2024. See Costs slides

  15. Slide 15: Financial performance summary

    1Q24 results Appendix Financial performance summary $m 1Q23 2Q23 3Q23 4Q23 1Q24 Δ 1Q23, % NII 8,840 8,974 8,862 7,829 8,653 (2)% Non-NII 11,385 7,436 7,017 4,915 12,099 6% Revenue 20,225 16,410 15,879 12,744 20,752 3% ECL (428) (894) (1,054) (968) (720) (68)% Costs (7,568) (7,732) (7,813) (8,530) (8

  16. Slide 16: Banking NII

    1Q24 results Appendix Banking NII NII to Banking NII, $bn Reported FX, $bn1 1Q23 2Q23 3Q23 4Q23 1Q24 ∆ 4Q23 NII 9.0 9.3 9.2 8.3 8.7 0.4 Less: insurance NII (0.1) (0.1) (0.1) (0.1) (0.1) (0.0) Central costs of funding trading income2 1.4 2.4 2.4 2.5 2.7 0.2 Banking NII 10.3* 11.6* 11.5 10.7* 11.3 0.6

  17. Slide 17: Banking NII is a less volatile, more comprehensive view of rate-sensitive revenues

    1Q24 results Appendix Banking NII is a less volatile, more comprehensive view of the Group’s rate- sensitive revenues Background Banking NII  The Group deploys surplus liquidity from customer deposits and other banking book liabilities Banking NII addresses these asymmetries by deducting, from into

  18. Slide 18: Net interest margin

    1Q24 results Appendix Net interest margin Quarterly NIM by key legal entity (reported FX basis) Group NIM, bps (reported FX basis) 163 % 1Q24 % 1Q24 152 5 (3) 1 (2) 1 1Q23 2Q23 3Q23 4Q23 1Q24 9 NII AIEA Asia* 1.83% 1.83% 1.85% 1.73% 1.66% 44% 43% HSBC Bank plc 0.59% 0.60% 0.53% 0.50% 0.35% 5% 22% 4Q

  19. Slide 19: Wholesale Transaction Banking and Wealth – additional information

    1Q24 results Appendix Wholesale Transaction Banking and Wealth – additional information Total revenue, $m Wholesale Transaction Banking – selected metrics Constant currency basis 1Q23 1Q24 Δ % 1Q23 2Q23 3Q23 4Q23 1Q24 Wholesale Transaction Banking 6,637 6,681 44 1% GTRF loans2, $bn 80 81 83 83 82 We

  20. Slide 20: ECL charge by legal entity

    1Q24 results Appendix ECL charge by legal entity Constant currency, $m 1Q23 2Q23 3Q23 4Q23 1Q24 Asia (HBAP) (64) (391) (748) (437) (271) o/w Hong Kong (44) (451) (660) (375) (234) o/w mainland China CRE (62) (259) (503) (195) (54) UK RFB (HBUK) (168) (260) (58) (48) (52) HSBC Bank plc (HBEU) (20) (5

  21. Slide 21: FY24 cost target basis reconciliation

    1Q24 results Appendix FY24 cost target basis reconciliation $m FY23 1Q23 1Q24 Constant currency (31,643) (7,568) (8,151) Less: Notable items 187 61 50 Add: Impact of retranslating results of hyperinflationary economies at constant (691) (130) — currency Less: Canada direct costs 702 173 162 Less: Fr

  22. Slide 22: Notable items

    1Q24 results Appendix Notable items Reported FX basis, $m 1Q23 2Q23 3Q23 4Q23 1Q24 Revenue 3,577 (241) (268) (2,733) 3,732 o/w: Disposals, acquisitions and related costs 3,562 (241) 310 (2,333) 3,732 o/w: Fair value movements on financial instruments 15 — — (1) — o/w: Restructuring and other related

  23. Slide 23: Argentina

    1Q24 results Appendix Argentina Reported FX basis, $m 1Q23 2Q23 3Q23 4Q23 1Q24* FY23  Announced agreement to sell the business on 9 April 2024 NII 242 384 355 13 488 994  In 1Q24, recognised a pre-tax $(1.1)bn impairment loss following the Non-NII classification of the business to held-for-sale 6

  24. Slide 24: EPS excluding material notable items and related impacts

    1Q24 results Appendix EPS excluding material notable items and related impacts Reported FX basis, $m 1Q23 2Q23 3Q23 4Q23 1Q24 PAOS 10,327 6,639 5,619 (153) 10,183 Gain on acquisition of SVB UK (1,511) 4 (86) 44 — Impact of the sale of our retail banking operations in France (net of tax) (1,636) 7 —

  25. Slide 25: Balance sheet – customer lending

    1Q24 results Appendix Balance sheet – customer lending Balances by global business, $bn Balances by entity Growth since 4Q23 $(1)bn 963 Asia (HBAP) $449bn 928 933 (0)% o/w: Hong $(4)bn GBM 183 $275bn 172 173 Kong (1)% $1bn UK RFB (HBUK) $268bn 0% CMB 322 306 309 HSBC Bank plc $14bn $108bn (HBEU) 15

  26. Slide 26: Balance sheet – customer accounts

    1Q24 results Appendix Balance sheet – customer accounts Balances by global business, $bn Balances by entity Growth since 4Q23 $(18)bn Asia (HBAP) $776bn 1,603 1,594 (2)% 1,570 o/w: Hong $(16)bn Kong $527bn GBM 320 325 (3)% 323 $(3)bn UK RFB (HBUK) $333bn (1)% HSBC Bank plc $20bn CMB 471 471 456 $291

  27. Slide 27: 1Q24 vs. 4Q23 equity drivers

    1Q24 results Appendix 1Q24 vs. 4Q23 equity drivers Shareholders’ Tangible equity, TNAV per share, Basic number of ordinary Reported FX basis equity, $bn $bn $ shares, millions At 31 December 2023 185.3 155.7 8.19 19,006 Profit attributable to: 10.6 10.7 0.56 — Ordinary shareholders1 10.2 10.7 0.56 —

  28. Slide 28: Total shareholders' equity to CET1 capital

    1Q24 results Appendix Total shareholders’ equity to CET1 capital 1Q24 total equity to CET1 capital (reported FX), $m Total equity to CET1 capital walk (reported FX), $m 3Q23 4Q23 1Q24 Total equity 198,377 Total equity (per balance sheet) 189,840 192,610 198,377 Non-controlling interests (7,120) (7,2

  29. Slide 29: Wealth and Personal Banking

    1Q24 results Appendix Wealth and Personal Banking Revenue 1Q24 vs. 1Q23 Total revenue down $(1.8)bn / (21)% due to $2.0bn notable items in 1Q23 (France impairment reversal) $m 1Q23 4Q23 1Q24 vs. 1Q23 vs. 4Q23 Wealth up $0.2bn (12%) with growth in all products. Key areas: (i) $0.1bn non-NII growth in

  30. Slide 30: Commercial Banking

    1Q24 results Appendix Commercial Banking Revenue 1Q24 vs. 1Q23  Revenue down $(1.2)bn / (18)%, due to the non-repeat of the gain on acquisition of SVB UK in 1Q23 of $1.6bn. This more than $m 1Q23 4Q23 1Q24 vs. 1Q23 vs. 4Q23 offset the growth of $0.4bn due to HSBC Innovation Banking (‘IVB‘) revenue,

  31. Slide 31: Global Banking and Markets

    1Q24 results Appendix Global Banking and Markets $m 1Q23 4Q23 1Q24 vs. 1Q23 vs. 4Q23 Commentary 1Q24 vs. 1Q23 Securities Services 558 565 564 6 1% (1) (0)% Revenue of $4.5bn, up 1% Global Debt Markets 354 77 324 (30) (8)% 247 >100% MSS revenue $2.5bn, down $(0.1)bn / (3)%: Global FX 1,201 963 971 (2

  32. Slide 32: Corporate Centre

    1Q24 results Appendix Corporate Centre $m 1Q23 4Q23 1Q24 vs. 1Q23 vs. 4Q23 Central Treasury 1Q24 vs. 1Q23 commentary 101 1 9 (92) 8 Legacy Credit (2) 6 10 12 4 Revenue up $3.5bn, primarily reflecting:  $4.8bn gain in 1Q24 on the sale of our banking Other 2 (277) 3,582 3,580 3,859 business in Canada

  33. Slide 33: Reconciliations

    1Q24 results Appendix Reconciliations Reported revenue to revenue excluding notable items Reported PBT to PBT excluding notable items $m 1Q23 1Q24 $m 1Q23 1Q24 Reported revenue 20,171 20,752 Reported profit before tax 12,886 12,650 Currency translation 54 — Currency translation 45 — Constant currenc

  34. Slide 34: Glossary

    1Q24 results Appendix Glossary AIEA Average interest earning assets GBM Global Banking and Markets, a global business Banking net interest income is an alternative performance measure, and is defined as GPS Global Payments Solutions Group net interest income after deducting: (1) the internal cost to

  35. Slide 35: Footnotes

    1Q24 results Appendix Footnotes Slide 2: Summary Slide 13: Guidance summary 1. 1Q24 RoTE annualised 1. Our guidance reflects our current forecasts, reflecting market-implied interest rates as of mid-February and our current 2. Cost growth is on a target basis which excludes the direct cost impact of

  36. Slide 36: Disclaimer

    1Q24 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 2024 Earnings Presentation on 6ix