Hsbc Holdings Plc · LSE:HSBA
Hsbc — Q4 2024 Earnings Presentation
66 slides from Hsbc's earnings presentation, Feb 19, 2025
Slide 1: HSBC Holdings plc 4Q24 Results
HSBC Holdings plc 4Q24 Results Presentation to Investors and Analysts
Slide 2: Business update
Business update Georges Elhedery Group CEO
Slide 3: Our FY24 performance
Our FY24 performance
Slide 4: FY24 performance
Business update 4Q24 results Appendix FY24 performance $26.9bn of distributions to shareholders1, on the back of our strong performance Record PBT $32.3bn, +6% YoY on a reported basis (o/w: WPB $12.2bn, CMB $11.9bn, GBM $7.1bn) Earnings $34.1bn excluding notable items, +4% YoY on a constant cu
Slide 5: Benefits from our organisational simplification
Benefits from our organisational simplification
Slide 6: Benefits from our organisational simplification
Business update 4Q24 results Appendix Benefits from our organisational simplification We are moving at pace to simplify the Group and unlock our growth potential Simplified the Group Elevated and empowered our two home markets 1 Combined our two wholesale businesses ~60% of revenue moved from
Slide 7: We've aligned our business structure to our strategic priorities (1)
Business update 4Q24 results Appendix We’ve aligned our business structure to our strategic priorities (1) Leading, scale businesses in our home markets Hong Kong business UK business Retail Banking Retail Banking Activities Wealth distribution Wealth distribution Commercial Banking Comm
Slide 8: We've aligned our business structure to our strategic priorities (2)
Business update 4Q24 results Appendix We’ve aligned our business structure to our strategic priorities (2) Global scale in our international network businesses Corporate and Institutional Banking International Wealth and Premier (CIB) Banking (IWPB) Premier Banking in our priority Serving clients
Slide 9: Building on our strengths
Building on our strengths
Slide 10: We generate recurring, predictable revenue streams
Business update 4Q24 results Appendix We generate recurring, predictable revenue streams >90% of revenue is from Banking NII, Wholesale Transaction Banking and Wealth FY24 revenue Other* Strong balance sheet positions in all Wealth 7% Banking NII our businesses 11% Wholesale Wholesale Transaction 16
Slide 11: We have a strong deposit base
Business update 4Q24 results Appendix We have a strong deposit base Our deposit strength drives Banking NII and gives us the funding capacity to support our customers Strong deposit franchise in each of our businesses High quality deposit base Loan to deposit ratio2 82% 85% Group 70% 56% 54% $1.7tn
Slide 12: We maintain a high-quality loan portfolio
Business update 4Q24 results Appendix We maintain a high-quality loan portfolio Gross loans by credit quality 89% of loans to personal customers are secured with good levels $447bn $493bn 1% of collateral 6% 4% 4% 32% 60% of loans to wholesale customers have a rating equivalent to 93% investment gra
Slide 13: We manage our capital with discipline
Business update 4Q24 results Appendix We manage our capital with discipline $47.7bn of distributions to shareholders in respect of 2023 and 2024 CET1 ratio $47.7bn Repurchased 11% of the of distributions to YE22 issued share count1 shareholders 2023-2024 Cumulative shares repurchased as a % of 14.9%
Slide 14: Investing for growth
Investing for growth
Slide 15: We aim to generate consistent mid-teens returns over the next three years
Business update 4Q24 results Appendix We aim to generate consistent mid-teens returns over the next three years External environment Actions Benign rate outlook*, Drive operating leverage as an ongoing process though policy uncertainty remains 1 Cost efficiency and optimisation 2025 – 2027 returns
Slide 16: We will focus our investment for long term strategic growth (1)
Business update 4Q24 results Appendix We will focus our investment for long term strategic growth (1) Key areas of growth and prioritised investments Growth opportunities Investment priorities Grow customer base in HK through acquisition of Invest in wealth centres, increase number of new-to-ban
Slide 17: We will focus our investment for long term strategic growth (2)
Business update 4Q24 results Appendix We will focus our investment for long term strategic growth (2) Key areas of growth and prioritised investments Growth opportunities Investment priorities Drive customer acquisition in Singapore and other Hire additional Relationship Managers and growth mark
Slide 18: A mid-teens RoTE provides a range of options for capital deployment
Business update 4Q24 results Appendix A mid-teens RoTE provides us with a range of options for capital deployment Capital deployment — priorities Returns drive EPS growth over time A mid-teens RoTE creates the capacity to grow the balance sheet, reduce the share count or both, while maintaining a 50
Slide 19: Your HSBC
Business update 4Q24 results Appendix Your HSBC Simplified the Group, creating a simple, more agile HSBC fit for future opportunities and challenges 1 Committed to deliver ~$1.5bn of simplification savings from our re-organisation by YE26*, to be taken to the bottom line Focused on growth opportun
Slide 20: 4Q24 results
4Q24 results Pam Kaur Group CFO
Slide 21: 4Q24 summary
Business update 4Q24 results Appendix 4Q24 summary $2.3bn PBT included $(5.0)bn notable items, principally $(5.2)bn on Argentina disposal* Income $7.3bn PBT ex. notable items / +10% YoY, primarily higher revenue statement FY24 costs (5)% YoY on a target basis, in line with guidance Balance $
Slide 22: Financial performance
Business update 4Q24 results Appendix Financial performance Income statement, $bn 4Q23 4Q24 Δ, $ Δ, % $2.3bn PBT included $(5.0)bn notable items, principally $(5.2)bn Revenue 12.5 11.6 (1.0) (8)% on Argentina disposal* ECL (0.9) (1.4) (0.5) (50)% Costs (8.4) (8.6) (0.2) (2)% Associates (2.4) 0.7 3.1
Slide 23: Revenue
Business update 4Q24 results Appendix Revenue +$1.2bn YoY excluding notable items, driven by Banking NII and Wealth Constant currency, $bn 4Q23 4Q24 Δ Banking NII 10.0 11.0 0.9 Fee and other income 2.5 0.6 (1.9) — Wholesale Transaction Banking 2.5 2.5 0.0 — Wealth 1.3 1.6 0.4 — Other (1.3) (3.6) (2.
Slide 24: Banking NII (1)
Business update 4Q24 results Appendix Banking NII (1) Run-rate broadly stable QoQ Reported FX, $bn 11.3 11.0 10.7 0.5 10.9 10.6 0.4 0.3 0.2 0.0 0.0 0.3 0.3 Run-rate broadly stable QoQ: Deposit growth and structural hedge unwind‡ partly offset by lower interest rates 10.4 10.5 10.5 10.6 10.7 Expect F
Slide 25: Banking NII (2)
Business update 4Q24 results Appendix Banking NII (2) Investment in the structural hedge has reduced our interest rate sensitivity and will support Banking NII Investment in the structural hedge Reduction in rate sensitivity Support to Banking NII Structural hedge notional balance Year 1 Banking NII
Slide 26: Fee and other income: Wholesale Transaction Banking
Business update 4Q24 results Appendix Fee and other income: Wholesale Transaction Banking Stable YoY Fee and other income, $bn +0% 2.6 2.6 Stable fee and other income vs. 4Q23 (up 3% excluding the 2.5 2.6 2.5 vs. 4Q23 impact of strategic transactions, principally the sale of Canada) GTS 7% Global
Slide 27: Fee and other income: Wealth
Business update 4Q24 results Appendix Fee and other income: Wealth Fourth consecutive quarter of double-digit % YoY growth Fee and other income, $bn Growth in all products vs. 4Q23 Life insurance: good business performance in the quarter (new business +27% CSM $0.4bn, +15% YoY) 1.9 1.8 1.8 Net
Slide 28: Wealth outlook
Business update 4Q24 results Appendix Wealth outlook Expect to grow fee and other income at a double-digit % CAGR over the medium term New-to-bank customers in Hong Kong Invested assets, $tn CSM balance, $bn For new customers, total balances and Double digit CAGR since 2022, strength in Store of fut
Slide 29: Credit performance
Business update 4Q24 results Appendix Credit performance (36)bps ECL charge in 2024* ECL charge trend, $bn (57)bps (36)bps (41)bps (28)bps (14)bps $(1.4)bn 4Q24 ECL charge, including: (1.4) $(1.0)bn Wholesale, including $(0.3)bn from two clients — one in the UK, one in the mainland China CRE sec
Slide 30: Costs: driving efficiencies and creating incremental investment capacity
Business update 4Q24 results Appendix Costs: driving efficiencies and creating incremental investment capacity Committed to deliver ~$1.5bn of simplification savings Aiming to re-allocate an additional ~$(1.5)bn of costs from from our re-organisation by YE26* non-strategic activities to priority gro
Slide 31: Cost guidance
Business update 4Q24 results Appendix Cost guidance 2025 guidance: ~(3)% growth on a target basis* FY25 costs ~(3)% ~1% Up to (4)% $(32.1)bn ~$0.3bn P&L saves Baseline* Inflation and Simplification savings FY25 on a target basis* Notable items‡ FY25 reported costs investment† from our re-organisatio
Slide 32: Customer loans and deposits
Business update 4Q24 results Appendix Customer loans and deposits Lending stable, deposits +3% QoQ Lending, $bn Deposits, $bn +3% (0)% 1,655 931 (1) 931 3 24 (3) 1 14 4 1,603 10 3Q24 Hong Kong UK RFB Rest of Other legal 4Q24 3Q24 Hong Kong UK RFB Rest of Other legal 4Q24 Asia entities Asia entities
Slide 33: Capital
Business update 4Q24 results Appendix Capital Strong capital base CET1 ratio, %1 +0.7 +0.2 (0.3) 15.2 (0.2) Upcoming impacts (0.4) (0.1) 14.9 1Q25 (0.2) Up to $2bn share buyback — around (0.2)ppts impact on the CET1 ratio $(1)bn CET1 impact from a 3Q24 Regulatory Dividend 3Q24 Disposals* Change
Slide 34: Outlook
Business update 4Q24 results Appendix Outlook Target Mid-teens RoTE in each of 2025 to 2027, excluding notable items FY25 guidance Banking NII Around $42bn (market-dependent) ECL charge (30) to (40)bps1 Costs Growth of ~(3)%, on a target basis2 Dividends 50% of PAOS excluding material notable items
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Slide 36: Appendix
Appendix
Slide 37: Re-presented 2024 financials by business
Business update 4Q24 results Appendix Re-presented 2024 financials by business International Corporate and Wealth and Corporate $m Hong Kong UK Institutional Group Premier Centre Banking Banking Revenue 15,034 11,954 26,819 13,976 (1,929) 65,854 ECL (1,076) (402) (869) (1,038) (29) (3,414) Costs (4,
Slide 38: Quarterly financial performance summary
Business update 4Q24 results Appendix Quarterly financial performance summary $m 4Q23 1Q24 2Q24 3Q24 4Q24 Δ 4Q23 Banking NII 10,040 11,042 10,856 10,461 10,950 910 Fee and other income 2,483 9,516 5,627 6,357 614 (1,869) Revenue 12,523 20,558 16,483 16,818 11,564 (959) ECL (906) (682) (318) (972) (1
Slide 39: Annual financial performance summary
Business update 4Q24 results Appendix Annual financial performance summary Income statement, $bn (constant currency) FY23 FY24 Δ, $ Δ, % Banking NII 42.4 43.7 1.4 3% Fee and other income 22.5 22.1 (0.4) (2)% — o/w: Wholesale Transaction Banking 10.5 10.4 (0.1) (1)% — o/w: Wealth 5.9 7.2 1.3 21% Reve
Slide 40: Banking NII
Business update 4Q24 results Appendix Banking NII Reported FX, $m 4Q23 1Q24 2Q24 3Q24 4Q24 ∆ 3Q24 FY23 FY24 Banking NII 10,7171 11,266 10,938 10,584 10,950 366 44,095 43,738 Of which: Asia 5,566 5,435 5,317 5,475 5,464 (11) 22,024 21,691 Of which: UK RFB 2,455 2,531 2,532 2,643 2,663 20 9,684 10,368
Slide 41: Banking NII sensitivity and structural hedge
Business update 4Q24 results Appendix Banking NII sensitivity and structural hedge Year 1 Banking NII sensitivity to a (100)bps down-shock,* $bn Banking NII sensitivity to a (100)bps downshock $(2.9)bn, a reduction of ~$(4)bn since June 2022. We estimate that ~50% of 1H22 FY22 1H23 FY23 1H24 FY24
Slide 42: Reported net interest margin
Business update 4Q24 results Appendix Reported net interest margin Quarterly NIM by key legal entity (reported FX) Group NIM, bps (reported FX) 154 % 4Q24 % 4Q24 2 4Q23 1Q24 2Q24 3Q24 4Q24 (3) 3 NII AIEA 6 146 Asia 1.73% 1.66% 1.63% 1.58% 1.63% 48% 45% HSBC Bank plc 0.50% 0.35% 0.35% 0.19% 0.17% 2%
Slide 43: Wholesale Transaction Banking and Wealth – additional information
Business update 4Q24 results Appendix Wholesale Transaction Banking and Wealth – additional information Constant currency, $m 4Q23 1Q24 2Q24 3Q24 4Q24 vs. 4Q23 Wholesale Transaction Banking revenue 6,664 6,590 6,472 6,568 6,515 (149) (2)% Of which: Fee and other income 2,527 2,566 2,617 2,649 2,536
Slide 44: Wholesale multi-jurisdictional revenue
Business update 4Q24 results Appendix Wholesale multi-jurisdictional revenue 62% of wholesale client revenue is from clients we bank in multiple jurisdictions... …a majority of which is earned from activity outside the clients’ home market FY24 Wholesale client revenue1, $bn Domestic-only clients in
Slide 45: Wealth — Global invested assets
Business update 4Q24 results Appendix Wealth — Global invested assets Global reported invested assets Asia reported invested assets GPB reported client assets $bn $bn $bn +9% +18% +8% 1,348 1,293 3Q24 to 4Q24: 662 645 448 489 484 1,191 $5bn NNIA 549 116 110 445 511 489 $(11)bn net market 91 205
Slide 46: Notable items
Business update 4Q24 results Appendix Notable items Reported FX, $m 4Q23 1Q24 2Q24 3Q24 4Q24 Revenue (2,733) 3,732 (161) (211) (4,940) — o/w: Banking NII — — — (283) 46 — o/w: Fee and other income (2,733) 3,732 (161) 72 (4,986) Costs (65) (50) (32) (45) (106) Associates (3,000) — — — — Total (5,798)
Slide 47: Global CRE exposure
Business update 4Q24 results Appendix Global CRE exposure Commercial real estate gross loans and advances, $m1 Hong Kong, excluding exposure to mainland China borrowers Stage 3 Reported FX 4Q23 2Q24 4Q24 Δ 2Q24 % Exposure of $33.2bn, down $(2.4)bn vs. 1H24 on a reported FX basis Asia (HBAP) 58,121 5
Slide 48: Mainland China commercial real estate
Business update 4Q24 results Appendix Mainland China commercial real estate Mainland China CRE exposures by booking location and credit quality At 31 December 2024 Memo: Hong Hong Mainland Rest of Reported FX, $bn Total Kong at 2Q24 Kong China Group Total 4.8 3.2 3.7 0.3 7.3 Strong 0.3 0.1 1.8 0.1 2
Slide 49: Mainland China exposure
Business update 4Q24 results Appendix Mainland China exposure Mainland China risk exposure, $bn Mainland China drawn risk exposure is defined as lending booked in mainland China and wholesale lending booked offshore where the ultimate parent and beneficial owner is in mainland China 158 Wholesale
Slide 50: Cost target basis reconciliations
Business update 4Q24 results Appendix Cost target basis reconciliations 2024 target basis $m FY23 FY24 1Q24 2Q24 3Q24 4Q24 Costs* (31,493) (33,043) (8,151) (8,145) (8,143) (8,604) Less: Notable items 185 233 50 32 45 106 Add: Impact of retranslating prior period results in (742) — — — — — hyperinfla
Slide 51: EPS excluding material notable items and related impacts
Business update 4Q24 results Appendix EPS excluding material notable items and related impacts Reported FX, $m 4Q23 1Q24 2Q24 3Q24 4Q24 FY23 FY24 PAOS (153) 10,183 6,403 6,134 197 22,432 22,917 Impact of acquisition of SVB UK 44 — (2) — (3) (1,549) (5) Impact of the sale of our retail banking operat
Slide 52: Reconciliations — revenue and PBT
Business update 4Q24 results Appendix Reconciliations — revenue and PBT $m 4Q23 4Q24 Constant currency revenue 12,523 11,564 Less: notable items 2,742 4,940 Constant currency revenue, ex. notable items 15,265 16,504 $m 4Q23 4Q24 Constant currency PBT 808 2,277 Less: notable items 5,820 5,046 Constan
Slide 53: Argentina
Business update 4Q24 results Appendix Argentina Reported FX, $m 4Q23 1Q24 2Q24 3Q24 4Q24 FY23 FY24 NII 13 488 434 264 142 994 1,328 Non-NII (42) (290) (125) (52) (18) (220) (486) Revenue (29) 197 309 211 125 774 842 Sale of the business completed on 6 December 2024 ECL (37) (61) 26 (5) (9) (107) (
Slide 54: Balance sheet
Business update 4Q24 results Appendix Balance sheet Customer lending Customer deposits By business, $bn 4Q23 3Q24 4Q24 Δ 3Q24 By business, $bn 4Q23 3Q24 4Q24 Δ 3Q24 WPB 445 445 447 2 1% WPB 793 806 823 17 2% CMB 301 309 307 (3) (1)% CMB 465 470 490 21 4% GBM 171 170 170 (0) (0)% GBM 321 327 341 14 4
Slide 55: 4Q24 vs. 3Q24 equity drivers
Business update 4Q24 results Appendix 4Q24 vs. 3Q24 equity drivers Basic number of ordinary Shareholders’ Tangible equity, TNAV per share, shares outstanding after Reported FX equity, $bn $bn $ deducting own shares held, millions At 30 September 2024 192.8 161.9 9.00 17,982 Profit attributable to: 0
Slide 56: FY24 vs. FY23 equity drivers
Business update 4Q24 results Appendix FY24 vs. FY23 equity drivers Basic number of ordinary Shareholders’ Tangible equity, TNAV per share, shares outstanding after Reported FX equity, $bn $bn $ deducting own shares held, millions At 31 December 2023 185.3 155.7 8.19 19,006 Profit attributable to: 24
Slide 57: Total shareholders' equity to CET1 capital
Business update 4Q24 results Appendix Total shareholders’ equity to CET1 capital 4Q24 total equity to CET1 capital (reported FX), $m Total equity to CET1 capital walk (reported FX), $m 2Q24 3Q24 4Q24 Total equity 192,273 Total equity (per balance sheet) 190,414 200,025 192,273 Non-controlling intere
Slide 58: Wealth and Personal Banking
Business update 4Q24 results Appendix Wealth and Personal Banking vs. 4Q23 Revenue 4Q24 vs 4Q23 Revenue +$2.8bn / 67%, including +$2bn impacts from strategic $m 4Q23 3Q24 4Q24 $ % transactions*. Excluding these, revenue up $0.8bn / 12% Wealth 1,674 2,346 2,062 388 23% Wealth +$0.4bn / 23% with stron
Slide 59: Commercial Banking
Business update 4Q24 results Appendix Commercial Banking vs. 4Q23 Revenue 4Q24 vs. 4Q23 $m 4Q23 3Q24 4Q24 Revenue +$0.3bn / 6% due to balance sheet growth, higher transaction $ % banking fee and other income, higher collaboration income and higher Global Payments Solutions 3,137 2,919 2,918 (219) (7
Slide 60: Global Banking and Markets
Business update 4Q24 results Appendix Global Banking and Markets vs. 4Q23 $m 4Q23 3Q24 4Q24 Revenue 4Q24 vs. 4Q23 $ % Securities Services 557 559 580 23 4% Revenue $4.4bn, +$0.8bn / 21% Global Debt Markets 76 257 155 79 >100% Securities Financing +$0.2bn / 56%, due to ongoing investment in Global FX
Slide 61: Corporate Centre
Business update 4Q24 results Appendix Corporate Centre vs. 4Q23 Revenue 4Q24 vs. 4Q23 $m 4Q23 3Q24 4Q24 $ % Revenue down $(4.8)bn, principally reflecting the impact of strategic transactions, notably: Central Treasury 1 68 (91) (92) >(100)% $(5.2)bn recycling of historical foreign currency reserve
Slide 62: Glossary
Business update 4Q24 results Appendix Glossary ADRs American Depositary Receipts EPS Earnings per share AI Artificial intelligence FVOCI Fair value through other comprehensive income AIEA Average interest earning assets Global Banking and Markets, one of our global business which operated until 31 G
Slide 63: Footnotes (1)
Business update 4Q24 results Appendix Footnotes (1) Business update 4. Source: Coalition Greenwich Competitor Analytics – 3Q24YTD. Based on HSBC’s internal business structure and internal revenue numbers, and the following peer group: BofA, BNPP, BNY, CITI, DB, JPM, NT, SG and STT Slide 3: FY24 perf
Slide 64: Footnotes (2)
Business update 4Q24 results Appendix Footnotes (2) Slide 18: Your HSBC included within ‘CMB Markets products, Insurance and Investments and Other’. GFX includes our emerging markets 1. Excluding the impact of notable items. Our targets and expectations reflect our current outlook for the global bus
Slide 65: Disclaimer
Business update 4Q24 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 app
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