HSBC Holdings PLC · LSE:HSBA

HSBC — UBS Conference 2007

8 slides from HSBC's conference presentation, May 16, 2007

  1. Slide 1: M&A: Curse or Cure?

    M&A: Curse or Cure? DOUGLAS FLINT Group Finance Director 16 May 2007

  2. Slide 2: Maintaining capital efficiency

    Maintaining capital efficiency US$105bn 100 20 Return on invested capital (%) US$95bn 90 US$86bn 15 80 US$bn US$76bn (%) Tier 1 ratio (%) 70 10 60 US$56bn US$52bn 50 5 2001 2002 2003 2004 2005 2006 Average invested capital employed (US$bn) Return on invested capital (%) Tier 1 ratio (%) (1) UK gaap

  3. Slide 3: HSBC acquisition framework

    HSBC acquisition framework • Strategic fit • Human fit • Technology fit • Something shareholders cannot do? • Financial returns • Market reaction 3

  4. Slide 4: Curse or Cure?

    Curse or Cure ? Cure Curse • Licence to operate • Management diversion • Access to resources • Technology strain • Access to distribution • Management and control framework • Economies of scale • Employee engagement • Diversification imbalances • Aggregated risk resolution • Capital and funding gaps

  5. Slide 5: Challenges to successful M&A

    Challenges to successful M&A • Balancing operational independence with consistency of control framework • Delivering clear lines of management accountability • Avoiding silos and tribes • Aligning reward structures for legacy and incoming management • Remembering what made the target successful Demo

  6. Slide 6: Impact of the current environment

    Impact of the current environment • Real focus being given to the benefits of scale and diversification • Capital discipline under scrutiny • Stock market rating - Use it or Lose it • Liquid market – high acquisition premia • Does scale offer differentiation and returns that offset complexity? • Dis

  7. Slide 7: Where we have come from

    Where we have come from Financial performance over 15 years $2.1bn provision at US$ Mortgage Services 1.50 1.40 1.36 Asian Argentine crisis crisis 1.18 0.99 1.00 0.80 0.81 0.76 0.73 0.69 0.66 0.66 0.61 0.63 0.60 0.54 0.53 0.49 0.48 0.50 0.41 0.44 0.35 0.34 0.31 0.28 0.31 0.22 0.15 0.14 0.16 0.08 0.1

  8. Slide 8: Thank you

    Thank you 8

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