Hsbc Holdings Plc · LSE:HSBA
Hsbc — H1 2002 Earnings Presentation
29 slides from Hsbc's earnings presentation, 2002
Slide 1: HSBC Holdings plc 2002 Interim Results
HSBC Holdings plc 2002 Interim Results =>@ =>@A
Slide 2: Forward-looking statements
Forward-looking Forward-looking statements statements This This presentation presentation andand subsequent subsequent discussion discussion may may contain contain certain certain forward-looking forward-looking statements statements with with respect respect toto the the financial financial condit
Slide 3: 2002 interim results - overview
2002 interim results - overview Cash Cash basis basis Reported Reported US$m % ch* US$m % ch* Operating profit before provisions 5,957 +5 5,561 +6 Pre-tax profit 5,458 -7 5,057 -7 Attributable profit 3,681 -7 3,280 -7 Earnings per share (US$) 0.40 -7 0.35 -8 Dividend per share (US$) 0.205 +8 Tier 1
Slide 4: 2002 interim results - overview
2002 interim results - overview ➣ Difference between the movement in operating and pre-tax profit mainly due to: •• Bad Bad debt debt provision provision rising rising by by US$ US$ 274 274 million million (H1 (H1 01 01 benefited benefited from from Olympia Olympia and and York York recovery recover
Slide 5: 2002 interim results - overview
2002 interim results - overview Cash Cash basis basis Reported Reported US$m % ch* US$m % ch* Operating profit before provisions 5,957 +5 5,561 +6 Pre-tax profit 5,458 -7 5,057 -7 Attributable profit 3,681 -7 3,280 -7 Earnings per share (US$) 0.40 -7 0.35 -8 Dividend per share (US$) 0.205 +8 Tier 1
Slide 6: 2002 interim results - key performance indicators
2002 interim results - key performance indicators* 1H02 1H02 1H01 1H01 Cost / income ratio 54.5% 55.8% Per share (US$) Operating profit before provisions 0.64 0.61 Operating income 1.41 1.39 Operating expense 0.77 0.78 Return on invested capital 13.8% 15.2% * All ratios cash basis 2002 Interim Resul
Slide 7: Line of business analysis
Line of business analysis Operating Profit before Provisions* (US$m) 1H 02 1H 01 2H 01 Personal Financial Services 2,345 2,034 2,110 Commercial Banking 1,588 1,518 1,470 Corporate, Investment Banking & Markets 1,834 1,834 1,919 Private Banking 238 217 209 * Excludes goodwill amortisation 2002 Interi
Slide 8: 2002 interim results highlights
2002 interim results highlights ➣ Developing our franchise and controlling costs has seen growth in operating profits - revenues up US$ 300m, costs flat ➣ Cautious approach to credit quality has resulted in stability in bad debt charge ➣ Continued careful watch of Argentina. Provisioning remains suf
Slide 9: Pre-provision profit growth cash basis
Pre-provision profit growth cash basis Europe Europe North North America America H1 H1 02 02 vv H1 H1 Hong Hong Kong Kong 01 01 Constant Constant fx fx Rest Rest of of Asia Asia H1 H1 02 02 vv H1 H1 01 01 Reported Reported Latin Latin America America -200 -200 -100 -100 00 100 100 200 200 300 300 40
Slide 10: Operating margin and bad debt charge
Operating margin (Operating (Operating profit profit before before provisions, provisions, excluding excluding goodwill goodwill amortisation amortisation as as % % of of average average risk-weighted risk-weighted assets) assets) Bad Bad debt debt charge charge (Bad (Bad debt debt charge charge as
Slide 11: Underlying growth in 2002 concentrated in personal sector
Underlying growth in 2002 concentrated in personal sector* -0.5% 120 120 100 100 +8.7% Billions US$ Billions 80 80 60 60 +5.1% +33.7% +2.1% 31/12/01 31/12/01 US$ 40 40 30/06/02 30/06/02 20 20 00 Residential Residential Other Other Commercial Commercial Commercial Commercial Financials Financials mor
Slide 12: Increased liquidity in corporate bond investment portfolio
Increased liquidity in corporate bond investment portfolio (accrual accounted) 173 397 367 Excess market value over book value (US$m) 50 50 45 45 40 40 35 35 Billions US$ Billions 30 30 25 25 Book Book value value Market Market value US$ 20 20 value 15 15 10 10 55 00 1H01 1H01 2H01 2H01 1H02 1H02 20
Slide 13: Evolution of fees and commission shows growing business
Evolution of fees and commission shows growing business in personal and commercial sectors* 4,000 4,000 3,500 3,500 Other Other 3,000 3,000 Private Private Banking Banking Millions US$ Millions 2,500 2,500 CIBM CIBM 2,000 2,000 US$ 1,500 1,500 Commercial Commercial Banking Banking +5% 1,000 1,000 Pe
Slide 14: Daily distribution of market risk revenues
14 Number Number of Days of Days 10 12 00 22 44 66 88 10 12 -26 -26 to -25 to -25 -23 -23 to -22 to -22 2002 Interim Results -20 -20 to -19 to -19 -17 -17 to -16 to -16 -14 -14 to -13 to -13 -11 -11 to -10 to -10 -8 -8 to -7 to -7 -5 -5 to -4 to -4 up from US$ 13.6m -2 -2 to -1 to -1 11 to to 22 Ave
Slide 15: Dealing profits as % of revenue
Dealing profits 77 66 55 Revenue of Revenue 44 Other Other DP DP 33 % of % 22 FX FX DP DP % % Revenues Revenues 11 00 1996 1996 1997 1997 1998 1998 1999 1999 2000 2000 2001 2001 H1 H1 2002 2002 2002 Interim Results 15 =>? =>
Slide 16: Credit broadly stable (US$m)
Credit broadly stable (US$m) 1H00 2H00 1H01 2H01 1H02 Specific provisions New provisions 995 1,298 1,126 1,544 1,406 Releases and recoveries (493) (590) (676) (530) (568) Net specific 502 708 450 1,014 838 General provisions (132) (148) (9) 582 (123) Banks (2) 4 Total provisions 368 564 441 1,596 71
Slide 17: Pre-provision operating profits 1H02 cash basis
Pre-provision operating profits 1H02 cash basis (US$ million) 2,345 2,345 238 238 Personal Personal Private Private Banking Banking 1,834 1,834 Corporate, Corporate, 1,588 Investment Investment 1,588 Commercial Banking Banking and and Commercial Markets Markets (Including Equity and Corporate Financ
Slide 18: Reshaping equity & corporate finance business
Reshaping equity & corporate finance business 1 Jan 2000 to 30 June 2002 US$m Total income (including profits on investments) 2,094 Total expenses 2,087 Profit 7 Current period performance (US$m) Revenues Costs Against the first half of 2001 79 90 Against the second half of 2001 26 131 2002 Interim
Slide 19: Retail network in France continuing strong growth in operating profits
Retail network in France continuing strong growth in operating profits +20.7% 0.0% 100 100 +16.3% 90 90 -10.9% +5.3% 80 80 +10.1% 70 70 Millions Euro Millions CCF CCF Network Network 60 60 50 50 French French regional Euro 40 40 regional 30 subsidiaries subsidiaries 30 (excluding (excluding Hervet)
Slide 20: Retail network in France - declining cost growth
Retail network in France - declining cost growth 300 300 -2.4% +0.8% +2.9% 250 250 Millions Euro Millions 200 200 -1.7% +4.0% -1.1% CCF CCF Network Network 150 150 French French regional Euro regional 100 100 subsidiaries subsidiaries (excluding (excluding Hervet) Hervet) 50 50 00 H2 H2 00 00 H1 H1
Slide 21: Argentina - update on provisioning
Argentina - update on provisioning US$m Provisions raised 2001 1,120 Write down opening net investment (179) Settlement of external liabilities (441) 500 Residual net liabilities of HSBC Argentina (386) 114 2002 Interim Results 21 =>? =>
Slide 22: Developing our world's local bank franchise
Developing our “world’s local bank” franchise ➣ Maintain cost discipline ➣ Improve productivity ➣ Build on strengths in Personal Financial Services ➣ Enhance position in commercial segment ➣ Develop HSBC brand 2002 Interim Results 22 =>? =>
Slide 23: Cost discipline and productivity improvement
Cost discipline and productivity improvement ➣ Improved distribution channels •• First First Direct, Direct, majority majority of of traffic traffic now now online online •• Hong Hong Kong Kong SAR, SAR, over over 70% 70% retail retail securities securities online online •• Malaysia, Malaysia, 80% 8
Slide 24: Developing our business
Developing our business ➣ ➣ Build Build on on strengths strengths in in Personal Personal Financial Financial Services Services •• Customer Customer relationship relationship management management systems systems producing producing results results -- 8% 8% higher higher sales sales volume volume ••
Slide 25: Developing our business
Developing our business ➣ ➣ Strengthening Strengthening wholesale wholesale banking banking •• Group’s Group’s capabilities capabilities increasingly increasingly harnessed harnessed through through successful successful teamwork teamwork −− Debt Debt Capital Capital Markets, Markets, ranked ranked
Slide 26: Future developments
Future developments ➣ Concentrate on organic growth ➣ Global reach and revenue synergies provide consolidation rationale ➣ Strict adherence to criteria: •• strategic strategic fit fit •• long-term long-term value value for for shareholders shareholders •• compatibility compatibility of of management
Slide 27: Outlook
Outlook ➣ We remain cautious 2002 Interim Results 27 =>? =>
Slide 28: HSBC's response
HSBC’s response ➣ Business has been positioned accordingly ➣ Both organic growth and acquisition opportunities available ➣ Capital position and liquidity strong 2002 Interim Results 28 =>? =>
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