Hsbc Holdings Plc · LSE:HSBA
Hsbc — Q1 2019 Earnings Presentation
29 slides from Hsbc's earnings presentation, May 3, 2019
Slide 1: HSBC Holdings plc 1Q19 Results Presentation to Investors and Analysts
HSBC Holdings plc 1Q19 Results Presentation to Investors and Analysts
Slide 2: Key messages
Key messages 1 1Q19 reported PAT up 31% to $4.9bn 2 1Q19 reported PBT up 31% to $6.2bn vs. 1Q18; 1Q19 adjusted PBT up 9% to $6.4bn vs. 1Q18 3 Annualised RoTE up 220bps in 1Q19 to 10.6% vs. 1Q18 CET1 ratio 14.3% vs. 14.0% FY18, including a 7bps adverse impact of IFRS 16 4 We are committed to the disc
Slide 3: Key financial metrics
1Q19 financial performance Key financial metrics Key financial metrics 1Q18 1Q19 ∆ 1Q18 Return on average ordinary shareholders’ equity (annualised) 7.5% 10.2% 2.7ppt Return on average tangible equity (annualised) 8.4% 10.6% 2.2ppt Jaws (adjusted) (5.7)% 6.0% nm Dividends per ordinary share in respe
Slide 4: 1Q19 adjusted revenue performance
1Q19 financial performance 1Q19 adjusted revenue performance Adjusted revenue analysis Global business 1Q19 revenue 1Q19 vs. 1Q18, $m 1Q19 vs. 4Q18, $m Wealth Management 139 778 RBWM $5,971m $0.5bn $0.8bn Retail Banking 376 or 10% (74) or 16% Other 13 132 GLCM (26) 216 25 $0.4bn 16 $0.2bn GTRF CMB $
Slide 5: 1Q19 adjusted performance by global business
1Q19 financial performance 1Q19 adjusted performance by global business 1Q18 4Q18 1Q19 Retail Banking and Wealth Management Commercial Banking -1.0ppt -1.6ppt +10% +11% 5,971 23.1% 22.1% 3,921 15.5% 5,443 5,135 3,535 3,715 -1% 13.9% +19% 2,030 2,016 2,231 1,676 1,876 1,354 Revenue PBT RoTE4 Revenue
Slide 6: 1Q19 net interest income $7.5bn, up 5% vs. 1Q18
1Q19 financial performance 1Q19 net interest income $7.5bn, up 5% vs. 1Q18 Net interest income Adjusted NII up 5% 1Q19 vs. 1Q18; down 4% vs. 4Q18 due to lower number of days ($166m), hyperinflation in Argentina5 ($63m) and +5% -4% IFRS 16 impact ($45m), with higher loan and deposit balances 7,636
Slide 7: 1Q19 adjusted costs
1Q19 financial performance 1Q19 adjusted costs 1Q18 vs. 1Q19, $bn Adjusted costs7 up 3.2% to $8.1bn (including the UK bank levy of $41m in 1Q18) vs. $7.8bn in 1Q18 $249m, +3.2% Investment spend of $1.0bn was $0.1bn (15%) higher 0.1 Near and medium term than 1Q18 investment in growth 0.1 Growth
Slide 8: 1Q19 credit performance
1Q19 financial performance 1Q19 credit performance 1Q19 of ECL charge $585m, up $433m vs. 1Q18; ECL charge as a % of gross loans and advances of 24bps RBWM 1Q19 ECL $302m up $13m or 4%, primarily from growth in unsecured lending CMB 1Q19 ECL $247m vs. a net release of $67m, reflecting specific
Slide 9: Capital adequacy: CET1 ratio of 14.3%
1Q19 financial performance Capital adequacy: CET1 ratio of 14.3% Capital progression CET1 ratio movement, % 1Q18 4Q18 1Q19 14.3 (0.2) Common equity tier 1 capital, $bn 129.6 121.0 125.8 0.4 0.2 Risk-weighted assets, $bn 894.4 865.3 879.5 (0.2) 14.0 0.1 CET1 ratio, % 14.5 14.0 14.3 1Q19 CET1 movement
Slide 10: Outlook
Outlook Financial targets RoTE9 >11% by 2020 1 Growing revenues in areas of strength Continue to redeploy capital into higher return businesses and invest Costs Positive adjusted jaws 2 in technology to improve customer service and competitiveness 3 Long term drivers of revenue growth remain str
Slide 11: Appendix
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Slide 12: Global business management view of adjusted revenue
Appendix Global business management view of adjusted revenue Δ% Δ% Group, $m 1Q18 2Q18 3Q18 4Q18 1Q19 GB&M, $m 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 1Q18 Total Group revenue 13,196 13,268 13,787 12,641 14,406 9 Global Markets 1,833 1,616 1,795 1,108 1,741 (5) Total adjusted revenue as previously disclosed10
Slide 13: Retail Banking and Wealth Management
Appendix Retail Banking and Wealth Management 1Q19 highlights Revenue performance, $m11 Balance sheet, $bn12 +10% +3% +16% +9% 5,443 5,256 5,720 5,135 5,971 634 644 654 Adjusted PBT (1Q18: $1.9bn) 181 339 365 369 Wealth 1,808 $2.2bn 19% Mgt. 1,588 1,635 1,314 1,726 (40) (53) (47) (185) 1Q18 4Q18 1Q1
Slide 14: Commercial Banking
Appendix Commercial Banking 1Q19 highlights Revenue performance, $m11 Balance sheet, $bn12 +11% +6% Customer lending: +8% Adjusted revenue 3,535 3,630 3,730 3,715 3,921 +1% Adjusted PBT +3% (1Q18: $2.0bn) Markets products, 335 340 Insurance and 307 316 Investments, and 580 $2.0bn 1% Other 533 466 46
Slide 15: Global Banking and Markets
Appendix Global Banking and Markets 1Q19 highlights Revenue performance, $m11 Management view of adjusted revenue +3% $m 1Q19 ∆ 1Q18 Adjusted revenue 3,954 3,989 4,169 3,083 4,068 Global Markets 1,741 (5)% Credit and - FX 698 (3)% 22 38 47 Funding Adjusted PBT Valuation (61) - Rates 490 8% (1Q18: $1
Slide 16: Global Private Banking
Appendix Global Private Banking 1Q19 highlights Revenue performance, $m11 Reported client assets, $bn 331 330 326 335 309 -4% Adjusted revenue +6% Adjusted PBT (1Q18: $111m) 467 441 430 425 450 $98m 12% Other 43 1Q18 2Q18 3Q18 4Q18 1Q19 46 44 48 44 Deposit 120 121 Growth in discretionary & advisor
Slide 17: Corporate Centre
Appendix Corporate Centre ** * 1Q19 highlights Revenue performance, $m11 Legacy credit adjusted RWAs12, $bn 1Q18 2Q18 3Q18 4Q18 1Q19 11.6 Central Treasury (21) 233 109 304 326 Of which: -28% Adjusted PBT Balance Sheet Management 570 680 534 637 623 (1Q18: $0.1 bn) 5.4 3.9 Holdings Interest expense (
Slide 18: Significant items
Appendix Significant items $m 1Q18 4Q18 1Q19 Reported PBT 4,755 3,256 6,213 Revenue Currency translation (656) 75 - Customer redress programmes - (7) - Disposals, acquisitions and investment in new businesses 112 (29) - Fair value movements on financial instruments 28 (95) (22) Currency translation
Slide 19: Certain revenue items and Argentina hyperinflation
Appendix Certain revenue items and Argentina hyperinflation Certain items included in adjusted revenue Argentina hyperinflation5 impact included in 1Q18 4Q18 1Q19 highlighted in management commentary, $m adjusted results (Latin America Corporate Centre), 4Q18 1Q19 $m Insurance manufacturing market i
Slide 20: Volatile items analysis
Appendix Volatile items analysis RBWM: Insurance manufacturing GB&M: Markets excl. Foreign GB&M: Credit and funding valuation Corporate Centre: Valuation market impacts revenue, $m Exchange revenue, $m adjustments revenue, $m differences on long-term debt and associated swaps revenue, $m 181 1,115 4
Slide 21: RoTE by global business excluding significant items and UK bank levy
Appendix RoTE by global business excluding significant items and UK bank levy 1Q19 $m Corporate RBWM CMB GB&M GPB Group Centre Reported profit before tax 2,174 2,012 1,535 96 396 6,213 Tax expense (410) (430) (307) (18) (138) (1,303) Reported profit after tax 1,764 1,582 1,228 78 258 4,910 less attr
Slide 22: Equity drivers
Appendix Equity drivers 1Q19 vs. 4Q18 equity drivers Basic number Shareholders’ Tangible equity, TNAV per share, of ordinary equity, $bn $bn $ shares, million As at 31 December 2018 186.3 140.1 7.01 19,981 Profit attributable to: 4.5 3.9 0.19 - Ordinary shareholders19 4.1 3.9 0.19 - Other equity hol
Slide 23: Balance sheet – customer lending
Appendix Balance sheet – customer lending 1Q19 Net loans and advances to customers 1Q19 adjusted lending growth by global business and region $bn Adjusted customer lending increased by $17.7bn (+2%) vs. 4Q18, reflecting: Lending growth in Asia up $10.1bn, notably in GPB up $3.2bn, mainly Hong Grow
Slide 24: Balance sheet – customer accounts
Appendix Balance sheet – customer accounts 1Q19 Customer accounts Reported average customer accounts21, $bn Adjusted customer accounts decreased by $13.7bn (1%) vs. 4Q18: Asia down $8.8bn, primarily in CMB ($9.3bn) and GB&M ($4.3bn). These 6% CAGR primarily seasonal reductions were notably in Hong
Slide 25: UK customer loans and advances
Appendix UK customer loans and advances Total UK22 gross customer loans and advances RBWM residential mortgages (RFB only)23, £bn RBWM unsecured lending26, £bn As at 31 March 2019 89.8 92.6 93.7 85.1 86.8 Of which £93.7bn relates to RBWM in the RFB 6.5 6.7 6.9 6.8 6.1 6.5 5.3 5.4 Wholesale £99bn 0.7
Slide 26: HSBC UK Bank plc disclosures
Appendix HSBC UK Bank plc disclosures For more information on the pro-forma basis of preparation, please see page 10 of the HSBC UK Bank plc Annual Report and Accounts 2018 Pro- Pro - Pro- Pro- Reported P&L, £m forma forma 3Q18 4Q18 1Q19 Includes significant items, £m forma forma 3Q18 4Q18 1Q19 FY17
Slide 27: Footnotes
Appendix Footnotes 1. 20,036 million average basic ordinary shares outstanding during the period (20,131 million on a fully diluted basis) 2. Unless otherwise stated, risk-weighted assets and capital are calculated using (i) the CRD IV transitional arrangement as implemented in the UK by the Prudent
Slide 28: Glossary
Appendix Glossary AIEA Average interest earning assets The difference between the rate of growth of revenue and the rate of Jaws growth of costs. Positive jaws is where the revenue growth rate ASEAN Association of Southeast Asian Nations exceeds the cost growth rate. Calculated on an adjusted basis
Slide 29: Disclaimer
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 an offer to se