HSBC Holdings PLC · LSE:HSBA
HSBC — Investor Day (March 2015)
23 slides from HSBC's investor day presentation, March 2015
Slide 1: Retail Banking and Wealth Management Investor Update – March 2015
Retail Banking and Wealth Management Investor Update – March 2015 John Flint Chief Executive, RBWM
Slide 2: Important notice and forward-looking statements
Important notice and forward-looking statements Important notice The information set out in this presentation and subsequent discussion does not constitute a public offer for the purposes of any applicable law or an offer to sell or solicitation of any offer to purchase any securities or other finan
Slide 3: Contents
Contents I. Group Results II. RBWM Results III. RBWM Strategic Execution Appendix - Group P&L and Balance Sheet 3
Slide 4: Key messages for 2014
I. Group Results Key messages for 2014 Highlights Reported and Adjusted2 PBT (USDm) § Reported PBT of USD18,680m included fines, settlements, UK customer redress, and associated provisions of USD3,709m Adjusted2 PBT § 2014 adjusted revenue1 of USD62,002m and adjusted2 PBT of broadly unchanged USD22,
Slide 5: Financial highlights
I. Group Results Financial highlights1 Summary financial highlights, USDbn Better/(worse) 2013 2014 2014 vs 2013 Reported PBT 22.6 18.7 (17)% Adjusted2 PBT 23.0 22.8 (1)% Key ratios, % 2013 2014 KPI Return on average ordinary shareholders’ equity 9.2% 7.3% 12-15% Return on average tangible equity 11
Slide 6: RBWM is a key contributor to Group
II. RBWM Results RBWM is a key contributor to Group Reported PBT by Global Businesses (USDbn) Retail Banking and Wealth Management % better/(worse) 22.6 PBT (USDbn) 2013 2014 18.7 2014 vs 2013 0.2 Reported PBT 6.6 5.7 (15) Currency translation and Significant items (1.3) (1.9) (52) 0.6 9.4 Adjusted
Slide 7: Principal RBWM revenue broadly unchanged, expected to provide better quality
II. RBWM Results Principal RBWM revenue broadly unchanged, expected to provide better quality Reported revenue (USDm) Principal RBWM revenue2 26,740 24,594 Stable, reflecting resilience considering: 488 § Challenging economic environment: low interest rates and low growth in 2,055 1,486 key markets
Slide 8: Growing balances
II. RBWM Results Growing balances Principal RBWM Revenue1 2014 vs 2013 (USDm) Principal RBWM Balances5 (USDbn) Principal RBWM Revenue6 mix Loans and Advances to Customers 2014 Mortgage and credit card 350 revenue broadly Personal lending2 unchanged, declining overdraft fees notably in the UK 25% ~2%
Slide 9: Lower LICs reflecting better asset quality
II. RBWM Results Lower LICs reflecting better asset quality Reported LICs (USDm) Principal RBWM LICs1 by Region (USDm) Principal RBWM: Lower LICs with Balance Sheet growth and lower RWAs 3,227 1,819 2,305 22% RWAs3 / Gross Loans & Advances to Customers4 217 (%) 705 50 1,787 2 30 2,305 1,787 40 § Loa
Slide 10: Operating expenses impacted by inflation, Regulatory Programmes and Compliance
II. RBWM Results Operating expenses impacted by inflation, Regulatory Programmes and Compliance Reported operating expenses (USDm) Principal RBWM operating expenses2 Principal RBWM operating expenses2 by Region (USDm) 17,248 17,522 Cost discipline through significant 7% 15,685 sustainable cost savin
Slide 11: UK customer redress and CCA impacts
II. RBWM Results UK customer redress and CCA impacts UK customer redress & CCA (USDm) Summary 78 875 1,751 953 1,560 § Cost and revenue impact in the UK related to provisions associated to customer redress (mainly PPI) and more recently CCA – Customer redress provisions: 4% increase from 2013 to 201
Slide 12: RBWM's strategy is to support the Group's aim to be the world's leading international bank
III. RBWM Strategic Execution RBWM’s strategy is to support the Group’s aim to be the world’s leading international bank We provide retail banking and wealth management services for targeted customer segments in selected markets Focus on relationship-led personal lending to drive balance sheet growt
Slide 13: Relationship-led lending: deepening relationships with existing customers
III. RBWM Strategic Execution - Growth Priorities Relationship-led lending: Using personal lending to deepen relationships with existing customers and to generate new relationships Markets Participation strategy Progress in 2014: Proposition led, emphasis on lending § Lending balances2 up 2%, primar
Slide 14: Wealth Management: Continue to develop with focus on growing customer balances
III. RBWM Strategic Execution - Growth Priorities Wealth Management: Continue to develop with focus on growing customer balances Our approach Progress in 2014: § Globally consistent, needs based, customer-centric § Informed by the conduct risk agenda, including no formulaic link between product sale
Slide 15: Digital: Developing capabilities to support customers
III. RBWM Strategic Execution - Growth Priorities Digital: Developing capabilities to support customers Strategic Focus Progress in 2014: § Continue improvement of digital capabilities to support and drive customer behaviour § Revenue derived from digital channels increased by 18% – Advanced capabil
Slide 16: RBWM transformation: Improving efficiency and customer experience
III. RBWM Strategic Execution - Streamline RBWM transformation: Improving efficiency and customer experience Our Approach Progress in 2014: § 9 Global Customer Journeys completed, implementation examples include: Define customer journey and benchmark performance – UK: New international customer onbo
Slide 17: RBWM: strongly interconnected with the other Global Businesses
III. RBWM Strategic Execution - Contributions to Group RBWM: strongly interconnected with the other Global Businesses – Cross selling of Insurance and AMG products to CMB clients § Fixed costs - RBWM shares – Client referrals provided between infrastructures principally with CMB, businesses generati
Slide 18: 2014 - 2016: Securing customers' future prosperity and realising their ambitions
III. RBWM Strategic Execution 2014 - 2016: Securing customers’ future prosperity and realising their ambitions Group Strategic Priorities RBWM Growth Priorities § Continue to optimise capital allocation within our risk appetite Relationship-led lending Grow the business § Further capitalise on globa
Slide 19: Appendix - Group P&L and Balance Sheet
Appendix - Group P&L and Balance Sheet
Slide 20: Group - Other significant items excluded from adjusted profit before tax
Appendix Group - Other significant items1 excluded from adjusted profit before tax USDm For the year-ending 31 December 2013 2014 Includes the following significant items (reported basis): Revenue Restructuring and repositioning: Net gain on completion of Ping An disposal 553 - FX gains relating to
Slide 21: Group - Consolidated Income Statement
Appendix Group - Consolidated Income Statement1 USDm For the year-ending 31 December 2013 2014 Net interest income 35,539 34,705 Net fee income 16,434 15,957 Net trading income 8,690 6,760 Net income from financial instruments designated at fair value 768 2,473 Gains less losses from financial inves
Slide 22: Group - Consolidated Balance Sheet
Appendix Group - Consolidated Balance Sheet1 USDm As at 31 December 2013 2014 Assets Cash and balances at central banks 166,599 129,957 Trading assets 303,192 304,193 Financial assets designated at fair value 38,430 29,037 Derivatives 282,265 345,008 Loans and advances to banks 120,046 112,149 Loans
Slide 23: Cover images: HSBC – then and now
Cover images: HSBC – then and now It is 150 years since HSBC was founded in Hong Kong to finance trade between Asia and Europe. Much has changed since then, as our cover photos demonstrate. The left photo shows Hong Kong harbour, with the HSBC office (extreme left) a few years after it was establish