Hsbc Holdings Plc · LSE:HSBA

Hsbc — Q3 2022 Earnings Presentation

33 slides from Hsbc's earnings presentation, Oct 25, 2022

  1. Slide 1: HSBC Holdings plc 3Q22 Results

    HSBC Holdings plc 3Q22 Results Presentation to Investors and Analysts

  2. Slide 2: Opening up a world of opportunity

    3Q22 results Appendix Our purpose, values and ambition support the execution of our strategy Our purpose Opening up a world of opportunity Our ambition To be the preferred international financial partner for our clients Our values We value difference We succeed together We take responsibility We get

  3. Slide 3: 3Q22 highlights

    3Q22 results Appendix 3Q22 highlights Good set of results; reported PBT of $3.1bn, including $2.4bn impairment related to the planned 1 disposal of our French retail business; adjusted PBT of $6.5bn, up $1.0bn (18%) vs. 3Q21 Adjusted revenue of $14.3bn, up $3.1bn (28%) vs. 3Q21; strong NII, up $2.5b

  4. Slide 4: 3Q22 results summary

    3Q22 results Appendix 3Q22 results summary $m 3Q22 3Q21 Δ  Good set of 3Q22 results, reported PBT of $3.1bn; adjusted PBT of $6.5bn up $1.0bn (18%) vs. 3Q21 NII 8,564 6,097 40% Non-NII 5,739 5,100 13%  Revenue of $14.3bn, up $3.1bn (28%) vs. 3Q21, strong NII growth, up Revenue $2.5bn (40%) vs. 3Q2

  5. Slide 5: Adjusted revenue performance

    3Q22 results Appendix Adjusted revenue performance Revenue by global business, $m +28%  Global Liquidity and Cash Management (GLCM) was renamed Global Payments Solutions (GPS) during 3Q22 14,303 95 537  WPB up $1.2bn (25%):  Personal Banking up $1.4bn (51%), primarily due to higher rates and 1,22

  6. Slide 6: Net interest income and margin

    3Q22 results Appendix Net interest income and margin Reported NIM progression, bps  3Q22 reported NII of $8.6bn was up $2.0bn (30%) vs. 157 3Q21, primarily due to rate rises (4) 1 135 25  3Q22 adjusted NII up $2.5bn (40%) vs. 3Q21, and up $1.3bn (19%) vs. 2Q22  3Q22 reported NIM of 1.57%, up 22bp

  7. Slide 7: Non-NII

    3Q22 results Appendix Non-NII Group non-NII, $m WPB, $m CMB, $m GBM, $m Net fees Net fees Net fees +13% +5% (10)% +4% +7% 0% (29)% (14)% 5,739 1,412 5,471 1,225 1,268 850 908 911 876 5,100 724 625 1,983 2,607 2,956 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 Wealth Mgmt Pers. Bnking Other GPS Other

  8. Slide 8: Credit performance

    3Q22 results Appendix Credit performance Adjusted ECL charge / (release) trend ECL, $m  3Q22 ECL net charge of $1,075m 1,075 ECL charge / 619 (release) as a %  Stage 1 and Stage 2 charges of $0.6bn, of 478 433 of average which: (561) gross loans and  $0.3bn relates to our China CRE portfolio adva

  9. Slide 9: Adjusted costs

    3Q22 results Appendix Adjusted costs Operating expenses trend, $m  3Q22 costs of $7.3bn, up $0.4bn (5%) vs. a low 3Q21 base. Cost saves were 7,727 offset by $0.3bn higher technology spend and $0.2bn higher performance-related 116 7,312 7,259 7,300 pay (PRP) accrual as a result of timing differences

  10. Slide 10: Capital adequacy

    3Q22 results Appendix Capital adequacy CET1 ratio, % 13.6 0.2 0.0 (0.1) 0.0 13.4  CET1 ratio of 13.4%, down 0.2ppts vs. 2Q22 due to: (0.3) (0.1)  Impairment related to movement of French retail operations to held-for-sale: 0.3ppts  Negative after-tax OCI movements: 0.1ppts 2Q22 Impact of Profits

  11. Slide 11: Summary

    3Q22 results Appendix Summary Good set of results; adjusted PBT of $6.5bn, up 18% vs. 3Q21; rising rates and strong markets 1 income offset higher investment spend and a net ECL charge Expect an ECL charge around 30bps in FY22; credit quality of the book remains strong, expect to 2 be towards the to

  12. Slide 12: Appendix

    Appendix

  13. Slide 13: Key financial metrics

    3Q22 results Appendix Key financial metrics Reported results, $m 3Q22 2Q22 3Q21 Alternative performance measures, $m 3Q22 2Q22 3Q21 NII 8,581 7,454 6,610 Adjusted NII 8,564 7,227 6,097 Other Income 3,035 5,318 5,402 Adjusted other income 5,739 5,471 5,100 Revenue 11,616 12,772 12,012 Adjusted revenu

  14. Slide 14: Reconciliation of reported PBT and adjusted profit after tax

    3Q22 results Appendix Reconciliation of reported PBT and adjusted profit after tax $m 3Q22 2Q22 3Q21 Reported PBT (B) 3,147 5,010 5,403 Currency translation — (470) (1,000) Customer redress programmes (17) 12 — Disposal, acquisitions and investment in new businesses 2,440 288 — Revenue Fair value mo

  15. Slide 15: Certain items included in adjusted revenue

    3Q22 results Appendix Certain items included in adjusted revenue Certain items included in adjusted revenue 3Q22 2Q22 1Q22 4Q21 3Q21 highlighted in management commentary, $m Insurance manufacturing market impacts in WPB (418) (380) (280) 125 (43) of which: Asia WPB insurance manufacturing market (44

  16. Slide 16: 3Q22 adjusted revenue performance

    3Q22 results Appendix 3Q22 adjusted revenue performance 3Q22 revenue 3Q22 vs. 3Q21 Revenue by global business, $bn o/w insurance market Wealth $1,901m (187) impacts: $(375)m +28% WPB $6,286m 25% Personal Banking $4,262m 1,438 14.3 Other $123m (3) 12.7 3.8 GTRF $518m 56 11.2 3.7 Credit and Lending $1

  17. Slide 17: Net interest margin supporting information

    3Q22 results Appendix Net interest margin supporting information 1 year NII sensitivity Quarterly NIM by key legal entity At 30 June 2022, using a simplified pass-through assumption of 50% % of 3Q22 % of 3Q22 3Q21 4Q21 1Q22 2Q22 3Q22 Group NII Group AIEA Parallel change Currency The Hongkong and fro

  18. Slide 18: Wealth and Personal Banking

    3Q22 results Appendix Wealth and Personal Banking 3Q22 financial highlights Balance sheet, $bn 3Q22 vs. 3Q21 Revenue $6.3bn 25% 0%  Revenue up $1.2bn (25%). Personal banking up $1.4bn (51%) (3Q21: $5.0bn) primarily from interest rate rises and global balance sheet growth. 21 >(100)% (1)% Wealth dow

  19. Slide 19: Commercial Banking

    3Q22 results Appendix Commercial Banking 3Q22 financial highlights Balance sheet, $bn 3Q22 vs. 3Q21 Revenue $4.3bn 40%  Revenue up $1.2bn (40%) across all products with double digit (3Q21: $3.1bn) Customer lending growth in all regions notably in Asia and the UK. GPS revenue up +6% >100%, driven by

  20. Slide 20: Global Banking and Markets

    3Q22 results Appendix Global Banking and Markets 3Q22 financial highlights View of adjusted revenue 3Q22 vs. 3Q21 16% $m 3Q22 ∆3Q21  GBM Revenue of $3.8bn up $0.5bn (16%) Revenue $3.8bn (3Q21: $3.3bn) MSS 2,209 20%  MSS revenue of $2.2bn up $0.4bn (20%): >(100)% Securities Services 525 9% • Global

  21. Slide 21: Corporate Centre

    3Q22 results Appendix Corporate Centre 3Q22 financial highlights Revenue performance, $m Revenue $(115m) 45% (3Q21: $(210)m) 3Q21 4Q21 1Q22 2Q22 3Q22 (100)% Central Treasury (35) (10) 5 (32) (48) ECL $0m (3Q21: $2m) Legacy Credit (34) (12) (18) 23 (6) Costs $59m (67)% (3Q21: $181m) Other (141) (98)

  22. Slide 22: 3Q22 vs. 2Q22 equity drivers

    3Q22 results Appendix 3Q22 vs. 2Q22 equity drivers Shareholders’ Tangible Equity, TNAV per share, Basic number of ordinary Equity, $bn $bn $ shares, million As at 30 June 2022 188.4 148.3 7.48 19,819 Profit attributable to: 2.4 3.2 0.16 — Ordinary shareholders14 1.9 3.2 0.16 — Other equity holders 0

  23. Slide 23: Total shareholders' equity to CET1 capital

    3Q22 results Appendix Total shareholders’ equity to CET1 capital Total equity to CET1 capital, at 30 September 2022, $m Total equity to CET1 capital walk, $m 3Q22 2Q22 1Q22 4Q21 Total equity (per balance sheet) 185,993 196,690 204,658 206,777 Total equity 185,993 Non-controlling interests (8,335) (8

  24. Slide 24: Impacts of financial investments

    3Q22 results Appendix Impacts of financial investments Hold-to-collect-and-sell (‘HTC&S’) debt portfolio, $bn  As part of our interest rate hedging strategy, we hold a debt portfolio of financial investments measured at fair value through other comprehensive income (‘FVOCI’), (22)% which are classi

  25. Slide 25: Balance sheet – customer lending

    3Q22 results Appendix Balance sheet – customer lending Balances by global business, $bn Balances by region, $bn Growth since 2Q22 +2% (2)% $(17)bn Europe $323bn (5)% o/w: mortgages 985 968 948 Adjusted customer lending of $968bn, 1 0 $7bn 1 o/w: UK $267bn 2 down $18bn (2%) vs. 2Q22 due to the 198 3%

  26. Slide 26: Balance sheet – customer accounts

    3Q22 results Appendix Balance sheet – customer accounts Balances by global business, $bn Balances by region, $bn Growth since 2Q22 +2% (1)% Europe $570bn $(7)bn Adjusted customer accounts of (1)% 1,584 1,567 $1,567bn, down $16bn (1%) vs. 2Q22 due 1,540 1 0 $9bn to the reclassification of $21bn of Fr

  27. Slide 27: Hong Kong loans and deposits

    3Q22 results Appendix Hong Kong loans and deposits HSBC Hong Kong balance sheet HKMA system data16, HK$tn At 31 December 2021 Source: HKMA. Data at 31 December 2021 US$bn % Reported net loans and advances to customers 311.9 100% System loans to customers System deposits Personal lending 130.6 42% o/

  28. Slide 28: Mainland China commercial real estate update

    3Q22 results Appendix Mainland China commercial real estate update Mainland China CRE exposures at 30 June 2022, $m By booking centre Hong Mainland RoW Total Kong China Loans and advances to customers18 9,773 6,488 441 16,702 18 Guarantees issued and others 1,961 1,026 94 3,081 Total 11,734 7,514 53

  29. Slide 29: HSBC Bank Canada financial information

    3Q22 results Appendix HSBC Bank Canada financial information Reported profit and loss account, CADm Selected balance sheet information, CADm 9M22 FY21 3Q22 FY21 NII 1,155 1,226 Total assets 134,047 119,853 Non-NII 679 989 o/w: Loans and advances to customers 75,672 68,699 Revenue 1,834 2,215 o/w: Go

  30. Slide 30: Glossary

    3Q22 results Appendix Glossary AIEA Average interest earning assets HIBOR Hong Kong Interbank Offered Rate AT1 Additional Tier 1 HKD Hong Kong Dollar BGF Business Growth Fund, an associate of HSBC IFRS International Financial Reporting Standard BoCom Bank of Communications Co. Limited, an associate

  31. Slide 31: Footnotes

    3Q22 results Appendix Footnotes 1. Unless otherwise stated, regulatory capital ratios and requirements are based on the transitional arrangements of the Capital Requirements Regulation in force at the time. These include the regulatory transitional arrangements for IFRS 9 ‘Financial Instruments’. Th

  32. Slide 32: Disclaimer

    3Q22 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 applicable law or a

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HSBC Holdings — Q3 2022 Earnings Presentation on 6ix