HSBC Holdings PLC · LSE:HSBA
HSBC — Goldman Sachs conference 2020
45 slides from HSBC's conference presentation, Jun 11, 2020
Slide 1: HSBC Wealth & Personal Banking
HSBC Wealth & Personal Banking Charlie Nunn, Wealth & Personal Banking CEO June 2020
Slide 2: Agenda
Agenda Introduction to Wealth & Personal Banking (WPB) Three opportunities for WPB 1) Wealth 2) International 3) Digital Conclusion 1
Slide 3: Introduction
Introduction Xp usec
Slide 4: Wealth & Personal Banking provides retail banking and wealth products and services to individuals
Introduction Wealth International Digital Wealth & Personal Banking provides retail banking and wealth products and services to individuals and small businesses Retail Banking and Wealth Management (RBWM) and Global Private Banking (GPB) have combined to form WPB 3
Slide 5: An integral part of the HSBC Group
Introduction Wealth International Digital An integral part of the HSBC Group % of Group FY19 RBWM GPB Numbers in the pie charts denote total Group Adjusted revenue Adjusted PBT Delivering accretive returns 36% 42% $ 55bn $ 22bn RWAs RoTE 2% 16% 3% 2% Deposits Customer lending $ 843bn RBWM 20.5% 38%
Slide 6: We serve >39 million customers
Introduction Wealth International Digital We serve >39 million customers Number of customers1 Ultra high net >10k worth >$30m High net worth >30k >$5m Jade >160k >$1m Premier >4m >$100k Personal banking >35m Eligibility criteria2 1 Customer number for personal banking includes Retail Business Bankin
Slide 7: Across 37 markets in 5 regions
Introduction Wealth International Digital Across 37 markets in 5 regions Excludes Private Bank representative offices and countries with only a Global Asset Management presence. We have a presence in Saudi Arabia through our associate, Saudi British Bank 6
Slide 8: Anchored by our scale markets, with opportunities to grow in all three
Introduction Wealth International Digital Anchored by our scale markets, with opportunities to grow in all three Adjusted PBT1 Mexico Others 2019 vs. 2018 Customers Market shares3 UK2 2% 13% 3% Hong Kong 8 million 28.3% 19.5% $ 8.5bn +3% Deposits Insurance 82% Hong Kong UK2 14 million 14.2% 6.8% Dep
Slide 9: Delivering franchise growth
Introduction Wealth International Digital Delivering franchise growth Active customer numbers1, m Adjusted deposits, $bn 4% 4% CAGR 2% CAGR 39.5 752 695 714 37.8 36.4 36.6 629 649 689 65 65 63 2016 2017 2018 2019 2017 2018 2019 Digitally active customers2, % Adjusted loans, $bn RBWM GPB 12% 8% CAGR
Slide 10: Wealth
Wealth Xp usec
Slide 11: Asia continues to drive global growth in wealth
Introduction Wealth International Digital Asia continues to drive global growth in wealth 2018-23E Global wealth1, $tn 5.7% Growth CAGR CAGR 272 3% MEA 7.9% 206 43% N. America 5.4% 159 2% L. America 46% 20% W Europe 3.8% E Europe Japan 23% 24% Asia ex Japan 9.0% 16% 2013 2018 2023E 1 Source: BCG wea
Slide 12: Wealth is a significant contributor to WPB revenue, anchored by our strength in Asia
Introduction Wealth International Digital Wealth is a significant contributor to WPB revenue, anchored by our strength in Asia $25.2bn $8.6bn $8.6bn Life insurance 2.5 manufacturing Retail Banking and Other 16.7 ~65% Asia 1.0 Asset management Investment 3.3 distribution Wealth Management 6.7 ~25% EM
Slide 13: HSBC covers the full spectrum of wealth customers, from mass to UHNW
Introduction Wealth International Digital HSBC covers the full spectrum of wealth customers, from mass to UHNW Revenue multiple1 Ultra high net worth >$30m >250x High net worth Wealth share of revenue >$5m grows as net assets increase Jade >30x >$1m Premier >4x >$100k Personal banking 1x Eligibility
Slide 14: Personal banking: simple, low-cost wealth solutions accessible to everyone
Introduction Wealth International Digital Personal banking: simple, low-cost wealth solutions accessible to everyone FlexInvest EasyInvest Digital sales of insurance Start investing in funds with as Trade single-name securities on Simple, digital-only product sales little as $15 an execution-o
Slide 15: Premier: a differentiated offering for our mass-affluent customers
Introduction Wealth International Digital Premier: a differentiated offering for our mass-affluent customers Customer benefits Customer numbers, m Access to Relationship Managers 5% Global View and Global Transfer, with instant CAGR 4.1 payments between accounts 3.8 3.7 Foreign currency and cr
Slide 16: Jade: a new level of recognition for an underserved customer segment
Introduction Wealth International Digital Jade: a new level of recognition for an underserved customer segment All the benefits of Premier, plus: Customer numbers2, ‘000s Specialist Relationship Manager and dedicated service line 13% Full portfolio advisory CAGR 157 24/7 concierge services1 13
Slide 17: Private Bank: well-positioned to capture the fastest-growing HNW and UHNW segments
Introduction Wealth International Digital Private Bank: well-positioned to capture the fastest-growing HNW and UHNW segments We have privileged access to fast-growing pools of wealth in Collaboration-driven growth Asia and the Middle East Net new money (NNM), $bn Client assets, $bn A brand backed
Slide 18: Investing for growth in our Jade and Private Banking segments
Introduction Wealth International Digital Investing for growth in our Jade and Private Banking segments More front-line staff in Asia 20% ~3,600 ~3,000 Relationship managers Product specialists Portfolio managers Other front-line staff 2017 2019 Investing in skills A bespoke three year tra
Slide 19: Investing for growth in our Jade and Private Banking segments
Introduction Wealth International Digital Investing for growth in our Jade and Private Banking segments Investing in world-class technology Our Wealth Portfolio Intelligence Service, powered by Aladdin, enables RMs to provide deep insights and advice: Look through all of a client’s holdings – mutu
Slide 20: Insurance and Asset Management: our manufacturing businesses give us control over the value chain
Introduction Wealth International Digital Insurance and Asset Management: our manufacturing businesses give us control over the value chain Insurance Global Asset Management Growth priorities: Growth priorities: Innovate around products: investment and savings insurance; Customers: Wealth and pr
Slide 21: Merging the strengths of RBWM and GPB for the benefit of customers
Introduction Wealth International Digital Merging the strengths of RBWM and GPB for the benefit of customers Digital capabilities Transaction banking capabilities Capacity to invest at scale RBWM Seamless client continuum GPB Specialist wealth and lending products and services Discretionar
Slide 22: International
International Xp usec
Slide 23: Positioned to be the international bank of choice
Introduction Wealth International Digital Positioned to be the international bank of choice Key diasporas for HSBC 77% of the world’s 85m mass affluent international customers are within our footprint1 Overseas Chinese Overseas Indian Western expats Markets they move to or have banking needs i
Slide 24: Our unique offering meets the complex needs of international customers
Introduction Wealth International Digital Our unique offering meets the complex needs of international customers, enabled by digital tools Cross-border account opening Open an account in another country without leaving home Global view and Global transfer View your accounts worldwide in one screen a
Slide 25: International customers generate more revenue per customer
Introduction Wealth International Digital Because of their relatively greater affluence and more complex banking needs, international customers generate more revenue per customer Revenue per customer vs. domestic1 8.3x Opportunity ~40% of our international customers2 have banking needs elsewhere in
Slide 26: Case Study: Overseas Chinese
Introduction Wealth International Digital Case Study: Overseas Chinese With >35m overseas, Chinese are the world’s largest diaspora Markets Overseas Chinese move to or have banking needs in Core activities With banking needs typically orchestrated from Hong Kong Travel ~3m Chinese tourists visit the
Slide 27: Case study: International students
Introduction Wealth International Digital Case study: International students We meet both parents’ and students’ needs throughout the overseas education life cycle Parents Students We make paying foreign tuition fees easy Summer camps and bespoke tours of elite international universities Select
Slide 28: Our focus on international has driven growth, with the potential to accelerate
Introduction Wealth International Digital Our focus on international has driven growth, with the potential to accelerate New to bank international customers1 Proactive referrals across corridors Number of customers, ‘000 Number of customers, ‘000 Referrals Walk-ins 15% CAGR 723 84 32% 84 CAGR Drivin
Slide 29: Digital
Digital Xp usec
Slide 30: Our bank in your pocket
Introduction Wealth International Digital Our bank in your pocket Mobile centred banking, supported Vision by the expertise of our people Improved customer satisfaction Outcomes Scalable growth Lower cost to serve 29
Slide 31: We offer our customers state of the art digital functionality
Introduction Wealth International Digital We offer our customers state of the art digital functionality Mobile App 4.7 4.8 4.6 Our HK digital wallet 4.7 >2m users HK UK EasyInvest 70% market share of Online equities P2P payments1 trading for more sophisticated investors FlexInvest Live Connect W
Slide 32: Increasingly sophisticated services, entirely on mobile
Introduction Wealth International Digital Increasingly sophisticated services, entirely on mobile Virtual card sent directly Fully mobile new-to-bank Global view and global Advised wealth and into your digital wallet account opening transfer insurance sales Instantly provides customers From selfie t
Slide 33: Digital creates new opportunities to serve our customers
Introduction Wealth International Digital Digital creates new opportunities to serve our customers Over 2m 70% market 2.9m P2M 1.9 2.0 customers share1 transactions2 1.8 1.6 of person to person 1.5 1.4 payments 1.2 1.0 PayMe is our digital wallet, launched in 2017 0.7 0.5 Can be topped up from a
Slide 34: Digital investments have enabled us to grow faster with a lower cost of acquisition
Introduction Wealth International Digital Digital investments have enabled us to grow faster with a lower cost of acquisition UK product sales1 by channel Hong Kong: Applications can be completed in less than 5 55% Credit cards minutes 53% Digital2 UK: End-to-end 80% of loan sales were fulfilled dig
Slide 35: Merging human and digital channels to help customers get the help they need more quickly
Introduction Wealth International Digital Merging human and digital channels to help customers get the help they need more quickly, at a lower cost to serve AI answers the simplest questions More complex problems are Customers begin a conversation immediately and can manage up handed off to a frontl
Slide 36: Standardising our digital infrastructure to enable 'build once, deploy everywhere'
Introduction Wealth International Digital Standardising our digital infrastructure to enable ‘build once, deploy everywhere’ and achieve global economies of scale Mobile X Common global security Common mobile platform Common next-generation platform 82% online banking platform 28 96% 92% 95% 89% 17
Slide 37: Intelligence Hub, our real-time data analytics platform
Introduction Wealth International Digital Intelligence Hub, our real-time data analytics platform: enabling personalisation, automation and improved risk management Disparate data sources Selected outcomes Customer data Automation of manual processes Transaction history Real-time fraud analytics
Slide 38: Convenience is driving increasing use of digital channels
Introduction Wealth International Digital Convenience is driving increasing use of digital channels Digital / mobile active customers1, % Digital transactions / retail sales2, % VC enabled front-line colleagues 40% 89% ~11,000 CAGR 84% 79% 75% 49% 45% 41% 38% 31% 25% 33% 17% 24% 25% 25% 12% ~300 201
Slide 39: Our most valuable customers use both digital and physical channels
Introduction Wealth International Digital Our most valuable customers use both digital and physical channels Revenue per customer1 2.5x 1.1x 1.0x Non-digital Multi-channel Customers who customers only use digital 1 Represents multiples of revenue per customer across the UK, Hong Kong (excl Hang Seng
Slide 40: Investments in digital have enabled higher staff productivity and improved customer satisfaction
Introduction Wealth International Digital Investments in digital have enabled higher staff productivity and improved customer satisfaction Fewer branches Improved Customer Satisfaction Number of branches Customer satisfaction1, % 84 (7)% 83 3,792 Branch CAGR 3,025 76 Contact centre 72 2016 Mar-20 20
Slide 41: Conclusion
Conclusion Xp usec
Slide 42: Wealth and International are significant and enduring opportunities
Wealth and International are significant and enduring opportunities, and our 1 heritage and footprint uniquely position us to capture them We will continue to leverage our proven digital capabilities with the aim of 2 delivering higher customer satisfaction, faster growth and a lower cost to serve 4
Slide 43: Appendix
Appendix Xp usec
Slide 44: Management view of adjusted revenue
Management view of adjusted revenue1 FY19 vs. FY18 FY19 vs. FY18 RBWM, $m FY18 FY19 Ή % GPB, $m FY18 FY19 Ή % Retail Banking 14,866 15,840 974 7 Investment 706 777 71 10 Current accounts, savings and deposits 8,356 9,492 1,136 14 Lending 383 424 41 11 Personal lending 6,510 6,348 (162) (2) Deposit 4
Slide 45: Disclaimer
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 sell or sol