Hsbc Holdings Plc · LSE:HSBA
Hsbc — HSBC Mexico — Q1 2018 Earnings Presentation
22 slides from Hsbc's earnings presentation, May 2018
Slide 1: HSBC Mexico update 1Q18
May 2018 HSBC Mexico update 1Q18 Martin Peusner CFO HSBC Mexico
Slide 2: Important notice and forward-looking statements
Important notice and forward-looking statements The information set out in this presentation and subsequent discussion do not constitute a public offer for the purposes of any applicable law or an offer to sell or solicitation of statements and opinions any offer to purchase any securities or other
Slide 3: 1. Mexico's economic outlook
1. Mexico’s economic outlook 3
Slide 4: Macroeconomic highlights – key fundamentals
Mexico’s economic outlook Macroeconomic highlights – key fundamentals GDP growth Central Bank policy rate % y-o-y % End of period 7.25 7.50 3.7 2.8 3.3 2.9 5.75 2.1 2.5 4.50 1.4 3.50 3.25 3.00 2012 2013 2014 2015 2016 2017 2018F 2012 2013 2014 2015 2016 2017 2018F Inflation Foreign exchange % End of
Slide 5: Macroeconomic highlights – financial depth and trade openness
Mexico’s economic outlook Macroeconomic highlights – financial depth and trade openness GDP per capita Domestic credit to private sector USDk1 As % of GDP2 10.1 10.6 10.9 9.6 32.5 35.0 8.7 9.1 9.7 29.3 29.6 26.4 2012 2013 2014 2015 2016 2017 2018F 2012 2013 2014 2015 2016 Total exports Exports to US
Slide 6: Macroeconomic highlights - public sector
Mexico’s economic outlook Macroeconomic highlights - public sector Central Government budget deficit Gross public sector debt % GDP1 % GDP1 43.2 46.6 46.9 45.4 3.5 37.7 40.1 2.6 2.3 3.1 2.6 35.0 2.3 1.3 2012 2013 2014 2015 2016 2017 2018F 2012 2013 2014 2015 2016 2017 2018F Oil revenues % of total g
Slide 7: Trade: Mexico connected to key regions
Mexico’s economic outlook Trade: Mexico connected to key regions Mexico in key trade corridors1 2017 value of trade (exports and imports), USDbn Trade with Europe Germany 23 Spain 9 Other 45 Europe 77 Trade under NAFTA US 522 Trade with Asia Canada 21 China 81 543 Japan 22 NAFTA South Korea 19 Other
Slide 8: Trade: NAFTA opportunities
Mexico’s economic outlook Trade: NAFTA opportunities HSBC is a leading international bank in Mexico and US-Mexico and US-Canada are amongst top trade corridors in the world and will be 1st and 2nd largest commodity corridors HSBC by 2020 advantages HSBC has significant presence in all three coun
Slide 9: 2. HSBC in Mexico
2. HSBC in Mexico 9
Slide 10: Our Mexican business is strategically important to Group with significant potential to improve
HSBC in Mexico Our Mexican business is strategically important to Group with significant potential to improve Ownership chart HSBC Mexico performance1 Adjusted revenue USDbn +11% % of Group³ HSBC Holdings plc 2.2 4.2% 1.9 4.0% 2016 2017 2016 2017 HSBC Latin America Holdings (UK) Limited Adjusted PBT
Slide 11: Key executives bios
HSBC in Mexico Key executives bios Joined HSBC in March 2015. Appointed CEO of HSBC Mexico in December 2015. Nuno A. Matos Experience: Worked for Santander between 1994 and 2015 in a variety of retail banking, investment banking CEO and functional leadership roles across Europe, the US and Latin Ame
Slide 12: HSBC Mexico is a key player in the Mexican financial system with room to grow
HSBC in Mexico HSBC Mexico is a key player in the Mexican financial system with room to grow HSBC Mexico position Key businesses Competitive top-5 universal bank with scale1 Contribution to HSBC Mexico results as of 2017 FY Leading trade and cash management bank2 Corporate RBWM CMB GB&M Total Ce
Slide 13: 2018-2020 strategy
HSBC in Mexico 2018-2020 strategy Consolidate as the third RBWM Market for HSBC Become the leading Wholesale bank for international customers and customers in Mexico with international needs RBWM CMB GB&M + Customers + Customers + Customers + Retail Business Banking + Cross-selling + Cross-selli
Slide 14: 3. HSBC Mexico financial performance
3. HSBC Mexico financial performance 14
Slide 15: Reported financial performance 1Q18 – Mexico GAAP
HSBC Mexico financial performance Reported financial performance 1Q18 – Mexico GAAP Loan impairment charges and other credit risk Revenue1 provisions MXNm MXNm +10.8% -5.0% 10,460 1,846 1,754 9,439 1Q17 1Q18 1Q17 1Q18 Operating expenses Profit before tax MXNm MXNm +3.5% +53.3% 6,111 2,613 5,903 1,70
Slide 16: Credit portfolio increasing vs prior year, whilst deposits being managed
HSBC Mexico financial performance Credit portfolio increasing vs prior year, whilst deposits being managed with a view to reach an effective A/D ratio Loans and advances to customers, net MXNbn +18.7% 305.3 308.5 284.3 275.0 260.0 Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Demand and Time Deposits1 MXNbn +1
Slide 17: HSBC credit growth (gross loans) as at 31 Mar 2018
HSBC Mexico financial performance HSBC credit growth (gross loans) as at 31 Mar 2018 Total loans Retail loans MXNbn MXNbn +10% +18% +8% +5% 4,772 320 1,741 93 98 4,354 1,607 272 Mar 17 Mar 18 Mar 17 Mar 18 Mar 17 Mar 18 Mar 17 Mar 18 Mexico banking industry HSBC Mexico Mexico banking industry HSBC M
Slide 18: HSBC margins increased; closing the gap with the market
HSBC Mexico financial performance HSBC margins increased; closing the gap with the market Lending rates (NIM) Lending rates (NIM adjusted by LICs) (%) (%) 8.1 8.0 5.7 5.8 6.4 6.6 5.0 4.3 Mar 17 Mar 18 Mar 17 Mar 18 Mar 17 Mar 18 Mar 17 Mar 18 Mexico banking industry HSBC Mexico Mexico banking indust
Slide 19: Non performing loan (NPL) ratio converging with the market
HSBC Mexico financial performance Non performing loan (NPL) ratio converging with the market Total NPL ratio NPL ratio - Wholesale (%) (%) 3.0 3.2 2.2 2.2 2.3 2.1 1.4 1.3 Mar 17 Mar 18 Mar 17 Mar 18 Mar 17 Mar 18 Mar 17 Mar 18 Mexico banking industry HSBC Mexico Mexico banking industry HSBC Mexico N
Slide 20: 4. Final remarks
4. Final remarks 20
Slide 21: Final remarks
Final remarks Keep on the profitability and growth path Increase ‘new to bank’ customer base in RBWM through CMB/GB payroll collaboration Increase share of wallet of existing customers across all businesses, and become a player commensurate with our retail scale Grow CMB/GB business (client
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