HSBC Holdings PLC · LSE:HSBA
HSBC — Investor Day (November 2007)
42 slides from HSBC's investor day presentation, Nov 23, 2007
Slide 1: Strategy Update
Strategy Update London 23 November 2007 Stephen Green, Group Chairman Michael Geoghegan, Group Chief Executive HSBC Holdings plc HSBC Holdings plc
Slide 2: Forward-looking statements
Strategy update Forward-looking statements This presentation and subsequent discussion may contain certain forward-looking statements with respect to the financial condition, results of operations and business of the Group. These forward-looking statements represent the Group’s expectations or belie
Slide 3: Agenda
Strategy update Agenda Introduction ………………………………………......….…...……………. Stephen Green Shaping the business ..…..……..………………………...….....…….…... Stephen Green Joining up .....…....…………………………......….…...……………. Michael Geoghegan Summary ……....................................................................
Slide 4: We are the world's local bank
HSBC Group We are the world’s local bank Largest international emerging markets bank Widespread international network Uniquely international customer base Unquestioned financial strength 1.01
Slide 5: Building on HSBC's heritage
Building on HSBC’s heritage We have consistently created strong value Market capitalisation (US$bn) Growth from organic investments and acquisitions CAGR 23% 31Dec91 – 30Jun07 US$bn 250 205 Tier 1 capital 31Dec91 9 200 Retained profits1 55 150 Newly issued capital2 62 100 Goodwill on acquisitions (3
Slide 6: Our global outlook
Our global outlook Our strategy is aligned with trends that will shape the global economy 10 years ago… Today… 10 years’ time… Share of global GDP 1. Emerging markets 35% 41% growing faster than G7 50% 50% Non-G7 rich countries… 65% 59% Source: HSBC estimates Level 1990 = 100 700 2. World trade grow
Slide 7: Building on HSBC's heritage
Building on HSBC’s heritage Our strategy is focused on delivering superior growth and earnings over time Our strategy: shaping our Our execution: joining up Our heritage business to deliver to create value Asian trade origins Align presence with Leverage brand and global trends network to increase r
Slide 8: Shaping the business
Shaping the business Stephen Green
Slide 9: Update strategy – shaping the business
Shaping the business Update strategy – shaping the business We are reshaping to focus primarily on high growth economies 1H04 1H05 1H06 1H07 Trending towards… 40% 43% 42% 49% 40% 60% 57% 58% 51% 60% Mature economies* Fast growing economies Based on PBT (excluding the gains on dilution of interests i
Slide 10: Inter-connectivity is increasing
Shaping the business Update strategy – shaping the business Inter-connectivity is increasing... being at both ends matters Developed | Developed Developed | Emerging Emerging | Developed Emerging | Emerging 2.02
Slide 11: Business models which define our 'right to win'
Shaping the business Business models which define our ‘right to win’ Corporate, Private Banking Businesses with Investment Banking CIB HNWI 90,000 customers international customers and Markets (CIBM) (PB) 1 where Emerging Markets 4,000 customers connectivity is critical Personal Mass Affluent Corpor
Slide 12: Defining our natural advantage: CIBM
Defining our natural advantage: CIBM Corporate, Investment Banking and Markets Emerging markets-led and financing-focused wholesale bank • Aligned with our global network and emerging markets presence CIBM Positioned for • Asia-Pacific, the Middle East and Latin America US$4,158m the next wave of ha
Slide 13: Defining our natural advantage: Private Banking
Defining our natural advantage: Private Banking Private Banking A world leading international private bank integrated into a unique distribution network • Customer base builds upon intra-Group referrals Customer links from PFS and Commercial Banking Private Banking with other • Globally US$2bn total
Slide 14: Defining our natural advantage: Commercial Banking
Defining our natural advantage: Commercial Banking Commercial Banking The leading international business bank serving corporates and small businesses • Capture both ends of the customer transaction • Network of International Banking centres across CMB Global network 23 countries to serve customers w
Slide 15: Defining our natural advantage: Personal Financial Services
Defining our natural advantage: Personal Financial Services Personal Financial Services Use our global scale and local knowledge to grow profitably in selected markets Winning models Examples In emerging markets where we have • Mexico, Brazil, PFS 1 or can build/acquire scale Turkey, Panama, US$4,72
Slide 16: Defining our natural advantage: PFS – Emerging Markets
Defining our natural advantage: PFS – Emerging Markets In emerging markets where we have or can build/acquire scale: 1 Three clusters Examples Panama Strengthen market share Strong Develop platform to support Mexico evolving customer needs PFS HSBC presence Turkey Invest to grow Brazil Build and/or
Slide 17: Defining our natural advantage: PFS – mature markets
Defining our natural advantage: PFS – mature markets In mature markets where we have scale: a robust position in 2 selected markets Example: UK PFS • Ranked fifth overall* with sustained market position • Strong market share in core products, eg current PFS Critical mass accounts (15%), credit cards
Slide 18: Shaping the business: summary
Shaping the business: summary Focused on delivering superior growth and earnings over time • We are reshaping to focus primarily on • Trending towards 60:40 fast growing (emerging) economies • Inter-connectivity is increasing... being • We will continue to build on our strong position in the midst o
Slide 19: Joining up
Joining up Michael Geoghegan
Slide 20: What is joining up?
Joining up What is joining up? Joining up to increase revenues Personal Financial Services Joining up to Commercial Banking benefit from scale CIBM Joining up to Global Transaction Private Banking engage our people Banking People engagement Technology and Services Metrics/Incentives Global Resourcin
Slide 21: Global Premier: unbeatable global proposition
PFS: scale and local knowledge to grow in selected markets Global Premier: unbeatable global proposition Significant increase in customers Proposition # customers, millions • Comprehensive and consistent 2011 proposition to mass affluent Upgrades 2 customers across many markets New to bank 2 6 + 200
Slide 22: Credit cards: a leading global proposition
PFS: scale and local knowledge to grow in selected markets Credit cards: a leading global proposition in cards building on our global presence and scale economies • 75% of cards on a global platform Global scale • Target of over 90% by end 2008 • Top five global issuer with over 120 million cards in
Slide 23: Build business model in one market and deploy many
PFS: scale and local knowledge to grow in selected markets Build business model in one market and deploy many Rapid replication 2008+ Initial rollout • Expansion into (2006-07) further markets with strong savings pools US launch (Nov 2005) • Taiwan • South Korea • June 2007: US$12bn in deposits • 90
Slide 24: Commercial Banking: the leading international business bank
Commercial Banking: the leading international business bank We are uniquely positioned to serve both ends of customer transactions Geographical linkages: Global network with local coverage • Added seven International Banking Centres (IBCs) in 1H07 • IBC network covers 23 countries Customer linkages:
Slide 25: Commercial Banking: best bank for small businesses
Commercial Banking: the leading international business bank We are employing our global expertise and local presence ‘to be the best bank for small businesses in target markets’ We are rebalancing towards high • Customer segmentation growth markets Extending • Credit scoring capabilities Current cus
Slide 26: Commercial Banking: global platforms for scalable proposition
Commercial Banking: the leading international business bank Global platforms provide us with a leading scalable customer proposition Business internet banking Build once – deploy many 1.4 Number of registered customers, millions Strong customer adoption… 1.3 • Comparing 1H07 with 1H06 • Registered c
Slide 27: CIBM: emerging markets-led and financing-focused
CIBM: emerging markets-led and financing-focused Implementing our refined strategy • Added enhanced financing capabilities and Approximately 50% of improved the credit process CIBM’s PBT is from fast Sharper focus • Focused the number of sectors with full growing markets Investment Banking coverage
Slide 28: CIBM: multiple product emerging markets leadership
CIBM: emerging markets-led and financing-focused Multiple product emerging markets leadership... Foreign exchange Risk management Best Bank for Emerging Asian Best Risk Management – Asia Currencies Euromoney Awards for Excellence – 2007 "HSBC's risk management and foreign exchange businesses boast B
Slide 29: CIBM: developed markets product strength
CIBM: emerging markets-led and financing-focused …developed markets product strength Foreign exchange Best Bank in Forward FX Best Bank – Corporates Best Bank for FX Research and Strategy Cash management Risk management Best Cash Management House Best Risk Management Euromoney Awards for Excellence
Slide 30: CIBM: Asian financing model rolled out to other emerging economies
CIBM: emerging markets-led and financing-focused We have rolled out our Asian financing model with great success to other emerging economies Global Markets: number of mandates at bookrunner or equivalent 120 100 80 60 40 20 0 2004 2005 2006 2007 YTD The Middle East and North Africa Central and Easte
Slide 31: Private Banking: a world leading international private bank
Private Banking: a world leading international private bank A world leading international private bank integrated into a unique distribution network Building brand • The third-largest international private bank recognition Building intra- • Cross-referrals from PFS and CMB, eg over 40% of new UK cus
Slide 32: Insurance: aim to double PBT contribution to 20%
Insurance: aim to double PBT contribution to 20% A three-step strategic plan building on our core strengths 3 Leverage Group strength • We have 120 Create strategic partnerships to million customers provide best of breed, eg 16 projects with AXA, AIG, Allianz, • Our penetration is Zurich and ING wor
Slide 33: Global Transaction Banking
Global Transaction Banking Global Transaction Banking provides a globally scaled product suite for CIBM and CMB customers • Payments and Cash Management (PCM): Best Cash Management House globally (2007) Global scale • Trade Services: Best Trade Finance Bank in Asia, Hong Kong and the propositions UK
Slide 34: Technology and services: One HSBC
Technology and services One HSBC – build once, deploy many World-class credit 2G cards system Global internet 75% of cards in force on a Deployed to 64% registered global platform and 74% public customers HSBCnet HSBC Universal Banking In 68 countries with Used by 72 countries 37,000 customers (R2 C
Slide 35: HSBC IT provides strong economies of scale
Technology and services HSBC IT continues to provide strong economies of scale The world’s largest privately-operated integrated corporate network Reducing unit cost of production 10% per annum • Four global data centre pairs • 80 global ‘Group’ platforms • Over 40 per cent of development in low-cos
Slide 36: Global Resourcing
Global Resourcing One of the largest ‘business and knowledge entity’ in financial services evolving from lift-and-shift to re-engineering 15 Group Service Centres Evolving from basic lift-and-shift work in five Asian countries to relocating high-end functions Consumer Cards Credit Finance GSC Guangz
Slide 37: Our people, our culture – the best place to work
Our organisation and our people Our people, our culture – the best place to work Strength of the Group culture enabling successful management of over 315,000 colleagues in 83 countries and 10,000 offices • Stronger emphasis on a performance management complemented by differentiated, market-driven to
Slide 38: Measuring and creating the right incentives
Measuring and creating the right incentives Our performance metrics Financial Customer Examples: Examples: Revenue Growth, Cost Brand health scorecard, Efficiency, Risk Adjusted customer recommendation Return, Return on Equity We will report further at our Internal process 2007 results People Exampl
Slide 39: Summary
Summary Stephen Green
Slide 40: Capital strength – HSBC's trademark
Capital strength – HSBC’s trademark Consistently strong Tier 1 capital ratios 10% 9.4% 9.4% 9.3% 8.9% 9.0% 9% 16.0% 21.7% 19.7% 21.3% 21.7% 8% 7% 6% 5% 78.7% 78.3% 78.3% 80.3% 84.0% 4% 3% 2% 1% 31 Dec 04 31 Dec 05 31 Dec 06 30 Jun 06 31 June 2007 Other Tier 1 capital Shareholders’ funds less deducti
Slide 41: Building on HSBC's heritage
Building on HSBC’s heritage Our strategy is focused on delivering superior growth and earnings over time Shaping our business Joining Up to Our heritage to deliver create value • Asian trade origins • Reshape business to focus on • Deep roots in many geographies fast growing (emerging) markets and m
Slide 42: We are the world's local bank
HSBC Group We are the world’s local bank Largest international emerging markets bank Widespread international network Uniquely international customer base Unquestioned financial strength 4.03