Hsbc Holdings Plc · LSE:HSBA

Hsbc — HSBC Mexico — Corporate Update (March 2018)

23 slides from Hsbc's corporate update, March 2018

  1. Slide 1: HSBC Mexico update

    March 2018 HSBC Mexico update Nuno A. Matos CEO HSBC Mexico

  2. 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

  3. Slide 3: 1. Mexico's economic outlook

    1. Mexico’s economic outlook 3

  4. 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 4.0 4.0 7.25 7.25 2.9 2.5 5.75 2.2 2.5 2.0 4.50 4.50 1.3 3.50 3.00 3.25 2011 2012 2013 2014 2015 2016 2017 2018F 2011 2012 2013 2014 2015 2016 2017 2018F Inflation Foreig

  5. 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 10.8 32.5 35.0 10.1 9.4 10.2 29.3 29.6 8.5 9.3 24.7 26.4 2011 2012 2013 2014 2015 2016 2017 2018F 2011 2012 2013 2014 2015 2016 Total

  6. Slide 6: Macroeconomic highlights - public sector

    Mexico’s economic outlook Macroeconomic highlights - public sector Central Government budget deficit Gross public sector debt % GDP1 % GDP2 43.9 48.0 48.0 47.3 3.5 38.0 40.6 2.6 3.1 2.6 33.6 35.3 2.4 2.3 2.2 1.4 2011 2012 2013 2014 2015 2016 2017 2018F 2011 2012 2013 2014 2015 2016 2017 2018F Oil re

  7. 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

  8. Slide 8: Trade: NAFTA opportunities

    Mexico’s economic outlook Trade: NAFTA opportunities  HSBC is the leading international bank and US-Mexico and US-Canada are amongst top trade corridors in the world and will be 1st and 2nd largest commodity corridors by 2020 HSBC advantages  HSBC has significant presence in all three countries 

  9. Slide 9: 2. HSBC in Mexico

    2. HSBC in Mexico 9

  10. 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

  11. 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 since 1994 to 2015 in a variety of retail banking, investment banking and CEO functional leadership roles across Europe, the US and Latin Americ

  12. 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

  13. 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 with international needs RBWM CMB GB&M + Customers + Customers + Customers + Retail Business Banking + Cross-selling + Cross-selling + Lendi

  14. Slide 14: 3. HSBC Mexico financial performance

    3. HSBC Mexico financial performance 14

  15. Slide 15: Reported financial performance 2017 – Mexico GAAP

    HSBC Mexico financial performance Reported financial performance 2017 – Mexico GAAP Loan impairment charges and other credit risk Revenue1 provisions MXNm MXNm +8.4% +34.9% 40,160 11,089 37,065 8,220 2016 2017 2016 2017 Operating expenses Profit before tax MXNm MXNm -1.6% +12.7% 23,621 5,521 24,008

  16. Slide 16: Financial performance 2017 – excluding non-recurrent items

    HSBC Mexico financial performance Financial performance 20171 – excluding non-recurrent items Loan impairment charges and other credit risk Revenue2 provisions MXNm MXNm +11.2% +37.4% 40,160 11,089 36,110 8,073 2016 2017 2016 2017 Operating expenses Profit before tax MXNm MXNm -1.8% +36.2% 23,621 5,

  17. Slide 17: 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 +15% 305.3 284.3 275.0 265.7 260.0 Dec 16 Mar 17 Jun 17 Sep 17 Dec 17 Demand and Time Deposits1 MXNbn +22%

  18. Slide 18: HSBC credit growth (gross loans), as at 31 Dec 2017

    HSBC Mexico financial performance HSBC credit growth (gross loans), as at 31 Dec 2017 Total loans Retail loans MXNbn MXNbn +9% +14% +8% +19% +5% +13% +11% +12% 4,746 318 1,718 93 98 4,339 1,584 278 1,421 3,843 248 78 Dec 15 Dec 16 Dec 17 Dec 15 Dec 16 Dec 17 Dec 15 Dec 16 Dec 17 Dec 15 Dec 16 Dec 17

  19. Slide 19: 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) (%) (%) 7.9 8.0 8.3 5.5 5.8 5.6 7.1 6.5 5.8 4.0 3.7 2.6 Dec 15 Dec 16 Dec 17 Dec 15 Dec 16 Dec 17 Dec 15 Dec 16 Dec 17 Dec 15 Dec 16 Dec 17 Mexico bankin

  20. Slide 20: NPL ratio converging with the Market

    HSBC Mexico financial performance NPL ratio converging with the Market Total NPL ratio NPL ratio - Wholesale (%) (%) 5.2 6.4 3.0 2.6 2.4 3.0 2.1 2.1 1.9 2.0 1.3 1.3 Dec 15 Dec 16 Dec 17 Dec 15 Dec 16 Dec 17 Dec 15 Dec 16 Dec 17 Dec 15 Dec 16 Dec 17 Mexico banking industry HSBC Mexico Mexico banking

  21. Slide 21: 4. Final remarks

    4. Final remarks 21

  22. Slide 22: 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 ba

  23. Slide 23: 23

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