TIDMHSBA
RNS Number : 5078U
HSBC Holdings PLC
01 August 2022
Financial summary
Page
Use of alternative performance
measures 29
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Adjusted performance 29
-------------------------------------- ----
Significant items 29
-------------------------------------- ----
Foreign currency translation
differences 29
-------------------------------------- ----
Changes to presentation from
1 January 2022 29
-------------------------------------- ----
Future accounting developments 29
-------------------------------------- ----
Summary consolidated income statement 30
-------------------------------------- ----
Income statement commentary 31
-------------------------------------- ----
Net interest income 31
Tax expense 33
-------------------------------------- ----
Summary consolidated balance
sheet 34
-------------------------------------- ----
Balance sheet commentary compared
with 31 December 2021 35
-------------------------------------- ----
Use of alternative performance
measures
Our reported results are prepared in accordance with IFRSs as
detailed in the interim condensed financial statements starting on
page 104.
To measure our performance, we supplement our IFRSs figures with
non-IFRSs measures, which constitute alternative performance
measures under European Securities and Markets Authority guidance
and non-GAAP financial measures defined in and presented in
accordance with US Securities and Exchange Commission rules and
regulations. These measures include those derived from our reported
results that eliminate factors that distort period-on-period
comparisons. The 'adjusted performance' measure used throughout
this report is described below. Definitions and calculations of
other alternative performance measures are included in our
'Reconciliation of alternative performance measures' on page 56.
All alternative performance measures are reconciled to the closest
reported performance measure.
The global business segmental results are presented on an
adjusted basis in accordance with IFRS 8 'Operating Segments' as
detailed in Note 5: 'Segmental analysis' on page 112.
Adjusted performance
Adjusted performance is computed by adjusting reported results
for the effects of foreign currency translation differences and
significant items, which distort period-on-period comparisons.
We consider adjusted performance provides useful information for
investors by aligning internal and external reporting, identifying
and quantifying items management believes to be significant, and
providing insight into how management assesses period-on-period
performance.
Significant items
'Significant items' refers collectively to the items that
management and investors would ordinarily identify and consider
separately to improve the understanding of the underlying trends in
the business.
The tables on pages 37 to 39 and pages 48 to 53 detail the
effects of significant items on each of our global business
segments, geographical regions and selected countries/territories
in 1H22, 1H21 and 2H21.
Foreign currency translation differences
Foreign currency translation differences reflect the movements
of the US dollar against most major currencies during 2022.
We exclude them to derive constant currency data, allowing us to
assess balance sheet and income statement performance on a
like-for-like basis and to better understand the underlying trends
in the business.
Foreign currency translation differences
Foreign currency translation differences
for the half-year to 30 June 2022
are computed by retranslating into
US dollars for non-US dollar branches,
subsidiaries, joint ventures and
associates:
* the income statements for the half-years to 30 June
2021 and 31 December 2021 at the average rates of
exchange for the half-year to 30 June 2022; and
* the balance sheets at 30 June 2021 and 31 December
2021 at the prevailing rates of exchange on 30 June
2022.
No adjustment has been made to the
exchange rates used to translate
foreign currency-denominated assets
and liabilities into the functional
currencies of any HSBC branches,
subsidiaries, joint ventures or
associates. The constant currency
data of HSBC's Argentina subsidiaries
have not been adjusted further for
the impacts of hyperinflation. Since
1 June 2022, Turkey has been deemed
a hyperinflationary economy for
accounting purposes. HSBC has an
operating entity in Turkey and the
constant currency data has not been
adjusted further for the impacts
of hyperinflation. When reference
is made to foreign currency translation
differences in tables or commentaries,
comparative data reported in the
functional currencies of HSBC's
operations have been translated
at the appropriate exchange rates
applied in the current period on
the basis described above.
==========================================================
Changes to presentation from 1
January 2022
Application of IAS 29 'Financial Reporting in Hyperinflationary
Economies'
Since 1 June 2022, Turkey has been deemed a hyperinflationary
economy for accounting purposes. The results of HSBC's operations
with a functional currency of the Turkish lira have been prepared
in accordance with IAS 29 'Financial Reporting in Hyperinflationary
Economies' as if the economy had always been hyperinflationary. The
results of those operations for the six-month period ended 30 June
2022 are stated in terms of current purchasing power using the
Turkey consumer price index at 30 June 2022 with the corresponding
adjustment presented in the consolidated statement of comprehensive
income in 2Q22. In accordance with IAS 21 'The Effects of Changes
in Foreign Exchange Rates', the results have been translated and
presented in US dollars at the prevailing rate of exchange on 30
June 2022. The Group's comparative information presented in US
dollars with respect to the six-month periods ended 30 June 2021
and 31 December 2021 has not been restated. The impact of applying
IAS 29 and the hyperinflation provisions of IAS 21 in the current
period was a decrease in the Group's profit before tax of $114m,
comprising a decrease in revenue of $113m and an increase in ECL
and operating expenses of $1m.
Future accounting developments
IFRS 17 'Insurance Contracts'
IFRS 17 will be effective from 1 January 2023, with comparatives
restated from 1 January 2022. The standard sets out the
requirements that an entity should apply in accounting for
insurance contracts it issues and reinsurance contracts it holds,
and applies retrospectively. The main changes arising from IFRS 17
are the removal of the present value of in-force long-term
insurance business ('PVIF') asset in respect of unearned profits,
the recognition of a contractual service margin ('CSM') liability,
the measurement of insurance liabilities, and the redesignation of
financial assets held to support insurance liabilities currently
measured at amortised cost, to fair value under IFRS 9. All of
these impacts will be subject to deferred tax.
The Group continues to make progress on the implementation of
IFRS 17 with accounting policies, data and models in place, with
focus now on finalising the opening balance sheet and rehearsing
our operational readiness. However, industry practice and
interpretation of aspects of the standard are still evolving, and
there remains uncertainty around the likely financial impact of its
implementation. As previously guided, our preliminary management
estimate of the impact of applying IFRS 17, compared with our
current accounting policies for insurance contracts, is an
approximate two-third reduction in total equity of our insurance
operations at 1 January 2022. Work is ongoing to estimate the
impact on the 2022 income statement, which will form the basis for
comparative period results following the adoption of the standard
in 2023. This estimate is expected to be communicated through an
update, to be provided towards the end of 2022, to our previously
communicated planning assumption of a reduction in profitability of
approximately two-thirds, albeit within a range of expected
outcomes.
Summary consolidated income statement
Half-year to
30 Jun 30 Jun 31 Dec
2022 2021 2021
$m $m $m
-------------------------------- -------------------------- ---------------------------- --------------------------
Net interest income 14,451 13,098 13,391
-------------------------------- -------------------------- ---------------------------- --------------------------
Net fee income 6,064 6,674 6,423
-------------------------------- -------------------------- ---------------------------- --------------------------
Net income from financial
instruments held for
trading or managed on a fair
value basis 4,921 4,184 3,560
-------------------------------- -------------------------- ---------------------------- --------------------------
Net income/(expense) from assets
and liabilities
of insurance businesses,
including related derivatives,
measured at fair value through
profit or loss (3,051) 2,795 1,258
-------------------------------- -------------------------- ---------------------------- --------------------------
Change in fair value of
designated debt and related
derivatives(1) (158) (67) (115)
-------------------------------- -------------------------- ---------------------------- --------------------------
Changes in fair value of other
financial instruments
mandatorily measured at fair
value through profit
or loss 68 548 250
-------------------------------- -------------------------- ---------------------------- --------------------------
Gains less losses from financial
investments 21 433 136
Net insurance premium income 7,646 5,663 5,207
-------------------------------- -------------------------- ---------------------------- --------------------------
Other operating income 723 155 347
-------------------------------- -------------------------- ---------------------------- --------------------------
Total operating income 30,685 33,483 30,457
-------------------------------- -------------------------- ---------------------------- --------------------------
Net insurance claims and
benefits paid and movement
in liabilities to policyholders (5,449) (7,932) (6,456)
-------------------------------- -------------------------- ---------------------------- --------------------------
Net operating income before
change in expected
credit losses and other credit
impairment charges(2) 25,236 25,551 24,001
-------------------------------- -------------------------- ---------------------------- --------------------------
Change in expected credit losses
and other credit
impairment charges (1,090) 719 209
-------------------------------- -------------------------- ---------------------------- --------------------------
Net operating income 24,146 26,270 24,210
-------------------------------- -------------------------- ---------------------------- --------------------------
Total operating expenses
excluding impairment of
goodwill and other intangible
assets (16,343) (17,045) (16,842)
-------------------------------- -------------------------- ---------------------------- --------------------------
Impairment of goodwill and other
intangible assets (76) (42) (691)
-------------------------------- -------------------------- ---------------------------- --------------------------
Operating profit 7,727 9,183 6,677
-------------------------------- -------------------------- ---------------------------- --------------------------
Share of profit in associates
and joint ventures 1,449 1,656 1,390
-------------------------------- -------------------------- ---------------------------- --------------------------
Profit before tax 9,176 10,839 8,067
-------------------------------- -------------------------- ---------------------------- --------------------------
Tax credit/(charge) 39 (2,417) (1,796)
-------------------------------- -------------------------- ---------------------------- --------------------------
Profit for the period 9,215 8,422 6,271
-------------------------------- -------------------------- ---------------------------- --------------------------
Attributable to:
-------------------------------- -------------------------- ---------------------------- --------------------------
- ordinary shareholders of the
parent company 8,289 7,276 5,331
-------------------------------- -------------------------- ---------------------------- --------------------------
- preference shareholders of the - 7 -
parent company
-------------------------------- -------------------------- ---------------------------- --------------------------
- other equity holders 626 666 637
-------------------------------- -------------------------- ---------------------------- --------------------------
- non-controlling interests 300 473 303
-------------------------------- -------------------------- ---------------------------- --------------------------
Profit for the period 9,215 8,422 6,271
-------------------------------- -------------------------- ---------------------------- --------------------------
$ $$
-------------------------------- -------------------------- ---------------------------- -------------------------
Basic earnings per share 0.42 0.36 0.26
-------------------------------- -------------------------- ---------------------------- --------------------------
Diluted earnings per share 0.41 0.36 0.26
-------------------------------- -------------------------- ---------------------------- --------------------------
Dividend per ordinary share
(paid in the period)(3) 0.18 0.15 0.07
-------------------------------- -------------------------- ---------------------------- --------------------------
% %%
-------------------------------- -------------------------- ---------------------------- -------------------------
Post-tax return on average total
assets (annualised) 0.6 0.6 0.4
-------------------------------- -------------------------- ---------------------------- --------------------------
Return on average ordinary
shareholders' equity
(annualised)(4) 9.7 8.4 7.1
-------------------------------- -------------------------- ---------------------------- --------------------------
Return on average tangible
equity (annualised)(4) 9.9 9.4 8.3
-------------------------------- -------------------------- ---------------------------- --------------------------
1 The debt instruments, issued for funding purposes, are
designated under the fair value option to reduce an accounting
mismatch.
2 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
3 Second interim dividend of $0.18 per ordinary share in respect
of the financial year ending 31 December 2021, paid in April
2022.
4 Half-year to 31 December 2021 is calculated on a full-year basis and not a 2H21 basis.
Income statement commentary
For further financial performance data of our global business
segments, see pages 37 to 45. For further financial performance
data by geographical regions and selected countries/territories,
see pages 46 to 55.
Net interest income
Half-year to Quarter to
-------------------------------------------------------------------------------------------
30 Jun 30 Jun 30 Jun 31 Mar 30 Jun
2022 2021 2022 2022 2021
$m $m $m $m $m
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Interest income 20,855 17,960 11,188 9,667 8,975
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Interest expense (6,404) (4,862) (3,734) (2,670) (2,391)
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Net interest
income 14,451 13,098 7,454 6,997 6,584
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Average
interest-earning
assets 2,233,321 2,188,991 2,207,731 2,259,198 2,198,953
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
% %% %%
----------------- ----------------------------- ----------------------------- ---------------------------- ----------------------------- ----------------------------
Gross interest
yield(1) 1.88 1.65 2.03 1.74 1.64
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Less: gross
interest
payable(1) (0.71) (0.54) (0.83) (0.59) (0.53)
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Net interest
spread(2) 1.17 1.11 1.20 1.15 1.11
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Net interest
margin(3) 1.30 1.21 1.35 1.26 1.20
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
1 Gross interest yield is the average annualised interest rate
earned on average interest-earning assets ('AIEA'). Gross interest
payable is the average annualised interest cost as a percentage of
average interest-bearing liabilities.
2 Net interest spread is the difference between the average
annualised interest rate earned on AIEA, net of amortised premiums
and loan fees, and the average annualised interest rate payable on
average interest-bearing funds.
3 Net interest margin is net interest income expressed as an annualised percentage of AIEA.
Summary of interest income by type of asset
Half-year to Full-year to
-------------------------------------------
30 Jun 2022 30 Jun 2021 31 Dec 2021
------------------------------------------------ --------------------------------------------- -------------------------------------------
Average Interest Average Interest Average Interest
balance income Yield balance income Yield balance income Yield
$m $m % $m $m % $m $m %
----------------- -------------- --------------- --------------- ------------ ---------------- ------------- ------------ -------------- -------------
Short-term funds
and loans
and advances to
banks 458,230 1,355 0.60 421,521 507 0.24 450,678 1,105 0.25
----------------- -------------- --------------- --------------- ------------ ---------------- ------------- ------------ -------------- -------------
Loans and
advances to
customers 1,055,938 13,878 2.65 1,063,974 13,005 2.46 1,060,658 26,071 2.46
----------------- -------------- --------------- --------------- ------------ ---------------- ------------- ------------ -------------- -------------
Reverse
repurchase
agreements
- non-trading 228,226 1,093 0.97 201,428 486 0.49 206,246 1,019 0.49
----------------- -------------- --------------- --------------- ------------ ---------------- ------------- ------------ -------------- -------------
Financial
investments 440,495 3,855 1.76 448,587 3,391 1.52 438,840 6,729 1.53
----------------- -------------- --------------- --------------- ------------ ---------------- ------------- ------------ -------------- -------------
Other
interest-earning
assets 50,432 674 2.70 53,481 571 2.15 53,091 1,264 2.38
----------------- -------------- --------------- --------------- ------------ ---------------- ------------- ------------ -------------- -------------
Total
interest-earning
assets 2,233,321 20,855 1.88 2,188,991 17,960 1.65 2,209,513 36,188 1.64
----------------- -------------- --------------- --------------- ------------ ---------------- ------------- ------------ -------------- -------------
Summary of interest expense by type of liability
Half-year to Full-year to
---------------------------------------------
30 Jun 2022 30 Jun 2021 31 Dec 2021
------------------------------------------------ --------------------------------------------- ---------------------------------------------
Average Interest Average Interest Average Interest
balance expense Cost balance expense Cost balance expense Cost
$m $m % $m $m % $m $m %
----------------- -------------- --------------- --------------- ------------ ---------------- ------------- ------------ ---------------- -------------
Deposits by
banks(1) 82,232 195 0.48 73,402 107 0.29 75,671 198 0.26
----------------- -------------- --------------- --------------- ------------ ---------------- ------------- ------------ ---------------- -------------
Customer
accounts(2) 1,369,088 2,834 0.42 1,355,092 2,020 0.30 1,362,580 4,099 0.30
----------------- -------------- --------------- --------------- ------------ ---------------- ------------- ------------ ---------------- -------------
Repurchase
agreements
- non-trading 122,886 584 0.96 108,165 166 0.31 114,201 363 0.32
----------------- -------------- --------------- --------------- ------------ ---------------- ------------- ------------ ---------------- -------------
Debt securities
in issue
- non-trading 182,080 2,053 2.27 199,058 1,864 1.89 193,137 3,603 1.87
----------------- -------------- --------------- --------------- ------------ ---------------- ------------- ------------ ---------------- -------------
Other
interest-bearing
liabilities 70,443 738 2.11 68,376 705 2.08 70,929 1,436 2.02
----------------- -------------- --------------- --------------- ------------ ---------------- ------------- ------------ ---------------- -------------
Total
interest-bearing
liabilities 1,826,729 6,404 0.71 1,804,093 4,862 0.54 1,816,518 9,699 0.53
----------------- -------------- --------------- --------------- ------------ ---------------- ------------- ------------ ---------------- -------------
1 Including interest-bearing bank deposits only.
2 Including interest-bearing customer accounts only.
Net interest income ('NII') for 1H22 was $14.5bn, an increase of
$1.4bn or 10.3% compared with 1H21. This reflected higher average
market interest rates across the major currencies compared with
1H21.
Excluding the unfavourable impacts of significant items and
foreign currency translation differences, NII increased by $1.9bn
or 15.3%.
NII for 2Q22 was $7.5bn, up 13.2% year-on-year, and 6.5%
compared with the previous quarter. This was driven by the impact
of higher market interest rates across major currencies,
particularly in Europe and North America. The increase was driven
by higher asset yields, particularly on customer term lending,
short-term funds and loans and advances to banks, as well as on
reverse repurchase agreements. This was partly offset by higher
funding costs, in particular for customer deposits, debt securities
and repurchase agreements.
Net interest margin ('NIM') of 1.30% was 9 basis points ('bps')
higher compared with 1H21, as the rise in the yield on AIEA of
23bps was partly offset by the rise in the funding cost of average
interest-bearing liabilities of 17bps. The increase in NIM in 1H22
included the unfavourable impacts of significant items and foreign
currency translation differences. Excluding this, NIM increased by
11bps.
NIM for 2Q22 was 1.35%, up 15bps year-on-year, and up 9bps
compared with the previous quarter, predominantly driven by the
impact of higher market interest rates.
Interest income of $20.9bn increased by $2.9bn or 16%, primarily
due to higher average interest rates compared with 1H21, as the
yield on AIEA increased by 23bps. This was caused by the increase
in market interest rates, partly offset by unfavourable changes in
balance sheet mix, as balances of low-yielding assets, particularly
short-term funds and loans and advances to banks, increased by
$37bn and reverse repurchase agreements increased by $27bn, while
the balances of high-yielding assets, particularly customer term
lending in the loans and advances to customer category, declined by
$24bn. The change in interest income included $32.1m in relation to
the unfavourable impact of significant items and $743m from the
adverse effects of foreign currency translation. Excluding these,
interest income increased by $3.7bn.
Interest income of $11.2bn in 2Q22 was up $2.2bn year-on-year,
and up $1.5bn from the previous quarter. This was predominantly
driven by the impact of higher market interest rates, partly offset
by an unfavourable change in the balance sheet mix as balances in
low-yielding assets increased, while balances in high-yielding
assets declined. Compared with the previous year, balances in
low-yielding reverse repurchase agreements increased by $34bn,
whereas higher-yielding customer term lending balances declined by
$23bn.
Interest expense of $6.4bn increased by $1.5bn or 32% compared
with 1H21. This reflected the increase in funding costs by 17bps,
mainly arising from higher interest rates paid on interest-bearing
customer accounts, repurchase agreements and debt securities in
issue. This was partly offset by a reduction in interest expense
attributable to reduced balances of high-costing subordinated debt,
which declined by $12bn. The change in interest expense included
the favourable effects of foreign currency translation differences
of $0.2bn. Excluding this, interest expense increased by
$1.7bn.
Interest expense of $3.7bn in 2Q22 was up $1.3bn year-on-year,
and up $1.1bn compared with the previous quarter. This was
predominantly driven by the impact of higher market interest
rates.
Net fee income of $6.1bn was $0.6bn lower than in 1H21, and
included a $0.2bn adverse impact from currency translation. The
fall in net fee income was in WPB and GBM, although it rose in
CMB.
In WPB, the reduction in fee income was mainly in Wealth,
particularly in broking and unit trusts in Hong Kong, reflecting
weaker equity markets due to muted customer sentiment.
Covid-19-related restrictions in Hong Kong in 1Q22 also resulted in
temporary branch network closures. These reductions were partly
offset by higher cards income, notably in the UK, as customer
spending increased. The growth in cards activity resulted in a rise
in fee expense.
In GBM, a reduction in fee income was driven by lower
underwriting fees, as market activity fell due to the effects of
the Russia-Ukraine war and wider macroeconomic uncertainty. This
compared with a strong 1H21 when corporates raised finance as
initial Covid-19 restrictions were eased.
In CMB, fee income increased from account services and credit
cards as customer activity increased, as well as from trade
products, as global trade volumes recovered compared with 1H21.
Net income from financial instruments held for trading or
managed on a fair value basis of $4.9bn was $0.7bn higher. The
increase was driven by GBM, as higher market volatility supported a
strong performance within Global Foreign Exchange.
This was partly offset by adverse fair value movements on
non-qualifying hedges of $0.2bn.
Net expense from assets and liabilities of insurance businesses,
including related derivatives, measured at fair value through
profit or loss of $3.1bn compared with a net income of $2.8bn in
1H21. This decrease primarily reflected adverse equity market
performances in Hong Kong and France.
This adverse movement resulted in a corresponding movement in
liabilities to policyholders and the present value of in-force
long-term insurance business ('PVIF') (see 'Other operating income'
below). This reflected the extent to which the policyholders and
shareholders respectively participate in the investment performance
of the associated asset portfolios.
Changes in fair value of other financial instruments mandatorily
measured at fair value through profit or loss of $0.1bn were $0.5bn
lower compared with 1H21. This included lower revaluation gains in
Principal Investments. It also included revaluation losses on other
financial assets due to the increased macroeconomic uncertainty, in
part due to the Russia-Ukraine war, as well as adverse movements on
interest rate-linked instruments as yield curves steepened.
Gains less losses from financial investments of $21m were $0.4bn
lower compared with 1H21, reflecting smaller gains on the disposal
of debt securities.
Net insurance premium income of $7.6bn was $2.0bn higher than in
1H21, reflecting strong sales in Hong Kong.
Other operating income of $0.7bn increased by $0.6bn compared
with 1H21, primarily due to $0.9bn higher net favourable changes in
PVIF.
The changes in PVIF were mainly in Hong Kong and included a
$0.2bn increase in the value of new business and a $0.3bn gain
following a pricing update for our policyholders' funds held on
deposit with us in Hong Kong to reflect the cost to provide this
service. There was also an increase of $0.3bn primarily reflecting
the effect of sharing lower investment returns with
policyholders.
PVIF is presented in accordance with IFRS 4 'Insurance
Contracts'. As set out in 'Future accounting developments' on page
29, IFRS 17 'Insurance Contracts' is effective from 1 January 2023.
Under IFRS 17, there will be no PVIF asset recognised. Instead, the
estimated future profit will be included in the measurement of the
insurance contract liability as the contractual service margin and
gradually recognised in revenue as services are provided over the
duration of the insurance contract.
The increase in 'Other operating income' also included a $0.1bn
provisional gain on completion of our acquisition of AXA Singapore
in 1H22. The increases were partly offset by 1H22 losses associated
with the planned sales of our branch operations in Greece and our
operations in Russia.
Net insurance claims and benefits paid and movement in
liabilities to policyholders of $5.4bn were $2.5bn lower, primarily
due to lower returns on financial assets supporting contracts where
the policyholder is subject to part or all of the investment risk,
mainly in France and Hong Kong, together with the impact of higher
sales volumes in Hong Kong.
Change in expected credit losses and other credit impairment
charges ('ECL') were a charge of $1.1bn, compared with a net
release of $0.7bn in 1H21.
The 1H22 charge primarily reflected stage 3 charges of $0.8bn,
including charges related to the commercial real estate sector in
mainland China, as well as against Russia exposures. We also
recognised additional stage 1 and stage 2 allowances to reflect
heightened levels of economic uncertainty and inflationary
pressures, in part offset by the release of most of our remaining
Covid-19-related allowances. This compared with a net release in
1H21 primarily relating to Covid-19-related allowances previously
built up in 2020.
We continue to expect our ECL charges to normalise towards 30bps
of average loans in 2022, recognising the possible risk of further
deterioration in the consensus economic outlook. We also continue
to monitor external developments in certain key vulnerable sectors,
particularly offshore commercial financing of the real estate
sector in mainland China.
For further details on the calculation of ECL, including the
measurement uncertainties and significant judgements applied to
such calculations, the impact of economic scenarios and management
judgemental adjustments, see pages 67 to 75.
Operating expenses - significant items and currency translation
Half-year to
30 Jun 30 Jun 31 Dec
2022 2021 2021
$m $m $m
--------------------------------- --------------------------- -------------------------- --------------------------
Significant items 1,043 818 1,576
- customer redress programmes (6) 17 32
- impairment of goodwill and
other intangibles 9 - 587
- restructuring and other related
costs 1,040 848 988
- currency translation on
significant items (47) (31)
--------------------------------- --------------------------- --------------------------
Currency translation 749 510
--------------------------------- --------------------------- -------------------------- --------------------------
Total 1,043 1,567 2,086
--------------------------------- --------------------------- -------------------------- --------------------------
Operating expenses
Half-year to
---------------------------------------------------------------------------------
30 Jun 30 Jun 31 Dec
2022 2021 2021
$m $m $m
----------------------------------- -------------------------- -------------------------- -------------------------
Gross employee compensation and
benefits 9,501 10,225 9,387
----------------------------------- -------------------------- -------------------------- -------------------------
Capitalised wages and salaries (430) (615) (255)
----------------------------------- -------------------------- -------------------------- -------------------------
Goodwill impairment - - 587
----------------------------------- -------------------------- -------------------------- -------------------------
Property and equipment 2,431 2,540 2,605
----------------------------------- -------------------------- -------------------------- -------------------------
Amortisation and impairment of
intangibles 828 642 796
----------------------------------- -------------------------- -------------------------- -------------------------
UK bank levy - - 116
----------------------------------- -------------------------- -------------------------- -------------------------
Legal proceedings and regulatory
matters 94 47 59
----------------------------------- -------------------------- -------------------------- -------------------------
Other operating expenses(1) 3,995 4,248 4,238
----------------------------------- -------------------------- -------------------------- -------------------------
Total operating expenses (reported) 16,419 17,087 17,533
----------------------------------- -------------------------- -------------------------- -------------------------
Total significant items (including
currency translation
on significant items) (1,043) (818) (1,576)
----------------------------------- -------------------------- -------------------------- -------------------------
Currency translation (749) (510)
----------------------------------- -------------------------- -------------------------- -------------------------
Total operating expenses (adjusted) 15,376 15,520 15,447
----------------------------------- -------------------------- -------------------------- -------------------------
1 Other operating expenses includes professional fees,
contractor costs, transaction taxes, marketing and travel. The
decrease was driven by favourable currency translation, as well as
higher capitalisation resulting from changes in the capitalisation
offset to contractors, services contracted out and other
administration expenses compared with the prior year. This was
partly offset by higher professional fees resulting from investment
in technology including cost to achieve spend.
Staff numbers (full-time equivalents)
At
30 Jun 30 Jun 31 Dec
2022 2021 2021
---------------------------- ------------------------ ------------------------- -------------------------
Global businesses
---------------------------- ------------------------ ------------------------- -------------------------
Wealth and Personal Banking 127,638 132,616 130,185
---------------------------- ------------------------ ------------------------- -------------------------
Commercial Banking 44,183 43,241 42,969
---------------------------- ------------------------ ------------------------- -------------------------
Global Banking and Markets 46,624 46,326 46,166
---------------------------- ------------------------ ------------------------- -------------------------
Corporate Centre 421 367 377
---------------------------- ------------------------ ------------------------- -------------------------
Total staff numbers 218,866 222,550 219,697
---------------------------- ------------------------ ------------------------- -------------------------
Operating expenses of $16.4bn were $0.7bn or 4% lower than in
1H21. This included a favourable impact of $0.7bn from foreign
currency translation differences, in part offset by an increase in
restructuring and other related costs of $0.2bn.
The reduction also reflected the impact of our cost-saving
initiatives of $1.1bn and a lower performance-related pay accrual
of $0.4bn, for which the Group-wide phasing of the accrual is
driven by the expected profile of full-year profits. Given profits
in 1H21 benefited from significant ECL releases, we recognised a
larger share of the accrual in the first half of the year relative
to 1H22. These factors more than offset increases from our
continued investments in technology of $0.4bn, which is gross of
cost savings of $0.2bn, and in wealth in Asia of $0.2bn, as well as
from other increases, including higher inflation, regulatory
investments, growth in business volumes and marketing.
The number of employees expressed in full-time equivalent staff
('FTEs') at 30 June 2022 was 218,866, a decrease of 831 from 31
December 2021. Additionally, the number of contractors at 30 June
2022 was 6,642, an increase of 450 from 31 December 2021.
Share of profit in associates and joint ventures of $1.4bn was
$0.2bn or 13% lower, primarily as 1H21 included a higher share of
profit from BGF due to the recovery in asset valuations.
In relation to Bank of Communications Co., Limited ('BoCom'), we
continue to be subject to a risk of impairment in the carrying
value of our investment. We have performed an impairment test on
the carrying amount of our investment and confirmed there was no
impairment at 30 June 2022. For further details of our impairment
review process, see Note 10 on the interim condensed financial
statements.
Tax expense
Tax in 1H22 was a credit of $39m. This was mainly due to a
$1.8bn credit arising from the recognition of a deferred tax asset
on historical tax losses of HSBC Holdings as a result of improved
profit forecasts for the UK tax group, which accelerated the
expected utilisation of these losses and reduced the uncertainty
regarding their recoverability. Excluding this, the effective tax
rate for 1H22 was 19.4% and was reduced by the remeasurement of
deferred tax balances following substantive enactment of
legislation to reduce the rate of the UK banking surcharge from 8%
to 3% with effect from 1 April 2023. The effective tax rate for
1H21 was 22.3%.
Summary consolidated balance sheet
At
----------------------------------------------
30 Jun 31 Dec
2022 2021
$m $m
------------------------------------------------------ --------------------- -----------------------
Assets
------------------------------------------------------ --------------------- -----------------------
Cash and balances at central banks 363,608 403,018
------------------------------------------------------ --------------------- -----------------------
Trading assets 217,350 248,842
------------------------------------------------------ --------------------- -----------------------
Financial assets designated and otherwise mandatorily
measured at fair value through profit or loss 45,873 49,804
------------------------------------------------------ --------------------- -----------------------
Derivatives 262,923 196,882
------------------------------------------------------ --------------------- -----------------------
Loans and advances to banks 96,429 83,136
------------------------------------------------------ --------------------- -----------------------
Loans and advances to customers(1) 1,028,356 1,045,814
------------------------------------------------------ --------------------- -----------------------
Reverse repurchase agreements - non-trading 244,451 241,648
------------------------------------------------------ --------------------- -----------------------
Financial investments 430,796 446,274
------------------------------------------------------ --------------------- -----------------------
Other assets 295,634 242,521
------------------------------------------------------ --------------------- -----------------------
Total assets 2,985,420 2,957,939
------------------------------------------------------ --------------------- -----------------------
Liabilities and equity
------------------------------------------------------ --------------------- -----------------------
Liabilities
------------------------------------------------------ --------------------- -----------------------
Deposits by banks 105,275 101,152
------------------------------------------------------ --------------------- -----------------------
Customer accounts 1,651,301 1,710,574
------------------------------------------------------ --------------------- -----------------------
Repurchase agreements - non-trading 129,707 126,670
------------------------------------------------------ --------------------- -----------------------
Trading liabilities 80,569 84,904
------------------------------------------------------ --------------------- -----------------------
Financial liabilities designated at fair value 126,006 145,502
------------------------------------------------------ --------------------- -----------------------
Derivatives 251,469 191,064
------------------------------------------------------ --------------------- -----------------------
Debt securities in issue 87,944 78,557
------------------------------------------------------ --------------------- -----------------------
Liabilities under insurance contracts 113,130 112,745
------------------------------------------------------ --------------------- -----------------------
Other liabilities 243,329 199,994
------------------------------------------------------ --------------------- -----------------------
Total liabilities 2,788,730 2,751,162
------------------------------------------------------ --------------------- -----------------------
Equity
------------------------------------------------------ --------------------- -----------------------
Total shareholders' equity 188,382 198,250
------------------------------------------------------ --------------------- -----------------------
Non-controlling interests 8,308 8,527
------------------------------------------------------ --------------------- -----------------------
Total equity 196,690 206,777
------------------------------------------------------ --------------------- -----------------------
Total liabilities and equity 2,985,420 2,957,939
------------------------------------------------------ --------------------- -----------------------
1 Net of impairment allowances.
Selected financial information
At
30 Jun 31 Dec
2022 2021
$m $m
------------------------------------------------------------ --------------- ---------------------
Called up share capital 10,188 10,316
------------------------------------------------------------ --------------- ---------------------
Capital resources(1) 158,519 177,786
------------------------------------------------------------ --------------- ---------------------
Undated subordinated loan capital 1,967 1,968
------------------------------------------------------------ --------------- ---------------------
Preferred securities and dated subordinated loan capital(2) 27,981 28,568
------------------------------------------------------------ --------------- ---------------------
Risk-weighted assets 851,743 838,263
------------------------------------------------------------ --------------- ---------------------
Total shareholders' equity 188,382 198,250
------------------------------------------------------------ --------------- ---------------------
Less: preference shares and other equity instruments (21,691) (22,414)
------------------------------------------------------------ --------------- ---------------------
Total ordinary shareholders' equity 166,691 175,836
------------------------------------------------------------ --------------- ---------------------
Less: goodwill and intangible assets (net of tax) (18,383) (17,643)
------------------------------------------------------------ --------------- ---------------------
Tangible ordinary shareholders' equity 148,308 158,193
------------------------------------------------------------ --------------- ---------------------
Financial statistics
------------------------------------------------------------ --------------- ---------------------
Loans and advances to customers as a percentage of customer
accounts (%) 62.3 61.1
------------------------------------------------------------ --------------- ---------------------
Average total shareholders' equity to average total assets
(%) 6.37 6.62
------------------------------------------------------------ --------------- ---------------------
Net asset value per ordinary share at period end ($)(3) 8.41 8.76
------------------------------------------------------------ --------------- ---------------------
Tangible net asset value per ordinary share at period
end ($)(4) 7.48 7.88
------------------------------------------------------------ --------------- ---------------------
Tangible net asset value per fully diluted ordinary share
at period end ($) 7.43 7.84
------------------------------------------------------------ --------------- ---------------------
Number of $0.50 ordinary shares in issue (millions) 20,376 20,632
------------------------------------------------------------ --------------- ---------------------
Basic number of $0.50 ordinary shares outstanding (millions) 19,819 20,073
------------------------------------------------------------ --------------- ---------------------
Basic number of $0.50 ordinary shares outstanding and
dilutive potential ordinary shares (millions) 19,949 20,189
------------------------------------------------------------ --------------- ---------------------
Closing foreign exchange translation rates to $:
------------------------------------------------------------ --------------- ---------------------
$1: GBP 0.822 0.739
------------------------------------------------------------ --------------- ---------------------
$1: EUR 0.959 0.880
------------------------------------------------------------ --------------- ---------------------
1 Capital resources are regulatory capital, the calculation of which is set out on page 91.
2 Including perpetual preferred securities.
3 The definition of net asset value per ordinary share is total
shareholders' equity, less non-cumulative preference shares and
capital securities, divided by the number of ordinary shares in
issue, excluding own shares held by the company, including those
purchased and held in treasury.
4 The definition of tangible net asset value per ordinary share
is total ordinary shareholder's equity excluding goodwill, PVIF and
other intangible assets (net of deferred tax), divided by the
number of basic ordinary shares in issue, excluding own shares held
by the company, including those purchased and held in treasury.
A more detailed consolidated balance sheet is contained in the
interim condensed financial statements on page 106.
Balance sheet commentary compared with 31 December 2021
At 30 June 2022, our total assets were $3.0tn, an increase of
$27bn or 1% on a reported basis, and $173bn or 6% on a constant
currency basis.
Our asset base included growth in derivative asset balances due
to favourable revaluation movements on interest rate contracts, and
higher other assets reflecting seasonal reductions in settlement
accounts at 31 December 2021, as clients settled trades prior to
the year end. These increases were partly offset by reductions in
cash and balances at central banks and lower trading assets.
Our ratio of loans and advances to customers as a percentage of
customer accounts of 62% was in line with 31 December 2021.
Assets
Cash and balances at central banks decreased by $39bn or 10%,
which included a $32bn impact of foreign exchange movements since
31 December 2021.
Trading assets decreased by $31bn or 13%, notably from a
reduction in equity securities held, particularly in the UK and
Hong Kong, notably reflecting lower client demand.
Derivative assets increased by $66bn or 34%, mainly in Europe,
reflecting favourable revaluation movements on interest rate
contracts due to movements in long-term yield curve rates in most
major markets. Foreign exchange contracts also increased as a
result of foreign exchange rate movements, mainly in the UK, France
and Hong Kong. The increase in derivative assets was consistent
with the increase in derivative liabilities, as the underlying risk
is broadly matched.
Loans and advances to customers of $1.0tn were $17bn lower,
which included an adverse impact from foreign currency translation
differences of $51bn. On a constant currency basis, customer
lending balances were $34bn higher.
The commentary below is on a constant currency basis.
Customer lending increased in WPB by $13bn to $475bn, mainly
from higher mortgage balances, notably in the UK (up $5bn),
Australia (up $2bn) and Hong Kong (up $1bn). There was also an
increase in term lending of $2bn, mainly in Hong Kong and the UK,
although overdraft and credit card balances fell, mainly in
Asia.
In CMB, customer lending of $348bn was $16bn higher with
increases in all regions. Trade volumes remained robust, with
growth in term lending of $9bn, reflecting a strong performance in
North America and Asia.
In GBM, customer lending of $204bn grew by $5bn, reflecting
higher term lending of $5bn, mainly in the US, the UK and UAE due
to increased customer drawdowns. There was also growth in overdraft
balances of $3bn, mainly in the UK and Hong Kong.
Financial investments decreased by $15bn or 3%, mainly in Europe
from the adverse impact of foreign currency translation differences
since 31 December 2021. The reduction included adverse fair value
movements recorded in 'other comprehensive income' in equity on
debt securities, treasury and other eligible bills as a result of
higher yield curves and wider macroeconomic pressures. It also
included reductions due to disposals and maturity of these
securities. The reductions were partly offset by increases in debt
instruments measured at amortised cost, as we repositioned our
portfolio to reduce capital volatility.
Other assets grew by $53bn or 22%, primarily due to an increase
of $29bn in settlement accounts in the UK, the US and Hong Kong
from higher trading activity, compared with the seasonal reduction
in December 2021. Cash collateral grew by $14bn, reflecting the
increase in fair value of derivative assets.
Liabilities
Customer accounts of $1.7tn decreased by $59bn on a reported
basis, including the adverse impact of foreign currency translation
differences of $83bn. On a constant currency basis, customer
accounts were $24bn higher.
The commentary below is on a constant currency basis.
The increase in customer accounts was primarily in WPB (up
$15bn), driven by higher interest-bearing and term deposit
balances, as interest rates rose. There was a smaller corresponding
reduction in non-interest-bearing current accounts.
Customer accounts also increased in GBM, mainly due to growth in
interest-bearing and term deposit balances as customers
demonstrated a preference for higher yielding accounts as interest
rates rose, notably in Europe.
In CMB, customer accounts remained broadly stable, with
reductions in North America, partly offset with growth in all other
regions. In the UK, customer accounts grew as clients deployed
their commercial surplus to interest-bearing accounts as interest
rates rose.
Financial liabilities designated at fair value decreased by
$19bn or 13%, notably from maturities, mark-to-market reductions
and foreign exchange revaluations on non-US dollar instruments.
Derivative liabilities increased by $60bn or 32%, which is
consistent with the increase in derivative assets, since the
underlying risk is broadly matched.
Other liabilities increased by $43bn or 22%, notably from a rise
of $31bn in settlement accounts in the UK, Hong Kong and the US
from an increase in trading activity, compared with the seasonal
reduction in December 2021. Cash collateral increased by $15bn,
mainly due to the increase in fair value of derivative
liabilities.
Equity
Total shareholders' equity , including non-controlling
interests, decreased by $10bn or 5% compared with 31 December
2021.
Profits generated of $9bn were more than offset by coupon
distributions on securities classified as equity and dividends paid
of $4bn, as well as net losses through other comprehensive income
('OCI') of $13bn. The net losses in OCI included adverse movements
of $5bn on financial instruments designated as
hold-to-collect-and-sell, which are held as hedges to our exposure
to interest rate movements, as a result of the increase in term
market yield curves in 1H22. The net loss also included an adverse
impact from foreign exchange differences of $9bn. These losses were
partly offset by fair value gains on liabilities related to changes
in own credit risk of $2bn.
Overall the Group is positively exposed to rising interest rates
through net interest income, although there is an impact on our
capital base due to the fair value of hold-to-collect-and-sell
instruments. These instruments are reported within 'financial
investments'. There is an initial negative effect materialising
through reserves, after which the net interest income of the Group
is expected to result in a net benefit over time, provided policy
rates follow market implied rates.
Over time, these adverse movements will unwind as the
instruments reach maturity, although not all will necessarily be
held to maturity.
It is currently estimated that it will take around four quarters
for the benefit to Group net interest income to offset the adverse
impact of these revaluations, provided the composition of the
portfolio were to remain static.
Customer accounts by country/territory
At
30 Jun 31 Dec
2022 2021
$m $m
------------------------- ---------------- -----------------
Europe 628,977 667,769
------------------------- ---------------- -----------------
- UK 505,195 535,797
-------------------------
- France 52,643 56,841
-------------------------
- Germany 25,942 22,509
-------------------------
- Switzerland 8,021 10,680
-------------------------
- other 37,176 41,942
------------------------- ----------------
Asia 779,153 792,098
------------------------- ---------------- -----------------
- Hong Kong 543,400 549,429
-------------------------
- Singapore 57,057 57,572
-------------------------
- mainland China 55,580 59,266
-------------------------
- Australia 28,366 28,240
-------------------------
- India 24,470 24,507
-------------------------
- Malaysia 16,353 16,500
-------------------------
- Taiwan 14,588 15,483
-------------------------
- Indonesia 5,804 6,019
-------------------------
- other 33,535 35,082
------------------------- ----------------
Middle East and North
Africa (excluding Saudi
Arabia) 44,008 42,629
------------------------- ---------------- -----------------
- United Arab Emirates 22,661 20,943
-------------------------
- Egypt 6,281 6,699
-------------------------
- Turkey 3,812 4,258
-------------------------
- other 11,254 10,729
------------------------- ----------------
North America 168,699 178,565
------------------------- ---------------- -----------------
- US 101,137 111,921
-------------------------
- Canada 58,241 58,071
-------------------------
- other 9,321 8,573
------------------------- ----------------
Latin America 30,464 29,513
------------------------- ---------------- -----------------
- Mexico 23,659 23,583
-------------------------
- other 6,805 5,930
------------------------- ----------------
At end of period 1,651,301 1,710,574
------------------------- ---------------- -----------------
Risk-weighted assets
Risk-weighted assets ('RWAs') rose by $13.4bn during the first
half of the year. Excluding foreign currency translation
differences, RWAs increased by $47.4bn, largely as a result of the
following:
-- a $19.9bn increase due to asset size movements, mostly due to
corporate loan growth across our major regions; and
-- a $28.3bn increase due to changes in methodology and policy.
This was mostly due to regulatory change and refinements to our
treatment of small and medium-sized enterprises, partly offset by
reductions from risk parameter refinements in GBM and CMB.
Global businesses
Page
Summary 36
------------------------------------ ----
Basis of preparation 36
Reconciliation of reported and
adjusted items - global businesses 37
------------------------------------ ----
Reconciliation of reported and
adjusted items - risk-weighted
assets 40
------------------------------------ ----
Supplementary tables for WPB 40
------------------------------------ ----
Summary
The Group Chief Executive, supported by the rest of the Group
Executive Committee ('GEC'), reviews operating activity on a number
of bases, including by global business and geographical region. Our
global businesses - Wealth and Personal Banking, Commercial
Banking, and Global Banking and Markets - along with Corporate
Centre are our reportable segments under IFRS 8 'Operating
Segments', and are presented below and in Note 5: 'Segmental
analysis' on page 112.
Basis of preparation
The Group Chief Executive, supported
by the rest of the GEC, is considered
the Chief Operating Decision Maker
('CODM') for the purposes of identifying
the Group's reportable segments.
Global business results are assessed
by the CODM on the basis of adjusted
performance, which removes the effects
of significant items and currency
translation from reported results.
Therefore, we present these results
on an adjusted basis. Adjusted performance
information for 1H21 and 2H21 is
presented on a constant currency
basis as described on page 29.
As required by IFRS 8, reconciliations
of the total adjusted global business
results to the Group's reported
results are presented on page 113.
Supplementary reconciliations from
reported to adjusted results by
global business are presented on
pages 37 to 39 for information purposes.
Global business performance is also
assessed using return on tangible
equity ('RoTE'), excluding significant
items. A reconciliation of global
business RoTE, excluding significant
items to the Group's RoTE, is provided
on page 56.
Our operations are closely integrated
and, accordingly, the presentation
of data includes internal allocations
of certain items of income and expense.
These allocations include the costs
of certain support services and
global functions to the extent that
they can be meaningfully attributed
to global businesses and geographical
regions. While such allocations
have been made on a systematic and
consistent basis, they necessarily
involve a degree of subjectivity.
Costs that are not allocated to
global businesses are included in
Corporate Centre.
Where relevant, income and expense
amounts presented include the results
of inter-segment funding along with
inter-company and inter-business
line transactions. All such transactions
are undertaken on arm's length terms.
The intra-Group elimination items
for the global businesses are presented
in Corporate Centre.
The expense of the UK bank levy
is included in the Europe geographical
region as HSBC regards the levy
as a cost of being headquartered
in the UK. The current year expense
is reflected in the fourth quarter
as it is assessed on our balance
sheet position as at 31 December.
The results of geographical regions
are presented on a reported and
adjusted basis. Geographical information
is classified by the location of
the principal operations of the
subsidiary or, for The Hongkong
and Shanghai Banking Corporation
Limited, HSBC Bank plc, HSBC UK
Bank plc, HSBC Bank Middle East
Limited and HSBC Bank USA, by the
location of the branch responsible
for reporting the results or providing
funding.
===========================================
Descriptions of the global businesses are provided in the
Overview section on pages 18 to 24.
Reconciliation of reported and adjusted items - global businesses
Supplementary unaudited analysis of significant items by global
business is presented below.
Half-year to 30 Jun 2022
------------------------------------------------------------------------------------------------------------------------------------
Wealth Global
and Banking
Personal Commercial and Corporate
Banking Banking Markets Centre Total
$m $m $m $m $m
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Revenue(1)
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Reported 11,006 7,216 7,943 (929) 25,236
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Significant
items (84) 1 (102) 639 454
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
- customer
redress
programmes 11 3 - - 14
----------------
- disposals,
acquisitions
and investment
in new
businesses(2) - - - 288 288
----------------
- fair value
movements on
financial
instruments(3) (2) (2) (127) 351 220
----------------
- restructuring
and other
related
costs(4) (93) - 25 - (68)
---------------- --------------------------- ------------------------ ------------------------ ------------------------
Adjusted 10,922 7,217 7,841 (290) 25,690
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
ECL
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Reported (573) (288) (227) (2) (1,090)
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Adjusted (573) (288) (227) (2) (1,090)
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Operating
expenses
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Reported (7,514) (3,417) (4,822) (666) (16,419)
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Significant
items 103 66 87 787 1,043
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
- customer
redress
programmes (10) - - 4 (6)
- impairment of
goodwill and
other
intangibles - - - 9 9
----------------
- restructuring
and other
related costs 113 66 87 774 1,040
Adjusted (7,411) (3,351) (4,735) 121 (15,376)
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Share of profit
in associates
and joint
ventures
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Reported 8 - - 1,441 1,449
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Adjusted 8 - - 1,441 1,449
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Profit/(loss)
before tax
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Reported 2,927 3,511 2,894 (156) 9,176
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Significant
items 19 67 (15) 1,426 1,497
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
- revenue (84) 1 (102) 639 454
----------------
- operating
expenses 103 66 87 787 1,043
---------------- --------------------------- ------------------------ ------------------------ ------------------------
Adjusted profit
before tax 2,946 3,578 2,879 1,270 10,673
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Reported tax
(charge)/credit (676) (822) (497) 2,034 39
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Tax significant
items (1) (12) 5 (1,993) (2,001)
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
- tax
charge/(credit)
on significant
items (1) (12) 5 (228) (236)
----------------
- recognition of
losses on HSBC
Holdings - - - (1,765) (1,765)
---------------- --------------------------- ------------------------ ------------------------ ------------------------
Adjusted profit
after tax 2,269 2,744 2,387 1,311 8,711
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Loans and
advances to
customers (net)
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Reported 475,464 348,253 204,097 542 1,028,356
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Adjusted 475,464 348,253 204,097 542 1,028,356
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Customer
accounts
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Reported 836,026 479,680 335,033 562 1,651,301
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
Adjusted 836,026 479,680 335,033 562 1,651,301
---------------- --------------------------- ------------------------ ------------------------ ------------------------ -------------------------
1 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
2 Includes losses from classifying businesses as held-for-sale
as part of a broader restructuring of our European business.
3 Includes fair value movements on non-qualifying hedges and
debt valuation adjustments on derivatives.
4 Comprises gains and losses relating to the business update in
February 2020, including losses associated with RWA reduction
commitments.
Reconciliation of reported results to adjusted results - global businesses
(continued)
Half-year to 30 Jun 2021
---------------------------------------------------------------------------------------------------------------------------------------
Wealth Global
and Banking
Personal Commercial and Corporate
Banking Banking Markets Centre Total
$m $m $m $m $m
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Revenue(1)
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Reported 11,400 6,670 7,703 (222) 25,551
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Currency
translation (423) (301) (349) 4 (1,069)
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Significant
items 3 (16) 164 101 252
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
- customer
redress
programmes 2 (20) - - (18)
- fair value
movements on
financial
instruments(2) (1) (1) 13 183 194
----------------
- restructuring
and other
related
costs(3) - 2 162 (94) 70
----------------
- currency
translation on
significant
items 2 3 (11) 12 6
---------------- --------------------------- ------------------------- ------------------------- -------------------------
Adjusted 10,980 6,353 7,518 (117) 24,734
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
ECL
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Reported 52 249 414 4 719
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Currency
translation (14) (21) (9) - (44)
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Adjusted 38 228 405 4 675
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Operating
expenses
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Reported (7,817) (3,544) (5,058) (668) (17,087)
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Currency
translation 332 156 267 (6) 749
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Significant
items 208 17 67 526 818
- customer
redress
programmes 13 - - 4 17
- restructuring
and other
related costs 204 19 73 552 848
- currency
translation on
significant
items (9) (2) (6) (30) (47)
---------------- --------------------------- ------------------------- ------------------------- -------------------------
Adjusted (7,277) (3,371) (4,724) (148) (15,520)
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Share of profit
in associates
and joint
ventures
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Reported 11 1 - 1,644 1,656
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Currency
translation (1) - - (6) (7)
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Adjusted 10 1 - 1,638 1,649
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Profit before
tax
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Reported 3,646 3,376 3,059 758 10,839
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Currency
translation (106) (166) (91) (8) (371)
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Significant
items 211 1 231 627 1,070
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
- revenue 3 (16) 164 101 252
----------------
- operating
expenses 208 17 67 526 818
---------------- --------------------------- ------------------------- ------------------------- -------------------------
Adjusted profit
before tax 3,751 3,211 3,199 1,377 11,538
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Reported tax
(charge)/
credit (768) (807) (655) (187) (2,417)
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Currency
translation 25 35 19 30 109
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Tax significant
items (46) (6) (48) (47) (147)
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
- tax
charge/(credit)
on significant
items (50) (6) (50) (47) (153)
- currency
translation on
significant
items 4 - 2 - 6
---------------- --------------------------- ------------------------- ------------------------- -------------------------
Adjusted profit
after tax 2,962 2,433 2,515 1,173 9,083
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Loans and
advances to
customers (net)
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Reported 491,320 350,945 216,098 1,148 1,059,511
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Currency
translation (32,747) (21,072) (11,054) (83) (64,956)
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Adjusted 458,573 329,873 205,044 1,065 994,555
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Customer
accounts
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Reported 841,257 485,689 341,242 903 1,669,091
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Currency
translation (47,980) (30,683) (24,377) (109) (103,149)
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Adjusted 793,277 455,006 316,865 794 1,565,942
---------------- --------------------------- ------------------------- ------------------------- ------------------------- -------------------------
1 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
2 Includes fair value movements on non-qualifying hedges and
debt valuation adjustments on derivatives.
3 Comprises losses associated with RWA reduction commitments and
gains relating to the business update in February 2020.
Reconciliation of reported results to adjusted results - global businesses
(continued)
Half-year to 31 Dec 2021
Wealth Global
and Banking
Personal Commercial and Corporate
Banking Banking Markets Centre Total
$m $m $m $m $m
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Revenue(1)
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Reported 10,717 6,761 6,885 (362) 24,001
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Currency
translation (271) (210) (235) 5 (711)
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Significant
items (7) 5 228 61 287
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
- customer
redress
programmes 5 2 - - 7
- fair value
movements on
financial
instruments(2) 1 - 6 41 48
----------------
- restructuring
and other
related
costs(3) (14) 1 233 17 237
----------------
- currency
translation on
significant
items 1 2 (11) 3 (5)
---------------- ------------------------- ------------------------- ------------------------- -------------------------
Adjusted 10,439 6,556 6,878 (296) 23,577
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
ECL
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Reported 236 51 (77) (1) 209
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Currency
translation (21) (11) (3) - (35)
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Adjusted 215 40 (80) (1) 174
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Operating
expenses
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Reported (8,489) (3,511) (5,145) (388) (17,533)
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Currency
translation 212 96 197 5 510
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Significant
items 703 60 117 696 1,576
- customer
redress
programmes 26 1 - 5 32
----------------
- impairment of
goodwill and
other
intangibles 587 - - - 587
- restructuring
and other
related costs 92 62 124 710 988
- currency
translation on
significant
items (2) (3) (7) (19) (31)
---------------- ------------------------- ------------------------- ------------------------- -------------------------
Adjusted (7,574) (3,355) (4,831) 313 (15,447)
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Share of profit
in associates
and joint
ventures
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Reported 23 - - 1,367 1,390
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Currency
translation 1 - - (14) (13)
Adjusted 24 - - 1,353 1,377
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Profit before
tax
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Reported 2,487 3,301 1,663 616 8,067
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Currency
translation (79) (125) (41) (4) (249)
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Significant
items 696 65 345 757 1,863
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
- revenue (7) 5 228 61 287
----------------
- operating
expenses 703 60 117 696 1,576
Adjusted profit
before tax 3,104 3,241 1,967 1,369 9,681
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Reported tax
(charge)/credit (662) (611) (838) 315 (1,796)
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Currency
translation 3 23 51 (24) 53
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Tax significant
items (15) (8) (41) (103) (167)
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
- tax
charge/(credit)
on significant
items (16) (9) (45) (103) (173)
- currency
translation on
significant
items 1 1 4 - 6
---------------- ------------------------- ------------------------- ------------------------- -------------------------
Adjusted profit
after tax 2,430 2,645 1,139 1,557 7,771
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Loans and
advances to
customers (net)
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Reported 488,786 349,126 207,162 740 1,045,814
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Currency
translation (26,334) (16,416) (8,308) (54) (51,112)
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Adjusted 462,452 332,710 198,854 686 994,702
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Customer
accounts
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Reported 859,029 506,688 344,205 652 1,710,574
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Currency
translation (38,465) (24,907) (19,966) (62) (83,400)
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
Adjusted 820,564 481,781 324,239 590 1,627,174
---------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------------
1 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
2 Includes fair value movements on non-qualifying hedges and
debt valuation adjustments on derivatives.
3 Comprises losses associated with RWA reduction commitments and
gains relating to the business update in February 2020.
Reconciliation of reported and adjusted risk-weighted assets
At 30 Jun 2022
-----------------------------------------------------------------------------------------------------------------------------------------------------
Wealth Global
and Banking
Personal Commercial and Corporate
Banking Banking Markets Centre Total
$bn $bn $bn $bn $bn
-------------- --------------------------------------- ------------------------- ------------------------- --------------------------- -------------------------
Risk-weighted
assets
-------------- --------------------------------------- ------------------------- ------------------------- --------------------------- -------------------------
Reported 186.1 341.9 241.1 82.6 851.7
Adjusted(1) 186.1 341.9 241.1 82.6 851.7
-------------- --------------------------------------- ------------------------- ------------------------- --------------------------- -------------------------
At 30 Jun 2021
Risk-weighted
assets
-------------- --------------------------------------- ------------------------- ------------------------- --------------------------- -------------------------
Reported 185.0 332.1 255.2 90.0 862.3
-------------- --------------------------------------- ------------------------- ------------------------- --------------------------- -------------------------
Currency
translation (9.4) (21.0) (11.2) (1.8) (43.4)
Adjusted(1) 175.6 311.1 244.0 88.2 818.9
-------------- --------------------------------------- ------------------------- ------------------------- --------------------------- -------------------------
At 31 Dec 2021
Risk-weighted
assets
-------------- ------------------------------------- ------------------------- --------------------------- --------------------------- -------------------------
Reported 178.3 332.9 236.2 90.9 838.3
-------------- ------------------------------------- ------------------------- --------------------------- --------------------------- -------------------------
Currency
translation (7.3) (16.4) (7.9) (1.4) (33.0)
Adjusted(1) 171.0 316.5 228.3 89.5 805.3
-------------- ------------------------------------- ------------------------- --------------------------- --------------------------- -------------------------
1 Adjusted risk-weighted assets are calculated using reported
risk-weighted assets adjusted for the effects of currency
translation differences and material significant items.
Supplementary tables for WPB
WPB adjusted performance by business unit
A breakdown of WPB by business unit is presented below to
reflect the basis of how the revenue performance of the business
units is assessed and managed.
WPB - summary (adjusted basis)
Consists of(1)
--------------------------------------------------------------------------------------------------------------------------
Global
Total Banking Insurance Private Asset
WPB operations manufacturing Banking management
$m $m $m $m $m
----------------- ---------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Half-year to 30
Jun 2022
----------------- ---------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Net operating
income before
change
in expected
credit losses
and other
credit
impairment
charges(2) 10,922 8,426 1,013 945 538
----------------- ---------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
- net interest
income 7,658 6,132 1,139 388 (1)
-----------------
- net fee
income/(expense) 2,619 2,013 (379) 424 561
-----------------
- other income 645 281 253 133 (22)
----------------- ---------------------------- ----------------------------- ----------------------------- -----------------------------
ECL (573) (562) (7) (4) -
----------------- ---------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Net operating
income 10,349 7,864 1,006 941 538
----------------- ---------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Total operating
expenses (7,411) (5,931) (404) (667) (409)
----------------- ---------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Operating profit 2,938 1,933 602 274 129
----------------- ---------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Share of
profit/(loss) in
associates
and joint
ventures 8 4 4 - -
----------------- ---------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Profit before tax 2,946 1,937 606 274 129
----------------- ---------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Half-year to 30
Jun 2021
----------------- ---------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Net operating
income before
change
in expected
credit losses
and other
credit
impairment
charges(2) 10,980 8,065 1,437 905 573
----------------- ---------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
- net interest
income 6,808 5,382 1,118 310 (2)
-----------------
- net fee
income/(expense) 2,955 2,238 (306) 464 559
-----------------
- other
income/(expense) 1,217 445 625 131 16
----------------- ---------------------------- ----------------------------- ----------------------------- -----------------------------
ECL 38 57 (20) 1 -
----------------- ---------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Net operating
income 11,018 8,122 1,417 906 573
----------------- ---------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Total operating
expenses (7,277) (5,942) (260) (685) (390)
----------------- ---------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Operating profit 3,741 2,180 1,157 221 183
----------------- ---------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Share of
profit/(loss) in
associates
and joint
ventures 10 3 7 - -
----------------- ---------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Profit before tax 3,751 2,183 1,164 221 183
----------------- ---------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
WPB - summary (adjusted basis) (continued)
Consists of(1)
----------------------------------------------------------------------------------------------------------------------
Global
Total Banking Insurance Private Asset
WPB operations manufacturing Banking management
$m $m $m $m $m
----------------- --------------------------- --------------------------- ----------------------------- --------------------------- -----------------------------
Half-year to 31
Dec 2021
----------------- --------------------------- --------------------------- ----------------------------- --------------------------- -----------------------------
Net operating
income before
change
in expected
credit losses
and other
credit
impairment
charges(2) 10,439 7,833 1,132 870 604
----------------- --------------------------- --------------------------- ----------------------------- --------------------------- -----------------------------
- net interest
income 6,953 5,476 1,157 320 -
-----------------
- net fee
income/(expense) 2,789 2,065 (299) 447 576
-----------------
- other
income/(expense) 697 292 274 103 28
----------------- --------------------------- --------------------------- ----------------------------- ---------------------------
ECL 215 201 3 12 (1)
----------------- --------------------------- --------------------------- ----------------------------- --------------------------- -----------------------------
Net operating
income 10,654 8,034 1,135 882 603
----------------- --------------------------- --------------------------- ----------------------------- --------------------------- -----------------------------
Total operating
expenses(2) (7,574) (6,019) (316) (835) (404)
----------------- --------------------------- --------------------------- ----------------------------- --------------------------- -----------------------------
Operating profit 3,080 2,015 819 47 199
----------------- --------------------------- --------------------------- ----------------------------- --------------------------- -----------------------------
Share of profit
in associates
and
joint ventures 24 14 10 - -
----------------- --------------------------- --------------------------- ----------------------------- --------------------------- -----------------------------
Profit before tax 3,104 2,029 829 47 199
----------------- --------------------------- --------------------------- ----------------------------- --------------------------- -----------------------------
1 The results presented for insurance manufacturing operations
are shown before elimination of inter-company transactions with
HSBC non-insurance operations. These eliminations are presented
within Banking operations.
2 Operating expenses in Global Private Banking in 2H21 included
a charge of $0.1bn, which did not meet the criteria to be
classified as a significant item.
WPB insurance manufacturing adjusted results
The following table shows the results of our insurance
manufacturing operations by income statement line item. It shows
the results of insurance manufacturing operations for WPB and for
all global business segments in aggregate, and separately the
insurance distribution income earned by HSBC bank channels.
Adjusted results of insurance manufacturing operations and insurance
distribution income earned by HSBC bank channels(1,2)
Half-year to
30 Jun 30 Jun 31 Dec
2022 2021 2021
--------------------------------------------- ---------------------------------------------
All
global All global All global
WPB businesses WPB businesses WPB businesses
$m $m $m $m $m $m
----------------- --------------------- ---------------------- --------------------- ---------------------- --------------------- ----------------------
Net interest
income 1,139 1,254 1,118 1,205 1,157 1,244
----------------- --------------------- ---------------------- --------------------- ---------------------- --------------------- ----------------------
Net fee expense (379) (398) (306) (330) (299) (306)
----------------- --------------------- ---------------------- --------------------- ---------------------- --------------------- ----------------------
- fee income 78 88 45 56 57 69
-----------------
- fee expense (457) (486) (351) (386) (356) (375)
----------------- --------------------- ---------------------- --------------------- ---------------------- ---------------------
Net
income/(expense)
from financial
instruments held
for trading or
managed
on a fair value
basis 55 45 (2) (6) 1 (1)
----------------- --------------------- ---------------------- --------------------- ---------------------- --------------------- ----------------------
Net
income/(expense)
from assets and
liabilities of
insurance
businesses,
including
related
derivatives,
measured
at fair value
through profit
or loss (3,060) (3,077) 2,656 2,682 1,245 1,254
----------------- --------------------- ---------------------- --------------------- ---------------------- --------------------- ----------------------
Gains less losses
from financial
investments (1) (1) 58 53 28 36
----------------- --------------------- ---------------------- --------------------- ---------------------- --------------------- ----------------------
Net insurance
premium income 7,335 7,702 5,241 5,563 5,028 5,180
----------------- --------------------- ---------------------- --------------------- ---------------------- --------------------- ----------------------
Other operating
income/(expense) 1,010 1,011 38 22 131 130
----------------- --------------------- ---------------------- --------------------- ---------------------- --------------------- ----------------------
- of which: PVIF 915 922 10 (2) 71 75
----------------- --------------------- ---------------------- --------------------- ---------------------- --------------------- ----------------------
Total operating
income 6,099 6,536 8,803 9,189 7,291 7,537
----------------- --------------------- ---------------------- --------------------- ---------------------- --------------------- ----------------------
Net insurance
claims and
benefits paid
and movement in
liabilities to
policyholders (5,086) (5,476) (7,366) (7,680) (6,159) (6,347)
----------------- --------------------- ---------------------- --------------------- ---------------------- --------------------- ----------------------
Net operating
income before
change
in expected
credit losses
and other
credit
impairment
charges(3) 1,013 1,060 1,437 1,509 1,132 1,190
----------------- --------------------- ---------------------- --------------------- ---------------------- --------------------- ----------------------
Change in
expected credit
losses and
other credit
impairment
charges (7) (8) (20) (19) 3 (1)
----------------- --------------------- ---------------------- --------------------- ---------------------- --------------------- ----------------------
Net operating
income 1,006 1,052 1,417 1,490 1,135 1,189
----------------- --------------------- ---------------------- --------------------- ---------------------- --------------------- ----------------------
Total operating
expenses (404) (416) (260) (271) (316) (332)
----------------- --------------------- ---------------------- --------------------- ---------------------- --------------------- ----------------------
Operating profit 602 636 1,157 1,219 819 857
----------------- --------------------- ---------------------- --------------------- ---------------------- --------------------- ----------------------
Share of
profit/(loss) in
associates
and joint
ventures 4 4 7 7 10 10
----------------- --------------------- ---------------------- --------------------- ---------------------- --------------------- ----------------------
Profit before tax
of insurance
manufacturing
operations(4) 606 640 1,164 1,226 829 867
Annualised new
business
premiums of
insurance
manufacturing
operations 1,280 1,320 1,525 1,561 1,272 1,289
Insurance
distribution
income earned
by HSBC bank
channels 431 470 386 430 353 378
----------------- --------------------- ---------------------- --------------------- ---------------------- --------------------- ----------------------
1 Adjusted results are derived by adjusting for period-on-period
effects of foreign currency translation differences, and the effect
of significant items that distort period-on-period comparisons.
There were no significant items included within insurance
manufacturing, and the impact of foreign currency translation on
'All global businesses' profit before tax was 1H21: $36m
unfavourable (reported: $1,262m); 2H21: $12m unfavourable
(reported: $879m).
2 The results presented for insurance manufacturing operations
are shown before elimination of inter-company transactions with
HSBC
non-insurance operations.
3 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
4 The effect on the insurance manufacturing operations of
applying hyperinflation accounting in Argentina resulted in a
decrease in adjusted revenue in 1H22 of $2m (1H21: increase of $6m;
2H21: increase of $5m) and a decrease in profit before tax in 1H22
of $2m (1H21: increase of $6m; 2H21: increase of $4m). These
effects are recorded within 'All global businesses'.
Insurance manufacturing
The following commentary, unless otherwise specified, relates to
the 'All global businesses' results.
HSBC recognises the present value of long-term in-force
insurance contracts and investment contracts with discretionary
participation features ('PVIF') as an asset on the balance
sheet.
The overall balance sheet equity, including PVIF, is therefore a
measure of the embedded value in the insurance manufacturing
entities, and the movement in this embedded value in the period
drives the overall income statement result.
Adjusted profit before tax of $0.6bn decreased by $0.6bn
compared with 1H21.
Net operating income before change in expected credit losses and
other credit impairment charges was $1.1bn, which was $0.5bn lower
than in 1H21. This reflected the following:
-- 'Net expense from assets and liabilities of insurance
businesses, including related derivatives, measured at fair value
through profit or loss' of $3.1bn in 1H22, compared with a net
income of $2.7bn in 1H21. This was primarily due to unfavourable
equity market performances in France and Hong Kong in 1H22,
compared with favourable market performances in 1H21.
This unfavourable movement resulted in a corresponding movement
in liabilities to policyholders and PVIF (see 'Other operating
income' below), reflecting the extent to which policyholders and
shareholders respectively participate in the investment performance
of the associated asset portfolios.
-- Net insurance premium income of $7.7bn was $2.1bn higher than
in 1H21. This increase reflected strong sales in Hong Kong driven
by our whole-of-life propositions.
--
Other operating income of $1.0bn increased by $1.0bn compared
with 1H21, reflecting an increase in the value of new business of
$0.2bn in Hong Kong, a $0.3bn gain from a pricing update for
policyholder funds held on deposit with us in Hong Kong to reflect
the cost of provision of these services, and an increase of $0.3bn
primarily reflecting the effect of sharing lower investment returns
with policyholders in Hong Kong. It also reflected a $0.1bn day one
provisional gain on completion of our acquisition of AXA Singapore
in 1H22.
-- Net insurance claims and benefits paid and movement in
liabilities to policyholders of $5.5bn were $2.2bn lower, primarily
due to a decline in returns on financial assets supporting
contracts where the policyholder is subject to part or all of the
investment risk, mainly in France and Hong Kong. It also reflected
higher sales volumes in Hong Kong.
-- Total operating expenses of $0.4bn increased by $0.1bn
compared with 1H21, reflecting the incorporation of the results of
AXA Singapore in 1H22 and investment in our Pinnacle proposition in
mainland China.
Annualised new business premiums ('ANP') is a measure of new
insurance premium generation by the business. It is calculated as
100% of annualised first-year regular premiums and 10% of single
premiums, before reinsurance ceded. ANP of $1.3bn in 1H22 was
$0.2bn lower due to a higher proportion of sales in Hong Kong
having been generated from single premium products.
Insurance distribution income from HSBC channels included $294m
(1H21: $258m; 2H21: $216m) on HSBC manufactured products, for which
a corresponding fee expense is recognised within insurance
manufacturing, and $175m (1H21: $172m; 2H21: $162m) on products
manufactured by third-party providers. The WPB component of this
distribution income was $265m (1H21: $223m; 2H21: $199m) from HSBC
manufactured products and $166m (1H21: $163m; 2H21: $154m) from
third-party products.
WPB: Wealth adjusted revenue by geography
The following table shows the adjusted revenue of our Wealth
business by region. Our Wealth business comprises investment
distribution, life insurance manufacturing, Global Private Banking
and Asset Management.
Wealth adjusted revenue by geography
Half-year to
---------------------------------------------------------------------------------
30 Jun 30 Jun 31 Dec
2022 2021 2021
$m $m $m
-------------- ------------------------- -------------------------- --------------------------
Europe 1,173 1,186 1,044
-------------- ------------------------- -------------------------- --------------------------
Asia 2,426 3,114 2,614
-------------- ------------------------- -------------------------- --------------------------
MENA 94 84 84
-------------- ------------------------- -------------------------- --------------------------
North America 281 259 268
-------------- ------------------------- -------------------------- --------------------------
Latin America 136 119 127
-------------- ------------------------- -------------------------- --------------------------
Total 4,110 4,762 4,137
-------------- ------------------------- -------------------------- --------------------------
WPB: Wealth balances
The following table shows the wealth balances, which include
invested assets and wealth deposits. Invested assets comprise
customer assets either managed by our Asset Management business
or by external third-party investment managers, as well as
self-directed investments by our customers.
WPB - reported wealth balances(1)
Half-year to
---------------------------------------------------------------------------------
30 Jun 30 Jun 31 Dec
2022 2021 2021
$bn $bn $bn
----------------------------------- ------------------------- -------------------------- --------------------------
Global Private Banking client
assets 311 360 351
----------------------------------- ------------------------- -------------------------- --------------------------
- managed by Global Asset
Management 57 69 67
-----------------------------------
- external managers, direct
securities and other 254 291 284
----------------------------------- ------------------------- --------------------------
Retail wealth balances 398 457 434
----------------------------------- ------------------------- -------------------------- --------------------------
- managed by Global Asset
Management 219 231 229
-----------------------------------
- external managers, direct
securities and other 179 226 205
----------------------------------- ------------------------- --------------------------
Asset Management third-party
distribution 310 317 334
----------------------------------- ------------------------- -------------------------- --------------------------
Reported invested assets(1) 1,019 1,134 1,119
----------------------------------- ------------------------- -------------------------- --------------------------
Wealth deposits (Premier, Jade and
Global Private
Banking)(2) 542 537 551
----------------------------------- ------------------------- -------------------------- --------------------------
Total reported wealth balances 1,561 1,671 1,670
----------------------------------- ------------------------- -------------------------- --------------------------
1 Invested assets are not reported on the Group's balance sheet,
except where it is deemed that we are acting as principal rather
than agent in our role as investment manager.
2 Premier, Jade and Global Private Banking deposits, which
include Prestige deposits in Hang Seng Bank, form part of the total
WPB customer accounts balance of $836bn (30 June 2021: $841bn, 31
December 2021: $859bn) on page 37.
Asset Management: Funds under management
The following table shows the funds under management of our
Asset Management business. Funds under management
represents assets managed, either actively or passively, on
behalf of our customers.
Asset Management - reported funds under management(1)
Half-year to
30 Jun 30 Jun 31 Dec
2022 2021 2021
$bn $bn $bn
---------------------------- --------------------------- ---------------------------- ----------------------------
Opening balance 630 602 616
---------------------------- --------------------------- ---------------------------- ----------------------------
Net new invested assets 20 4 23
---------------------------- --------------------------- ---------------------------- ----------------------------
Net market movements (33) 16 2
---------------------------- --------------------------- ---------------------------- ----------------------------
Foreign exchange and others (32) (6) (11)
Closing balance 585 616 630
---------------------------- --------------------------- ---------------------------- ----------------------------
Asset Management - reported funds under management by geography
At
30 Jun 30 Jun 31 Dec
2022 2021 2021
$bn $bn $bn
---------------------------- --------------------------- ---------------------------- ----------------------------
Europe 317 347 367
---------------------------- --------------------------- ---------------------------- ----------------------------
Asia 170 186 180
---------------------------- --------------------------- ---------------------------- ----------------------------
MENA 5 6 5
---------------------------- --------------------------- ---------------------------- ----------------------------
North America 84 68 69
---------------------------- --------------------------- ---------------------------- ----------------------------
Latin America 9 9 9
---------------------------- --------------------------- ---------------------------- ----------------------------
Closing balance 585 616 630
---------------------------- --------------------------- ---------------------------- ----------------------------
1 Funds under management are not reported on the Group's balance
sheet, except where it is deemed that we are acting as principal
rather than agent in our role as investment manager.
At 30 June 2022, Asset Management funds under management
amounted to $585bn, a decrease of $45bn or 7% compared with 31
December 2021. The decrease was driven by an adverse market
performance, reflecting the effects of macroeconomic uncertainty on
financial markets, and the unfavourable impact of
foreign currency translation differences. Despite this, we
delivered robust net new invested assets of $20bn, primarily from
money market solutions, passive investment products and private
equity investment products.
Global Private Banking client assets(1)
The following table shows the client assets of our Global
Private Banking business.
Global Private Banking - reported client assets(2)
Half-year to
30 Jun 30 Jun 31 Dec
2022 2021 2021
$bn $bn $bn
----------------------------- --------------------------- ---------------------------- ----------------------------
Opening balance 423 394 427
----------------------------- --------------------------- ---------------------------- ----------------------------
Net new invested assets 14 20 (1)
----------------------------- --------------------------- ---------------------------- ----------------------------
Increase/(decrease) in
deposits (2) - 4
----------------------------- --------------------------- ---------------------------- ----------------------------
Net market movements (43) 16 1
Foreign exchange and others (10) (3) (8)
----------------------------- --------------------------- ---------------------------- ----------------------------
Closing balance 382 427 423
----------------------------- --------------------------- ---------------------------- ----------------------------
Global Private Banking - reported client assets by geography
At
30 Jun 30 Jun 31 Dec
2022 2021 2021
$bn $bn $bn
---------------- ------------------------- -------------------------- --------------------------
Europe 154 176 174
---------------- ------------------------- -------------------------- --------------------------
Asia 167 193 178
---------------- ------------------------- -------------------------- --------------------------
North America 61 58 71
Closing balance 382 427 423
---------------- ------------------------- -------------------------- --------------------------
1 Client assets are translated at the rates of exchange
applicable for their respective period-ends, with the effects of
currency translation reported separately.
2 Client assets are not reported on the Group's balance sheet,
except where it is deemed that we are acting as principal rather
than agent in our role as investment manager. Customer deposits
included in these client assets are recorded on our balance
sheet.
Retail invested assets
The following table shows the invested assets of our retail
customers. These comprise customer assets either managed by our
Asset Management business or by external third-party
investment managers as well as self-directed investments by our
customers. Retail invested assets are not reported on the Group's
balance sheet, except where it is deemed that we are acting as
principal rather than agent in our role as investment manager.
Retail invested assets
Half-year to
30 Jun 30 Jun 31 Dec
2022 2021 2021
$bn $bn $bn
---------------------------- --------------------------- ---------------------------- ----------------------------
Opening balance 434 407 457
---------------------------- --------------------------- ---------------------------- ----------------------------
Net new invested assets(1) 12 16 10
---------------------------- --------------------------- ---------------------------- ----------------------------
Net market movements (27) 22 (17)
---------------------------- --------------------------- ---------------------------- ----------------------------
Foreign exchange and others (21) 12 (16)
---------------------------- --------------------------- ---------------------------- ----------------------------
Closing balance 398 457 434
---------------------------- --------------------------- ---------------------------- ----------------------------
Retail invested assets by geography
At
30 Jun 30 Jun 31 Dec
2022 2021 2021
$bn $bn $bn
---------------------------- --------------------------- ---------------------------- ----------------------------
Europe 65 81 81
---------------------------- --------------------------- ---------------------------- ----------------------------
Asia 284 316 293
---------------------------- --------------------------- ---------------------------- ----------------------------
MENA 4 5 4
---------------------------- --------------------------- ---------------------------- ----------------------------
North America 37 46 47
---------------------------- --------------------------- ---------------------------- ----------------------------
Latin America 8 9 9
---------------------------- --------------------------- ---------------------------- ----------------------------
Closing balance 398 457 434
---------------------------- --------------------------- ---------------------------- ----------------------------
1 'Retail net new invested assets' covers nine markets,
comprising Hong Kong including Hang Seng Bank (Hong Kong), mainland
China, Malaysia, Singapore, HSBC UK, UAE, US, Canada and Mexico.
The 'net new invested assets' related to all other geographies is
reported in 'Foreign exchange and other'.
WPB invested assets
'Net new invested assets' represents the net customer inflows
from retail invested assets, Asset Management third-party
distribution and Global Private Banking invested assets. It
excludes all customer deposits. The 'net new invested assets' in
the table below is non-additive from the tables above, as net new
invested assets managed by Asset Management that are generated by
retail clients or Global Private Banking will be recorded in both
businesses.
WPB: Invested assets
Half-year to
30 Jun 30 Jun 31 Dec
2022 2021 2021
$bn $bn $bn
---------------------------- -------------------------- ---------------------------- ---------------------------
Opening balance 1,119 1,050 1,134
---------------------------- -------------------------- ---------------------------- ---------------------------
Net new invested assets 39 36 28
---------------------------- -------------------------- ---------------------------- ---------------------------
Net market movements (85) 44 (10)
---------------------------- -------------------------- ---------------------------- ---------------------------
Foreign exchange and others (54) 4 (33)
---------------------------- -------------------------- ---------------------------- ---------------------------
Closing balance 1,019 1,134 1,119
---------------------------- -------------------------- ---------------------------- ---------------------------
WPB: Net new invested assets by geography
At
30 Jun 30 Jun 31 Dec
2022 2021 2021
$bn $bn $bn
---------------------------- -------------------------- ---------------------------- ---------------------------
Europe - (1) 18
---------------------------- -------------------------- ---------------------------- ---------------------------
Asia 22 27 10
---------------------------- -------------------------- ---------------------------- ---------------------------
MENA - - -
---------------------------- -------------------------- ---------------------------- ---------------------------
North America 17 10 -
---------------------------- -------------------------- ---------------------------- ---------------------------
Latin America - - -
---------------------------- -------------------------- ---------------------------- ---------------------------
Total 39 36 28
---------------------------- -------------------------- ---------------------------- ---------------------------
Geographical regions
Page
Analysis of reported results
by geographical regions 46
-------------------------------------- ------------
Reconciliation of reported and
adjusted items - geographical
regions 48
-------------------------------------- ------------
Analysis by country/territory 54
-------------------------------------- ------------ ----------------------------------------------------------------------------------------------------------------------------------------------------------
Analysis of reported results by geographical regions
HSBC reported profit/(loss) before tax and balance sheet data
Half-year to 30 Jun 2022
North Latin Intra-HSBC
Europe Asia MENA America America items Total
$m $m $m $m $m $m $m
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Net interest income 3,578 6,785 702 1,527 1,260 599 14,451
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Net fee income 1,847 2,527 431 997 263 (1) 6,064
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Net income from financial
instruments
held for trading or managed
on a fair value basis 1,692 2,286 310 294 299 40 4,921
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Net income/(expense) from
assets
and liabilities of
insurance
businesses, including
related
derivatives, measured at
fair
value through profit and
loss (1,709) (1,354) - - 11 1 (3,051)
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Changes in fair value of
other
financial instruments
mandatorily
measured at fair value
through
profit or loss 691 4 3 (7) 19 (642) 68
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Other income/(expense)(1) 3,253 2,701 (108) 378 (71) (3,370) 2,783
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Net operating income before
change in expected credit
losses
and other credit impairment
charges(2) 9,352 12,949 1,338 3,189 1,781 (3,373) 25,236
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Change in expected credit
losses
and other credit impairment
charges (302) (529) 49 (47) (261) - (1,090)
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Net operating income 9,050 12,420 1,387 3,142 1,520 (3,373) 24,146
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Total operating expenses
excluding
impairment of goodwill and
other intangible assets (8,102) (7,443) (755) (2,281) (1,135) 3,373 (16,343)
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Impairment of goodwill and
other intangible assets (42) (28) (1) (3) (2) - (76)
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Operating profit 906 4,949 631 858 383 - 7,727
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Share of profit/(loss) in
associates
and joint ventures (23) 1,351 117 - 4 - 1,449
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Profit before tax 883 6,300 748 858 387 - 9,176
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
%% %% % %
---------------------------- --------------------------- ------------------------ --------------------- ----------------------- -------------------- ------------------------ ----------------------
Share of HSBC's profit
before
tax 9.5 68.7 8.2 9.4 4.2 100.0
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Cost efficiency ratio 87.1 57.7 56.5 71.6 63.8 65.1
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Balance sheet data $m $m $m $m $m $m $m
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Loans and advances to
customers
(net) 368,923 492,548 28,348 116,075 22,462 - 1,028,356
Total assets 1,356,981 1,311,551 72,791 366,751 50,024 (172,678) 2,985,420
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Customer accounts 628,977 779,153 44,008 168,699 30,464 - 1,651,301
Risk-weighted assets(3) 257,609 410,736 60,856 111,990 37,870 - 851,743
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Half-year to 30 Jun 2021
---------------------------- --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Net interest income 3,144 6,266 650 1,432 1,009 597 13,098
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Net fee income 1,925 3,115 370 1,009 255 - 6,674
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Net income from financial
instruments
held for trading or managed
on a fair value basis 1,439 2,010 205 258 235 37 4,184
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Net income from assets and
liabilities of insurance
businesses,
including related
derivatives,
measured at fair value
through
profit and loss 1,074 1,700 - - 21 - 2,795
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Changes in fair value of
other
financial instruments
mandatorily
measured at fair value
through
profit or loss 1,124 (3) (3) 31 36 (637) 548
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Other income/(expense)(1) 1,523 168 30 321 (71) (3,719) (1,748)
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Net operating income before
change in expected credit
losses
and other credit impairment
charges(2) 10,229 13,256 1,252 3,051 1,485 (3,722) 25,551
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Change in expected credit
losses
and other credit impairment
charges 670 (207) 116 212 (72) - 719
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Net operating income 10,899 13,049 1,368 3,263 1,413 (3,722) 26,270
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Total operating expenses
excluding
impairment of goodwill and
other intangible assets (9,071) (7,457) (782) (2,448) (1,009) 3,722 (17,045)
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Impairment of goodwill and
other intangible assets (13) (15) (3) (10) (1) - (42)
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Operating profit 1,815 5,577 583 805 403 - 9,183
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Share of profit in
associates
and joint ventures 153 1,359 140 - 4 - 1,656
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Profit before tax 1,968 6,936 723 805 407 - 10,839
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
%% %% % %
---------------------------- --------------------------- ------------------------ --------------------- ----------------------- -------------------- ------------------------ ----------------------
Share of HSBC's profit
before
tax 18.2 64.0 6.7 7.4 3.7 100.0
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Cost efficiency ratio 88.8 56.4 62.7 80.6 68.0 66.9
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Balance sheet data $m $m $m $m $m $m $m
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Loans and advances to
customers
(net) 402,778 502,360 27,608 106,414 20,351 - 1,059,511
Total assets 1,376,064 1,249,145 68,351 383,082 49,102 (149,739) 2,976,005
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
Customer accounts 663,996 759,948 41,086 176,152 27,909 - 1,669,091
Risk-weighted assets(3) 269,873 407,117 59,476 115,208 34,845 - 862,292
---------------------------- --------------------------- ------------------------- --------------------- ------------------------ -------------------- ------------------------ -----------------------
HSBC reported profit/(loss) before tax and balance sheet data (continued)
Half-year to 31 Dec 2021
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
North Latin Intra-HSBC
Europe Asia MENA America America items Total
$m $m $m $m $m $m $m
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
Net interest income 3,310 6,330 649 1,413 1,186 503 13,391
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
Net fee income 1,957 2,756 404 1,047 259 - 6,423
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
Net income from
financial
instruments
held for trading or
managed
on a fair value
basis 1,163 1,633 226 168 241 129 3,560
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
Net income from
assets and
liabilities of
insurance
businesses,
including related
derivatives,
measured at fair
value through
profit and loss 596 640 - - 24 (2) 1,258
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
Changes in fair
value of other
financial
instruments
mandatorily
measured at fair
value through
profit or loss 849 - - 23 4 (626) 250
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
Other
income/(expense)(1) 2,000 1,148 29 352 (141) (4,269) (881)
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
Net operating income
before
change in expected
credit losses
and other credit
impairment
charges(2) 9,875 12,507 1,308 3,003 1,573 (4,265) 24,001
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
Change in expected
credit losses
and other credit
impairment
charges 931 (633) 16 26 (131) - 209
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
Net operating income 10,806 11,874 1,324 3,029 1,442 (4,265) 24,210
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
Total operating
expenses excluding
impairment of
goodwill and
other intangible
assets (9,028) (7,679) (754) (2,457) (1,189) 4,265 (16,842)
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
Impairment of
goodwill and
other intangible
assets (82) (9) (5) (3) (592) - (691)
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
Operating
profit/(loss) 1,696 4,186 565 569 (339) - 6,677
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
Share of
profit/(loss) in
associates
and joint ventures 115 1,127 135 - 13 - 1,390
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
Profit/(loss) before
tax 1,811 5,313 700 569 (326) - 8,067
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
%% %% % %
-------------------- ----------------------- ------------------------ --------------------- ------------------------ -------------------- ------------------------- ---------------------
Share of HSBC's
profit before
tax 22.3 65.9 8.7 7.1 (4.0) 100.0
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
Cost efficiency
ratio 92.3 61.5 58.0 81.9 113.2 73.1
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
Balance sheet data $m $m $m $m $m $m $m
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
Loans and advances
to customers
(net) 397,090 492,525 26,375 108,717 21,107 - 1,045,814
Total assets 1,354,483 1,261,707 70,974 362,150 46,602 (137,977) 2,957,939
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
Customer accounts 667,769 792,098 42,629 178,565 29,513 - 1,710,574
Risk-weighted
assets(3) 261,115 396,206 60,223 110,412 35,915 - 838,263
-------------------- ----------------------- ------------------------- --------------------- ------------------------- -------------------- ------------------------- ----------------------
1 Other income/(expense) in this context comprises, where
applicable, net income/(expense) from other financial instruments
designated at fair value, gains less losses from financial
investments, dividend income, net insurance premium income and
other operating income less net insurance claims and benefits paid
and movement in liabilities to policyholders.
2 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
3 Risk-weighted assets are non-additive across geographical
regions due to market risk diversification effects within the
Group.
Reconciliation of reported and adjusted items - geographical regions
Reconciliation of reported and adjusted items - geographical regions
and selected countries/territories
Half-year to 30 Jun 2022
-----------------------------------------------------------------------------------------------------------------------------
North Latin
Europe Asia MENA America America Total
$m $m $m $m $m $m
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Revenue(1)
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Reported(2) 9,352 12,949 1,338 3,189 1,781 25,236
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Significant
items 437 (166) (5) (105) - 454
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
- customer
redress
programmes 14 - - - - 14
----------------
- disposals,
acquisitions
and investment
in new
businesses(3) 288 - - - - 288
----------------
- fair value
movements on
financial
instruments(4) 308 (76) (5) (6) (1) 220
----------------
- restructuring
and other
related
costs(2,5) (173) (90) - (99) 1 (68)
---------------- ------------------ ----------------- ------------------ -------------------- --------------------
Adjusted(2) 9,789 12,783 1,333 3,084 1,781 25,690
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
ECL
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Reported (302) (529) 49 (47) (261) (1,090)
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Adjusted (302) (529) 49 (47) (261) (1,090)
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Operating
expenses
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Reported(2) (8,144) (7,471) (756) (2,284) (1,137) (16,419)
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Significant
items 835 281 22 155 43 1,043
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
- customer
redress
programmes (6) - - - - (6)
- impairment of
goodwill and
other
intangibles 9 - - - - 9
- restructuring
and other
related
costs(2) 832 281 22 155 43 1,040
Adjusted(2) (7,309) (7,190) (734) (2,129) (1,094) (15,376)
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Share of profit
in associates
and joint
ventures
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Reported (23) 1,351 117 - 4 1,449
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Adjusted (23) 1,351 117 - 4 1,449
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Profit before
tax
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Reported 883 6,300 748 858 387 9,176
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Significant
items 1,272 115 17 50 43 1,497
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
- revenue(2) 437 (166) (5) (105) - 454
----------------
- operating
expenses(2) 835 281 22 155 43 1,043
---------------- ------------------ ----------------- ------------------ -------------------- --------------------
Adjusted profit
before tax 2,155 6,415 765 908 430 10,673
Reported tax
(charge)/credit 1,536 (1,045) (167) (205) (80) 39
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Tax significant
items (1,962) (14) (3) (10) (12) (2,001)
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
- tax
charge/(credit)
on significant
items (197) (14) (3) (10) (12) (236)
----------------
- recognition of
losses on HSBC
Holdings (1,765) - - - - (1,765)
---------------- ------------------ ----------------- ------------------ -------------------- --------------------
Adjusted profit
after tax 1,729 5,356 595 693 338 8,711
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Loans and
advances to
customers (net)
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Reported 368,923 492,548 28,348 116,075 22,462 1,028,356
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Adjusted 368,923 492,548 28,348 116,075 22,462 1,028,356
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Customer
accounts
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Reported 628,977 779,153 44,008 168,699 30,464 1,651,301
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
Adjusted 628,977 779,153 44,008 168,699 30,464 1,651,301
---------------- ------------------ ----------------- ------------------ -------------------- -------------------- ----------------------
1 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
2 Amounts are non-additive across geographical regions due to
inter-company transactions within the Group.
3 Includes losses from classifying businesses as held-for-sale
as part of a broader restructuring of our European business.
4 Includes fair value movements on non-qualifying hedges and
debt valuation adjustments on derivatives.
5 Comprises gains and losses relating to the business update in
February 2020, including losses associated with RWA reduction
commitments.
Reconciliation of reported and adjusted items - geographical regions
and selected countries/territories (continued)
Half-year to 30 Jun 2022
--------------------------------------------------------------------------------------------------
Hong Mainland
UK(1) Kong China US Mexico
$m $m $m $m $m
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Revenue(2)
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Reported 8,811 6,974 2,157 2,122 1,296
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Significant items 127 (16) (38) (101) 1
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
- customer redress 14 - - - -
programmes
- fair value
movement on
financial
instruments(3) 318 (56) (2) (4) (1)
------------------
- restructuring
and other related
costs(4) (205) 40 (36) (97) 2
------------------ ------------------ ------------------ ------------------ ------------------
Adjusted 8,938 6,958 2,119 2,021 1,297
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
ECL
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Reported (196) (419) (139) (21) (243)
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Adjusted (196) (419) (139) (21) (243)
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Operating expenses
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Reported (6,465) (4,065) (1,422) (1,696) (790)
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Significant items 694 132 15 127 36
- customer redress (6) - - - -
programmes
- restructuring
and other related
costs 700 132 15 127 36
Adjusted (5,771) (3,933) (1,407) (1,569) (754)
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Share of profit in
associates and
joint ventures
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Reported (23) (1) 1,344 - 4
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Adjusted (23) (1) 1,344 - 4
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Profit before tax
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Reported 2,127 2,489 1,940 405 267
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Significant items 821 116 (23) 26 37
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
- revenue 127 (16) (38) (101) 1
------------------
- operating
expenses 694 132 15 127 36
Adjusted profit
before tax 2,948 2,605 1,917 431 304
Reported tax
(charge)/credit 1,653 (367) (103) (101) (69)
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Tax significant
items (1,869) (18) 6 (7) (11)
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
- tax
charge/(credit)
on significant
items (104) (18) 6 (7) (11)
------------------
- recognition of (1,765) - - - -
losses on HSBC
Holdings
------------------ ------------------ ------------------ ------------------ ------------------
Adjusted profit
after tax 2,732 2,220 1,820 323 224
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Loans and advances
to customers (net)
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Reported 285,097 310,779 52,922 56,819 18,996
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Adjusted 285,097 310,779 52,922 56,819 18,996
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Customer accounts
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Reported 505,195 543,400 55,580 101,137 23,659
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
Adjusted 505,195 543,400 55,580 101,137 23,659
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
1 UK includes HSBC UK Bank plc (ring-fenced bank) and HSBC Bank plc (non-ring-fenced bank).
2 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
3 Includes fair value movements on non-qualifying hedges and
debt valuation adjustments on derivatives.
4 Comprises gains and losses relating to the business update in
February 2020, including losses associated with RWA reduction
commitments.
Reconciliation of reported and adjusted items - geographical regions
and selected countries/territories (continued)
Half-year to 30 Jun 2021
----------------------------------------------------------------------------------------------------------------------------------------
North Latin
Europe Asia MENA America America Total
$m $m $m $m $m $m
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Revenue(1)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported(2) 10,229 13,256 1,252 3,051 1,485 25,551
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation(2) (743) (244) (89) (18) (53) (1,069)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Significant
items 90 (53) (1) 3 7 252
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
- customer
redress
programmes (18) - - - - (18)
- fair value
movements on
financial
instruments(3) 188 5 - - 1 194
----------------
- restructuring
and other
related
costs(2,4) (91) (59) - 3 6 70
----------------
- currency
translation on
significant
items 11 1 (1) - - 6
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted(2) 9,576 12,959 1,162 3,036 1,439 24,734
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
ECL
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 670 (207) 116 212 (72) 719
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (42) 5 (7) (2) 2 (44)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 628 (202) 109 210 (70) 675
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Operating
expenses
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported(2) (9,084) (7,472) (785) (2,458) (1,010) (17,087)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation(2) 576 143 52 11 45 749
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Significant
items 590 197 21 190 26 818
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
- customer
redress
programmes 17 - - - - 17
- restructuring
and other
related
costs(2) 617 202 22 191 27 848
- currency
translation on
significant
items (44) (5) (1) (1) (1) (47)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted(2) (7,918) (7,132) (712) (2,257) (939) (15,520)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Share of profit
in associates
and joint
ventures
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 153 1,359 140 - 4 1,656
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (6) (1) - - - (7)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 147 1,358 140 - 4 1,649
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Profit before
tax
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 1,968 6,936 723 805 407 10,839
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (215) (97) (44) (9) (6) (371)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Significant
items 680 144 20 193 33 1,070
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
- revenue(2) 90 (53) (1) 3 7 252
----------------
- operating
expenses(2) 590 197 21 190 26 818
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted profit
before tax 2,433 6,983 699 989 434 11,538
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported tax
(charge)/credit (738) (1,123) (123) (316) (117) (2,417)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation 63 29 12 2 3 109
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Tax significant
items (67) (28) (4) (39) (9) (147)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
- tax
charge/(credit)
on significant
items (70) (29) (4) (39) (11) (153)
- currency
translation on
significant
items 3 1 - - 2 6
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted profit
after tax 1,691 5,861 584 636 311 9,083
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Loans and
advances to
customers (net)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 402,778 502,360 27,608 106,414 20,351 1,059,511
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (47,474) (12,973) (1,773) (2,182) (554) (64,956)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 355,304 489,387 25,835 104,232 19,797 994,555
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Customer
accounts
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 663,996 759,948 41,086 176,152 27,909 1,669,091
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (78,133) (18,216) (3,225) (2,352) (1,223) (103,149)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 585,863 741,732 37,861 173,800 26,686 1,565,942
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
1 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
2 Amounts are non-additive across geographical regions due to
inter-company transactions within the Group.
3 Includes fair value movements on non-qualifying hedges and
debt valuation adjustments on derivatives.
4 Comprises gains and losses relating to the business update in
February 2020, including losses associated with RWA reduction
commitments.
Reconciliation of reported and adjusted items - geographical regions
and selected countries/territories (continued)
Half-year to 30 Jun 2021
-----------------------------------------------------------------------------------------------------------------
Hong Mainland
UK(1) Kong China US Mexico
$m $m $m $m $m
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Revenue(2)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 8,179 7,661 1,791 2,048 1,149
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (535) (59) (3) - (5)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Significant
items 122 25 (21) 4 16
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
- customer (18) - - - -
redress
programmes
- fair value
movements on
financial
instruments(3) 186 2 - - 1
----------------
- restructuring
and other
related costs (49) 23 (21) 4 15
----------------
- currency 3 - - - -
translation on
significant
items
---------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 7,766 7,627 1,767 2,052 1,160
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
ECL
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 655 (91) (2) 174 (68)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (41) 1 - - -
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 614 (90) (2) 174 (68)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Operating
expenses
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported (7,307) (3,945) (1,306) (1,849) (725)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation 419 29 3 - 4
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Significant
items 537 85 11 153 10
- customer 17 - - - -
redress
programmes
- restructuring
and other
related costs 558 86 11 153 10
- currency
translation on
significant
items (38) (1) - - -
---------------- --------------------- --------------------- --------------------- ---------------------
Adjusted (6,351) (3,831) (1,292) (1,696) (711)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Share of profit
in associates
and joint
ventures
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 153 8 1,348 - 4
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (6) - (1) - -
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 147 8 1,347 - 4
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Profit before
tax
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 1,680 3,633 1,831 373 360
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (163) (29) (1) - (1)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Significant
items 659 110 (10) 157 26
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
- revenue 122 25 (21) 4 16
----------------
- operating
expenses 537 85 11 153 10
---------------- --------------------- --------------------- --------------------- ---------------------
Adjusted profit
before tax 2,176 3,714 1,820 530 385
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported tax
(charge)/credit (581) (556) (111) (209) (96)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation 42 5 1 - -
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Tax significant
items (82) (18) 3 (38) (8)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
- tax
charge/(credit)
on significant
items (87) (18) 3 (38) (8)
- currency 5 - - - -
translation on
significant
items
---------------- --------------------- --------------------- --------------------- ---------------------
Adjusted profit
after tax 1,555 3,145 1,713 283 281
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Loans and
advances to
customers (net)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 313,966 328,913 51,123 51,985 17,793
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (37,606) (3,392) (1,800) - (252)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 276,360 325,521 49,323 51,985 17,541
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Customer
accounts
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 534,034 529,172 57,227 110,579 22,516
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (63,965) (5,456) (2,015) - (318)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 470,069 523,716 55,212 110,579 22,198
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
1 UK includes HSBC UK Bank plc (ring-fenced bank) and HSBC Bank plc (non-ring-fenced bank).
2 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
3 Includes fair value movements on non-qualifying hedges and
debt valuation adjustments on derivatives.
Reconciliation of reported and adjusted items - geographical regions
and selected countries/territories (continued)
Half-year to 31 Dec 2021
----------------------------------------------------------------------------------------------------------------------------------------
North Latin
Europe Asia MENA America America Total
$m $m $m $m $m $m
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Revenue(1)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported(2) 9,875 12,507 1,308 3,003 1,573 24,001
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation(2) (503) (147) (74) (9) (35) (711)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Significant
items(2) 44 (108) - 7 (2) 287
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
- customer
redress
programmes 7 - - - - 7
- fair value
movements on
financial
instruments(3) 38 6 - 5 (1) 48
----------------
- restructuring
and other
related
costs(2,4) 1 (116) - 2 (1) 237
----------------
- currency
translation on
significant
items (2) 2 - - - (5)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted(2) 9,416 12,252 1,234 3,001 1,536 23,577
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
ECL
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 931 (633) 16 26 (131) 209
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (37) 7 3 - (8) (35)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 894 (626) 19 26 (139) 174
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Operating
expenses
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported(2) (9,110) (7,688) (759) (2,460) (1,781) (17,533)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation(2) 406 94 32 6 29 510
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Significant
items(2) 699 303 32 241 647 1,576
- customer
redress
programmes 32 - - - - 32
- impairment of
goodwill and
other
intangibles - - - - 587 587
- restructuring
and other
related
costs(2) 701 307 34 241 56 988
- currency
translation on
significant
items (34) (4) (2) - 4 (31)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted(2) (8,005) (7,291) (695) (2,213) (1,105) (15,447)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Share of
profit/(loss) in
associates
and joint
ventures
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 115 1,127 135 - 13 1,390
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (5) (9) 1 - - (13)
Adjusted 110 1,118 136 - 13 1,377
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Profit/(loss)
before tax
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 1,811 5,313 700 569 (326) 8,067
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (139) (55) (38) (3) (14) (249)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Significant
items 743 195 32 248 645 1,863
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
- revenue(2) 44 (108) - 7 (2) 287
----------------
- operating
expenses(2) 699 303 32 241 647 1,576
Adjusted profit
before tax 2,415 5,453 694 814 305 9,681
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported tax
(charge)/credit (514) (958) (129) (27) (168) (1,796)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation 22 13 12 1 5 53
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Tax significant
items (77) (16) (6) (54) (14) (167)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
- tax
charge/(credit)
on significant
items (82) (16) (7) (54) (14) (173)
- currency
translation on
significant
items 5 - 1 - - 6
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted profit
after tax 1,846 4,492 571 734 128 7,771
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Loans and
advances to
customers (net)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 397,090 492,525 26,375 108,717 21,107 1,045,814
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (38,009) (11,318) (802) (1,024) 41 (51,112)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 359,081 481,207 25,573 107,693 21,148 994,702
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Customer
accounts
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 667,769 792,098 42,629 178,565 29,513 1,710,574
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (64,037) (15,936) (1,995) (1,097) (335) (83,400)
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 603,732 776,162 40,634 177,468 29,178 1,627,174
---------------- --------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
1 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
2 Amounts are non-additive across geographical regions due to
inter-company transactions within the Group.
3 Includes fair value movements on non-qualifying hedges and
debt valuation adjustments on derivatives.
4 Comprises gains and losses relating to the business update in
February 2020, including losses associated with RWA reduction
commitments.
Reconciliation of reported and adjusted items - geographical regions
and selected countries/territories (continued)
Half-year to 31 Dec 2021
-----------------------------------------------------------------------------------------------------------------
Hong Mainland
UK(1) Kong China US Mexico
$m $m $m $m $m
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Revenue(2)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 8,236 6,802 1,943 1,958 1,192
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (399) (33) (15) - 5
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Significant
items (130) 36 (19) 10 -
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
- customer 7 - - - -
redress
programmes
- fair value
movements on
financial
instruments(3) 34 5 - 5 (1)
----------------
- restructuring
and other
related
costs(4) (178) 31 (20) 5 -
----------------
- currency
translation on
significant
items 7 - 1 - 1
---------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 7,707 6,805 1,909 1,968 1,197
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
ECL
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 990 (517) (87) 31 (156)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (40) 4 2 - (5)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 950 (513) (85) 31 (161)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Operating
expenses
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported (7,501) (4,010) (1,467) (1,834) (840)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation 313 20 11 - (9)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Significant
items 592 140 20 202 52
- customer 32 - - - -
redress
programmes
- restructuring
and other
related costs 586 141 21 202 49
- currency
translation on
significant
items (26) (1) (1) - 3
---------------- --------------------- --------------------- --------------------- ---------------------
Adjusted (6,596) (3,850) (1,436) (1,632) (797)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Share of profit
in associates
and joint
ventures
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 114 8 1,113 - 13
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (4) - (9) - -
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 110 8 1,104 - 13
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Profit/(loss)
before tax
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 1,839 2,283 1,502 155 209
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (130) (9) (11) - (9)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Significant
items 462 176 1 212 52
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
- revenue (130) 36 (19) 10 -
----------------
- operating
expenses 592 140 20 202 52
---------------- --------------------- --------------------- --------------------- ---------------------
Adjusted profit
before tax 2,171 2,450 1,492 367 252
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported tax
(charge)/credit (498) (377) (148) 57 (112)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation 23 2 1 - (1)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Tax significant
items (56) (29) - (50) (14)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
- tax
charge/(credit)
on significant
items (59) (29) - (50) (14)
- currency 3 - - - -
translation on
significant
items
---------------- --------------------- --------------------- --------------------- ---------------------
Adjusted profit
after tax 1,640 2,046 1,345 374 125
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Loans and
advances to
customers (net)
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 306,464 311,947 54,239 52,678 18,043
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (30,977) (1,910) (2,733) 2 227
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 275,487 310,037 51,506 52,680 18,270
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Customer
accounts
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Reported 535,797 549,429 59,266 111,921 23,583
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (54,158) (3,365) (2,986) - 297
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 481,639 546,064 56,280 111,921 23,880
---------------- --------------------- --------------------- --------------------- --------------------- ---------------------
1 UK includes HSBC UK Bank plc (ring-fenced bank) and HSBC Bank plc (non-ring-fenced bank).
2 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
3 Includes fair value movements on non-qualifying hedges and
debt valuation adjustments on derivatives.
4 Comprises losses associated with RWA reduction commitments we
made at our business update in February 2020.
Analysis by country/territory
Profit/(loss) before tax by country/territory within global businesses
Wealth
and Global
Personal Commercial Banking Corporate
Banking Banking and Markets Centre Total
$m $m $m $m $m
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
Europe 740 1,468 148 (1,473) 883
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
- UK(1) 614 1,203 (54) 364 2,127
--------------------
of which: HSBC UK
Bank plc
(ring-fenced
bank) 843 1,515 71 (159) 2,270
--------------------
of which: HSBC
Bank plc
(non-ring-fenced
bank) 112 113 264 (209) 280
--------------------
of which:
Holdings and
other(2) (341) (425) (389) 732 (423)
--------------------
- France 117 143 53 (82) 231
--------------------
- Germany 4 36 93 (65) 68
--------------------
- Switzerland 11 (42) (1) (12) (44)
--------------------
- other(2) (6) 128 57 (1,678) (1,499)
-------------------- ---------------------------- ---------------------------- --------------------------------- ----------------------------
Asia 1,741 1,276 1,832 1,451 6,300
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
- Hong Kong 1,570 567 518 (166) 2,489
--------------------
- Australia 60 84 91 (22) 213
--------------------
- India 33 156 324 131 644
--------------------
- Indonesia 8 44 52 (2) 102
--------------------
- mainland China (56) 137 310 1,549 1,940
--------------------
- Malaysia 45 34 115 (15) 179
--------------------
- Singapore 65 73 144 (21) 261
--------------------
- Taiwan 19 15 68 (7) 95
--------------------
- other (3) 166 210 4 377
-------------------- ---------------------------- ---------------------------- --------------------------------- ----------------------------
Middle East and
North Africa 114 120 442 72 748
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
- Egypt 48 15 94 (2) 155
--------------------
- UAE 38 76 187 (39) 262
--------------------
- Saudi Arabia 12 - 54 118 184
--------------------
- other 16 29 107 (5) 147
-------------------- ---------------------------- ---------------------------- --------------------------------- ----------------------------
North America 224 499 327 (192) 858
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
- US 92 220 255 (162) 405
--------------------
- Canada 98 263 54 (26) 389
--------------------
- other 34 16 18 (4) 64
-------------------- ---------------------------- ---------------------------- --------------------------------- ----------------------------
Latin America 108 148 145 (14) 387
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
- Mexico 123 112 86 (54) 267
--------------------
- other (15) 36 59 40 120
-------------------- ---------------------------- ---------------------------- --------------------------------- ----------------------------
Half-year to 30 Jun
2022 2,927 3,511 2,894 (156) 9,176
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
Europe 853 1,348 111 (344) 1,968
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
- UK(1) 654 1,156 (42) (88) 1,680
--------------------
of which: HSBC UK
Bank plc
(ring-fenced
bank) 802 1,403 58 (125) 2,138
--------------------
of which: HSBC
Bank plc
(non-ring-fenced
bank) 115 113 327 22 577
--------------------
of which:
Holdings and
other (263) (360) (427) 15 (1,035)
--------------------
- France 164 52 (41) (72) 103
--------------------
- Germany 11 41 116 105 273
--------------------
- Switzerland 20 12 (1) (12) 19
--------------------
- other 4 87 79 (277) (107)
-------------------- ---------------------------- ---------------------------- --------------------------------- ----------------------------
Asia 2,544 1,259 1,953 1,180 6,936
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
- Hong Kong 2,310 774 767 (218) 3,633
--------------------
- Australia 83 62 74 (6) 213
--------------------
- India (11) 146 317 77 529
--------------------
- Indonesia 18 (8) 59 (5) 64
--------------------
- mainland China (3) 171 304 1,359 1,831
--------------------
- Malaysia 36 (68) 59 (10) 17
--------------------
- Singapore 96 54 134 (7) 277
--------------------
- Taiwan 11 7 58 (1) 75
--------------------
- other 4 121 181 (9) 297
-------------------- ---------------------------- ---------------------------- --------------------------------- ----------------------------
Middle East and
North Africa 80 145 402 96 723
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
- Egypt 36 18 77 (4) 127
--------------------
- UAE 37 22 188 (35) 212
--------------------
- Saudi Arabia 11 - 23 139 173
--------------------
- other (4) 105 114 (4) 211
-------------------- ---------------------------- ---------------------------- --------------------------------- ----------------------------
North America 4 522 419 (140) 805
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
- US (86) 243 318 (102) 373
--------------------
- Canada 72 274 85 (36) 395
--------------------
- other 18 5 16 (2) 37
-------------------- ---------------------------- ---------------------------- --------------------------------- ----------------------------
Latin America 165 102 174 (34) 407
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
- Mexico 178 73 134 (25) 360
--------------------
- other (13) 29 40 (9) 47
-------------------- ---------------------------- ---------------------------- --------------------------------- ----------------------------
Half-year to 30 Jun
2021 3,646 3,376 3,059 758 10,839
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
Profit/(loss) before tax by country/territory within global businesses
(continued)
Wealth
and Global
Personal Commercial Banking Corporate
Banking Banking and Markets Centre Total
$m $m $m $m $m
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
Europe 964 1,545 (410) (288) 1,811
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
- UK(1) 857 1,319 (445) 108 1,839
--------------------
of which: HSBC UK
Bank plc
(ring-fenced
bank) 1,245 1,526 69 (193) 2,647
--------------------
of which: HSBC
Bank plc
(non-ring-fenced
bank) 61 146 (107) (39) 61
--------------------
of which:
Holdings and
other (449) (353) (407) 340 (869)
--------------------
- France 72 111 (56) (61) 66
--------------------
- Germany 6 41 39 (38) 48
--------------------
- Switzerland 26 (2) 1 - 25
--------------------
- other 3 76 51 (297) (167)
-------------------- ---------------------------- ---------------------------- --------------------------------- ----------------------------
Asia 1,822 1,105 1,240 1,146 5,313
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
- Hong Kong 1,766 529 153 (165) 2,283
--------------------
- Australia 63 70 57 (20) 170
--------------------
- India 31 119 276 155 581
--------------------
- Indonesia (4) 20 52 (3) 65
--------------------
- mainland China (92) 117 282 1,195 1,502
--------------------
- Malaysia 1 45 86 (10) 122
--------------------
- Singapore 49 53 97 (6) 193
--------------------
- Taiwan 3 9 48 (4) 56
--------------------
- other 5 143 189 4 341
-------------------- ---------------------------- ---------------------------- --------------------------------- ----------------------------
Middle East and
North Africa 114 90 403 93 700
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
- Egypt 43 24 86 2 155
--------------------
- UAE 54 (19) 154 (26) 163
--------------------
- Saudi Arabia 6 - 42 135 183
--------------------
- other 11 85 121 (18) 199
-------------------- ---------------------------- ---------------------------- --------------------------------- ----------------------------
North America 56 501 278 (266) 569
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
- US (45) 229 206 (235) 155
--------------------
- Canada 69 270 60 (26) 373
--------------------
- other 32 2 12 (5) 41
-------------------- ---------------------------- ---------------------------- --------------------------------- ----------------------------
Latin America (469) 60 152 (69) (326)
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
- Mexico 127 15 88 (21) 209
--------------------
- other(3) (596) 45 64 (48) (535)
Half-year to 31 Dec
2021 2,487 3,301 1,663 616 8,067
-------------------- ---------------------------- ---------------------------- --------------------------------- ---------------------------- --------------------------
1 UK includes results from the ultimate holding company, HSBC
Holdings plc, and the separately incorporated group of service
companies ('ServCo Group').
2 Corporate Centre includes intercompany debt eliminations of $1,334m.
3 Loss reported in Latin America for the half-year to 31
December 2021 includes the impact of goodwill impairment of $587m.
As per the Group's accounting policy, HSBC's cash-generating units
are based on geographical regions, which are sub-divided by global
businesses.
Reconciliation of alternative performance
measures
Page
Use of alternative performance
measures 56
----------------------------------------- ----
Return on average ordinary shareholders'
equity and return on average
tangible equity 56
----------------------------------------- ----
Net asset value and tangible
net asset value per ordinary
share 58
----------------------------------------- ----
Post-tax return and average total
shareholders' equity on average
total assets 58
----------------------------------------- ----
Expected credit losses and other
credit impairment charges as
% of average gross loans and
advances to customers 58
----------------------------------------- ----
Use of alternative performance
measures
Our reported results are prepared in accordance with IFRSs as
detailed in our interim condensed financial statements starting on
page 104.
As described on page 29, we use a combination of reported and
alternative performance measures, including those derived from our
reported results that eliminate factors that distort
period-on-period comparisons. These are considered alternative
performance measures (non-GAAP financial measures).
The following information details the adjustments made to the
reported results and the calculation of other alternative
performance measures. All alternative performance measures are
reconciled to the closest reported performance measure.
Return on average ordinary shareholders'
equity and return on average tangible
equity
Return on average ordinary shareholders' equity ('RoE') is
computed by taking profit attributable to the ordinary shareholders
of the parent company ('reported results'), divided by average
ordinary shareholders' equity ('reported equity') for the period.
The adjustment to reported results and reported equity excludes
amounts attributable to non-controlling interests and holders of
preference shares and other equity instruments.
Return on average tangible equity ('RoTE') is computed by
adjusting reported results for the movements in the present value
of in-force long-term insurance business ('PVIF') and for
impairment of goodwill and other intangible assets (net of tax),
divided by average reported equity adjusted for goodwill,
intangibles and PVIF for the period.
Return on average tangible equity excluding significant items is
annualised profit attributable to ordinary shareholders, excluding
changes in PVIF and significant items (net of tax), divided by
average tangible shareholders' equity excluding fair value of own
debt, debt valuation adjustment ('DVA') and other adjustments for
the period.
We provide RoTE ratios in addition to RoE as a way of assessing
our performance, which is closely aligned to our capital
position.
Return on average
ordinary
shareholders' equity
and return on
average tangible
equity
--------------------------------- ---------------------------------- -----------------------------------
Half-year ended Year ended
--------------------------------------------------------------------- -----------------------------------
30 Jun 30 Jun 31 Dec
2022 2021 2021
$m $m $m
-------------------- --------------------------------- ---------------------------------- -----------------------------------
Profit
-------------------- --------------------------------- ---------------------------------- -----------------------------------
Profit attributable
to the ordinary
shareholders
of the parent
company 8,289 7,276 12,607
-------------------- --------------------------------- ---------------------------------- -----------------------------------
Impairment of
goodwill and other
intangible
assets (net of tax) 46 - 608
-------------------- --------------------------------- ---------------------------------- -----------------------------------
Decrease/(increase)
in PVIF (net of
tax) (699) 16 (58)
-------------------- --------------------------------- ---------------------------------- -----------------------------------
Profit attributable
to ordinary
shareholders,
excluding goodwill
impairment and PVIF 7,636 7,292 13,157
-------------------- --------------------------------- ---------------------------------- -----------------------------------
Significant items
(net of tax) and
other
adjustments(1) (582) 994 2,086
-------------------- --------------------------------- ---------------------------------- -----------------------------------
Profit attributable
to ordinary
shareholders,
excluding goodwill
impairment, PVIF
and significant
items 7,054 8,286 15,243
-------------------- --------------------------------- ---------------------------------- -----------------------------------
Equity
-------------------- --------------------------------- ---------------------------------- -----------------------------------
Average total
shareholders'
equity 195,250 197,402 199,295
-------------------- --------------------------------- ---------------------------------- -----------------------------------
Effect of average
preference shares
and other
equity instruments (22,173) (23,414) (22,814)
-------------------- --------------------------------- ---------------------------------- -----------------------------------
Average ordinary
shareholders'
equity 173,077 173,988 176,481
-------------------- --------------------------------- ---------------------------------- -----------------------------------
Effect of goodwill,
PVIF and other
intangibles
(net of deferred
tax) (18,024) (17,576) (17,705)
-------------------- --------------------------------- ---------------------------------- -----------------------------------
Average tangible
equity 155,053 156,412 158,776
-------------------- --------------------------------- ---------------------------------- -----------------------------------
Fair value of own
debt, DVA and other
adjustments 878 3,286 1,278
-------------------- --------------------------------- ---------------------------------- -----------------------------------
Average tangible
equity excluding
fair value
of own debt, DVA
and other
adjustments 155,931 159,698 160,054
-------------------- --------------------------------- ---------------------------------- -----------------------------------
Ratio % %%
-------------------- --------------------------------- ---------------------------------- ----------------------------------
Return on average
ordinary
shareholders'
equity
(annualised) 9.7 8.4 7.1
-------------------- --------------------------------- ---------------------------------- -----------------------------------
Return on average
tangible equity
(annualised) 9.9 9.4 8.3
-------------------- --------------------------------- ---------------------------------- -----------------------------------
Return on average
tangible equity
excluding
significant items
(annualised)(1) 9.1 10.5 9.5
-------------------- --------------------------------- ---------------------------------- -----------------------------------
1 Other adjustments includes entries relating to the timing of
payments on additional tier 1 coupons.
Return on average tangible equity by global business
Half-year ended 30 Jun 2022
Wealth Global
and Banking
Personal Commercial and Corporate
Banking Banking Markets Centre Total
$m $m $m $m $m
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Profit before tax 2,927 3,511 2,894 (156) 9,176
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Tax expense (639) (827) (494) 1,999 39
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Profit after tax 2,288 2,684 2,400 1,843 9,215
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Less attributable
to: preference
shareholders,
other equity
holders,
non-controlling
interests (289) (304) (337) 4 (926)
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Profit attributable
to ordinary
shareholders
of the parent
company 1,999 2,380 2,063 1,847 8,289
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Decrease/(increase)
in PVIF (net of
tax) (700) 1 1 (1) (699)
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Significant items
(net of tax) 19 56 (10) (568) (503)
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Other adjustments 2 (2) (3) (30) (33)
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Profit attributable
to ordinary
shareholders,
excluding PVIF and
significant items 1,320 2,435 2,051 1,248 7,054
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Average tangible
shareholders'
equity
excluding fair
value of own debt,
DVA and other
adjustments 31,696 38,912 37,970 47,353 155,931
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
RoTE excluding
significant items
(annualised)
(%) 8.4 12.6 10.9 5.3 9.1
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Half-year ended 30 Jun 2021
-------------------- ----------------------------------------------------------------------------------------------------------------------------------------------------
Profit before tax 3,646 3,376 3,059 758 10,839
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Tax expense (769) (874) (624) (150) (2,417)
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Profit after tax 2,877 2,502 2,435 608 8,422
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Less attributable
to: preference
shareholders,
other equity
holders,
non-controlling
interests (389) (343) (382) (32) (1,146)
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Profit attributable
to ordinary
shareholders
of the parent
company 2,488 2,159 2,053 576 7,276
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Decrease/(increase)
in PVIF (net of
tax) 9 10 - (3) 16
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Significant items
(net of tax) 169 (6) 197 600 960
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Other adjustments - (1) (1) 36 34
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Profit attributable
to ordinary
shareholders,
excluding PVIF and
significant items 2,666 2,162 2,249 1,209 8,286
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Average tangible
shareholders'
equity
excluding fair
value of own debt,
DVA and other
adjustments 29,971 39,310 42,428 47,989 159,698
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
RoTE excluding
significant items
(annualised)
(%) 17.9 11.1 10.7 5.1 10.5
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Year ended 31 Dec 2021
-------------------- ----------------------------------------------------------------------------------------------------------------------------------------------------
Profit before tax 6,133 6,677 4,722 1,374 18,906
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Tax expense (1,540) (1,783) (1,020) 130 (4,213)
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Profit after tax 4,593 4,894 3,702 1,504 14,693
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Less attributable
to: preference
shareholders,
other equity
holders,
non-controlling
interests (735) (665) (618) (68) (2,086)
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Profit attributable
to ordinary
shareholders
of the parent
company 3,858 4,229 3,084 1,436 12,607
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Increase in PVIF
(net of tax) (65) 4 - 3 (58)
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Significant items
(net of tax) and
UK bank levy 850 51 517 1,269 2,687
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Other adjustments 3 (4) (3) 11 7
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Profit attributable
to ordinary
shareholders,
excluding PVIF and
significant items 4,646 4,280 3,598 2,719 15,243
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Average tangible
shareholders'
equity
excluding fair
value of own debt,
DVA and other
adjustments 30,587 39,487 41,816 48,164 160,054
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
RoTE excluding
significant items
(annualised)
(%) 15.2 10.8 8.6 5.6 9.5
-------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ----------------------------
Net asset value and tangible net
asset value per ordinary share
Net asset value per ordinary share is total shareholders' equity
less non-cumulative preference shares and capital securities
('total ordinary shareholders' equity'), divided by the number of
ordinary shares in issue excluding shares that the company has
purchased and are held in treasury.
Tangible net asset value per ordinary share is total ordinary
shareholders' equity excluding goodwill, PVIF and other intangible
assets (net of deferred tax) ('tangible ordinary shareholders'
equity'), divided by the number of basic ordinary shares in issue
excluding shares that the company has purchased and are held in
treasury.
Net asset value and tangible net asset value per
ordinary share
--------------------- --------------------- ---------------------
At
-------------------------------------------------------------------
30 Jun 30 Jun 31 Dec
2022 2021 2021
$m $m $m
------------------------------------------------- --------------------- --------------------- ---------------------
Total shareholders' equity 188,382 198,218 198,250
------------------------------------------------- --------------------- --------------------- ---------------------
Preference shares and other equity instruments (21,691) (22,414) (22,414)
------------------------------------------------- --------------------- --------------------- ---------------------
Total ordinary shareholders' equity 166,691 175,804 175,836
------------------------------------------------- --------------------- --------------------- ---------------------
Goodwill, PVIF and intangible assets (net of
deferred
tax) (18,383) (17,819) (17,643)
------------------------------------------------- --------------------- --------------------- ---------------------
Tangible ordinary shareholders' equity 148,308 157,985 158,193
------------------------------------------------- --------------------- --------------------- ---------------------
Basic number of $0.50 ordinary shares outstanding 19,819 20,223 20,073
------------------------------------------------- --------------------- --------------------- ---------------------
Value per share $ $ $
------------------------------------------------- --------------------- --------------------- ---------------------
Net asset value per ordinary share 8.41 8.69 8.76
------------------------------------------------- --------------------- --------------------- ---------------------
Tangible net asset value per ordinary share 7.48 7.81 7.88
------------------------------------------------- --------------------- --------------------- ---------------------
Post-tax return and average total
shareholders'
equity on average total assets
Post-tax return on average total assets is profit after tax
divided by average total assets for the period.
Average total shareholders' equity to average total assets is
average total shareholders' equity divided by average total assets
for the period.
Post-tax return and average total shareholders' equity on average total
assets
Half-year ended Year-ended
--------------------------------------- ------------------
30 Jun 30 Jun 31 Dec
2022 2021 2021
$m $m $m
----------------------------------------------------- ------------------ ------------------- ------------------
Profit after tax 9,215 8,422 14,693
----------------------------------------------------- ------------------ ------------------- ------------------
Average total shareholders' equity 195,250 197,402 199,295
----------------------------------------------------- ------------------ ------------------- ------------------
Average total assets 3,063,125 3,011,306 3,012,437
Ratio % %%
----------------------------------------------------- ------------------ ------------------- -----------------
Post-tax return on average total assets (annualised) 0.6 0.6 0.5
----------------------------------------------------- ------------------ ------------------- ------------------
Average total shareholders' equity to average total
assets 6.37 6.56 6.62
----------------------------------------------------- ------------------ ------------------- ------------------
Expected credit losses and other
credit impairment charges as % of
average gross loans and advances
to customers
Expected credit losses and other credit impairment charges
('ECL') as % of average gross loans and advances to customers is
the
annualised adjusted ECL divided by adjusted average gross loans
and advances to customers for the period.
The adjusted numbers are derived by adjusting reported ECL and
loans and advances to customers for the effects of foreign currency
translation differences.
Expected credit losses and other credit impairment charges as % of
average gross loans and advances to customers
Half-year ended
---------------------------------------------------------------------------------
30 Jun 30 Jun 31 Dec
2022 2021 2021
$m $m $m
----------------------------------- ------------------- ----------------------------- -----------------------------
Expected credit losses and other
credit impairment
charges ('ECL') (1,090) 719 209
----------------------------------- ------------------- ----------------------------- -----------------------------
Currency translation (44) (35)
----------------------------------- ------------------- ----------------------------- -----------------------------
Adjusted ECL (1,090) 675 174
----------------------------------- ------------------- ----------------------------- -----------------------------
Average gross loans and advances to
customers 1,054,321 1,059,548 1,060,264
----------------------------------- ------------------- ----------------------------- -----------------------------
Currency translation (30,887) (65,308) (56,427)
----------------------------------- ------------------- ----------------------------- -----------------------------
Average gross loans and advances to
customers -
at most recent balance sheet
foreign exchange rates 1,023,434 994,240 1,003,837
Ratio % %%
----------------------------------- ------------------- ----------------------------- ----------------------------
Expected credit losses and other
credit impairment
charges as % of average gross
loans and advances
to customers (annualised) 0.21 (0.14) (0.03)
----------------------------------- ------------------- ----------------------------- -----------------------------
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END
IR FLFLETRILIIF
(END) Dow Jones Newswires
August 01, 2022 11:37 ET (15:37 GMT)
Grafico Azioni Hsbc (LSE:HSBA)
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Da Mar 2024 a Apr 2024
Grafico Azioni Hsbc (LSE:HSBA)
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