|
|
|
|
HSBC
Holdings plc Earnings Release 1Q17
|
5
|
Earnings
Release - 1Q17
|
|
|
|
|
|
|
|
|
|
|
|
Financial
performance commentary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution
of results by global business
|
|
|
|
|
|
|
|
Quarter
ended
|
|
|
|
|
|
|
|
31
Mar
|
|
31
Dec
|
|
31
Mar
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
2016
|
|
|
|
|
|
|
|
|
$m
|
|
$m
|
|
$m
|
|
|
|
|
|
|
|
Adjusted
profit/(loss) before tax
|
|
|
|
|
|
|
|
|
|
Retail
Banking and Wealth Management
|
1,781
|
|
1,140
|
|
1,216
|
|
|
|
|
|
|
|
Commercial
Banking
|
1,795
|
|
1,389
|
|
1,487
|
|
|
|
|
|
|
|
Global
Banking and Markets
|
1,709
|
|
1,319
|
|
1,262
|
|
|
|
|
|
|
|
Global
Private Banking
|
70
|
|
24
|
|
85
|
|
|
|
|
|
|
|
Corporate
Centre
|
582
|
|
(1,284
|
)
|
1,246
|
|
|
|
|
|
|
|
|
5,937
|
|
2,588
|
|
5,296
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution
of results by geographical region
|
|
|
|
Quarter
ended
|
|
|
|
31
Mar
|
|
31
Dec
|
|
31
Mar
|
|
|
|
|
2017
|
|
2016
|
|
2016
|
|
|
|
|
$m
|
|
$m
|
|
$m
|
|
|
|
Reported
profit/(loss) before tax
|
|
|
|
|
|
Europe
1
|
(206
|
)
|
(6,741
|
)
|
1,698
|
|
|
|
Asia
|
4,094
|
|
2,962
|
|
3,530
|
|
|
|
Middle
East and North Africa
1
|
387
|
|
195
|
|
509
|
|
|
|
North
America
|
572
|
|
69
|
|
364
|
|
|
|
Latin
America
|
114
|
|
70
|
|
5
|
|
|
|
|
4,961
|
|
(3,445
|
)
|
6,106
|
|
|
|
Adjusted
profit/(loss) before tax
|
|
|
|
|
|
Europe
1
|
595
|
|
(1,163
|
)
|
908
|
|
|
|
Asia
|
4,307
|
|
3,185
|
|
3,437
|
|
|
|
Middle
East and North Africa
1
|
395
|
|
212
|
|
446
|
|
|
|
North
America
|
512
|
|
264
|
|
366
|
|
|
|
Latin
America
|
128
|
|
90
|
|
139
|
|
|
|
|
5,937
|
|
2,588
|
|
5,296
|
|
|
|
|
|
1
|
In
3Q16, HSBC Bank plc executed a management services agreement,
transferring its governance responsibilities over HSBC Bank A.S.
(Turkey) to HSBC Bank Middle East Limited to leverage the strong
commercial ties between Turkey and MENA. Comparative data for
Europe and MENA have been re-presented accordingly.
|
Adjusted
PBT by global business and region is presented to support the
commentary on adjusted performance on the following
pages.
The
tables on pages 22 to 29 reconcile reported to adjusted results for
each of our global business segments and geographical
regions.
Group
1Q17
compared with 1Q16 - reported results
|
|
|
Movement
in reported profit before tax compared with 1Q16
|
|
1Q17
|
|
1Q16
|
|
1Q17
vs. 1Q16
|
|
$m
|
|
$m
|
|
$m
|
|
%
|
|
Revenue
|
12,993
|
|
14,976
|
|
(1,983
|
)
|
(13
|
)
|
LICs
|
(236
|
)
|
(1,161
|
)
|
925
|
|
80
|
|
Operating
expenses
|
(8,328
|
)
|
(8,264
|
)
|
(64
|
)
|
(1
|
)
|
Share
of profit from associates and JVs
|
532
|
|
555
|
|
(23
|
)
|
(4
|
)
|
Profit
before tax
|
4,961
|
|
6,106
|
|
(1,145
|
)
|
(19
|
)
|
Reported
profit before tax of $5.0bn in 1Q17 was $1.1bn or 19% lower than in
1Q16. This was due to lower reported revenue ($2.0bn), partly
offset by lower reported LICs ($0.9bn).
Excluding
the net adverse effects of significant items ($1.5bn) and net
adverse currency translation differences ($0.3bn), profit before
tax increased by $0.6bn or 12%.
Revenue
Reported
revenue of $13.0bn in 1Q17 was $2.0bn or 13% lower. This reflected
a net unfavourable movement in significant items of $1.8bn.
Significant items included:
|
|
●
|
In
1Q16, favourable fair value movements on our own debt designated at
fair value reflecting changes in our own credit spread of $1.2bn.
These movements are reported in the statement of comprehensive
income, following the implementation of IFRS 9 Financial
Instruments on 1 January 2017.
|
|
|
●
|
Revenue
of $0.7bn in 1Q16 related to the operations in Brazil that we sold
in July 2016.
|
Excluding
significant items and adverse currency translation differences of
$0.5bn, revenue increased by $0.3bn or 2%.
LICs
Reported
LICs of $0.2bn were $0.9bn or 80% lower, reflecting reductions in
CMB and GB&M, primarily in North America, as well as the
effects of the disposal of our Brazil operations ($0.3bn). These
were partly offset by the unfavourable effect of currency
translation differences of $0.1bn.
Excluding
significant items and currency translation differences, LICs
reduced by $0.6bn or 71%.
|
|
|
|
6
|
HSBC
Holdings plc Earnings Release 1Q17
|
Earnings
Release - 1Q17
Operating
expenses
Reported
operating expenses of $8.3bn were $0.1bn or 1% higher and included
an increase in significant items of $0.2bn. Significant items
included:
|
|
●
|
costs
to achieve of $0.8bn, compared with $0.3bn in 1Q16;
and
|
|
|
●
|
a
provision of $0.2bn in 1Q17 relating to customer redress in the
UK.
|
These
were partly offset by:
|
|
●
|
the
operating expenses incurred in 1Q16 in our Brazil business of
$0.5bn.
|
Excluding
significant items and favourable currency translation differences
of $0.3bn, operating expenses increased by $0.2bn or
3%.
Share
of income from associates
Reported
income from associates of $0.5bn was broadly
unchanged.
Group
1Q17
compared with 1Q16 - adjusted results
|
|
|
|
Movement
in adjusted profit before tax compared with 1Q16
|
|
1Q17
|
|
1Q16
|
|
1Q17
vs. 1Q16
|
|
$m
|
|
$m
|
|
$m
|
|
%
|
|
Revenue
|
12,843
|
|
12,579
|
|
264
|
|
2
|
|
LICs
|
(236
|
)
|
(800
|
)
|
564
|
|
71
|
|
Operating
expenses
|
(7,202
|
)
|
(7,016
|
)
|
(186
|
)
|
(3
|
)
|
Share
of profit from associates and JVs
|
532
|
|
533
|
|
(1
|
)
|
-
|
|
Profit
before tax
|
5,937
|
|
5,296
|
|
641
|
|
12
|
|
On an
adjusted basis, profit before tax of $5.9bn was $0.6bn or 12%
higher, as we grew revenue and LICs decreased.
Adjusted
revenue
Adjusted
revenue of $12.8bn was $0.3bn or 2% higher.
|
|
●
|
In
RBWM, revenue increased by $0.7bn. This was mainly in life
insurance manufacturing, which benefited from favourable market
impacts in Asia and Europe, compared with adverse market impacts in
1Q16. In current accounts, savings and deposits, revenue also
increased, reflecting growth in balances and wider spreads,
primarily in Asia.
|
|
|
●
|
In
GB&M, revenue increased by $0.4bn, primarily in Rates and
Credit, as we captured increased client flows. This was partly
offset by net adverse movements on credit and funding valuation
adjustments.
|
These
were partly offset:
|
|
●
|
In
Corporate Centre, revenue decreased by $0.7bn, driven by Central
Treasury and the US run-off portfolio. The reduction in Central
Treasury reflected minimal adverse fair value movements, relating
to the economic hedging of interest and exchange rate risk on our
long-term debt with long-term derivatives, compared with favourable
movements of $0.2bn in 1Q16. In addition, interest expense on debt
increased. These factors were partly offset by higher revenue in
Balance Sheet Management.
|
Adjusted
LICs
Adjusted
LICs of $0.3bn were $0.6bn or 71% lower. This reflected a reduction
in CMB ($0.2bn) as 1Q16 included a small number of individually
assessed LICs related to exposures within the oil and gas sector,
notably in Canada and the US. We also recorded lower individually
assessed LICs in GB&M, as well as lower LICs in the US run-off
portfolio in Corporate Centre.
Adjusted
operating expenses
Adjusted
operating expenses of $7.2bn increased by $0.2bn or 3%. This was
mainly due to a credit in 1Q16 relating to the 2015 UK bank
levy.
Excluding
the UK bank levy credit, operating expenses increased due to
inflationary pressures and continued investment in our regulatory
and growth programmes. This was partly offset by the impact of our
cost-saving initiatives.
Our
total investment in regulatory programmes and compliance was
$0.8bn, up $81m or 12%. This reflected the continued implementation
of our Global Standards programme to enhance financial crime risk
controls and capabilities, and meet external
commitments.
The
number of employees expressed in FTEs at 31 March 2017 was 235,854,
an increase of 679 from 31 December 2016. This was driven by
investment in compliance, partly offset by transformation
savings.
Adjusted
share of income from associates
Adjusted
income from associates of $0.5bn was broadly
unchanged.
Tax
expense
The
effective tax rate for 1Q17 of 24.2% was lower than the 25.7% in
1Q16, principally due to lower prior year adjustments in
1Q17.
First
interim dividend for 2017
The
Board announces a first interim dividend for 2017 of $0.10 per
ordinary share, further details of which are set out at the end of
this release.
Retail
Banking and Wealth Management
1Q17
compared with 1Q16 - adjusted results
|
|
|
Management
view of adjusted revenue
|
|
1Q17
|
|
4Q16
|
|
1Q16
|
|
1Q17
vs. 1Q16
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
%
|
|
Net
operating income
1
|
|
|
|
|
|
|
|
|
|
|
Retail
Banking
|
3,213
|
|
3,120
|
|
3,125
|
|
88
|
|
3
|
|
Current
accounts, savings and deposits
|
1,453
|
|
1,319
|
|
1,261
|
|
192
|
|
15
|
|
Personal
lending
|
1,760
|
|
1,801
|
|
1,864
|
|
(104
|
)
|
(6
|
)
|
-
mortgages
|
590
|
|
609
|
|
642
|
|
(52
|
)
|
(8
|
)
|
-
credit cards
|
722
|
|
731
|
|
778
|
|
(56
|
)
|
(7
|
)
|
- other
personal lending
2
|
448
|
|
461
|
|
444
|
|
4
|
|
1
|
|
Wealth
Management
|
1,652
|
|
1,280
|
|
1,137
|
|
515
|
|
45
|
|
-
investment distribution
3
|
799
|
|
674
|
|
689
|
|
110
|
|
16
|
|
- life
insurance manufacturing
|
606
|
|
365
|
|
212
|
|
394
|
|
186
|
|
- asset
management
|
247
|
|
241
|
|
236
|
|
11
|
|
5
|
|
Other
4
|
144
|
|
163
|
|
95
|
|
49
|
|
52
|
|
Total
|
5,009
|
|
4,563
|
|
4,357
|
|
652
|
|
15
|
|
RoRWA
5
|
6.4
|
|
4.0
|
|
4.3
|
|
|
|
For
footnotes see page 11
Adjusted
profit before tax of $1.8bn was $0.6bn or 46% higher. This was
driven by increased revenue in life insurance manufacturing,
current accounts, savings and deposits and investment distribution,
partly offset by a fall in personal lending. By contrast, we
recorded small increases in costs and LICs.
|
|
|
|
HSBC
Holdings plc Earnings Release 1Q17
|
7
|
Earnings
Release - 1Q17
Adjusted
revenue of $5.0bn was $0.7bn or 15% higher, as revenue grew in
Wealth Management and Retail Banking. In Wealth Management, this
was mainly driven by life insurance manufacturing reflecting
favourable market impacts ($138m), notably in Asia and Europe,
compared with adverse market impacts in 1Q16 ($168m). In addition,
income from investment distribution increased, reflecting higher
sales of mutual funds, retail securitiesand wealth insurance
distribution in Asia, following increased investor confidence. In
Retail Banking, revenue increased, mainly from current accounts,
savings and deposits due to wider spreads and balance growth in
Asia and Latin America. This was partly offset by lower personal
lending revenue in Asia, partly reflecting spread
compression.
Adjusted
LICs of $296m increased by $46m or 18%. This included an increase
of $22m in Mexico, reflecting growth in unsecured lending balances
and an increase in delinquencies. In addition, in the UK we
increased collective allowances against our mortgages and cards
exposures.
Adjusted
operating expenses increased by $43m or 1%, as transformational and
other cost savings were more than offset by inflation and
investments.
Commercial
Banking
1Q17
compared with 1Q16 - adjusted results
|
|
|
Management
view of adjusted revenue
|
|
1Q17
|
|
4Q16
|
|
1Q16
|
|
1Q17
vs. 1Q16
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
%
|
|
Net
operating income
1
|
|
|
|
|
|
|
|
|
|
|
Global
Trade and
Receivables
Finance
|
449
|
|
443
|
|
468
|
|
(19
|
)
|
(4
|
)
|
Credit
and Lending
|
1,207
|
|
1,215
|
|
1,233
|
|
(26
|
)
|
(2
|
)
|
Global
Liquidity and
Cash
Management
|
1,104
|
|
1,076
|
|
1,030
|
|
74
|
|
7
|
|
Markets
products, Insurance and Investments, and Other
6
|
431
|
|
290
|
|
413
|
|
18
|
|
4
|
|
Total
|
3,191
|
|
3,024
|
|
3,144
|
|
47
|
|
1
|
|
RoRWA
5
|
2.6
|
|
2.0
|
|
2.2
|
|
|
|
For
footnotes see page 11
Adjusted
profit before tax of $1.8bn was $0.3bn or 21% higher, primarily due
to lower LICs and an increase in revenue.
Adjusted
revenue was $47m or 1% higher, mainly in Global Liquidity and Cash
Management ('GLCM') reflecting wider spreads and increased deposit
balances in Hong Kong. In the UK, we increased our GLCM average
deposit balances by 16%, compared with 1Q16, but this was offset by
narrower spreads resulting from the base rate
reduction.
Revenue
growth was partly offset in Credit and Lending, as narrower spreads
outweighed balance growth, particularly in Asia. Revenue in Global
Trade and Receivables Finance ('GTRF') was also lower, although
revenue has stabilised since 4Q16.
Net
loan impairment releases of $3m in 1Q17 compared with adjusted LICs
of $258m in 1Q16. This movement reflected lower individually
assessed LICs compared with 1Q16, particularly in Canada and the
US, primarily against oil and gas sector exposures. LICs also
included a net release of collective allowances in the UK during
1Q17, reflecting reduced exposures and lower loss rates relating to
the oil and gas sector.
Adjusted
operating expenses of $1.4bn were unchanged as cost savings offset
salary inflation and investment in Global Standards.
Global
Banking and Markets
1Q17
compared with 1Q16 - adjusted results
|
|
|
Management
view of adjusted revenue
|
|
1Q17
|
|
4Q16
|
|
1Q16
|
|
1Q17
vs. 1Q16
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
%
|
|
Net
operating income
1
|
|
|
|
|
|
|
|
|
|
|
Global
Markets
|
1,934
|
|
1,526
|
|
1,501
|
|
433
|
|
29
|
|
-
Foreign Exchange
|
625
|
|
733
|
|
692
|
|
(67
|
)
|
(10
|
)
|
-
Credit
|
327
|
|
73
|
|
153
|
|
174
|
|
114
|
|
-
Rates
|
648
|
|
496
|
|
424
|
|
224
|
|
53
|
|
-
Equities
|
334
|
|
224
|
|
232
|
|
102
|
|
44
|
|
Global
Banking
|
894
|
|
978
|
|
874
|
|
20
|
|
2
|
|
Global
Liquidity and
Cash
Management
|
518
|
|
483
|
|
459
|
|
59
|
|
13
|
|
Securities
Services
|
405
|
|
391
|
|
363
|
|
42
|
|
12
|
|
Global
Trade and Receivables Finance
|
180
|
|
169
|
|
170
|
|
10
|
|
6
|
|
Principal
Investments
|
29
|
|
49
|
|
3
|
|
26
|
|
867
|
|
Credit
and funding
valuation
adjustments
7
|
(2
|
)
|
(26
|
)
|
137
|
|
(139
|
)
|
(101
|
)
|
Other
8
|
(72
|
)
|
4
|
|
33
|
|
(105
|
)
|
(318
|
)
|
Total
|
3,886
|
|
3,574
|
|
3,540
|
|
346
|
|
10
|
|
RoRWA
5
|
2.3
|
|
1.7
|
|
1.6
|
|
|
|
For
footnotes see page 11
Adjusted
profit before tax of $1.7bn was $447m or 35% higher, reflecting a
strong revenue performance in the quarter. Revenue increased by
$346m or 10%, including a net adverse movement of $139m on credit
and funding valuation adjustments. Excluding this movement, profit
before tax rose by $586m (52%), and revenue increased by $485m
(14%), with increases in the majority of our
businesses.
The
rise in adjusted revenue was driven by Global Markets (up
$0.4bn), notably in Rates and Credit, as we captured
increased client flows. Revenue in 1Q16 in these businesses was
impacted by market volatility, which led to reduced client
activity. In GLCM, revenue increased as we won client mandates,
grew balances in mainland China and benefited from wider spreads in
Asia. We also grew balances in the UK, but this was offset by
narrower spreads. In Securities Services, revenue grew by
$42m. By contrast, revenue fell in Foreign Exchange by $67m,
reflecting reduced market volatility in 1Q17.
Net
loan impairment releases of $20m in 1Q17 compared with adjusted
LICs of $178m in 1Q16. This largely reflected a reduction in
individually assessed charges, notably as the prior year included
LICs on exposures in the oil and gas sector in the US, and in the
mining sector in Australia.
Adjusted
operating expenses increased by $0.1bn or 5%, reflecting higher
performance-related pay and, in the US, increased deposit insurance
costs. Our continued cost management, efficiency improvements and
FTE reductions more than offset the cost of our investments in the
business.
|
|
|
|
8
|
HSBC
Holdings plc Earnings Release 1Q17
|
Earnings
Release - 1Q17
Global
Private Banking
1Q17
compared with 1Q16 - adjusted results
|
|
|
Management
view of adjusted revenue
|
|
1Q17
|
|
4Q16
|
|
1Q16
|
|
1Q17
vs. 1Q16
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
%
|
|
Net
operating income
1
|
|
|
|
|
|
|
|
|
|
|
Investment
revenue
|
176
|
|
158
|
|
193
|
|
(17
|
)
|
(9
|
)
|
Lending
|
91
|
|
92
|
|
106
|
|
(15
|
)
|
(14
|
)
|
Deposit
|
89
|
|
82
|
|
91
|
|
(2
|
)
|
(2
|
)
|
Other
|
59
|
|
65
|
|
62
|
|
(3
|
)
|
(5
|
)
|
Total
|
415
|
|
397
|
|
452
|
|
(37
|
)
|
(8
|
)
|
RoRWA
5
|
1.9
|
|
0.6
|
|
2.0
|
|
|
|
For
footnotes see page 11
Adjusted
profit before tax of $70m decreased by $15m or 18%, reflecting the
impact of our previously announced repositioning
actions.
Adjusted
revenue of $415m decreased by $37m or 8%, due to the continued
impact of client repositioning. This was partly offset in Hong Kong
as we grew deposits and spreads widened, and increased client
activity resulted in higher investment revenue.
In
1Q17, we attracted net new money of $4.8bn in key markets targeted
for growth, notably Hong Kong, the UK and the Channel
Islands.
Adjusted
operating expenses decreased by $23m or 6%, reflecting a managed
reduction in FTEs and the impact of our cost-saving
initiatives.
Corporate
Centre
1Q17
compared with 1Q16 - adjusted results
|
|
|
Management
view of adjusted revenue
|
|
1Q17
|
|
4Q16
|
|
1Q16
|
|
1Q17
vs. 1Q16
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
%
|
|
Net
operating income
1
|
|
|
|
|
|
|
|
|
Central
Treasury
9
|
373
|
|
(289
|
)
|
736
|
|
(363
|
)
|
(49
|
)
|
Legacy
portfolios
|
33
|
|
123
|
|
210
|
|
(177
|
)
|
(84
|
)
|
- US
run-off portfolio
|
33
|
|
125
|
|
248
|
|
(215
|
)
|
(87
|
)
|
-
legacy credit
|
-
|
|
(2
|
)
|
(38
|
)
|
38
|
|
(100
|
)
|
Other
10
|
(64
|
)
|
(467
|
)
|
140
|
|
(204
|
)
|
(146
|
)
|
Total
|
342
|
|
(633
|
)
|
1,086
|
|
(744
|
)
|
(69
|
)
|
For
footnotes see page 11
Adjusted
profit before tax of $0.6bn was $0.7bn or 53% lower, as revenue
decreased and operating expenses increased. This was partly offset
by a reduction in LICs.
Adjusted
revenue was down $0.7bn or 69%, reflecting a decrease in Central
Treasury and continuing sales and disposals in the US run-off
portfolio.
In
Central Treasury, revenue decreased as a result of minimal adverse
fair value movements ($32m) relating to the economic hedging of
interest-rate and exchange-rate risk on our long-term debt with
long-term derivatives, compared with favourable movements of $249m
in 1Q16. We also recorded higher interest expense on our debt
($0.2bn), reflecting a higher cost of funds. This was partly offset
by an increase in revenue in Balance Sheet Management ($0.1bn),
driven by higher investment yields in Hong Kong.
Adjusted
LICs were $152m lower as net releases in the US run-off portfolio
in 1Q17, compared with net charges in 1Q16. In addition, LICs
decreased in legacy credit (down $49m) as we recorded net releases
in 1Q17 compared with net charges in 1Q16.
Adjusted
operating expenses were $0.1bn or 27% higher as a result of a
credit booked in 1Q16 relating to the 2015 UK bank levy ($0.1bn).
This was partly offset by FTE reductions in the US run-off
portfolio.
Group
1Q17
compared with 4Q16 - reported results
|
|
|
Movement
in reported profit before tax compared with 4Q16
|
|
1Q17
|
|
4Q16
|
|
1Q17
vs. 4Q16
|
|
$m
|
|
$m
|
|
$m
|
|
%
|
Revenue
|
12,993
|
|
8,984
|
|
4,009
|
|
45
|
LICs
|
(236
|
)
|
(468
|
)
|
232
|
|
50
|
Operating
expenses
|
(8,328
|
)
|
(12,459
|
)
|
4,131
|
|
33
|
Share
of profit from associates and JVs
|
532
|
|
498
|
|
34
|
|
7
|
Profit
before tax
|
4,961
|
|
(3,445
|
)
|
8,406
|
|
244
|
Reported
profit before tax of $5.0bn in 1Q17 was $8.4bn higher than in 4Q16.
This was largely due to significant items recorded in
4Q16.
Excluding
a net favourable effect of significant items of
$5.1bn, profit before tax increased by $3.3bn to
$5.9bn.
Revenue
Reported
revenue of $13.0bn in 1Q17 was $4.0bn or 45% higher than in 4Q16,
due to an overall favourable movement in significant items of
$2.2bn. Significant items included:
|
|
●
|
adverse
fair value movements on our own debt designated at fair value from
changes in credit spreads of $1.6bn in 4Q16; and
|
|
|
●
|
favourable
fair value movements on non-qualifying hedges in 1Q17 of $0.1bn,
compared with adverse movements in 4Q16 of $0.3bn.
|
Excluding
significant items and currency translation differences, revenue
increased by $1.9bn or 18% reflecting revenue growth in all global
businesses and Corporate Centre.
LICs
Reported
LICs of $0.2bn were $0.2bn or 50% lower than in 4Q16, notably due
to a reduction in individually assessed LICs in CMB.
Excluding
currency translation differences, LICs were $0.2bn or 48%
lower.
Operating
expenses
Reported
operating expenses of $8.3bn were $4.1bn or 33% lower than in 4Q16.
This reduction in reported operating expenses was largely caused by
a decrease in significant items of $2.9bn, notably the write-off of
$2.4bn of goodwill related to our GPB business in Europe in 4Q16.
Other significant items reduced by $0.5bn and
included:
|
|
●
|
costs
to achieve of $0.8bn in 1Q17, compared with $1.1bn in 4Q16;
and
|
|
|
●
|
regulatory
provisions in GPB in 4Q16 of $0.4bn.
|
Excluding
significant items and currency translation differences, operating
expenses decreased by $1.2bn or 14%, primarily as 4Q16 included the
UK bank levy charge of $1.0bn.
Share
of income from associates
Reported
income from associates of $0.5bn was $34m or 7% higher than in
4Q16.
|
|
|
|
HSBC
Holdings plc Earnings Release 1Q17
|
9
|
Earnings
Release - 1Q17
Group
1Q17
compared with 4Q16 - adjusted results
|
|
|
|
Movement
in adjusted profit before tax compared with 4Q16
|
|
1Q17
|
|
4Q16
|
|
1Q17
vs. 4Q16
|
|
$m
|
|
$m
|
|
$m
|
|
%
|
Revenue
|
12,843
|
|
10,925
|
|
1,918
|
|
18
|
LICs
|
(236
|
)
|
(456
|
)
|
220
|
|
48
|
Operating
expenses
|
(7,202
|
)
|
(8,375
|
)
|
1,173
|
|
14
|
Share
of profit from associates and JVs
|
532
|
|
494
|
|
38
|
|
8
|
Profit
before tax
|
5,937
|
|
2,588
|
|
3,349
|
|
129
|
On an
adjusted basis, profit before tax of $5.9bn was $3.3bn higher than
in 4Q16, reflecting higher revenue, lower operating expenses and a
reduction in LICs.
Adjusted
revenue
Adjusted
revenue of $12.8bn increased by $1.9bn or 18% compared with 4Q16,
mainly reflecting higher revenue in RBWM, GB&M and Corporate
Centre.
|
|
●
|
In
RBWM, revenue increased by $0.4bn, mainly as a result of favourable
market impacts in life insurance manufacturing and higher revenue
from investment distribution. In addition, revenue in Retail
Banking increased, notably from current accounts, savings and
deposits, reflecting higher customer deposits and balance growth in
Asia.
|
|
|
●
|
In
GB&M revenue increased by $0.3bn, primarily driven by Global
Markets as we captured increased client flows in Rates and Credit.
This was partly offset by a lower revenue from Global Banking, as
4Q16 included restructuring gains which did not recur.
|
|
|
●
|
In
Corporate Centre, revenue increased by $1.0bn, notably as a result
of adverse fair value movements of $32m relating to the hedging of
our long-term debt in 1Q17 (4Q16: $741m).
|
Adjusted
LICs
Adjusted
LICs of $0.2bn were $0.2bn or 48% lower than in 4Q16. The reduction
was mainly in CMB reflecting releases of individually assessed
allowances, notably on exposures related to the oil and gas
sector.
Adjusted
operating expenses
Adjusted
operating expenses of $7.2bn were $1.2bn or 14% lower than in 4Q16,
primarily due to a UK bank levy charge of $1.0bn recorded in 4Q16.
Excluding this charge, adjusted operating expenses decreased by
$0.1bn or 2%, partly reflecting the impact of our cost-saving
initiatives.
Adjusted
share of income from associates
Adjusted
income from associates of $0.5bn was $38m or 8% higher than in
4Q16.
Balance
sheet commentary compared with 31 December 2016
Total
assets grew by $41.5bn or 2% on a reported basis and $20.6bn or 1%
on a constant currency basis. This reflected increases in reported
trading assets of $59.5bn as activity increased after the seasonal
reduction in December 2016, and higher non-trading reverse
repurchase agreements, partly offset by a decrease in derivative
assets.
Loans
and advances to customers grew by $14.5bn or 2%, primarily driven
by growth in Asia, partly offset by our strategic focus on reducing
legacy portfolios
Customer
accounts were broadly unchanged on a reported basis. On a constant
currency basis, customer accounts decreased, primarily in Asia in
GB&M and CMB, partly offset by continuing growth in RBWM,
notably in Hong Kong and the UK.
Reported
loans and advances to customers increased by $14.5bn during
1Q17 and included the following items:
|
|
●
|
favourable
currency translation differences of $9.2bn; and
|
|
|
●
|
a
$6.4bn reduction in corporate overdraft balances in the UK relating
to a small number of customers (with a corresponding decrease in
customer accounts). These balances were previously managed on a net
basis with their corresponding current accounts.
|
Excluding
these factors, loans and advances to customers grew by $11.7bn,
which includes a $3.9bn reduction from the sale of CML run-off
portfolio loans in the US. We continued to grow lending in Asia (up
$10.1bn) across all our global businesses, notably in CMB and
GB&M term lending in Hong Kong, with growth also in mainland
China and Australia. This reflected our strategic focus on growth
in the region.
Lending
in Europe increased by $8.5bn, notably in the UK from growth in CMB
term lending (up $1.6bn) and from an increase in UK overdrafts of
$6.0bn as a result of customers in CMB and GB&M who no longer
settled their overdraft and deposit balances on a net basis. We
also recorded growth in residential mortgages.
These
lending increases were partly offset by a $2.2bn reduction across
GB&M and CMB balances in North America, reflecting our active
management of overall client returns.
Reported
customer accounts increased by $0.6bn during 1Q17 and included the
following items:
|
|
●
|
favourable
currency translation of $11.3bn; and
|
|
|
●
|
a
$6.4bn reduction in corporate current account balances, in line
with the decrease in corporate overdrafts.
|
Excluding
these factors, customer accounts decreased by $4.3bn, despite
growth of $10.8bn in RBWM, notably in Hong Kong and the US.
Balances decreased in Asia in GB&M and CMB ($14.1bn) in both
Hong Kong and mainland China, as customer outflows were higher than
new deposit growth.
In
Europe, customer accounts grew by $4.7bn, primarily as a result of
customers in the UK who no longer settled their overdraft and
deposit balances net, as noted above.
|
|
|
|
10
|
HSBC
Holdings plc Earnings Release 1Q17
|
Earnings
Release - 1Q17
Net
interest margin
|
|
|
Net
interest margin
|
|
1Q17
|
|
1Q16
|
|
2016
|
|
|
$m
|
|
$m
|
|
$m
|
|
Net
interest income
|
6,787
|
|
7,913
|
|
29,813
|
|
Average
interest earning assets
|
1,683,136
|
|
1,716,128
|
|
1,723,702
|
|
|
%
|
|
%
|
|
%
|
|
Gross
yield
|
2.33
|
|
2.68
|
|
2.46
|
|
Less:
cost of funds
|
(0.83
|
)
|
(0.99
|
)
|
(0.87
|
)
|
Net
interest spread
|
1.50
|
|
1.69
|
|
1.59
|
|
Net
interest margin
|
1.64
|
|
1.85
|
|
1.73
|
|
In
2016, we earned net interest income of $0.9bn in Brazil (1Q16:
$0.5bn) from average interest-earning assets of $25.8bn (1Q16:
$35.4bn). Excluding Brazil, our net interest margin for 2016 was
1.70% (1Q16: 1.80%) with a gross yield of 2.34% (1Q16: 2.43%) and a
cost of funds of 0.76% (1Q16: 0.77%)
Net
interest margin of 1.64% fell by 9bps compared with net interest
margin for 2016, or 6bps if we exclude our operations in Brazil.
This was primarily driven by an increase of 7bps in the cost of
funds and a fall of 1bp in our gross yields.
Gross
yields benefited from US dollar rate rises, notably from increased
yields on surplus liquidity in Asia, which have had the effect of
widening deposit spreads in our global businesses, and in North
America. Additionally, gross yields on reverse repurchase
agreements rose in all regions, in line with the rise in costs of
repurchase agreements. However, these benefits were more than
offset by the effects of the UK base rate fall during 2016, the
continuing run-off of our higher-yielding US run-off portfolio and
continuing pressures on customer lending yields, notably in
mortgages and term lending in the UK. Lending yields also fell
marginally in Asia.
Cost of
funds rose by 7bps, partly driven by an increase in the cost of
Group debt, primarily relating to the higher cost of issuances of
senior debt from HSBC Holdings. In addition, costs of repurchase
agreements rose in line with movements in reverse repurchase
agreements. These rises were broadly offset by a fall in the cost
of customer accounts in both Europe and Asia, the latter reflecting
a change in the mix of the portfolio towards lower-cost current
accounts.
Compared
with the fourth quarter of 2016, net interest margin rose by 4bps,
reflecting benefits from US dollar interest rate rises. Gross
yields rose on surplus liquidity in Asia, which had the effect of
widening deposit spreads in RBWM and GLCM, and also in North
America. Our net interest margin also benefitted from increased
interest income on customer lending, despite a marginal fall in
lending yields. These benefits were, however, partly offset by a
rise in the cost of Group debt and further disposals in the
higher-yielding US run-off portfolio.
Notes
|
|
●
|
Income
statement comparisons, unless stated otherwise, are between the
quarter ended 31 March 2017 and the quarter ended 31 March 2016.
Balance sheet comparisons, unless otherwise stated, are between
balances at 31 March 2017 and the corresponding balances
at 31 December 2016.
|
|
|
●
|
The
financial information on which this Earnings Release is based,
and the data set out in the appendix to this statement, are
unaudited and have been prepared in accordance with HSBC's
significant accounting policies as described on pages 194 to
203 of our Annual Report and Accounts 2016.
|
|
|
●
|
The
Board has adopted a policy of paying quarterly interim dividends on
ordinary shares. Under this policy, it is intended to have a
pattern of three equal interim dividends with a variable fourth
interim dividend. Dividends are declared in US dollars and, at the
election of the shareholder, paid in cash in one of, or in a
combination of, US dollars, sterling and Hong Kong dollars or,
subject to the Board's determination that a scrip dividend is to be
offered in respect of that dividend, may be satisfied in whole or
in part by the issue of new shares in lieu of a cash dividend.
Details of the first interim dividend for 2017 and the series A
dollar preference share dividend are set out at the end of this
release.
|
|
|
|
Footnotes
to financial performance
commentary
|
1
|
Net
operating income before loan impairment charges and other credit
risk provisions, also referred to as revenue.
|
|
2
|
'Other
personal lending' includes personal non-residential closed-end
loans and personal overdrafts.
|
|
3
|
'Investment
distribution' includes Investments, which comprises mutual funds
(HSBC manufactured and third party), structured products and
securities trading, and Wealth Insurance distribution, consisting
of HSBC manufactured and third-party life, pension and investment
insurance products.
|
|
4
|
'Other'
mainly includes the distribution and manufacturing (where
applicable) of retail and credit protection insurance.
|
|
5
|
Adjusted
RoRWA is calculated using adjusted annualised profit before tax and
adjusted average risk-weighted assets.
|
|
6
|
'Markets
products, Insurance and Investments and Other' includes revenue
from Foreign Exchange, insurance manufacturing and distribution,
interest rate management and Global Banking products.
|
|
7
|
In
1Q17, credit and funding valuation adjustments included an adverse
fair value movement of $119m on the widening of credit spreads on
structured liabilities (1Q16: favourable fair value movement of
$233m; 4Q16: adverse fair value movement of $156m).
|
|
8
|
'Other'
in GB&M includes net interest earned on free capital held in
the global business not assigned to products, allocated funding
costs and gains resulting from business disposals. Within the
management view of total operating income, notional tax credits are
allocated to the businesses to reflect the economic benefit
generated by certain activities which is not reflected within
operating income, such as notional credits on income earned from
tax-exempt investments where the economic benefit of the activity
is reflected in tax expense. In order to reflect the total
operating income on an IFRS basis, the offset to these tax credits
is included within 'Other'.
|
|
9
|
Central
Treasury includes revenue relating to BSM of $845m (4Q16: $763m;
1Q16: $719m), interest expense of $331m (4Q16: $273m; 1Q16: $155m)
and adverse valuation differences on issued long-term debt and
associated swaps of $32m (4Q16: adverse movements of $742m; 1Q16:
favourable movements of $249m). Revenue relating to BSM includes
other internal allocations, including notional tax credits to
reflect the economic benefit generated by certain activities which
is not reflected within operating income, for example notional
credits on income earned from tax-exempt investments where the
economic benefit of the activity is reflected in tax expense. In
order to reflect the total operating income on an IFRS basis, the
offset to these tax credits is included in other Central
Treasury.
|
|
10
|
Other
miscellaneous items in Corporate Centre includes internal
allocations relating to legacy credit.
|
|
|
|
|
|
HSBC
Holdings plc Earnings Release 1Q17
|
11
|
Earnings
Release - 1Q17
Cautionary
statement regarding forward-looking statements
This
Earnings Release contains certain forward-looking statements with
respect to HSBC's financial condition, results of operations,
capital position and business.
Statements
that are not historical facts, including statements about HSBC's
beliefs and expectations, are forward-looking statements. Words
such as 'expects', 'anticipates', 'intends', 'plans', 'believes',
'seeks', 'estimates', 'potential' and 'reasonably possible',
variations of these words and similar expressions are intended to
identify forward-looking statements. These statements are based on
current plans, estimates and projections, and therefore undue
reliance should not be placed on them. Forward-looking statements
speak only as of the date they are made. HSBC makes no
commitment to revise or update any forward-looking statements
to reflect events or circumstances occurring or existing after
the date of any forward-looking statements.
Written
and/or oral forward-looking statements may also be made in the
periodic reports to the US Securities and Exchange Commission,
summary financial statements to shareholders, proxy
statements, offering circulars and prospectuses, press releases and
other written materials, and in oral statements made by HSBC's
Directors, officers or employees to third parties, including
financial analysts.
Forward-looking
statements involve inherent risks and uncertainties. Readers are
cautioned that a number of factors could cause actual results to
differ, in some instances materially, from those anticipated or
implied in any forward-looking statement.
These
include, but are not limited to:
|
|
●
|
changes
in general economic conditions in the markets in which we
operate, such as continuing or deepening recessions and
fluctuations in employment beyond those factored into consensus
forecasts; changes in foreign exchange rates and interest rates;
volatility in equity markets; lack of liquidity in wholesale
funding markets; illiquidity and downward price pressure in
national real estate markets; adverse changes in central
banks'policies with respect to the provision of liquidity support
to financial markets; heightened market concerns over sovereign
creditworthiness in over-indebted countries; adverse changes in the
funding status of public or private defined benefit pensions; and
consumer perception as to the continuing availability of credit and
price competition in the market segments we
serve;
|
|
|
●
|
changes
in government policy and regulation, including the monetary,
interest rate and other policies of central banks and other
regulatory authorities; initiatives to change the size,
scope of activities and interconnectedness of financial
institutions in connection with the implementation of stricter
regulation of financial institutions in key markets worldwide;
revised capital and liquidity benchmarks which could serve to
deleverage bank balance sheets and lower returns available from the
current business model and portfolio mix; imposition of levies
or taxes designed to change business mix and risk appetite;
the conduct of business of financial institutions in serving their
retail customers, corporate clients and counterparties; the
standards of market conduct; the costs, effects and outcomes
of product regulatory reviews, actions or litigation,
including any additional compliance requirements; expropriation,
nationalisation, confiscation of assets and changes in legislation
relating to foreign ownership; changes in bankruptcy
legislation in the principal markets in which we operate
and the consequences thereof; general changes in government
policy that may significantly influence investor decisions;
extraordinary government actions as a result of current market
turmoil; other unfavourable political or diplomatic
developments producing social instability or legal uncertainty
which in turn may affect demand for our products and services; and
the effects of competition in the markets where we
operate including increased competition from non-bank financial
services companies, including securities firms; and
|
|
|
●
|
factors
specific to HSBC, including our success in adequately identifying
the risks we face, such as the incidence of loan losses
or delinquency, and managing those risks (through account
management, hedging and other techniques). Effective risk
management depends on, among other things, our ability through
stress testing and other techniques to prepare for events that
cannot be captured by the statistical models we use; our success in
addressing operational, legal and regulatory, and litigation
challenges, notably compliance with the Deferred Prosecution
Agreement with US authorities; and other risks and uncertainties we
identify in the 'top and emerging risks' on pages 64 to 67 of the
Annual Report and Accounts 2016.
|
For
further information contact:
|
|
|
Investor
Relations
|
Media
Relations
|
UK -
Richard O'Connor
|
UK -
Heidi Ashley
|
Email:
investorrelations@hsbc.com
|
Tel:
+44 (0) 20 7992 2045
|
|
|
Hong
Kong - Hugh Pye
|
Hong
Kong - Gareth Hewett
|
Tel:
+852 2822 4908
|
Tel:
+852 2822 4929
|
|
|
|
|
12
|
HSBC
Holdings plc Earnings Release 1Q17
|
Earnings
Release - 1Q17
|
|
Summary
consolidated income statement
|
|
|
|
|
|
Quarter
ended
|
|
31
Mar
|
|
31
Dec
|
|
31
Mar
|
|
|
2017
|
|
2016
|
|
2016
|
|
|
$m
|
|
$m
|
|
$m
|
|
Net
interest income
|
6,787
|
|
6,868
|
|
7,913
|
|
Net fee
income
|
3,224
|
|
2,929
|
|
3,197
|
|
Net
trading income
|
2,246
|
|
1,897
|
|
2,836
|
|
Net
income/(expense) from financial instruments designated at fair
value
|
929
|
|
(2,413
|
)
|
695
|
|
-
changes in fair value of long-term debt issued and related
derivatives
|
(60
|
)
|
(2,572
|
)
|
690
|
|
- net
income/(expense) from other financial instruments designated at
fair value
|
989
|
|
159
|
|
5
|
|
Gains
less losses from financial investments
|
338
|
|
114
|
|
192
|
|
Dividend
income
|
13
|
|
17
|
|
28
|
|
Net
insurance premium income
|
2,793
|
|
2,060
|
|
2,915
|
|
Other
operating income/(expense)
|
202
|
|
(125
|
)
|
172
|
|
Total
operating income
|
16,532
|
|
11,347
|
|
17,948
|
|
Net
insurance claims and benefits paid and movement in liabilities to
policyholders
|
(3,539
|
)
|
(2,363
|
)
|
(2,972
|
)
|
Net
operating income before loan impairment charges and other credit
risk provisions
|
12,993
|
|
8,984
|
|
14,976
|
|
Loan
impairment charges and other credit risk provisions
|
(236
|
)
|
(468
|
)
|
(1,161
|
)
|
Net
operating income
|
12,757
|
|
8,516
|
|
13,815
|
|
Total
operating expenses
|
(8,328
|
)
|
(12,459
|
)
|
(8,264
|
)
|
Operating
profit/(loss)
|
4,429
|
|
(3,943
|
)
|
5,551
|
|
Share
of profit in associates and joint ventures
|
532
|
|
498
|
|
555
|
|
Profit/(loss)
before tax
|
4,961
|
|
(3,445
|
)
|
6,106
|
|
Tax
expense
|
(1,201
|
)
|
(572
|
)
|
(1,571
|
)
|
Profit/(loss)
after tax
|
3,760
|
|
(4,017
|
)
|
4,535
|
|
Attributable
to:
|
|
|
|
-
ordinary shareholders of the parent company
|
3,130
|
|
(4,440
|
)
|
3,888
|
|
-
preference shareholders of the parent company
|
22
|
|
23
|
|
22
|
|
- other
equity holders
|
313
|
|
188
|
|
391
|
|
-
non-controlling interests
|
295
|
|
212
|
|
234
|
|
Profit/(loss)
after tax
|
3,760
|
|
(4,017
|
)
|
4,535
|
|
|
$
|
|
$
|
|
$
|
|
Basic
earnings per share
|
0.16
|
|
(0.22
|
)
|
0.20
|
|
Diluted
earnings per share
|
0.16
|
|
(0.22
|
)
|
0.20
|
|
Dividend
per ordinary share (in respect of the period)
|
0.10
|
|
0.21
|
|
0.10
|
|
|
%
|
|
%
|
|
%
|
|
Return
on average ordinary shareholders' equity (annualised)
|
8.0
|
|
(10.9
|
)
|
9.0
|
|
Return
on risk-weighted assets
1
|
2.3
|
|
(1.6
|
)
|
2.2
|
|
Cost
efficiency ratio
|
64.1
|
|
138.7
|
|
55.2
|
|
|
|
1
|
Return
on risk-weighted assets ('RoRWA') is calculated using annualised
profit before tax and reported average RWAs.
|
|
|
|
|
HSBC
Holdings plc Earnings Release 1Q17
|
13
|
Earnings
Release - 1Q17
|
|
Summary
consolidated balance sheet
|
|
|
|
|
|
At
|
|
31
Mar
|
|
31
Dec
|
|
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Assets
|
|
|
Cash
and balances at central banks
|
132,265
|
|
128,009
|
|
Trading
assets
|
294,588
|
|
235,125
|
|
Financial
assets designated at fair value
|
26,735
|
|
24,756
|
|
Derivatives
|
234,048
|
|
290,872
|
|
Loans
and advances to banks
|
87,993
|
|
88,126
|
|
Loans
and advances to customers
|
875,969
|
|
861,504
|
|
Reverse
repurchase agreements - non-trading
|
193,014
|
|
160,974
|
|
Financial
investments
|
414,022
|
|
436,797
|
|
Assets
held for sale
|
2,925
|
|
4,389
|
|
Other
assets
|
154,908
|
|
144,434
|
|
Total
assets
|
2,416,467
|
|
2,374,986
|
|
Liabilities
and Equity
|
|
|
Liabilities
|
|
|
Deposits
by banks
|
67,178
|
|
59,939
|
|
Customer
accounts
|
1,272,957
|
|
1,272,386
|
|
Repurchase
agreements - non-trading
|
118,197
|
|
88,958
|
|
Trading
liabilities
|
197,777
|
|
153,691
|
|
Financial
liabilities designated at fair value
|
91,379
|
|
86,832
|
|
Derivatives
|
226,724
|
|
279,819
|
|
Debt
securities in issue
|
66,877
|
|
65,915
|
|
Liabilities
of disposal groups held for sale
|
2,114
|
|
2,790
|
|
Liabilities
under insurance contracts
|
77,771
|
|
75,273
|
|
Other
liabilities
|
109,467
|
|
106,805
|
|
Total
liabilities
|
2,230,441
|
|
2,192,408
|
|
Equity
|
|
|
Total
shareholders' equity
|
178,784
|
|
175,386
|
|
Non-controlling
interests
|
7,242
|
|
7,192
|
|
Total
equity
|
186,026
|
|
182,578
|
|
Total
liabilities and equity
|
2,416,467
|
|
2,374,986
|
|
|
%
|
|
%
|
|
Ratio
of customer advances to customer accounts
|
68.8
|
|
67.7
|
|
|
|
|
|
14
|
HSBC
Holdings plc Earnings Release 1Q17
|
Earnings
Release - 1Q17
|
|
|
|
|
|
Capital
|
|
|
|
|
|
|
|
Transitional
own funds disclosure
|
|
|
At
|
|
|
31
Mar
|
|
31
Dec
|
|
|
|
2017
|
|
2016
|
|
Ref*
|
|
$m
|
|
$m
|
|
6
|
Common
equity tier 1 capital before regulatory adjustments
|
154,290
|
|
149,291
|
|
28
|
Total
regulatory adjustments to common equity tier 1
|
(31,925
|
)
|
(32,739
|
)
|
29
|
Common
equity tier 1 capital
|
122,365
|
|
116,552
|
|
36
|
Additional
tier 1 capital before regulatory adjustments
|
19,914
|
|
21,624
|
|
43
|
Total
regulatory adjustments to additional tier 1 capital
|
(107
|
)
|
(154
|
)
|
44
|
Additional
tier 1 capital
|
19,807
|
|
21,470
|
|
45
|
Tier 1
capital
|
142,172
|
|
138,022
|
|
51
|
Tier 2
capital before regulatory adjustments
|
31,587
|
|
34,750
|
|
57
|
Total
regulatory adjustments to tier 2 capital
|
(465
|
)
|
(414
|
)
|
58
|
Tier 2
capital
|
31,122
|
|
34,336
|
|
59
|
Total
capital
|
173,294
|
|
172,358
|
|
60
|
Total
risk-weighted assets
|
857,865
|
|
857,181
|
|
|
Capital
ratios
|
%
|
|
%
|
|
61
|
Common
equity tier 1 ratio
|
14.3
|
|
13.6
|
|
62
|
Tier 1
ratio
|
16.6
|
|
16.1
|
|
63
|
Total
capital ratio
|
20.2
|
|
20.1
|
|
|
|
*
|
The
references identify the lines prescribed in the EBA
template.
|
Capital
Our
CET1 capital ratio increased to 14.3%.
CET1
capital increased in the quarter by $5.8bn, due to:
|
|
●
|
$2.5bn
of capital generation through profits, net of dividends and
scrip;
|
|
|
●
|
favourable
foreign currency translation differences of
$1.6bn; and
|
|
|
●
|
regulatory
netting of $1.5bn.
|
These
increases were partly offset by:
|
|
●
|
the
share buy-back of $1.0bn.
|
|
|
Minimum
requirement for own funds
and
eligible liabilities
|
MREL
During
the first quarter HSBC received its indicative non-binding MREL
requirement from the Bank of England. HSBC's resolution strategy
has been confirmed as multiple point of entry and our MREL
requirement set at the higher of: (i) 16% of RWAs from 1 January
2019 (18% from 1 January 2022); (ii) 6% of leverage exposures from
1 January 2019 (6.75% from 1 January 2022); or (iii) the sum
of requirements relating to each of its resolution groups. CET1
capital buffers have to be added to these requirements. The final
requirements may change due to a number of factors, although based
on our understanding of the indicative requirement, HSBC currently
meets its 2019 MREL requirement.
RWAs
RWAs
increased by $0.7bn in the first quarter, including a positive
impact of $6.7bn due to foreign currency translation differences
and an underlying decrease of $6.0bn. The following comments
describe RWA movements excluding foreign currency translation
differences.
RWA
initiatives
The
main drivers for these reductions were:
|
|
●
|
$7.8bn
through the continued reduction in legacy credit and US run-off
portfolios; and
|
|
|
●
|
$5.5bn
as a result of reduced exposures, refined calculations and process
improvements.
|
Asset
size
Asset
size movements increased RWAs by $1.9bn, principally
from:
|
|
●
|
increased
corporate lending in CMB, increasing RWAs by $3.4bn in Asia and
Europe.
|
This
increase was partly offset by:
|
|
●
|
movements
in market parameters reducing market risk RWAs by
$2.1bn.
|
Methodology
and policy
Methodology
and policy movements increased RWAs by $5.7bn, mainly as a
result of changes to the treatment of:
|
|
●
|
netting
of current accounts, increasing RWAs by $2.8bn; and
|
|
|
●
|
non-recourse
purchased receivables, increasing RWAs by $1.8bn.
|
|
|
|
|
HSBC
Holdings plc Earnings Release 1Q17
|
15
|
Earnings
Release - 1Q17
|
|
|
|
|
|
|
|
|
|
Overview
of RWAs
|
|
|
a
|
b
|
c
|
|
|
31
Mar
|
|
31
Dec
|
|
31
Mar
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
|
|
RWA
|
|
RWA
|
|
Capital
requirement
1
|
|
|
|
$bn
|
|
$bn
|
|
$bn
|
|
1
|
Credit
risk (excluding Counterparty credit risk)
|
592.8
|
|
589.1
|
|
47.4
|
|
2
|
Standardised
approach
|
122.5
|
|
120.6
|
|
9.8
|
|
3
|
Foundation
IRB (FIRB) approach
2
|
26.0
|
|
25.9
|
|
2.1
|
|
4
|
Advanced
IRB (AIRB) approach
|
444.3
|
|
442.6
|
|
35.5
|
|
6
|
Counterparty
credit risk
|
61.2
|
|
61.8
|
|
4.9
|
|
7
|
Mark to
market
|
36.3
|
|
35.8
|
|
2.9
|
|
10
|
Internal
model method (IMM)
|
9.9
|
|
10.9
|
|
0.8
|
|
11
|
Risk
exposure amount for contributions to the default fund of a
CCP
|
0.7
|
|
0.7
|
|
0.1
|
|
12
|
CVA
|
14.3
|
|
14.4
|
|
1.1
|
|
13
|
Settlement
risk
|
0.2
|
|
0.2
|
|
-
|
|
14
|
Securitisation
exposures in the banking book (after the cap)
|
21.3
|
|
21.8
|
|
1.7
|
|
15
|
IRB
approach
|
18.5
|
|
19.1
|
|
1.5
|
|
16
|
IRB
supervisory formula approach (SFA)
|
0.2
|
|
0.2
|
|
-
|
|
17
|
Internal
assessment approach (IAA)
|
1.5
|
|
1.6
|
|
0.1
|
|
18
|
Standardised
approach
|
1.1
|
|
0.9
|
|
0.1
|
|
19
|
Market
risk
|
38.9
|
|
41.5
|
|
3.1
|
|
20
|
Standardised
approach
|
4.8
|
|
5.0
|
|
0.4
|
|
21
|
Internal
models approach (IMA)
|
34.1
|
|
36.5
|
|
2.7
|
|
23
|
Operational
risk
|
98.0
|
|
98.0
|
|
7.8
|
|
25
|
Standardised
approach
|
98.0
|
|
98.0
|
|
7.8
|
|
27
|
Amounts
below the thresholds for deduction (subject to 250% risk
weight)
|
45.5
|
|
44.8
|
|
3.7
|
|
28
|
Floor
adjustment
|
-
|
|
-
|
|
-
|
|
29
|
Total
|
857.9
|
|
857.2
|
|
68.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
'Capital
requirement' here and in all tables where the term is used,
represents the Pillar 1 capital charge at 8% of the RWAs.
|
|
|
2
|
Internal
ratings based.
|
|
|
|
RWAs by
global business
|
|
RBWM
|
|
CMB
|
|
GB&M
|
|
GPB
|
|
Corporate
Centre
|
|
Total
|
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
Credit
risk
|
86.1
|
|
256.3
|
|
171.6
|
|
12.4
|
|
133.2
|
|
659.6
|
|
Counterparty
credit risk
|
-
|
|
-
|
|
58.5
|
|
0.2
|
|
2.7
|
|
61.4
|
|
Market
risk
|
-
|
|
-
|
|
34.9
|
|
-
|
|
4.0
|
|
38.9
|
|
Operational
risk
|
27.4
|
|
24.3
|
|
31.0
|
|
2.8
|
|
12.5
|
|
98.0
|
|
At 31
Mar 2017
|
113.5
|
|
280.6
|
|
296.0
|
|
15.4
|
|
152.4
|
|
857.9
|
|
|
|
|
RWAs by
geographical region
|
|
Europe
|
|
Asia
|
|
MENA
|
|
NorthAmerica
|
|
LatinAmerica
|
|
Total
|
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
Credit
risk
|
212.8
|
|
265.8
|
|
48.1
|
|
108.4
|
|
24.5
|
|
659.6
|
|
Counterparty
credit risk
|
31.0
|
|
15.0
|
|
1.2
|
|
12.6
|
|
1.6
|
|
61.4
|
|
Market
risk
1
|
26.8
|
|
18.6
|
|
2.1
|
|
6.8
|
|
0.6
|
|
38.9
|
|
Operational
risk
|
30.9
|
|
36.6
|
|
7.5
|
|
12.8
|
|
10.2
|
|
98.0
|
|
At 31
Mar 2017
|
301.5
|
|
336.0
|
|
58.9
|
|
140.6
|
|
36.9
|
|
857.9
|
|
|
|
1
|
RWAs
are non-additive across geographical regions due to market risk
diversification effects within the Group.
|
|
|
|
16
|
HSBC
Holdings plc Earnings Release 1Q17
|
Earnings
Release - 1Q17
|
|
|
RWA
movement by global businesses by key driver
|
|
Credit
risk, counterparty credit risk and operational risk
|
|
|
|
RBWM
|
|
CMB
|
|
GB&M
|
|
GPB
|
|
Corporate
Centre
|
|
Market
risk
|
|
Total
RWAs
|
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
RWAs at
1 Jan 2017
|
115.1
|
|
275.9
|
|
261.9
|
|
15.3
|
|
147.5
|
|
41.5
|
|
857.2
|
|
RWA
initiatives
|
(0.4
|
)
|
(2.0
|
)
|
(2.5
|
)
|
(0.1
|
)
|
(7.7
|
)
|
(0.5
|
)
|
(13.2
|
)
|
Asset
size
|
0.8
|
|
2.4
|
|
(0.6
|
)
|
0.1
|
|
1.3
|
|
(2.1
|
)
|
1.9
|
|
Asset
quality
|
0.1
|
|
0.5
|
|
(1.8
|
)
|
0.1
|
|
0.6
|
|
-
|
|
(0.5
|
)
|
Model
updates
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
portfolios moving onto IRB approach
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
new/updated models
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Methodology and
policy
|
(3.1
|
)
|
1.3
|
|
1.9
|
|
(0.2
|
)
|
5.8
|
|
-
|
|
5.7
|
|
-
internal updates
|
(3.1
|
)
|
1.3
|
|
2.0
|
|
(0.2
|
)
|
5.8
|
|
-
|
|
5.8
|
|
-
external updates - regulatory
|
-
|
|
-
|
|
(0.1
|
)
|
-
|
|
-
|
|
-
|
|
(0.1
|
)
|
Acquisitions
and disposals
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Foreign
exchange movements
|
1.0
|
|
2.5
|
|
2.2
|
|
0.2
|
|
0.9
|
|
-
|
|
6.8
|
|
Total
RWA movement
|
(1.6
|
)
|
4.7
|
|
(0.8
|
)
|
0.1
|
|
0.9
|
|
(2.6
|
)
|
0.7
|
|
RWAs at
31 Mar 2017
|
113.5
|
|
280.6
|
|
261.1
|
|
15.4
|
|
148.4
|
|
38.9
|
|
857.9
|
|
|
|
|
RWA
movement by geographical region by key driver
|
|
Credit
risk, counterparty credit risk and operational risk
|
|
|
|
Europe
|
|
Asia
|
|
MENA
|
|
NorthAmerica
|
|
LatinAmerica
|
|
Market
risk
|
|
Total
RWAs
|
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
RWAs at
1 Jan 2017
|
267.6
|
|
312.7
|
|
57.7
|
|
143.9
|
|
33.8
|
|
41.5
|
|
857.2
|
|
RWA
initiatives
|
(1.6
|
)
|
(2.4
|
)
|
(0.4
|
)
|
(8.3
|
)
|
-
|
|
(0.5
|
)
|
(13.2
|
)
|
Asset
size
|
3.2
|
|
3.0
|
|
(0.3
|
)
|
(2.0
|
)
|
0.1
|
|
(2.1
|
)
|
1.9
|
|
Asset
quality
|
(0.4
|
)
|
-
|
|
-
|
|
(0.6
|
)
|
0.5
|
|
-
|
|
(0.5
|
)
|
Model
updates
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
portfolios moving onto IRB approach
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
new/updated models
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Methodology and
policy
|
3.7
|
|
1.5
|
|
(0.1
|
)
|
0.6
|
|
-
|
|
-
|
|
5.7
|
|
-
internal updates
|
3.7
|
|
1.5
|
|
-
|
|
0.6
|
|
-
|
|
-
|
|
5.8
|
|
-
external updates - regulatory
|
-
|
|
-
|
|
(0.1
|
)
|
-
|
|
-
|
|
-
|
|
(0.1
|
)
|
Acquisitions
and disposals
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Foreign
exchange movements
|
2.2
|
|
2.6
|
|
(0.1
|
)
|
0.2
|
|
1.9
|
|
-
|
|
6.8
|
|
Total
RWA movement
|
7.1
|
|
4.7
|
|
(0.9
|
)
|
(10.1
|
)
|
2.5
|
|
(2.6
|
)
|
0.7
|
|
RWAs at
31 Mar 2017
|
274.7
|
|
317.4
|
|
56.8
|
|
133.8
|
|
36.3
|
|
38.9
|
|
857.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RWA
flow statements of credit risk exposures under the IRB
approach
1
|
|
|
|
a
|
b
|
|
|
|
RWA
|
|
Capital
requirement
|
|
|
|
|
$bn
|
|
$bn
|
|
|
1
|
RWAs at
1 Jan 2017
|
468.5
|
|
37.5
|
|
|
2
|
Asset
size
|
2.0
|
|
0.2
|
|
|
3
|
Asset
quality
|
-
|
|
-
|
|
|
4
|
Model
updates
|
-
|
|
-
|
|
|
5
|
Methodology
and policy
|
1.2
|
|
0.1
|
|
|
6
|
Acquisitions
and disposals
|
(5.7
|
)
|
(0.5
|
)
|
|
7
|
Foreign
exchange movements
|
4.3
|
|
0.3
|
|
|
8
|
Other
|
-
|
|
-
|
|
|
9
|
RWAs at
31 Mar 2017
|
470.3
|
|
37.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
This
table includes RWA initiatives of $9.7bn allocated across the RWA
flow layers to which they relate.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HSBC
Holdings plc Earnings Release 1Q17
|
17
|
Earnings
Release - 1Q17
|
|
|
|
|
RWA
flow statements of counterparty credit risk exposures under the
IMM
1
|
|
|
a
|
|
b
|
|
|
RWA
|
|
Capital
requirement
|
|
|
$bn
|
|
$bn
|
1
|
RWAs at
1 Jan 2017
|
14.4
|
|
1.2
|
2
|
Asset
size
|
(0.4
|
)
|
-
|
3
|
Credit
quality of counterparties
|
(0.2
|
)
|
-
|
4
|
Model
updates (IMM only)
|
1.0
|
|
-
|
5
|
Methodology
and policy (IMM only)
|
(0.5
|
)
|
-
|
6
|
Acquisitions
and disposals
|
-
|
|
-
|
7
|
Foreign
exchange movements
|
-
|
|
-
|
8
|
Other
|
-
|
|
-
|
9
|
RWAs at
31 Mar 2017
|
14.3
|
|
1.2
|
|
|
1
|
This
table includes an increase in RWAs of $0.6bn associated with RWA
initiatives.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RWA
flow statements of market risk exposures under the IMA
1
|
|
|
|
a
|
b
|
c
|
d
|
e
|
f
|
g
|
|
|
|
VaR
|
|
StressedVaR
|
|
IRC
|
|
CRM
|
|
Other
|
|
Total
RWA
|
|
Capital
requirement
|
|
|
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
|
1
|
|
RWAs at
1 Jan 2017
|
8.7
|
|
15.8
|
|
9.5
|
|
-
|
|
2.5
|
|
36.5
|
|
2.9
|
|
|
2
|
|
Movement
in risk levels
|
0.8
|
|
(3.5
|
)
|
0.6
|
|
-
|
|
(0.3
|
)
|
(2.4
|
)
|
(0.2
|
)
|
|
3
|
|
Model
updates/changes
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
4
|
|
Methodology
and policy
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
5
|
|
Acquisitions
and disposals
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
6
|
|
Foreign
exchange movements
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
7
|
|
Other
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
8
|
|
RWAs at
31 Mar 2017
|
9.5
|
|
12.3
|
|
10.1
|
|
-
|
|
2.2
|
|
34.1
|
|
2.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
This
table includes RWA initiatives of $0.2bn allocated across the RWA
flow layers to which they relate.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leverage
|
|
|
|
Leverage
ratio
|
|
|
At
|
|
|
31
Mar
|
|
31
Dec
|
|
|
|
2017
|
|
2016
|
|
Ref*
|
|
$bn
|
|
$bn
|
|
20
|
Tier 1
capital (end point)
|
133.7
|
|
127.3
|
|
21
|
Total
leverage ratio exposure
|
2,449.8
|
|
2,354.4
|
|
|
|
%
|
|
%
|
|
22
|
Leverage
ratio
|
5.5
|
|
5.4
|
|
EU-23
|
Choice
on transitional arrangements for the definition of the capital
measure
|
Fully
phased in
|
|
Fully
phased in
|
|
|
UK
leverage ratio exposure - quarterly average
|
2,313.0
|
|
|
|
|
%
|
|
%
|
|
|
UK
leverage ratio - quarterly average
|
5.7
|
|
|
|
UK
leverage ratio - quarter end
|
5.8
|
|
5.7
|
|
|
|
*
|
The
references identify the lines prescribed in the EBA
template.
|
Our
leverage ratio calculated on the CRR basis was 5.5% at
31 March 2017, up from 5.4% at 31 December 2016. This was
mainly due to increased capital.
The
Group's UK leverage ratio on a modified basis, excluding qualifying
central bank balances, was 5.8%. This modification
to the leverage ratio exposure measure was made following
recommendations by the Bank of England's Financial Policy
Committee.
The
Financial Policy Committee has stated that it intends to
recalibrate the leverage ratio in 2017 to take account of this
modification. HSBC's UK leverage ratio should be considered
in this context.
At 31
March 2017, our UK minimum leverage ratio requirement of 3% was
supplemented by an additional leverage ratio buffer of 0.4%
that translates to a value of $10bn, and a countercyclical leverage
ratio buffer which results in no capital impact. We comfortably
exceeded these leverage requirements.
|
|
|
|
18
|
HSBC
Holdings plc Earnings Release 1Q17
|
Earnings
Release - 1Q17
|
|
Summary
information - global businesses
|
|
|
|
HSBC
adjusted profit before tax
|
|
Quarter
ended 31 Mar 2017
|
|
Retail
Bankingand WealthManagement
|
|
CommercialBanking
|
|
GlobalBanking
andMarkets
|
|
GlobalPrivateBanking
|
|
Corporate
Centre
|
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Net
interest income
|
3,336
|
|
2,117
|
|
1,063
|
|
189
|
|
82
|
|
6,787
|
|
Net fee
income
|
1,224
|
|
908
|
|
912
|
|
176
|
|
4
|
|
3,224
|
|
Net
trading income
1
|
139
|
|
125
|
|
1,864
|
|
49
|
|
75
|
|
2,252
|
|
Other
income
2
|
310
|
|
41
|
|
47
|
|
1
|
|
181
|
|
580
|
|
Net
operating income before loan impairment charges and other
credit risk provisions
|
5,009
|
|
3,191
|
|
3,886
|
|
415
|
|
342
|
|
12,843
|
|
Loan
impairment (charges)/recoveries and other credit risk
provisions
|
(296
|
)
|
3
|
|
20
|
|
(1
|
)
|
38
|
|
(236
|
)
|
Net
operating income
|
4,713
|
|
3,194
|
|
3,906
|
|
414
|
|
380
|
|
12,607
|
|
Total
operating expenses
|
(2,941
|
)
|
(1,399
|
)
|
(2,197
|
)
|
(344
|
)
|
(321
|
)
|
(7,202
|
)
|
Operating
profit
|
1,772
|
|
1,795
|
|
1,709
|
|
70
|
|
59
|
|
5,405
|
|
Share
of profit in associates and joint ventures
|
9
|
|
-
|
|
-
|
|
-
|
|
523
|
|
532
|
|
Adjusted
profit before tax
|
1,781
|
|
1,795
|
|
1,709
|
|
70
|
|
582
|
|
5,937
|
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
Share
of HSBC's adjusted profit before tax
|
30.0
|
|
30.2
|
|
28.8
|
|
1.2
|
|
9.8
|
|
100.0
|
|
Adjusted
cost efficiency ratio
|
58.7
|
|
43.8
|
|
56.5
|
|
82.9
|
|
93.9
|
|
56.1
|
|
|
|
|
|
|
Quarter
ended 31 Dec 2016
|
Net
interest income
|
3,227
|
|
2,097
|
|
1,121
|
|
199
|
|
176
|
|
6,820
|
|
Net fee
income
|
1,149
|
|
843
|
|
724
|
|
171
|
|
30
|
|
2,917
|
|
Net
trading income
1
|
121
|
|
78
|
|
1,589
|
|
37
|
|
430
|
|
2,255
|
|
Other
income/(expense)
2
|
66
|
|
6
|
|
140
|
|
(10
|
)
|
(1,269
|
)
|
(1,067
|
)
|
Net
operating income/(expense) before loan impairment charges and other
credit risk provisions
|
4,563
|
|
3,024
|
|
3,574
|
|
397
|
|
(633
|
)
|
10,925
|
|
Loan
impairment (charges)/recoveries and other credit risk
provisions
|
(252
|
)
|
(194
|
)
|
(12
|
)
|
(9
|
)
|
11
|
|
(456
|
)
|
Net
operating income/(expense)
|
4,311
|
|
2,830
|
|
3,562
|
|
388
|
|
(622
|
)
|
10,469
|
|
Total
operating expenses
|
(3,173
|
)
|
(1,441
|
)
|
(2,243
|
)
|
(364
|
)
|
(1,154
|
)
|
(8,375
|
)
|
Operating
profit/(loss)
|
1,138
|
|
1,389
|
|
1,319
|
|
24
|
|
(1,776
|
)
|
2,094
|
|
Share
of profit in associates and joint ventures
|
2
|
|
-
|
|
-
|
|
-
|
|
492
|
|
494
|
|
Adjusted
profit/(loss) before tax
|
1,140
|
|
1,389
|
|
1,319
|
|
24
|
|
(1,284
|
)
|
2,588
|
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
Share
of HSBC's adjusted profit before tax
|
44.0
|
|
53.7
|
|
51.0
|
|
0.9
|
|
(49.6
|
)
|
100.0
|
|
Adjusted
cost efficiency ratio
|
69.5
|
|
47.7
|
|
62.8
|
|
91.7
|
|
(182.3
|
)
|
76.7
|
|
|
|
|
|
|
Quarter
ended 31 Mar 2016
|
Net
interest income
|
3,123
|
|
2,103
|
|
1,148
|
|
204
|
|
464
|
|
7,042
|
|
Net fee
income/(expense)
|
1,120
|
|
888
|
|
782
|
|
201
|
|
(15
|
)
|
2,976
|
|
Net
trading income
1
|
112
|
|
108
|
|
1,557
|
|
48
|
|
825
|
|
2,650
|
|
Other
income/(expense)
2
|
2
|
|
45
|
|
53
|
|
(1
|
)
|
(188
|
)
|
(89
|
)
|
Net
operating income before loan impairment charges and other credit
risk provisions
|
4,357
|
|
3,144
|
|
3,540
|
|
452
|
|
1,086
|
|
12,579
|
|
Loan
impairment charges and other credit risk provisions
|
(250
|
)
|
(258
|
)
|
(178
|
)
|
-
|
|
(114
|
)
|
(800
|
)
|
Net
operating income
|
4,107
|
|
2,886
|
|
3,362
|
|
452
|
|
972
|
|
11,779
|
|
Total
operating expenses
|
(2,898
|
)
|
(1,399
|
)
|
(2,100
|
)
|
(367
|
)
|
(252
|
)
|
(7,016
|
)
|
Operating
profit
|
1,209
|
|
1,487
|
|
1,262
|
|
85
|
|
720
|
|
4,763
|
|
Share
of profit in associates and joint ventures
|
7
|
|
-
|
|
-
|
|
-
|
|
526
|
|
533
|
|
Adjusted
profit before tax
|
1,216
|
|
1,487
|
|
1,262
|
|
85
|
|
1,246
|
|
5,296
|
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
Share
of HSBC's adjusted profit before tax
|
23.0
|
|
28.1
|
|
23.8
|
|
1.6
|
|
23.5
|
|
100.0
|
|
Adjusted
cost efficiency ratio
|
66.5
|
|
44.5
|
|
59.3
|
|
81.2
|
|
23.2
|
|
55.8
|
|
|
|
1
|
Net
trading income includes the revenues of internally funding trading
assets, while the related costs are reported in net interest
income. In our global business results, the total cost of funding
trading assets is included within Corporate Centre net trading
income as an interest expense. In the statutory presentation,
internal interest income and expense are eliminated.
|
|
|
2
|
Other
income 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.
|
|
|
|
|
HSBC
Holdings plc Earnings Release 1Q17
|
19
|
Earnings
Release - 1Q17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
Private Banking - reported client assets
1
|
|
|
Quarter
ended
|
|
|
31
Mar
|
|
31
Dec
|
|
31
Mar
|
|
|
|
2017
|
|
2016
|
|
2016
|
|
|
|
$bn
|
|
$bn
|
|
$bn
|
|
|
Opening
balance
|
298
|
|
315
|
|
349
|
|
|
Net new
money
|
1
|
|
(7
|
)
|
(5
|
)
|
|
- of
which: areas targeted for growth
|
5
|
|
(3
|
)
|
4
|
|
|
Value
change
|
7
|
|
(1
|
)
|
(6
|
)
|
|
Disposals
|
(7
|
)
|
(2
|
)
|
-
|
|
|
Exchange
and other
|
7
|
|
(7
|
)
|
3
|
|
|
Closing
balance
|
306
|
|
298
|
|
341
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
Private Banking - reported client assets by geography
1
|
|
|
Quarter
ended
|
|
|
31
Mar
|
|
31
Dec
|
|
31
Mar
|
|
|
|
2017
|
|
2016
|
|
2016
|
|
|
|
$bn
|
|
$bn
|
|
$bn
|
|
|
Europe
|
153
|
|
147
|
|
162
|
|
|
Asia
|
111
|
|
108
|
|
108
|
|
|
North
America
|
42
|
|
40
|
|
62
|
|
|
Latin
America
|
-
|
|
3
|
|
8
|
|
|
Middle
East
2
|
-
|
|
-
|
|
1
|
|
|
Closing
balance
|
306
|
|
298
|
|
341
|
|
|
|
1
|
Client
assets are translated at the rates of exchange applicable for their
respective period-ends, with the effects of currency translation
reported separately. The main components of client assets are funds
under management, which are not reported on the Group's balance
sheet, and customer deposits, which are reported on the Group's
balance sheet.
|
|
|
2
|
'Middle
East' is an offshore business, therefore client assets are booked
across to various regions, primarily in Europe.
|
|
|
|
|
20
|
HSBC
Holdings plc Earnings Release 1Q17
|
Earnings
Release - 1Q17
|
|
|
|
|
|
|
|
|
|
|
|
Summary
information - geographical regions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HSBC
reported profit/(loss) before tax
|
|
|
|
Quarter
ended 31 Mar 2017
|
|
|
|
Europe
3
|
|
Asia
|
|
MENA
3
|
|
North
America
|
|
LatinAmerica
|
|
Intra-HSBCitems
|
|
Total
|
|
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
|
|
Net
interest income
|
1,704
|
|
3,332
|
|
407
|
|
894
|
|
488
|
|
(38
|
)
|
6,787
|
|
|
|
Net fee
income
|
1,043
|
|
1,406
|
|
158
|
|
494
|
|
123
|
|
-
|
|
3,224
|
|
|
|
Net
trading income
1
|
1,044
|
|
904
|
|
83
|
|
114
|
|
63
|
|
38
|
|
2,246
|
|
|
|
Other
income
2
|
422
|
|
898
|
|
5
|
|
274
|
|
61
|
|
(924
|
)
|
736
|
|
|
|
Net
operating income before loan impairment charges and other credit
risk provisions
|
4,213
|
|
6,540
|
|
653
|
|
1,776
|
|
735
|
|
(924
|
)
|
12,993
|
|
|
|
Loan
impairment (charges)/recoveries and other credit
risk provisions
|
5
|
|
(167
|
)
|
(57
|
)
|
106
|
|
(123
|
)
|
-
|
|
(236
|
)
|
|
|
Net
operating income
|
4,218
|
|
6,373
|
|
596
|
|
1,882
|
|
612
|
|
(924
|
)
|
12,757
|
|
|
|
Total
operating expenses
|
(4,428
|
)
|
(2,694
|
)
|
(322
|
)
|
(1,310
|
)
|
(498
|
)
|
924
|
|
(8,328
|
)
|
|
|
Operating
profit/(loss)
|
(210
|
)
|
3,679
|
|
274
|
|
572
|
|
114
|
|
-
|
|
4,429
|
|
|
|
Share
of profit in associates and joint ventures
|
4
|
|
415
|
|
113
|
|
-
|
|
-
|
|
-
|
|
532
|
|
|
|
Profit/(loss)
before tax
|
(206
|
)
|
4,094
|
|
387
|
|
572
|
|
114
|
|
-
|
|
4,961
|
|
|
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
|
%
|
|
|
|
Share
of HSBC's profit before tax
|
(4.2
|
)
|
82.6
|
|
7.8
|
|
11.5
|
|
2.3
|
|
|
100.0
|
|
|
|
Cost
efficiency ratio
|
105.1
|
|
41.2
|
|
49.3
|
|
73.8
|
|
67.8
|
|
|
64.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
ended 31 Dec 2016
|
|
|
Net
interest income
|
1,800
|
|
3,196
|
|
426
|
|
965
|
|
507
|
|
(26
|
)
|
6,868
|
|
|
|
Net fee
income
|
962
|
|
1,240
|
|
161
|
|
450
|
|
116
|
|
-
|
|
2,929
|
|
|
|
Net
trading income
1
|
926
|
|
650
|
|
81
|
|
132
|
|
82
|
|
26
|
|
1,897
|
|
|
|
Other
income/(expense)
2
|
(2,041
|
)
|
482
|
|
(36
|
)
|
(14
|
)
|
21
|
|
(1,122
|
)
|
(2,710
|
)
|
|
|
Net
operating income before loan impairment charges and other credit
risk provisions
|
1,647
|
|
5,568
|
|
632
|
|
1,533
|
|
726
|
|
(1,122
|
)
|
8,984
|
|
|
|
Loan
impairment charges and other credit
risk provisions
|
(60
|
)
|
(125
|
)
|
(133
|
)
|
(27
|
)
|
(123
|
)
|
-
|
|
(468
|
)
|
|
|
Net
operating income
|
1,587
|
|
5,443
|
|
499
|
|
1,506
|
|
603
|
|
(1,122
|
)
|
8,516
|
|
|
|
Total
operating expenses
|
(8,333
|
)
|
(2,898
|
)
|
(377
|
)
|
(1,440
|
)
|
(533
|
)
|
1,122
|
|
(12,459
|
)
|
|
|
Operating
profit/(loss)
|
(6,746
|
)
|
2,545
|
|
122
|
|
66
|
|
70
|
|
-
|
|
(3,943
|
)
|
|
|
Share
of profit in associates and joint ventures
|
5
|
|
417
|
|
73
|
|
3
|
|
-
|
|
-
|
|
498
|
|
|
|
Profit/(loss)
before tax
|
(6,741
|
)
|
2,962
|
|
195
|
|
69
|
|
70
|
|
-
|
|
(3,445
|
)
|
|
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
|
%
|
|
|
|
Share
of HSBC's loss before tax
|
195.7
|
|
(86.0
|
)
|
(5.7
|
)
|
(2.0
|
)
|
(2.0
|
)
|
|
100.0
|
|
|
|
Cost
efficiency ratio
|
506.0
|
|
52.0
|
|
59.7
|
|
93.9
|
|
73.4
|
|
|
138.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
ended 31 Mar 2016
|
Net
interest income
|
2,291
|
|
3,046
|
|
459
|
|
1,144
|
|
989
|
|
(16
|
)
|
7,913
|
|
Net fee
income
|
1,047
|
|
1,266
|
|
202
|
|
451
|
|
231
|
|
-
|
|
3,197
|
|
Net
trading income
1
|
1,546
|
|
909
|
|
131
|
|
79
|
|
155
|
|
16
|
|
2,836
|
|
Other
income
2
|
748
|
|
612
|
|
43
|
|
320
|
|
44
|
|
(737
|
)
|
1,030
|
|
Net
operating income before loan impairment charges and other credit
risk provisions
|
5,632
|
|
5,833
|
|
835
|
|
1,994
|
|
1,419
|
|
(737
|
)
|
14,976
|
|
Loan
impairment charges and other credit
risk provisions
|
(151
|
)
|
(190
|
)
|
(46
|
)
|
(328
|
)
|
(446
|
)
|
-
|
|
(1,161
|
)
|
Net
operating income
|
5,481
|
|
5,643
|
|
789
|
|
1,666
|
|
973
|
|
(737
|
)
|
13,815
|
|
Total
operating expenses
|
(3,784
|
)
|
(2,543
|
)
|
(405
|
)
|
(1,302
|
)
|
(967
|
)
|
737
|
|
(8,264
|
)
|
Operating
profit
|
1,697
|
|
3,100
|
|
384
|
|
364
|
|
6
|
|
-
|
|
5,551
|
|
Share
of profit/(loss) in associates
and joint ventures
|
1
|
|
430
|
|
125
|
|
-
|
|
(1
|
)
|
-
|
|
555
|
|
Profit
before tax
|
1,698
|
|
3,530
|
|
509
|
|
364
|
|
5
|
|
-
|
|
6,106
|
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
|
%
|
|
Share
of HSBC's profit before tax
|
27.8
|
|
57.8
|
|
8.3
|
|
6.0
|
|
0.1
|
|
|
100.0
|
|
Cost
efficiency ratio
|
67.2
|
|
43.6
|
|
48.5
|
|
65.3
|
|
68.1
|
|
|
55.2
|
|
|
|
1
|
Net
trading income includes the revenues of internally funding trading
assets, while the related costs are reported in net interest
income.
|
|
|
2
|
Other
income 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.
|
|
|
3
|
In
3Q16, HSBC Bank plc executed a management services agreement,
transferring its governance responsibilities over HSBC Bank A.S.
(Turkey) to HSBC Bank Middle East Limited to leverage the strong
commercial ties between Turkey and MENA. Comparative data for
Europe and MENA have been re-presented accordingly.
|
|
|
|
|
HSBC
Holdings plc Earnings Release 1Q17
|
21
|
Earnings
Release - 1Q17
|
|
Appendix
- selected information
|
Supplementary
analysis of significant items by global business is presented
below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of reported and adjusted results - global businesses
|
|
Quarter
ended 31 Mar 2017
|
|
Retail
Bankingand WealthManagement
|
|
CommercialBanking
|
|
Global
Bankingand Markets
|
|
Global
PrivateBanking
|
|
Corporate
Centre
|
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
5,082
|
|
3,191
|
|
3,789
|
|
419
|
|
512
|
|
12,993
|
|
Significant
items
|
(73
|
)
|
-
|
|
97
|
|
(4
|
)
|
(170
|
)
|
(150
|
)
|
- DVA
on derivative contracts
|
-
|
|
-
|
|
97
|
|
-
|
|
-
|
|
97
|
|
- fair
value movements on non-qualifying hedges
1
|
-
|
|
-
|
|
-
|
|
-
|
|
(91
|
)
|
(91
|
)
|
- gain
on disposal of our membership interest in Visa - US
|
(146
|
)
|
-
|
|
-
|
|
-
|
|
-
|
|
(146
|
)
|
-
portfolio disposals
|
73
|
|
-
|
|
-
|
|
(4
|
)
|
(79
|
)
|
(10
|
)
|
Adjusted
|
5,009
|
|
3,191
|
|
3,886
|
|
415
|
|
342
|
|
12,843
|
|
Loan
impairment charge and other credit risk provisions
('LICs')
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
(296
|
)
|
3
|
|
20
|
|
(1
|
)
|
38
|
|
(236
|
)
|
Adjusted
|
(296
|
)
|
3
|
|
20
|
|
(1
|
)
|
38
|
|
(236
|
)
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
(3,276
|
)
|
(1,398
|
)
|
(2,245
|
)
|
(344
|
)
|
(1,065
|
)
|
(8,328
|
)
|
Significant
items
|
335
|
|
(1
|
)
|
48
|
|
-
|
|
744
|
|
1,126
|
|
- costs
to achieve
|
125
|
|
(1
|
)
|
48
|
|
-
|
|
661
|
|
833
|
|
- costs
to establish UK ring-fenced bank
|
-
|
|
-
|
|
-
|
|
-
|
|
83
|
|
83
|
|
- UK
customer redress programmes
|
210
|
|
-
|
|
-
|
|
-
|
|
-
|
|
210
|
|
Adjusted
|
(2,941
|
)
|
(1,399
|
)
|
(2,197
|
)
|
(344
|
)
|
(321
|
)
|
(7,202
|
)
|
Share
of profit in associates and joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
9
|
|
-
|
|
-
|
|
-
|
|
523
|
|
532
|
|
Adjusted
|
9
|
|
-
|
|
-
|
|
-
|
|
523
|
|
532
|
|
Profit/(loss)
before tax
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
1,519
|
|
1,796
|
|
1,564
|
|
74
|
|
8
|
|
4,961
|
|
Significant
items
|
262
|
|
(1
|
)
|
145
|
|
(4
|
)
|
574
|
|
976
|
|
-
revenue
|
(73
|
)
|
-
|
|
97
|
|
(4
|
)
|
(170
|
)
|
(150
|
)
|
-
operating expenses
|
335
|
|
(1
|
)
|
48
|
|
-
|
|
744
|
|
1,126
|
|
Adjusted
|
1,781
|
|
1,795
|
|
1,709
|
|
70
|
|
582
|
|
5,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Excludes items
where there are substantial offsets in the income statement for the
same period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22
|
HSBC
Holdings plc Earnings Release 1Q17
|
Earnings
Release - 1Q17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of reported and adjusted results - global businesses
(continued)
|
|
Quarter
ended 31 Dec 2016
|
|
Retail
Bankingand WealthManagement
|
|
CommercialBanking
|
|
Global
Bankingand Markets
|
|
Global
PrivateBanking
|
|
CorporateCentre
|
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
4,664
|
|
3,041
|
|
3,521
|
|
373
|
|
(2,615
|
)
|
8,984
|
|
Currency
translation
|
(29
|
)
|
(17
|
)
|
(17
|
)
|
(1
|
)
|
(10
|
)
|
(74
|
)
|
Significant
items
|
(72
|
)
|
-
|
|
70
|
|
25
|
|
1,992
|
|
2,015
|
|
- DVA
on derivative contracts
|
-
|
|
-
|
|
70
|
|
-
|
|
-
|
|
70
|
|
- fair
value movements on non-qualifying hedges
1
|
(2
|
)
|
-
|
|
-
|
|
-
|
|
304
|
|
302
|
|
- gain
on disposal of our membership interest in Visa - US
|
(72
|
)
|
-
|
|
-
|
|
-
|
|
(44
|
)
|
(116
|
)
|
- own
credit spread
2
|
-
|
|
-
|
|
-
|
|
-
|
|
1,648
|
|
1,648
|
|
-
portfolio disposals
|
-
|
|
-
|
|
-
|
|
26
|
|
86
|
|
112
|
|
-
currency translation on significant items
|
2
|
|
-
|
|
-
|
|
(1
|
)
|
(2
|
)
|
(1
|
)
|
Adjusted
|
4,563
|
|
3,024
|
|
3,574
|
|
397
|
|
(633
|
)
|
10,925
|
|
LICs
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
(259
|
)
|
(201
|
)
|
(12
|
)
|
(8
|
)
|
12
|
|
(468
|
)
|
Currency
translation
|
7
|
|
7
|
|
-
|
|
(1
|
)
|
(1
|
)
|
12
|
|
Adjusted
|
(252
|
)
|
(194
|
)
|
(12
|
)
|
(9
|
)
|
11
|
|
(456
|
)
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
(3,417
|
)
|
(1,472
|
)
|
(2,300
|
)
|
(3,204
|
)
|
(2,066
|
)
|
(12,459
|
)
|
Currency
translation
|
22
|
|
7
|
|
9
|
|
1
|
|
3
|
|
42
|
|
Significant
items
|
222
|
|
24
|
|
48
|
|
2,839
|
|
909
|
|
4,042
|
|
- costs
associated with portfolio disposals
|
-
|
|
-
|
|
-
|
|
10
|
|
18
|
|
28
|
|
- costs
to achieve
|
164
|
|
14
|
|
91
|
|
-
|
|
817
|
|
1,086
|
|
- costs
to establish UK ring-fenced bank
|
1
|
|
-
|
|
-
|
|
-
|
|
75
|
|
76
|
|
-
impairment of GPB - Europe goodwill
|
-
|
|
-
|
|
-
|
|
2,440
|
|
-
|
|
2,440
|
|
-
regulatory provisions in GPB
|
-
|
|
-
|
|
-
|
|
389
|
|
1
|
|
390
|
|
-
settlements and provisions in connection with legal
matters
|
-
|
|
-
|
|
(42
|
)
|
-
|
|
-
|
|
(42
|
)
|
- UK
customer redress programmes
|
59
|
|
11
|
|
-
|
|
-
|
|
-
|
|
70
|
|
-
currency translation on significant items
|
(2
|
)
|
(1
|
)
|
(1
|
)
|
-
|
|
(2
|
)
|
(6
|
)
|
Adjusted
|
(3,173
|
)
|
(1,441
|
)
|
(2,243
|
)
|
(364
|
)
|
(1,154
|
)
|
(8,375
|
)
|
Share
of profit in associates and joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
2
|
|
-
|
|
-
|
|
-
|
|
496
|
|
498
|
|
Currency
translation
|
-
|
|
-
|
|
-
|
|
-
|
|
(4
|
)
|
(4
|
)
|
Adjusted
|
2
|
|
-
|
|
-
|
|
-
|
|
492
|
|
494
|
|
Profit/(loss)
before tax
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
990
|
|
1,368
|
|
1,209
|
|
(2,839
|
)
|
(4,173
|
)
|
(3,445
|
)
|
Currency
translation
|
-
|
|
(3
|
)
|
(8
|
)
|
(1
|
)
|
(12
|
)
|
(24
|
)
|
Significant
items
|
150
|
|
24
|
|
118
|
|
2,864
|
|
2,901
|
|
6,057
|
|
-
revenue
|
(72
|
)
|
-
|
|
70
|
|
25
|
|
1,992
|
|
2,015
|
|
-
operating expenses
|
222
|
|
24
|
|
48
|
|
2,839
|
|
909
|
|
4,042
|
|
Adjusted
|
1,140
|
|
1,389
|
|
1,319
|
|
24
|
|
(1,284
|
)
|
2,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Excludes
items where there are substantial offsets in the income statement
for the same period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
'Own
credit spread' includes the fair value movements on our long-term
debt attributable to credit spread where the net result of such
movements will be zero upon maturity of the debt. This does
not include fair value changes due to own credit risk in respect of
trading liabilities or derivative liabilities. On 1 January 2017,
HSBC adopted the requirements of IFRS 9 relating to the
presentation of gains and losses on financial liabilities
designated at fair value. As a result, the effects of changes in
those liabilities' credit risk is presented in other
comprehensive income.
|
|
|
|
|
HSBC
Holdings plc Earnings Release 1Q17
|
23
|
Earnings
Release - 1Q17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of reported and adjusted results - global businesses
(continued)
|
|
Quarter
ended 31 Mar 2016
|
|
Retail
Bankingand WealthManagement
|
|
CommercialBanking
|
|
Global
Bankingand Markets
|
|
Global
PrivateBanking
|
|
CorporateCentre
|
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
5,059
|
|
3,460
|
|
3,987
|
|
471
|
|
1,999
|
|
14,976
|
|
Currency
translation
|
(127
|
)
|
(140
|
)
|
(119
|
)
|
(12
|
)
|
(68
|
)
|
(466
|
)
|
Significant
items
|
(575
|
)
|
(176
|
)
|
(328
|
)
|
(7
|
)
|
(845
|
)
|
(1,931
|
)
|
- DVA
on derivative contracts
|
-
|
|
-
|
|
(158
|
)
|
-
|
|
-
|
|
(158
|
)
|
- fair
value movements on non-qualifying hedges
1
|
-
|
|
-
|
|
-
|
|
-
|
|
233
|
|
233
|
|
- own
credit spread
2
|
-
|
|
-
|
|
-
|
|
-
|
|
(1,151
|
)
|
(1,151
|
)
|
-
trading results from disposed-of operations in Brazil
|
(462
|
)
|
(142
|
)
|
(152
|
)
|
(6
|
)
|
41
|
|
(721
|
)
|
-
currency translation on significant items
|
(113
|
)
|
(34
|
)
|
(18
|
)
|
(1
|
)
|
32
|
|
(134
|
)
|
Adjusted
|
4,357
|
|
3,144
|
|
3,540
|
|
452
|
|
1,086
|
|
12,579
|
|
LICs
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
(484
|
)
|
(386
|
)
|
(175
|
)
|
-
|
|
(116
|
)
|
(1,161
|
)
|
Currency
translation
|
(36
|
)
|
(12
|
)
|
(9
|
)
|
-
|
|
2
|
|
(55
|
)
|
Significant
items
|
270
|
|
140
|
|
6
|
|
-
|
|
-
|
|
416
|
|
-
trading results from disposed-of operations in Brazil
|
217
|
|
113
|
|
4
|
|
-
|
|
-
|
|
334
|
|
-
currency translation on significant items
|
53
|
|
27
|
|
2
|
|
-
|
|
-
|
|
82
|
|
Adjusted
|
(250
|
)
|
(258
|
)
|
(178
|
)
|
-
|
|
(114
|
)
|
(800
|
)
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
(3,487
|
)
|
(1,561
|
)
|
(2,286
|
)
|
(382
|
)
|
(548
|
)
|
(8,264
|
)
|
Currency
translation
|
87
|
|
48
|
|
100
|
|
8
|
|
31
|
|
274
|
|
Significant
items
|
502
|
|
114
|
|
86
|
|
7
|
|
265
|
|
974
|
|
- costs
to achieve
|
44
|
|
23
|
|
30
|
|
2
|
|
242
|
|
341
|
|
- costs
to establish UK ring-fenced bank
|
-
|
|
-
|
|
-
|
|
-
|
|
31
|
|
31
|
|
-
regulatory provisions in GPB
|
-
|
|
-
|
|
-
|
|
-
|
|
1
|
|
1
|
|
-
trading results from disposed-of operations in Brazil
|
371
|
|
74
|
|
48
|
|
4
|
|
7
|
|
504
|
|
-
currency translation on significant items
|
87
|
|
17
|
|
8
|
|
1
|
|
(16
|
)
|
97
|
|
Adjusted
|
(2,898
|
)
|
(1,399
|
)
|
(2,100
|
)
|
(367
|
)
|
(252
|
)
|
(7,016
|
)
|
Share
of profit in associates and joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
7
|
|
-
|
|
-
|
|
-
|
|
548
|
|
555
|
|
Currency
translation
|
-
|
|
-
|
|
-
|
|
-
|
|
(23
|
)
|
(23
|
)
|
Significant
items
|
-
|
|
-
|
|
-
|
|
-
|
|
1
|
|
1
|
|
-
trading results from disposed-of operations in Brazil
|
-
|
|
-
|
|
-
|
|
-
|
|
1
|
|
1
|
|
-
currency translation on significant items
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Adjusted
|
7
|
|
-
|
|
-
|
|
-
|
|
526
|
|
533
|
|
Profit/(loss)
before tax
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
1,095
|
|
1,513
|
|
1,526
|
|
89
|
|
1,883
|
|
6,106
|
|
Currency
translation
|
(76
|
)
|
(104
|
)
|
(28
|
)
|
(4
|
)
|
(58
|
)
|
(270
|
)
|
Significant
items
|
197
|
|
78
|
|
(236
|
)
|
-
|
|
(579
|
)
|
(540
|
)
|
-
revenue
|
(575
|
)
|
(176
|
)
|
(328
|
)
|
(7
|
)
|
(845
|
)
|
(1,931
|
)
|
-
LICs
|
270
|
|
140
|
|
6
|
|
-
|
|
-
|
|
416
|
|
-
operating expenses
|
502
|
|
114
|
|
86
|
|
7
|
|
265
|
|
974
|
|
- share
of profit in associates and joint ventures
|
-
|
|
-
|
|
-
|
|
-
|
|
1
|
|
1
|
|
Adjusted
|
1,216
|
|
1,487
|
|
1,262
|
|
85
|
|
1,246
|
|
5,296
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Excludes
items where there are substantial offsets in the income statement
for the same period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
'Own
credit spread' includes the fair value movements on our long-term
debt attributable to credit spread where the net result of such
movements will be zero upon maturity of the debt. This does
not include fair value changes due to own credit risk in respect of
trading liabilities or derivative liabilities. On 1 January 2017,
HSBC adopted the requirements of IFRS 9 relating to the
presentation of gains and losses on financial liabilities
designated at fair value. As a result, the effects of changes in
those liabilities' credit risk is presented in other
comprehensive income.
|
|
|
|
24
|
HSBC
Holdings plc Earnings Release 1Q17
|
Earnings
Release - 1Q17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of reported and adjusted risk-weighted assets
|
|
Quarter
ended 31 Mar 2017
|
|
Retail
Bankingand WealthManagement
|
|
CommercialBanking
|
|
Global
Banking
and
Markets
|
|
Global
PrivateBanking
|
|
Corporate
Centre
|
|
Total
|
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
Risk-weighted
assets
|
|
|
|
|
|
|
Reported
|
113.5
|
|
280.6
|
|
296.0
|
|
15.4
|
|
152.4
|
|
857.9
|
|
Brazil
operations
|
-
|
|
-
|
|
-
|
|
-
|
|
(5.2
|
)
|
(5.2
|
)
|
Adjusted
|
113.5
|
|
280.6
|
|
296.0
|
|
15.4
|
|
147.2
|
|
852.7
|
|
|
|
|
|
|
|
|
|
Quarter
ended 31 Dec 2016
|
Risk-weighted
assets
|
|
|
|
|
|
|
Reported
|
115.1
|
|
275.9
|
|
300.4
|
|
15.3
|
|
150.5
|
|
857.2
|
|
Currency
translation
|
1.0
|
|
2.5
|
|
2.3
|
|
-
|
|
0.9
|
|
6.7
|
|
Brazil
operations
|
(3.2
|
)
|
(1.0
|
)
|
(0.8
|
)
|
-
|
|
(0.2
|
)
|
(5.2
|
)
|
Adjusted
|
112.9
|
|
277.4
|
|
301.9
|
|
15.3
|
|
151.2
|
|
858.7
|
|
|
|
|
|
|
|
|
|
Quarter
ended 31 Mar 2016
|
Risk-weighted
assets
|
|
|
|
|
|
|
Reported
|
130.2
|
|
304.3
|
|
344.3
|
|
17.9
|
|
318.5
|
|
1,115.2
|
|
Currency
translation
|
(3.7
|
)
|
(14.2
|
)
|
(5.8
|
)
|
(0.6
|
)
|
(14.9
|
)
|
(39.2
|
)
|
Brazil
operations
|
(14.4
|
)
|
(16.2
|
)
|
(13.5
|
)
|
(0.2
|
)
|
(4.0
|
)
|
(48.3
|
)
|
Adjusted
|
112.1
|
|
273.9
|
|
325.0
|
|
17.1
|
|
299.6
|
|
1,027.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of reported and adjusted results - geographical
regions
|
|
Quarter
ended 31 Mar 2017
|
|
Europe
|
|
Asia
|
|
MENA
|
|
NorthAmerica
|
|
LatinAmerica
|
|
Total
|
|
UK
|
|
HongKong
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
1
|
4,213
|
|
6,540
|
|
653
|
|
1,776
|
|
735
|
|
12,993
|
|
3,018
|
|
4,107
|
|
Significant
items
|
(55
|
)
|
46
|
|
-
|
|
(142
|
)
|
1
|
|
(150
|
)
|
(60
|
)
|
22
|
|
- DVA
on derivative contracts
|
51
|
|
36
|
|
-
|
|
9
|
|
1
|
|
97
|
|
43
|
|
10
|
|
- fair
value movements on non-qualifying hedges
2
|
(102
|
)
|
10
|
|
-
|
|
1
|
|
-
|
|
(91
|
)
|
(103
|
)
|
12
|
|
- gain
on disposal of our membership interest in Visa - US
|
-
|
|
-
|
|
-
|
|
(146
|
)
|
-
|
|
(146
|
)
|
-
|
|
-
|
|
-
portfolio disposals
|
(4
|
)
|
-
|
|
-
|
|
(6
|
)
|
-
|
|
(10
|
)
|
-
|
|
-
|
|
Adjusted
1
|
4,158
|
|
6,586
|
|
653
|
|
1,634
|
|
736
|
|
12,843
|
|
2,958
|
|
4,129
|
|
LICs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
5
|
|
(167
|
)
|
(57
|
)
|
106
|
|
(123
|
)
|
(236
|
)
|
16
|
|
(155
|
)
|
Adjusted
|
5
|
|
(167
|
)
|
(57
|
)
|
106
|
|
(123
|
)
|
(236
|
)
|
16
|
|
(155
|
)
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
1
|
(4,428
|
)
|
(2,694
|
)
|
(322
|
)
|
(1,310
|
)
|
(498
|
)
|
(8,328
|
)
|
(3,546
|
)
|
(1,393
|
)
|
Significant
items
|
856
|
|
167
|
|
8
|
|
82
|
|
13
|
|
1,126
|
|
824
|
|
75
|
|
- costs
to achieve
|
563
|
|
167
|
|
8
|
|
82
|
|
13
|
|
833
|
|
531
|
|
75
|
|
- costs
to establish UK ring-fenced bank
|
83
|
|
-
|
|
-
|
|
-
|
|
-
|
|
83
|
|
83
|
|
-
|
|
- UK
customer redress programmes
|
210
|
|
-
|
|
-
|
|
-
|
|
-
|
|
210
|
|
210
|
|
-
|
|
Adjusted
1
|
(3,572
|
)
|
(2,527
|
)
|
(314
|
)
|
(1,228
|
)
|
(485
|
)
|
(7,202
|
)
|
(2,722
|
)
|
(1,318
|
)
|
Share
of profit in associates and joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
4
|
|
415
|
|
113
|
|
-
|
|
-
|
|
532
|
|
5
|
|
7
|
|
Adjusted
|
4
|
|
415
|
|
113
|
|
-
|
|
-
|
|
532
|
|
5
|
|
7
|
|
Profit/(loss)
before tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
(206
|
)
|
4,094
|
|
387
|
|
572
|
|
114
|
|
4,961
|
|
(507
|
)
|
2,566
|
|
Significant
items
|
801
|
|
213
|
|
8
|
|
(60
|
)
|
14
|
|
976
|
|
764
|
|
97
|
|
-
revenue
|
(55
|
)
|
46
|
|
-
|
|
(142
|
)
|
1
|
|
(150
|
)
|
(60
|
)
|
22
|
|
-
operating expenses
|
856
|
|
167
|
|
8
|
|
82
|
|
13
|
|
1,126
|
|
824
|
|
75
|
|
Adjusted
|
595
|
|
4,307
|
|
395
|
|
512
|
|
128
|
|
5,937
|
|
257
|
|
2,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Amounts are
non-additive across geographical regions due to intra-Group
transactions.
|
|
|
2
|
Excludes
items where there are substantial offsets in the income statement
for the same period.
|
|
|
|
|
HSBC
Holdings plc Earnings Release 1Q17
|
25
|
Earnings
Release - 1Q17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of reported and adjusted results - geographical regions
(continued)
|
|
Quarter
ended 31 Dec 2016
|
|
Europe
|
|
Asia
|
|
MENA
|
|
NorthAmerica
|
|
LatinAmerica
|
|
Total
|
|
UK
|
|
HongKong
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
1
|
1,647
|
|
5,568
|
|
632
|
|
1,533
|
|
726
|
|
8,984
|
|
525
|
|
3,315
|
|
Currency
translation
1
|
(31
|
)
|
(13
|
)
|
(35
|
)
|
3
|
|
(13
|
)
|
(74
|
)
|
(8
|
)
|
(2
|
)
|
Significant
items
|
1,905
|
|
16
|
|
2
|
|
91
|
|
1
|
|
2,015
|
|
1,895
|
|
10
|
|
- DVA
on derivative contracts
|
50
|
|
14
|
|
-
|
|
7
|
|
(1
|
)
|
70
|
|
45
|
|
7
|
|
- fair
value movements on non-qualifying hedges
2
|
303
|
|
(1
|
)
|
-
|
|
(2
|
)
|
2
|
|
302
|
|
311
|
|
1
|
|
- gain
on the disposal of our membership interest in Visa -
US
|
-
|
|
-
|
|
-
|
|
(116
|
)
|
-
|
|
(116
|
)
|
-
|
|
-
|
|
- own
credit spread
3
|
1,526
|
|
4
|
|
2
|
|
116
|
|
-
|
|
1,648
|
|
1,539
|
|
2
|
|
-
portfolio disposals
|
26
|
|
-
|
|
-
|
|
86
|
|
-
|
|
112
|
|
-
|
|
-
|
|
-
currency translation on significant items
|
-
|
|
(1
|
)
|
-
|
|
-
|
|
-
|
|
(1
|
)
|
-
|
|
-
|
|
Adjusted
1
|
3,521
|
|
5,571
|
|
599
|
|
1,627
|
|
714
|
|
10,925
|
|
2,412
|
|
3,323
|
|
LICs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
(60
|
)
|
(125
|
)
|
(133
|
)
|
(27
|
)
|
(123
|
)
|
(468
|
)
|
(5
|
)
|
(90
|
)
|
Currency
translation
|
-
|
|
2
|
|
7
|
|
1
|
|
2
|
|
12
|
|
1
|
|
-
|
|
Adjusted
|
(60
|
)
|
(123
|
)
|
(126
|
)
|
(26
|
)
|
(121
|
)
|
(456
|
)
|
(4
|
)
|
(90
|
)
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
1
|
(8,333
|
)
|
(2,898
|
)
|
(377
|
)
|
(1,440
|
)
|
(533
|
)
|
(12,459
|
)
|
(4,661
|
)
|
(1,526
|
)
|
Currency
translation
1
|
27
|
|
7
|
|
16
|
|
(2
|
)
|
9
|
|
42
|
|
5
|
|
1
|
|
Significant
items
|
3,677
|
|
215
|
|
27
|
|
102
|
|
21
|
|
4,042
|
|
773
|
|
97
|
|
- costs
associated with portfolio disposals
|
28
|
|
-
|
|
-
|
|
-
|
|
-
|
|
28
|
|
-
|
|
-
|
|
- costs
to achieve
|
720
|
|
214
|
|
29
|
|
102
|
|
21
|
|
1,086
|
|
651
|
|
97
|
|
- costs
to establish UK ring-fenced bank
|
76
|
|
-
|
|
-
|
|
-
|
|
-
|
|
76
|
|
76
|
|
-
|
|
-
impairment of GPB - Europe goodwill
|
2,440
|
|
-
|
|
-
|
|
-
|
|
-
|
|
2,440
|
|
-
|
|
-
|
|
-
regulatory provisions in GPB
|
389
|
|
1
|
|
-
|
|
-
|
|
-
|
|
390
|
|
-
|
|
-
|
|
-
settlements and provisions in connection with legal
matters
|
(42
|
)
|
-
|
|
-
|
|
-
|
|
-
|
|
(42
|
)
|
(22
|
)
|
-
|
|
- UK
customer redress programmes
|
70
|
|
-
|
|
-
|
|
-
|
|
-
|
|
70
|
|
70
|
|
-
|
|
-
currency translation on significant items
|
(4
|
)
|
-
|
|
(2
|
)
|
-
|
|
-
|
|
(6
|
)
|
(2
|
)
|
-
|
|
Adjusted
1
|
(4,629
|
)
|
(2,676
|
)
|
(334
|
)
|
(1,340
|
)
|
(503
|
)
|
(8,375
|
)
|
(3,883
|
)
|
(1,428
|
)
|
Share
of profit in associates and joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
5
|
|
417
|
|
73
|
|
3
|
|
-
|
|
498
|
|
5
|
|
3
|
|
Currency
translation
|
-
|
|
(4
|
)
|
-
|
|
-
|
|
-
|
|
(4
|
)
|
-
|
|
-
|
|
Adjusted
|
5
|
|
413
|
|
73
|
|
3
|
|
-
|
|
494
|
|
5
|
|
3
|
|
Profit/(loss)
before tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
(6,741
|
)
|
2,962
|
|
195
|
|
69
|
|
70
|
|
(3,445
|
)
|
(4,136
|
)
|
1,702
|
|
Currency
translation
|
(4
|
)
|
(8
|
)
|
(12
|
)
|
2
|
|
(2
|
)
|
(24
|
)
|
(2
|
)
|
(1
|
)
|
Significant
items
|
5,582
|
|
231
|
|
29
|
|
193
|
|
22
|
|
6,057
|
|
2,668
|
|
107
|
|
-
revenue
|
1,905
|
|
16
|
|
2
|
|
91
|
|
1
|
|
2,015
|
|
1,895
|
|
10
|
|
-
operating expenses
|
3,677
|
|
215
|
|
27
|
|
102
|
|
21
|
|
4,042
|
|
773
|
|
97
|
|
Adjusted
|
(1,163
|
)
|
3,185
|
|
212
|
|
264
|
|
90
|
|
2,588
|
|
(1,470
|
)
|
1,808
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Amounts are
non-additive across geographical regions due to intra-Group
transactions.
|
|
|
2
|
Excludes
items where there are substantial offsets in the income statement
for the same period.
|
|
|
3
|
'Own
credit spread' includes the fair value movements on our long-term
debt attributable to credit spread where the net result of such
movements will be zero upon maturity of the debt. This does
not include fair value changes due to own credit risk in respect of
trading liabilities or derivative liabilities. On 1 January 2017,
HSBC adopted the requirements of IFRS 9 relating to the
presentation of gains and losses on financial liabilities
designated at fair value. As a result, the effects of changes in
those liabilities' credit risk is presented in other
comprehensive income.
|
|
|
26
|
HSBC
Holdings plc Earnings Release 1Q17
|
Earnings
Release - 1Q17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of reported and adjusted results - geographical regions
(continued)
|
|
Quarter
ended 31 Mar 2016
|
|
Europe
|
|
Asia
|
|
MENA
|
|
NorthAmerica
|
|
LatinAmerica
|
|
Total
|
|
UK
|
|
HongKong
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
1
|
5,632
|
|
5,833
|
|
835
|
|
1,994
|
|
1,419
|
|
14,976
|
|
4,524
|
|
3,498
|
|
Currency
translation
1
|
(457
|
)
|
(13
|
)
|
(114
|
)
|
15
|
|
103
|
|
(466
|
)
|
(440
|
)
|
7
|
|
Significant
items
|
(936
|
)
|
(70
|
)
|
(8
|
)
|
(52
|
)
|
(865
|
)
|
(1,931
|
)
|
(949
|
)
|
(22
|
)
|
- DVA
on derivative contracts
|
(99
|
)
|
(64
|
)
|
-
|
|
(22
|
)
|
27
|
|
(158
|
)
|
(86
|
)
|
(24
|
)
|
- fair
value movements on non-qualifying hedges
2
|
111
|
|
4
|
|
-
|
|
119
|
|
(1
|
)
|
233
|
|
73
|
|
8
|
|
- own
credit spread
3
|
(985
|
)
|
(9
|
)
|
(8
|
)
|
(149
|
)
|
-
|
|
(1,151
|
)
|
(973
|
)
|
(6
|
)
|
-
trading results from disposed-of operations in Brazil
|
-
|
|
-
|
|
-
|
|
-
|
|
(721
|
)
|
(721
|
)
|
-
|
|
-
|
|
-
currency translation on significant items
|
37
|
|
(1
|
)
|
-
|
|
-
|
|
(170
|
)
|
(134
|
)
|
37
|
|
-
|
|
Adjusted
1
|
4,239
|
|
5,750
|
|
713
|
|
1,957
|
|
657
|
|
12,579
|
|
3,135
|
|
3,483
|
|
LICs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
(151
|
)
|
(190
|
)
|
(46
|
)
|
(328
|
)
|
(446
|
)
|
(1,161
|
)
|
(89
|
)
|
(44
|
)
|
Currency
translation
|
14
|
|
(2
|
)
|
4
|
|
(2
|
)
|
(69
|
)
|
(55
|
)
|
12
|
|
-
|
|
Significant
items
|
-
|
|
-
|
|
-
|
|
-
|
|
416
|
|
416
|
|
-
|
|
-
|
|
-
trading results from disposed-of operations in Brazil
|
-
|
|
-
|
|
-
|
|
-
|
|
334
|
|
334
|
|
-
|
|
-
|
|
-
currency translation on significant items
|
-
|
|
-
|
|
-
|
|
-
|
|
82
|
|
82
|
|
-
|
|
-
|
|
Adjusted
|
(137
|
)
|
(192
|
)
|
(42
|
)
|
(330
|
)
|
(99
|
)
|
(800
|
)
|
(77
|
)
|
(44
|
)
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
1
|
(3,784
|
)
|
(2,543
|
)
|
(405
|
)
|
(1,302
|
)
|
(967
|
)
|
(8,264
|
)
|
(2,847
|
)
|
(1,372
|
)
|
Currency
translation
1
|
302
|
|
11
|
|
46
|
|
(8
|
)
|
(77
|
)
|
274
|
|
280
|
|
(3
|
)
|
Significant
items
|
289
|
|
2
|
|
9
|
|
49
|
|
625
|
|
974
|
|
224
|
|
19
|
|
- costs
to achieve
|
277
|
|
3
|
|
11
|
|
49
|
|
1
|
|
341
|
|
212
|
|
19
|
|
- costs
to establish UK ring-fenced bank
|
31
|
|
-
|
|
-
|
|
-
|
|
-
|
|
31
|
|
31
|
|
-
|
|
-
regulatory provisions in GPB
|
1
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1
|
|
-
|
|
-
|
|
-
trading results from disposed-of operations in Brazil
|
-
|
|
-
|
|
-
|
|
-
|
|
504
|
|
504
|
|
-
|
|
-
|
|
-
currency translation on significant items
|
(20
|
)
|
(1
|
)
|
(2
|
)
|
-
|
|
120
|
|
97
|
|
(19
|
)
|
-
|
|
Adjusted
1
|
(3,193
|
)
|
(2,530
|
)
|
(350
|
)
|
(1,261
|
)
|
(419
|
)
|
(7,016
|
)
|
(2,343
|
)
|
(1,356
|
)
|
Share
of profit in associates and joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
1
|
|
430
|
|
125
|
|
-
|
|
(1
|
)
|
555
|
|
(1
|
)
|
7
|
|
Currency
translation
|
(2
|
)
|
(21
|
)
|
-
|
|
-
|
|
-
|
|
(23
|
)
|
-
|
|
-
|
|
Significant
items
|
-
|
|
-
|
|
-
|
|
-
|
|
1
|
|
1
|
|
-
|
|
-
|
|
-
trading results from disposed-of operations in Brazil
|
-
|
|
-
|
|
-
|
|
-
|
|
1
|
|
1
|
|
-
|
|
-
|
|
-
currency translation on significant items
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Adjusted
|
(1
|
)
|
409
|
|
125
|
|
-
|
|
-
|
|
533
|
|
(1
|
)
|
7
|
|
Profit/(loss)
before tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
1,698
|
|
3,530
|
|
509
|
|
364
|
|
5
|
|
6,106
|
|
1,587
|
|
2,089
|
|
Currency
translation
|
(143
|
)
|
(25
|
)
|
(64
|
)
|
5
|
|
(43
|
)
|
(270
|
)
|
(148
|
)
|
4
|
|
Significant
items
|
(647
|
)
|
(68
|
)
|
1
|
|
(3
|
)
|
177
|
|
(540
|
)
|
(725
|
)
|
(3
|
)
|
-
revenue
|
(936
|
)
|
(70
|
)
|
(8
|
)
|
(52
|
)
|
(865
|
)
|
(1,931
|
)
|
(949
|
)
|
(22
|
)
|
-
LICs
|
-
|
|
-
|
|
-
|
|
-
|
|
416
|
|
416
|
|
-
|
|
-
|
|
-
operating expenses
|
289
|
|
2
|
|
9
|
|
49
|
|
625
|
|
974
|
|
224
|
|
19
|
|
- share
of profit in associates and joint ventures
|
-
|
|
-
|
|
-
|
|
-
|
|
1
|
|
1
|
|
-
|
|
-
|
|
Adjusted
|
908
|
|
3,437
|
|
446
|
|
366
|
|
139
|
|
5,296
|
|
714
|
|
2,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Amounts are
non-additive across geographical regions due to intra-Group
transactions.
|
|
|
2
|
Excludes
items where there are substantial offsets in the income statement
for the same period.
|
|
|
3
|
'Own
credit spread' includes the fair value movements on our long-term
debt attributable to credit spread where the net result of such
movements will be zero upon maturity of the debt. This does
not include fair value changes due to own credit risk in respect of
trading liabilities or derivative liabilities. On 1 January 2017,
HSBC adopted the requirements of IFRS 9 relating to the
presentation of gains and losses on financial liabilities
designated at fair value. As a result, the effects of changes in
those liabilities' credit risk is presented in other
comprehensive income.
|
|
|
|
|
HSBC
Holdings plc Earnings Release 1Q17
|
27
|
Earnings
Release - 1Q17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
loans and advances by industry sector and by geographical
region
|
|
Europe
|
|
Asia
|
|
MENA
|
|
North
America
|
|
Latin
America
|
|
Total
|
|
As a
%of total
gross
loans
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
At 31
Mar 2017
|
|
|
|
|
|
|
|
Personal
|
149,155
|
|
138,140
|
|
7,459
|
|
40,961
|
|
6,536
|
|
342,251
|
|
35.3
|
- first
lien residential mortgages
|
110,765
|
|
101,301
|
|
2,503
|
|
35,532
|
|
2,156
|
|
252,257
|
|
26.0
|
- other
personal
|
38,390
|
|
36,839
|
|
4,956
|
|
5,429
|
|
4,380
|
|
89,994
|
|
9.3
|
Wholesale
|
|
|
|
|
|
|
|
Corporate
and commercial
|
163,636
|
|
218,543
|
|
21,395
|
|
55,955
|
|
11,384
|
|
470,913
|
|
48.4
|
-
manufacturing
|
28,034
|
|
32,732
|
|
2,885
|
|
14,579
|
|
2,786
|
|
81,016
|
|
8.3
|
-
international trade and services
|
56,876
|
|
72,743
|
|
8,743
|
|
10,483
|
|
2,674
|
|
151,519
|
|
15.6
|
-
commercial real estate
|
22,220
|
|
34,168
|
|
740
|
|
8,069
|
|
1,533
|
|
66,730
|
|
6.9
|
- other
property-related
|
7,829
|
|
39,045
|
|
1,870
|
|
8,375
|
|
327
|
|
57,446
|
|
5.9
|
-
government
|
3,142
|
|
2,827
|
|
1,244
|
|
311
|
|
542
|
|
8,066
|
|
0.8
|
- other
commercial
|
45,535
|
|
37,028
|
|
5,913
|
|
14,138
|
|
3,522
|
|
106,136
|
|
10.9
|
Financial
|
47,031
|
|
81,717
|
|
9,711
|
|
15,612
|
|
4,264
|
|
158,335
|
|
16.3
|
-
non-bank financial institutions
|
32,678
|
|
24,049
|
|
2,565
|
|
10,305
|
|
744
|
|
70,341
|
|
7.2
|
-
banks
|
14,353
|
|
57,668
|
|
7,146
|
|
5,307
|
|
3,520
|
|
87,994
|
|
9.1
|
Total
wholesale
|
210,667
|
|
300,260
|
|
31,106
|
|
71,567
|
|
15,648
|
|
629,248
|
|
64.7
|
Total
gross loans and advances at 31 Mar 2017
|
359,822
|
|
438,400
|
|
38,565
|
|
112,528
|
|
22,184
|
|
971,499
|
|
100.0
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
Percentage
of total gross loans and advances
|
37.0
|
|
45.1
|
|
4.0
|
|
11.6
|
|
2.3
|
|
100.0
|
|
|
|
|
|
|
|
|
|
|
At 31
Dec 2016
|
|
|
|
|
|
|
|
Personal
|
146,499
|
|
134,700
|
|
7,744
|
|
44,956
|
|
5,899
|
|
339,798
|
|
35.5
|
- first
lien residential mortgages
|
108,008
|
|
98,072
|
|
2,535
|
|
39,239
|
|
1,924
|
|
249,778
|
|
26.1
|
- other
personal
|
38,491
|
|
36,628
|
|
5,209
|
|
5,717
|
|
3,975
|
|
90,020
|
|
9.4
|
Wholesale
|
|
|
|
|
|
|
|
Corporate
and commercial
|
161,653
|
|
212,848
|
|
22,078
|
|
58,276
|
|
10,972
|
|
465,827
|
|
48.6
|
-
manufacturing
|
27,005
|
|
32,564
|
|
2,941
|
|
15,348
|
|
2,785
|
|
80,643
|
|
8.4
|
-
international trade and services
|
55,875
|
|
72,166
|
|
8,448
|
|
11,035
|
|
2,518
|
|
150,042
|
|
15.6
|
-
commercial real estate
|
21,460
|
|
32,798
|
|
724
|
|
7,849
|
|
1,340
|
|
64,171
|
|
6.7
|
- other
property-related
|
7,025
|
|
37,628
|
|
1,856
|
|
8,823
|
|
306
|
|
55,638
|
|
5.8
|
-
government
|
3,009
|
|
2,919
|
|
1,619
|
|
354
|
|
541
|
|
8,442
|
|
0.9
|
- other
commercial
|
47,279
|
|
34,773
|
|
6,490
|
|
14,867
|
|
3,482
|
|
106,891
|
|
11.2
|
Financial
|
43,666
|
|
79,254
|
|
10,370
|
|
14,823
|
|
3,742
|
|
151,855
|
|
15.9
|
-
non-bank financial institutions
|
31,307
|
|
19,517
|
|
2,599
|
|
9,750
|
|
556
|
|
63,729
|
|
6.7
|
-
banks
|
12,359
|
|
59,737
|
|
7,771
|
|
5,073
|
|
3,186
|
|
88,126
|
|
9.2
|
Total
wholesale
|
205,319
|
|
292,102
|
|
32,448
|
|
73,099
|
|
14,714
|
|
617,682
|
|
64.5
|
Total
gross loans and advances at 31 Dec 2016
|
351,818
|
|
426,802
|
|
40,192
|
|
118,055
|
|
20,613
|
|
957,480
|
|
100.0
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
Percentage
of total gross loans and advances
|
36.7
|
|
44.6
|
|
4.2
|
|
12.3
|
|
2.2
|
|
100.0
|
|
|
|
|
|
28
|
HSBC
Holdings plc Earnings Release 1Q17
|
Earnings
Release - 1Q17
|
|
First
interim dividend for 2017
|
The
Directors of HSBC Holdings plc have declared a first interim
dividend of $0.10 per ordinary share in respect of the financial
year ending 31 December 2017 in accordance with their intention, as
set out in the Annual Report and Accounts 2016, to pay quarterly
dividends on the ordinary shares in a pattern of three equal
dividends with a variable fourth interim dividend. The ordinary
shares will be quoted ex-dividend in London, Hong Kong, Paris and
Bermuda on 18 May 2017. The American Depositary Shares will be
quoted ex-dividend in New York on 17 May 2017. The dividend will be
payable on 5 July 2017 to holders of record on 19 May
2017.
The
dividend will be payable in US dollars, sterling or Hong Kong
dollars, or a combination of these currencies, at the forward
exchange rates quoted by HSBC Bank plc in London at or about
11.00am on 26 June 2017. A scrip dividend will also be offered.
Particulars of these arrangements will be sent to shareholders on
or about 2 June 2017 and elections must be received by
22 June 2017.
The
dividend will be payable on ordinary shares held through Euroclear
France, the settlement and central depositary system for Euronext
Paris, on 5 July 2017 to the holders of record on 19 May 2017. The
dividend will be payable by Euroclear France, in euros, at the
forward exchange rate quoted by HSBC France on 26 June 2017, or as
a scrip dividend. Particulars of these arrangements will be
announced through Euronext Paris on 5 May, 26 May and 26 June
2017.
The
dividend will be payable on American Depositary Shares ('ADS'),
each of which represents five ordinary shares, on 5 July 2017 to
holders of record on 19 May 2017. The dividend of $0.50 per ADS
will be payable by the depositary in US dollars or as a scrip
dividend of new ADSs. Particulars of these arrangements will be
sent to holders on or about 2 June 2017 and elections will be
required to be made by 16 June 2017.
Alternatively,
the cash dividend may be invested in additional ADSs for
participants in the dividend reinvestment plan operated by the
depositary.
Any
person who has acquired ordinary shares registered on the Principal
register in the United Kingdom, the Hong Kong Overseas Branch
register or the Bermuda Overseas Branch register but who has not
lodged the share transfer with the Principal Registrar, Hong Kong
or Bermuda Overseas Branch Registrar should do so before 4.00pm
local time on 19 May 2017 in order to receive the
dividend.
Ordinary
shares may not be removed to or from the Principal register in the
United Kingdom, the Hong Kong Overseas Branch register or the
Bermuda Overseas Branch register on 19 May 2017. Any person wishing
to remove ordinary shares to or from each register must do so
before 4.00pm local time on 18 May 2017.
Transfer
of ADSs must be lodged with the depositary by 11.00am on 19 May
2017 to receive the dividend.
Dividend
on 6.20% non-cumulative US dollar preference shares, series A
('Series A Dollar Preference Shares')
In
2005, 1,450,000 Series A Dollar Preference Shares were issued for a
consideration of $1,000 each, and Series A American Depositary
Shares, each of which represents one-fortieth of a Series A Dollar
Preference Share, were listed on the New York Stock
Exchange.
A
non-cumulative fixed-rate dividend of 6.20% per annum is payable on
the Series A Dollar Preference Shares on 15 March, 15 June, 15
September and 15 December 2017 for the quarter then ended at the
sole and absolute discretion of the Board of HSBC Holdings plc.
Accordingly, the Board of HSBC Holdings plc has declared a dividend
of $0.3875 per Series A American Depositary Share for the quarter
ending 15 June 2017.
The
dividend will be payable on 15 June 2017 to holders of record on 31
May 2017.
Any
person who has acquired Series A American Depositary Shares but who
has not lodged the transfer documentation with the depositary
should do so before 12.00pm on 31 May 2017 in order to receive the
dividend.
For and
on behalf of
HSBC
Holdings plc
Ben J S
Mathews
Group
Company Secretary
The
Board of Directors of HSBC Holdings plc as at the date of this
announcement are: Douglas Flint, Stuart Gulliver, Phillip
Ameen
†
, Kathleen
Casey
†
, Laura
Cha
†
, Henri de
Castries
†
, Lord Evans of
Weardale
†
, Joachim
Faber
†
, Irene
Lee
†
, John
Lipsky
†
, Iain Mackay,
Heidi Miller
†
, Marc Moses,
David Nish
†
, Jonathan
Symonds
†
, Jackson
Tai
†
and Pauline van der Meer Mohr
†
.
|
|
†
|
Independent
non-executive Director.
|
|
|
|
HSBC
Holdings plc Earnings Release 1Q17
|
29
|
Earnings
Release - 1Q17
|
|
|
Terms
and abbreviations
|
|
|
|
|
1Q17
|
First
quarter of 2017
|
1Q16
|
First
quarter of 2016
|
3Q16
|
Third
quarter of 2016
|
4Q16
|
Fourth
quarter of 2016
|
BoCom
|
Bank of
Communications Co., Limited, one of China's largest
banks
|
Bps
|
Basis
points. One basis point is equal to one-hundredth of a percentage
point
|
CET1
|
Common
equity tier 1
|
CMB
|
Commercial
Banking, a global business
|
CML
|
Consumer
and Mortgage Lending (US)
|
Corporate
Centre
|
In
December 2016, certain functions were combined to create a
Corporate Centre. These include Balance Sheet Management, legacy
businesses and interests in associates and joint ventures. The
Corporate Centre also includes the results of our financing
operations, central support costs with associated recoveries and
the UK bank levy
|
Costs
to achieve
|
Transformation
costs to deliver the cost reduction and productivity outcomes
outlined in the Investor Update in June 2015
|
CRD
IV
|
Capital
Requirements Directive IV
|
CRR
|
Capital
Requirements Regulation
|
DVA
|
Debit
valuation adjustment
|
EBA
|
European
Banking Authority
|
FTEs
|
Full-time
equivalent staff
|
FX
|
Foreign
exchange
|
GB&M
|
Global
Banking and Markets, a global business
|
GLCM
|
Global
Liquidity and Cash Management
|
GPB
|
Global
Private Banking, a global business
|
Group
|
HSBC
Holdings together with its subsidiary undertakings
|
GTRF
|
Global
Trade and Receivables Finance
|
IFRSs
|
International
Financial Reporting Standards
|
IMA
|
Internal
Models Approach
|
IRB
|
Internal
ratings based
|
Jaws
|
The
difference between the rate of growth of revenue and the rate of
growth of costs. Positive jaws is where the revenue growth rate
exceeds the cost growth rate. We calculate this on an adjusted
basis
|
JV
|
Joint
venture
|
Legacy
credit
|
A
portfolio of assets comprising Solitaire Funding Limited,
securities investment conduits, asset-backed securities trading
portfolios, credit correlation portfolios and derivative
transactions entered into directly with monoline
insurers
|
LICs
|
Loan
impairment charges and other credit risk provisions
|
MENA
|
Middle
East and North Africa
|
MREL
|
Minimum
requirement for own funds and eligible liabilities
|
Own
credit spread
|
Fair
value movements on our long-term debt designated at fair value
resulting from changes in credit spread
|
PBT
|
Profit
before tax
|
PRA
|
Prudential
Regulation Authority (UK)
|
Revenue
|
Net
operating income before LICs
|
RBWM
|
Retail
Banking and Wealth Management, a global business
|
RoRWA
|
Return
on risk-weighted assets
|
RWAs
|
Risk-weighted
assets
|
$m/$bn
|
United
States dollar millions/billions
|
VaR
|
Value
at risk
|
Click
on, or paste the following link into your web browser, to view the
associated PDF document.
http://www.rns-pdf.londonstockexchange.com/rns/1299E_-2017-5-4.pdf
|
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30
|
HSBC
Holdings plc Earnings Release 1Q17
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
HSBC
Holdings plc
|
|
|
|
By:
|
|
Name:
Ben J S Mathews
|
|
Title:
Group Company Secretary
|
|
|
|
Date:
04 May 2017
|
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