2004 IFRS Comparative Info-P2

HSBC Holdings PLC 5 July 2005 Appendices ________________________________________________________________________________ Appendix I Reconciliation of UK GAAP and IFRS numbers Consolidated income statement for the year ended 31 December 2004 Consolidated income statement for the half-year to 31 December 2004 Consolidated income statement for the half-year to 30 June 2004 Consolidated balance sheet at 31 December 2004 Consolidated balance sheet at 30 June 2004 Consolidated balance sheet at 1 January 2004 (date of transition to IFRS) Appendix II Effect of IAS 1 'Presentation of Financial Statements' Consolidated income statement for the year ended 31 December 2004 Consolidated income statement for the half-year to 31 December 2004 Consolidated income statement for the half-year to 30 June 2004 Consolidated balance sheet at 31 December 2004 Consolidated balance sheet at 30 June 2004 Consolidated balance sheet at 1 January 2004 (date of transition to IFRS) 2004 IFRS Comparative Financial Information(continued) Appendix I ________________________________________________________________________________ Consolidated income statement for the year ended 31 December 2004 Reconciliation of UK GAAP and IFRS Adjustments to conform HSBC's UK GAAP income statement for the year ended 31 December 2004 to its accounting policies under IFRS are set out below: UK GAAP Retirement Goodwill Other Software Share- benefits amortisation goodwill capitalisation based under UK adjustments payments GAAP US$m US$m US$m US$m US$m US$m Interest receivable 50,203 - - - - - Interest payable (19,179) - - - - - --------- --------- --------- --------- --------- --------- Net interest income 31,024 - - - - - Fees and commissions receivable 15,877 - - - - - Fees and commissions payable (2,784) - - - - - Dealing profits 2,566 - - - - - Dividend income 601 - - - - - Net investment income on assets backing policyholder liabilities - - - - - - Net earned insurance premiums - - - - - - Other operating income 3,303 - - - - - --------- --------- --------- --------- --------- --------- Operating income 50,587 - - - - - Administrative expenses (24,183) (170) - (39) 329 (152) Depreciation and amortisation (3,506) - 1,814 (57) (304) - --------- --------- --------- --------- --------- --------- Operating profit before provisions 22,898 (170) 1,814 (96) 25 (152) Provision for bad and doubtful debts (6,357) - - - - - Provision for contingent liabilities and commitments (27) - - - - - Net insurance claims - - - - - - Amounts written off fixed asset investments - - - - - - --------- --------- --------- --------- --------- --------- Operating profit 16,514 (170) 1,814 (96) 25 (152) Leases Insurance Consolidation Property Other IFRS US$m US$m US$m US$m US$m US$m Interest receivable - 61 254 - (47) 50,471 Interest payable - 4 (245) - 48 (19,372) --------- --------- --------- --------- --------- --------- Net interest income - 65 9 - 1 31,099 Fees and commissions receivable - (3) (31) - (171) 15,672 Fees and commissions payable - (356) (9) - 195 (2,954) Dealing profits - - 73 - (20) 2,619 Dividend income - - 25 - (4) 622 Net investment income on assets backing policyholder liabilities - 1,012 - - - 1,012 Net earned insurance premiums - 5,368 - - - 5,368 Other operating income - (1,482) 21 90 (151) 1,781 --------- --------- --------- --------- --------- --------- Operating income - 4,604 88 90 (150) 55,219 Administrative expenses - (49) 15 (7) 32 (24,224) Depreciation and amortisation (90) - - 4 (86) (2,225) --------- --------- --------- --------- --------- --------- Operating profit before provisions (90) 4,555 103 87 (204) 28,770 Provision for bad and doubtful debts - - - - 162 (6,195) Provision for contingent liabilities and commitments - - - - (44) (71) Net insurance claims - (4,565) (70) - - (4,635) Amounts written off fixed asset investments - - 4 - (2) 2 --------- --------- --------- --------- --------- --------- Operating profit (90) (10) 37 87 (88) 17,871 Consolidated income statement for the year ended 31 December 2004 (continued) Reconciliation of UK GAAP and IFRS UK Retirement Goodwill Other Software Share- GAAP benefits amortisation goodwill capitalisation Based under UK adjustments payments GAAP US$m US$m US$m US$m US$m US$m Operating profit 16,514 (170) 1,814 (96) 25 (152) Share of profit in associates and joint ventures 292 - 4 2 - - Gains on disposal of fixed assets and investments 802 - - (8) - - ------ ------ ------ ------ ------- ------ Profit on ordinary activities before tax 17,608 (170) 1,818 (102) 25 (152) Tax on profit on ordinary activities (4,507) 39 - 57 (21) (12) ------ ------ ------ ------ ------- ------ Profit on ordinary activities after tax 13,101 (131) 1,818 (45) 4 (164) Minority interests (1,261) (3) - - - - ------ ------ ------ ------ ------- ------ Profit attributable to shareholders 11,840 (134) 1,818 (45) 4 (164) ------ ------ ------ ------ ------- ------ Leases Insurance Consolidation Property Other IFRS US$m US$m US$m US$m US$m US$m Operating profit (90) (10) 37 87 (88) 17,871 Share of profit in associates and joint ventures - - - 18 - 316 Gains on disposal of fixed assets and investments - 11 - 1 (2) 804 ------ ------ ------ ------ ------- ------ Profit on ordinary activities before tax (90) 1 37 106 (90) 18,991 Tax on profit on ordinary activities 27 (1) (6) (11) (298) (4,733) ------ ------ ------ ------ ------- ------ Profit on ordinary activities after tax (63) - 31 95 (388) 14,258 Minority interests - - (19) (35) (22) (1,340) ------ ------ ------ ------ ------- ------ Profit attributable to shareholders (63) - 12 60 (410) 12,918 ------ ------ ------ ------ ------- ------ Consolidated income statement for the half-year to 31 December 2004 Reconciliation of UK GAAP and IFRS Adjustments to conform HSBC's UK GAAP income statement for the half-year to 31 December 2004 to its accounting policies under IFRS are set out below: UK Retirement Goodwill Other Software Share- GAAP benefits amortisation goodwill capitalisation Based under UK adjustments payments GAAP US$m US$m US$m US$m US$m US$m Interest receivable 26,725 - - - - - Interest payable (10,807) - - - - - ------ ------ ------ ------ ------- ------ Net interest income 15,918 - - - - - Fees and commissions receivable 8,161 - - - - - Fees and commissions payable (1,432) - - - - - Dealing profits 1,183 - - - - - Dividend income 272 - - - - - Net investment income on assets backing policyholder liabilities - - - - - - Net earned insurance premiums - - - - - - Other operating income 1,457 - - - - - ------ ------ ------ ------ ------- ------ Operating income 25,559 - - - - - Administrative expenses (12,648) (215) - (39) 175 (97) Depreciation and amortisation (1,815) - 931 (23) (108) - ------ ------ ------ ------ ------- ------ Operating profit before provisions 11,096 (215) 931 (62) 67 (97) Provision for bad and doubtful debts (3,554) - - - - - Provision for contingent liabilities and commitments 82 - - - - - Net insurance claims - - - - - - Amounts written off fixed asset investments (16) - - - - - ------ ------ ------ ------ ------- ------ Operating profit 7,608 (215) 931 (62) 67 (97) Leases Insurance Consolidation Property Other IFRS US$m US$m US$m US$m US$m US$m Interest receivable 11 25 123 - (29) 26,855 Interest payable - 5 (122) - 38 (10,886) ------ ------ ------ ------ ------- ------ Net interest income 11 30 1 - 9 15,969 Fees and commissions receivable - (11) 71 - (181) 8,040 Fees and commissions payable - (184) (107) - 191 (1,532) Dealing profits - - 66 - (30) 1,219 Dividend income - - 14 - (3) 283 Net investment income on assets backing policyholder liabilities - 818 - - - 818 Net earned insurance premiums - 2,904 - - - 2,904 Other operating income - (782) 25 30 (28) 702 ------ ------ ------ ------ ------- ------ Operating income 11 2,775 70 30 (42) 28,403 Administrative expenses - (24) 10 (3) 42 (12,799) Depreciation and amortisation (66) - (1) (6) (37) (1,125) ------ ------ ------ ------ ------- ------ Operating profit before provisions (55) 2,751 79 21 (37) 14,479 Provision for bad and doubtful debts - - - - 67 (3,487) Provision for contingent liabilities and commitments - - - - (44) 38 Net insurance claims - (2,760) (50) - - (2,810) Amounts written off fixed asset investments - - 3 - (1) (14) ------ ------ ------ ------ ------- ------ Operating profit (55) (9) 32 21 (15) 8,206 Consolidated income statement for the half-year to 31 December 2004 (continued) Reconciliation of UK GAAP and IFRS UK GAAP Retirement Goodwill Other Software Share- benefits amortisation goodwill capitalisation based under UK adjustments payments GAAP US$m US$m US$m US$m US$m US$m Operating profit 7,608 (215) 931 (62) 67 (97) Share of profit in associates and joint ventures 169 - 4 2 - - Gains on disposal of fixed assets and investments 463 - - - - - --------- --------- --------- --------- --------- --------- Profit on ordinary activities before tax 8,240 (215) 935 (60) 67 (97) Tax on profit on ordinary activities (2,139) 49 - 23 (30) 19 --------- --------- --------- --------- --------- --------- Profit on ordinary activities after tax 6,101 (166) 935 (37) 37 (78) Minority interests (607) 1 - - - - --------- --------- --------- --------- --------- --------- Profit attributable to shareholders 5,494 (165) 935 (37) 37 (78) --------- --------- --------- --------- --------- --------- Leases Insurance Consolidation Property Other IFRS US$m US$m US$m US$m US$m US$m Operating profit (55) (9) 32 21 (15) 8,206 Share of profit in associates and joint ventures - - (5) 18 (1) 187 Gains on disposal of fixed assets and investments - 5 (1) 2 (2) 467 --------- --------- --------- --------- --------- --------- Profit on ordinary activities before tax (55) (4) 26 41 (18) 8,860 Tax on profit on ordinary activities 16 4 (4) (1) (146) (2,209) --------- --------- --------- --------- --------- --------- Profit on ordinary activities after tax (39) - 22 40 (164) 6,651 Minority interests - - (25) (12) (30) (673) --------- --------- --------- --------- --------- --------- Profit attributable to shareholders (39) - (3) 28 (194) 5,978 --------- --------- --------- --------- --------- --------- Consolidated income statement for the half-year to 30 June 2004 Reconciliation of UK GAAP and IFRS Adjustments to conform HSBC's UK GAAP income statement for the half-year to 30 June 2004 to its accounting policies under IFRS are set out below: UK GAAP Retirement Goodwill Other Software Share- benefits amortisation goodwill capitalisation based under UK adjustments payments GAAP US$m US$m US$m US$m US$m US$m Interest receivable 23,478 - - - - - Interest payable (8,372) - - - - - --------- --------- --------- --------- --------- --------- Net interest income 15,106 - - - - - Fees and commissions receivable 7,716 - - - - - Fees and commissions payable (1,352) - - - - - Dealing profits 1,383 - - - - - Dividend income 329 - - - - - Net investment income on assets backing policyholder liabilities - - - - - - Net earned insurance premiums - - - - - - Other operating income 1,846 - - - - - --------- --------- --------- --------- --------- --------- Operating income 25,028 - - - - - Administrative expenses (11,535) 45 - - 154 (55) Depreciation and amortisation (1,691) - 883 (34) (196) - --------- --------- --------- --------- --------- --------- Operating profit before provisions 11,802 45 883 (34) (42) (55) Provision for bad and doubtful debts (2,803) - - - - - Provision for contingent liabilities and commitments (109) - - - - - Net insurance claims - - - - - - Amounts written off fixed asset investments 16 - - - - - --------- --------- --------- --------- --------- --------- Operating profit 8,906 45 883 (34) (42) (55) Leases Insurance Consolidation Property Other IFRS US$m US$m US$m US$m US$m US$m Interest receivable (11) 36 131 - (18) 23,616 Interest payable - (1) (123) - 10 (8,486) --------- --------- --------- --------- --------- --------- Net interest income (11) 35 8 - (8) 15,130 Fees and commissions receivable - 8 (102) - 10 7,632 Fees and commissions payable - (172) 98 - 4 (1,422) Dealing profits - - 7 - 10 1,400 Dividend income - - 11 - (1) 339 Net investment income on assets backing policyholder liabilities - 194 - - - 194 Net earned insurance premiums - 2,464 - - - 2,464 Other operating income - (700) (4) 60 (123) 1,079 --------- --------- --------- --------- --------- --------- Operating income (11) 1,829 18 60 (108) 26,816 Administrative expenses - (25) 5 (4) (10) (11,425) Depreciation and amortisation (24) - 1 10 (49) (1,100) --------- --------- --------- --------- --------- --------- Operating profit before provisions (35) 1,804 24 66 (167) 14,291 Provision for bad and doubtful debts - - - - 95 (2,708) Provision for contingent liabilities and commitments - - - - - (109) Net insurance claims - (1,805) (20) - - (1,825) Amounts written off fixed asset investments - - 1 - (1) 16 --------- --------- --------- --------- --------- --------- Operating profit (35) (1) 5 66 (73) 9,665 Consolidated income statement for the half-year to 30 June 2004 (continued) Reconciliation of UK GAAP and IFRS UK GAAP Retirement Goodwill Other Software Share- benefits amortisation goodwill capitalisation based under UK adjustments payments GAAP US$m US$m US$m US$m US$m US$m Operating profit 8,906 45 883 (34) (42) (55) Share of profit in associates and joint ventures 123 - - - - - Gains on disposal of fixed assets and investments 339 - - (8) - - --------- --------- --------- --------- --------- --------- Profit on ordinary activities before tax 9,368 45 883 (42) (42) (55) Tax on profit on ordinary activities (2,368) (10) - 34 9 (31) --------- --------- --------- --------- --------- --------- Profit on ordinary activities after tax 7,000 35 883 (8) (33) (86) Minority interests (654) (4) - - - - --------- --------- --------- --------- --------- --------- Profit attributable to shareholders 6,346 31 883 (8) (33) (86) --------- --------- --------- --------- --------- --------- Leases Insurance Consolidation Property Other IFRS US$m US$m US$m US$m US$m US$m Operating profit (35) (1) 5 66 (73) 9,665 Share of profit in associates and joint ventures - - 5 - 1 129 Gains on disposal of fixed assets and investments - 6 1 (1) - 337 --------- --------- --------- --------- --------- --------- Profit on ordinary activities before tax (35) 5 11 65 (72) 10,131 Tax on profit on ordinary activities 11 (5) (2) (10) (152) (2,524) --------- --------- --------- --------- --------- --------- Profit on ordinary activities after tax (24) - 9 55 (224) 7,607 Minority interests - - 6 (23) 8 (667) --------- --------- --------- --------- --------- --------- Profit attributable to shareholders (24) - 15 32 (216) 6,940 --------- --------- --------- --------- --------- --------- Consolidated balance sheet at 31 December 2004 Reconciliation of UK GAAP and IFRS Adjustments to conform HSBC's UK GAAP balance sheet at 31 December 2004 to its accounting policies under IFRS are set out below: UK GAAP Retirement Dividends Goodwill Software Share- benefits capitalisation based payments US$m US$m US$m US$m US$m US$m ASSETS Cash and balances at central banks 9,872 - - - - - Items in the course of collection from other banks 6,352 - - - - - Treasury bills and other eligible bills 30,284 - - - - - Hong Kong Government certificates of indebtedness 11,878 - - - - - Loans and advances to banks 142,712 - - - - - Loans and advances to customers 669,831 - - - - - Debt securities 240,999 4 - - - - Equity shares 19,319 - - - - - Interests in associates and joint ventures 3,452 - - 3 - - Other participating interests 881 - - - - - Goodwill and intangible assets 29,382 - - 1,809 760 - Tangible fixed assets 18,829 - - - - - Other assets 73,498 1,152 - 57 (138) 110 Prepayments and accrued income 19,489 (1,003) - - - - --------- --------- --------- --------- --------- --------- Total assets 1,276,778 153 - 1,869 622 110 --------- --------- --------- --------- --------- --------- Leases Insurance Consolidation Property Other IFRS US$m US$m US$m US$m US$m US$m ASSETS Cash and balances at central banks - - 72 - - 9,944 Items in the course of collection from other banks - - (14) - - 6,338 Treasury bills and other eligible bills - 197 - - - 30,481 Hong Kong Government certificates of indebtedness - - - - - 11,878 Loans and advances to banks - 699 40 - (2) 143,449 Loans and advances to customers (122) 342 3,602 - (762) 672,891 Debt securities - 8,109 (701) - - 248,411 Equity shares - 6,896 1,321 - 183 27,719 Interests in associates and joint ventures - - - (14) - 3,441 Other participating interests - - - - - 881 Goodwill and intangible assets - 1,874 (3) - 673 34,495 Tangible fixed assets (596) - - (2,140) (89) 16,004 Other assets - (19,141) 468 (241) (490) 55,275 Prepayments and accrued income - (64) 11 352 (14) 18,771 --------- --------- --------- --------- --------- --------- Total assets (718) (1,088) 4,796 (2,043) (501) 1,279,978 --------- --------- --------- --------- --------- --------- Consolidated balance sheet at 31 December 2004 (continued) Reconciliation of UK GAAP and IFRS UK GAAP Retirement Dividends Goodwill Software Share- benefits capitalisation based payments US$m US$m US$m US$m US$m US$m LIABILITIES Hong Kong currency notes in circulation 11,878 - - - - - Deposits by banks 83,539 - - - - - Customer accounts 693,751 - - - - - Items in the course of transmission to other banks 5,301 - - - - - Debt securities in issue 208,593 - - - - - Other liabilities 123,315 (3) (3,173) - - 27 Liabilities to - - - - - - policyholders under long-term assurance business Retirement benefit liabilities - 6,475 - - - - Accruals and deferred income 16,500 31 - - - (140) Provision for liabilities and charges - deferred taxation 2,066 (128) - - 71 25 - other provisions 5,532 (1,740) - - - - Subordinated liabilities 26,486 - - - - - Minority interests 13,194 (12) 177 - - - Called up share capital 5,587 - - - - - Share premium account 4,881 - - - - - Other reserves 21,457 - - - - - Revaluation reserve 2,660 - - - - - Profit and loss account 52,038 (4,470) 2,996 1,869 551 198 --------- ------- --------- --------- --------- --------- Total liabilities 1,276,778 153 - 1,869 622 110 --------- ------- --------- --------- --------- --------- Leases Insurance Consolidation Property Other IFRS US$m US$m US$m US$m US$m US$m LIABILITIES Hong Kong currency notes in circulation - - - - - 11,878 Deposits by banks - - 516 - - 84,055 Customer accounts - (528) (151) - 693,072 Items in the course of transmission to other banks - - - - - 5,301 Debt securities in issue - (486) 3,614 - - 211,721 Other liabilities - (18,428) 295 - (4) 102,029 Liabilities to policyholders under long-term assurance business - 19,190 - - - 19,190 Retirement benefit liabilities - - - - - 6,475 Accruals and deferred income - 2 57 - 49 16,499 Provision for liabilities and charges - deferred taxation (215) 362 18 220 (980) 1,439 - other provisions - (1,202) 1 - 45 2,636 Subordinated liabilities - - - - - 26,486 Minority interests - - 484 (161) (7) 13,675 Called up share capital - - - - - 5,587 Share premium account - - - - - 4,881 Other reserves - - - - 210 21,667 Revaluation reserve - - - (2,660) - - Profit and loss account (503) 2 (38) 558 186 53,387 --------- ------- --------- --------- --------- --------- Total liabilities (718) (1,088) 4,796 (2,043) (501) 1,279,978 --------- ------- --------- --------- --------- --------- Consolidated balance sheet at 30 June 2004 Reconciliation of UK GAAP and IFRS Adjustments to conform HSBC's UK GAAP balance sheet at 30 June 2004 to its accounting policies under IFRS are set out below: UK GAAP Retirement Dividends Goodwill Software Share- benefits capitalisation based payments US$m US$m US$m US$m US$m US$m ASSETS Cash and balances at central banks 10,103 - - - - - Items in the course of collection from other banks 8,641 - - - - - Treasury bills and other eligible bills 30,525 - - - - - Hong Kong Government certificates of indebtedness 10,984 - - - - - Loans and advances to banks 140,188 - - - - - Loans and advances to customers 594,875 - - - - - Debt securities 225,349 4 - - - - Equity shares 14,048 - - - - - Interests in associates and joint ventures 1,421 (1) - - - - Other participating interests 867 - - - - - Goodwill and intangible assets 28,029 - - 892 687 - Tangible fixed assets 16,922 - - - - - Other assets 57,109 813 - 14 (117) 81 Prepayments and accrued income 14,871 (948) - - - - --------- --------- --------- --------- --------- --------- Total assets 1,153,932 (132) - 906 570 81 --------- --------- --------- --------- --------- --------- Leases Insurance Consolidation Property Other IFRS US$m US$m US$m US$m US$m US$m ASSETS Cash and balances at central banks - - 72 - - 10,175 Items in the course of collection from other banks - - - - - 8,641 Treasury bills and other eligible bills - 50 - - - 30,575 Hong Kong Government certificates of indebtedness - - - - - 10,984 Loans and advances to banks - 606 19 - - 140,813 Loans and advances to customers (123) 297 5,054 - (862) 599,241 Debt securities - 7,305 (434) - - 232,224 Equity shares - 5,498 965 - 201 20,712 Interests in associates and joint ventures - - (41) (10) - 1,369 Other participating interests - - - - - 867 Goodwill and intangible assets - 1,640 - - 686 31,934 Tangible fixed assets (496) - (6) (1,755) (93) 14,572 Other assets - (16,367) (281) (235) (258) 40,759 Prepayments and accrued income - (41) 13 356 (9) 14,242 --------- --------- --------- -------- --------- --------- Total assets (619) (1,012) 5,361 (1,644) (335) 1,157,108 --------- --------- --------- -------- --------- --------- Consolidated balance sheet at 30 June 2004 (continued) Reconciliation of UK GAAP and IFRS UK GAAP Retirement Dividends Goodwill Software Share- benefits capitalisation based payments US$m US$m US$m US$m US$m US$m LIABILITIES Hong Kong currency notes in circulation 10,984 - - - - - Deposits by banks 97,307 - - - - - Customer accounts 635,031 - - - - - Items in the course of transmission to other banks 6,923 - - - - - Debt securities in issue 164,760 - - - - - Other liabilities 106,120 (4) (1,538) 13 - 23 Liabilities to policyholders under long-term assurance business - - - - - - Retirement benefit liabilities - 5,151 - - - - Accruals and deferred income 12,073 14 - - - (93) Provision for liabilities and charges - deferred taxation 1,908 (175) - - 69 26 - other provisions 5,237 (1,560) - (68) - - Subordinated liabilities 21,875 - - - - - Minority interests 12,455 (7) 102 - - - Called up share capital 5,513 - - - - - Share premium account 4,459 - - - - - Other reserves 21,431 - - 22 - - Revaluation reserve 2,281 - - - - - Profit and loss account 45,575 (3,551) 1,436 939 501 125 --------- --------- --------- ------- --------- --------- Total liabilities 1,153,932 (132) - 906 570 81 --------- --------- --------- ------- --------- --------- Leases Insurance Consolidation Property Other IFRS US$m US$m US$m US$m US$m US$m LIABILITIES Hong Kong currency notes in circulation - - - - - 10,984 Deposits by banks - 20 - - - 97,327 Customer accounts - (337) (92) - - 634,602 Items in the course of transmission to other banks - - - - - 6,923 Debt securities in issue - (493) 5,137 - - 169,404 Other liabilities - (15,581) 199 - 4 89,236 Liabilities to policyholders under long-term assurance business - 16,200 - - - 16,200 Retirement benefit liabilities - - - - - 5,151 Accruals and deferred income - 1 12 - 39 12,046 Provision for liabilities and charges - deferred taxation (189) 325 - 204 (933) 1,235 - other provisions - (1,146) 2 - 27 2,492 Subordinated liabilities - - - - - 21,875 Minority interests - - 180 (165) 2 12,567 Called up share capital - - - - - 5,513 Share premium account - - - - - 4,459 Other reserves - - - - 86 21,539 Revaluation reserve - - - (2,281) - - Profit and loss account (430) (1) (77) 598 440 45,555 --------- --------- --------- ------- --------- --------- Total liabilities (619) (1,012) 5,361 (1,644) (335) 1,157,108 --------- --------- --------- ------- --------- --------- Consolidated balance sheet at 1 January 2004 Reconciliation of UK GAAP and IFRS Adjustments to conform HSBC's UK GAAP balance sheet at 1 January 2004 to its accounting policies under IFRS are set out below: UK GAAP Retirement Dividends Goodwill Software Share- benefits capitalisation based payments US$m US$m US$m US$m US$m US$m ASSETS Cash and balances at central banks 7,661 - - - - - Items in the course of collection from other banks 6,628 - - - - - Treasury bills and other eligible bills 20,391 - - - - - Hong Kong Government certificates of indebtedness 10,987 - - - - - Loans and advances to banks 117,173 - - - - - Loans and advances to customers 528,977 - - - - - Debt securities 205,722 4 - - - - Equity shares 12,879 - - - - - Interests in associates and joint ventures 1,273 (1) - 8 - - Other participating interests 690 - - - - - Goodwill and intangible assets 28,640 - - 112 718 - Tangible fixed assets 15,748 - - - - - Other assets 63,128 733 - 44 (127) 111 Prepayments and accrued income 14,319 (948) - (77) - 24 --------- --------- --------- -------- --------- --------- Total assets 1,034,216 (212) - 87 591 135 --------- --------- --------- -------- --------- --------- Leases Insurance Consolidation Property Other IFRS US$m US$m US$m US$m US$m US$m ASSETS Cash and balances at central banks - - 72 - - 7,733 Items in the course of collection from other banks - - - - - 6,628 Treasury bills and other eligible bills - 84 - - - 20,475 Hong Kong Government certificates of indebtedness - - - - - 10,987 Loans and advances to banks - 752 109 - - 118,034 Loans and advances to customers (110) 316 5,555 - (888) 533,850 Debt securities - 6,597 (466) - - 211,857 Equity shares - 5,037 578 - 200 18,694 Interests in associates and joint ventures - - (16) (11) - 1,253 Other participating interests - - - - - 690 Goodwill and intangible assets - 1,579 - - 869 31,918 Tangible fixed assets (465) - - (979) (94) 14,210 Other assets - (15,169) (649) (18) (286) 47,767 Prepayments and accrued income - 76 (108) 353 (14) 13,625 --------- --------- --------- -------- --------- --------- Total assets (575) (728) 5,075 (655) (213) 1,037,721 --------- --------- --------- -------- --------- --------- Consolidated balance sheet at 1 January 2004 (continued) Reconciliation of UK GAAP and IFRS UK GAAP Retirement Dividends Goodwill Software Share- benefits capitalisation based payments US$m US$m US$m US$m US$m US$m LIABILITIES Hong Kong currency notes in circulation 10,987 - - - - - Deposits by banks 70,426 - - - - - Customer accounts 573,130 - - - - - Items in the course of transmission to other banks 4,383 - - - - - Debt securities in issue 153,562 - - - - - Other liabilities 94,669 (126) (2,794) 156 - (5) Liabilities to policyholders under long-term assurance business - - - - - - Retirement benefit liabilities - 4,982 - - - - Accruals and deferred income 13,760 (6) - 26 - (106) Provision for liabilities and charges - deferred taxation 1,670 (142) - - 73 35 - other provisions 5,078 (1,390) - (73) - - Subordinated liabilities 21,197 - - - - - Minority interests 10,881 (1) 167 - - - Called up share capital 5,481 - - - - - Share premium account 4,406 - - - - - Other reserves 21,543 - - - - - Revaluation reserve 1,615 - - - - - Profit and loss account 41,428 (3,529) 2,627 (22) 518 211 --------- --------- --------- ------- --------- --------- Total liabilities 1,034,216 (212) - 87 591 135 --------- --------- --------- ------- --------- --------- Leases Insurance Consolidation Property Other IFRS US$m US$m US$m US$m US$m US$m LIABILITIES Hong Kong currency notes in circulation - - - - - 10,987 Deposits by banks - 13 - - - 70,439 Customer accounts - (78) (23) - - 573,029 Items in the course of transmission to other banks - - - - - 4,383 Debt securities in issue - (516) 5,560 - - 158,606 Other liabilities - (14,773) (598) - (28) 76,501 Liabilities to policyholders under long-term assurance business - 15,168 - - - 15,168 Retirement benefit liabilities - - - - - 4,982 Accruals and deferred income - - 12 - 28 13,714 Provision for liabilities and charges - deferred taxation (173) 306 3 201 (862) 1,111 - other provisions - (848) (25) - 9 2,751 Subordinated liabilities - - - - - 21,197 Minority interests - - 148 (101) 11 11,105 Called up share capital - - - - - 5,481 Share premium account - - - - - 4,406 Other reserves - - - - - 21,543 Revaluation reserve - - - (1,615) - - Profit and loss account (402) - (2) 860 629 42,318 --------- --------- --------- ------- --------- --------- Total liabilities (575) (728) 5,075 (655) (213) 1,037,721 --------- --------- --------- ------- --------- --------- Appendix II ____________________________________________________________________________ IFRS Consolidated income statement for the year ended 31 December 2004 Effect of IAS 1 'Presentation of Financial Statements' IFRS numbers Reclassification IFRS numbers in in UK GAAP IFRS format format US$m US$m US$m Interest receivable 50,471 50,471 Interest income Interest payable (19,372) (19,372) Interest expense -------- -------- Net interest Net interest income 31,099 31,099 income Fees and commissions receivable 15,672 15,672 Fee income Fees and commissions payable (2,954) (2,954) Fee expense -------- 12,718 Net fee income Dealing profits 2,619 2,619 Trading income Net investment Net investment income on income on assets assets backing backing policyholder policyholder liabilities 1,012 1,012 liabilities 773 773 Gains less losses from financial investments Dividend income 622 622 Dividend income Net earned insurance premiums 5,368 5,368 Net earned insurance premiums Other operating income 1,781 34 1,815 Other operating -------- -------- -------- income Operating income 55,219 807 56,026 Total operating income (6,191) (6,191) Loan impairment charges and other credit risk provisions (4,635) (4,635) Net insurance -------- claims incurred and movement in policyholder liabilities 45,200 Net operating income Administrative expenses (24,224) 24,224 (14,612) (14,612) Employee compensation and benefits (9,688) (9,688) General and administrative expenses Depreciation and amortisation (2,225) 2,225 (1,731) (1,731) Depreciation of property, plant and equipment (494) (494) Amortisation of -------- intangible assets and impairment of goodwill (26,525) Total operating -------- expenses Operating profit before provisions 28,770 Provision for bad and doubtful debts (6,195) 6,195 Provision for contingent liabilities and commitments (71) 71 Net insurance claims incurred and movement in policyholder liabilities (4,635) 4,635 Amounts written off fixed asset investments 2 (2) -------- -------- -------- Operating profit 17,871 804 18,675 Operating profit IFRS Consolidated income statement for the year ended 31 December 2004 (continued) Effect of IAS 1 'Presentation of Financial Statements' IFRS numbers Reclassification IFRS numbers in IFRS in UK GAAP format format US$m US$m US$m Operating profit 17,871 804 18,675 Operating profit Share of profit in associates and 316 (48) 268 Share of profit in joint associates and joint ventures ventures Gains on disposal of fixed assets and investments : 804 (804) -------- -------- -------- Profit on ordinary activities before tax 18,991 (48) 18,943 Profit before tax Tax on profit on ordinary activities (4,733) 48 (4,685) Tax expense -------- -------- Profit on ordinary activities after tax 14,258 14,258 Profit for the period Minority interests (1,340) (1,340) Profit attributable -------- -------- -------- to minority interests Profit attributable to shareholders 12,918 - 12,918 Profit attributable -------- -------- -------- to shareholders IFRS Consolidated income statement for the half-year to 31 December 2004 Effect of IAS 1 'Presentation of Financial Statements' IFRS numbers Reclassification IFRS numbers in in UK GAAP IFRS format format US$m US$m US$m Interest receivable 26,855 26,855 Interest income Interest payable (10,886) (10,886) Interest expense -------- -------- Net interest income 15,969 15,969 Net interest income Fees and commissions receivable 8,040 8,040 Fee income Fees and commissions payable (1,532) (1,532) Fee expense -------- 6,508 Net fee income Dealing profits 1,219 1,219 Trading income Net investment income on assets backing policyholder liabilities 818 818 Net investment income on assets backing policyholder liabilities 443 443 Gains less losses from financial investments Dividend income 283 283 Dividend income Net earned insurance premiums 2,904 2,904 Net earned insurance premiums Other operating income 702 11 713 Other operating -------- -------- -------- income Operating income 28,403 454 28,857 Total operating income (3,451) (3,451) Loan impairment charges and other credit risk provisions (2,810) (2,810) Net insurance -------- claims incurred and movement in policyholder liabilities 22,596 Net operating income Administrative expenses (12,799) 12,799 (7,649) (7,649) Employee compensation and benefits (5,149) (5,149) General and administrative expenses Depreciation and amortisation (1,125) 1,125 (932) (932) Depreciation of property, plant and equipment (193) (193) Amortisation of -------- intangible assets and impairment of goodwill (13,923) Total operating -------- expenses Operating profit before provisions 14,479 Provision for bad and doubtful debts (3,487) 3,487 Provision for contingent liabilities and commitments 38 (38) Net insurance claims incurred and movement in policyholder liabilities (2,810) 2,810 Amounts written off fixed asset investments (14) 14 -------- -------- -------- Operating profit 8,206 467 8,673 Operating profit IFRS Consolidated income statement for the half-year to 31 December 2004 (continued) Effect of IAS 1 'Presentation of Financial Statements' IFRS numbers Reclassification IFRS numbers in IFRS in UK GAAP format format US$m US$m US$m Operating profit 8,206 467 8,673 Operating profit Share of profit in associates and 187 (37) 150 Share of profit in joint associates and joint ventures ventures Gains on disposal of fixed assets and investments : 467 (467) -------- -------- -------- Profit on ordinary activities before tax 8,860 (37) 8,823 Profit before tax Tax on profit on ordinary activities (2,209) 37 (2,172) Tax expense -------- -------- Profit on ordinary activities after tax 6,651 6,651 Profit for the period Minority interests (673) (673) Profit attributable -------- -------- -------- to minority interests Profit attributable to shareholders 5,978 - 5,978 Profit attributable -------- -------- -------- to shareholders IFRS Consolidated income statement for the half-year to 30 June 2004 Effect of IAS 1 'Presentation of Financial Statements' IFRS numbers Reclassification IFRS numbers in in UK GAAP IFRS format format US$m US$m US$m Interest receivable 23,616 23,616 Interest income Interest payable (8,486) (8,486) Interest expense -------- -------- Net interest income 15,130 15,130 Net interest income Fees and commissions receivable 7,632 7,632 Fee income Fees and commissions payable (1,422) (1,422) Fee expense -------- 6,210 Net fee income Dealing profits 1,400 1,400 Trading income Net investment income on assets backing policyholder liabilities 194 194 Net investment income on assets backing policyholder liabilities 330 330 Gains less losses from financial investments Dividend income 339 339 Dividend income Net earned insurance premiums 2,464 2,464 Net earned insurance premiums Other operating income 1,079 23 1,102 Other operating -------- -------- -------- income Operating income 26,816 353 27,169 Total operating income (2,740) (2,740) Loan impairment charges and other credit risk provisions (1,825) (1,825) Net insurance -------- claims incurred and movement in policyholder liabilities 22,604 Net operating income Administrative expenses (11,425) 11,425 (6,963) (6,963) Employee compensation and benefits (4,539) (4,539) General and administrative expenses Depreciation and amortisation (1,100) 1,100 (799) (799) Depreciation of property, plant and equipment (301) (301) Amortisation of -------- intangible assets and impairment of goodwill (12,602) Total operating -------- expenses Operating profit before provisions 14,291 Provision for bad and doubtful debts (2,708) 2,708 Provision for contingent liabilities and commitments (109) 109 Net insurance claims incurred and movement in policyholder liabilities (1,825) 1,825 Amounts written off fixed asset investments 16 (16) -------- -------- -------- Operating profit 9,665 337 10,002 Operating profit IFRS Consolidated income statement for the half-year to 30 June 2004 (continued) Effect of IAS 1 'Presentation of Financial Statements' IFRS numbers Reclassification IFRS numbers in IFRS in UK GAAP format format US$m US$m US$m Operating profit 9,665 337 10,002 Operating profit Share of profit in associates and 129 (11) 118 Share of profit in joint associates and joint ventures ventures Gains on disposal of fixed assets and investments : 337 (337) -------- -------- -------- Profit on ordinary activities before tax 10,131 (11) 10,120 Profit before tax Tax on profit on ordinary activities (2,524) 11 (2,513) Tax expense -------- -------- Profit on ordinary activities after tax 7,607 7,607 Profit for the period Minority interests (667) (667) Profit attributable -------- -------- -------- to minority interests Profit attributable to shareholders 6,940 - 6,940 Profit attributable -------- -------- -------- to shareholders IFRS Consolidated balance sheet at 31 December 2004 Effect of IAS 1 'Presentation of Financial Statements' IFRS numbers Reclassification IFRS numbers in in UK GAAP IFRS format format US$m US$m US$m ASSETS ASSETS Cash and balances at central banks 9,944 9,944 Cash and balances at central banks Items in the course of collection from other banks 6,338 6,338 Items in the course of collection from other banks Treasury bills and other 30,481 (30,481) eligible bills Hong Kong Government certificates of indebtedness 11,878 11,878 Hong Kong Government certificates of indebtedness 122,160 122,160 Trading securities 32,190 32,190 Derivatives Loans and advances to banks 143,449 143,449 Loans and advances to banks Loans and advances to customers 672,891 672,891 Loans and advances to customers Debt securities 248,411 (248,411) Equity 27,719 (27,719) shares 185,332 185,332 Financial investments Interests in associates and 3,441 3,441 Interests in joint associates and ventures joint ventures Other participating interests 881 (881) Goodwill and intangible assets 34,495 34,495 Goodwill and intangible assets Tangible fixed 16,004 16,004 Property, plant assets and equipment Other 55,275 (32,190) 23,085 Other assets assets Prepayments and accrued income 18,771 18,771 Prepayments and -------- -------- -------- accrued income Total 1,279,978 - 1,279,978 Total assets assets -------- -------- -------- IFRS Consolidated balance sheet at 31 December 2004 (continued) Effect of IAS 1 'Presentation of Financial Statements' IFRS numbers Reclassification IFRS numbers in in UK GAAP IFRS format format US$m US$m US$m LIABILITIES LIABILITIES AND EQUITY Liabilities Hong Kong currency notes 11,878 11,878 Hong Kong in currency notes circulation in circulation Deposits by banks 84,055 84,055 Deposits by banks Customer accounts 693,072 693,072 Customer accounts Items in the course of transmission to other 5,301 5,301 Items in the banks course of transmission to other banks 46,460 46,460 Trading liabilities 34,988 34,988 Derivatives Debt securities in issue 211,721 211,721 Debt securities in issue Retirement benefit liabilities 6,475 6,475 Retirement benefit liabilities Other liabilities 102,029 (81,448) 20,581 Other liabilities Liabilities to policyholders under long term 19,190 19,190 Liabilities to assurance policyholders business under long term assurance business Accruals and deferred income 16,499 16,499 Accruals and deferred income Provisions Provisions for for liabilities and liabilities charges and charges - deferred taxation 1,439 1,439 - deferred tax - other provisions 2,636 2,636 - other provisions Subordinated liabilities 26,486 26,486 Subordinated -------- liabilities 1,180,781 Total liabilities Minority interests 13,675 (13,675) Equity Called up share capital 5,587 5,587 Called up share capital Share premium account 4,881 4,881 Share premium account Other 21,667 21,667 Other reserves reserves Profit and loss account 53,387 53,387 Retained -------- -------- earnings Shareholders' funds 85,522 85,522 Total shareholders' equity 13,675 13,675 Minority -------- interests 99,197 Total equity -------- -------- -------- Total liabilities 1,279,978 - 1,279,978 Total equity -------- -------- -------- and liabilities IFRS Consolidated balance sheet at 30 June 2004 Effect of IAS 1 'Presentation of Financial Statements' IFRS numbers Reclassification IFRS numbers in in UK GAAP IFRS format format US$m US$m US$m ASSETS ASSETS Cash and balances at central banks 10,175 10,175 Cash and balances at central banks Items in the course of collection from other banks 8,641 8,641 Items in the course of collection from other banks Treasury bills and other 30,575 (30,575) eligible bills Hong Kong Government certificates of indebtedness 10,984 10,984 Hong Kong Government certificates of indebtedness 111,703 111,703 Trading securities 22,724 22,724 Derivatives Loans and advances to banks 140,813 140,813 Loans and advances to banks Loans and advances to customers 599,241 599,241 Loans and advances to customers Debt securities 232,224 (232,224) Equity 20,712 (20,712) shares 172,675 172,675 Financial investments Interests in associates and 1,369 1,369 Interests in joint associates and ventures joint ventures Other participating interests 867 (867) Goodwill and intangible assets 31,934 31,934 Goodwill and intangible assets Tangible fixed 14,572 14,572 Property, plant assets and equipment Other 40,759 (22,724) 18,035 Other assets assets Prepayments and accrued income 14,242 14,242 Prepayments and -------- -------- -------- accrued income Total 1,157,108 - 1,157,108 Total assets assets -------- -------- -------- IFRS Consolidated balance sheet at 30 June 2004 (continued) Effect of IAS 1 'Presentation of Financial Statements' IFRS numbers Reclassification IFRS numbers in in UK GAAP IFRS format format US$m US$m US$m LIABILITIES LIABILITIES AND EQUITY Liabilities Hong Kong currency notes 10,984 10,984 Hong Kong in currency notes circulation in circulation Deposits by banks 97,327 97,327 Deposits by banks Customer accounts 634,602 634,602 Customer accounts Items in the course of transmission to other 6,923 6,923 Items in the banks course of transmission to other banks 49,770 49,770 Trading liabilities 21,523 21,523 Derivatives Debt securities in issue 169,404 169,404 Debt securities in issue Retirement benefit liabilities 5,151 5,151 Retirement benefit liabilities Other liabilities 89,236 (71,293) 17,943 Other liabilities Liabilities to policyholders under long term 16,200 16,200 Liabilities to assurance policyholders business under long term assurance business Accruals and deferred income 12,046 12,046 Accruals and deferred income Provisions for Provisions liabilities for and charges liabilities and - deferred charges taxation 1,235 1,235 - deferred tax - other provisions 2,492 2,492 - other provisions Subordinated liabilities 21,875 21,875 Subordinated -------- liabilities 1,067,475 Total liabilities Minority interests 12,567 (12,567) Equity Called up share capital 5,513 5,513 Called up share capital Share premium account 4,459 4,459 Share premium account Other 21,539 21,539 Other reserves reserves Profit and loss account 45,555 45,555 Retained -------- -------- earnings Shareholders' funds 77,066 77,066 Total shareholders' equity 12,567 12,567 Minority -------- interests 89,633 Total equity -------- -------- -------- Total liabilities 1,157,108 - 1,157,108 Total equity -------- -------- -------- and liabilities IFRS Consolidated balance sheet at 1 January 2004 (date of transition to IFRS) Effect of IAS 1 'Presentation of Financial Statements' IFRS numbers Reclassification IFRS numbers in in UK GAAP IFRS format format US$m US$m US$m ASSETS ASSETS Cash and balances at central banks 7,733 7,733 Cash and balances at central banks Items in the course of collection from other banks 6,628 6,628 Items in the course of collection from other banks Treasury bills and other 20,475 (20,475) eligible bills Hong Kong Government certificates of indebtedness 10,987 10,987 Hong Kong Government certificates of indebtedness 95,416 95,416 Trading securities 27,436 27,436 Derivatives Loans and advances to banks 118,034 118,034 Loans and advances to banks Loans and advances to customers 533,850 533,850 Loans and advances to customers Debt securities 211,857 (211,857) Equity 18,694 (18,694) shares 156,299 156,299 Financial investments Interests in associates and 1,253 1,253 Interests in joint associates and ventures joint ventures Other participating interests 690 (690) Goodwill and intangible assets 31,918 31,918 Goodwill and intangible assets Tangible fixed 14,210 14,210 Property, plant assets and equipment Other 47,767 (27,435) 20,332 Other assets assets Prepayments and accrued income 13,625 13,625 Prepayments and -------- -------- -------- accrued income Total 1,037,721 - 1,037,721 Total assets assets -------- -------- -------- IFRS Consolidated balance sheet at 1 January 2004 (date of transition to IFRS) (continued) Effect of IAS 1 'Presentation of Financial Statements' IFRS numbers Reclassification IFRS numbers in in UK GAAP IFRS format format US$m US$m US$m LIABILITIES LIABILITIES AND EQUITY Liabilities Hong Kong currency notes 10,987 10,987 Hong Kong in currency notes circulation in circulation Deposits by banks 70,439 70,439 Deposits by banks Customer accounts 573,029 573,029 Customer accounts Items in the course of transmission to other 4,383 4,383 Items in the banks course of transmission to other banks 30,127 30,127 Trading liabilities 27,879 27,879 Derivatives Debt securities in issue 158,606 158,606 Debt securities in issue Retirement benefit liabilities 4,982 4,982 Retirement benefit liabilities Other liabilities 76,501 (58,006) 18,495 Other liabilities Liabilities to policyholders under long term 15,168 15,168 Liabilities to assurance policyholders business under long term assurance business Accruals and deferred income 13,714 13,714 Accruals and deferred income Provisions Provisions for for liabilities and liabilities charges and charges - deferred taxation 1,111 1,111 - deferred tax - other provisions 2,751 2,751 - other provisions Subordinated liabilities 21,197 21,197 Subordinated -------- liabilities 952,868 Total liabilities Minority interests 11,105 (11,105) Equity Called up share capital 5,481 5,481 Called up share capital Share premium account 4,406 4,406 Share premium account Other 21,543 21,543 Other reserves reserves Profit and loss account 42,318 42,318 Retained -------- -------- earnings Shareholders' funds 73,748 73,748 Total shareholders' equity 11,105 11,105 Minority -------- interests 84,853 Total equity -------- -------- -------- Total Total equity liabilities 1,037,721 - 1,037,721 and -------- -------- -------- liabilities Please follow the link below to view the IFRS Results powerpoint presentation - http://www.rns-pdf.londonstockexchange.com/rns/4761o_-2005-7-4.pdf This information is provided by RNS The company news service from the London Stock Exchange

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