Half Year Report - 2023 Interim Report - Part 2

HSBC Holdings PLC

01 August 2023

Financial summary

Contents


28	Changes to presentation from 1 January 2023
28	Use of alternative performance measures
29	Summary consolidated income statement
30	Distribution of results by global business and legal entity
31	Income statement commentary
31	Net interest income
34	Tax expense
35	Summary consolidated balance sheet
37	Balance sheet commentary compared with 31 December 2022

Changes to presentation from 1 January 2023

Changes to our reporting framework

On 1 January 2023, we updated our financial reporting framework. We no longer report 'adjusted' results, which exclude the impact of both foreign currency translation differences and significant items. Instead, we compute constant currency performance by adjusting comparative reported results only for the effects of foreign currency translation differences between the relevant periods. This will enable users to understand the impact of foreign currency translation differences on the Group's performance. We separately disclose 'notable items', which are components of our income statement that management would consider as outside the normal course of business and generally non-recurring in nature. While our primary segmental reporting by global business remains unchanged, effective from 1 January 2023, the Group changed the supplementary presentation of results from geographical regions to main legal entities to better reflect the Group's structure.

IFRS 17 'Insurance Contracts'

On 1 January 2023, HSBC adopted IFRS 17 'Insurance Contracts'. As required by the standard, the Group applied the requirements retrospectively with comparative data previously published under IFRS 4 'Insurance Contracts' restated from the 1 January 2022 transition date. Under IFRS 17 there is no present value of in-force business ('PVIF') asset recognised up front. Instead the measurement of the insurance contract liability takes into account fulfilment cash flows and a contractual service margin ('CSM') representing the unearned profit. In contrast to the Group's previous IFRS 4 accounting where profits are recognised up front, under IFRS 17 they are deferred and systematically recognised in revenue as services are provided over the life of the contract. The CSM also includes attributable cost, which had previously been expensed as incurred and which is now incorporated within the insurance liability measurement and recognised over the life of the contract.

In conjunction with the implementation of IFRS 17, the Group has made use of the option to re-designate to fair value through profit or loss assets that were previously held at amortised cost totalling $55.1bn, and assets previously held at fair value through other comprehensive income totalling $1.1bn. The re-designation of amortised cost assets generated a net increase to assets of $4.9bn because the fair value measurement on transition was higher than the previous amortised cost carrying amount.

The impact of the transition was a reduction of $0.7bn on the Group's 1H22 reported revenue and a reduction of $0.4bn on 1H22 reported profit before tax. The Group's total equity at 1 January 2022 reduced by $10.5bn to $196.3bn on the transition, and tangible equity reduced by $2.4bn to $155.8bn. For further details of our adoption of IFRS 17, see our Report on Transition to IFRS 17 'Insurance Contracts' at www.hsbc.com/investors and Note 16 'Effects of adoption of IFRS 17' on page 137.

Cost target

At our full-year 2022 results, we set a target for our 'adjusted' operating expenses of approximately 3% growth for 2023 compared with 2022. While our new reporting framework no longer presents 'adjusted' results, we make an exception for operating expenses, where we will adjust reported results for notable items and the period-on-period effects of foreign currency translation differences. We also exclude the impact of re-translating comparative period financial information at the latest rates of foreign exchange in hyperinflationary economies, which we consider to be outside of our control, and the incremental costs associated with our acquisition of SVB UK and related international investments. We consider that this target basis operating expense measure provides useful information to investors by quantifying and excluding the items that management considered separately when setting and assessing cost-related targets.

Resegmentation

In the first quarter of 2023, following an internal review to assess which global businesses were best suited to serve our customers' respective needs, a portfolio of our Global Banking customers within our entities in Latin America was transferred from GBM to CMB for reporting purposes. Comparative data have been re-presented accordingly. Similar smaller transfers from GBM to CMB were also undertaken within our entities in Australia and Indonesia, where comparative data have not been re-presented.

Use of alternative performance measures

Our reported results are prepared in accordance with IFRSs as detailed in the interim condensed financial statements starting on page 108.

To measure our performance, we supplement our IFRSs figures with non-IFRSs measures, which constitute alternative performance measures under European Securities and Markets Authority guidance and non-GAAP financial measures defined in and presented in accordance with US Securities and Exchange Commission rules and regulations. These measures include those derived from our reported results that eliminate factors that distort period-on-period comparisons. The 'constant currency performance' measure used in this report is described below. Definitions and calculations of other alternative performance measures are included in our 'Reconciliation of alternative performance measures' on page 57. All alternative performance measures are reconciled to the closest reported performance measure.

The global business segmental results are presented on a constant currency basis in accordance with IFRS 8 'Operating Segments' as detailed in Note 5: 'Segmental analysis' on page 118.

Constant currency performance

Constant currency performance is computed by adjusting reported results for the effects of foreign currency translation differences, which distort period-on-period comparisons.

We consider constant currency performance to provide useful information for investors by aligning internal and external reporting, and reflecting how management assesses period-on-period performance.

Notable items

We separately disclose 'notable items', which are components of our income statement that management would consider as outside the normal course of business and generally non-recurring in nature.

The tables on pages 39 to 40 and pages 51 to 54 detail the effects of notable items on each of our global business segments, legal entities and selected countries/territories in 1H23 and 1H22.

Foreign currency translation differences

Foreign currency translation differences reflect the movements of the US dollar against most major currencies during 2023.

We exclude them to derive constant currency data, allowing us to assess balance sheet and income statement performance on a like-for-like basis and to better understand the underlying trends in the business.

Foreign currency translation differences for the half-year to 30 June 2023 are computed by retranslating into US dollars for non-US dollar branches, subsidiaries, joint ventures and associates:

- the income statement for the half-year to 30 June 2022 at the average rate of exchange for the half-year to 30 June 2023; and

- the balance sheets at 30 June 2022 and 31 December 2022 at the prevailing rates of exchange on 30 June 2023.

No adjustment has been made to the exchange rates used to translate foreign currency-denominated assets and liabilities into the functional currencies of any HSBC branches, subsidiaries, joint ventures or associates. The constant currency data of HSBC's Argentina subsidiaries have not been adjusted further for the impacts of hyperinflation. Since 1 June 2022, Türkiye has been deemed a hyperinflationary economy for accounting purposes. HSBC has an operating entity in Türkiye and the constant currency data have not been adjusted further for the impacts of hyperinflation. When reference is made to foreign currency translation differences in tables or commentaries, comparative data reported in the functional currencies of HSBC's operations have been translated at the appropriate exchange rates applied in the current period on the basis described above.

Summary consolidated income statement

	Half-year to¹
	30 Jun	30 Jun
	2023	2022
	$m	$m
Net interest income	18,264	13,385
Net fee income	6,085	6,228
Net income from financial instruments held for trading or managed on a fair value basis	8,112	4,856
Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss	4,304	(11,849)
Insurance finance income/(expense)	(4,234)	11,773
Insurance service result	524	370
Gain on acquisitions²	1,507	-
Reversal of impairment loss relating to the planned sale of our retail banking operations in France³	2,130	-
Other operating income	184	(218)
Net operating income before change in expected credit losses and other credit impairment charges⁴	36,876	24,545
Change in expected credit losses and other credit impairment charges	(1,345)	(1,087)
Net operating income	35,531	23,458
Total operating expenses	(15,457)	(16,127)
Operating profit	20,074	7,331
Share of profit in associates and joint ventures	1,583	1,449
Profit before tax	21,657	8,780
Tax (charge)/credit	(3,586)	151
Profit for the period	18,071	8,931
Attributable to:
- ordinary shareholders of the parent company	16,966	7,966
- other equity holders	542	626
- non-controlling interests	563	339
Profit for the period	18,071	8,931
	$	$
Basic earnings per share	0.86	0.40
Diluted earnings per share	0.86	0.40
Dividend per ordinary share (paid in the period)⁵	0.33	0.18
	%	%
Post-tax return on average total assets (annualised)	1.2	0.6
Return on average ordinary shareholders' equity (annualised)	20.8	9.9
Return on average tangible equity (annualised)	22.4	10.6

1 From 1 January 2023, we adopted IFRS 17 'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'. Comparative data have been restated accordingly.

2 Provisional gain of $1.5bn recognised in respect of the acquisition of SVB UK.

3 Reversal of the $2.1bn impairment loss relating to the planned sale of our retail banking operations in France, which is no longer classified as held for sale.

4 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

5 The $0.33 dividend paid during the period consisted of a second interim dividend of $0.23 per ordinary share in respect of the financial year ended 31 December 2022 paid in April 2023 and a first interim dividend of $0.10 per ordinary share in respect of the financial year ending 31 December 2023.

Distribution of results by global business and legal entity

Distribution of results by global business
	Half year to
	30 Jun	30 Jun
	2023	2022
	$m	$m
Constant currency revenue¹
Wealth and Personal Banking	16,200	10,058
Commercial Banking²	12,216	7,055
Global Banking and Markets²	8,501	7,459
Corporate Centre	(41)	(925)
Total	36,876	23,647
Constant currency profit/(loss) before tax
Wealth and Personal Banking	8,592	2,487
Commercial Banking²	7,939	3,432
Global Banking and Markets²	3,580	2,692
Corporate Centre	1,546	(207)
Total	21,657	8,404

1 Constant currency net operating income before change in expected credit losses and other credit impairment charges including the effects of foreign currency translation differences, also referred to as constant currency revenue.

2 In the first quarter of 2023, following an internal review to assess which global businesses were best suited to serve our customers' respective needs, a portfolio of our customers within our entities in Latin America was transferred from GBM to CMB for reporting purposes. Comparative data have been re-presented accordingly.

Distribution of results by legal entity
	Half year to
	30 Jun	30 Jun
	2023	2022
	$m	$m
Reported profit/(loss) before tax
HSBC UK Bank plc	4,791	2,270
HSBC Bank plc	3,498	252
The Hongkong and Shanghai Banking Corporation Limited	10,917	5,734
HSBC Bank Middle East Limited	673	378
HSBC North America Holdings Inc.	701	424
HSBC Bank Canada	475	385
Grupo Financiero HSBC, S.A. de C.V.	436	239
Other trading entities¹	1,282	532
- of which: other Middle East entities (including Oman, Türkiye, Egypt and Saudi Arabia)	420	264
- of which: Saudi Awwal Bank	272	117
Holding companies, shared service centres and intra-Group eliminations	(1,116)	(1,434)
Total	21,657	8,780
Constant currency profit/(loss) before tax
HSBC UK Bank plc	4,791	2,159
HSBC Bank plc	3,498	295
The Hongkong and Shanghai Banking Corporation Limited	10,917	5,531
HSBC Bank Middle East Limited	673	379
HSBC North America Holdings Inc.	701	423
HSBC Bank Canada	475	363
Grupo Financiero HSBC, S.A. de C.V.	436	267
Other trading entities¹	1,282	455
- of which: other Middle East entities (including Oman, Türkiye, Egypt and Saudi Arabia)	420	198
- of which: Saudi Awwal Bank	272	117
Holding companies, shared service centres and intra-Group eliminations	(1,116)	(1,468)
Total	21,657	8,404

1 Other trading entities includes the results of entities located in Oman, Türkiye, Egypt and Saudi Arabia (including our share of the results of Saudi Awwal Bank) which do not consolidate into HSBC Bank Middle East Limited. Supplementary analysis is provided on page 56 for a fuller picture of the Middle East, North Africa and Türkiye ('MENAT') regional performance.

Income statement commentary

For further financial performance data of our global business segments, see pages 39 to 48. For further financial performance data by major legal entity, see pages 49 to 55.

Net interest income

	Half-year to		Quarter to
	30 Jun	30 Jun	30 Jun	31 Mar	30 Jun
	2023	2022	2023	2023	2022
	$m	$m	$m	$m	$m
Interest income	46,955	19,788	24,863	22,092	10,643
Interest expense	(28,691)	(6,403)	(15,558)	(13,133)	(3,733)
Net interest income	18,264	13,385	9,305	8,959	6,910
Average interest-earning assets	2,162,662	2,174,796	2,172,324	2,152,893	2,148,983
	%	%	%	%	%
Gross interest yield¹	4.38	1.83	4.59	4.16	1.99
Less: gross interest payable¹	(3.12)	(0.71)	(3.33)	(2.91)	(0.83)
Net interest spread²	1.26	1.12	1.26	1.25	1.16
Net interest margin³	1.70	1.24	1.72	1.69	1.29

1 Gross interest yield is the average annualised interest rate earned on average interest-earning assets ('AIEA'). Gross interest payable is the average annualised interest cost as a percentage of average interest-bearing liabilities.

2 Net interest spread is the difference between the average annualised interest rate earned on AIEA, net of amortised premiums and loan fees, and the average annualised interest rate payable on average interest-bearing liabilities.

3 Net interest margin is net interest income expressed as an annualised percentage of AIEA.

Banking net interest income

Banking net interest income is defined as Group net interest income after deducting:

- the internal cost to fund trading and fair value net assets for which associated revenue is reported in 'Net income from financial instruments held for trading or managed on a fair value basis', also referred to as 'trading and fair value income'. These funding costs reflect proxy overnight or term interest rates as applied by internal funds transfer pricing;

- the funding cost of foreign exchange swaps in Markets Treasury, where an offsetting income or loss is recorded in trading and fair value income. These instruments are used to manage foreign currency deployment and funding in our entities; and

- third-party net interest income in our insurance business.

In our segmental disclosures, the funding costs of trading and fair value net assets are predominantly recorded in GBM in 'net income from financial instruments held for trading or managed on a fair value basis'. On consolidation, this funding is eliminated in Corporate Centre, resulting in an increase in the funding cost reported in net interest income with an equivalent offsetting increase in 'net income from financial instruments held for trading or managed on a fair value basis' in this segment. During 2Q23 we implemented a consistent reporting approach across the 14 most material entities that contribute to our trading and fair value net assets, which resulted in an increase to the 1H23 associated funding costs reported through the intersegment elimination in Corporate Centre of approximately $0.4bn, recognised in 2Q23. In the consolidated Group results, the cost to fund these trading and fair value net assets is reported in net interest income.

The internally allocated funding cost of $3.8bn, which was incurred in 1H23 to generate trading and fair value income, related to trading, fair value and associated net asset balances predominantly in GBM. At 30 June 2023, these stood at approximately $130bn. We expect these centrally allocated funding costs to be at least $7bn in 2023.

	Half-year to		Quarter to
	30 Jun	30 Jun	30 Jun	31 Mar	30 Jun
	2023	2022	2023	2023	2022
	$bn	$bn	$bn	$bn	$bn
Net interest income	18.3	13.4	9.3	9.0	6.9
Banking book funding costs used to generate 'net income from financial instruments held for trading or managed on a fair value basis'	3.8	0.4	2.4	1.4	0.3
Third-party net interest income from insurance	(0.2)	(0.2)	(0.1)	(0.1)	(0.1)
Banking net interest income	21.9	13.6	11.6	10.3	7.1

Summary of interest income by type of asset
	Half-year to						Full-year to
	30 Jun 2023			30 Jun 2022			31 Dec 2022
	Average balance	Interest income	Yield	Average balance	Interest income	Yield	Average balance	Interest income	Yield
	$m	$m	%	$m	$m	%	$m	$m	%
Short-term funds and loans and advances to banks	425,103	6,961	3.30	457,709	1,344	0.59	445,657	5,577	1.25
Loans and advances to customers	954,171	22,747	4.81	1,054,657	13,848	2.65	1,022,320	32,543	3.18
Reverse repurchase agreements - non-trading	239,945	6,173	5.19	228,231	1,093	0.97	231,058	4,886	2.11
Financial investments	382,384	7,378	3.89	384,368	2,838	1.49	372,702	7,704	2.07
Other interest-earning assets	161,059	3,696	4.63	49,831	665	2.69	72,017	2,116	2.94
Total interest-earning assets	2,162,662	46,955	4.38	2,174,796	19,788	1.83	2,143,754	52,826	2.46

Summary of interest expense by type of liability
	Half-year to						Full-year to
	30 Jun 2023			30 Jun 2022			31 Dec 2022
	Average balance	Interest expense	Cost	Average balance	Interest expense	Cost	Average balance	Interest expense	Cost
	$m	$m	%	$m	$m	%	$m	$m	%
Deposits by banks¹	61,901	1,117	3.64	82,232	195	0.48	75,739	770	1.02
Customer accounts²	1,317,536	14,722	2.25	1,369,088	2,834	0.42	1,342,342	10,903	0.81
Repurchase agreements - non-trading	134,936	4,550	6.80	122,883	584	0.96	118,308	3,085	2.61
Debt securities in issue - non-trading	181,682	5,199	5.77	182,067	2,053	2.27	179,776	5,608	3.12
Other interest-bearing liabilities	157,218	3,103	3.98	70,948	737	2.10	87,965	2,083	2.37
Total interest-bearing liabilities	1,853,273	28,691	3.12	1,827,218	6,403	0.71	1,804,130	22,449	1.24

1 Including interest-bearing bank deposits only.

2 Including interest-bearing customer accounts only.

Net interest income ('NII') for 1H23 was $18.3bn, an increase of $4.9bn or 36% compared with 1H22. This reflected higher average market interest rates across the major currencies compared with 1H22.

Excluding the unfavourable impact of foreign currency translation differences, NII increased by $5.4bn or 42%.

NII for 2Q23 was $9.3bn, up 35% compared with 2Q22, and up 4% compared with 1Q23. This was driven by the impact of higher market interest rates across our asset book, notably in the UK and our main legal entities in Asia. This was partly offset by higher funding costs across our liability book, which included the impact of deposit migration mainly in our main legal entities in Asia and Europe.

We have introduced a new banking net interest income metric, which is derived by deducting the centrally allocated funding cost to generate trading and fair value income. These funding costs were $3.8bn in 1H23, an increase of $3.4bn compared with 1H22. Banking net interest income also deducts third-party net interest income related to our insurance business, which was $0.2bn in 1H23, broadly stable compared with 1H22.

In 1H23, banking net interest income of $21.9bn was up $8.3bn or 61% compared with 1H22. The growth in banking net interest income was in all of our global businesses, mainly in WPB (up $3.6bn), reflecting wider margins and growth in mortgages and unsecured lending, excluding the impact of transfers to held for sale. It also grew in CMB (up $3.3bn) and GBM (up $1.4bn), notably from wider deposit margins in Global Payments Solutions.

Net interest margin ('NIM') of 1.70% was 46 basis points ('bps') higher compared with 1H22, as the rise in the yield on AIEA of 254bps was partly offset by the rise in the funding cost of average interest-bearing liabilities of 242bps. The increase in NIM in 1H23 included the unfavourable impact of foreign currency translation differences. Excluding this, NIM increased by 48bps.

NIM for 2Q23 was 1.72%, up 43bps year-on-year, and up 3bps compared with the previous quarter, predominantly driven by the impact of higher market interest rates.

Interest income of $47bn increased by $27.2bn, compared with 1H22. This was primarily due to higher average interest rates, partly offset by a reduction in term lending of $41bn, predominantly in our main legal entities in Asia and Europe, and a reduction in central bank placements of $38bn, notably in our main legal entities in the UK and the US. The central bank placements declined due to the reduction in deposit balances. The change in interest income included $0.9bn from the adverse effect of foreign currency translation differences. Excluding this, interest income increased by $28.1bn.

Interest income of $24.9bn in 2Q23 was up $14.2bn compared with 2Q22, and up $2.8bn compared with 1Q23. This was predominantly driven by the impact of higher market interest rates, partly offset by a reduction in term lending and central bank placements.

Interest expense of $28.7bn increased by $22.3bn or 348% compared with 1H22. This reflected an increase in funding costs of 242bps, mainly due to the impact of higher interest rates on our liabilities. In addition, money market deposits increased by $42bn and 'repurchase agreements - non-trading' balances rose by $12bn, mainly in Asia, compounded by the impact of deposit migration, notably in Asia and Europe. The rise in interest expense included the favourable effects of foreign currency translation differences of $0.3bn. Excluding this, interest expense increased by $22.6bn.

Interest expense of $15.6bn in 2Q23 was up $11.8bn compared with 2Q22, and up $2.5bn compared with 1Q23. This was predominantly driven by the impact of higher market interest rates, and the impact of deposit migration. Net fee income of $6.1bn was $0.1bn lower than in 1H22, and included a $0.1bn adverse impact from foreign currency translation differences. On a constant currency basis, net fee income was broadly unchanged as an increase in CMB was largely offset by a reduction in GBM.

In CMB, fee income grew, mainly in cards and account services as customer activity increased.

In GBM, fee income fell in broking income in our main entities in Europe and Hong Kong, and corporate finance income was lower in Europe and the US as clients' refinancing activities fell. These reductions were mitigated by growth in underwriting fees in Europe due to the completion of a number of debt capital markets deals in 1H23.

In WPB, fee income was broadly stable, excluding the impact of foreign currency translation differences. Income from broking and funds under management fell, notably in Hong Kong, reflecting weaker equity markets and muted customer sentiment. This reduction was partly offset by higher cards income, notably in our main entity in Hong Kong and also in Mexico, as customer spending increased. The growth in cards activity resulted in a rise in fee expense.

Net income from financial instruments held for trading or managed on a fair value basis of $8.1bn was $3.3bn higher. There was a favourable movement on non-qualifying hedges in Corporate Centre of $0.3bn due to the non-recurrence of fair value losses in 1H22, and higher income in CMB, reflecting increased collaboration revenue with GBM, mainly in Global Foreign Exchange.

In GBM, trading and fair value income fell by $0.7bn, which was inclusive of an increase of $3.4bn relating to internally allocated funding costs. Trading activity decreased in Equities, as customer demand was muted, although this was partly offset by Global Debt Markets and Global Foreign Exchange.

Net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss of $4.3bn compared with a net expense of $11.8bn in 1H22. This increase was mainly in Hong Kong and France, primarily reflecting favourable fair value movements on both debt and equity securities in the portfolio.

This favourable movement resulted in a corresponding movement in insurance finance expense, which has an offsetting impact for the related liabilities to policyholders.

Insurance finance expense of $4.2bn compared with an income of $11.8bn in 1H22, reflecting the impact of investment returns on underlying assets on the value of liabilities to policyholders, which moves inversely with 'net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss'.

Insurance service result of $0.5bn increased by $0.2bn compared with 1H22, primarily due to an increase in the release of the contractual service margin ('CSM'). This primarily reflected a higher CSM balance from higher new business written, favourable experience variances and updates to lapse rate assumptions, as well as the impact of interest rates on the CSM duration profile. The increase also reflected a reduction in losses from onerous contracts.

Under IFRS 17, the measurement of the insurance contract liability takes into account fulfilment cash flows and a CSM representing the unearned profit. In contrast to the Group's previous IFRS 4 accounting where profits are recognised up front, under IFRS 17 they are deferred and systematically recognised in revenue as services are provided over the life of the contract. The CSM also includes attributable cost, which had previously been expensed as incurred and which is now incorporated within the insurance liability measurement and recognised over the life of the contract.

Gain on acquisitions of $1.5bn related to the provisional gain recognised in respect of the acquisition of Silicon Valley Bank UK Limited in 1Q23.

Reversal of impairment loss relating to the planned sale of our retail banking operations in France was $2.1bn, as the sale became less certain during 1Q23. In June, we agreed new terms for the sale of these operations that will involve HSBC retaining a portfolio of home and other loans. The parties are aiming to complete the transaction on 1 January 2024, subject to information and consultation processes with respective works councils and regulatory approvals, with an estimated pre-tax loss of up to $2.2bn expected to be recognised in the second half of 2023 upon reclassification to held for sale.

Change in expected credit losses and other credit impairment charges ('ECL') of $1.3bn were $0.3bn higher than in 1H22.

The 1H23 charge included stage 3 charges of $1.1bn. There were charges of $0.3bn related to the commercial real estate sector in mainland China and charges in CMB in the UK. The 1H23 charge reflected a more stable outlook in most markets, although inflationary pressures remain.

In 1H22, ECL included charges of $0.3bn relating to the commercial real estate sector in mainland China, as well as Russia-related exposures. It also included additional stage 1 and stage 2 allowances to reflect heightened levels of economic uncertainty and inflationary pressures, in part offset by the release of most of our remaining Covid-19-related allowances.

For further details on the calculation of ECL, including the measurement uncertainties and significant judgements applied to such calculations, the impact of economic scenarios and management judgemental adjustments, see pages 69 to 77.

Operating expenses
	Half-year to
	30 Jun	30 Jun
	2023	2022
	$m	$m
Gross employee compensation and benefits	9,433	9,326
Capitalised wages and salaries	(479)	(430)
Property and equipment	2,047	2,419
Amortisation and impairment of intangibles	809	822
Legal proceedings and regulatory matters	56	94
Other operating expenses¹	3,591	3,896
Reported operating expenses	15,457	16,127
Currency translation		(595)
Constant currency operating expenses	15,457	15,532

1 Other operating expenses includes professional fees, contractor costs, transaction taxes, marketing and travel. The decrease was driven by favourable currency translation differences and lower restructuring and other related costs following the completion of our cost-saving programme at the end of 2022.

Staff numbers (full-time equivalents)
	At
	30 Jun	30 Jun	31 Dec
	2023	2022	2022
Global businesses
Wealth and Personal Banking	129,188	127,638	128,764
Commercial Banking	46,006	44,183	43,640
Global Banking and Markets	46,247	46,624	46,435
Corporate Centre	323	421	360
Total staff numbers	221,764	218,866	219,199

Operating expenses of $15.5bn were $0.7bn or 4% lower than in 1H22, mainly due to the non-recurrence of restructuring and other related costs of $1.1bn, following the completion of our cost-saving programme, which concluded at the end of 2022. The reduction also included a $0.2bn impact from the reversal of historical asset impairments, the impact of our continued cost discipline and favourable foreign currency translation differences between the periods of $0.6bn.

These factors were partly offset by higher technology spend of $0.5bn, an increase in our performance-related pay accrual of $0.2bn and severance payments of $0.2bn. Our operating expenses also rose due to the impact of higher inflation and incremental costs following our acquisition of SVB UK.

We continue to target operating expense growth of approximately 3% for 2023, excluding the impact of foreign currency translation differences, notable items and the impact of retranslating the 2022 results of hyperinflationary economies at constant currency. Our target also excludes the impact of our acquisition of SVB UK, and the related investments internationally, which are expected to add approximately 1% to the Group's operating expenses.

While we remain committed to disciplined cost management, we expect continued pressure from persistently high levels of inflation. In addition, the impact of the proposed special assessment from the Federal Deposit Insurance Corporation in the US is not expected to be known until the second half of the year.

The number of employees expressed in full-time equivalent staff ('FTEs') at 30 June 2023 was 221,764, an increase of 2,565 from 31 December 2022. Additionally, the number of contractors at 30 June 2023 was 5,198, a decrease of 849 from 31 December 2022.

Share of profit in associates and joint ventures of $1.6bn was $0.1bn or 9% higher, reflecting an increase in the share of profit from Saudi Awwal Bank ('SAB') and Bank of Communications Co., Limited ('BoCom').

In relation to BoCom, we continue to be subject to a risk of impairment in the carrying value of our investment. We have performed an impairment test on the carrying amount of our investment and confirmed there was no impairment at 30 June 2023. For further details of our impairment review process, see Note 10 on the interim condensed financial statements.

Tax expense

Tax
	Half-year to
	30 Jun	30 Jun
	2023	2022
	$m	$m
Tax (charge)/credit
Reported	(3,586)	151
Currency translation		76
Constant currency tax (charge)/credit	(3,586)	227

Notable items
	Half-year to
	30 Jun	30 Jun
	2023	2022
	$m	$m
Tax
Tax (charge)/credit on notable items	(500)	242
Recognition of losses	-	2,082
Uncertain tax positions	427	(317)

Tax in 1H23 was a charge of $3.6bn, representing an effective tax rate of 16.6%. The effective tax rate for 1H23 was reduced by 1.9 percentage points by the non-taxable provisional gain recognised on the acquisition of SVB UK and by 2.0 percentage points by the release of provisions for uncertain tax positions. A deferred tax charge of $0.4bn was recorded on the temporary difference in tax and accounting treatment relating to the planned sale of our retail banking operations in France. The resulting deferred tax liability will reverse upon classification as held for sale.

Tax in 1H22 was a credit of $151m. This was mainly due to a $2.1bn credit arising from the recognition of a deferred tax asset on historical tax losses of HSBC Holdings as a result of improved profit forecasts for the UK tax group and a charge of $0.3bn for uncertain tax positions. Excluding these items, the effective tax rate for 1H22 was 18.4%.

Summary consolidated balance sheet

	At¹
	30 Jun	31 Dec
	2023	2022
	$m	$m
Assets
Cash and balances at central banks	307,733	327,002
Trading assets	255,387	218,093
Financial assets designated and otherwise mandatorily measured at fair value through profit or loss	104,303	100,101
Derivatives	272,595	284,159
Loans and advances to banks	100,921	104,475
Loans and advances to customers	959,558	923,561
Reverse repurchase agreements - non-trading	258,056	253,754
Financial investments	407,933	364,726
Assets held for sale	95,480	115,919
Other assets	279,510	257,496
Total assets	3,041,476	2,949,286
Liabilities and equity
Liabilities
Deposits by banks	68,709	66,722
Customer accounts	1,595,769	1,570,303
Repurchase agreements - non-trading	170,110	127,747
Trading liabilities	81,228	72,353
Financial liabilities designated at fair value	139,618	127,321
Derivatives	269,560	285,762
Debt securities in issue	85,471	78,149
Insurance contract liabilities	115,756	108,816
Liabilities of disposal groups held for sale	87,241	114,597
Other liabilities	236,363	212,319
Total liabilities	2,849,825	2,764,089
Equity
Total shareholders' equity	184,170	177,833
Non-controlling interests	7,481	7,364
Total equity	191,651	185,197
Total liabilities and equity	3,041,476	2,949,286

1 From 1 January 2023, we adopted IFRS 17 'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'. Comparative data have been restated accordingly.

Selected financial information
	At
	30 Jun	31 Dec
	2023	2022
	$m	$m
Called up share capital	10,073	10,147
Capital resources¹	170,021	162,423
Undated subordinated loan capital	918	1,967
Preferred securities and dated subordinated loan capital²	32,810	29,921
Risk-weighted assets	859,545	839,720
Total shareholders' equity	184,170	177,833
Less: preference shares and other equity instruments	(19,392)	(19,746)
Total ordinary shareholders' equity	164,778	158,087
Less: goodwill and intangible assets (net of tax)	(11,544)	(11,160)
Tangible ordinary shareholders' equity	153,234	146,927
Financial statistics
Loans and advances to customers as a percentage of customer accounts (%)	60.1	58.8
Average total shareholders' equity to average total assets (%)	5.91	5.98
Net asset value per ordinary share at period end ($)³	8.44	8.01
Tangible net asset value per ordinary share at period end ($)⁴	7.84	7.44
Tangible net asset value per fully diluted ordinary share at period end ($)	7.79	7.39
Number of $0.50 ordinary shares in issue (millions)	20,147	20,294
Basic number of $0.50 ordinary shares outstanding (millions)	19,534	19,739
Basic number of $0.50 ordinary shares outstanding and dilutive potential ordinary shares (millions)	19,679	19,876
Closing foreign exchange translation rates to $:
$1: £	0.786	0.830
$1: €	0.915	0.937

1 Capital resources are total regulatory capital, the calculation of which is set out on page 95.

2 Including perpetual preferred securities.

3 The definition of net asset value per ordinary share is total shareholders' equity, less non-cumulative preference shares and capital securities, divided by the number of ordinary shares in issue, excluding own shares held by the company, including those purchased and held in treasury.

4 The definition of tangible net asset value per ordinary share is total ordinary shareholder's equity excluding goodwill and other intangible assets (net of deferred tax), divided by the number of basic ordinary shares in issue, excluding own shares held by the company, including those purchased and held in treasury.

A more detailed consolidated balance sheet is contained in the interim condensed financial statements on page 110.

Combined view of customer lending and customer deposits
	At
	30 June	31 Dec
	2023	2022
	$m	$m
Loans and advances to customers	959,558	923,561
- of which HSBC Innovation Bank Limited (formerly SVB UK)	7,040	-
Loans and advances to customers of disposal groups reported in 'Assets held for sale'	59,210	80,576
- banking business in Canada	55,932	55,197
- retail banking operations in France	-	25,029
- other	3,278	350
Non-current assets held for sale¹	659	112
Combined customer lending	1,019,427	1,004,249
Currency translation	-	15,070
Combined customer lending at constant currency	1,019,427	1,019,319
Customer accounts	1,595,769	1,570,303
- of which HSBC Innovation Bank Limited (formerly SVB UK)	7,220	-
Customer accounts reported in 'Liabilities of disposal groups held for sale'	66,154	85,274
- banking business in Canada	59,813	60,606
- retail banking operations in France	-	22,348
- other	6,341	2,320
Combined customer deposits	1,661,923	1,655,577
Currency translation	-	24,227
Combined customer deposits at constant currency	1,661,923	1,679,803

1 Largely relates to US commercial real estate loans classified as held for sale at 30 June 2023.

Balance sheet commentary compared with 31 December 2022

At 30 June 2023, our total assets were $3.0tn, an increase of $92bn or 3% on a reported basis, and $46bn or 2% on a constant currency basis.

Our asset base included higher financial investments as we increased our holdings of treasury bills and debt securities, and a rise in trading assets in HSBC Bank plc and Hong Kong. In addition, there was growth in loans and advances to customers due to reclassifications from 'assets held for sale', while higher other assets reflected seasonal reductions in settlement accounts at 31 December 2022. These increases were partly offset by reductions in cash and balances at central banks and lower derivative assets.

Our ratio of loans and advances to customers as a percentage of customer accounts of 60% was broadly in line with 31 December 2022.

Assets

Cash and balances at central banks decreased by $19bn or 6%, mainly in HSBC UK due to a fall in customer accounts and an increase in financial investments, and in HSBC Bank plc as we manage liquidity in the context of developing market conditions. This was partly offset by favourable foreign currency translation differences of $11bn.

Trading assets rose by $37bn or 17%, reflecting an increase in holdings of debt and equity securities, particularly in our main legal entities in Europe and Hong Kong.

Derivative assets decreased by $12bn or 4%, reflecting a reduction in foreign exchange contracts, mainly in HSBC Bank plc, as a result of lower client demand and foreign exchange rate movements. This was partly offset by favourable foreign currency translation differences of $11bn. The decrease in derivative assets was consistent with the fall in derivative liabilities, as the underlying risk is broadly matched.

Loans and advances to customers of $1.0tn were $36bn higher on a reported basis. This included:

- a favourable impact from foreign currency translation differences of $13bn;

- an increase from the reclassification of $26bn of lending balances, on a constant currency basis, that were classified as 'assets held for sale' at 31 December 2022 relating to the planned sale of our retail banking operations in France;

- an increase in lending balances through the acquisition of SVB UK of $7bn; and

- a decrease from the classification of $3bn of lending balances to 'assets held for sale' relating to the planned merger of our business in Oman.

Excluding these factors, customer lending balances were $7bn lower, reflecting the following movements:

Customer lending balances decreased in GBM by $12bn, including the transfer of a portfolio of Global Banking clients to CMB in our legal entities in Australia and Indonesia. The reduction also reflected lower term lending, mainly in our legal entities in Hong Kong (down $4bn) and HSBC Bank plc (down $3bn), reflecting muted demand and repayments.

In CMB, customer lending was $2bn lower, reflecting a decrease in term lending balances, notably in our main legal entities in Hong Kong and the UK. This was partly offset by the transfer of a portfolio of Global Banking clients to CMB referred to above and an increase in overdraft balances, primarily in HSBC Bank plc and HSBC UK.

In WPB, customer lending balances increased by $8bn, mainly from higher mortgage balances, notably in our legal entities in Hong Kong (up $4bn), the UK (up $1bn), Mexico (up $1bn) and Australia (up $1bn).

Financial investments increased by $43bn or 12%, mainly as we increased our holdings of treasury bills and debt securities in most of our key legal entities, notably in Hong Kong and Europe.

Assets held for sale decreased by $20bn or 18%, from the reclassification of asset balances from 'assets held for sale' relating to the planned sale of retail banking operations in France, partly offset by the transfer of asset balances in Oman into 'assets held for sale'.

Other assets grew by $22bn or 9%, primarily due to an increase of $18bn in settlement accounts in HSBC Bank plc, from higher trading activity, compared with the seasonal reduction in December 2022.

Liabilities

Customer accounts of $1.6tn increased by $25bn on a reported basis. This included:

- a favourable impact from foreign currency translation differences of $22bn;

- an increase from the reclassification of $23bn of customer account balances, on a constant currency basis, that were classified as 'liabilities of disposal groups held for sale' at 31 December 2022 relating to the planned sale of our retail banking operations in France;

- an increase in customer accounts through the acquisition of SVB UK of $7bn; and

- a decrease from the classification of $5bn of customer account balances to 'liabilities of disposal groups held for sale' relating to the planned merger of our business in Oman.

Excluding these factors, customer accounts were $22bn lower, reflecting the following movements:

In GBM, customer accounts were $16bn lower, including the transfer of a portfolio of Global Banking clients to CMB in our legal entities in Australia and Indonesia. The reduction also reflected lower interest-bearing and non-interest-bearing balances, notably in HSBC Bank plc and in our main legal entities in Hong Kong and the US.

In CMB, customer accounts decreased by $4bn, reflecting net outflows in HSBC UK and in our main legal entity in Hong Kong. These reductions were partly offset by the transfer of a portfolio of Global Banking clients to CMB referred to above and growth in our main legal entity in the US.

Customer accounts decreased in WPB by $2bn, primarily driven by a reduction in HSBC UK of $9bn, reflecting higher cost of living and competitive pressures. They also fell in Hong Kong (down $3bn) and the US (down $3bn). These reductions were partly offset by growth in a number of other markets, notably HSBC Bank plc and Singapore.

Financial liabilities designated at fair value increased by $12bn or 10%, primarily due to an increase in debt securities in issue, together with the reclassification of liability balances from 'liabilities of disposal groups held for sale' relating to the planned sale of our retail banking operations in France.

Repurchase agreements - non trading increased by $42bn or 33%, primarily in our main legal entities in Hong Kong, Europe and the US as client demand increased.

Derivative liabilities decreased by $16bn or 6%, which is consistent with the decrease in derivative assets, since the underlying risk is broadly matched.

Liabilities of disposal groups held for sale decreased by $27bn or 24%, notably from the reclassification of liability balances from 'liabilities of disposal groups held for sale' relating to the planned sales of our retail banking operations in France, partly offset by the transfer of liability balances in Oman into 'liabilities of disposal groups held for sale'.

Other liabilities increased by $24bn or 11%, notably from a rise of $23bn in settlement accounts in our main legal entities in Europe, Hong Kong, Mexico and the US from an increase in trading activity, compared with the seasonal reduction in December 2022.

Equity

Total shareholders' equity, including non-controlling interests, increased by $6bn or 3% compared with 31 December 2022.

Profits generated of $18bn were partly offset by dividends paid of $8bn and the impact of our up to $2bn share buy-back announced at our 1Q23 results in May 2023, as well as net losses through other comprehensive income ('OCI') of $1bn and other movements of $1bn.

Financial investments

As part of our interest rate hedging strategy, we hold a portfolio of debt instruments, reported within financial investments, which are classified as hold-to-collect-and-sell. As a result, the change in value of these instruments is recognised through 'debt instruments at fair value through other comprehensive income' in equity.

At 30 June 2023, we had recognised a cumulative unrealised loss reserve through other comprehensive income of $6.5bn, of which a pre-tax unrealised loss of $6.2bn related to these hold-to-collect-and-sell positions, reflecting a $0.3bn pre-tax gain in 1H23, inclusive of movements on related fair value hedges. Overall, the Group is positively exposed to rising interest rates through net interest income, although there is an adverse impact on our capital base in the early stages of a rising interest rate environment due to the fair value of hold-to-collect-and-sell instruments. After the initial negative effect materialising through reserves, the net interest income of the Group is expected to result in a net benefit over time, provided policy rates follow market implied rates. Over time, these adverse movements will unwind as the instruments reach maturity, although not all will necessarily be held to maturity.

We also hold a portfolio of financial investments measured at amortised cost, which are classified as hold-to-collect. At 30 June 2023, there was a cumulative unrealised loss of $3.5bn. Within this, $2.8bn related to debt instruments held to manage our interest rate exposure, representing a $0.9bn deterioration during 1H23.

Customer accounts by country/territory
	At
	30 Jun	31 Dec
	2023	2022
	$m	$m
UK	508,052	493,028
France	60,283	33,726
Germany	25,445	28,949
Switzerland	4,081	5,167
Hong Kong	529,574	542,543
Singapore	68,189	61,475
Mainland China	53,835	56,948
Australia	28,189	28,506
India	24,147	22,636
Malaysia	15,207	16,008
Taiwan	15,219	15,316
Indonesia	5,728	5,840
United Arab Emirates	24,469	23,331
Egypt	5,265	6,045
Türkiye	3,953	3,497
US	99,303	100,404
Mexico	28,402	25,531
Other	96,428	101,353
At end of period	1,595,769	1,570,303

Risk-weighted assets

Risk-weighted assets ('RWAs') rose by $19.8bn during the first half of the year. Excluding foreign currency translation differences, RWAs increased by $15.4bn, largely as a result of the following:

- a $19.7bn increase due to asset size movements. This was predominantly driven by a $9.0bn movement in credit risk, mainly attributable to sovereign exposures, in Argentina, Asia and North America and growth in retail mortgages, notably in Hong Kong; a $6.6bn increase from heightened market volatility on market risk RWAs, including hedges related to the agreed sale of our banking business in Canada; and a $3.5bn increase from mark-to-market movements in counterparty credit risk mainly in HSBC Bank plc, Asia and Mexico; and

- a $9.6bn increase through the acquisition of SVB UK.

These were partly offset by:

- a $11.5bn decrease due to changes in methodology and policy, including a $7.7bn fall due to a regulatory change to the Hong Kong Monetary Authority's risk-weight floor for residential mortgages, which became effective 1 January 2023 and further decreases attributed to risk parameter refinements.

Global businesses

Contents


39	Summary
39	Basis of preparation
39	Supplementary analysis of constant currency results and notable items by global business
42	Reconciliation of reported risk-weighted assets to constant currency risk-weighted assets
42	Supplementary tables for WPB

Summary

The Group Chief Executive, supported by the rest of the Group Executive Committee ('GEC'), reviews operating activity on a number of bases, including by global business and legal entities. Our global businesses - Wealth and Personal Banking, Commercial Banking, and Global Banking and Markets - along with Corporate Centre are our reportable segments under IFRS 8 'Operating Segments', and are presented below and in Note 5: 'Segmental analysis' on page 118.

Descriptions of the global businesses are provided in the Overview section on pages 17 to 24.

Basis of preparation

The Group Chief Executive, supported by the rest of the GEC, is considered the Chief Operating Decision Maker ('CODM') for the purposes of identifying the Group's reportable segments. Global business results are assessed by the CODM on the basis of constant currency performance. We separately disclose 'notable items', which are components of our income statement that management would consider as outside the normal course of business and generally non-recurring in nature. Constant currency performance information for 1H22 is presented as described on page 28.

As required by IFRS 8, reconciliations of the total constant currency global business results to the Group's reported results are presented on page 119.

Supplementary reconciliations from reported to constant currency results by global business are presented on pages 39 to 40 for information purposes.

Global business performance is also assessed using return on tangible equity ('RoTE'). A reconciliation of global business RoTE to the Group's RoTE is provided on page 57.

Our operations are closely integrated and, accordingly, the presentation of data includes internal allocations of certain items of income and expense. These allocations include the costs of certain support services and global functions to the extent that they can be meaningfully attributed to global businesses and legal entities. While such allocations have been made on a systematic and consistent basis, they necessarily involve a degree of subjectivity. Costs that are not allocated to global businesses are included in Corporate Centre.

Where relevant, income and expense amounts presented include the results of inter-segment funding along with inter-company and inter-business line transactions. All such transactions are undertaken on arm's length terms. The intra-Group elimination items for the global businesses are presented in Corporate Centre.

HSBC Holdings incurs the liability of the UK bank levy, with the cost being recharged to its UK operating subsidiaries. The current year expense will be reflected in the fourth quarter as it is assessed on our balance sheet position as at 31 December.

The results of main legal entities are presented on a reported and constant currency basis, including HSBC UK Bank plc, HSBC Bank plc, The Hong Kong and Shanghai Banking Corporation Limited, HSBC Bank Middle East Limited, HSBC North America Holdings Inc. and Grupo Financiero HSBC, S.A. de C.V.

In the first quarter of 2023, following an internal review to assess which global businesses were best suited to serve our customers' respective needs, a portfolio of our customers within our entities in Latin America was transferred from GBM to CMB for reporting purposes. Comparative data have been re-presented accordingly. Similar smaller transfers from Global Banking and Markets to Commercial Banking were also undertaken within our entities in Australia and Indonesia, where comparative data have not been re-presented.

Supplementary analysis of constant currency results and notable items by global business

Constant currency results¹

	Half-year to 30 Jun 2023
	Wealth and Personal Banking	Commercial Banking³	Global Banking and Markets³	Corporate Centre	Total
	$m	$m	$m	$m	$m
Revenue²	16,200	12,216	8,501	(41)	36,876
ECL	(502)	(704)	(136)	(3)	(1,345)
Operating expenses	(7,141)	(3,572)	(4,785)	41	(15,457)
Share of profit in associates and joint ventures	35	(1)	-	1,549	1,583
Profit before tax	8,592	7,939	3,580	1,546	21,657
Loans and advances to customers (net)	463,836	319,246	176,182	294	959,558
Customer accounts	809,864	472,146	313,126	633	1,595,769

1 In the current period, constant currency results are equal to reported as there is no currency translation.

2 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

3 In the first quarter of 2023, following an internal review to assess which global businesses were best suited to serve our customers' respective needs, a portfolio of our customers within our entities in Latin America was transferred from GBM to CMB for reporting purposes. Comparative data have been re-presented accordingly.

Notable items
	Half-year to 30 Jun 2023
	Wealth and Personal Banking	Commercial Banking	Global Banking and Markets	Corporate Centre	Total
	$m	$m	$m	$m	$m
Revenue
Disposals, acquisitions and related costs^1,2	2,034	1,507	-	(220)	3,321
Fair value movements on financial instruments³	-	-	-	15	15
Operating expenses
Disposals, acquisitions and related costs	(23)	(15)	3	(83)	(118)
Restructuring and other related costs⁴	-	29	-	18	47

1 Includes the reversal of a $2.1bn impairment loss relating to the planned sale of our retail banking operations in France, which is no longer classified as held for sale.

2 Includes the provisional gain of $1.5bn recognised in respect of the acquisition of SVB UK.

3 Fair value movements on non-qualifying hedges in HSBC Holdings.

4 In 2Q23, we recognised $47m of reversals relating to restructuring provisions recognised during 2022.

Reconciliation of reported results to constant currency results - global businesses
	Half-year to 30 Jun 2022
	Wealth and Personal Banking	Commercial Banking²	Global Banking and Markets²	Corporate Centre	Total
	$m	$m	$m	$m	$m
Revenue¹
Reported	10,322	7,324	7,793	(894)	24,545
Currency translation	(264)	(269)	(334)	(31)	(898)
Constant currency	10,058	7,055	7,459	(925)	23,647
ECL
Reported	(571)	(279)	(234)	(3)	(1,087)
Currency translation	(13)	1	24	1	13
Constant currency	(584)	(278)	(210)	(2)	(1,074)
Operating expenses
Reported	(7,216)	(3,485)	(4,736)	(690)	(16,127)
Currency translation	221	140	179	55	595
Constant currency	(6,995)	(3,345)	(4,557)	(635)	(15,532)
Share of profit in associates and joint ventures
Reported	8	-	-	1,441	1,449
Currency translation	-	-	-	(86)	(86)
Constant currency	8	-	-	1,355	1,363
Profit/(loss) before tax
Reported	2,543	3,560	2,823	(146)	8,780
Currency translation	(56)	(128)	(131)	(61)	(376)
Constant currency	2,487	3,432	2,692	(207)	8,404
Loans and advances to customers (net)
Reported	474,181	352,136	200,163	541	1,027,021
Currency translation	8,781	2,137	(81)	16	10,853
Constant currency	482,962	354,273	200,082	557	1,037,874
Customer accounts
Reported	836,026	484,626	330,087	562	1,651,301
Currency translation	10,948	6,489	2,386	27	19,850
Constant currency	846,974	491,115	332,473	589	1,671,151

1 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

Notable items (continued)
	Half-year to 30 Jun 2022
	Wealth and Personal Banking	Commercial Banking	Global Banking and Markets	Corporate Centre	Total
	$m	$m	$m	$m	$m
Revenue
Disposals, acquisitions and related costs¹	-	-	-	(288)	(288)
Fair value movements on financial instruments²	-	-	-	(371)	(371)
Restructuring and other related costs³	93	-	(26)	1	68
Operating expenses
Restructuring and other related costs	(113)	(66)	(87)	(774)	(1,040)

1 Includes losses from classifying businesses as held for sale as part of a broader restructuring of our European business.

2 Fair value movements on non-qualifying hedges in HSBC Holdings.

3 Comprises gains and losses relating to the business update in February 2020, including losses associated with the RWA reduction programme.

Reconciliation of reported risk-weighted assets to constant currency risk-weighted assets

	At 30 Jun 2023
	Wealth and Personal Banking	Commercial Banking¹	Global Banking and Markets¹	Corporate Centre	Total
	$bn	$bn	$bn	$bn	$bn
Risk-weighted assets
Reported	186.6	353.8	227.0	92.1	859.5
Constant currency	186.6	353.8	227.0	92.1	859.5

	At 30 Jun 2022
Risk-weighted assets
Reported	186.1	348.9	234.1	82.6	851.7
Currency translation	1.2	(1.3)	(1.9)	(0.2)	(2.2)
Constant currency	187.3	347.6	232.2	82.4	849.5


	At 31 Dec 2022
Risk-weighted assets
Reported	182.9	342.4	225.9	88.5	839.7
Currency translation	2.1	2.7	(0.6)	-	4.2
Constant currency	185.0	345.1	225.3	88.5	843.9

1 In the first quarter of 2023, following an internal review to assess which global businesses were best suited to serve our customers' respective needs, a portfolio of our customers within our entities in Latin America was transferred from GBM to CMB for reporting purposes. Comparative data have been re-presented accordingly.

Supplementary tables for WPB

WPB performance by business unit (constant currency)

A breakdown of WPB by business unit is presented below to reflect the basis of how the revenue performance of the business units is assessed and managed.

WPB - summary (constant currency basis)
	Total WPB	Consists of
	Total WPB	Banking operations	Life insurance	Global Private Banking	Asset management
	$m	$m	$m	$m	$m
Half-year to 30 Jun 2023
Net operating income before change in expected credit losses and other credit impairment charges¹	16,200	13,560	875	1,141	624
- net interest income/(expense)	10,299	9,587	137	580	(5)
- net fee income	2,692	1,636	79	393	584
- other income	3,209	2,337	659	168	45
ECL	(502)	(501)	(3)	2	-
Net operating income	15,698	13,059	872	1,143	624
Total operating expenses	(7,141)	(5,557)	(351)	(778)	(455)
Operating profit	8,557	7,502	521	365	169
Share of profit in associates and joint ventures	35	7	28	-	-
Profit before tax	8,592	7,509	549	365	169

Half-year to 30 Jun 2022²
Net operating income before change in expected credit losses and other credit impairment charges¹	10,058	7,939	651	941	527
- net interest income/(expense)	6,493	5,932	175	387	(1)
- net fee income	2,706	1,650	83	424	549
- other income/(expense)	859	357	393	130	(21)
ECL	(584)	(576)	(4)	(4)	-
Net operating income	9,474	7,363	647	937	527
Total operating expenses	(6,995)	(5,518)	(391)	(678)	(408)
Operating profit	2,479	1,845	256	259	119
Share of profit in associates and joint ventures	8	5	3	-	-
Profit before tax	2,487	1,850	259	259	119

1 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

2 From 1 January 2023, we adopted IFRS 17 'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'. Comparative data have been restated accordingly.

Life insurance business performance

The following table provides an analysis of the performance of our life insurance business for the period. It comprises income earned by our insurance manufacturing operations within our WPB business, as well as income earned and costs incurred within our Wealth insurance distribution channels and consolidation and inter-company elimination entries.

Results of WPB's life insurance business unit (constant currency basis)
	Half-year to 30 Jun 2023
	Insurance manufac-turing operations	Wealth insurance and other¹	Life insurance
	$m	$m	$m
Net interest income	136	1	137
Net fee income/(expense)	(25)	104	79
Other income	651	8	659
- insurance service results	558	(25)	533
- net investment returns (excluding net interest income)	4	-	4
- other income	89	33	122
Net operating income before change in expected credit losses and other credit impairment charges²	762	113	875
ECL	(3)	-	(3)
Net operating income	759	113	872
Total operating expenses	(266)	(85)	(351)
Operating profit	493	28	521
Share of profit/(loss) in associates and joint ventures	28	-	28
Profit before tax	521	28	549

	Half-year to 30 Jun 2022³
Net interest income	175	-	175
Net fee income/(expense)	(17)	100	83
Other income	393	-	393
- insurance service results	378	(3)	375
- net investment returns (excluding net interest income)	(126)	(5)	(131)
- other income	141	8	149
Net operating income before change in expected credit losses and other credit impairment charges²	551	100	651
ECL	(5)	1	(4)
Net operating income	546	101	647
Total operating expenses	(261)	(130)	(391)
Operating profit	285	(29)	256
Share of profit/(loss) in associates and joint ventures	3	-	3
Profit before tax	288	(29)	259

1 'Wealth insurance and other' includes fee income earned and operating expenses incurred within our Wealth distribution channels. It also includes the IFRS 17 consolidation entries arising from transactions between our insurance manufacturing operations and Wealth distribution channels and with the wider Group, as well as allocations of central costs benefiting life insurance.

2 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

3 From 1 January 2023, we adopted IFRS 17 'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'. Comparative data have been restated accordingly.

WPB insurance manufacturing (constant currency basis)

The following table shows the results of our insurance manufacturing operations for our WPB business and for all global business segments in aggregate.

Results of insurance manufacturing operations^1,2,3
	Half-year to
	30 Jun		30 Jun
	2023		2022
	WPB	All global businesses	WPB	All global businesses
	$m	$m	$m	$m
Net interest income	136	155	175	187
Net fee expense	(25)	(18)	(17)	(9)
Other income	651	643	393	378
Insurance service result	558	557	378	378
- release of contractual service margin	524	524	431	431
- risk adjustment release	19	19	22	22
- experience variance and other	2	1	29	29
- loss from onerous contracts	13	13	(104)	(104)
Net investment returns (excluding net interest income)⁴	4	-	(126)	(128)
- insurance finance income/(expense)	(4,236)	(4,235)	11,765	11,767
- other investment income	4,240	4,235	(11,891)	(11,895)
Other operating income	89	86	141	128
Net operating income before change in expected credit losses and other credit impairment charges⁵	762	780	551	556
Change in expected credit losses and other credit impairment charges	(3)	(3)	(5)	(4)
Net operating income	759	777	546	552
Total operating expenses	(266)	(270)	(261)	(250)
Operating profit	493	507	285	302
Share of profit in associates and joint ventures	28	28	3	3
Profit before tax of insurance business operations⁶	521	535	288	305
Additional information
Insurance manufacturing new business contractual service margin (reported basis)	747	747	599	599
Consolidated Group new business contractual service margin (reported basis)	811	811	637	637
Annualised new business premiums of insurance manufacturing operations	1,861	1,890	1,274	1,314

1 From 1 January 2023, we adopted IFRS 17 'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'. Comparative data have been restated accordingly.

2 Constant currency results are derived by adjusting for period-on-period effects of foreign currency translation differences. The impact of foreign currency translation differences on 'All global businesses' profit before tax was nil for 1H22.

3 The results presented for insurance manufacturing operations are shown before elimination of inter-company transactions with HSBC non-insurance operations. The 'All global businesses' result consists primarily of WPB business, as well as a small proportion of CMB business.

4 Net investment return for all global businesses for the half-year to 30 June 2023 was $155m (30 June 2022: $59m), which consisted of net interest income, net income/(expenses) on assets held at fair value through profit or loss, and insurance finance income/(expense).

5 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

6 The effect on insurance manufacturing operations of applying hyperinflation accounting in Argentina resulted in a decrease in WPB revenue in 1H23 of $27m (1H22: decrease of $13m) and a decrease in WPB profit before tax in 1H23 of $27m (1H22: decrease of $13m).

Insurance manufacturing

The following commentary, unless otherwise stated, relates to the constant currency results for 'All global businesses'.

Profit before tax of $0.5bn increased by $0.2bn compared with 1H22. This primarily reflected the following:

- Insurance service result of $0.6bn in 1H23 increased by $0.2bn compared with 1H22. This was driven by an increase to the release of CSM of $0.1bn as a result of a higher closing CSM balance from the effect of new business written, favourable experience variances, and updates to lapse rate assumptions impacting the CSM measurement, as well as the impact of higher interest rates on the CSM duration profile. The improved insurance service result also reflected a reduction to losses from onerous contracts of $0.1bn, mainly in Hong Kong and Singapore, in part due to improved economic conditions in 1H23.

- Net investment return (excluding net interest income) increased by $0.1bn, with higher asset returns in 1H23 compared with losses in the prior period.

Insurance equity plus CSM net of tax represents a measure of our insurance manufacturing operations' net asset value plus the future earnings from in-force business. At 30 June 2023, insurance equity plus CSM net of tax on a reported basis was $16,310m (31 December 2022: $14,646m; 30 June 2022: $14,663m).

At 30 June 2023, Insurance equity plus CSM net of tax was calculated as insurance manufacturing operations equity of $7,661m plus CSM of $10,571m less tax of $1,922m. At 31 December 2022, it was calculated as insurance manufacturing operations equity of $7,236m plus CSM of $9,058m less tax of $1,648m. At 30 June 2022, it was calculated as insurance manufacturing operations equity of $7,116m plus CSM of $9,233m less tax of $1,686m.

Manufacturing value of new business

Insurance manufacturing value of new business is a non-GAAP alternative performance measure that provides information about value generation from new business sold during the period. It is conceptually similar to the value of new business metric previously reported by the insurance business under IFRS 4 'Insurance Contracts', although it is not equivalent to the previously disclosed measure that was calculated as the incremental present value of in-force business ('PVIF') intangible asset generated from new business written. Since transitioning to IFRS 17, insurance manufacturing value of new business is a metric used internally to measure the long-term profitability of new business sold and its disclosure supports the consistent communication of this performance measure, albeit on a new calculation basis. Insurance manufacturing value of new business is calculated as the sum of the IFRS 17 new business CSM and loss component adjusted for:

- a full attribution of expenses incurred within our manufacturing operations. IFRS 17 considers only directly attributable acquisition expenses within the new business CSM measurement; and

- long-term asset spreads expected to be generated over the contract term. Under IFRS 17, new business CSM is in contrast calculated on a risk neutral basis.

Insurance manufacturing value of new business is measured before tax and after inclusion of the impact of reinsurance. Insurance manufacturing value of new business amounts for previous periods have not been disclosed as their preparation was not practicable without unreasonable operational burden and expense. This reflects the fact that the further work required to prepare comparative information extends beyond the principal aim of the IFRS 17 programme to date of implementing the mandatory reporting requirements of IFRS 17. Comparative information will be provided with 2023 full-year information.

Insurance manufacturing value of new business
	Half-year to
	30 Jun 2023
	$m
Insurance manufacturing operations new business contractual service margin and loss component¹	740
Inclusion of incremental expenses not attributable to the contractual service margin	(143)
Long-term asset spreads	195
Insurance manufacturing value of new business	792

1 Insurance manufacturing new business contractual service margin was $747m and the loss component was $(7)m.

WPB: Wealth balances

The following table shows the wealth balances, which include invested assets and wealth deposits. Invested assets comprise

customer assets either managed by our Asset Management business or by external third-party investment managers, as well as self-directed investments by our customers.

WPB - reported wealth balances¹
	Half-year to
	30 Jun	30 Jun	31 Dec
	2023	2022	2022
	$bn	$bn	$bn
Global Private Banking client assets	341	311	312
- managed by Global Asset Management	64	57	57
- external managers, direct securities and other	277	254	255
Retail wealth balances	372	393	363
- managed by Global Asset Management	207	218	198
- external managers, direct securities and other	165	175	165
Asset Management third-party distribution	384	310	340
Reported invested assets¹	1,097	1,014	1,015
Wealth deposits (Premier, Jade and Global Private Banking)²	533	542	503
Total reported wealth balances	1,630	1,556	1,518

1 Invested assets are not reported on the Group's balance sheet, except where it is deemed that we are acting as principal rather than agent in our role as investment manager.

2 Premier and Global Private Banking deposits, which include Prestige deposits in Hang Seng Bank, form part of the total WPB customer accounts balance of $810bn (30 June 2022: $836bn; 31 December 2022: $779bn) on page 39.

Asset Management: Funds under management

The following table shows the funds under management of our Asset Management business. Funds under management represents assets managed, either actively or passively, on behalf of our customers.

Asset Management - reported funds under management¹
	Half-year to
	30 Jun	30 Jun	31 Dec
	2023	2022	2022
	$bn	$bn	$bn
Opening balance	595	630	585
Net new invested assets	9	20	25
Net market movements	15	(33)	(3)
Foreign exchange and others	9	(32)	(12)
Closing balance	628	585	595

Asset Management - reported funds under management by legal entities
	At
	30 Jun	30 Jun	31 Dec
	2023	2022	2022
	$bn	$bn	$bn
HSBC Bank plc	141	134	134
The Hongkong and Shanghai Banking Corporation Limited	188	166	184
HSBC North America Holdings Inc.	55	69	60
HSBC Bank Canada	-	15	-
Grupo Financiero HSBC, S.A. de C.V.	11	8	8
Other trading entities²	233	193	209
Closing balance	628	585	595

1 Funds under management are not reported on the Group's balance sheet, except where it is deemed that we are acting as principal rather than agent in our role as investment manager.

2 Funds under management of $164m related to our Asset Management entity in the UK are reported under 'other trading entities' in the table above.

At 30 June 2023, Asset Management funds under management were $628bn, an increase of $33bn or 6% compared with 31 December 2022. The increase was driven by favourable market performances and net new invested assets received, notably in the UK and Hong Kong.

We delivered robust net new invested assets of $9bn, primarily from passive investment products, developed market fixed income and private equity investment products, and benefited from a favourable impact of foreign currency translation differences.

Global Private Banking client assets¹

The following table shows the client assets of our Global Private Banking business.

Global Private Banking - reported client assets²
	Half-year to
	30 Jun	30 Jun	31 Dec
	2023	2022	2022
	$bn	$bn	$bn
Opening balance	383	423	382
Net new invested assets	17	13	4
Increase/(decrease) in deposits	3	(2)	1
Net market movements	14	(43)	(10)
Foreign exchange and others	2	(9)	6
Closing balance	419	382	383

Global Private Banking - reported client assets by legal entities
	At
	30 Jun	30 Jun	31 Dec
	2023	2022	2022
	$bn	$bn	$bn
HSBC UK Bank plc	29	27	28
HSBC Bank plc	62	67	58
The Hongkong and Shanghai Banking Corporation Limited	187	167	174
HSBC North America Holdings Inc.	65	61	56
Grupo Financiero HSBC, S.A. de C.V.	2	-	-
Other trading entities	74	60	67
Closing balance	419	382	383

1 Client assets are translated at the rates of exchange applicable for their respective period-ends, with the effects of currency translation reported separately.

2 Client assets are not reported on the Group's balance sheet, except where it is deemed that we are acting as principal rather than agent in our role as investment manager. Customer deposits included in these client assets are recorded on our balance sheet.

Retail invested assets

The following table shows the invested assets of our retail customers. These comprise customer assets either managed by our Asset Management business or by external third-party investment

managers as well as self-directed investments by our customers. Retail invested assets are not reported on the Group's balance sheet, except where it is deemed that we are acting as principal rather than agent in our role as investment manager.

Retail invested assets
	Half-year to
	30 Jun	30 Jun	31 Dec
	2023	2022	2022
	$bn	$bn	$bn
Opening balance	363	434	393
Net new invested assets¹	14	12	14
Net market movements	6	(32)	(15)
Foreign exchange and others	(11)	(21)	(29)
Closing balance	372	393	363

Retail invested assets by legal entities
	At
	30 Jun	30 Jun	31 Dec
	2023	2022	2022
	$bn	$bn	$bn
HSBC UK Bank plc	29	27	27
HSBC Bank plc	36	34	27
The Hongkong and Shanghai Banking Corporation Limited	280	283	284
HSBC Bank Middle East Limited	3	2	2
HSBC North America Holdings Inc.	13	11	12
HSBC Bank Canada	-	26	-
Grupo Financiero HSBC, S.A. de C.V.	8	7	7
Other trading entities	3	3	4
Closing balance	372	393	363

1 'Retail net new invested assets' covers nine markets, comprising Hong Kong including Hang Seng Bank (Hong Kong), mainland China, Malaysia, Singapore, HSBC UK, UAE, the US, Canada and Mexico. The 'net new invested assets' related to all other geographies is reported in 'Foreign exchange and other'.

WPB invested assets

'Net new invested assets' represents the net customer inflows from retail invested assets, Asset Management third-party distribution and Global Private Banking invested assets. It excludes all customer

deposits. The 'net new invested assets' in the table below is non-additive from the tables above, as net new invested assets managed by Asset Management that are generated by retail clients or Global Private Banking will be recorded in both businesses.

WPB: Invested assets
	Half-year to
	30 Jun	30 Jun	31 Dec
	2023	2022	2022
	$bn	$bn	$bn
Opening balance	1,015	1,119	1,014
Net new invested assets	34	39	41
Net market movements	29	(90)	(28)
Foreign exchange and others	19	(54)	(12)
Closing balance	1,097	1,014	1,015

WPB: Net new invested assets by legal entities
	At
	30 Jun	30 Jun	31 Dec
	2023	2022	2022
	$bn	$bn	$bn
HSBC UK Bank plc	0	1	1
HSBC Bank plc	1	2	4
The Hongkong and Shanghai Banking Corporation Limited	27	22	37
HSBC Bank Middle East Limited	0	0	0
HSBC North America Holdings Inc.	(7)	17	(9)
HSBC Bank Canada	-	0	(1)
Grupo Financiero HSBC, S.A. de C.V.	1	0	1
Other trading entities	12	(3)	8
Total	34	39	41

Legal entities

Contents


49	Analysis of reported results by legal entities
51	Summary information - legal entities and selected countries
55	Analysis by country/territory

On 1 January 2023, we updated our financial reporting framework and changed the supplementary presentation of results from geographical regions to main legal entities to better reflect the Group's structure.

Analysis of reported results by legal entities

HSBC reported profit/(loss) before tax and balance sheet data
	Half-year to 30 Jun 2023
	HSBC UK Bank plc	HSBC Bank plc	The Hongkong and Shanghai Banking Corporation Limited	HSBC Bank Middle East Limited	HSBC North America Holdings Inc.	HSBC Bank Canada	Grupo Financiero HSBC, S.A. de C.V.	Other trading entities	Holding companies, shared service centres and intra-Group eliminations	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m
Net interest income	4,779	1,407	8,398	764	933	663	998	1,424	(1,102)	18,264
Net fee income	801	832	2,555	243	624	284	274	565	(93)	6,085
Net income from financial instruments held for trading or managed on a fair value basis	235	2,053	4,740	212	380	50	226	494	(278)	8,112
Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit and loss	-	782	3,446	-	-	-	3	83	(10)	4,304
Insurance finance income/(expense)	-	(780)	(3,402)	-	-	-	-	(64)	12	(4,234)
Insurance service result	-	91	399	-	-	-	41	4	(11)	524
Other income/(expense)¹	1,574	2,318	397	(21)	205	11	32	(289)	(406)	3,821
Net operating income before change in expected credit losses and other credit impairment charges²	7,389	6,703	16,533	1,198	2,142	1,008	1,574	2,217	(1,888)	36,876
Change in expected credit losses and other credit impairment charges	(418)	(73)	(456)	-	(62)	(11)	(264)	(71)	10	(1,345)
Net operating income	6,971	6,630	16,077	1,198	2,080	997	1,310	2,146	(1,878)	35,531
Total operating expenses	(2,180)	(3,089)	(6,507)	(525)	(1,379)	(522)	(880)	(1,139)	764	(15,457)
Operating profit	4,791	3,541	9,570	673	701	475	430	1,007	(1,114)	20,074
Share of profit/(loss) in associates and joint ventures	-	(43)	1,347	-	-	-	6	275	(2)	1,583
Profit before tax	4,791	3,498	10,917	673	701	475	436	1,282	(1,116)	21,657
	%	%	%	%	%	%	%	%	%	%
Share of HSBC's profit before tax	22.1	16.2	50.4	3.1	3.2	2.2	2.0	5.9	(5.1)	100.0
Cost efficiency ratio	29.5	46.1	39.4	43.8	64.4	51.8	55.9	51.4	40.6	41.9
Balance sheet data	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m
Loans and advances to customers (net)	266,694	112,408	464,546	18,804	53,410	-	24,507	19,189	-	959,558
Total assets	425,833	920,578	1,318,640	51,664	251,755	91,646	46,382	66,548	(131,570)	3,041,476
Customer accounts	345,835	282,041	775,430	31,262	99,303	-	28,402	33,313	183	1,595,769
Risk-weighted assets^3,4	125,782	127,402	391,470	24,187	73,140	31,382	30,657	66,317	11,285	859,545

HSBC reported profit/(loss) before tax and balance sheet data (continued)
	Half-year to 30 Jun 2022
	HSBC UK Bank plc	HSBC Bank plc	The Hongkong and Shanghai Banking Corporation Limited	HSBC Bank Middle East Limited	HSBC North America Holdings Inc.	HSBC Bank Canada	Grupo Financiero HSBC, S.A. de C.V.	Other trading entities	Holding companies, shared service centres and intra-Group eliminations	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m
Net interest income	3,563	1,285	5,766	353	896	555	871	884	(788)	13,385
Net fee income	774	858	2,636	239	679	308	218	557	(41)	6,228
Net income from financial instruments held for trading or managed on a fair value basis	224	2,001	2,273	195	237	40	136	280	(530)	4,856
Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit and loss	-	(1,707)	(10,130)	-	-	-	(10)	2	(4)	(11,849)
Insurance finance income	-	1,503	10,253	-	-	-	1	16	-	11,773
Insurance service result	-	79	287	-	-	-	13	(8)	(1)	370
Other income/(expense)¹	96	(193)	229	13	328	16	36	(241)	(502)	(218)
Net operating income before change in expected credit losses and other credit impairment charges²	4,657	3,826	11,314	800	2,140	919	1,265	1,490	(1,866)	24,545
Change in expected credit losses and other credit impairment charges	(48)	(252)	(528)	68	(21)	(31)	(243)	(34)	2	(1,087)
Net operating income	4,609	3,574	10,786	868	2,119	888	1,022	1,456	(1,864)	23,458
Total operating expenses	(2,339)	(3,294)	(6,403)	(490)	(1,695)	(503)	(788)	(1,046)	431	(16,127)
Operating profit	2,270	280	4,383	378	424	385	234	410	(1,433)	7,331
Share of profit in associates and joint ventures	-	(28)	1,351	-	-	-	5	122	(1)	1,449
Profit before tax	2,270	252	5,734	378	424	385	239	532	(1,434)	8,780
	%	%	%	%	%	%	%	%	%	%
Share of HSBC's profit before tax	25.9	2.9	65.3	4.3	4.8	4.4	2.7	6.1	(16.4)	100.0
Cost efficiency ratio	50.2	86.1	56.6	61.3	79.2	54.7	62.3	70.2	23.1	65.7
Balance sheet data	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m
Loans and advances to customers (net)	245,310	114,905	491,213	20,658	56,819	57,550	18,996	21,569	1	1,027,021
Total assets	423,703	862,478	1,295,484	48,944	262,701	96,830	37,218	68,330	(125,207)	2,970,481
Customer accounts	347,845	267,788	779,153	28,960	101,137	58,241	23,659	44,517	1	1,651,301
Risk-weighted assets^3,4	109,943	139,873	408,110	22,922	77,428	31,870	24,998	59,491	4,526	851,743

1 Other income/(expense) in this context comprises gain on acquisitions, reversal of impairment loss relating to the planned sale of our retail banking operations in France and other operating income.

2 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

3 Risk-weighted assets are non-additive across the principal entities due to market risk diversification effects within the Group.

4 Balances are on a third-party Group consolidated basis.

Summary information - legal entities and selected countries

Legal entity reported and constant currency results¹
	Half-year to 30 Jun 2023
	HSBC UK Bank plc	HSBC Bank plc	The Hongkong and Shanghai Banking Corpo- ration Limited	HSBC Bank Middle East Limited	HSBC North America Holdings Inc.	HSBC Bank Canada	Grupo Financiero HSBC, S.A. de C.V.	Other trading entities²	Holding companies, shared service centres and intra-Group eliminations	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m
Revenue³	7,389	6,703	16,533	1,198	2,142	1,008	1,574	2,217	(1,888)	36,876
ECL	(418)	(73)	(456)	-	(62)	(11)	(264)	(71)	10	(1,345)
Operating expenses	(2,180)	(3,089)	(6,507)	(525)	(1,379)	(522)	(880)	(1,139)	764	(15,457)
Share of profit in associates and joint ventures	-	(43)	1,347	-	-	-	6	275	(2)	1,583
Profit/(loss) before tax	4,791	3,498	10,917	673	701	475	436	1,282	(1,116)	21,657
Loans and advances to customers (net)	266,694	112,408	464,546	18,804	53,410	-	24,507	19,189	-	959,558
Customer accounts	345,835	282,041	775,430	31,262	99,303	-	28,402	33,313	183	1,595,769

1 In the current period, constant currency results are equal to reported, as there is no currency translation.

2 Other trading entities includes the results of entities located in Oman, Türkiye, Egypt and Saudi Arabia (including our share of the results of Saudi Awwal Bank) which do not consolidate into HSBC Bank Middle East Limited. These entities had an aggregated impact on the Group's reported profit before tax of $692m. Supplementary analysis is provided on page 56 to provide a fuller picture of the MENAT regional performance.

3 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

Legal entity results: notable items
	Half-year to 30 Jun 2023
	HSBC UK Bank plc	HSBC Bank plc	The Hongkong and Shanghai Banking Corpo- ration Limited	HSBC Bank Middle East Limited	HSBC North America Holdings Inc.	HSBC Bank Canada	Grupo Financiero HSBC, S.A. de C.V.	Other trading entities	Holding companies, shared service centres and intra-Group eliminations	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m
Revenue
Disposals, acquisitions and related costs^1,2	1,507	2,101	-	-	-	-	-	-	(287)	3,321
Fair value movements on financial instruments³	-	-	-	-	-	-	-	-	15	15
Operating expenses
Disposals, acquisitions and related costs	(15)	(45)	-	-	(2)	(54)	-	-	(2)	(118)
Restructuring and other related costs⁴	-	-	-	-	-	-	-	-	47	47

1 Includes the reversal of a $2.1bn impairment loss relating to the planned sale of our retail banking operations in France, which is no longer classified as held for sale.

2 Includes the provisional gain of $1.5bn recognised in respect of the acquisition of SVB UK.

3 Fair value movements on non-qualifying hedges in HSBC Holdings.

4 In 2Q23, we recognised $47m of reversals relating to restructuring provisions recognised during 2022.

Country results¹
	Half-year to 30 Jun 2023
	UK²	Hong Kong	Mainland China	US	Mexico
	$m	$m	$m	$m	$m
Revenue³	10,478	10,574	2,030	2,090	1,574
ECL	(484)	(489)	24	(62)	(264)
Operating expenses	(5,851)	(3,964)	(1,314)	(1,379)	(880)
Share of profit/(loss) in associates and joint ventures	(44)	16	1,318	-	6
Profit before tax	4,099	6,137	2,058	649	436
Loans and advances to customers (net)	305,923	288,917	45,694	53,410	24,507
Customer accounts	508,052	529,574	53,835	99,303	28,402

1 In the current period, constant currency results are equal to reported, as there is no currency translation.

2 UK includes HSBC UK Bank plc (ring-fenced bank) and HSBC Bank plc (non-ring-fenced bank).

3 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

Country results: notable items
	Half-year to 30 Jun 2023
	UK¹	Hong Kong	Mainland China	US	Mexico
	$m	$m	$m	$m	$m
Revenue
Disposals, acquisitions and related costs²	1,220	-	-	-	-
Fair value movements on financial instruments³	15	-	-	-	-
Operating expenses
Disposals, acquisitions and related costs	(12)	-	-	(2)	-

1 UK includes HSBC UK Bank plc (ring-fenced bank) and HSBC Bank plc (non-ring-fenced bank).

2 Includes the provisional gain of $1.5bn recognised in respect of the acquisition of SVB UK.

3 Fair value movements on non-qualifying hedges in HSBC Holdings.

Legal entity reported and constant currency results (continued)
	Half-year to 30 Jun 2022
	HSBC UK Bank plc	HSBC Bank plc	The Hongkong and Shanghai Banking Corpo- ration Limited	HSBC Bank Middle East Limited	HSBC North America Holdings Inc.	HSBC Bank Canada	Grupo Financiero HSBC, S.A. de C.V.	Other trading entities¹	Holding companies, shared service centres and intra-Group eliminations	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m
Revenue²
Reported	4,657	3,826	11,314	800	2,140	919	1,265	1,490	(1,866)	24,545
Currency translation	(216)	(92)	(234)	1	-	(51)	149	(299)	(156)	(898)
Constant currency	4,441	3,734	11,080	801	2,140	868	1,414	1,191	(2,022)	23,647
ECL
Reported	(48)	(252)	(528)	68	(21)	(31)	(243)	(34)	2	(1,087)
Currency translation	(8)	21	7	-	-	1	(29)	21	-	13
Constant currency	(56)	(231)	(521)	68	(21)	(30)	(272)	(13)	2	(1,074)
Operating expenses
Reported	(2,339)	(3,294)	(6,403)	(490)	(1,695)	(503)	(788)	(1,046)	431	(16,127)
Currency translation	113	112	112	-	(1)	28	(92)	200	123	595
Constant currency	(2,226)	(3,182)	(6,291)	(490)	(1,696)	(475)	(880)	(846)	554	(15,532)
Share of profit/(loss) in associates and joint ventures
Reported	-	(28)	1,351	-	-	-	5	122	(1)	1,449
Currency translation	-	2	(88)	-	-	-	-	1	(1)	(86)
Constant currency	-	(26)	1,263	-	-	-	5	123	(2)	1,363
Profit/(loss) before tax
Reported	2,270	252	5,734	378	424	385	239	532	(1,434)	8,780
Currency translation	(111)	43	(203)	1	(1)	(22)	28	(77)	(34)	(376)
Constant currency	2,159	295	5,531	379	423	363	267	455	(1,468)	8,404
Loans and advances to customers (net)
Reported	245,310	114,905	491,213	20,658	56,819	57,550	18,996	21,569	1	1,027,021
Currency translation	11,292	5,332	(6,106)	36	-	(1,347)	3,412	(1,765)	(1)	10,853
Constant currency	256,602	120,237	485,107	20,694	56,819	56,203	22,408	19,804	-	1,037,874
Customer accounts
Reported	347,845	267,788	779,153	28,960	101,137	58,241	23,659	44,517	1	1,651,301
Currency translation	16,011	11,905	(5,774)	51	-	(1,363)	4,250	(5,228)	(2)	19,850
Constant currency	363,856	279,693	773,379	29,011	101,137	56,878	27,909	39,289	(1)	1,671,151

1 Other trading entities includes the results of entities located in Oman, Türkiye, Egypt and Saudi Arabia (including our share of the results of Saudi Awwal Bank) which do not consolidate into HSBC Bank Middle East Limited. These entities had an aggregated impact on the Group's reported profit before tax of $381m and constant currency profit before tax of $315m. Supplementary analysis is provided on page 56 to provide a fuller picture of the MENAT regional performance.

2 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

Legal entity results: notable items (continued)
	Half-year to 30 Jun 2022
	HSBC UK Bank plc	HSBC Bank plc	The Hongkong and Shanghai Banking Corporation Limited	HSBC Bank Middle East Limited	HSBC North America Holdings Inc.	HSBC Bank Canada	Grupo Financiero HSBC, S.A. de C.V.	Other trading entities	Holding companies, shared service centres and intra-Group eliminations	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m
Revenue
Disposals, acquisitions and related costs¹	-	(278)	-	-	-	-	-	-	(10)	(288)
Fair value movements on financial instruments²	-	-	-	-	-	-	-	-	(371)	(371)
Restructuring and other related costs³	1	(21)	4	-	96	-	(1)	-	(11)	68
Operating expenses
Restructuring and other related costs	(212)	(250)	(227)	(19)	(126)	(22)	(36)	(39)	(109)	(1,040)

1 Includes losses from classifying businesses as held for sale as part of a broader restructuring of our European business.

2 Fair value movements on non-qualifying hedges in HSBC Holdings.

3 Comprises gains and losses relating to the business update in February 2020, including losses associated with the RWA reduction programme.

Country results (continued)
	Half-year to 30 Jun 2022
	UK¹	Hong Kong	Mainland China	US	Mexico
	$m	$m	$m	$m	$m
Revenue²
Reported	8,805	6,604	2,108	2,122	1,265
Currency translation	(424)	(9)	(137)	-	149
Constant currency	8,381	6,595	1,971	2,122	1,414
ECL
Reported	(196)	(418)	(138)	(21)	(243)
Currency translation	-	-	11	-	(29)
Constant currency	(196)	(418)	(127)	(21)	(272)
Operating expenses
Reported	(6,471)	(3,907)	(1,356)	(1,695)	(789)
Currency translation	300	6	89	(1)	(91)
Constant currency	(6,171)	(3,901)	(1,267)	(1,696)	(880)
Share of profit/(loss) in associates and joint ventures
Reported	(23)	(1)	1,343	-	4
Currency translation	2	-	(87)	-	1
Constant currency	(21)	(1)	1,256	-	5
Profit before tax
Reported	2,115	2,278	1,957	406	237
Currency translation	(122)	(3)	(124)	(1)	30
Constant currency	1,993	2,275	1,833	405	267
Loans and advances to customers (net)
Reported	285,097	309,445	52,922	56,819	18,996
Currency translation	13,123	430	(4,123)	-	3,412
Constant currency	298,220	309,875	48,799	56,819	22,408
Customer accounts
Reported	505,195	543,400	55,580	101,137	23,659
Currency translation	23,255	756	(4,330)	-	4,250
Constant currency	528,450	544,156	51,250	101,137	27,909

1 UK includes HSBC UK Bank plc (ring-fenced bank) and HSBC Bank plc (non-ring-fenced bank).

2 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

Country results: notable items (continued)
	Half-year to 30 Jun 2022
	UK¹	Hong Kong	Mainland China	US	Mexico
	$m	$m	$m	$m	$m
Revenue
Fair value movements on financial instruments²	(371)	-	-	-	-
Restructuring and other related costs³	205	(40)	36	97	(2)
Operating expenses
Restructuring and other related costs	(699)	(132)	(15)	(127)	(36)

1 UK includes HSBC UK Bank plc (ring-fenced bank) and HSBC Bank plc (non-ring-fenced bank).

2 Fair value movements on non-qualifying hedges in HSBC Holdings.

3 Comprises gains and losses relating to the business update in February 2020, including losses associated with RWA reduction commitments.

Analysis by country/territory

Profit/(loss) before tax by country/territory within global businesses
	Wealth and Personal Banking	Commercial Banking¹	Global Banking and Markets¹	Corporate Centre	Total
	$m	$m	$m	$m	$m
UK²	1,341	2,789	(115)	84	4,099
- of which: HSBC UK Bank plc (ring-fenced bank)	1,520	3,171	69	31	4,791
- of which: HSBC Bank plc (non-ring-fenced bank)	460	382	592	(186)	1,248
- of which: Holdings and other	(639)	(764)	(776)	239	(1,940)
France	2,019	192	41	51	2,303
Germany	20	77	65	(2)	160
Switzerland	28	15	-	8	51
Hong Kong	3,567	1,816	881	(127)	6,137
Australia	102	157	40	(18)	281
India	35	209	408	114	766
Indonesia	16	57	39	(2)	110
Mainland China	(12)	245	374	1,451	2,058
Malaysia	55	74	109	(6)	232
Singapore	255	233	248	(17)	719
Taiwan	61	39	98	(5)	193
Egypt	65	44	121	(16)	214
UAE	175	135	208	(49)	469
Saudi Arabia	-	-	53	273	326
US	259	347	153	(110)	649
Canada	167	299	68	(54)	480
Mexico	196	263	11	(34)	436
Other³	243	948	778	5	1,974
Half-year to 30 Jun 2023	8,592	7,939	3,580	1,546	21,657

UK²	601	1,203	(54)	365	2,115
- of which: HSBC UK Bank plc (ring-fenced bank)	843	1,515	71	(159)	2,270
- of which: HSBC Bank plc (non-ring-fenced bank)	99	113	264	(208)	268
- of which: Holdings and other	(341)	(425)	(389)	732	(423)
France	(45)	143	53	(63)	88
Germany	4	36	93	(64)	69
Switzerland	11	(42)	(1)	(13)	(45)
Hong Kong	1,375	547	518	(162)	2,278
Australia	60	84	91	(22)	213
India	33	156	324	132	645
Indonesia	8	44	52	(2)	102
Mainland China	(38)	137	310	1,548	1,957
Malaysia	45	34	115	(15)	179
Singapore	52	73	144	(20)	249
Taiwan	19	15	68	(7)	95
Egypt	48	15	94	(3)	154
UAE	38	76	187	(39)	262
Saudi Arabia	12	-	54	117	183
US	92	220	255	(161)	406
Canada	98	263	54	(25)	390
Mexico	95	179	18	(55)	237
Other	35	377	448	(1,657)	(797)
Half-year to 30 Jun 2022	2,543	3,560	2,823	(146)	8,780

2 UK includes results from the ultimate holding company, HSBC Holdings plc, and the separately incorporated group of service companies ('ServCo Group').

3 Corporate Centre includes inter-company debt eliminations of $62m.

Middle East, North Africa and Türkiye supplementary information

The following tables show the results of our Middle East, North Africa and Türkiye business operations on a regional basis (including results of all the legal entities operating in the region and our share of the results of Saudi Awwal Bank). It also shows the profit before tax of each of the global businesses and Corporate Centre.

Middle East, North Africa and Türkiye regional performance
	Half year to
	30 Jun	30 Jun
	2023	2022
	$m	$m
Revenue¹	1,854	1,338
Change in expected credit losses and other credit impairment charges	(4)	49
Operating expenses	(773)	(756)
Share of profit from associates and joint ventures	272	117
Profit before tax	1,349	748
Loans and advances to customers (net)²	21,901	28,348
Customer accounts²	40,480	44,008

1 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

2 Loans and advances to customers of $2,975m have been classified as 'Assets held for sale' and Customer accounts of $4,878m have been classified as 'Liabilities of disposal groups held for sale' at 30 June 2023, in respect of the planned merger of our business in Oman.

Profit before tax by global business
	Half year to
	30 Jun	30 Jun
	2023	2022
	$m	$m
Wealth and Personal Banking	301	114
Commercial Banking	276	120
Global Banking and Markets	571	442
Corporate Centre	201	72
Total	1,349	748

Reconciliation of alternative performance measures

Contents

57	Use of alternative performance measures
57	Return on average ordinary shareholders' equity and return on average tangible equity
58	Net asset value and tangible net asset value per ordinary share
59	Post-tax return and average total shareholders' equity on average total assets
59	Expected credit losses and other credit impairment charges as % of average gross loans and advances to customers
60	Target basis operating expenses
60	Earnings per share excluding material notable items

Use of alternative performance measures

Our reported results are prepared in accordance with IFRSs as detailed in our interim condensed financial statements starting on page 108.

As described on page 28, we use a combination of reported and alternative performance measures, including those derived from our reported results that eliminate factors that distort period-on-period comparisons. These are considered alternative performance measures (non-GAAP financial measures).

The following information details the adjustments made to the reported results and the calculation of other alternative performance

measures. All alternative performance measures are reconciled to the closest reported performance measure.

Return on average ordinary shareholders' equity and return on average tangible equity

Return on average ordinary shareholders' equity ('RoE') is computed by taking profit attributable to the ordinary shareholders of the parent company ('reported results'), divided by average ordinary shareholders' equity ('reported equity') for the period. The adjustment to reported results and reported equity excludes amounts attributable to non-controlling interests and holders of preference shares and other equity instruments.

Return on average tangible equity ('RoTE') is computed by adjusting reported results for impairment of goodwill and other intangible assets (net of tax), divided by average reported equity adjusted for goodwill and intangibles for the period.

We provide RoTE ratios in addition to RoE as a way of assessing our performance, which is closely aligned to our capital position.

Return on average ordinary shareholders' equity and return on average tangible equity
	Half-year ended
	30 Jun	30 Jun
	2023	2022
	$m	$m
Profit
Profit attributable to the ordinary shareholders of the parent company	16,966	7,966
Impairment of goodwill and other intangible assets (net of tax)	29	37
Profit attributable to ordinary shareholders, excluding goodwill and other intangible assets impairment	16,995	8,003
Impact of strategic transactions¹	(3,117)	-
Profit attributable to the ordinary shareholders, excluding goodwill, other intangible assets impairment and strategic transactions	13,878	8,003
Equity
Average total shareholders' equity	184,033	185,022
Effect of average preference shares and other equity instruments	(19,510)	(22,173)
Average ordinary shareholders' equity	164,523	162,849
Effect of goodwill and other intangibles (net of deferred tax)	(11,316)	(10,845)
Average tangible equity	153,207	152,004
Average impact of strategic transactions	(2,102)	-
Average tangible equity excluding strategic transactions	151,105	152,004
Ratio	%	%
Return on average ordinary shareholders' equity (annualised)	20.8	9.9
Return on average tangible equity (annualised)	22.4	10.6
Return on average tangible equity excluding strategic transactions (annualised)	18.5	10.6

1 Includes the reversal of a $1.6bn (net of tax) impairment loss relating to the planned sale of our retail banking operations in France, which is no longer classified as held for sale, and the provisional gain of $1.5bn recognised in respect of the acquisition of SVB UK.

Return on average tangible equity by global business
	Half-year ended 30 Jun 2023
	Wealth and Personal Banking	Commercial Banking	Global Banking and Markets	Corporate Centre	Total
	$m	$m	$m	$m	$m
Profit before tax	8,592	7,939	3,580	1,546	21,657
Tax expense	(1,740)	(1,532)	(683)	369	(3,586)
Profit after tax	6,852	6,407	2,897	1,915	18,071
Less attributable to: preference shareholders, other equity holders, non-controlling interests	(428)	(293)	(275)	(109)	(1,105)
Profit attributable to ordinary shareholders of the parent company	6,424	6,114	2,622	1,806	16,966
Other adjustments	(91)	206	112	(198)	29
Profit attributable to ordinary shareholders	6,333	6,320	2,734	1,608	16,995
Average tangible shareholders' equity	29,646	44,224	38,824	40,513	153,207
RoTE (%) (annualised)	43.1	28.8	14.2	8.0	22.4

	Half-year ended 30 Jun 2022
Profit before tax	2,543	3,560	2,823	(146)	8,780
Tax expense	(473)	(926)	(387)	1,937	151
Profit after tax	2,070	2,634	2,436	1,791	8,931
Less attributable to: preference shareholders, other equity holders, non-controlling interests	(316)	(233)	(273)	(143)	(965)
Profit attributable to ordinary shareholders of the parent company	1,754	2,401	2,163	1,648	7,966
Other adjustments	(21)	187	148	(277)	37
Profit attributable to ordinary shareholders	1,733	2,588	2,311	1,371	8,003
Average tangible shareholders' equity	30,507	42,880	40,603	38,014	152,004
RoTE (%) (annualised)	11.5	12.2	11.5	7.3	10.6

Net asset value and tangible net asset value per ordinary share

Net asset value per ordinary share is total shareholders' equity less non-cumulative preference shares and capital securities ('total ordinary shareholders' equity'), divided by the number of ordinary shares in issue excluding shares that the company has purchased and are held in treasury.

Tangible net asset value per ordinary share is total ordinary shareholders' equity excluding goodwill and other intangible assets (net of deferred tax) ('tangible ordinary shareholders' equity'), divided by the number of basic ordinary shares in issue excluding shares that the company has purchased and are held in treasury.

Net asset value and tangible net asset value per ordinary share
	At
	30 Jun	31 Dec
	2023	2022
	$m	$m
Total shareholders' equity	184,170	177,833
Preference shares and other equity instruments	(19,392)	(19,746)
Total ordinary shareholders' equity	164,778	158,087
Goodwill and intangible assets (net of deferred tax)	(11,544)	(11,160)
Tangible ordinary shareholders' equity	153,234	146,927
Basic number of $0.50 ordinary shares outstanding	19,534	19,739
Value per share	$	$
Net asset value per ordinary share	8.44	8.01
Tangible net asset value per ordinary share	7.84	7.44

Post-tax return and average total shareholders' equity on average total assets

Post-tax return on average total assets is profit after tax divided by average total assets for the period. Average total shareholders' equity to average total assets is average total shareholders' equity divided by average total assets for the period.

Post-tax return and average total shareholders' equity on average total assets
	Half-year ended
	30 Jun	30 Jun
	2023	2022
	$m	$m
Profit after tax	18,071	8,931
Average total shareholders' equity	184,033	185,022
Average total assets	3,116,401	3,052,565
Ratio	%	%
Post-tax return on average total assets (annualised)	1.2	0.6
Average total shareholders' equity to average total assets	5.9	6.1

Expected credit losses and other credit impairment charges as % of average gross loans and advances to customers

Expected credit losses and other credit impairment charges ('ECL') as % of average gross loans and advances to customers is the annualised constant currency ECL divided by constant currency average gross loans and advances to customers for the period. The constant currency numbers are derived by adjusting reported ECL and average loans and advances to customers for the effects of foreign currency translation differences.

Expected credit losses and other credit impairment charges as % of average gross loans and advances to customers
	Half-year ended
	30 Jun	30 Jun
	2023	2022
	$m	$m
Expected credit losses and other credit impairment charges ('ECL')	(1,345)	(1,087)
Currency translation		13
Constant currency	(1,345)	(1,074)
Average gross loans and advances to customers	960,452	1,053,459
Currency translation	6,276	(20,196)
Constant currency	966,728	1,033,263
Average gross loans and advances to customers, including held for sale	1,026,201	1,054,420
Currency translation	7,395	(20,189)
Constant currency	1,033,596	1,034,231
Ratios	%	%
Expected credit losses and other credit impairment charges (annualised) as % of average gross loans and advances to customers	0.28	0.21
Expected credit losses and other credit impairment charges (annualised) as % of average gross loans and advances to customers, including held for sale	0.26	0.21

Target basis operating expenses

Target basis operating expenses is computed by excluding the impact of notable items and foreign exchange translation impacts from reported results. We also exclude the impact of re-translating comparative period financial information at the latest rates of foreign exchange in hyperinflationary economies, which we consider to be outside of our control, and the incremental costs associated with our acquisition of SVB UK and related international investments. We consider this measure to provide useful information to investors by quantifying and excluding the notable items that management considered when setting and assessing cost-related targets.

Target basis operating expenses
	Half-year to
	30 Jun	30 Jun
	2023	2022
	$m	$m
Reported operating expenses	15,457	16,127
Notable items	(71)	(1,040)
- disposals, acquisitions and related costs	(118)	-
- restructuring and other related costs¹	47	(1,040)
Excluding the impact of SVB UK and related international investments	(67)	-
Currency translation²		(564)
Excluding the impact of retranslating prior year costs of hyperinflationary economies at a constant currency foreign exchange rate		160
Target basis operating expenses	15,319	14,683

1 In 2Q23, we recognised $47m of reversals relating to restructuring provisions recognised during 2022.

2 Currency translation on reported operating expenses, excluding currency translation on notable items.

Earnings per share excluding material notable items

Basic earnings per ordinary share excluding material notable items is calculated by dividing the profit attributable to ordinary shareholders of the parent company, excluding the impacts of material M&A transactions and the 1H22 deferred tax adjustment in HSBC Holdings, by the weighted average number of ordinary shares outstanding, excluding own shares held.

Earnings per share excluding material notable items
	Half-year to
	30 Jun	30 Jun
	2023	2022
	$m	$m
Profit attributable to shareholders of company	17,508	8,592
Coupon payable on capital securities classified as equity	(542)	(626)
Profit attributable to ordinary shareholders of company	16,966	7,966
Provisional gain on acquisition of SVB UK	(1,507)	-
Reversal of impairment loss relating to the planned sale of our retail banking operations in France¹	(1,629)	-
Impact of the agreed sale of our banking business in Canada²	(54)	-
Recognition of a deferred tax asset from historical tax losses in HSBC Holdings	-	(2,082)
Profit attributable to ordinary shareholders of company excluding material notable items	13,776	5,884

Number of shares
Basic number of ordinary shares (millions)	19,693	19,954
Basic earnings per share excluding material notable items	0.70	0.29
Basic earnings per share	0.86	0.40

1 Net of deferred tax of $501m.

2 Represents the earnings recognised by the banking business in Canada, net of gains and losses on foreign exchange hedges held at Group level, that will reduce the gain on sale recognised by the Group on completion.

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