Interim Report - 1 of 26

RNS Number : 0960M

HSBC Holdings PLC

12 August 2011

 



The Interim Report 2011 of HSBC Holdings has been prepared in accordance with the requirements of English law, and liability in respect thereof is also governed by English law. In particular, the liability of the Directors for these reports is solely to HSBC Holdings. Certain defined terms Unless the context requires otherwise, 'HSBC Holdings' means HSBC Holdings plc and 'HSBC', the 'Group', 'we', 'us' and 'our' refers to HSBC Holdings together with its subsidiaries. Within this document, the Hong Kong Special Administrative Region of the People's Republic of China is referred to as 'Hong Kong'. When used in the terms 'shareholders' equity' and 'total shareholders' equity', 'shareholders' means holders of HSBC Holdings ordinary shares and those preference shares classified as equity. The abbreviations 'US$m' and 'US$bn' represents millions and billions (thousands of millions) of US dollars, respectively. Interim financial statements and notes HSBC's Interim Consolidated Financial Statements and Notes thereon, as set out on pages 171 to 218, have been prepared in accordance with the Disclosure Rules and Transparency Rules of the Financial Services Authority and International Accounting Standard ('IAS') 34 'Interim Financial Reporting' as issued by the International Accounting Standards Board ('IASB') and as endorsed by the European Union ('EU'). The consolidated financial statements of HSBC at 31 December 2010 were prepared in accordance with International Financial Reporting Standards ('IFRSs') as issued by the IASB, and as endorsed by the EU. EU-endorsed IFRSs may differ from IFRSs as issued by the IASB if, at any point in time, new or amended IFRSs have not been endorsed by the EU. At 31 December 2010, there were no unendorsed standards effective for the year ended 31 December 2010 affecting the consolidated financial statements at that date, and there was no difference between IFRSs endorsed by the EU and IFRSs issued by the IASB in terms of their application to HSBC. Accordingly, HSBC's financial statements for the year ended 31 December 2010 were prepared in accordance with IFRSs as issued by the IASB. At 30 June 2011, there were no unendorsed standards effective for the period ended 30 June 2011 affecting these interim consolidated financial statements, and there was no difference between IFRSs endorsed by the EU and IFRSs issued by the IASB in terms of their application to HSBC. HSBC uses the US dollar as its presentation currency because the US dollar and currencies linked to it form the major currency bloc in which HSBC transacts and funds its business. Unless otherwise stated, the information presented in this document has been measured in accordance with IFRSs. When reference is made to 'underlying' or 'underlying basis' in tables or commentaries, comparative information has been expressed at constant currency (see page 10) eliminating the impact of fair value movements in respect of credit spread changes on HSBC's own debt and adjusted for the effects of acquisitions and disposals.		Contents
		Overview
		Financial highlights ......................................................	2
		Group Chairman's Statement .......................................	4
		Group Chief Executive's Review ..................................	6
		Principal activities .......................................................	8
		HSBC's values ..............................................................	8
		Strategic direction ........................................................	8
		Top and emerging risks ................................................	9
		Basis of preparation .....................................................	9
		Interim Management Report
		Financial summary1 .....................................................	10
		Customer groups and global businesses1 ........................	29
		Geographical regions1 ..................................................	41
		Other information .......................................................	80
		Risk1 ............................................................................	83
		Capital .........................................................................	158
		Board of Directors and Senior Management	165
		Financial Statements
		Financial statements ....................................................	171
		Notes on the financial statements1 ..............................	179
		Directors' Responsibility Statement ....................	219
		Independent Review Report by KPMG Audit plc to HSBC Holdings plc .......................	220
		Additional Information
		Shareholder information1 .............................................	221
		Cautionary statement regarding forward-looking statements ...................................................................	232
		Glossary .......................................................................	233
		Index ...........................................................................	242
		1. Detailed contents are provided on the referenced pages.

Headquartered in London,HSBC is one of the world's largest banking and financial services organisations and one of the industry's most valuable brands. We provide a comprehensive range of financial services to around 89 million customers through two customer groups, Retail Banking and Wealth Management (formerly Personal Financial Services) and Commercial Banking, and two global businesses, Global Banking and Markets and Global Private Banking.

Our international network covers 87 countries and territories in six geographical regions: Europe, Hong Kong, Rest of Asia-Pacific, Middle East and North Africa, North America and Latin America.

With listings on the London, Hong Kong, New York, Paris and Bermuda stock exchanges, shares in HSBC Holdings plc are held by over 220,000 shareholders in 129 countries and territories.

Highlights

·    Profit attributable to ordinary shareholders of US$8.9bn, up 35% on 1H10 and 46% on 2H10.

·    Earnings per share of US$0.51, up 34% on 1H10 and 46% on 2H10.

·    Net assets per share of US$8.59, up 17% on 1H10 and 8% on 2H10.

·    Reported pre-tax profit of US$11.5bn, up 3% on 1H10, and 45% on 2H10.

·    Profitable in all regions, with profits up in Hong Kong, Rest of Asia-Pacific, Latin America, Middle East and North Africa and North America.

·    Cost efficiency ratio of 57.5% compared with 50.9% in 1H10 and 59.9% in 2H10.

·    Return on average ordinary shareholders' equity of 12.3%, up from 10.4% in 1H10, and 8.9% in 2H10.

·    Dividends declared in respect of 2011 totalling US$0.18 per ordinary share, up 12.5%.

·    Core tier 1 ratio increased from 10.5% to 10.8% during the period, driven by profit generation.

Cover theme

An evening view of the Central Elevated Walkway in Hong Kong's business district. Used by tens of thousands of commuters every day, this walkway forms a vital artery through the heart of Asia's pre-eminent financial centre, which hosts over 190 banks and deposit-taking companies from all over the world.

Financial highlights

Earnings per share US$0.51 - up 34% 30 June 2010: US$0.38 31 December 2010: US$0.35		Dividends per share1 US$0.21 30 June 2010: US$0.18 31 December 2010: US$0.16		Net assets per share US$8.59 30 June 2010: US$7.35 31 December 2010: US$7.94

For the period

Profit before taxation US$11,474m - up 3% 30 June 2010: US$11,104m 31 December 2010: US$7,933m		Underlying profit before taxation US$11,437m - up 13% 30 June 2010: US$10,109m 31 December 2010: US$8,918m		Total operating income US$42,311m - up 4% 30 June 2010: US$40,672m 31 December 2010: US$39,342m
Net operating income before loan impairment charges and other credit risk provisions US$35,694m 30 June 2010: US$35,551m 31 December 2010: US$32,696m		Profit attributable to ordinary shareholders of the parent company US$8,929m - up 35% 30 June 2010: US$6,629m 31 December 2010: US$6,117m

At the period-end

Loans and advances to customers US$1,038bn - up 8% 30 June 2010: US$893bn 31 December 2010: US$958bn		Customer accounts US$1,319bn - up 7% 30 June 2010: US$1,147bn 31 December 2010: US$1,228bn		Ratio of customer advances to customer accounts 78.7% 30 June 2010: 77.9% 31 December 2010: 78.1%
Total equity US$168bn - up 8% 30 June 2010: US$143bn 31 December 2010: US$155bn		Average total shareholders' equity to average total assets 5.7% 30 June 2010: 5.5% 31 December 2010: 5.5%		Risk-weighted assets US$1,169bn - up 6% 30 June 2010: US$1,075bn 31 December 2010: US$1,103bn

Capital ratios

Core tier 1 ratio 10.8% 30 June 2010: 9.9% 31 December 2010: 10.5%		Tier 1 ratio 12.2% 30 June 2010: 11.5% 31 December 2010: 12.1%		Total capital ratio 14.9% 30 June 2010: 14.4% 31 December 2010: 15.2%

Percentage growth rates compare with figures at 30 June 2010 for income statement items and 31 December 2010 for balance sheet items.

Performance ratios (annualised)

Credit coverage ratios

Loan impairment charges to total operating income 11.8% 30 June 2010: 17.8% 31 December 2010: 16.1%		Loan impairment charges to average gross customer advances 1.0% 30 June 2010: 1.7% 31 December 2010: 1.4%		Total impairment allowances to impaired loans at period-end 72.2% 30 June 2010: 79.0% 31 December 2010: 71.6%

Return ratios

Return on average invested capital2 11.4% 30 June 2010: 9.4% 31 December 2010: 8.2%		Return on average ordinary shareholders' equity3 12.3% 30 June 2010: 10.4% 31 December 2010: 8.9%		Post-tax return on average total assets 0.7% 30 June 2010: 0.6% 31 December 2010: 0.5%		Pre-tax return on average risk-weighted assets 2.0% 30 June 2010: 2.0% 31 December 2010: 1.4%

Efficiency and revenue mix ratios

Cost efficiency ratio4 57.5% 30 June 2010: 50.9% 31 December 2010: 59.9%		Net interest income to total operating income 47.8% 30 June 2010: 48.6% 31 December 2010: 50.0%		Net fee income to total operating income 20.8% 30 June 2010: 20.9% 31 December 2010: 22.5%		Net trading income to total operating income 11.4% 30 June 2010: 8.7% 31 December 2010: 9.3%

Share information at the period-end

				Closing market price
US$0.50 ordinary shares in issue 17,818m 30 Jun 2010: 17,510m 31 Dec 2010: 17,686m		Market capitalisation US$177bn 30 Jun 2010: US$161bn 31 Dec 2010: US$180bn		London £6.18 30 Jun 2010: £6.15 31 Dec 2010: £6.51		Hong Kong HK$77.05 30 Jun 2010: HK$72.65 31 Dec 2010: HK$79.70		American Depositary Share5 US$49.62 30 Jun 2010: US$45.59 31 Dec 2010: US$51.04
				Total shareholder return6
				Over 1 year		Over 3 years		Over 5 years
To 30 June 2011 ..............................................				104.6		104.9		95.6
Benchmarks:
- FTSE 1007 ......................................................				124.9		118.4		122.6
- MSCI World8 ..................................................				122.3		127.9		132.6
- MSCI Banks8 ..................................................				111.0		103.2		77.5

For footnotes, see page 81.

 

END

 

 

IR URARRASAWAAR