Interim Report - 24 of 25

RNS Number : 7155J

HSBC Holdings PLC

10 August 2012

 



Shareholder information

1.. Directors' interests ...........................................	266		8 Interim Management Statement .......................	274
2.. Employee share plans .......................................	269		9 Final results ......................................................	274
3.. Notifiable interests in share capital ...................	272		10 Corporate governance ......................................	274
4.. Dealings in HSBC Holdings shares .....................	272		11 Going concern basis ..........................................	274
5.. First interim dividend for 2012 .........................	272		12 Telephone and online share dealing service ......	275
6.. Second interim dividend for 2012 ......................	273		13 Stock symbols ..................................................	275
7.. Proposed interim dividends for 2012 .................	273		14 Copies of Interim Report 2012 and shareholder enquiries and communications ..........................	275

1      Directors' interests

According to the register of Directors' interests maintained by HSBC Holdings pursuant to section 352 of the Securities and Futures Ordinance of Hong Kong, the Directors of HSBC Holdings at 30 June 2012 had the following interests, all beneficial unless otherwise stated, in the shares and loan capital of HSBC and its associated corporations:

Directors' interests - shares and loan capital

			At 30 June 2012
	At    1 January              2012		Beneficial           owner		Child      under 18     or spouse		Jointly              with        another          person		Trustee		Total      interests1
HSBC Holdings ordinary shares of US$0.50
J D Coombe ..................................	21,139		21,724		-		-		-		21,724
R A Fairhead ................................	21,300		-		-		21,300		-		21,300
D J Flint .......................................	272,861		312,948		-		-		36,0612		349,009
A A Flockhart ..............................	407,829		613,940		-		-		353,527		967,467
S T Gulliver ..................................	2,731,100		2,553,592		176,885		-		-		2,730,477
J W J Hughes-Hallett ....................	46,952		-		-		-		56,8702		56,870
W S H Laidlaw ..............................	31,872		31,298		-		-		1,4162		32,714
I J Mackay ...................................	133,648		238,813		-		-		-		238,813
Sir Simon Robertson .....................	176,709		9,206		-		-		167,7502		176,956
J L Thornton................................	10,250		-		10,2503		-		-		10,250
	US$		US$		US$		US$		US$		US$
Loan Capital - 6.5% Subordinated Notes 2036
L M L Cha ...................................	300,000		300,000		-		-		-		300,000

1  Details of executive Directors' other interests in HSBC Holdings ordinary shares arising from the HSBC Holdings savings-related share option plans, the HSBC Share Plan and HSBC Share Plan 2011 are set out on the following pages. At 30 June 2012, the aggregate interests under the Securities and Futures Ordinance of Hong Kong in HSBC Holdings ordinary shares of US$0.50, including interests arising through employee share plans, were: D J Flint - 558,686; A A Flockhart - 1,534,795; S T Gulliver - 5,106,458; and I J Mackay - 643,838. Each Director's total interests represent less than 0.03% of the shares in issue.

2  Non-beneficial.

3  Interest of spouse in 2,050 listed American Depositary Shares ('ADS'), which are categorised as equity derivatives under Part XV of the Securities and Futures Ordinance of Hong Kong. Each ADS represents five HSBC Holdings ordinary shares of US$0.50.

As a director of HSBC France, S T Gulliver has an interest as beneficial owner in one share of €5 in that company (representing less than 0.01% of the shares in issue), which he held throughout the period. He has waived his right to receive dividends on this share and has undertaken to transfer it to HSBC on ceasing to be a director of HSBC France.

J Faber has an interest as beneficial owner in 3,950 retail bonds and as non-beneficial owner in 1,170 retail bonds of RMB10,000 each issued by HSBC Bank plc. These bonds were acquired on 15 June 2012.

Savings-related share option plans, the HSBC Share Plan and the HSBC Share Plan 2011

HSBC Holdings savings-related share option plans

HSBC Holdings ordinary shares of US$0.50

	Date of             award		Exercise      price (£)						Held at          1 Jan           2012		Held at        30 Jun           2012
					Exercisable
					from1		until
D J Flint .........................................	25 Apr 2007		6.1760		1 Aug 2012		31 Jan 2013		2,650		2,650
D J Flint ........................................	24 Apr 2012		4.4621		1 Aug 2015		31 Jan 2016		-		2,016
A A Flockhart ...............................	29 Apr 2009		3.3116		1 Aug 2014		31 Jan 2015		4,529		4,529
			(US$)
I J Mackay.....................................	30 Apr 2008		11.8824		1 Aug 2011		31 Jan 2012		1,531		-2

The HSBC Holdings savings-related share option plans are all-employee share plans under which eligible HSBC employees may be granted options to acquire HSBC Holdings ordinary shares. An employee may make contributions of up to £250 (or equivalent) each month over a period of one, three or five years which may be used on the first, third or fifth anniversary of the commencement of the relevant savings contract, at the employee's election, to exercise the options. The plans help align the interests of employees with the creation of shareholder value. The options were awarded for nil consideration and are exercisable at a 20% discount to the average market value of the ordinary shares on the five business days immediately preceding the invitation date. There are no performance criteria conditional upon which the outstanding options are exercisable and there have been no variations to the terms and conditions since the awards were made. The market value per ordinary share at 30 June 2012 was £5.61. The highest and lowest market values per ordinary share during the period were £5.82 and £4.92. Market value is the mid-market price derived from the London Stock Exchange Daily Official List on the relevant date. Under the Securities and Futures Ordinance of Hong Kong, the options are categorised as unlisted physically settled equity derivatives.

1  May be advanced to an earlier date in certain circumstances, e.g. retirement.

2  Options lapsed on 31 January 2012 following the end of the exercise period.

Awards of Restricted Shares

HSBC Share Plan

HSBC Holdings ordinary shares of US$0.50

			Year in		Awards		Awards made during period				Awards vested during period				Awards
			which		held at										held at
	Date of		awards		1 Jan				Monetary				Monetary		30 Jun
	award		may vest		2012		Number		value		Number		value		20121
									£000				£000
D J Flint.................	1 Mar 2010		2011-20132		220,201		-		-		111,3403		617		113,243
	15 Mar 2011		2012-20142		133,280		-		-		44,5165		256		91,768
A A Flockhart4 ......	2 Mar 2009		2012		535,162		-		-		541,6516		3,028		-
	1 Mar 2010		2011-20132		212,927		-		-		107,6623		596		109,503
	15 Mar 2011		2012-20142		86,062		-		-		28,7455		165		59,256
S T Gulliver ...........	1 Mar 2010		2011-20132		943,723		-		-		477,1743		2,644		485,332
	15 Mar 2011		2012-20142		825,072		-		-		275,5755		1,585		568,093
I J Mackay .............	2 Mar 2009		2012		104,244		-		-		105,5086		590		-
	1 Mar 2010		2011-20132		41,263		-		-		20,8643		116		21,220
	15 Mar 2011		2012-20142		35,954		-		-		12,0085		69		24,757

Vesting of Restricted Share awards is normally subject to the Director remaining an employee on the vesting date. The vesting date may be advanced to an earlier date in certain circumstances, e.g. death. Under the Securities and Futures Ordinance of Hong Kong, interests in Restricted Share awards are categorised as the interests of a beneficial owner.

1  Includes additional shares arising from scrip dividends.

2  33% of the award vests on each of the first and second anniversaries of the date of the award, with the balance vesting on the third anniversary of the date of the award. In the case of the awards granted on 15 March 2011 the shares (net of tax) are subject to a six month retention period following each vesting date.

3  At the date of vesting, 27 February 2012, the market value per share was £5.54. The market value per share on the date of the award, 1 March 2010, was £6.82.

4  Retired as an employee on 30 April 2012. The vesting of the awards will continue in line with the vesting schedule set at the date of grant and will also continue to accrue scrip dividends.

5  At the date of vesting, 15 March 2012, the market value per share was £5.75. The market value per share on the date of the award, 15 March 2011, was £6.46.

6  At the date of vesting, 5 March 2012, the market value per share was £5.59. The market value per share on the date of the award, 2 March 2009, was £3.48.

Awards of Restricted Shares

HSBC Share Plan 2011

HSBC Holdings ordinary shares of US$0.50

			Year in		Awards		Awards made during period				Awards vested during period				Awards
			which		held at										held at
	Date of		awards		1 Jan				Monetary				Monetary		30 Jun
	award		may vest		2012		Number		value		Number		value		20121
									£000				£000
A A Flockhart2 ......	28 Feb 20123		2012		-		68,941		385		68,941		385		-
	12 Mar 20124		2013-2015		-		207,546		1,154		-		-		210,732
	12 Mar 20125		2012		-		69,182		385		69,1825		385		-
S T Gulliver ...........	28 Feb 20123		2012		-		77,167		431		77,167		431		-
	12 Mar 20124		2013-2015		-		232,312		1,292		-		-		235,878
	12 Mar 20125		2012		-		77,437		431		77,4375		431		-
I J Mackay .............	28 Feb 20123		2012		-		38,854		217		38,854		217		-
	12 Mar 20124		2013-2015		-		116,968		650		-		-		118,764
	12 Mar 20125		2012		-		38,989		217		38,9895		217		-

Vesting of Restricted Share awards is normally subject to the Director remaining an employee on the vesting date. The vesting date may be advanced to an earlier date in certain circumstances, e.g. death. Under the Securities and Futures Ordinance of Hong Kong, interests in Restricted Share awards are categorised as the interests of a beneficial owner.

1  Includes additional shares arising from scrip dividends.

2  Retired as an employee on 30 April 2012. The vesting of the awards will continue in line with the vesting schedule set at the date of grant and will also continue to accrue scrip dividends.

3  The non-deferred award vested immediately on 28 February 2012. At the date of vesting the market value per share was £5.59.

4  At the date of the award, 12 March 2012, the market value per share was £5.56. 50% of these deferred awards are subject to a six month retention period upon vesting. 33% of the awards vest on each of the first and second anniversaries of the date of the awards, with the balance vesting on the third anniversary of the date of the award.

5  The non-deferred award vested immediately on 12 March 2012 and the shares (net of tax) are subject to a six month retention period. At the date of vesting, the market value per share was £5.56.

Conditional awards under the Group Performance Share Plan ('GPSP')

HSBC Share Plan 2011

HSBC Holdings ordinary shares of US$0.50

	Date of             award		Year in             which            awards        may vest		Awards          held at            1 Jan              2012		Awards made during period1				Awards          held at          30 Jun              20122
									Monetary
							Number		value
									£000
A A Flockhart3 .........................	23 Jun 2011	2011	2016		178,373		-		-		183,308
S T Gulliver ..............................	23 Jun 2011	2011	2016		392,119		-		-		402,968
	12 Mar 2012	2011	2017		-		673,370		3,744		683,710
I J Mackay ...............................	23 Jun 2011	2011	2016		109,626		-		-		112,659
	12 Mar 2012	2011	2017		-		125,695		699		127,625

The GPSP is the long-term incentive plan under the HSBC Share Plan 2011. Vesting of GPSP awards is normally subject to the Director remaining an employee on the vesting date. Any shares (net of tax) which the Director becomes entitled to on the vesting date are subject to a retention requirement until cessation of employment. Under the Securities and Futures Ordinance of Hong Kong, interests in awards are categorised as the interests of a beneficial owner.

1  On the date of award, 12 March 2012, the market value per share was £5.56.

2  Includes additional shares arising from scrip dividends.

3  Retired as an employee on 30 April 2012. The vesting of the awards will continue in line with the vesting schedule set at the date of grant and will also continue to accrue scrip dividends.

No Directors held any short position as defined in the Securities and Futures Ordinance of Hong Kong in the shares and loan capital of HSBC Holdings and its associated corporations. Save as stated above, none of the Directors had an interest in any shares or debentures of HSBC Holdings or any associated corporation at the beginning or at the end of the period, and none of the Directors or members of their immediate families were awarded or exercised any right to subscribe for any shares or debentures in any HSBC corporation during the period. Since the end of the period, the interests of each of the following Directors have increased by the number of HSBC Holdings ordinary shares shown against their name:

Increase in Directors' interests since 30 June 2012

HSBC Holdings ordinary shares of US$0.50

	Beneficial               owner		Trustee
J D Coombe ............................................................................................................................	2381		-
D J Flint ..................................................................................................................................	2,3362		3963
A A Flockhart .........................................................................................................................	12,9074		3,8771
S T Gulliver .............................................................................................................................	26,0555		-
W S H Laidlaw ........................................................................................................................	3431		-
I J Mackay ..............................................................................................................................	4,4455		-
Sir Simon Robertson ................................................................................................................	1001		-

1  Scrip dividend.

2  Comprises the automatic reinvestment of dividend income by an Individual Savings Account manager (60 shares), the automatic reinvestment of dividend income on shares held in the HSBC Holdings UK Share Incentive Plan (29 shares) and scrip dividends on Restricted Share awards granted under the HSBC Share Plan (2,247 shares).

3  Non-beneficial.

4  Comprises scrip dividend on ordinary shares (6,733 shares) and on Restricted Share awards and GPSP awards granted under the HSBC Share Plan and HSBC Share Plan 2011 (6,174 shares).

5  Comprises scrip dividend on Restricted Share awards and GPSP awards granted under the HSBC Share Plan and HSBC Share Plan 2011.

2     Employee share plans

To help align the interests of employees with those of shareholders, share options and discretionary awards of shares are granted under HSBC share plans. The following are particulars of outstanding options, including those held by employees working under employment contracts that are regarded as 'continuous contracts' for the purposes of the Hong Kong Employment Ordinance. The options were granted for nil consideration. No options have been granted to substantial shareholders, suppliers of goods or services, or in excess of the individual limit for each share plan. No options were cancelled by HSBC during the period. No discretionary share options have been granted under the HSBC Share Plan 2011, which replaced the HSBC Share Plan on 27 May 2011.

A summary for each plan of the total number of the options which were awarded, exercised or lapsed during the period is shown in the tables below. Further details required to be disclosed pursuant to Chapter 17 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited are available on our website at www.hsbc.com by selecting 'Investor Relations', then 'Governance' then 'Share Plans', and on the website of The Stock Exchange of Hong Kong Limited at www.hkex.com.hk or can be obtained upon request from the Group Company Secretary, 8 Canada Square, London E14 5HQ. Particulars of options held by Directors of HSBC Holdings are set out on page 267.

All-employee share option plans

The HSBC Holdings Savings-Related Share Option Plan and the HSBC Holdings Savings-Related Share Option Plan: International are all-employee share plans under which eligible employees (those employed within the Group on the first working day of the year of grant) may be granted options to acquire HSBC Holdings ordinary shares. Employees may make contributions of up to £250 (or equivalent) each month over a period of one, three or five years which may be used on the first, third or fifth anniversary of the commencement of the relevant savings contract, at the employee's election, to exercise the options. Alternatively, the employee may elect to have the savings, plus (where applicable) any interest or bonus, repaid in cash. One-year options are only available under the HSBC Holdings Savings-Related Share Option Plan: International and will be exercisable within three months following the first anniversary of the commencement of the savings contract. Three or five-year options are exercisable within six months following the third or fifth anniversary of the commencement of the relevant savings contract. In the case of redundancy, retirement on grounds of injury or ill health, retirement, the transfer of the employing business to another party, or a change of control of the employing company, options may be exercised before completion of the relevant savings contract.

Under the HSBC Holdings Savings-Related Share Option Plan and the HSBC Holdings Savings-Related Share Option Plan: International the option exercise price is determined by reference to the average market value of the ordinary shares on the five business days immediately preceding the invitation date, then applying a discount of 20% (except for the one-year options awarded under the US sub-plan where a 15% discount is applied). Where applicable, the US dollar, Hong Kong dollar and euro exercise prices are converted from the sterling exercise price at the applicable exchange rate on the working day preceding the relevant invitation date. The exercise period of the options awarded under all-employee share plans may be advanced to an earlier date in certain circumstances, for example on retirement, and may be extended in certain circumstances, for example on the death of a participant, the executors may exercise the option up to six months beyond the normal exercise period. The closing price per HSBC Holdings ordinary share on 23 April 2012, the day before options were granted in 2012 was £5.46. The all-employee share option plans will terminate on 27 May 2015 unless the Directors resolve to terminate the plans at an earlier date.

HSBC Holdings All-employee Share Option Plans

												HSBC Holdings ordinary shares of US$0.50
Dates of award				Exercise price				Exercisable				At		Awarded		Exercised		Lapsed		At
from		to		from		to		from		to		1 Jan 2012		in period		in period		in period		30 Jun 2012
Savings-Related Share Option Plan1
26 Apr      2006		24 Apr      2012		(£) 3.3116		(£) 6.6870		1 Aug     2011		31 Jan     2018		68,499,109		20,726,298		806,439		5,851,323		82,567,645
Savings-Related Share Option Plan: International2
26 Apr      2006		24 Apr      2012		(£) 3.3116		(£) 6.6870		1 Aug     2011		31 Jan     2018		26,615,253		8,549,570		433,294		3,182,321		31,549,208
26 Apr      2006		24 Apr      2012		(US$) 4.8876	(US$) 12.0958			1 Aug     2011		31 Jan     2018		9,752,066		2,666,374		196,972		1,517,073		10,704,395
26 Apr      2006		24 Apr      2012		(€) 3.6361		(€) 9.5912		1 Aug     2011		31 Jan     2018		3,176,265		827,832		25,570		262,831		3,715,696
26 Apr      2006		24 Apr      2012	(HK$) 37.8797		(HK$) 94.5057			1 Aug     2011		31 Jan     2018		45,422,511		12,098,312		885,563		2,495,459		54,139,801

1  The weighted average closing price of the shares immediately before the dates on which options were exercised was £5.44.

2  The weighted average closing price of the shares immediately before the dates on which options were exercised was £5.46.

The aggregate fair value of options granted in the period under the HSBC Savings-Related Share Option Plan was US$34m.

The aggregate fair value of options granted in the period under the HSBC Savings-Related Share Option Plan: International was US$39m.

The fair values of share options are calculated at the date of grant of the option using a Black-Scholes model.

The fair values of share awards are based on the share price at the date of grant. The fair values of share options are inherently subjective and uncertain due to the assumptions made and the limitations of the model used. The significant weighted average assumptions used to estimate the fair value of the options granted in 2012 were as follows:

	1-year          savings-related share option     plan		3-year          savings-related share option   plans		5-year          savings-related share option   plans
Risk-free interest rate (%)1 .........................................................................	0.4		0.6		1.2
Expected life (years) ..................................................................................	1		3		5
Expected volatility (%)2 .............................................................................	25		25		25
Share price at grant date (£) .......................................................................	5.535		5.535		5.535

1  The risk-free interest rate was determined from the UK gilts yield curve. A similar yield curve was used for the HSBC Holdings Savings-Related Share Option Plan: International.

2  Expected volatility is estimated by considering both historic average HSBC share price volatility and implied volatility derived from options over HSBC shares of similar maturity to those of the employee options.

The expected US dollar denominated dividend yield was determined to be 5% per annum, in line with consensus analyst forecasts.

Discretionary Share Option Plans

There have been no awards of discretionary share options under employee share plans since 30 September 2005.

HSBC Holdings ordinary shares of US$0.50

Dates of award

Exercise price

Exercisable

At

Exercised

Lapsed

At

from

to

from

to

from

to

1 Jan 2012

in period

in period

30 Jun 2012

HSBC Holdings Group Share Option Plan1

7 May     2002

20 Apr      2005

(£) 6.0216

(£)   7.9606

7 May    2005

20 Apr     2015

120,797,419

-

30,668,958

90,128,461

HSBC Share Plan

30 Sep     2005

(£) 7.9911

30 Sep     2008

30 Sep      2015

86,046

-

-

86,046

1  The HSBC Holdings Group Share Option Plan expired on 26 May 2005. No options have been granted under the Plan since that date.

Subsidiary company share plans

HSBC France

When it was acquired in 2000, HSBC France and certain of its subsidiary companies operated employee share option plans under which options could be granted over their respective shares. All holders of options to acquire shares of HSBC France are obliged to exchange the HSBC France shares they receive on exercise of these options for HSBC Holdings' shares.

Details of options to acquire shares in HSBC France are set out in the following table. No further options will be granted under share plans of HSBC France.

HSBC France

HSBC France shares of €5

Date of award

Exercise price

Exercisable

At

Exercised

Lapsed

At

from

to

1 Jan 2012

in period

in period

30 Jun 20121

1 Oct       2002

(€) 142.84

2 Oct       2005

1 Oct       2012

22,645

-

-

22,645

1  When exercised options over HSBC France shares will be exchanged for HSBC Holdings ordinary shares in the ratio of 13.499897 HSBC Holdings ordinary shares for each HSBC France share. At 30 June 2012, the CCF Employee Benefit Trust 2001 (Private Banking France) held 989,502 HSBC Holdings ordinary shares which may be exchanged for HSBC France shares arising from the exercise of these options.

HSBC Finance

Upon the acquisition of HSBC Finance in 2003, all outstanding options over and rights to receive HSBC Finance common shares were converted into options over and rights to receive HSBC Holdings ordinary shares in the same ratio as the share exchange offer for the acquisition of HSBC Finance (2.675 HSBC Holdings ordinary shares for each HSBC Finance common share). The exercise price payable for each option was adjusted using the same exchange ratio.

Details of options to acquire shares in HSBC Holdings under share plans of HSBC Finance are set out in the following table. No further options will be granted under share plans of HSBC Finance.

HSBC Finance: 1996 Long-Term Executive Incentive Compensation Plan

HSBC Holdings ordinary shares of US$0.50

Date of award

Exercise price

Exercisable

At

Exercised

Lapsed

At

from

to

1 Jan 2012

in period

in period

30 Jun 20121

20 Nov 2002

(US$)  9.29

20 Nov       2003

20 Nov       2012

2,429,538

-

-

2,429,538

1  At 30 June 2012, the HSBC (Household) Employee Benefit Trust 2003 held 2,335,315 HSBC Holdings ordinary shares and 1,455 American Depositary Shares, each of which represents five HSBC Holdings ordinary shares, which may be used to satisfy the exercise of employee share options.

HSBC Bank Bermuda

Upon the acquisition of HSBC Bank Bermuda Limited ('HSBC Bank Bermuda') in 2004, all outstanding options over its shares were converted into options to acquire HSBC Holdings ordinary shares using an exchange ratio calculated by dividing US$40 (being the consideration paid for each HSBC Bank Bermuda share) by the average price of HSBC Holdings ordinary shares over the five day period to the completion of the acquisition. The exercise price payable for each option was adjusted using the same ratio.

Details of options to acquire shares in HSBC Holdings under the share plans of HSBC Bank Bermuda are set out in the following table. No further options will be granted under the share plans of HSBC Bank Bermuda.

HSBC Bank Bermuda

HSBC Holdings ordinary shares of US$0.50

Dates of award

Exercise price

Exercisable

At

Exercised

Lapsed

At

from

to

from

to

from

to

1 Jan 2012

in period

in period

30 Jun 20121

Share Option Plan 2000

30 Jan       2002

21 Apr       2003

(US$)     9.32

(US$)   14.02

30 Jan      2003

21 Apr      2013

1,014,026

-

850,033

163,993

Directors' Share Option Plan

3 Apr       2002

(US$)   13.95

3 Apr      2003

3 Apr      2012

16,881

-

16,881

-

1  At 30 June 2012, the HSBC (Bank of Bermuda) Employee Benefit Trust 2004 held 2,108,830 HSBC Holdings ordinary shares which may be used to satisfy the exercise of employee share options.

 

3     Notifiable interests in share capital

At 30 June 2012, we had received the following disclosures (which have not subsequently changed) of major holdings of voting rights pursuant to the requirements of Rule 5 of the FSA Disclosure Rules and Transparency Rules:

·     Legal & General Group Plc gave notice on 9 March 2010 that it had a direct interest on 8 March 2010 in 696,851,431 HSBC Holdings ordinary shares, representing 3.99% of the total voting rights at that date; and

·     BlackRock, Inc. gave notice on 9 December 2009 that on 7 December 2009 it had the following: an indirect interest in HSBC Holdings ordinary shares of 1,142,439,457; qualifying financial instruments with 705,100 voting rights that may be acquired if the instruments are exercised or converted; and financial instruments with similar economic effect to qualifying financial instruments which refer to 234,880 voting rights, each representing 6.56%, 0.0041% and 0.0013%, respectively, of the total voting rights at that date.

At 30 June 2012, according to the register maintained by HSBC Holdings pursuant to section 336 of the Securities and Futures Ordinance of Hong Kong:

·      JPMorgan Chase & Co. gave notice on 30 May 2012 that on 22 May 2012 it had the following interests in HSBC Holdings ordinary shares: a long position of 1,223,415,421 shares; a short position of 62,908,403 shares; and a lending pool of 964,993,499 shares, each representing 6.74%, 0.35% and 5.31%, respectively, of the ordinary shares in issue at that date; and

·      BlackRock, Inc. gave notice on 14 March 2012 that on 8 March 2012 it had the following interests in HSBC Holdings ordinary shares: a long position of 1,070,691,325 shares and a short position of 16,175,072 shares, each representing 5.94% and 0.09%, respectively, of the ordinary shares in issue at that date.

4     Dealings in HSBC Holdings shares

Except for dealings as intermediaries by HSBC Bank plc and The Hongkong and Shanghai Banking Corporation Limited, which are members of a European Economic Area exchange, neither HSBC Holdings nor any subsidiary undertaking has purchased, sold or redeemed any securities of HSBC Holdings during the six months to 30 June 2012.

5     First interim dividend for 2012

The first interim dividend for 2012 of US$0.09 per ordinary share was paid on 5 July 2012.

6     Second interim dividend for 2012

The Directors have declared a second interim dividend for 2012 of US$0.09 per ordinary share. The second interim dividend will be payable on 4 October 2012 to holders of record on 16 August 2012 on the Hong Kong Overseas Branch Register and 17 August 2012 on the Principal Register in the United Kingdom or the Bermuda Overseas Branch Register. The dividend will be payable in cash, US dollars, sterling or Hong Kong dollars, or a combination of these currencies, at the forward exchange rates quoted by HSBC Bank plc in London at or about 11.00am on 24 September 2012, and with a scrip dividend alternative. Particulars of these arrangements will be sent to shareholders on or about 29 August 2012 and elections must be received by 19 September 2012.

The dividend will be payable on ordinary shares held through Euroclear France, the settlement and central depositary system for Euronext Paris, on 4 October 2012 to the holders of record on 17 August 2012. The dividend will be payable by Euroclear France in cash, in euros, at the forward exchange rate quoted by HSBC France on 24 September 2012, or as a scrip dividend. Particulars of these arrangements will be announced through Euronext Paris on 13 August and 22 August 2012.

The dividend will be payable on ADSs, each of which represents five ordinary shares, on 4 October 2012 to holders of record on 17 August 2012. The dividend of US$0.45 per ADS will be payable by the depositary in cash, in US dollars or as a scrip dividend of new ADSs. Elections must be received by the depositary on or before 13 September 2012. Alternatively, the cash dividend may be invested in additional ADSs for participants in the dividend reinvestment plan operated by the depositary.

Ordinary shares will be quoted ex-dividend in London, Hong Kong, Paris and Bermuda on 15 August 2012. The ADSs will be quoted ex-dividend in New York on 15 August 2012.

Any person who has acquired ordinary shares registered on the Hong Kong Overseas Branch Register but who has not lodged the share transfer with the Hong Kong Branch Registrar should do so before 4.00pm on 16 August 2012 in order to receive the dividend.

Any person who has acquired ordinary shares registered on the Principal Register in the United Kingdom or on the Bermuda Overseas Branch Register but who has not lodged the share transfer with the Principal Registrar or the Bermuda Overseas Branch Registrar respectively, should do so before 4.00pm on 17 August 2012 in order to receive the dividend.

Removals of ordinary shares may not be made to or from the Hong Kong Overseas Branch Register on 17 August 2012. Accordingly any person who wishes to remove ordinary shares to the Hong Kong Overseas Branch Register must lodge the removal request with the Principal Registrar in the United Kingdom or the Bermuda Branch Registrar by 4.00pm on 15 August 2012; any person who wishes to remove ordinary shares from the Hong Kong Overseas Branch Register must lodge the removal request with the Hong Kong Branch Registrar by 4.00pm on 16 August 2012.

Transfers of ADSs must be lodged with the depositary by 12 noon on 17 August 2012 in order to receive the dividend.

7     Proposed interim dividends for 2012

The Board has adopted a policy of paying quarterly dividends on the ordinary shares. Under this policy it is intended to have a pattern of three equal interim dividends with a variable fourth interim dividend. The proposed timetables for dividends payable on the ordinary shares in respect of 2012 that have not yet been declared are:

	Third interim     dividend for 2012		Fourth interim     dividend for 2012
Announcement ..................................................................................................	9 October 2012		4 March 2013
Shares quoted ex-dividend in London, Hong Kong, Paris and Bermuda ...............	24 October 2012		20 March 2013
ADSs quoted ex-dividend in New York ...............................................................	24 October 2012		20 March 2013
Record date in Hong Kong .................................................................................	25 October 2012		21 March 2013
Record date in London, New York, Paris and Bermuda1 .....................................	26 October 2012		22 March 2013
Payment date ....................................................................................................	12 December 2012		8 May 2013

1  Removals to and from the Overseas Branch Register of shareholders in Hong Kong will not be permitted on these dates.

8     Interim Management Statement

An Interim Management Statement is expected to be issued on 5 November 2012.

9     Final results

The results for the year to 31 December 2012 are expected to be announced on Monday 4 March 2013.

10   Corporate governance

HSBC is committed to high standards of corporate governance.

Throughout the six months to 30 June 2012, HSBC Holdings has complied with the applicable code provisions of The UK Corporate Governance Code issued by the Financial Reporting Council. HSBC Holdings also complied with the Code on Corporate Governance Practices in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ('Hong Kong Code'), from 1 January 2012 until its amendment on 1 April 2012 and with the amended Hong Kong Code from 1 April 2012 to 30 June 2012, save that the Group Risk Committee (all the members of which are independent non-executive Directors), which was established in accordance with the recommendations of the Report on Governance in UK banks and other financial industry entities, is responsible for the oversight of internal control (other than internal controls over financial reporting) and risk management systems (Hong Kong Code provision C.3.3 paragraphs (f), (g) and (h)). If there were no Group Risk Committee, these matters would be the responsibility of the Group Audit Committee. At its meeting on 24 May 2012, the Board adopted Terms of Reference and approved a shareholder communication policy as required under the amended Hong Kong Code.

The Board of HSBC Holdings has adopted a code of conduct for transactions in HSBC Group securities by Directors. The code of conduct complies with The Model Code in the Listing Rules of the Financial Services Authority and with The Model Code for Securities Transactions by Directors of Listed Issuers ('Hong Kong Model Code') set out in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, save that The Stock Exchange of Hong Kong Limited has granted certain waivers from strict compliance with the Hong Kong Model Code. The waivers granted by The Stock Exchange of Hong Kong Limited primarily take into account accepted practices in the UK, particularly in respect of employee share plans. Following specific enquiry, each Director has confirmed that he or she has complied with the code of conduct for transactions in HSBC Group securities throughout the period, save that, on 15 June 2012, an independent non-executive Director acquired an interest as beneficial owner in 3,950 retail bonds and as non-beneficial owner in 1,170 retail bonds of RMB10,000 each issued by HSBC Bank plc before giving notification and receiving written clearance to deal. All Directors have since been reminded of their obligations under the code of conduct for transactions in HSBC Group securities.

There have been no material changes to the information disclosed in the Annual Report and Accounts 2011 in respect of the number and remuneration of employees, remuneration policies, bonus and share option plans and training schemes.

The biographies of Directors on pages 205 to 210 include changes during 2012 and the updated information required pursuant to rule 13.51B (1) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

11   Going concern basis

The financial statements are prepared on the going concern basis, as the Directors are satisfied that the Group has the resources to continue in business for the foreseeable future. In making this assessment, the Directors have considered a wide range of information relating to present and future conditions, including projections of profitability, cash flows and capital resources. Further information relevant to the assessment is provided elsewhere in this Interim Report 2012.

In particular, HSBC's principal activities, business and operating models, strategic direction and top and emerging risks are addressed in the 'Overview' section; a financial summary, including a review of the consolidated income statement and consolidated balance sheet, is provided in the 'Interim Management Report' section; HSBC's objectives, policies and processes for managing credit, liquidity and market risk are described in the 'Risk' section; and HSBC's approach to capital management and allocation is described in the 'Capital' section.

12   Telephone and online share dealing service

For shareholders on the Principal Register who are resident in the UK, Channel Islands or Isle of Man with a UK, Channel Islands or Isle of Man postal address, and who hold an HSBC Bank personal current account, the HSBC InvestDirect share dealing service is available for buying and selling HSBC Holdings ordinary shares. Details are available from: HSBC InvestDirect, PO Box 1683, Frobisher House, Nelson Gate, Commercial Road, Southampton, SO15 9DG, UK telephone : [phone], overseas telephone: + 44 (0) 1226 261090, web: www.hsbc.co.uk/shares.

13   Stock symbols

HSBC Holdings plc ordinary shares of US$0.50 trade under the following stock symbols:

London Stock Exchange                                HSBA

Hong Kong Stock Exchange                        5

New York Stock Exchange (ADS)                HBC

Euronext Paris                                                 HSB

Bermuda Stock Exchange                              HSBC

14   Copies of the Interim Report 2012 and shareholder enquiries and communications

Further copies of the Interim Report 2012 may be obtained from Global Communications, HSBC Holdings plc, 8 Canada Square, London E14 5HQ, United Kingdom; from Communications (Asia), The Hongkong and Shanghai Banking Corporation Limited, 1 Queen's Road Central, Hong Kong; or from Employee Communications, HSBC - North America, 26525 North Riverwoods Boulevard, Mettawa, Illinois 60045, USA. The Interim Report 2012 may also be downloaded from the HSBC website, www.hsbc.com.

Shareholders may at any time choose to receive corporate communications in printed form or to receive a notification of their availability on HSBC's website. To receive future notifications of the availability of a corporate communication on HSBC's website by email, or revoke or amend an instruction to receive such notifications by email, go to www.hsbc.com/ecomms. If you provide an email address to receive electronic communications from HSBC, we will also send notifications of your dividend entitlements by email. If you received a notification of the availability of this document on HSBC's website and would like to receive a printed copy, or if you would like to receive future corporate communications in printed form, please write or send an email to the appropriate Registrars at the address given below. Printed copies will be provided without charge.

Any enquiries relating to your shareholdings on the share register, for example transfers of shares, change of name or address, lost share certificates or dividend cheques, should be sent to the Registrars at the address given below. The Registrars offer an online facility, Investor Centre, which enables shareholders to manage their shareholding electronically.

Principal Register	Hong Kong Overseas Branch Register	Bermuda Overseas Branch Register
Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS99 6ZZ United Kingdom Telephone: [phone] Email via website: www.investorcentre.co.uk/contactus Investor Centre: www.computershare.com/investor/uk	Computershare Hong Kong Investor Services Limited Rooms 1712-1716, 17th Floor Hopewell Centre 183 Queen's Road East Hong Kong Telephone: [phone] Email: [e-mail] Investor Centre: www.computershare.com/hk/investors	Investor Relations Team HSBC Bank Bermuda Limited 6 Front Street Hamilton HM 11 Bermuda Telephone: [phone] Email: [e-mail] Investor Centre: www.computershare.com/investor/bm

Any enquiries relating to ADSs should be sent to the depositary at:

The Bank of New York Mellon PO Box 358516 Pittsburgh PA 15252-8516 USA

Telephone (US): [phone] Telephone (international): 201 680 6825 Email: [e-mail] Website: www.bnymellon.com/shareowner

Any enquiries relating to shares held through Euroclear France, the settlement and central depositary system for Euronext Paris, should be sent to the paying agent:

HSBC France

103 avenue des Champs Elysées

75419 Paris Cedex 08

France

Telephone: [phone]

Email: [e-mail]

Website: www.hsbc.fr

A Chinese translation of this and future documents may be obtained on request from the Registrars. Please also contact the Registrars if you have received a Chinese translation of this document and do not wish to receive such translations in the future.

Persons whose shares are held on their behalf by another person may have been nominated to receive communications from HSBC pursuant to section 146 of the UK Companies Act 2006 ('nominated person'). The main point of contact for a nominated person remains the registered shareholder (for example your stockbroker, investment manager, custodian or other person who manages the investment on your behalf). Any changes or queries relating to a nominated person's personal details and holding (including any administration thereof) must continue to be directed to the registered shareholder and not HSBC's Registrars. The only exception is where HSBC, in exercising one of its powers under the UK Companies Act 2006, writes to a nominated person directly for a response.

Cautionary statement regarding forward-looking statements

This Interim Report 2012 contains certain forward-looking statements with respect to the financial condition, results of operations and business of HSBC. These forward-looking statements represent HSBC's expectations or beliefs concerning future events and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ, in some instances materially, from those expressed or implied in such statements. For example, certain of the market risk disclosures, some of which are only estimates and, therefore, could be materially different from actual results, are dependent on key model characteristics and assumptions and are subject to various limitations. Certain statements that are not historical facts, such as those that include the words 'potential', 'value at risk', 'expects', 'anticipates', 'objective', 'intends', 'seeks', 'plans', 'believes', 'estimates', and similar expressions or variations on such expressions may be considered 'forward-looking statements'.

Written and/or oral forward-looking statements may also be made in the periodic reports to the US Securities and Exchange Commission, summary financial statements to shareholders, proxy statements, offering circulars and prospectuses, press releases and other written materials and in oral statements made by HSBC's Directors, officers or employees to third parties, including financial analysts.

Forward-looking statements involve inherent risks and uncertainties. Readers are cautioned that a number of factors could cause actual results to differ, in some instances materially, from those anticipated or implied in any forward-looking statement. Forward-looking statements speak only as of the date they are made, and it should not be assumed that they have been revised or updated in the light of new information or future events. Past performance cannot be relied on as a guide to future performance. Trends and factors that are expected to affect HSBC's results of operations are described in the 'Interim Management Report'. A more detailed cautionary statement is given on page 422 of the Annual Report and Accounts 2011.

 

 

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