Interim Report - 5 of 24

RNS Number : 1993X

HSBC Holdings PLC

26 August 2015

 



Summary	33
Retail Banking and Wealth Management	34
Commercial Banking	35
Global Banking and Markets	36
Global Private Banking	37
Other	38

Summary

HSBC reviews operating activity on a number of bases, including by geographical region and by global business.

We present global businesses followed by geographical regions because certain strategic themes, business initiatives and trends affect more than one geographical region.

Basis of preparation The results of global businesses are presented in accordance with the accounting policies used in the preparation of HSBC's consolidated financial statements. Our operations are closely integrated and, accordingly, the presentation of global business data includes internal allocations of certain items of income and expense. These allocations include the costs of some support services and global functions to the extent that they can be meaningfully attributed to operational business lines. While such allocations have been made on a systematic and consistent basis, they necessarily involve a degree of subjectivity. Those costs which are not allocated to global businesses are included in 'Other'. Where relevant, income and expense amounts presented include the results of inter-segment funding as well as inter-company and inter-business line transactions. All such transactions are undertaken on arm's length terms. The expense of the UK bank levy is included in the Europe geographical region as we regard the levy as a cost of being headquartered in the UK. For the purposes of the segmentation by global businesses, the cost of the levy is included in 'Other'.

Profit/(loss) before tax

						Half-year to
		30 June 2015				30 June 2014				31 December 2014
		$m		%		$m		%		$m		%
Retail Banking and Wealth Management9		3,362		24.7		3,002		24.4		2,579		40.7
Commercial Banking9		4,523		33.2		4,814		39.0		4,000		63.1
Global Banking and Markets		4,754		34.9		5,033		40.8		856		13.5
Global Private Banking		180		1.3		364		2.9		262		4.1
Other13		809		5.9		(873)		(7.1)		(1,357)		(21.4)
		13,628		100.0		12,340		100.0		6,340		100.0

Total assets¹⁴

		At
		30 June 2015				30 June 2014				31 December 2014
		$m		%		$m		%		$m		%
Retail Banking and Wealth Management9		497,199		19.3		526,089		19.1		500,864		19.0
Commercial Banking9		378,641		14.7		375,014		13.6		370,958		14.1
Global Banking and Markets		1,790,461		69.6		2,043,767		74.2		1,839,644		69.8
Global Private Banking		85,740		3.3		99,379		3.6		88,342		3.4
Other		167,946		6.5		170,802		6.2		164,537		6.2
Intra-HSBC items		(348,274)		(13.4)		(461,458)		(16.7)		(330,206)		(12.5)
		2,571,713		100.0		2,753,593		100.0		2,634,139		100.0

Risk-weighted assets

		At
		30 June 2015				30 June 2014				31 December 2014
		$bn		%		$bn		%		$bn		%
Retail Banking and Wealth Management9		204.6		17.2		225.4		18.1		207.2		17.0
Commercial Banking9		439.6		36.8		422.5		33.8		430.3		35.3
Global Banking and Markets		491.0		41.1		537.3		43.0		516.1		42.3
Global Private Banking		21.1		1.8		22.1		1.8		20.8		1.7
Other		36.9		3.1		41.3		3.3		45.4		3.7
		1,193.2		100.0		1,248.6		100.0		1,219.8		100.0

For footnotes, see page 56.

Global Banking and Markets client-facing and BSM

The GB&M client-facing and BSM businesses measure (see page 36) excludes the effects of the legacy credit portfolio and income from associates. We believe that highlighting the client-facing and BSM businesses allows GB&M management to more clearly discuss the cause of material changes from period-to-period in the ongoing businesses and to assess the factors and trends in the businesses which are expected to have a material effect in future years.

Retail Banking and Wealth Management

RBWM provides banking and wealth management services for our personal customers to help them secure their future prosperity and realise their ambitions.
		Total        RBWM		US         run-off      portfolio		Principal       RBWM16
		$m		$m		$m
Half-year to 30 June 2015
Net interest income		8,054		536		7,518
Net fee income/(expense)		3,334		(2)		3,336
Other income		1,054		46		1,008
Net operating income15		12,442		580		11,862
LICs		(934)		(47)		(887)
Net operating income		11,508		533		10,975
Total operating expenses		(8,354)		(688)		(7,666)
Operating profit/(loss)		3,154		(155)		3,309
Income from associates		208		-		208
Profit/(loss) before tax		3,362		(155)		3,517
RoRWA		3.3%		(0.6)%		4.6%
Half-year to 30 June 20149
Net interest income		8,617		750		7,867
Net fee income/(expense)		3,377		(1)		3,378
Other income/(expense)		622		(149)		771
Net operating income15		12,616		600		12,016
LICs		(1,299)		(180)		(1,119)
Net operating income		11,317		420		10,897
Total operating expenses		(8,530)		(361)		(8,169)
Operating profit		2,787		59		2,728
Income from associates		215		-		215
Profit before tax		3,002		59		2,943
RoRWA		2.6%		0.2%		3.8%
Half-year to 31 December 20149
Net interest income		8,513		640		7,873
Net fee income/(expense)		3,459		(3)		3,462
Other income		561		100		461
Net operating income15		12,533		737		11,796
LICs		(637)		150		(787)
Net operating income		11,896		887		11,009
Total operating expenses		(9,500)		(377)		(9,123)
Operating profit		2,396		510		1,886
Income from associates		183		-		183
Profit before tax		2,579		510		2,069
RoRWA		2.4%		1.7%		2.7%

For footnotes, see page 56.

For details of significant items, see page 53.

Principal RBWM¹⁶ performance
Management view of adjusted revenue¹⁵

		Half-year to
		30 Jun		30 Jun		31 Dec
		2015		2014		2014
		$m		$m		$m
Current accounts, savings and deposits		2,815		2,766		2,845
Wealth Management products		3,605		3,008		2,879
- investment distribution		1,966		1,635		1,666
- life insurance manufacturing		1,080		866		681
- asset management		559		507		532
Personal lending		5,101		5,222		5,210
- mortgages		1,432		1,491		1,494
- credit cards		1,995		1,992		2,037
- other personal lending		1,674		1,739		1,679
Other		321		374		395
Net operating income15		11,842		11,370		11,329

For footnotes, see page 56.

Profit before tax ($m)

Revenue ($m)

Operating expenses ($m)

Commercial Banking

CMB offers a full range of financial services and tailored solutions to almost three million customers ranging from small and medium-sized enterprises to publicly quoted companies in around 55 countries.
		Half-year to
			30 Jun		30 Jun		31 Dec
			2015		20149		20149
			$m		$m		$m
Net interest income			4,892		4,994		5,164
Net fee income			2,168		2,327		2,243
Other income			474		502		518
Net operating income15			7,534		7,823		7,925
LICs			(511)		(488)		(1,070)
Net operating income			7,023		7,335		6,855
Total operating expenses			(3,321)		(3,327)		(3,654)
Operating profit			3,702		4,008		3,201
Income from associates			821		806		799
Profit before tax			4,523		4,814		4,000
RoRWA			2.1%		2.4%		1.9%

Management view of adjusted revenue¹⁵

		Half-year to
		30 Jun		30 Jun		31 Dec
		2015		20149		20149
		$m		$m		$m
Global Trade and Receivables Finance		1,219		1,214		1,266
Credit and Lending		2,982		2,747		2,925
Payments and Cash Management, current accounts and savings deposits		2,262		2,184		2,287
Markets products, Insurance and Investments and Other		1,071		1,069		996
Net operating income15		7,534		7,214		7,474

For footnotes, see page 56.

For details of significant items, see page 53.

Profit before tax ($m)

Revenue ($m)

Operating expenses ($m)

Global Banking and Markets

GB&M provides tailored financial solutions to major government, corporate and institutional clients worldwide.
		Total GB&M		Legacy		GB&M  client  facing and BSM
		$m		$m		$m
Half-year to 30 June 2015
Net interest income		3,629		114		3,515
Net fee income/(expense)		1,711		(6)		1,717
Net trading income/(expense)6		3,743		(1)		3,744
Other income/(expense)		1,178		(10)		1,188
Net operating income15		10,261		97		10,164
LICs		11		15		(4)
Net operating income		10,272		112		10,160
Total operating expenses		(5,790)		(41)		(5,749)
Operating profit		4,482		71		4,411
						-
Income from associates		272
Profit before tax		4,754
RoRWA		1.9%		0.4%		2.0%
Half-year to 30 June 2014
Net interest income/(expense)		3,602		(19)		3,621
Net fee income		1,939		4		1,935
Net trading income6		2,790		51		2,739
Other income		1,460		140		1,320
				176
Net operating income15		9,791		176		9,615
LICs		(49)		217		(266)
Net operating income		9,742		393		9,349
Total operating expenses		(4,958)		(86)		(4,872)
Operating profit		4,784		307		4,477
Income from associates		249
Profit before tax		5,033
RoRWA		2.0%		1.3%		2.1%
Half-year to 31 December 2014
Net interest income/(expense)		3,420		(153)		3,573
Net fee income/(expense)		1,621		(11)		1,632
Net trading income/(expense)6		3,071		(106)		3,177
Other income/(expense)		(125)		92		(217)
Net operating income/ (expense)15		7,987		(178)		8,165
LICs		(316)		132		(448)
Net operating income/ (expense)		7,671		(46)		7,717
Total operating expenses		(7,070)		(622)		(6,448)
Operating profit/(loss)		601		(668)		1,269
Income from associates		255
Profit/(loss) before tax		856
RoRWA		0.3%		(2.7)%		0.6%

For footnotes, see page 56.

For details of significant items, see page 53.

Total GB&M performance
Management view of adjusted revenue¹⁵

		Half-year to
		30 Jun             2015		30 Jun             2014		31 Dec             2014
		$m		$m		$m
Markets		4,372		3,557		2,261
- Legacy credit		97		161		(177)
- Credit		492		395		138
- Rates		1,006		1,027		395
- Foreign Exchange		1,670		1,343		1,411
- Equities		1,107		631		494
Capital Financing		1,881		1,922		1,891
Payments and Cash Management		899		851		849
Securities Services		865		792		814
Global Trade and Receivables Finance		370		359		353
Balance Sheet Management		1,588		1,369		1,508
Principal Investments		128		318		182
Other17		15		18		(83)
Net operating income15		10,118		9,186		7,775

For footnotes, see page 56.

Profit before tax ($m)

Revenue ($m)

Operating expenses ($m)

Global Private Banking

GPB serves high net worth individuals and families with complex and international financial needs within the Group's priority markets.
		Half-year to
		30 Jun		30 Jun		31 Dec
		2015		2014		2014
		$m		$m		$m
Net interest income		454		536		458
Net fee income		527		533		523
Other income/(expense)		196		161		166
Net operating income15		1,177		1,230		1,147
LICs		(5)		(6)		14
Net operating income		1,172		1,224		1,161
Total operating expenses		(1,001)		(868)		(910)
Operating profit		171		356		251
Income from associates		9		8		11
Profit before tax		180		364		262
RoRWA		1.8%		3.3%		2.4%

 

Client assets¹⁸

		Half-year to
		30 Jun             2015		30 Jun             2014		31 Dec             2014
		$bn		$bn		$bn
At beginning of period		365		382		384
Net new money		(1)		(3)		-
- of which: areas targeted for growth		7		5		9
Value change		9		6		2
Exchange and other		(3)		(1)		(21)
At end of period		370		384		365

For footnotes, see page 56.

For details of significant items, see page 53.

Profit before tax ($m)

Revenue ($m)

Operating expenses ($m)

Other¹³

'Other' contains the results of HSBC's holding company and financing operations, central support and functional costs with associated recoveries, unallocated investment activities, centrally held investment companies, certain property transactions and movements in fair value of own debt.
		Half-year to
		30 Jun		30 Jun		31 Dec
		2015		2014		2014
		$m		$m		$m
Net interest expense		(397)		(221)		(280)
Net fee income/(expense)		(15)		1		(66)
Net trading income/(expense)		(123)		(120)		28
- changes in fair value of long-term debt issued and related derivatives		1,324		438		70
- changes in other financial instruments designated at fair value		(661)		(719)		710
Net income/(expense) from financial instruments designated at fair value		663		(281)		780
Other income		4,559		3,279		3,245
Net operating income		4,687		2,658		3,707
Total operating expenses		(3,879)		(3,533)		(5,068)
Operating profit/(loss)		808		(875)		(1,361)
Income from associates		1		2		4
Profit/(loss) before tax		809		(873)		(1,357)

For footnotes, see page 56.

For details of significant items, see page 53.

Profit/(loss) before tax ($m)

Revenue ($m)

Operating expenses ($m)

 

END

 

 

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