Interim Report - 24 of 24

RNS Number : 2083X

HSBC Holdings PLC

26 August 2015

 



Abbreviations

Abbreviation	Brief description
1H14	First half of 2014
1H15	First half of 2015
A
ABS	Asset-backed security
ADS	American Depositary Share
AML	Anti-money laundering
ARM	Adjustable-rate mortgage
B
Basel Committee	Basel Committee on Banking Supervision
Basel III	Basel Committee's reforms to strengthen global capital and liquidity rules
BoCom	Bank of Communications Co., Limited, one of China's largest banks
BRRD	Bank Recovery and Resolution Directive (EU)
BSA	Bank Secrecy Act (US)
BSM	Balance Sheet Management
BVI	British Virgin Islands
C
CA$	Canadian dollars
CAPM	Capital asset pricing model
CCB	Capital conservation buffer
CCyB	Countercyclical capital buffer
CEA	Commodity Exchange Act (US)
CET1	Common equity tier 1 ratio
CMB	Commercial Banking, a global business
CML	Consumer and Mortgage Lending (US)
CRD	Capital Requirements Directive
CRS	Card and Retail Services
CVA	Credit valuation adjustment
D
DANY DPA	Two-year deferred prosecution agreement with the New York County District Attorney (US)
DoJ	Department of Justice (US)
DPA	Deferred prosecution agreement (US)
DPF	Discretionary participation feature of insurance and investment contracts
E
EBA	European Banking Authority
EU	European Union
Euribor	European Interbank Offered Rates
F
FCA	Financial Conduct Authority (UK)
FPC	Financial Policy Committee (UK)
FRB	Federal Reserve Board (US)
G
GB&M	Global Banking and Markets, a global business
GDP	Gross domestic product
GPB	Global Private Banking, a global business
Group	HSBC Holdings together with its subsidiary undertakings
G-SIB	Global systemically important bank
G-SII	Global systemically important institutions
H
HNAH	HSBC North America Holdings Inc.
Hong Kong	Hong Kong Special Administrative Region of the People's Republic of China
HSBC	HSBC Holdings together with its subsidiary undertakings
HSBC Bank USA	HSBC Bank USA, N.A., HSBC's retail bank in the US
HSBC Colombia	HSBC Bank (Colombia) S.A.
HSBC Finance	HSBC Finance Corporation, the US consumer finance company (formerly Household International, Inc.)
HSBC France	HSBC's French banking subsidiary, formerly CCF S.A.
HSBC Holdings	HSBC Holdings plc, the parent company of HSBC
HSBC USA	The sub-group, HSBC USA Inc and HSBC Bank USA, consolidated for liquidity purposes
HSI	HSBC Securities (USA) Inc.
HSSL	HSBC Securities Services (Luxembourg)
HTIE	HSBC Institutional Trust Services (Ireland) Limited

Abbreviation	Brief description
I
IAS	International Accounting Standards
IASB	International Accounting Standards Board
IFRSs	International Financial Reporting Standards
Industrial Bank	Industrial Bank Co. Limited, a national joint-stock bank in mainland China in which Hang Seng Bank Limited has a shareholding
Investor Update	The Investor Update in June 2015
IRB	Internal ratings-based
ISDA	International Swaps and Derivatives Association
L
LCR	Liquidity coverage ratio
LFRF	Liquidity and funding risk management framework
LGD	Loss given default
Libor	London Interbank Offered Rate
LICs	Loan impairment charge and other credit risk provisions
LTV	Loan to value
M
Madoff Securities	Bernard L Madoff Investment Securities LLC
Mainland China	People's Republic of China excluding Hong Kong and Macau
MBS	US mortgage-backed security
MENA	Middle East and North Africa
MREL	EU minimum requirements for own funds and eligible liabilities
N
NII	Net interest income
NSFR	Net stable funding ratio
O
OCC	Office of the Comptroller of the Currency (US)
ORMF	Operational risk management framework
P
PBT	Profit before tax
PPI	Payment protection insurance product
PRA	Prudential Regulation Authority (UK)
Premier	HSBC Premier, HSBC's premium personal global banking service
PVIF	Present value of in-force long-term insurance business and long-term investment contracts with DPF
Q
QIS	Quantitative impact study
R
RBWM	Retail Banking and Wealth Management, a global business
Repo	Sale and repurchase transaction
Reverse repo	Security purchased under commitments to sell
RMB	Renminbi
RMBS	Residential mortgage-backed securities
RoRWA	Return on average risk-weighted assets
RTS	Regulatory technical standards
RWA	Risk-weighted assets
S
ServCo group	Separately incorporated group of service companies planned in response to UK ring-fencing proposals
SRB	Systematic risk buffer
T
TLAC	Total loss absorbing capacity
U
UAE	United Arab Emirates
UK	United Kingdom
US	United States of America
US DPA	Five-year deferred prosecution agreement with the Department of Justice and others (US)
V
VaR	Value at risk
VIU	Value in use

Glossary

Terminology used in this Interim Report is consistent with that used in our Annual Report and Accounts 2014, where a glossary of terms can be found.

Index

A

Abbreviations 152

Accounting

future developments 107

policies 107

Adjusted performance 15

Anti-money laundering investigations 134

Areas of special interest 59

Asia

adjusted/reported reconciliation 50

assets 42

balance sheet data 110

by country 44, 48, 72

cost efficiency ratios 44

customer accounts 44

impaired loans 71

impairment allowances/charges 66

loans and advances 44, 61, 68, 69

net operating income 109

profit before tax 44, 48, 109

renegotiated loans 64

risk-weighted assets 42

snapshot 5

staff numbers 44

Asset-backed securities 75

Assets

by geographical region 42

by global business 33, 39

charged as security 123

held for sale 39, 62, 122

maturity analysis 125

movement in 30

risk-weighted 3

total 3, 29, 103

trading 110

Associates and joint ventures (income from) 18, 28, 123

adjusted/reported reconciliation 50, 53

Auditor's review report 141

B

Backtesting 79

Balance sheet

consolidated 29, 103

data 39

insurance manufacturing subsidiaries 84

movement 30

Balance Sheet Management 79

Bank of Communications 123

Basis of preparation 33, 107

Brazil 18, 122

Brazilian labour and fiscal claims 129, 138

C

Capital

buffers 98

commitments 130

composition 95

management 87

overall requirements 98

overview 87

ratios 14, 87

regulatory 29, 87, 95

source and application of regulatory capital 94

subordinated loan 29

total regulatory 87

Cash flows

consolidated statement 104

Cautionary statement regarding forward-looking statements 151

Client assets 37

Collateral 123

Combined customer lending and deposits 30

Commercial Banking 35

adjusted/reported reconciliation 53

cost efficiency ratios 27

management view 35

snapshot 4

Commitments 130

Compliance risk 83

Compliance with IFRSs 107

Composition of Group (changes in) 107

Consumer Credit Act (UK) 129

Contents - inside front cover

Contingent liabilities, contractual commitments and guarantees 130

Copies of the Interim Report 149

Corporate governance 147

Counterparty risk 92

Credit default swap regulatory investigation and litigation 138

Credit quality 62

Credit risk 60

risk-weighted assets 89

Customer accounts

by country 31

by global business 39

Customer lending and deposits (combined) 30

D

Dealings in HSBC Holdings shares 146

Deferred tax 108

Defined terms - inside front cover

Derivatives 118

by product contract type 118

credit 119

hedging instruments 119

interest rate 129

trading 119

Directors

Board changes 8

changes in details 148

interests 142

responsibility statement 140

Disposal groups 122

Dividends 108, 146, 147

E

Earnings per share 101, 149

Earnings release 147

Equity 3, 29, 103

movement in 31

Estimates and judgements 107

Europe

adjusted/reported reconciliation 50

assets 42

balance sheet data 110

by country 43, 48, 72

cost efficiency ratios 43

customer accounts 43

impaired loans 71

impairment allowances/charges 66

loans and advances 43, 61, 68, 69

net operating income 109

profit before tax 43, 48, 109

renegotiated loans 63

risk-weighted assets 42

snapshot 5

staff numbers 43

Events after the balance sheet date 139

F

Fair values

adjustments 111

movements 113

of derivatives 118

of financial instruments at fair value 111

of financial instruments not at fair value 117

significant unobservable assumptions 114

valuation bases 112

Fee income (net) 20

Final results 147

Financial assets

designated at fair value 117

Financial crime compliance 59

Financial highlights 2

Financial instruments

at fair value 111

credit quality 62

net income from 22

not at fair value 117

Financial investments 120

Footnotes 56, 86, 106

Forbearance 63

Foreign currency translation differences 15

Foreign exchange rates 29

investigations and litigation 137

Funding sources 77

Funds under management 50

G

Gains less losses from financial investments 22

significant items and currency translation 23

Geographical regions 42

Global Banking and Markets 36

adjusted/reported reconciliation 53

client-facing 33

cost efficiency ratios 27

fair value adjustments 112

management view 36

snapshot 4

Global businesses 33

Global Private Banking 37

adjusted/reported reconciliation 53

cost efficiency ratios 27

snapshot 4

Global Standards 7, 12

Glossary 153

Going concern 107, 148

Goodwill impairment 139

Greece 74

Group Chairman's Statement 6

Group Chief Executive's Review 9

H

Headquarters 8

Held for sale 39, 62, 122

Highlights 2

HSBC Finance 71

HSBC Bank USA 71

HSBC Holdings 81

I

Impairment

allowances and charges 66, 68

by geographical region 66

charges and other credit risk provisions 25

constant currency/reported profit 71

impaired loans 63, 71

Income from financial instruments designated at fair value (net) 21

Income statement

consolidated 16, 101

Information security 82

Insurance

asset and liability matching 84

balance sheet by type of contract 84

claims and benefits paid and movement in liabilities to policyholders (net) 24

net insurance premium income 23

risk 85

Interest-earning assets 19

Interest expense 20

Interest income (net) 19

sensitivity 80

significant items and currency translation 19

Interest rate derivatives 129

Interim Report 2015 139

Investor update 9

L

Latin America

adjusted/reported reconciliation 50

assets 42

balance sheet data 110

by country 47, 48, 72

cost efficiency ratios 47

customer accounts 47

impaired loans 71

impairment allowances/charges 66

loans and advances 47, 61, 68, 69

net operating income 109

profit before tax 47, 48, 109

renegotiated loans 63

risk-weighted assets 42

snapshot 3

staff numbers 47

Legal proceedings 130

Leverage ratio 97

Liabilities

maturity analysis 125

movement in 30

total 29, 103

trading 124

Libor investigation 136

Liquidity and funding 76

management 76

regulation 76

Loans and advances

by country/region 61, 72

by credit quality 62

by global business 39

by industry sector 61, 72

exposure 61

held for sale 39

impaired 63, 71

mortgage lending 70

personal lending 69

renegotiated 63

wholesale lending 68

Loan impairment charges and other credit risk provisions 17, 25, 66

adjusted/reported reconciliation 50, 53

on held for sale 62

Loss absorbing capacity 100

M

Madoff 131

Margin 19

Market capitalisation 3

Market risk 78

measures applicable to parent 81

Middle East and North Africa

adjusted/reported reconciliation 50

assets 42

balance sheet data 110

by country 45, 48, 72

cost efficiency ratios 45

customer accounts 45

impaired loans 71

impairment allowances/charges 66

loans and advances 45, 61, 68, 69

net operating income 109

profit before tax 45, 48, 109

renegotiated loans 63

risk-weighted assets 42

snapshot 5

staff numbers 45

Monitor 13

Mortgage lending 70

Mortgage-related investigations (US) 133

Mortgage securitisation activity (US) 134

N

Non-GAAP measures 15

Non-trading portfolios 79

North America

adjusted/reported reconciliation 50

assets 42

balance sheet data 110

by country 46, 48, 72

cost efficiency ratios 46

customer accounts 46

impaired loans 71

impairment allowances/charges 66

loans and advances 46, 61, 68, 69

net operating income 109

profit before tax 46, 48, 109

renegotiated loans 63

risk-weighted assets 42

snapshot 5

staff numbers 46

Notifiable interests in share capital 146

O

Offices 1

Oil and gas 59

Operating expenses 26

adjusted/reported reconciliation 50, 53

by geographical region 43 to 47

by global business 34 to 38

change-the-bank 26

run-the-bank 26

significant items and currency translation 26

Operating income (other) 23

significant items and currency translation 24

Operational risk 82

'Other' segment 38

adjusted/reported reconciliation 53

Outlook 8, 10

P

Payment protection insurance 128

Performance

adjusted 16

measurement 1

reported 16

Personal lending 69

Pillar 2 and the PRA buffer 98

Precious metals litigation 138

Preferred securities 29

Profit before tax

adjusted 3, 9

adjusted/reported reconciliation 50, 53

attributable 16, 101

by country 48

by geographical region 42, 43 to 47

by global business 33 to 38, 39

consolidated 101

reported 3, 9

PRA buffer 98

Provisions 128

Purpose 1

PVIF 23

R

Ratios

advances to core funding 76

advances to deposits 14

capital (total) 14, 87

common equity tier 1 3, 87

core tier 1 ratio 87

cost efficiency 14, 28, 43 to 47

customer advances to customer accounts 29

earnings per share 101

leverage 97

LICs to advances 14

return on average risk-weighted assets 3, 31

by geographical region 43 to 47

by global business 34 to 37

return on equity 3, 14

shareholders' equity to total assets 29

stressed coverage 77

Recovery and resolution 100

Regulatory

capital 29, 87

capital buffers 97

developments 97

review of consumer enhancement services products 139

risks 58

source and application 94

stress testing 98

Related parties 139

Representations and warranties 75

Reputational risk 83

Responsibility statement 140

Retail Banking and Wealth Management 34

adjusted/reported reconciliation 53

cost efficiency ratios 27

management view 34

Principal RBWM 34

snapshot 4

Revenue 17

adjusted/reported reconciliation 50, 53

by geographical region 43 to 47

by global business 34 to 38

items (significant) 50 to 55

Review of performance 6, 9, 16

Ring-fencing 8

Risks

appetite 14

compliance 83

counterparty credit risk 92

credit 60, 89

data management 58

dispute 58

economic outlook 58

factors 57

foreign exchange 81

fraud 82

geopolitical 58

information security 58, 82

insurance operations 84

interest rate repricing gap 81

liquidity and funding 76

managing risk 13, 57

market 78

model 58

non-trading interest rate 79

operational 82

complexity 82

people 58

profile 57

regulatory 58

reputational 83

third parties 58, 83

top and emerging 57

Risk-weighted assets 3, 29, 88

adjusted/reported reconciliation 32

by geographical region 42, 89

by global business 33, 88

developments 99

S

Securities litigation 130

Securitisation 75

Segmental analysis 109

Sensitivity of fair values 115

Sensitivity of net interest income 80

Share capital 29 Share capital - notifiable interests 146

Shareholder enquiries 149

Share information 3

Share option plans

Directors' interests 143

discretionary 146

employee share plans 145

Significant items 15, 50

Six filters 12

Snapshot

Global business 4

Regional 5

Spread 19

Staff numbers 1, 26

Statement of changes in equity (consolidated) 105

Statement of comprehensive income (consolidated) 102

Stock symbols 149

Strategic actions 11

Strategy 1, 2, 11

Stress testing 59, 98

Structural banking reform 12, 100

Swiss Private Bank 59

T

Targets 10, 13

Tax 18, 28, 108

US tax-related investigations 135

Telephone and online share-dealing service 148

Total shareholder return 3

Trading

assets 110

derivatives 119

income (net) 21

significant items and currency translation 21

liabilities 124

portfolios 78

Turkey 18

U

UK leverage ratio framework 99

V

Value at risk 78

W

Whistleblowing 83

Wholesale funding 76

Wholesale lending 68

Y

Yield 19

 

END

 

 

IR PKADBPBKDQFB