FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the
month of
May
2018
Commission
File Number: 001-14930
HSBC Holdings plc
42nd
Floor, 8 Canada Square, London E14 5HQ, England
(Indicate
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F).
Form
20-F X Form 40-F
Indicate
by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T
Rule 101(b)(1): ______
Indicate
by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T
Rule 101(b)(7): ______
(Indicate
by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934).
Yes
No X
(If
"Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-
).
This
Report on Form 6-K with respect to our quarterly results for the
three-month period ended March 31, 2018 is hereby incorporated by
reference in the following HSBC Holdings plc registration
statements: Registration Statements on Form F-3 (Nos. 333-92024,
333-135007, 333-158065, 333-180288, 333-202420, 333-223191) and
Registration Statement on Form F-4 (No. 333-126531).
Neither
our website referred to herein, nor any of the information
contained on our website, is incorporated by reference in the Form
6-K.
HSBC HOLDINGS PLC
1Q18 EARNINGS RELEASE - HIGHLIGHTS
Financial performance
●
Reported
revenue
of $13.7bn was 6% higher, driven by higher
deposit margins and balance growth in RBWM, and GLCM growth within
CMB, notably in Asia. These increases were partly offset by lower
revenue in Corporate Centre.
Adjusted revenue
of $13.9bn was 3%
higher, excluding the effects of currency translation and movements
in significant items.
●
Reported
operating expenses
of $9.4bn were 13% higher, primarily
reflecting investments to grow the business and enhance our digital
capabilities, and the effects of currency translation.
Adjusted operating expenses
of
$8.2bn were 8% higher, excluding the effects of currency
translation and movements in significant items.
●
Reported profit
before tax
of $4.8bn was 4% lower, as higher revenue
was more than offset by higher operating expenses.
Adjusted profit before tax
of
$6.0bn was 3% lower, excluding the effects of currency translation
and movements in significant items.
●
Lending
growth
of $17bn in 1Q18, increasing net loans and
advances to customers by 2% in the quarter.
●
Strong capital base with a
common equity tier 1 ('CET1')
ratio
of 14.5% and a
CRD IV leverage ratio
of
5.6%.
●
We intend to initiate a
share buy-back
of up to $2bn, which
we expect to commence shortly. In light of the growth opportunities
that we currently see, we expect this to be the only share buy-back
that we announce in 2018.
●
We intend to call two Tier 1 securities, with a
nominal amount outstanding of $6bn.
John Flint, Group Chief Executive, said:
"Our
global businesses performed well in the first quarter, maintaining
momentum from the end of 2017. We continue to benefit from interest
rate rises and economic growth, particularly in Asia. Our primary
focus is to grow the businesses safely, and we have increased
investment to deliver that aim. We intend to deliver positive jaws
for 2018."
Financial
highlights and key ratios
|
|
Quarter ended 31 Mar
|
|
2018
|
2017
|
Change
|
|
$m
|
$m
|
%
|
Reported PBT
|
4,755
|
4,961
|
(4)
|
Adjusted PBT
|
6,033
|
6,210
|
(3)
|
|
%
|
%
|
%
|
Return on average ordinary shareholders' equity
(annualised)
|
7.5
|
8.0
|
(6.3)
|
Return
on average tangible equity (annualised)
|
8.4
|
9.1
|
(7.7)
|
Adjusted jaws
|
(5.7)
|
|
|
We use
adjusted performance to understand the underlying trends in the
business. The main differences between reported and adjusted
figures are foreign currency translation and significant items,
which include litigation and regulatory items, offset by the
non-recurrence of costs-to-achieve in 1Q18.
Capital
and balance sheet
|
|
At
|
|
31 Mar
|
31 Dec
|
|
2018
|
2017
|
|
%
|
%
|
Common
equity tier 1 ratio
1
|
14.5
|
14.5
|
Leverage
ratio
1
|
5.6
|
5.6
|
|
$m
|
$m
|
Loans and advances to customers
|
981,165
|
962,964
|
Customer accounts
|
1,379,679
|
1,364,462
|
Risk-weighted
assets
1
|
894,400
|
871,337
|
1 Calculated using the EU's
regulatory transitional arrangements for IFRS 9 in article 473a of
the Capital Requirements Regulation. Figures at 31 December 2017
are reported under IAS 39.
Table of contents
|
|
Page
|
|
|
Page
|
Highlights
|
1
|
|
Risk-weighted assets
|
24
|
Group Chief Executive's review
|
3
|
|
Summary information - global businesses
|
27
|
Adoption of IFRS 9 'Financial Instruments'
|
4
|
|
Summary
information - geographical regions
|
29
|
Adjusted performance
|
4
|
|
Appendix
- selected information
|
31
|
Financial performance commentary
|
6
|
|
-
Reconciliation of reported and adjusted results - global
businesses
|
31
|
Cautionary statement regarding forward-looking
statements
|
14
|
|
-
Reconciliation of reported and adjusted risk-weighted
assets
|
34
|
Summary consolidated income statement
|
15
|
|
- Reconciliation of reported and adjusted results -
geographical regions
|
34
|
Summary consolidated balance sheet
|
16
|
|
First interim dividend for 2018
|
37
|
Credit risk
|
17
|
|
Dividend on Series A dollar preference shares
|
37
|
Capital
|
22
|
|
Terms and abbreviations
|
38
|
Leverage
|
23
|
|
|
|
HSBC Holdings plc - Earnings Release
|
HSBC
Holdings plc will be conducting a trading update conference call
with analysts and investors today to coincide with the publication
of its Earnings Release. The call will take place at 07.30am BST.
Details of how to participate in the call and the live audio
webcast can be found at
www.hsbc.com/investor-relations.
Note to editors
HSBC Holdings plc
HSBC
Holdings plc, the parent company of HSBC, is headquartered in
London. HSBC serves customers worldwide from approximately 3,900
offices in 67 countries and territories in our geographical
regions: Europe, Asia, North America, Latin America, and Middle
East and North Africa. With assets of $2,652bn at 31 March
2018, HSBC is one of the world's largest banking and financial
services organisations.
Review by John Flint, Group Chief Executive
|
Our
global businesses performed well in the first quarter. Retail
Banking and Wealth Management and Commercial Banking both benefited
from wider deposit spreads and increased balances to deliver
significant increases in adjusted revenue on last year's first
quarter. Both businesses also grew lending, with Commercial Banking
making notable progress in Hong Kong and the UK, and Retail Banking
and Wealth Management making further headway in the UK mortgage
market. Global Banking and Markets adjusted revenue was stable
relative to a strong first quarter last year, as growth in
transaction banking and Equities revenue balanced the impact of
lower client activity on our fixed income businesses. Global
Private Banking grew adjusted revenue and continued to attract net
new money in its target markets.
A
stronger revenue environment enabled us to invest in growing the
business. In 1Q18, we increased investment in Retail Banking and
Wealth Management to further grow our market share in the UK and
mainland China. We also made strategic hires in our securities
joint venture in mainland China, and invested to enhance our
digital capabilities in all our global businesses. This targeted
spending contributed to a rise in adjusted costs in the first three
months of the year. We intend to deliver positive adjusted jaws for
2018.
Having
received the appropriate regulatory clearances, we now plan to
execute a share buy-back of up to $2bn. We expect this to commence
shortly.
Adoption of IFRS 9 'Financial Instruments'
|
HSBC
adopted the requirements of IFRS 9 'Financial Instruments' on 1
January 2018, with the exception of the provisions relating to the
presentation of gains and losses on financial liabilities
designated at fair value, which were adopted on 1 January
2017.
The
classification and measurement and impairment requirements of IFRS
9 were applied retrospectively by adjusting the opening balance
sheet at the date of initial application. As permitted by IFRS 9,
HSBC has not restated comparative periods. Adoption is expected to
reduce net assets at 1 January 2018 by $1.6bn, with the
classification and measurement changes increasing net assets by
$1.1bn, impairment reducing net assets by $2.2bn, impacts on our
associates reducing net assets by $0.9bn, and deferred tax
increasing net assets by $0.4bn. The effect of IFRS 9 on the
carrying value of investments in associates has been updated from
the effect disclosed in our
Annual
Report and Accounts 2017
and in our
Report on Transition to IFRS 9 'Financial
Instruments' 1 January 2018
as a result of those entities
publicly reporting their expected transition impacts. The effect of
adoption of IFRS 9 remains subject to change until the Group
finalises its financial statements for the year ending 31 December
2018.
Under
IFRS 9, the recognition and measurement of expected credit losses
differs from under IAS 39. The change in expected credit losses
relating to financial assets under IFRS 9 is recorded in the income
statement under 'change in expected credit losses and other credit
impairment charges' ('ECL'). As prior periods have not been
restated, changes in impairment of financial assets in the
comparative periods remain in accordance with IAS 39 and are
recorded in the income statement under 'loan impairment charges and
other credit risk provisions' ('LICs') and are therefore not
necessarily comparable to ECL recorded for the current period.
Further information is provided in our
Report on Transition to IFRS 9 'Financial
Instruments' 1 January 2018.
Adjusted
performance is computed by adjusting reported results for the
effects of foreign currency translation differences and significant
items, which both distort period-on-period
comparisons.
We
consider adjusted performance to provide useful information for
investors by aligning internal and external reporting, identifying
and quantifying items management believes to be significant, and
providing insight into how management assesses period-on-period
performance.
Foreign currency translation differences
Foreign
currency translation differences reflect the movements of the US
dollar against most major currencies during 1Q18. 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
better understand the underlying trends in the
business.
Foreign currency translation differences
Foreign
currency translation differences for 1Q18 are computed
by retranslating into US dollars for non-US dollar branches,
subsidiaries, joint ventures and associates:
●
the income statements for 4Q17 and 1Q17 at the average
rates of exchange for 1Q18; and
●
the closing prior period balance sheets at the
prevailing rates of exchange on 31 March 2018.
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. 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.
|
Significant items
'Significant
items' refers collectively to the items that management and
investors would ordinarily identify and consider separately to
understand better the underlying trends in the
business.
The
tables on pages 27 to 30 detail the effects of significant items on
each of our global business segments and geographical regions in
1Q18, 4Q17 and 1Q17.
Adjusted performance - foreign currency translation of significant
items
The
foreign currency translation differences related to significant
items are presented as a separate component of significant items.
This is considered a more meaningful presentation as it allows
better comparison of period-on-period movements in
performance.
Global business performance
The
Group Chief Executive, supported by the rest of the Group
Management Board ('GMB'), is considered to be the Chief Operating
Decision Maker ('CODM') for the purposes of identifying the Group's
reportable segments.
The
Group Chief Executive and the rest of the GMB review operating
activity on a number of bases, including by global business and
geographical region. Global businesses are our reportable segments
under IFRS 8 'Operating segments'. Global business results are
assessed by CODM on the basis of adjusted performance, that removes
the effects of significant items and currency translation from
reported results. We therefore present these results on an adjusted
basis as required by IFRSs.
A
reconciliation of the Group's adjusted results to the Group's
reported results is presented on page 5. Supplementary
reconciliations of adjusted to reported results by global
business are presented on pages 31 to 33 for information
purposes.
Management view of adjusted revenue
Our
global business segment commentary includes tables which provide
breakdowns of revenue by major product. These reflect the basis on
which revenue performance of the businesses is assessed and
managed.
Reconciliation
of reported and adjusted results
|
|
Quarter ended
|
|
31 Mar
|
31 Dec
|
31 Mar
|
|
2018
|
2017
|
2017
|
|
$m
|
$m
|
$m
|
Revenue
|
|
|
|
Reported
|
13,710
|
|
12,301
|
|
12,993
|
|
Currency translation
|
|
236
|
|
660
|
|
Significant items
|
140
|
|
145
|
|
(142
|
)
|
- customer redress programmes
|
-
|
|
105
|
|
-
|
|
- disposals, acquisitions and investment in new
businesses
|
112
|
|
79
|
|
(156
|
)
|
- fair value movement on financial instruments
|
28
|
|
(45
|
)
|
6
|
|
- currency translation of significant items
|
|
6
|
|
8
|
|
Adjusted
|
13,850
|
|
12,682
|
|
13,511
|
|
ECL/LICs
|
|
|
|
Reported
|
(170
|
)
|
(658
|
)
|
(236
|
)
|
Currency translation
|
|
(24
|
)
|
(4
|
)
|
Adjusted
|
(170
|
)
|
(682
|
)
|
(240
|
)
|
Operating expenses
|
|
|
|
Reported
|
(9,383
|
)
|
(9,895
|
)
|
(8,328
|
)
|
Currency translation
|
|
(219
|
)
|
(513
|
)
|
Significant items
|
1,138
|
|
1,173
|
|
1,220
|
|
- costs to achieve
|
-
|
|
655
|
|
833
|
|
-
cost of structural reform
†
|
126
|
|
131
|
|
83
|
|
- customer redress programmes
|
93
|
|
272
|
|
210
|
|
- disposals, acquisitions and investment in new
businesses
|
2
|
|
39
|
|
-
|
|
- gain on partial settlement of pension
obligation
|
-
|
|
(188
|
)
|
-
|
|
- restructuring and other related costs
|
20
|
|
-
|
|
-
|
|
- settlements and provisions in connection with legal and
regulatory matters*
|
897
|
|
228
|
|
-
|
|
- currency translation of significant items
|
|
36
|
|
94
|
|
Adjusted
|
(8,245
|
)
|
(8,941
|
)
|
(7,621
|
)
|
Share of profit in associates and joint ventures
|
|
|
|
Reported
|
598
|
|
556
|
|
532
|
|
Currency translation
|
|
18
|
|
28
|
|
Adjusted
|
598
|
|
574
|
|
560
|
|
Profit before tax
|
|
|
|
Reported
|
4,755
|
|
2,304
|
|
4,961
|
|
Currency translation
|
|
11
|
|
171
|
|
Significant items
|
1,278
|
|
1,318
|
|
1,078
|
|
- revenue
|
140
|
|
145
|
|
(142
|
)
|
- operating expenses
|
1,138
|
|
1,173
|
|
1,220
|
|
Adjusted
|
6,033
|
|
3,633
|
|
6,210
|
|
†
Comprises costs associated with the UK's exit from
the European Union, costs to establish the UK ring-fenced bank
(including the UK ServCo group) and costs associated with
establishing an intermediate holding company in Hong
Kong.
*As
previously disclosed, we are engaged in active discussions with the
US Department of Justice ('DoJ') with a view toward potential
resolution of civil claims based on the DoJ's investigation of
HSBC's legacy RMBS securitisation activities. As discussions
developed during Q1 2018, we recognised a provision with respect to
this matter. There can be no assurances, however, as to how or when
this matter will be resolved, or whether this matter will be
resolved prior to the commencement of formal legal proceedings by
the DoJ or whether the ultimate loss will exceed the provision.
Also in relation to securitisation matters, HSBC Mortgage
Corporation (USA) Inc. and Decision One Mortgage Company LLC
engaged in court-ordered mediation discussions with Residential
Funding Company LLC ('RFC') and a provision has been recognised in
this regard.
Financial performance commentary
|
Distribution
of results by global business
|
|
Quarter ended
|
|
31 Mar
|
31 Dec
|
31 Mar
|
|
2018
|
2017
|
2017
|
|
$m
|
$m
|
$m
|
Adjusted profit/(loss) before tax
|
|
|
|
Retail Banking and Wealth Management
|
1,906
|
1,430
|
|
1,815
|
|
Commercial Banking
|
2,111
|
1,721
|
|
1,888
|
|
Global Banking and Markets
|
1,713
|
834
|
|
1,806
|
|
Global Private Banking
|
113
|
93
|
|
74
|
|
Corporate Centre
|
190
|
(445)
|
|
627
|
|
Total
|
6,033
|
3,633
|
|
6,210
|
|
Distribution
of results by geographical region
|
|
Quarter ended
|
|
31 Mar
|
31 Dec
|
31 Mar
|
|
2018
|
2017
|
2017
|
|
$m
|
$m
|
$m
|
Reported profit/(loss) before tax
|
|
|
|
Europe
|
(18)
|
(2,386
|
)
|
(206
|
)
|
Asia
|
4,768
|
3,670
|
|
4,094
|
|
Middle East and North Africa
|
437
|
333
|
|
387
|
|
North America
|
(596)
|
521
|
|
572
|
|
Latin America
|
164
|
166
|
|
114
|
|
Total
|
4,755
|
2,304
|
|
4,961
|
|
Adjusted profit/(loss) before tax
|
|
|
|
Europe
|
222
|
(1,314
|
)
|
786
|
|
Asia
|
4,756
|
4,009
|
|
4,384
|
|
Middle East and North Africa
|
437
|
347
|
|
395
|
|
North America
|
438
|
422
|
|
521
|
|
Latin America
|
180
|
169
|
|
124
|
|
Total
|
6,033
|
3,633
|
|
6,210
|
|
Adjusted
PBT by global business and region is presented to support the
commentary on adjusted performance on the following
pages.
The
tables on pages 27 to 30 reconcile reported to adjusted results for
each of our global business segments and geographical
regions.
Group
1Q18 compared with 1Q17 - reported results
Movement
in reported profit before tax compared with 1Q17
|
|
Quarter ended
|
|
31 Mar
|
31 Mar
|
Variance
|
|
2018
|
2017
|
|
1Q18 vs. 1Q17
|
|
$m
|
$m
|
$m
|
%
|
Revenue
|
13,710
|
12,993
|
|
717
|
6
|
ECL/LICs
|
(170)
|
(236
|
)
|
66
|
28
|
Operating expenses
|
(9,383)
|
(8,328
|
)
|
(1,055)
|
(13)
|
Share of profit from associates and JVs
|
598
|
532
|
|
66
|
12
|
Profit before tax
|
4,755
|
4,961
|
|
(206)
|
(4)
|
Reported profit before tax
Reported
profit before tax of $4.8bn in 1Q18 was $0.2bn or 4% lower than in
1Q17. This included a net adverse movement in significant items of
$0.2bn, partly offset by the favourable effects of foreign currency
translation of $0.2bn.
Excluding
the effects of significant items and foreign currency translation,
profit before tax decreased by $0.2bn or 3%, as revenue growth was
more than offset by a rise in operating expenses.
Reported revenue
Reported
revenue of $13.7bn in 1Q18 was $0.7bn or 6% higher than 1Q17. This
reflected a favourable effect of foreign currency translation of
$0.7bn, partly offset by a net adverse movement in significant
items of $0.3bn, which included a loss on disposals, acquisitions
and investment in new businesses of $0.1bn in 1Q18 related to the
early redemption of subordinated debt in the US. This compared with
a gain of $0.2bn in 1Q17, largely related to the disposal of our
membership interest in Visa Inc.
Excluding
significant items and currency translation, revenue increased by
$0.3bn or 3%.
Reported ECL/LICs
The
reported change in expected credit losses and other credit
impairment charges ('ECL') was $0.2bn in 1Q18. This mainly related
to charges of $0.3bn in RBWM, partly offset by net releases of ECL
in Corporate Centre and CMB.
In
1Q17, reported LICs of $0.2bn mainly related to RBWM ($0.3bn),
partly offset by net releases, notably in GB&M and Corporate
Centre. The effect of currency translation differences between the
periods was minimal.
Reported operating expenses
Reported
operating expenses of $9.4bn were $1.1bn or 13% higher than in 1Q17
and included an adverse impact of foreign currency translation of
$0.5bn, partly offset by a favourable movement in significant items
of $0.1bn.
The
favourable movement in significant items was driven
by:
●
the non-recurrence of costs to achieve, which
were $0.8bn in 1Q17; and
●
customer redress programme costs of $0.1bn in
1Q18, compared with $0.2bn in 1Q17.
These
were partly offset by:
●
settlements and provisions in connection with
legal and regulatory matters of $0.9bn.
Excluding
significant items and currency translation, operating expenses
increased by $0.6bn or 8%.
Reported income from associates
Reported
income from associates of $0.6bn increased by $66m or
12%.
Group
1Q18 compared with 1Q17 - adjusted results
Movement
in adjusted profit before tax compared with 1Q17
|
|
Quarter ended
|
|
31 Mar
|
31 Mar
|
Variance
|
|
2018
|
2017
|
1Q18 vs. 1Q17
|
|
$m
|
$m
|
$m
|
%
|
Revenue
|
13,850
|
13,511
|
|
339
|
3
|
|
ECL/LICs
|
(170)
|
(240
|
)
|
70
|
29
|
|
Operating expenses
|
(8,245)
|
(7,621
|
)
|
(624)
|
(8
|
)
|
Share of profit from associates and JVs
|
598
|
560
|
|
38
|
7
|
|
Profit before tax
|
6,033
|
6,210
|
|
(177)
|
(3
|
)
|
Adjusted profit before tax
Adjusted
profit before tax of $6.0bn was $0.2bn or 3% lower compared with
1Q17, as revenue growth was more than offset by a rise in operating
expenses.
Adjusted revenue
Adjusted
revenue of $13.9bn was $0.3bn or 3% higher than 1Q17, notably
driven by RBWM and CMB, partly offset by lower revenue in Corporate
Centre. Revenue in GB&M was broadly unchanged.
●
In RBWM, revenue increased by $0.5bn or 9%,
driven by growth in Retail Banking, reflecting wider spreads and
balance growth in current accounts, savings and deposits, and in
Wealth Management from investment distribution due to growth in
sales of retail securities and mutual funds in Asia.
●
In CMB, revenue increased by $0.3bn or 10%,
notably in GLCM, as we benefited from wider deposit spreads in
Hong Kong and mainland China. In addition, revenue also
increased in Credit and Lending ('C&L'), notably in the UK and
Hong Kong as we grew balances.
●
In GB&M, revenue was broadly unchanged from
1Q17. Strong growth in GLCM and Securities Services reflected
interest rate rises and deposit balance growth, primarily in Asia
and the US. Revenue also increased in Global Banking from growth in
lending balances, and from recoveries on restructured facilities in
1Q18. By contrast, revenue fell in Rates and Credit, partly offset
in Equities and Foreign Exchange.
●
In GPB, revenue increased by $45m or 10%, mainly
in Hong Kong, as higher investment revenue reflected increased
client activity, and deposit revenue increased as we benefited from
wider spreads.
●
In Corporate Centre, we recorded a net loss of
$0.1bn in 1Q18, compared with revenue of $0.4bn in 1Q17. This was
primarily in Central Treasury, reflecting lower revenue in Balance
Sheet Management (down $0.3bn) and a loss arising from swap
mark-to-market movements following a bond reclassification under
IFRS 9 'Financial Instruments' of $0.2bn.
Adjusted ECL/LICs
Adjusted
ECL of $0.2bn in 1Q18 mainly related to charges in RBWM ($0.3bn),
notably in Mexico and the UK against our unsecured lending
balances, and to a lesser extent in Hong Kong, also against
unsecured lending. These charges were partly offset by net releases
in Corporate Centre related to our Legacy Credit portfolio, as well
as in CMB.
In
1Q17, adjusted LICs of $0.2bn related to charges in RBWM mainly in
Mexico reflecting growth in unsecured lending together with an
associated rise in delinquency.
Adjusted operating expenses
Adjusted
operating expenses of $8.2bn were $0.6bn or 8% higher than 1Q17.
This reflected investments to grow the business mainly in RBWM and
GB&M, and continued investment in digital across all global
businesses.
Our
total investment in regulatory programmes and compliance was
$0.7bn, up $39m or 6%. This reflected the continued focus on our
Global Standards programme to ensure that changes we have made are
effective and sustainable.
The
number of employees expressed in full-time equivalent staff
('FTEs') at 31 March 2018 was 228,899, an increase of 212 from
31 December 2017. This was primarily driven by investments in
business growth programmes.
We
expect adjusted operating expenses excluding the UK bank levy for
the full year to be broadly in line with 1Q18, subject to achieving
full year positive jaws.
Adjusted share of income from associates
Adjusted
income from associates of $0.6bn increased by $38m or
7%.
Tax expense
The
effective tax rate for 1Q18 of 21.4% was lower than the 24.2% in
1Q17, principally due to a change in profit mix and a favourable
adjustment in respect of prior years in comparison to
1Q17.
First interim dividend for 2018
The
Board announces a first interim dividend for 2018 of $0.10 per
ordinary share, further details of which are set out at the end of
this release.
Retail Banking and Wealth Management
1Q18 compared with 1Q17 - adjusted results
Management
view of adjusted revenue
|
|
Quarter ended
|
|
31 Mar
|
31 Dec
|
31 Mar
|
Variance
|
|
2018
|
2017
|
2017
|
1Q18 vs. 1Q17
|
|
$m
|
$m
|
$m
|
$m
|
%
|
Net operating income
1
|
|
|
|
|
|
Retail Banking
|
3,653
|
3,531
|
|
3,380
|
|
273
|
|
8
|
|
- current accounts, savings and deposits
|
1,857
|
1,740
|
|
1,510
|
|
347
|
|
23
|
|
- personal lending
|
1,796
|
1,791
|
|
1,870
|
|
(74
|
)
|
(4
|
)
|
mortgages
|
579
|
603
|
|
630
|
|
(51
|
)
|
(8
|
)
|
credit cards
|
725
|
689
|
|
753
|
|
(28
|
)
|
(4
|
)
|
other personal lending
2
|
492
|
499
|
|
487
|
|
5
|
|
1
|
|
Wealth Management
|
1,829
|
1,433
|
|
1,698
|
|
131
|
|
8
|
|
-
investment distribution
3
|
1,044
|
793
|
|
821
|
|
223
|
|
27
|
|
-
life insurance manufacturing
|
503
|
353
|
|
614
|
|
(111
|
)
|
(18
|
)
|
-
asset management
|
282
|
287
|
|
263
|
|
19
|
|
7
|
|
Other
4
|
187
|
165
|
|
135
|
|
52
|
|
39
|
|
Total
|
5,669
|
5,129
|
|
5,213
|
|
456
|
|
9
|
|
Adjusted
RoRWA (%)
5
|
6.2
|
4.6
|
|
6.3
|
|
|
|
RoTE
excluding significant items and UK bank levy (%)
11
|
23.1
|
-
|
25.0
|
|
|
|
For footnotes see page 13.
Adjusted
profit before tax of $1.9bn was $0.1bn or 5% higher than 1Q17. This
primarily reflected increased revenue from deposits and investment
distribution, partly offset by higher operating
expenses.
Adjusted
revenue of $5.7bn was $0.5bn or 9% higher than 1Q17, as we grew
revenue in both Retail Banking and Wealth Management.
●
In Retail Banking (up $0.3bn), the increase was
driven by wider spreads and balance growth in current accounts,
savings and deposits, notably in Hong Kong, and to a lesser extent
in the US and Mexico. This was partly offset by lower personal
lending revenue, mainly in the US, mainland China and Hong Kong,
reflecting continuing mortgage spread compression from competitive
pressures, although we grew our total lending balances by $25bn, or
8% compared with 1Q17.
●
In Wealth Management (up $0.1bn), the increase
was primarily in investment distribution, reflecting higher sales
of retail securities and mutual funds in Asia, following increased
investor confidence. This increase was partly offset by lower life
insurance manufacturing revenue, largely from a net adverse
movement in market updates of $0.2bn, notably in Asia and
France.
Adjusted
ECL were $0.3bn in 1Q18, mainly related to charges in Mexico, the
UK and Hong Kong, primarily against unsecured lending
balances.
In
1Q17, adjusted LICs of $0.3bn were notably related to charges in
Mexico, as well as in the UK, Hong Kong and the UAE, against
unsecured lending balances.
Adjusted
operating expenses of $3.5bn increased by $0.4bn or 12% driven by
investments to grow the business, particularly in cards in the
Pearl River Delta and in the US, as well as continued investment in
digital capabilities in our core markets. We have invested in
the UK to expand our intermediary channel to exceed 30 brokers.
Additionally, inflation contributed to higher operating
expenses.
Commercial Banking
1Q18 compared with 1Q17 - adjusted results
Management
view of adjusted revenue
|
|
Quarter ended
|
|
31 Mar
|
31 Dec
|
31 Mar
|
Variance
|
|
2018
|
2017
|
2017
|
1Q18 vs. 1Q17
|
|
$m
|
$m
|
$m
|
$m
|
%
|
Net operating income
1
|
|
|
|
|
|
Global Trade and Receivables Finance
|
466
|
462
|
|
467
|
|
(1
|
)
|
-
|
|
Credit and Lending
|
1,325
|
1,351
|
|
1,280
|
|
45
|
|
4
|
|
Global Liquidity and Cash Management
|
1,351
|
1,303
|
|
1,158
|
|
193
|
|
17
|
|
Markets
products, Insurance and Investments, and Other
6
|
557
|
416
|
|
447
|
|
110
|
|
25
|
|
Total
|
3,699
|
3,532
|
|
3,352
|
|
347
|
|
10
|
|
Adjusted
RoRWA (%)
5
|
2.8
|
2.2
|
|
2.6
|
|
|
|
RoTE
excluding significant items and UK bank levy (%)
11
|
15.5
|
-
|
15.7
|
|
|
|
For footnotes see page 13.
Adjusted
profit before tax of $2.1bn was $0.2bn or 12% higher, as strong
revenue growth was partly offset by higher operating
expenses.
Adjusted
revenue was $0.3bn or 10% higher, driven by an increase in GLCM and
C&L. Revenue also increased from Markets products and Insurance
and Investments, notably in Asia. In GTRF, revenue remained broadly
unchanged.
●
In GLCM, revenue increased by $0.2bn or 17%,
reflecting wider spreads in Hong Kong and mainland China as we
benefited from interest rate rises. We also grew average balances
compared with 1Q17.
●
In C&L, revenue increased by $45m or 4%, as
we grew balances, notably in the UK and Hong Kong. This was partly
offset by the effects of spread compression.
●
In GTRF, revenue was unchanged as balance sheet
growth in the UK and Asia was offset by lower balances in MENA
reflecting the effect of repositioning.
A net
release in adjusted ECL of $0.1bn reflected continuing stable
credit conditions. In 1Q17, there was a net release of adjusted
LICs of $10m.
Adjusted
operating expenses of $1.7bn were $0.2bn or 12% higher, reflecting
continued investment in Global Standards and digital capabilities,
as well as higher performance-related pay.
Global Banking and Markets
1Q18 compared with 1Q17 - adjusted results
Management
view of adjusted revenue
|
|
Quarter ended
|
|
31 Mar
|
31 Dec
|
31 Mar
|
Variance
|
|
2018
|
2017
|
2017
|
1Q18 vs. 1Q17
|
|
$m
|
$m
|
$m
|
$m
|
%
|
Net operating income
1
|
|
|
|
|
|
Global Markets
|
1,864
|
1,323
|
|
2,066
|
|
(202
|
)
|
(10)
|
-
Foreign exchange
|
741
|
625
|
|
658
|
|
83
|
|
13
|
-
Rates
|
445
|
282
|
|
696
|
|
(251
|
)
|
(36)
|
-
Credit
|
252
|
146
|
|
351
|
|
(99
|
)
|
(28)
|
- FICC
|
1,438
|
1,053
|
|
1,705
|
|
(267
|
)
|
(16)
|
- Equities
|
426
|
270
|
|
361
|
|
65
|
|
18
|
Global Banking
|
1,010
|
933
|
|
949
|
|
61
|
|
6
|
Global Liquidity and Cash Management
|
635
|
599
|
|
543
|
|
92
|
|
17
|
Securities Services
|
482
|
477
|
|
431
|
|
51
|
|
12
|
Global Trade and Receivables Finance
|
180
|
171
|
|
189
|
|
(9
|
)
|
(5)
|
Principal Investments
|
69
|
64
|
|
32
|
|
37
|
|
116
|
Credit
and funding valuation adjustments
7
|
(65)
|
(109
|
)
|
-
|
|
(65
|
)
|
n/a
|
Other
8
|
(27)
|
5
|
|
(68
|
)
|
41
|
|
60
|
Total
|
4,148
|
3,463
|
|
4,142
|
|
6
|
|
-
|
Adjusted
RoRWA (%)
5
|
2.3
|
1.1
|
|
2.4
|
|
|
|
RoTE
excluding significant items and UK bank levy (%)
11
|
11.9
|
-
|
12.8
|
|
|
|
For footnotes see page 13.
Adjusted
profit before tax of $1.7bn was $0.1bn or 5% lower, reflecting an
increase in operating expenses, and a small charge in ECL in
contrast to a net release of LICs in 1Q17.
Adjusted
revenue of $4.1bn was broadly unchanged and included a net adverse
movement of $65m on credit and funding valuation adjustments.
Excluding these movements, revenue increased by $71m or 2%. The
increase in adjusted revenue primarily reflected:
●
an increase in our transaction banking products,
with double digit growth in GLCM (up $0.1bn, or 17%), and in
Securities Services (up $0.1bn, or 12%), driven by the impact of
higher interest rates and growth of operating balances as we
continued to win new client mandates in GLCM, notably in Asia and
the US;
●
an increase in Global Banking (up $0.1bn, or
6%), as we continued to grow lending balances, and from recoveries
on restructured facilities, partly offset by muted investment
banking activity compared with 1Q17.
This
was partly offset by:
●
a decrease in Global Markets (down $0.2bn),
primarily in fixed income revenue (Rates and Credit) reflecting
reduced client flows, although this was partly offset by higher
revenue in Equities and Foreign Exchange.
Adjusted
ECL were $22m in 1Q18. In 1Q17, there was a net release of adjusted
LICs of $21m.
Adjusted
operating expenses increased by $0.1bn or 2%, reflecting increased
litigation expenses, and a rise in investment costs to grow the
business.
Global Private Banking
1Q18 compared with 1Q17 - adjusted results
Management
view of adjusted revenue
|
|
Quarter ended
|
|
31 Mar
|
31 Dec
|
31 Mar
|
Variance
|
|
2018
|
2017
|
2017
|
1Q18 vs. 1Q17
|
|
$m
|
$m
|
$m
|
$m
|
%
|
Net operating income
1
|
|
|
|
|
|
Investment revenue
|
210
|
168
|
|
185
|
|
25
|
14
|
|
Lending
|
103
|
104
|
|
97
|
|
6
|
6
|
|
Deposit
|
122
|
109
|
|
92
|
|
30
|
33
|
|
Other
|
47
|
49
|
|
63
|
|
(16)
|
(25
|
)
|
Total
|
482
|
430
|
|
437
|
|
45
|
10
|
|
Adjusted
RoRWA (%)
5
|
2.8
|
2.2
|
|
1.9
|
|
|
|
RoTE
excluding significant items and UK bank levy (%)
11
|
12.3
|
-
|
7.4
|
|
|
|
For footnotes see page
13.
Adjusted
profit before tax of $113m was $39m or 53% higher, due to revenue
growth, partly offset by a marginal increase in operating
expenses.
Adjusted
revenue of $0.5bn increased by $45m or 10%, mainly in Hong Kong
from higher investment revenue due to increased client activity and
higher deposit revenue as spreads widened following interest rate
rises.
In
1Q18, we attracted net new money of $5.3bn in key markets targeted
for growth.
Adjusted
operating expenses of $0.4bn increased by 3% primarily reflecting
higher performance-related pay.
Corporate Centre
1Q18 compared with 1Q17 - adjusted results
Management
view of adjusted revenue
|
|
Quarter ended
|
|
31 Mar
|
31 Dec
|
31 Mar
|
Variance
|
|
2018
|
2017
|
2017
|
1Q18 vs. 1Q17
|
|
$m
|
$m
|
$m
|
$m
|
%
|
Net operating income
1
|
|
|
|
|
|
Central
Treasury
9
|
(75)
|
269
|
|
364
|
|
(439
|
)
|
(121)
|
Legacy portfolios
|
19
|
(84
|
)
|
28
|
|
(9
|
)
|
(32)
|
-
US run-off portfolio
|
12
|
(7
|
)
|
28
|
|
(16
|
)
|
(57)
|
-
legacy credit
|
7
|
(77
|
)
|
-
|
|
7
|
|
n/a
|
Other
10
|
(92)
|
(57
|
)
|
(25
|
)
|
(67
|
)
|
>(200)
|
Total
|
(148)
|
128
|
|
367
|
|
(515
|
)
|
(140)
|
For
footnotes see page 13.
Adjusted
profit before tax of $0.2bn was $0.4bn or 70% lower, driven by a
decrease in revenue, while operating expenses were broadly
unchanged.
We
recorded a net loss of adjusted revenue of $0.1bn in 1Q18, compared
with revenue of $0.4bn in 1Q17. This reduction mainly reflected
decreases in Central Treasury primarily due to:
●
lower revenue in Balance Sheet Management (down
$0.3bn) reflecting repositioning carried out in 2017 in
anticipation of higher policy rates, lower reinvestment yields and
lower gains from AFS disposals; and
●
a loss arising from adverse swap mark-to-market
movements following a bond reclassification under IFRS 9 'Financial
Instruments' ($0.2bn).
A net
release of adjusted ECL of $0.1bn in 1Q18 primarily related to our
Legacy Credit portfolio.
In
1Q17, we recorded a net release of LICs of $41m which included
releases related to Legacy Credit, as well as our US run-off
portfolio.
Adjusted
operating expenses of $0.3bn were broadly unchanged from
1Q17.
Adjusted
income from associates increased by $44m or 8%.
Group
1Q18 compared with 4Q17 - reported results
Movement
in reported profit before tax compared with 4Q17
|
|
Quarter ended
|
|
31 Mar
|
31 Dec
|
Variance
|
|
2018
|
2017
|
1Q18 vs. 4Q17
|
|
$m
|
$m
|
$m
|
%
|
Revenue
|
13,710
|
12,301
|
|
1,409
|
11
|
|
ECL/LICs
|
(170)
|
(658
|
)
|
488
|
74
|
|
Operating expenses
|
(9,383)
|
(9,895
|
)
|
512
|
5
|
|
Share of profit from associates and JVs
|
598
|
556
|
|
42
|
8
|
|
Profit before tax
|
4,755
|
2,304
|
|
2,451
|
106
|
|
Reported profit before tax
Reported
profit before tax of $4.8bn in 1Q18 was $2.5bn higher than in 4Q17.
This included a net favourable movement in significant items of
$40m.
Excluding
significant items, profit before tax increased by $2.4bn to
$6.0bn, reflecting higher revenue and lower operating
expenses.
Reported revenue
Reported
revenue of $13.7bn in 1Q18 was $1.4bn or 11% higher than in 4Q17,
and reflected a favourable effect of foreign currency translation
of $0.2bn. Significant items of $0.1bn were broadly in line with
4Q17.
Excluding
significant items and currency translation differences, revenue
increased by $1.2bn or 9% reflecting revenue growth in all global
businesses, partly offset by lower revenue in Corporate
Centre.
Reported ECL/LICs
ECL
were $0.2bn in 1Q18. This mainly related to charges of $0.3bn in
RBWM, partly offset by a net release of ECL in Corporate Centre and
CMB.
LICs in
4Q17 were $0.7bn and were mainly incurred in GB&M $0.4bn. In
addition we incurred charges of $0.2bn in RBWM and $0.2bn in CMB.
These charges were partly offset by a net release of $0.1bn in
Corporate Centre.
Reported operating expenses
Reported
operating expenses of $9.4bn were $0.5bn or 5% lower. This
reduction included a $35m favourable movement in significant items
which included:
●
the non-recurrence of costs to achieve, which
were $0.7bn in 4Q17;
●
customer redress programme costs of $0.1bn in
1Q18, compared with $0.3bn in 4Q17.
These
were partly offset by:
●
settlements and provisions in connection with
legal matters of $0.9bn in 1Q18. This compared with settlements and
provisions in connection with legal matters of $0.2bn in
4Q17.
Excluding
significant items and an adverse effect of foreign currency
translation of $0.2bn, operating expenses decreased by $0.7bn or
8%.
Reported income from associates
Reported
income from associates of $0.6bn was $42m or 8% higher than in
4Q17.
Group
1Q18 compared with 4Q17 - adjusted results
Movement
in adjusted profit before tax compared with 4Q17
|
|
Quarter ended
|
|
31 Mar
|
31 Dec
|
Variance
|
|
2018
|
2017
|
1Q18 vs. 4Q17
|
|
$m
|
$m
|
$m
|
%
|
Revenue
|
13,850
|
12,682
|
|
1,168
|
|
9
|
|
ECL/LICs
|
(170)
|
(682
|
)
|
512
|
|
75
|
|
Operating expenses
|
(8,245)
|
(8,941
|
)
|
696
|
|
8
|
|
Share of profit from associates and JVs
|
598
|
574
|
|
24
|
|
4
|
|
Profit before tax
|
6,033
|
3,633
|
|
2,400
|
|
66
|
|
Adjusted profit before tax
On an
adjusted basis, profit before tax of $6.0bn was $2.4bn or 66%
higher, reflecting higher revenue and lower operating
expenses.
Adjusted revenue
Adjusted
revenue of $13.9bn increased by $1.2bn or 9% compared with 4Q17,
mainly reflecting higher revenue in all our global businesses,
partly offset by lower revenue in Corporate Centre.
●
In GB&M revenue increased by $0.7bn, with
growth in all businesses, notably in Global Markets reflecting a
seasonal increase in client activity in 1Q18, as well as continued
momentum in GLCM and Securities Services.
●
In RBWM, revenue increased by $0.5bn, driven by
Wealth Management, notably in investment distribution and insurance
manufacturing in Asia from higher sales in 1Q18 compared with 4Q17,
due to seasonality.
●
In CMB, revenue increased by $0.2bn, notably in
GLCM as spreads widened, primarily in Asia. Revenue also increased
from Insurance and Investments and Markets products, notably in
Asia.
These
increases were partly offset:
●
In Corporate Centre, revenue decreased by
$0.3bn, notably as a result of a loss arising from adverse swap
mark-to-market movements following a bond reclassification under
IFRS 9 'Financial Instruments' ($0.2bn).
Adjusted ECL/LICs
Adjusted
ECL of $0.2bn, mainly related to charges in RBWM ($0.3bn), notably
in Mexico against our unsecured lending balances, as well as in the
UK and Hong Kong, also against unsecured lending. These charges
were partly offset by a net release in Corporate
Centre.
In
4Q17, adjusted LICs were $0.7bn and included individually assessed
LICs relating to two large corporate exposures in GB&M in
Europe. In addition, 4Q17 included LICs of $0.2bn in CMB, primarily
related to individually assessed exposures in the UK, and in RBWM
LICs of $0.2bn related mainly to our unsecured lending portfolio in
Mexico.
Adjusted operating expenses
Adjusted
operating expenses of $8.2bn were $0.7bn or 8% lower, primarily due
to a UK bank levy charge of $0.9bn recorded in 4Q17. Excluding this
charge, adjusted operating expenses increased by $0.2bn or 2%,
mainly reflecting investments to grow the business and enhance our
digital capabilities, and also an increase in performance-related
pay.
Adjusted share of income from associates
Adjusted
income from associates of $0.6bn was $24m or 4% higher than in
4Q17.
Balance sheet commentary compared with 1 January
2018
The
impact of transitioning to IFRS 9 'Financial Instruments' on 1
January 2018 was a reduction in our total assets of $3.3bn from
31 December 2017, as well as the reclassification of certain
items within the balance sheet. The commentary that follows
compares our balance sheet as at 31 March 2018 with that as at 1
January 2018.
At 31
March 2018 our total assets were $2.7tn, an increase of $134bn or
5% on a reported basis and $95bn or 4% on a constant currency
basis. The reported growth reflected an increase in short-term
settlement accounts relating to Global Markets activity of $33bn,
as activity increased after the seasonal reduction in December
2017, as well as an increase in loans and advances to customers (up
$31bn), and trading assets (up $23bn).
Loans and advances to customers
Reported
loans and advances to customers grew by $31.4bn or 3%, and included
a favourable effect of currency translation of
$14.6bn.
Excluding
currency translation, and a small reduction in corporate overdraft
balances relating to customers that settled their overdraft and
deposit balances on a net basis, loans and advances to customers
grew by $17.0bn, reflecting continued lending growth in Asia (up
$14.2bn), primarily in Hong Kong as we increased term lending in
CMB and GB&M.
We also
grew lending in the Middle East and North Africa by $2.1bn, notably
in term lending in GB&M.
Lending
in Europe fell by $0.4bn, as growth in term lending in CMB in the
UK was more than offset by a reduction in GB&M in the UK
reflecting a reclassification of short-term lending by Global
Markets into other assets during 1Q18. In RBWM we continued to grow
our mortgage lending, notably in the UK (up $1.8bn).
Customer accounts
Reported
customer accounts grew by $19.5bn, but were broadly unchanged on a
constant currency basis, despite robust growth in RBWM, notably in
Hong Kong and the UK.
We grew
balances in Europe by $8.0bn, reflecting growth in GB&M in the
UK, partly offset in CMB, as well as in GPB as we actively
redeployed clients' deposits to assets under management to maximise
their returns.
In Asia
customer accounts fell by $3.5bn, primarily in GB&M and CMB in
Hong Kong and mainland China, as seasonal customer outflows were
higher than new deposit growth. The remaining reduction in customer
accounts was driven by North America, notably in GB&M and
CMB.
Net interest margin
|
Quarter ended
|
Year
ended
|
|
31 Mar
|
31
Mar
|
31
Dec
|
|
2018
|
2017
|
2017
|
|
$m
|
$m
|
$m
|
Net
interest income
|
7,456
|
6,787
|
28,176
|
|
Average
interest earning assets
|
1,812,194
|
1,683,136
|
1,726,120
|
|
|
%
|
%
|
%
|
Gross
yield
|
2.55
|
2.33
|
2.37
|
|
Less:
cost of funds
|
(1.02)
|
(0.83
|
(0.88
|
)
|
Net
interest spread
|
1.53
|
1.50
|
1.49
|
|
Net
interest margin
|
1.67
|
1.64
|
1.63
|
|
The
1Q18 net interest margin of 1.67% was 4bps higher than that for
2017. This was driven by an increase of 18bps in gross yields,
partly offset by an increase of 14bps in the cost of
funds.
Gross
yields benefited from a rate rise in Hong Kong, notably from
increased lending yields on term lending in Asia. Gross yields on
surplus liquidity increased in all regions, mainly on AFS
securities. These benefits were partly offset by the completion of
the run-off of our higher-yielding US CML portfolio in 2017 and
continuing competitive pressures on lending yields in Europe,
notably in mortgages and overdrafts, despite balance
growth.
The
cost of funds rose by 14bps from the increased cost of customer
accounts, mainly deposit accounts in Asia reflecting the rate rise
in Hong Kong. The cost of Group debt also rose, primarily relating
to the higher cost of issuances of senior debt by HSBC
Holdings.
Compared
with the fourth quarter of 2017, net interest margin increased,
reflecting an increase in our gross yields, driven by increased
lending yields and increased yields on surplus liquidity in most
regions. This was partly offset by an increase in our cost of
funds, notably from increased cost of customer accounts in
Asia.
Notes
●
Income statement comparisons, unless stated otherwise, are between
the quarter ended 31 March 2018 and the quarter ended 31 March
2017. Balance sheet comparisons, unless otherwise stated, are
between balances at 31 March 2018 and the corresponding
balances at 1 January 2018.
●
The financial information on which this Earnings Release
is based, and the data set out in the appendix to this
statement, are unaudited and have been prepared in accordance with
HSBC's significant accounting policies as described on pages
188 to 194 of our
Annual Report
and Accounts 2017
and the new policies for financial
instruments as described on pages 16 to 20 of our
Report on Transition to IFRS 9 'Financial
Instruments' 1 January 2018
. Comparative periods have not
been restated. IFRS 9 does not require restatement and the impact
of other new policies are not material.
●
The Board has adopted a policy of paying quarterly interim
dividends on ordinary shares. Under this policy, it is intended to
have a pattern of three equal interim dividends with a variable
fourth interim dividend. Dividends are declared in US dollars and,
at the election of the shareholder, paid in cash in one of, or in a
combination of, US dollars, sterling and Hong Kong dollars or,
subject to the Board's determination that a scrip dividend is to be
offered in respect of that dividend, may be satisfied in whole or
in part by the issue of new shares in lieu of a cash dividend.
Details of the first interim dividend for 2018 and the series A
dollar preference share dividend are set out at the end of this
release.
Footnotes to financial performance commentary
|
1
|
Net operating income before changes in expected credit losses and
other credit impairment charges, also referred to as
revenue.
|
2
|
'Other personal lending' includes personal non-residential
closed-end loans and personal overdrafts.
|
3
|
'Investment distribution' includes Investments, which comprises
mutual funds (HSBC manufactured and third party), structured
products and securities trading, and Wealth Insurance distribution,
consisting of HSBC manufactured and third-party life, pension and
investment insurance products.
|
4
|
'Other' mainly includes the distribution and manufacturing (where
applicable) of retail and credit protection insurance.
|
5
|
Adjusted return on average risk-weighted assets ('Adjusted RoRWA')
is used to measure the performance of RBWM, CMB, GB&M and GPB.
Adjusted RoRWA is calculated using annualised profit before tax and
reported average risk-weighted assets at constant currency adjusted
for the effects of significant items.
|
6
|
'Markets products, Insurance and Investments and Other' includes
revenue from Foreign Exchange, insurance manufacturing and
distribution, interest rate management and Global Banking
products.
|
7
|
From 1 January 2018, the qualifying components according to IFRS 7
'Financial Instruments: Disclosures' of fair value movements
relating to changes in credit spreads on structured liabilities,
were recorded through OCI. The residual movements remain in credit
and funding valuation adjustments, and comparatives have not been
restated.
|
8
|
'Other' in GB&M includes net interest earned on free capital
held in the global business not assigned to products, allocated
funding costs and gains resulting from business disposals. Within
the management view of total operating income, notional tax credits
are allocated to the businesses to reflect the economic benefit
generated by certain activities that is not reflected within
operating income, such as notional credits on income earned from
tax-exempt investments where the economic benefit of the activity
is reflected in tax expense. In order to reflect the total
operating income on an IFRS basis, the offset to these tax credits
is included within 'Other'.
|
9
|
Central Treasury includes revenue relating to Balance Sheet
Management ('BSM') of $592m (4Q17: $660m; 1Q17: $854m), interest
expense of $377m (4Q17: $278m; 1Q17: $343m) and adverse valuation
differences on issued long-term debt and associated swaps of $241m
(4Q17: adverse movements of $56m; 1Q17: adverse movements of $65m).
Revenue relating to BSM includes other internal allocations,
including notional tax credits to reflect the economic benefit
generated by certain activities which is not reflected within
operating income, for example notional credits on income earned
from tax-exempt investments where the economic benefit of the
activity is reflected in tax expense. In order to reflect the total
operating income on an IFRS basis, the offset to these tax credits
is included in other Central Treasury.
|
10
|
Other miscellaneous items in Corporate Centre include internal
allocations relating to legacy credit.
|
11
|
Return on average tangible equity ('RoTE') is calculated as Profit
Attributable to Ordinary Shareholders (based on annualised Reported
PBT, as adjusted for tax, insurance balances, certain capital
securities and associates) divided by allocated Average Tangible
Shareholders' Equity. In 1Q18, Group RoTE on this basis was
8.4%.
RoTE excluding significant items and the UK bank levy adjusts RoTE
for the effects of significant items, the UK bank levy, tax and
other items. This is the RoTE measure used at the global business
level. In 1Q18, Group RoTE excluding significant items and the UK
bank levy was 11.6%.
The reconciling items between Group RoTE and Group RoTE excluding
significant items and the UK bank levy in 1Q18 were significant
items (+3.5% points), the UK bank levy (+0.1% points), tax (-0.2%
points) and other items (-0.2%
points).
|
Cautionary statement regarding forward-looking
statements
|
This
Earnings Release contains certain forward-looking statements with
respect to HSBC's financial condition, results of operations,
capital position and business.
Statements
that are not historical facts, including statements about HSBC's
beliefs and expectations, are forward-looking statements. Words
such as 'expects', 'anticipates', 'intends', 'plans', 'believes',
'seeks', 'estimates', 'potential' and 'reasonably possible',
variations of these words and similar expressions are intended to
identify forward-looking statements. These statements are based on
current plans, estimates and projections, and therefore undue
reliance should not be placed on them. Forward-looking statements
speak only as of the date they are made. HSBC makes no
commitment to revise or update any forward-looking statements
to reflect events or circumstances occurring or existing after
the date of any 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.
These
include, but are not limited to:
●
changes in general economic conditions in the markets in which
we operate, such as continuing or deepening recessions and
fluctuations in employment beyond those factored into consensus
forecasts; changes in foreign exchange rates and interest rates;
volatility in equity markets; lack of liquidity in wholesale
funding markets; illiquidity and downward price pressure in
national real estate markets; adverse changes in central banks'
policies with respect to the provision of liquidity support to
financial markets; heightened market concerns over sovereign
creditworthiness in over-indebted countries; adverse changes in the
funding status of public or private defined benefit pensions; and
consumer perception as to the continuing availability of credit and
price competition in the market segments we
serve;
●
changes in government policy and regulation,
including the monetary, interest rate and other policies of central
banks and other regulatory authorities; initiatives to change
the size, scope of activities and interconnectedness of
financial institutions in connection with the implementation of
stricter regulation of financial institutions in key markets
worldwide; revised capital and liquidity benchmarks which could
serve to deleverage bank balance sheets and lower returns available
from the current business model and portfolio mix; imposition
of levies or taxes designed to change business mix and
risk appetite; the conduct of business of financial
institutions in serving their retail customers, corporate clients
and counterparties; the standards of market conduct;
the costs, effects and outcomes of product regulatory reviews,
actions or litigation, including any additional compliance
requirements; expropriation, nationalisation, confiscation of
assets and changes in legislation relating to foreign
ownership; changes in bankruptcy legislation in the principal
markets in which we operate and the consequences thereof;
general changes in government policy that may significantly
influence investor decisions; extraordinary government actions as a
result of current market turmoil; other unfavourable political
or diplomatic developments producing social instability or
legal uncertainty which in turn may affect demand for our products
and services; and the effects of competition
in the markets where we operate including increased
competition from non-bank financial services companies, including
securities firms; and
●
factors specific to HSBC, including our success in adequately
identifying the risks we face, such as the incidence of loan losses
or delinquency, and managing those risks (through account
management, hedging and other techniques). Effective risk
management depends on, among other things, our ability through
stress testing and other techniques to prepare for events that
cannot be captured by the statistical models we use; our success in
addressing operational, legal and regulatory, and litigation
challenges; and other risks and uncertainties we identify in the
'top and emerging risks' on pages 63 to 66 of the
Annual Report and Accounts
2017.
For further information contact:
Investor Relations
|
Media Relations
|
UK
- Richard O'Connor
|
UK
- Heidi Ashley
|
Tel:
+44 (0) 20 7991 6590
|
Tel:
+44 (0) 20 7992 2045
|
|
|
Hong
Kong - Hugh Pye
|
|
Tel:
+852 2822 4908
|
|
Summary consolidated income statement
|
|
Quarter ended
|
|
31 Mar
|
31 Dec
|
31 Mar
|
|
2018
|
2017
|
2017
|
|
$m
|
$m
|
$m
|
Net
interest income
|
7,456
|
7,272
|
6,787
|
|
Net fee
income
|
3,507
|
3,065
|
3,224
|
|
Net
income from financial instruments held for trading or managed on a
fair value basis
2,3
|
2,384
|
1,997
|
2,187
|
|
Net
income from assets and liabilities of insurance businesses,
including related derivatives, measured at fair value through
profit or loss
2
|
(155)
|
627
|
964
|
|
Changes
in fair value of long-term debt and related derivatives
3
|
10
|
(13)
|
24
|
|
Changes
in fair value of other financial instruments mandatorily measured
at fair value through profit or loss
2
|
117
|
N/A
|
N/A
|
Gains
less losses from financial investments
|
101
|
71
|
338
|
|
Dividend
income
|
9
|
17
|
13
|
|
Net
insurance premium income
|
3,078
|
2,317
|
2,793
|
|
Other
operating income/(expense)
|
41
|
(79)
|
202
|
|
Total operating income
|
16,548
|
15,274
|
16,532
|
|
Net
insurance claims and benefits paid and movement in liabilities to
policyholders
|
(2,838)
|
(2,973)
|
(3,539
|
)
|
Net operating income before change in expected credit losses and
other credit impairment charges
|
13,710
|
12,301
|
12,993
|
|
Change in expected credit losses and other credit impairment
charges
|
(170)
|
N/A
|
N/A
|
Loan impairment charges and other credit risk
provisions
|
N/A
|
(658)
|
(236
|
)
|
Net operating income
|
13,540
|
11,643
|
12,757
|
|
Total operating expenses
|
(9,383
|
(9,895)
|
(8,328
|
)
|
Operating profit/(loss)
|
4,157
|
1,748
|
4,429
|
|
Share of profit in associates and joint ventures
|
598
|
556
|
532
|
|
Profit/(loss) before tax
|
4,755
|
2,304
|
4,961
|
|
Tax expense
|
(1,017)
|
(1,978)
|
(1,201
|
)
|
Profit/(loss) after tax
|
3,738
|
326
|
3,760
|
|
Attributable to:
|
|
|
|
- ordinary shareholders of the parent company
|
3,086
|
(274)
|
3,130
|
|
- preference shareholders of the parent company
|
22
|
23
|
22
|
|
- other equity holders
|
288
|
303
|
313
|
|
- non-controlling interests
|
342
|
274
|
295
|
|
Profit/(loss) after tax
|
3,738
|
326
|
3,760
|
|
|
$
|
$
|
$
|
Basic earnings per share
|
0.15
|
(0.01)
|
0.16
|
Diluted earnings per share
|
0.15
|
(0.01)
|
0.16
|
Dividend per ordinary share (in respect of the period)
|
0.10
|
0.21
|
0.10
|
|
%
|
%
|
%
|
Return on average ordinary shareholders' equity
(annualised)
|
7.5
|
(0.7)
|
8.0
|
|
Return
on average tangible equity (annualised)
|
8.4
|
(0.5)
|
9.1
|
|
Return
on average risk-weighted assets
1
|
2.2
|
1.0
|
2.3
|
|
Cost efficiency ratio
|
68.4
|
80.4
|
64.1
|
|
1 Return on average risk-weighted
assets is calculated using annualised profit before tax and
reported average risk-weighted assets.
2 The classification and
measurement requirements under IFRS 9, which was adopted from 1
January 2018, are based on an entity's assessment of both the
business model for managing the assets and the contractual cash
flow characteristics of the assets. The standard contains a
classification for items measured mandatorily at fair value through
profit or loss as a residual category. Given its residual
nature, the presentation of the income statement has been updated
to separately present items in this category which are of a
dissimilar nature or function, in line with IAS 1 'Presentation of
Financial Statements' requirements. Comparative data have been
re-presented. There is no net impact on Total operating
income.
3 Prior to 2018 foreign exchange
exposure on some financial instruments designated at fair value was
presented in the same line in the income statement as the
underlying fair value movement on these instruments. In 2018 we
have grouped the presentation of the entire effect of foreign
exchange exposure in profit or loss and presented it within 'Net
income from financial instruments held for trading or managed on a
fair value basis'. Comparative data have been re-presented. There
is no net impact on Total operating income and the impact on
'Changes in fair value of long-term debt and related derivatives'
is $563m in 4Q17 and $84m in 1Q17.
Summary consolidated balance sheet
|
|
At
|
|
31 Mar
|
1 Jan
|
31 Dec
|
|
2018
|
2018
1
|
2017
|
|
$m
|
$m
|
$m
|
Assets
|
|
|
|
Cash and balances at central banks
|
184,445
|
180,621
|
180,624
|
|
Trading assets
|
277,116
|
254,410
|
287,995
|
|
Financial assets designated and otherwise mandatorily measured at
fair value through profit or loss
|
40,964
|
39,746
|
N/A
|
Financial
assets designated at fair value
|
N/A
|
N/A
|
29,464
|
|
Derivatives
|
221,038
|
219,818
|
219,818
|
|
Loans and advances to banks
|
78,727
|
82,559
|
90,393
|
|
Loans and advances to customers
|
981,165
|
949,737
|
962,964
|
|
Reverse repurchase agreements - non-trading
|
213,107
|
201,553
|
201,553
|
|
Financial investments
|
392,878
|
383,499
|
389,076
|
|
Other assets
|
262,683
|
206,487
|
159,884
|
|
Total assets
|
2,652,123
|
2,518,430
|
2,521,771
|
|
Liabilities and Equity
|
|
|
|
Liabilities
|
|
|
|
Deposits by banks
|
63,999
|
64,492
|
69,922
|
|
Customer accounts
|
1,379,679
|
1,360,227
|
1,364,462
|
|
Repurchase agreements - non-trading
|
168,614
|
130,002
|
130,002
|
|
Trading liabilities
|
83,364
|
80,864
|
184,361
|
|
Financial liabilities designated at fair value
|
150,008
|
144,006
|
94,429
|
|
Derivatives
|
216,902
|
216,821
|
216,821
|
|
Debt securities in issue
|
71,482
|
66,536
|
64,546
|
|
Liabilities under insurance contracts
|
87,611
|
85,598
|
85,667
|
|
Other liabilities
|
226,902
|
173,660
|
113,690
|
|
Total liabilities
|
2,448,561
|
2,322,206
|
2,323,900
|
|
Equity
|
|
|
|
Total shareholders' equity
|
195,924
|
188,644
|
190,250
|
|
Non-controlling interests
|
7,638
|
7,580
|
7,621
|
|
Total equity
|
203,562
|
196,224
|
197,871
|
|
Total liabilities and equity
|
2,652,123
|
2,518,430
|
2,521,771
|
|
|
%
|
%
|
%
|
Ratio of customer advances to customer accounts
|
71.1
|
69.8
|
70.6
|
|
1 Balances at 1 January 2018 have
been prepared in accordance with accounting policies referred to on
page 13. 31 December 2017 balances have not been
represented.
Refer
to pages 16 to 20 of our
Report on
Transition to IFRS 9 'Financial Instruments' 1 January
2018
for the new policies for financial
instruments.
Summary of credit risk
Summary
of financial instruments to which the impairment requirements in
IFRS 9 are applied
|
|
At 31 Mar 2018
|
At 1 Jan 2018
|
|
Gross carrying/nominal amount
|
Allowance for ECL
1
|
Gross carrying/nominal amount
|
Allowance
for ECL
1
|
|
$m
|
$m
|
$m
|
$m
|
Loans and advances to customers at amortised cost
|
990,523
|
(9,358)
|
959,080
|
|
(9,343)
|
- personal
|
388,278
|
(3,068)
|
375,069
|
|
(3,047)
|
- corporate and commercial
|
542,061
|
(6,023)
|
520,137
|
|
(6,053)
|
- non-bank financial institutions
|
60,184
|
(267)
|
63,874
|
|
(243)
|
Loans and advances to banks at amortised cost
|
78,750
|
(23)
|
82,582
|
|
(23)
|
Other financial assets measured at amortised cost
|
615,008
|
(75)
|
557,864
|
|
(114)
|
- cash and balances at central banks
|
184,448
|
(3)
|
180,624
|
|
(3)
|
- items in the course of collection from other
banks
|
5,527
|
-
|
6,628
|
|
-
|
- Hong Kong Government certificates of
indebtedness
|
36,334
|
-
|
34,186
|
|
-
|
- reverse repurchase agreements - non-trading
|
213,107
|
-
|
201,553
|
|
-
|
- financial investments
|
60,568
|
(18)
|
59,539
|
|
(16)
|
-
prepayments, accrued income and other assets
2
|
115,024
|
(54)
|
75,334
|
|
(95)
|
Total gross carrying amount on balance sheet
|
1,684,281
|
(9,456)
|
1,599,526
|
|
(9,480)
|
Loans and other credit related commitments
|
517,769
|
(375)
|
501,361
|
|
(376)
|
- personal
|
205,638
|
(44)
|
196,093
|
|
(14)
|
- corporate and commercial
|
263,335
|
(324)
|
262,391
|
|
(355)
|
- financial
|
48,796
|
(7)
|
42,877
|
|
(7)
|
Financial guarantee and similar contracts
|
89,096
|
(184)
|
89,382
|
|
(161)
|
- personal
|
1,408
|
(3)
|
791
|
|
(4)
|
- corporate and commercial
|
76,352
|
(176)
|
78,102
|
|
(153)
|
- financial
|
11,336
|
(5)
|
10,489
|
|
(4)
|
Total nominal amount off-balance sheet
3
|
606,865
|
(559)
|
590,743
|
|
(537)
|
|
2,291,146
|
(10,015)
|
2,190,269
|
|
(10,017)
|
|
|
|
|
|
|
Fair value
|
Memorandum allowance for ECL
4
|
Fair value
|
Memorandum
allowance for ECL
4
|
|
$m
|
$m
|
$m
|
$m
|
Debt instruments measured at fair value through other comprehensive
income
|
330,420
|
(122
|
322,163
|
|
(184
|
1 The total ECL is recognised in the
loss allowance for the financial asset unless the total ECL exceeds
the gross carrying amount of the financial asset, in which case the
ECL is recognised as a provision.
2 Includes only those financial
instruments which are subject to the impairment requirements of
IFRS 9. 'Prepayments, accrued income and other assets' as presented
within the summary consolidated balance sheet on page 16 includes
both financial and non-financial assets.
3 Represents the maximum amount at
risk should the contracts be fully drawn upon and clients
default.
4 Debt instruments measured at FVOCI
continue to be measured at fair value with the allowance for ECL as
a memorandum item. Change in ECL is recognised in 'Change in
expected credit losses and other credit impairment charges' in the
income statement.
Summary
of credit risk (excluding debt instruments measured at FVOCI) by
stage distribution and ECL coverage by industry sector at 31 March
2018
|
|
Gross carrying/nominal amount
1
|
|
|
Allowance for ECL
|
|
|
ECL coverage %
|
|
|
Stage 1
|
Stage 2
|
Of which:
|
Of which:
|
Stage 3
|
POCI
3
|
Total
|
|
Stage 1
|
Stage 2
|
Of which:
|
Of which:
|
Stage 3
|
POCI
3
|
Total
|
|
Stage 1
|
Stage 2
|
Of which:
|
Of which:
|
Stage 3
|
POCI
3
|
Total
|
|
|
|
1 to 29
DPD
2
|
30 and > DPD
2
|
|
|
|
|
|
|
1 to 29
DPD
2
|
30 and > DPD
2
|
|
|
|
|
|
|
1 to 29
DPD
2
|
30 and > DPD
2
|
|
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
Loans and advances to customers at amortised cost
|
906,278
|
|
68,078
|
|
3,069
|
|
2,136
|
|
15,367
|
|
800
|
|
990,523
|
|
|
(1,273
|
)
|
(2,230
|
)
|
(246
|
)
|
(251
|
)
|
(5,665
|
)
|
(190
|
)
|
(9,358
|
)
|
|
0.1
|
|
3.3
|
|
8.0
|
|
11.8
|
|
36.9
|
|
23.8
|
|
0.9
|
|
- personal
|
365,886
|
|
17,580
|
|
2,183
|
|
1,317
|
|
4,812
|
|
-
|
|
388,278
|
|
|
(559
|
)
|
(1,184
|
)
|
(191
|
)
|
(224
|
)
|
(1,325
|
)
|
-
|
|
(3,068
|
)
|
|
0.2
|
|
6.7
|
|
8.7
|
|
17.0
|
|
27.5
|
|
-
|
|
0.8
|
|
-
corporate and commercial
|
483,882
|
|
47,415
|
|
870
|
|
806
|
|
9,964
|
|
800
|
|
542,061
|
|
|
(675
|
)
|
(1,020
|
)
|
(55
|
)
|
(27
|
)
|
(4,138
|
)
|
(190
|
)
|
(6,023
|
)
|
|
0.1
|
|
2.2
|
|
6.3
|
|
3.3
|
|
41.5
|
|
23.8
|
|
1.1
|
|
-
non-bank financial institutions
|
56,510
|
|
3,083
|
|
16
|
|
13
|
|
591
|
|
-
|
|
60,184
|
|
|
(39
|
)
|
(26
|
)
|
-
|
|
-
|
|
(202
|
)
|
-
|
|
(267
|
)
|
|
0.1
|
|
0.8
|
|
-
|
|
-
|
|
34.2
|
|
-
|
|
0.4
|
|
Loans and advances to banks at amortised cost
|
78,137
|
|
594
|
|
2
|
|
30
|
|
19
|
|
-
|
|
78,750
|
|
|
(18
|
)
|
(3
|
)
|
(1
|
)
|
-
|
|
(2
|
)
|
-
|
|
(23
|
)
|
|
-
|
|
0.5
|
|
50.0
|
|
-
|
|
10.5
|
|
-
|
|
-
|
|
Other financial assets measured at amortised cost
|
613,843
|
|
1,084
|
|
22
|
|
45
|
|
79
|
|
2
|
|
615,008
|
|
|
(40
|
)
|
(3
|
)
|
-
|
|
-
|
|
(32
|
)
|
-
|
|
(75
|
)
|
|
-
|
|
0.3
|
|
-
|
|
-
|
|
40.5
|
|
-
|
|
-
|
|
Loan and other credit-related commitments
|
487,707
|
|
29,359
|
|
|
|
696
|
|
7
|
|
517,769
|
|
|
(109
|
)
|
(172
|
)
|
|
|
(94
|
)
|
-
|
|
(375
|
)
|
|
-
|
|
0.6
|
|
|
|
13.5
|
|
-
|
|
0.1
|
|
- personal
|
202,538
|
|
2,912
|
|
|
|
188
|
|
-
|
|
205,638
|
|
|
(11
|
)
|
(1
|
)
|
|
|
(32
|
)
|
-
|
|
(44
|
)
|
|
-
|
|
-
|
|
|
|
17.0
|
|
-
|
|
-
|
|
-
corporate and commercial
|
237,562
|
|
25,304
|
|
|
|
462
|
|
7
|
|
263,335
|
|
|
(91
|
)
|
(171
|
)
|
|
|
(62
|
)
|
-
|
|
(324
|
)
|
|
-
|
|
0.7
|
|
|
|
13.4
|
|
-
|
|
0.1
|
|
- financial
|
47,607
|
|
1,143
|
|
|
|
46
|
|
-
|
|
48,796
|
|
|
(7
|
)
|
-
|
|
|
|
-
|
|
-
|
|
(7
|
)
|
|
-
|
|
-
|
|
|
|
-
|
|
-
|
|
-
|
|
Financial guarantee and similar contracts
|
79,251
|
|
9,014
|
|
|
|
814
|
|
17
|
|
89,096
|
|
|
(43
|
)
|
(57
|
)
|
|
|
(84
|
)
|
-
|
|
(184
|
)
|
|
0.1
|
|
0.6
|
|
|
|
10.3
|
|
-
|
|
0.2
|
|
- personal
|
1,404
|
|
1
|
|
|
|
3
|
|
-
|
|
1,408
|
|
|
(1
|
)
|
-
|
|
|
|
(2
|
)
|
-
|
|
(3
|
)
|
|
0.1
|
|
-
|
|
|
|
66.7
|
|
-
|
|
0.2
|
|
-
corporate and commercial
|
66,892
|
|
8,632
|
|
|
|
811
|
|
17
|
|
76,352
|
|
|
(38
|
)
|
(56
|
)
|
|
|
(82
|
)
|
-
|
|
(176
|
)
|
|
0.1
|
|
0.6
|
|
|
|
10.1
|
|
-
|
|
0.2
|
|
- financial
|
10,955
|
|
381
|
|
|
|
-
|
|
-
|
|
11,336
|
|
|
(4
|
)
|
(1
|
)
|
|
|
-
|
|
-
|
|
(5
|
)
|
|
-
|
|
0.3
|
|
|
|
-
|
|
-
|
|
-
|
|
At 31 Mar 2018
|
2,165,216
|
|
108,129
|
|
|
|
16,975
|
|
826
|
|
2,291,146
|
|
|
(1,483
|
)
|
(2,465
|
)
|
|
|
(5,877
|
)
|
(190
|
)
|
(10,015
|
)
|
|
0.1
|
|
2.3
|
|
|
|
34.6
|
|
23.0
|
|
0.4
|
|
For
footnotes, see page 19.
Summary
of credit risk (excluding debt instruments measured at FVOCI) by
stage distribution and ECL coverage by industry sector at 1 January
2018
|
|
Gross
carrying/nominal amount
1
|
|
|
Allowance for ECL
|
|
|
ECL coverage %
|
|
|
Stage 1
|
Stage 2
|
Of which:
|
Of which:
|
Stage 3
|
POCI
3
|
Total
|
|
Stage 1
|
Stage 2
|
Of which:
|
Of which:
|
Stage 3
|
POCI
3
|
Total
|
|
Stage 1
|
Stage 2
|
Of which:
|
Of which:
|
Stage 3
|
POCI
3
|
Total
|
|
|
|
1 to 29
DPD
2
|
30 and > DPD
2
|
|
|
|
|
|
|
1 to 29
DPD
2
|
30 and > DPD
2
|
|
|
|
|
|
|
1 to 29
DPD
2
|
30 and > DPD
2
|
|
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
Loans and advances to customers at amortised cost
|
871,566
|
|
72,658
|
|
2,393
|
|
2,447
|
|
13,882
|
|
974
|
|
959,080
|
|
|
(1,309
|
)
|
(2,201
|
)
|
(261
|
)
|
(261
|
)
|
(5,591
|
)
|
(242
|
)
|
(9,343
|
)
|
|
0.2
|
|
3.0
|
|
10.9
|
|
10.7
|
|
40.3
|
|
24.8
|
|
1.0
|
|
- personal
|
354,305
|
|
16,354
|
|
1,683
|
|
1,428
|
|
4,410
|
|
-
|
|
375,069
|
|
|
(581
|
)
|
(1,156
|
)
|
(218
|
)
|
(230
|
)
|
(1,310
|
)
|
-
|
|
(3,047
|
)
|
|
0.2
|
|
7.1
|
|
13.0
|
|
16.1
|
|
29.7
|
|
-
|
|
0.8
|
|
-
corporate and commercial
|
456,837
|
|
53,262
|
|
684
|
|
977
|
|
9,064
|
|
974
|
|
520,137
|
|
|
(701
|
)
|
(1,037
|
)
|
(42
|
)
|
(31
|
)
|
(4,073
|
)
|
(242
|
)
|
(6,053
|
)
|
|
0.2
|
|
1.9
|
|
6.1
|
|
3.2
|
|
44.9
|
|
24.8
|
|
1.2
|
|
-
non-bank financial institutions
|
60,424
|
|
3,042
|
|
26
|
|
42
|
|
408
|
|
-
|
|
63,874
|
|
|
(27
|
)
|
(8
|
)
|
(1
|
)
|
-
|
|
(208
|
)
|
-
|
|
(243
|
)
|
|
-
|
|
0.3
|
|
3.8
|
|
-
|
|
51.0
|
|
-
|
|
0.4
|
|
Loans and advances to banks at amortised cost
|
81,027
|
|
1,540
|
|
7
|
|
66
|
|
15
|
|
-
|
|
82,582
|
|
|
(17
|
)
|
(4
|
)
|
(2
|
)
|
-
|
|
(2
|
)
|
-
|
|
(23
|
)
|
|
-
|
|
0.3
|
|
28.6
|
|
-
|
|
13.3
|
|
-
|
|
-
|
|
Other financial assets measured at amortised cost
|
556,185
|
|
1,517
|
|
133
|
|
46
|
|
155
|
|
7
|
|
557,864
|
|
|
(28
|
)
|
(4
|
)
|
-
|
|
(1
|
)
|
(82
|
)
|
-
|
|
(114
|
)
|
|
-
|
|
0.3
|
|
-
|
|
2.2
|
|
52.9
|
|
-
|
|
-
|
|
Loan and other credit-related commitments
|
475,986
|
|
24,330
|
|
|
|
999
|
|
46
|
|
501,361
|
|
|
(126
|
)
|
(183
|
)
|
|
|
(67
|
)
|
-
|
|
(376
|
)
|
|
-
|
|
0.8
|
|
|
|
6.7
|
|
-
|
|
0.1
|
|
- personal
|
194,320
|
|
1,314
|
|
|
|
459
|
|
-
|
|
196,093
|
|
|
(13
|
)
|
(1
|
)
|
|
|
-
|
|
-
|
|
(14
|
)
|
|
-
|
|
0.1
|
|
|
|
-
|
|
-
|
|
-
|
|
-
corporate and commercial
|
240,854
|
|
20,951
|
|
|
|
540
|
|
46
|
|
262,391
|
|
|
(108
|
)
|
(180
|
)
|
|
|
(67
|
)
|
-
|
|
(355
|
)
|
|
-
|
|
0.9
|
|
|
|
12.4
|
|
-
|
|
0.1
|
|
-
financial
|
40,812
|
|
2,065
|
|
|
|
-
|
|
-
|
|
42,877
|
|
|
(5
|
)
|
(2
|
)
|
|
|
-
|
|
-
|
|
(7
|
)
|
|
-
|
|
0.1
|
|
|
|
-
|
|
-
|
|
-
|
|
Financial guarantee and similar contracts
|
77,921
|
|
11,014
|
|
|
|
413
|
|
34
|
|
89,382
|
|
|
(36
|
)
|
(47
|
)
|
|
|
(78
|
)
|
-
|
|
(161
|
)
|
|
-
|
|
0.4
|
|
|
|
18.9
|
|
-
|
|
0.2
|
|
- personal
|
768
|
|
18
|
|
|
|
5
|
|
-
|
|
791
|
|
|
-
|
|
(2
|
)
|
|
|
(2
|
)
|
-
|
|
(4
|
)
|
|
-
|
|
11.1
|
|
|
|
40.0
|
|
-
|
|
0.5
|
|
-
corporate and commercial
|
67,596
|
|
10,064
|
|
|
|
408
|
|
34
|
|
78,102
|
|
|
(35
|
)
|
(44
|
)
|
|
|
(74
|
)
|
-
|
|
(153
|
)
|
|
0.1
|
|
0.4
|
|
|
|
18.1
|
|
-
|
|
0.2
|
|
- financial
|
9,557
|
|
932
|
|
|
|
-
|
|
-
|
|
10,489
|
|
|
(1
|
)
|
(1
|
)
|
|
|
(2
|
)
|
-
|
|
(4
|
)
|
|
-
|
|
0.1
|
|
|
|
-
|
|
-
|
|
-
|
|
At 1 Jan 2018
|
2,062,685
|
|
111,059
|
|
|
|
15,464
|
|
1,061
|
|
2,190,269
|
|
|
(1,516
|
)
|
(2,439
|
)
|
|
|
(5,820
|
)
|
(242
|
)
|
(10,017
|
)
|
|
0.1
|
|
2.2
|
|
|
|
37.6
|
|
22.8
|
|
0.5
|
|
1 Represents the maximum amount at
risk should the contracts be fully drawn upon and clients
default.
2 Days past due ('DPD'). Up to date
accounts in Stage 2 are not shown in amounts presented
above.
3 Purchased or originated
credit-impaired ('POCI').
Personal lending
Total
personal lending for loans and advances to customers by stage
distribution
|
|
Gross carrying amount
|
Allowance for ECL
|
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
By portfolio
|
|
|
|
|
|
|
|
|
First lien residential mortgages
|
275,794
|
|
8,376
|
|
3,160
|
|
287,330
|
|
(41
|
)
|
(73
|
)
|
(491
|
)
|
(605
|
)
|
- of which:
|
|
|
|
|
|
|
|
|
interest only (including offset)
|
31,482
|
|
1,231
|
|
237
|
|
32,950
|
|
(3
|
)
|
(17
|
)
|
(67
|
)
|
(87
|
)
|
affordability including ARMs
|
13,380
|
|
2,409
|
|
569
|
|
16,358
|
|
(2
|
)
|
(4
|
)
|
(5
|
)
|
(11
|
)
|
Other personal lending
|
90,092
|
|
9,204
|
|
1,652
|
|
100,948
|
|
(518
|
)
|
(1,111
|
)
|
(834
|
)
|
(2,463
|
)
|
- other
|
66,961
|
|
5,163
|
|
1,087
|
|
73,211
|
|
(233
|
)
|
(349
|
)
|
(484
|
)
|
(1,066
|
)
|
- credit cards
|
20,681
|
|
3,855
|
|
492
|
|
25,028
|
|
(279
|
)
|
(744
|
)
|
(333
|
)
|
(1,356
|
)
|
-
second lien residential mortgages
|
1,080
|
|
142
|
|
69
|
|
1,291
|
|
(2
|
)
|
(14
|
)
|
(14
|
)
|
(30
|
)
|
- motor vehicle finance
|
1,370
|
|
44
|
|
4
|
|
1,418
|
|
(4
|
)
|
(4
|
)
|
(3
|
)
|
(11
|
)
|
At 31 Mar 2018
|
365,886
|
|
17,580
|
|
4,812
|
|
388,278
|
|
(559
|
)
|
(1,184
|
)
|
(1,325
|
)
|
(3,068
|
)
|
By geography
|
|
|
|
|
|
|
|
|
Europe
|
171,904
|
|
5,594
|
|
2,108
|
|
179,606
|
|
(177
|
)
|
(282
|
)
|
(518
|
)
|
(977
|
)
|
- of which: UK
|
141,821
|
|
4,165
|
|
1,429
|
|
147,415
|
|
(168
|
)
|
(259
|
)
|
(316
|
)
|
(743
|
)
|
Asia
|
146,034
|
|
5,822
|
|
694
|
|
152,550
|
|
(176
|
)
|
(381
|
)
|
(197
|
)
|
(754
|
)
|
- of which: HK
|
95,662
|
|
2,861
|
|
171
|
|
98,694
|
|
(70
|
)
|
(249
|
)
|
(39
|
)
|
(358
|
)
|
MENA
|
5,710
|
|
552
|
|
476
|
|
6,738
|
|
(62
|
)
|
(123
|
)
|
(294
|
)
|
(479
|
)
|
North America
|
36,575
|
|
4,512
|
|
1,215
|
|
42,302
|
|
(23
|
)
|
(97
|
)
|
(142
|
)
|
(262
|
)
|
Latin America
|
5,663
|
|
1,100
|
|
319
|
|
7,082
|
|
(121
|
)
|
(301
|
)
|
(174
|
)
|
(596
|
)
|
At 31 Mar 2018
|
365,886
|
|
17,580
|
|
4,812
|
|
388,278
|
|
(559
|
)
|
(1,184
|
)
|
(1,325
|
)
|
(3,068
|
)
|
Wholesale lending
Total
wholesale lending for loans and advances to banks and customers at
amortised cost
|
|
Gross carrying amount
|
Allowance for ECL
|
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Corporate and commercial
|
483,882
|
|
47,415
|
|
9,964
|
|
800
|
|
542,061
|
|
(675
|
)
|
(1,020
|
)
|
(4,138
|
)
|
(190
|
)
|
(6,023
|
)
|
-
agriculture, forestry and fishing
|
7,964
|
|
1,317
|
|
317
|
|
3
|
|
9,601
|
|
(28
|
)
|
(37
|
)
|
(127
|
)
|
(2
|
)
|
(194
|
)
|
-
mining and quarrying
|
9,282
|
|
3,094
|
|
704
|
|
1
|
|
13,081
|
|
(17
|
)
|
(193
|
)
|
(221
|
)
|
(1
|
)
|
(432
|
)
|
- manufacture
|
90,635
|
|
10,555
|
|
1,849
|
|
501
|
|
103,540
|
|
(139
|
)
|
(162
|
)
|
(922
|
)
|
(66
|
)
|
(1,289
|
)
|
-
electricity, gas, steam and air-conditioning
supply
|
14,998
|
|
1,330
|
|
84
|
|
55
|
|
16,467
|
|
(15
|
)
|
(37
|
)
|
(23
|
)
|
(40
|
)
|
(115
|
)
|
-
water supply, sewerage, waste management and
remediation
|
3,043
|
|
112
|
|
20
|
|
-
|
|
3,175
|
|
(5
|
)
|
(3
|
)
|
(8
|
)
|
-
|
|
(16
|
)
|
- construction
|
14,901
|
|
1,449
|
|
876
|
|
43
|
|
17,269
|
|
(38
|
)
|
(35
|
)
|
(456
|
)
|
(42
|
)
|
(571
|
)
|
-
wholesale and retail trade, repair of motor vehicles and
motorcycles
|
85,380
|
|
11,130
|
|
3,062
|
|
117
|
|
99,689
|
|
(81
|
)
|
(126
|
)
|
(1,002
|
)
|
(14
|
)
|
(1,223
|
)
|
-
transportation and storage
|
23,254
|
|
1,439
|
|
150
|
|
59
|
|
24,902
|
|
(23
|
)
|
(62
|
)
|
(84
|
)
|
(17
|
)
|
(186
|
)
|
-
accommodation and food
|
18,021
|
|
1,995
|
|
242
|
|
-
|
|
20,258
|
|
(42
|
)
|
(53
|
)
|
(68
|
)
|
-
|
|
(163
|
)
|
-
publishing, audiovisual and broadcasting
|
18,729
|
|
1,324
|
|
142
|
|
-
|
|
20,195
|
|
(30
|
)
|
(24
|
)
|
(85
|
)
|
-
|
|
(139
|
)
|
- real estate
|
113,512
|
|
7,029
|
|
1,208
|
|
1
|
|
121,750
|
|
(90
|
)
|
(94
|
)
|
(636
|
)
|
-
|
|
(820
|
)
|
-
professional, scientific and technical activities
|
20,484
|
|
1,769
|
|
289
|
|
-
|
|
22,542
|
|
(28
|
)
|
(25
|
)
|
(65
|
)
|
-
|
|
(118
|
)
|
-
administrative and support services
|
22,024
|
|
1,498
|
|
345
|
|
20
|
|
23,887
|
|
(33
|
)
|
(38
|
)
|
(181
|
)
|
(8
|
)
|
(260
|
)
|
-
public administration and defence, compulsory social
security
|
1,411
|
|
222
|
|
-
|
|
-
|
|
1,633
|
|
(1
|
)
|
(2
|
)
|
-
|
|
-
|
|
(3
|
)
|
- education
|
1,963
|
|
101
|
|
18
|
|
-
|
|
2,082
|
|
(11
|
)
|
(5
|
)
|
(9
|
)
|
-
|
|
(25
|
)
|
- health and care
|
5,753
|
|
539
|
|
132
|
|
-
|
|
6,424
|
|
(12
|
)
|
(16
|
)
|
(53
|
)
|
-
|
|
(81
|
)
|
-
arts, entertainment and recreation
|
4,559
|
|
397
|
|
51
|
|
-
|
|
5,007
|
|
(21
|
)
|
(30
|
)
|
(8
|
)
|
-
|
|
(59
|
)
|
- other services
|
15,890
|
|
1,119
|
|
462
|
|
-
|
|
17,471
|
|
(59
|
)
|
(52
|
)
|
(190
|
)
|
-
|
|
(301
|
)
|
-
activities of households
|
123
|
|
721
|
|
-
|
|
-
|
|
844
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
extra-territorial organisations and bodies activities
|
1,460
|
|
11
|
|
4
|
|
-
|
|
1,475
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
- government
|
9,332
|
|
176
|
|
9
|
|
-
|
|
9,517
|
|
(2
|
)
|
(1
|
)
|
-
|
|
-
|
|
(3
|
)
|
- asset-backed securities
|
1,164
|
|
88
|
|
-
|
|
-
|
|
1,252
|
|
-
|
|
(25
|
)
|
-
|
|
-
|
|
(25
|
)
|
Non-bank financial institutions
|
56,510
|
|
3,083
|
|
591
|
|
-
|
|
60,184
|
|
(39
|
)
|
(26
|
)
|
(202
|
)
|
-
|
|
(267
|
)
|
Loans
and advances
to
banks
|
78,137
|
|
594
|
|
19
|
|
-
|
|
78,750
|
|
(18
|
)
|
(3
|
)
|
(2
|
)
|
-
|
|
(23
|
)
|
At 31 Mar 2018
|
618,529
|
|
51,092
|
|
10,574
|
|
800
|
|
680,995
|
|
(732
|
)
|
(1,049
|
)
|
(4,342
|
)
|
(190
|
)
|
(6,313
|
)
|
By geography
|
|
|
|
|
|
|
|
|
|
|
Europe
|
208,110
|
|
15,051
|
|
5,911
|
|
626
|
|
229,698
|
|
(379
|
)
|
(578
|
)
|
(2,030
|
)
|
(98
|
)
|
(3,085
|
)
|
- of which: UK
|
147,238
|
|
11,724
|
|
4,190
|
|
424
|
|
163,576
|
|
(276
|
)
|
(515
|
)
|
(1,332
|
)
|
(22
|
)
|
(2,145
|
)
|
Asia
|
314,431
|
|
19,490
|
|
1,713
|
|
116
|
|
335,750
|
|
(178
|
)
|
(115
|
)
|
(963
|
)
|
(41
|
)
|
(1,297
|
)
|
- of which: HK
|
182,941
|
|
12,225
|
|
825
|
|
72
|
|
196,063
|
|
(81
|
)
|
(65
|
)
|
(419
|
)
|
(26
|
)
|
(591
|
)
|
MENA
|
24,598
|
|
5,117
|
|
1,803
|
|
47
|
|
31,565
|
|
(51
|
)
|
(96
|
)
|
(983
|
)
|
(47
|
)
|
(1,177
|
)
|
North America
|
54,405
|
|
10,531
|
|
851
|
|
-
|
|
65,787
|
|
(36
|
)
|
(227
|
)
|
(221
|
)
|
-
|
|
(484
|
)
|
Latin America
|
16,985
|
|
903
|
|
296
|
|
11
|
|
18,195
|
|
(88
|
)
|
(33
|
)
|
(145
|
)
|
(4
|
)
|
(270
|
)
|
At 31 Mar 2018
|
618,529
|
|
51,092
|
|
10,574
|
|
800
|
|
680,995
|
|
(732
|
)
|
(1,049
|
)
|
(4,342
|
)
|
(190
|
)
|
(6,313
|
)
|
Key
metrics
|
|
|
|
At
|
|
|
|
31 Mar
1
|
1
Jan
1
|
31
Dec
2
|
Ref*
|
|
Footnotes
|
2018
|
2018
|
2017
|
|
Available capital ($bn)
|
3
|
|
|
|
1
|
Common equity tier 1 ('CET1') capital
|
|
129.6
|
127.3
|
126.1
|
2
|
CET1 capital as if IFRS 9 transitional arrangements had not been
applied
|
|
128.6
|
126.3
|
N/A
|
3
|
Tier 1 capital
|
|
157.1
|
152.1
|
151.0
|
4
|
Tier 1 capital as if IFRS 9 transitional arrangements had not been
applied
|
|
156.1
|
151.1
|
N/A
|
5
|
Total capital
|
|
185.2
|
183.1
|
182.4
|
6
|
Total capital as if IFRS 9 transitional arrangements had not been
applied
|
|
184.2
|
182.1
|
N/A
|
|
Risk-weighted assets ('RWAs') ($bn)
|
|
|
|
|
7
|
Total RWAs
|
|
894.4
|
872.1
|
871.3
|
8
|
Total RWAs as if IFRS 9 transitional arrangements had not been
applied
|
|
893.8
|
871.6
|
N/A
|
|
Capital ratios (%)
|
3
|
|
|
|
9
|
CET1
|
|
14.5
|
14.6
|
14.5
|
10
|
CET1 as if IFRS 9 transitional arrangements had not been
applied
|
|
14.4
|
14.5
|
N/A
|
11
|
Tier 1
|
|
17.6
|
17.4
|
17.3
|
12
|
Tier 1 as if IFRS 9 transitional arrangements had not been
applied
|
|
17.5
|
17.3
|
N/A
|
13
|
Total capital
|
|
20.7
|
21.0
|
20.9
|
14
|
Total capital as if IFRS 9 transitional arrangements had not been
applied
|
|
20.6
|
20.9
|
N/A
|
|
Additional CET1 buffer requirements as a percentage of RWA
(%)
|
|
|
|
|
|
Capital conservation buffer requirement
|
|
1.88
|
N/A
|
1.25
|
|
Countercyclical buffer requirement
|
|
0.34
|
N/A
|
0.22
|
|
Bank G-SIB and/or D-SIB additional requirements
|
|
1.50
|
N/A
|
1.25
|
|
Total of bank CET1 specific buffer requirements
|
|
3.72
|
N/A
|
2.72
|
|
CET1 available after meeting the bank's minimum capital
requirements
|
4
|
8.0
|
N/A
|
8.0
|
|
Total Capital Requirement (%)
|
|
|
|
|
|
Total Capital Requirement
|
|
11.5
|
N/A
|
N/A
|
|
Leverage ratio
|
|
|
|
|
15
|
Total leverage ratio exposure measure ($bn)
|
|
2,707.9
|
2,556.4
|
2,557.1
|
16
|
Leverage ratio (%)
|
5
|
5.6
|
5.6
|
5.6
|
17
|
Leverage ratio as if IFRS 9 transitional arrangements had not been
applied (%)
|
5
|
5.5
|
5.6
|
N/A
|
|
Liquidity Coverage Ratio ('LCR')
|
6
|
|
|
|
|
Total high-quality liquid assets ($bn)
|
|
533.1
|
N/A
|
512.6
|
|
Total net cash outflow ($bn)
|
|
338.5
|
N/A
|
359.9
|
|
LCR ratio (%)
|
7
|
157.5
|
N/A
|
142.2
|
* The references identify the lines
prescribed in the EBA template.
For footnotes, see page 26.
Own
funds disclosure
|
|
|
At
|
|
|
31 Mar
1
|
1
Jan
1
|
31
Dec
2
|
|
|
2018
|
2018
|
2017
|
Ref*
|
|
$m
|
$m
|
$m
|
6
|
Common equity tier 1 capital before regulatory
adjustments
|
163,401
|
158,923
|
158,557
|
28
|
Total regulatory adjustments to common equity tier 1
|
(33,755)
|
(31,613)
|
(32,413)
|
29
|
Common equity tier 1 capital
|
129,646
|
127,310
|
126,144
|
36
|
Additional tier 1 capital before regulatory
adjustments
|
27,489
|
24,922
|
24,922
|
43
|
Total regulatory adjustments to additional tier 1
capital
|
(60)
|
(112)
|
(112)
|
44
|
Additional tier 1 capital
|
27,429
|
24,810
|
24,810
|
45
|
Tier 1 capital
|
157,075
|
152,120
|
150,954
|
51
|
Tier 2 capital before regulatory adjustments
|
28,661
|
31,517
|
31,932
|
57
|
Total regulatory adjustments to tier 2 capital
|
(545)
|
(503)
|
(503)
|
58
|
Tier 2 capital
|
28,116
|
31,014
|
31,429
|
59
|
Total capital
|
185,191
|
183,134
|
182,383
|
60
|
Total risk-weighted assets
|
894,400
|
872,089
|
871,337
|
|
Capital ratios
|
%
|
%
|
%
|
61
|
Common equity tier 1 ratio
|
14.5
|
14.6
|
14.5
|
62
|
Tier 1 ratio
|
17.6
|
17.4
|
17.3
|
63
|
Total capital ratio
|
20.7
|
21.0
|
20.9
|
* The references identify the lines
prescribed in the EBA template.
For footnotes, see page 26.
Capital
Our
CET1 capital ratio remained unchanged at 14.5%.
CET1
capital increased in the quarter by $3.5bn, mainly as a result
of:
●
a $1.2bn IFRS 9 day one transitional impact,
mainly due to classification and measurement changes;
●
$0.7bn of capital generation through profits,
net of cash and scrip dividends; and
●
$1.9bn of favourable foreign currency
translation differences.
In 2Q
2018, HSBC will change the way in which some of its capital
securities are recognised in regulatory capital. The securities
were previously recognised as grandfathered Tier 2 capital and will
now be treated as fully eligible Tier 2 instruments. This
change is expected to increase the Group's total capital ratio by
an estimated 40bps to 21.1% based on figures as at 31 March
2018.
Leverage
ratio
|
|
|
At
|
|
|
31 Mar
1
|
1
Jan
1
|
31
Dec
2
|
|
|
2018
|
2018
|
2017
|
Ref*
|
|
$bn
|
$bn
|
$bn
|
20
|
Tier
1 capital
|
150.3
|
143.8
|
|
142.7
|
21
|
Total
leverage ratio exposure
|
2,707.9
|
2,556.4
|
|
2,557.1
|
|
|
%
|
%
|
%
|
22
|
Leverage ratio
|
5.6
|
5.6
|
|
5.6
|
EU-23
|
Choice
on transitional arrangements for the definition of the capital
measure
|
Fully phased-in
|
Fully phased-in
|
Fully phased-in
|
|
UK leverage ratio exposure - quarterly average
|
2,444.9
|
2,351.2
|
|
2,351.4
|
|
|
%
|
%
|
%
|
|
UK leverage ratio - quarterly average
|
6.1
|
6.2
|
|
6.1
|
|
UK leverage ratio - quarter end
|
6.0
|
6.1
|
|
6.1
|
* The references identify the lines
prescribed in the EBA template.
For footnotes, see page 26.
Our
leverage ratio calculated in accordance with CRD IV was 5.6% at
31 March 2018, unchanged from 5.6% at 31 December 2017.
Growth in tier 1 capital was offset by a rise in the leverage
exposure measure.
The
Group's UK leverage ratio at 31 March 2018 on a modified basis,
excluding qualifying central bank balances, was 6.0%.
At 31
March 2018, our UK minimum leverage ratio requirement of 3.25% was
supplemented by an additional leverage ratio buffer of 0.5%
and a countercyclical leverage ratio buffer of 0.1%. These
additional buffers translate into capital values of $13.1bn and
$2.9bn respectively. We comfortably exceeded these leverage
requirements.
Overview
of RWAs
|
|
|
31 Mar
1
|
1
Jan
1
|
31
Dec
2
|
31 Mar
|
|
|
2018
|
2018
|
2017
|
2018
|
|
|
RWA
|
RWA
|
RWA
|
Capital
requirement
8
|
Ref*
|
|
$bn
|
$bn
|
$bn
|
$bn
|
1
|
Credit risk (excluding counterparty credit risk)
|
638.1
|
|
624.0
|
|
623.9
|
|
51.1
|
|
2
|
- standardised approach
|
129.4
|
|
127.0
|
|
126.9
|
|
10.4
|
|
3
|
- foundation Internal Ratings Based ('IRB')
approach
|
30.4
|
|
28.4
|
|
28.4
|
|
2.4
|
|
4
|
- advanced IRB approach
|
478.3
|
|
468.6
|
|
468.6
|
|
38.3
|
|
6
|
Counterparty credit risk
|
57.9
|
|
54.1
|
|
54.1
|
|
4.5
|
|
7
|
- mark-to-market
|
37.7
|
|
34.2
|
|
34.2
|
|
3.0
|
|
10
|
- internal model method
|
10.4
|
|
9.7
|
|
9.7
|
|
0.8
|
|
11
|
- risk exposure amount for contributions to the default fund
of a central counterparty
|
0.6
|
|
0.7
|
|
0.7
|
|
-
|
|
12
|
- credit valuation adjustment
|
9.2
|
|
9.5
|
|
9.5
|
|
0.7
|
|
13
|
Settlement risk
|
0.1
|
|
0.4
|
|
0.4
|
|
-
|
|
14
|
Securitisation exposures in the non-trading book
|
14.8
|
|
15.2
|
|
15.3
|
|
1.1
|
|
15
|
- IRB ratings based method
|
11.3
|
|
11.9
|
|
12.0
|
|
0.9
|
|
16
|
- IRB supervisory formula method
|
-
|
|
0.2
|
|
0.2
|
|
-
|
|
17
|
- IRB internal assessment approach
|
1.7
|
|
1.5
|
|
1.5
|
|
0.1
|
|
18
|
- standardised approach
|
1.8
|
|
1.6
|
|
1.6
|
|
0.1
|
|
19
|
Market risk
|
43.2
|
|
38.9
|
|
38.9
|
|
3.5
|
|
20
|
- standardised approach
|
4.8
|
|
4.4
|
|
4.4
|
|
0.4
|
|
21
|
- internal models approach
|
38.4
|
|
34.5
|
|
34.5
|
|
3.1
|
|
23
|
Operational risk
|
92.7
|
|
92.7
|
|
92.7
|
|
7.4
|
|
25
|
- standardised approach
|
92.7
|
|
92.7
|
|
92.7
|
|
7.4
|
|
27
|
Amounts below the thresholds for deduction (subject to 250% risk
weight)
|
47.6
|
|
46.8
|
|
46.0
|
|
3.8
|
|
29
|
Total
|
894.4
|
|
872.1
|
|
871.3
|
|
71.4
|
|
* The references identify the lines
prescribed in the EBA template.
For
footnotes, see page 26.
RWAs
by global business
|
|
RBWM
|
CMB
|
GB&M
|
GPB
|
CorporateCentre
|
Total
|
|
$bn
|
$bn
|
$bn
|
$bn
|
$bn
|
$bn
|
Credit
risk
|
98.5
|
|
290.3
|
|
177.3
|
|
13.9
|
|
120.5
|
|
700.5
|
|
Counterparty
credit risk
|
-
|
|
-
|
|
56.1
|
|
0.2
|
|
1.7
|
|
58.0
|
|
Market
risk
|
-
|
|
-
|
|
40.1
|
|
-
|
|
3.1
|
|
43.2
|
|
Operational
risk
|
27.3
|
|
23.7
|
|
30.8
|
|
2.8
|
|
8.1
|
|
92.7
|
|
At 31 Mar 2018
|
125.8
|
|
314.0
|
|
304.3
|
|
16.9
|
|
133.4
|
|
894.4
|
|
RWAs
by geographical region
|
|
|
Europe
|
Asia
|
MENA
|
NorthAmerica
|
LatinAmerica
|
Total
|
|
Footnote
|
$bn
|
$bn
|
$bn
|
$bn
|
$bn
|
$bn
|
Credit
risk
|
|
231.6
|
|
292.7
|
|
47.9
|
|
100.0
|
|
28.3
|
|
700.5
|
|
Counterparty
credit risk
|
|
29.2
|
|
14.2
|
|
1.0
|
|
12.1
|
|
1.5
|
|
58.0
|
|
Market
risk
|
9
|
29.1
|
|
23.7
|
|
3.8
|
|
9.1
|
|
1.3
|
|
43.2
|
|
Operational
risk
|
|
28.9
|
|
37.1
|
|
7.1
|
|
12.1
|
|
7.5
|
|
92.7
|
|
At 31 Mar 2018
|
|
318.8
|
|
367.7
|
|
59.8
|
|
133.3
|
|
38.6
|
|
894.4
|
|
For
footnote, see page 26.
RWA
movement by global businesses by key driver
|
|
Credit risk, counterparty credit risk and operational
risk
|
|
|
|
RBWM
|
CMB
|
GB&M
|
GPB
|
Corporate
Centre
|
Market risk
|
Total
RWAs
|
|
$bn
|
$bn
|
$bn
|
$bn
|
$bn
|
$bn
|
$bn
|
RWAs at 31 Dec 2017
|
121.5
|
|
301.0
|
|
263.4
|
|
16.0
|
|
130.5
|
|
38.9
|
|
871.3
|
|
Asset size
|
2.0
|
|
5.1
|
|
2.6
|
|
0.4
|
|
(3.8
|
)
|
4.5
|
|
10.8
|
|
Asset quality
|
0.4
|
|
1.3
|
|
(0.6
|
)
|
0.3
|
|
1.6
|
|
-
|
|
3.0
|
|
Model updates
|
0.1
|
|
0.6
|
|
-
|
|
-
|
|
-
|
|
-
|
|
0.7
|
|
-
new/updated models
|
0.1
|
|
0.6
|
|
-
|
|
-
|
|
-
|
|
-
|
|
0.7
|
|
Methodology
and policy
|
0.5
|
|
1.9
|
|
(3.9
|
)
|
-
|
|
0.3
|
|
(0.2
|
)
|
(1.4
|
)
|
-
internal updates
|
0.7
|
|
1.7
|
|
(3.9
|
)
|
-
|
|
(0.5
|
)
|
(0.2
|
)
|
(2.2
|
)
|
-
external updates
|
(0.2
|
)
|
0.2
|
|
-
|
|
-
|
|
0.8
|
|
-
|
|
0.8
|
|
Foreign exchange movements
|
1.3
|
|
4.1
|
|
2.7
|
|
0.2
|
|
1.7
|
|
-
|
|
10.0
|
|
Total RWA movement
|
4.3
|
|
13.0
|
|
0.8
|
|
0.9
|
|
(0.2
|
)
|
4.3
|
|
23.1
|
|
RWAs at 31 Mar 2018
|
125.8
|
|
314.0
|
|
264.2
|
|
16.9
|
|
130.3
|
|
43.2
|
|
894.4
|
|
RWA
movement by geographical region by key driver
|
|
Credit risk, counterparty credit risk and operational
risk
|
|
|
|
Europe
|
Asia
|
MENA
|
NorthAmerica
|
LatinAmerica
|
Market risk
|
Total RWAs
|
|
$bn
|
$bn
|
$bn
|
$bn
|
$bn
|
$bn
|
$bn
|
RWAs at 31 Dec 2017
|
282.6
|
|
334.3
|
|
55.9
|
|
124.2
|
|
35.4
|
|
38.9
|
|
871.3
|
|
Asset size
|
(2.8
|
)
|
6.6
|
|
0.1
|
|
1.9
|
|
0.5
|
|
4.5
|
|
10.8
|
|
Asset quality
|
2.4
|
|
1.6
|
|
(0.1
|
)
|
(1.1
|
)
|
0.2
|
|
-
|
|
3.0
|
|
Model updates
|
0.7
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
0.7
|
|
-
new/updated models
|
0.7
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
0.7
|
|
Methodology
and policy
|
(0.8
|
)
|
(0.6
|
)
|
0.3
|
|
-
|
|
(0.1
|
)
|
(0.2
|
)
|
(1.4
|
)
|
-
internal updates
|
(0.8
|
)
|
(1.0
|
)
|
(0.1
|
)
|
(0.1
|
)
|
-
|
|
(0.2
|
)
|
(2.2
|
)
|
-
external updates
|
-
|
|
0.4
|
|
0.4
|
|
0.1
|
|
(0.1
|
)
|
-
|
|
0.8
|
|
Foreign exchange movements
|
7.6
|
|
2.1
|
|
(0.2
|
)
|
(0.8
|
)
|
1.3
|
|
-
|
|
10.0
|
|
Total RWA movement
|
7.1
|
|
9.7
|
|
0.1
|
|
-
|
|
1.9
|
|
4.3
|
|
23.1
|
|
RWAs at 31 Mar 2018
|
289.7
|
|
344.0
|
|
56.0
|
|
124.2
|
|
37.3
|
|
43.2
|
|
894.4
|
|
RWAs
RWAs
increased by $23.1bn, including an increase of $10.0bn due to
foreign currency translation differences.
The
resulting increase of $13.1bn (excluding foreign currency
translation differences) was primarily due to asset size growth of
$10.8bn and asset quality changes of $3.0bn.
The
following comments describe RWA movements for the three month
period to 31 March 2018, excluding foreign currency translation
differences.
Asset size
Asset
size movements were principally driven by exposure growth and
movements in market parameters which increased counterparty credit
risk and market risk RWAs by $8.2bn.
Lending
growth of $2.6bn was driven by CMB ($5.2bn) and RBWM ($2.0bn) and
mainly concentrated in Asia, North America and Europe. This was
partly offset by reductions in Corporate Centre ($3.7bn) and
GB&M ($1.3bn).
Asset quality changes
Asset
quality movements increased RWAs by $4.1bn, mainly reflecting
changes in portfolio mix in Europe ($2.4bn) and Asia
($1.6bn). These changes were partly offset by changes in the
North American portfolio which reduced RWAs by $1.1bn.
Methodology and policy
The
$2.2bn decrease reported in internal updates derives from
management initiatives, mainly taking the form of process
improvements and refined calculations ($1.4bn) and trade actions
($0.4bn). The partly offsetting $0.8bn increase in external updates
arises from the Group's adoption of IFRS 9 'Financial Instruments'
and the EU's related regulatory transitional
arrangements.
RWA flow statements of credit risk exposures under
IRB approach
10
|
|
|
RWA
|
Capital requirement
8
|
|
|
$bn
|
$bn
|
1
|
RWAs
at 31 Dec 2017
|
497.0
|
|
39.8
|
|
2
|
Asset size
|
2.8
|
|
0.2
|
|
3
|
Asset quality
|
2.0
|
|
0.2
|
|
4
|
Model updates
|
0.7
|
|
0.1
|
|
5
|
Methodology and policy
|
(0.7
|
)
|
(0.1
|
)
|
7
|
Foreign exchange movements
|
6.9
|
|
0.5
|
|
9
|
RWAs at 31 Mar 2018
|
508.7
|
|
40.7
|
|
For
footnotes, see page 26.
RWAs
under the IRB approach increased by $11.7bn including an increase
of $6.9bn due to foreign currency translation differences. The
remaining increase of $4.8bn was principally due to organic book
growth of $2.8bn in Asia and a movement in asset quality of $2.0bn
reflecting the changes in portfolio mix in Europe and
Asia.
RWA
flow statements of counterparty credit risk exposures under the
IMM
|
|
|
RWA
|
Capital requirement
8
|
|
|
$bn
|
$bn
|
1
|
RWAs
at 31 Dec 2017
|
12.5
|
|
1.0
|
|
2
|
Asset size
|
0.3
|
|
-
|
|
5
|
Methodology and policy
|
(0.1
|
)
|
-
|
|
9
|
RWAs at 31 Mar 2018
|
12.7
|
|
1.0
|
|
For footnote, see page 26.
RWAs under the IMM increased by $0.2bn, mainly as a result of
increases in asset size driven by mark-to-market
movements.
RWA
flow statements of market risk exposures under the IMA
|
|
|
VaR
|
StressedVaR
|
IRC
|
Other
|
Total RWA
|
Capital requirement
8
|
|
|
$bn
|
$bn
|
$bn
|
$bn
|
$bn
|
$bn
|
1
|
RWAs
at 31 Dec 2017
|
8.3
|
|
14.3
|
|
10.0
|
|
1.9
|
|
34.5
|
|
2.8
|
|
2
|
Movement in risk levels
|
1.2
|
|
-
|
|
1.4
|
|
1.5
|
|
4.1
|
|
0.3
|
|
4
|
Methodology and policy
|
-
|
|
-
|
|
(0.2
|
)
|
-
|
|
(0.2
|
)
|
-
|
|
8
|
RWAs at 31 Mar 2018
|
9.5
|
|
14.3
|
|
11.2
|
|
3.4
|
|
38.4
|
|
3.1
|
|
For footnote, see page 26.
RWAs
under the IMA increased by $3.9bn mainly due to increased risk
levels in Europe and Asia as a result of:
●
higher volatility and exposure that added $1.2bn
to VaR;
●
high grade sovereign exposure that added $1.4bn
to the incremental risk charge; and
●
increased exposure and currency depreciation
that added $1.5bn to other market risk measures.
Footnotes to capital, leverage and risk-weighted
assets
|
1
|
Unless otherwise stated, all figures are calculated using the EU's
regulatory transitional arrangements for IFRS 9 in article 473a of
the Capital Requirements Regulation.
|
2
|
All figures presented as reported under IAS 39 at 31 December
2017.
|
3
|
Capital figures and ratios are reported on the CRD IV transitional
basis for additional tier 1 and tier 2 capital in accordance with
articles 484-92 of the Capital Requirements
Regulation.
|
4
|
The minimum requirements include the total capital requirement to
be met by CET1, comprised of the Pillar 1 and Pillar 2A
requirements set by the Prudential Regulation
Authority.
|
5
|
Leverage ratio is calculated using the CRD IV end-point basis for
additional tier 1 capital.
|
6
|
The EU's regulatory transitional arrangements for IFRS 9 in article
473a of the Capital Requirements Regulation do not apply to
liquidity coverage measures.
|
7
|
LCR is calculated as at the end of each period rather than using
average values.
|
8
|
'Capital requirement' represents the minimum total capital charge
set at 8% of RWAs by article 92 of the Capital Requirements
Regulation.
|
9
|
RWAs are non-additive across geographical regions due to market
risk diversification effects within the Group.
|
10
|
Securitisation positions are not included in this
table.
|
Summary information - global businesses
|
HSBC
adjusted profit before tax
|
|
Quarter ended 31 Mar 2018
|
|
Retail Bankingand WealthManagement
|
CommercialBanking
|
GlobalBanking andMarkets
|
GlobalPrivateBanking
|
Corporate Centre
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Net interest income
|
3,799
|
2,517
|
1,181
|
223
|
(264)
|
7,456
|
Net fee income
|
1,497
|
952
|
863
|
207
|
(12)
|
3,507
|
Net
income from financial instruments held for trading or managed on a
fair value basis
2,3
|
116
|
148
|
2,077
|
48
|
23
|
2,412
|
Net
income from assets and liabilities of insurance businesses,
including related derivatives, measured at fair value through
profit or loss
2
|
(143)
|
(12)
|
-
|
-
|
-
|
(155)
|
Changes
in fair value of other financial instruments mandatorily measured
at fair value through profit or loss
2
|
(59)
|
4
|
112
|
-
|
60
|
117
|
Other
income
1,3
|
459
|
90
|
(85)
|
4
|
45
|
513
|
Net operating income before change in expected credit losses and
other credit impairment charges
|
5,669
|
3,699
|
4,148
|
482
|
(148)
|
13,850
|
Change in expected credit losses and other credit impairment
charges/(recoveries)
|
(303)
|
64
|
(22)
|
3
|
88
|
(170)
|
Net operating income
|
5,366
|
3,763
|
4,126
|
485
|
(60)
|
13,680
|
Total operating expenses
|
(3,463)
|
(1,652)
|
(2,413)
|
(372)
|
(345)
|
(8,245)
|
Operating profit
|
1,903
|
2,111
|
1,713
|
113
|
(405)
|
5,435
|
Share of profit in associates and joint ventures
|
3
|
-
|
-
|
-
|
595
|
598
|
Adjusted profit before tax
|
1,906
|
2,111
|
1,713
|
113
|
190
|
6,033
|
|
%
|
%
|
%
|
%
|
%
|
%
|
Share of HSBC's adjusted profit before tax
|
31.6
|
35.0
|
28.4
|
1.9
|
3.1
|
100.0
|
Adjusted cost efficiency ratio
|
61.1
|
44.7
|
58.2
|
77.2
|
(233.1)
|
59.5
|
|
Quarter ended 31 Dec 2017
|
Net interest income
|
3,684
|
|
2,462
|
1,482
|
216
|
(356)
|
7,488
|
Net fee income
|
1,295
|
|
898
|
771
|
179
|
(27)
|
3,116
|
Net
income from financial instruments held for trading or managed on a
fair value basis
2,3
|
122
|
|
159
|
1,087
|
32
|
638
|
2,038
|
Net
income from assets and liabilities of insurance businesses,
including related derivatives, measured at fair value through
profit or loss
2
|
630
|
|
(6)
|
-
|
10
|
-
|
634
|
Changes
in fair value of other financial instruments mandatorily measured
at fair value through profit or loss
2
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Other
income/(expense)
1,3
|
(602
|
)
|
19
|
123
|
(7)
|
(127)
|
(594)
|
Net operating income/(expense) before loan impairment charges and
other credit risk provisions
|
5,129
|
|
3,532
|
3,463
|
430
|
128
|
12,682
|
Loan impairment (charges)/recoveries and other credit risk
provisions
|
(188
|
)
|
(198)
|
(392)
|
1
|
95
|
(682)
|
Net operating income/(expense)
|
4,941
|
|
3,334
|
3,071
|
431
|
223
|
12,000
|
Total operating expenses
|
(3,527
|
)
|
(1,613)
|
(2,237)
|
(338)
|
(1,226)
|
(8,941)
|
Operating profit/(loss)
|
1,414
|
|
1,721
|
834
|
93
|
(1,003)
|
3,059
|
Share of profit in associates and joint ventures
|
16
|
|
-
|
-
|
-
|
558
|
574
|
Adjusted profit/(loss) before tax
|
1,430
|
|
1,721
|
834
|
93
|
(445)
|
3,633
|
|
%
|
%
|
%
|
%
|
%
|
%
|
Share of HSBC's adjusted profit before tax
|
39.4
|
|
47.4
|
23.0
|
2.6
|
(12.4)
|
100.0
|
Adjusted cost efficiency ratio
|
68.8
|
|
45.7
|
64.6
|
78.6
|
957.8
|
70.5
|
For
footnotes, see page 30.
HSBC
adjusted profit before tax (continued)
|
|
Quarter ended 31 Mar 2017
|
|
Retail Bankingand WealthManagement
|
CommercialBanking
|
GlobalBanking andMarkets
|
GlobalPrivateBanking
|
Corporate Centre
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Net interest income
|
3,484
|
2,220
|
1,100
|
197
|
86
|
7,087
|
Net fee income/(expense)
|
1,272
|
959
|
959
|
184
|
4
|
3,378
|
Net
income from financial instruments held for trading or managed on a
fair value basis
2,3
|
139
|
128
|
1,932
|
53
|
73
|
2,325
|
Net
income from assets and liabilities of insurance businesses,
including related derivatives, measured at fair value through
profit or loss
2
|
1,007
|
(13)
|
-
|
12
|
-
|
1,006
|
Changes
in fair value of other financial instruments mandatorily measured
at fair value through profit or loss
2
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Other
income/(expense)
1,3
|
(689)
|
58
|
151
|
(9)
|
204
|
(285)
|
Net operating income before loan impairment charges and other
credit risk provisions
|
5,213
|
3,352
|
4,142
|
437
|
367
|
13,511
|
Loan impairment charges and other credit risk
provisions
|
(311)
|
10
|
21
|
(1)
|
41
|
(240)
|
Net operating income
|
4,902
|
3,362
|
4,163
|
436
|
408
|
13,271
|
Total operating expenses
|
(3,096)
|
(1,474)
|
(2,357)
|
(362)
|
(332)
|
(7,621)
|
Operating profit
|
1,806
|
1,888
|
1,806
|
74
|
76
|
5,650
|
Share of profit in associates and joint ventures
|
9
|
-
|
-
|
-
|
551
|
560
|
Adjusted profit before tax
|
1,815
|
1,888
|
1,806
|
74
|
627
|
6,210
|
|
%
|
%
|
%
|
%
|
%
|
%
|
Share of HSBC's adjusted profit before tax
|
29.2
|
30.4
|
29.1
|
1.2
|
10.1
|
100.0
|
Adjusted cost efficiency ratio
|
59.4
|
44.0
|
56.9
|
82.8
|
90.5
|
56.4
|
For footnotes, see page 30.
Global Private Banking - reported client
assets
4
|
|
Quarter ended
|
|
31 Mar
|
31 Dec
|
31 Mar
|
|
2018
|
2017
|
2017
|
|
$bn
|
$bn
|
$bn
|
Opening balance
|
330
|
|
327
|
|
298
|
|
Net new money
|
3
|
|
(4
|
)
|
1
|
|
- of which: areas targeted for growth
|
5
|
|
2
|
|
5
|
|
Value change
|
(2
|
)
|
4
|
|
7
|
|
Disposals
|
-
|
|
(1
|
)
|
(7
|
)
|
Exchange and other
|
-
|
|
4
|
|
7
|
|
Closing balance
|
331
|
|
330
|
|
306
|
|
For footnotes, see page 30.
Global Private Banking - reported client assets by
geography
4
|
|
Quarter ended
|
|
31 Mar
|
31 Dec
|
31 Mar
|
|
2018
|
2017
|
2017
|
|
$bn
|
$bn
|
$bn
|
Europe
|
162
|
|
161
|
|
153
|
|
Asia
|
131
|
|
130
|
|
111
|
|
North America
|
38
|
|
39
|
|
42
|
|
Latin America
|
-
|
|
-
|
|
-
|
|
Middle
East
5
|
-
|
|
-
|
|
-
|
|
Closing balance
|
331
|
|
330
|
|
306
|
|
For footnotes, see page 30.
Summary information - geographical regions
|
HSBC
reported profit/(loss) before tax
|
|
Quarter ended 31 Mar 2018
|
|
Europe
|
Asia
|
MENA
|
North America
|
Latin
America
|
Intra-HSBC
items
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Net interest income
|
1,739
|
3,831
|
461
|
870
|
528
|
27
|
7,456
|
Net fee income
|
1,087
|
1,678
|
157
|
444
|
141
|
-
|
3,507
|
Net
income from financial instruments held for trading or managed on a
fair value basis
2,3
|
1,155
|
956
|
42
|
212
|
121
|
(102)
|
2,384
|
Net
income from assets and liabilities of insurance businesses,
including related derivatives, measured at fair value through
profit or loss
2
|
(227)
|
70
|
-
|
-
|
2
|
-
|
(155)
|
Changes
in fair value of other financial instruments mandatorily measured
at fair value through profit or loss
2
|
155
|
(34)
|
5
|
10
|
8
|
(27)
|
117
|
Other
income
1,3
|
561
|
806
|
11
|
89
|
(3)
|
(1,063)
|
401
|
Net operating income before change in expected credit losses and
other credit impairment charges
|
4,470
|
7,307
|
676
|
1,625
|
797
|
(1,165)
|
13,710
|
Change
in expected credit losses and other credit impairment
charges/(recoveries)
|
(62)
|
(32)
|
(4)
|
47
|
(119)
|
-
|
(170)
|
Net operating income
|
4,408
|
7,275
|
672
|
1,672
|
678
|
(1,165)
|
13,540
|
Total operating expenses
|
(4,437)
|
(2,986)
|
(343)
|
(2,268)
|
(514)
|
1,165
|
(9,383)
|
Operating profit/(loss)
|
(29)
|
4,289
|
329
|
(596)
|
164
|
-
|
4,157
|
Share of profit in associates
and joint ventures
|
11
|
479
|
108
|
-
|
-
|
-
|
598
|
Profit/(loss) before tax
|
(18)
|
4,768
|
437
|
(596)
|
164
|
-
|
4,755
|
|
%
|
%
|
%
|
%
|
%
|
|
%
|
Share of HSBC's profit before tax
|
(0.4)
|
100.3
|
9.2
|
(12.5)
|
3.4
|
|
100.0
|
Cost efficiency ratio
|
99.3
|
40.9
|
50.7
|
139.6
|
64.5
|
|
68.4
|
|
|
|
|
|
|
|
|
|
Quarter ended 31 Dec 2017
|
Net interest income
|
1,684
|
3,822
|
440
|
848
|
551
|
(73)
|
7,272
|
Net fee income
|
957
|
1,364
|
149
|
462
|
133
|
-
|
3,065
|
Net
income from financial instruments held for trading or managed on a
fair value basis
2,3
|
897
|
709
|
26
|
153
|
139
|
73
|
1,997
|
Net
income from assets and liabilities of insurance businesses,
including related derivatives, measured at fair value through
profit or loss
2
|
183
|
428
|
-
|
-
|
16
|
-
|
627
|
Changes
in fair value of other financial instruments mandatorily measured
at fair value through profit or loss
2
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Other
income/(expense)
1,3
|
262
|
46
|
23
|
335
|
4
|
(1,330)
|
(660)
|
Net operating income before loan impairment charges and other
credit risk provisions
|
3,983
|
6,369
|
638
|
1,798
|
843
|
(1,330)
|
12,301
|
Loan impairment charges and other credit
risk provisions
|
(506)
|
(26)
|
(32)
|
31
|
(125)
|
-
|
(658)
|
Net operating income
|
3,477
|
6,343
|
606
|
1,829
|
718
|
(1,330)
|
11,643
|
Total operating expenses
|
(5,874)
|
(3,127)
|
(357)
|
(1,308)
|
(559)
|
1,330
|
(9,895)
|
Operating profit/(loss)
|
(2,397)
|
3,216
|
249
|
521
|
159
|
-
|
1,748
|
Share of profit in associates
and joint ventures
|
11
|
454
|
84
|
-
|
7
|
-
|
556
|
Profit/(loss) before tax
|
(2,386)
|
3,670
|
333
|
521
|
166
|
-
|
2,304
|
|
%
|
%
|
%
|
%
|
%
|
|
%
|
Share of HSBC's profit before tax
|
(103.6)
|
159.3
|
14.5
|
22.6
|
7.2
|
|
100.0
|
Cost efficiency ratio
|
147.5
|
49.1
|
56.0
|
72.7
|
66.3
|
|
80.4
|
For footnotes, see page 30.
HSBC
reported profit/(loss) before tax (continued)
|
|
Quarter ended 31 Mar 2017
|
|
Europe
|
Asia
|
MENA
|
North America
|
Latin
America
|
Intra-HSBC
items
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Net interest income
|
1,704
|
|
3,332
|
407
|
894
|
488
|
(38)
|
6,787
|
Net fee income
|
1,043
|
|
1,406
|
158
|
494
|
123
|
-
|
3,224
|
Net
income from financial instruments held for trading or managed on a
fair value basis
2,3
|
962
|
|
906
|
83
|
114
|
84
|
38
|
2,187
|
Net
income from assets and liabilities of insurance businesses,
including related derivatives, measured at fair value through
profit or loss
2
|
298
|
|
651
|
-
|
-
|
15
|
-
|
964
|
Changes
in fair value of other financial instruments mandatorily measured
at fair value through profit or loss
2
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
Other
income
1,3
|
206
|
|
245
|
5
|
274
|
25
|
(924)
|
(169)
|
Net operating income before loan impairment charges and other
credit risk provisions
|
4,213
|
|
6,540
|
653
|
1,776
|
735
|
(924)
|
12,993
|
Loan impairment charges and other credit
risk provisions
|
5
|
|
(167)
|
(57)
|
106
|
(123)
|
-
|
(236)
|
Net operating income
|
4,218
|
|
6,373
|
596
|
1,882
|
612
|
(924)
|
12,757
|
Total operating expenses
|
(4,428
|
)
|
(2,694)
|
(322)
|
(1,310)
|
(498)
|
924
|
(8,328)
|
Operating profit
|
(210
|
)
|
3,679
|
274
|
572
|
114
|
-
|
4,429
|
Share of profit/(loss) in associates
and joint ventures
|
4
|
|
415
|
113
|
-
|
-
|
-
|
532
|
Profit before tax
|
(206
|
)
|
4,094
|
387
|
572
|
114
|
-
|
4,961
|
|
%
|
%
|
%
|
%
|
%
|
|
%
|
Share of HSBC's profit before tax
|
(4.2
|
)
|
82.6
|
7.8
|
11.5
|
2.3
|
|
100.0
|
Cost efficiency ratio
|
105.1
|
|
41.2
|
49.3
|
73.8
|
67.8
|
|
64.1
|
|
|
|
|
|
|
|
|
|
Footnotes to summary information - global businesses and
geographical regions
|
1
|
Other income in this context comprises where applicable changes in
fair value of long-term debt and related derivatives, gains less
losses from financial investments, dividend income, net insurance
premium income and other operating income less net insurance claims
and benefits paid and movement in liabilities to
policyholders.
|
2
|
The classification and measurement requirements under IFRS 9, which
was adopted from 1 January 2018, are based on an entity's
assessment of both the business model for managing the assets and
the contractual cash flow characteristics of the assets. The
standard contains a classification for items measured mandatorily
at fair value through profit or loss as a residual category.
Given its residual nature, the presentation of the income statement
has been updated to separately present items in this category which
are of a dissimilar nature or function, in line with IAS 1
'Presentation of Financial Statements' requirements. Comparative
data have been re-presented. There is no net impact on Total
operating income.
|
3
|
Prior to 2018 foreign exchange exposure on some financial
instruments designated at fair value was presented in the same line
in the income statement as the underlying fair value movement on
these instruments. In 2018 we have grouped the presentation of the
entire effect of foreign exchange exposure in profit or loss and
presented it within 'Net income from financial instruments held for
trading or managed on a fair value basis'. Comparative data have
been re-presented. There is no net impact on Total operating income
and the impact on 'Changes in fair value of long-term debt and
related derivatives' is $563m in 4Q17 and $84m in
1Q17.
|
4
|
Client assets are translated at the rates of exchange applicable
for their respective period-ends, with the effects of currency
translation reported separately. The main components of client
assets are funds under management, which are not reported on the
Group's balance sheet, and customer deposits, which are reported on
the Group's balance sheet.
|
5
|
'Middle East' is an offshore business, therefore client assets are
booked across to various regions, primarily in Europe.
|
Appendix - selected information
|
Supplementary
analysis of significant items by global business is presented
below.
Reconciliation
of reported and adjusted results - global businesses
|
|
Quarter ended 31 Mar 2018
|
|
Retail Banking and WealthManagement
|
CommercialBanking
|
Global Bankingand Markets
|
Global PrivateBanking
|
Corporate Centre
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue
|
|
|
|
|
|
|
Reported
|
5,669
|
|
3,699
|
|
4,178
|
|
482
|
|
(318
|
)
|
13,710
|
|
Significant
items
|
-
|
|
-
|
|
(30
|
)
|
-
|
|
170
|
|
140
|
|
-
disposals, acquisitions and investment in new
businesses
|
-
|
|
-
|
|
-
|
|
-
|
|
112
|
|
112
|
|
-
fair value movement on financial instruments
|
-
|
|
-
|
|
(30
|
)
|
-
|
|
58
|
|
28
|
|
Adjusted
|
5,669
|
|
3,699
|
|
4,148
|
|
482
|
|
(148
|
)
|
13,850
|
|
Change in expected credit losses and other credit impairment
charges/(recoveries)
|
|
|
|
|
|
|
Reported
|
(303
|
)
|
64
|
|
(22
|
)
|
3
|
|
88
|
|
(170
|
)
|
Adjusted
|
(303
|
)
|
64
|
|
(22
|
)
|
3
|
|
88
|
|
(170
|
)
|
Operating expenses
|
|
|
|
|
|
|
Reported
|
(3,573
|
)
|
(1,653
|
)
|
(2,387
|
)
|
(415
|
)
|
(1,355
|
)
|
(9,383
|
)
|
Significant
items
|
110
|
|
1
|
|
(26
|
)
|
43
|
|
1,010
|
|
1,138
|
|
-
costs of structural reform
|
1
|
|
1
|
|
7
|
|
-
|
|
117
|
|
126
|
|
-
customer redress programmes
|
93
|
|
-
|
|
-
|
|
-
|
|
-
|
|
93
|
|
-
disposals, acquisitions and investment in new
businesses
|
-
|
|
-
|
|
-
|
|
2
|
|
-
|
|
2
|
|
-
restructuring and other related costs
|
-
|
|
-
|
|
-
|
|
-
|
|
20
|
|
20
|
|
-
settlements and provisions in connection with legal and regulatory
matters
|
16
|
|
-
|
|
(33
|
)
|
41
|
|
873
|
|
897
|
|
Adjusted
|
(3,463
|
)
|
(1,652
|
)
|
(2,413
|
)
|
(372
|
)
|
(345
|
)
|
(8,245
|
)
|
Share of profit in associates and joint ventures
|
|
|
|
|
|
|
Reported
|
3
|
|
-
|
|
-
|
|
-
|
|
595
|
|
598
|
|
Adjusted
|
3
|
|
-
|
|
-
|
|
-
|
|
595
|
|
598
|
|
Profit/(loss) before tax
|
|
|
|
|
|
|
Reported
|
1,796
|
|
2,110
|
|
1,769
|
|
70
|
|
(990
|
)
|
4,755
|
|
Significant
items
|
110
|
|
1
|
|
(56
|
)
|
43
|
|
1,180
|
|
1,278
|
|
-
revenue
|
-
|
|
-
|
|
(30
|
)
|
-
|
|
170
|
|
140
|
|
-
operating expenses
|
110
|
|
1
|
|
(26
|
)
|
43
|
|
1,010
|
|
1,138
|
|
Adjusted
|
1,906
|
|
2,111
|
|
1,713
|
|
113
|
|
190
|
|
6,033
|
|
Reconciliation
of reported and adjusted results - global businesses
(continued)
|
|
Quarter ended 31 Dec 2017
|
|
Retail
Bankingand WealthManagement
|
CommercialBanking
|
Global
Bankingand Markets
|
Global
PrivateBanking
|
CorporateCentre
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue
|
|
|
|
|
|
|
Reported
|
5,057
|
|
3,366
|
|
3,256
|
|
420
|
|
202
|
|
12,301
|
|
Currency
translation
|
68
|
|
58
|
|
72
|
|
10
|
|
28
|
|
236
|
|
Significant
items
|
4
|
|
108
|
|
135
|
|
-
|
|
(102
|
)
|
145
|
|
-
customer redress programmes
|
-
|
|
103
|
|
2
|
|
-
|
|
-
|
|
105
|
|
-
disposals, acquisitions and investment in new
businesses
|
4
|
|
-
|
|
99
|
|
-
|
|
(24
|
)
|
79
|
|
-
fair value movement on financial instruments
|
-
|
|
-
|
|
33
|
|
-
|
|
(78
|
)
|
(45
|
)
|
-
currency translation on significant items
|
-
|
|
5
|
|
1
|
|
-
|
|
-
|
|
6
|
|
Adjusted
|
5,129
|
|
3,532
|
|
3,463
|
|
430
|
|
128
|
|
12,682
|
|
LICs
|
|
|
|
|
|
|
Reported
|
(186
|
)
|
(190
|
)
|
(373
|
)
|
1
|
|
90
|
|
(658
|
)
|
Currency
translation
|
(2
|
)
|
(8
|
)
|
(19
|
)
|
-
|
|
5
|
|
(24
|
)
|
Adjusted
|
(188
|
)
|
(198
|
)
|
(392
|
)
|
1
|
|
95
|
|
(682
|
)
|
Operating
expenses
|
|
|
|
|
|
|
Reported
|
(3,751
|
)
|
(1,619
|
)
|
(2,325
|
)
|
(512
|
)
|
(1,688
|
)
|
(9,895
|
)
|
Currency
translation
|
(68
|
)
|
(29
|
)
|
(63
|
)
|
(15
|
)
|
(44
|
)
|
(219
|
)
|
Significant
items
|
292
|
|
35
|
|
151
|
|
189
|
|
506
|
|
1,173
|
|
-
costs to achieve
|
46
|
|
24
|
|
97
|
|
(2
|
)
|
490
|
|
655
|
|
-
costs of structural reform
|
6
|
|
3
|
|
4
|
|
-
|
|
118
|
|
131
|
|
-
customer redress programmes
|
254
|
|
16
|
|
2
|
|
-
|
|
-
|
|
272
|
|
-
disposals, acquisitions and investment in new
businesses
|
-
|
|
-
|
|
-
|
|
30
|
|
9
|
|
39
|
|
-
gain on partial settlement of pension obligation
|
(26
|
)
|
(9
|
)
|
(9
|
)
|
(3
|
)
|
(141
|
)
|
(188
|
)
|
-
settlements and provisions in connection with legal and regulatory
matters
|
-
|
|
-
|
|
50
|
|
164
|
|
14
|
|
228
|
|
-
currency translation on significant items
|
12
|
|
1
|
|
7
|
|
-
|
|
16
|
|
36
|
|
Adjusted
|
(3,527
|
)
|
(1,613
|
)
|
(2,237
|
)
|
(338
|
)
|
(1,226
|
)
|
(8,941
|
)
|
Share
of profit in associates and joint ventures
|
|
|
|
|
|
|
Reported
|
16
|
|
-
|
|
-
|
|
-
|
|
540
|
|
556
|
|
Currency
translation
|
-
|
|
-
|
|
-
|
|
-
|
|
18
|
|
18
|
|
Adjusted
|
16
|
|
-
|
|
-
|
|
-
|
|
558
|
|
574
|
|
Profit/(loss)
before tax
|
|
|
|
|
|
|
Reported
|
1,136
|
|
1,557
|
|
558
|
|
(91
|
)
|
(856
|
)
|
2,304
|
|
Currency
translation
|
(2
|
)
|
21
|
|
(10
|
)
|
(5
|
)
|
7
|
|
11
|
|
Significant
items
|
296
|
|
143
|
|
286
|
|
189
|
|
404
|
|
1,318
|
|
-
revenue
|
4
|
|
108
|
|
135
|
|
-
|
|
(102
|
)
|
145
|
|
-
operating expenses
|
292
|
|
35
|
|
151
|
|
189
|
|
506
|
|
1,173
|
|
Adjusted
|
1,430
|
|
1,721
|
|
834
|
|
93
|
|
(445
|
)
|
3,633
|
|
Reconciliation
of reported and adjusted results - global businesses
(continued)
|
|
Quarter ended 31 Mar 2017
|
|
Retail
Bankingand WealthManagement
|
CommercialBanking
|
Global
Bankingand Markets
|
Global
PrivateBanking
|
CorporateCentre
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue
|
|
|
|
|
|
|
Reported
|
5,082
|
|
3,191
|
|
3,789
|
|
419
|
|
512
|
|
12,993
|
|
Currency
translation
|
204
|
|
161
|
|
248
|
|
22
|
|
25
|
|
660
|
|
Significant
items
|
(73
|
)
|
-
|
|
105
|
|
(4
|
)
|
(170
|
)
|
(142
|
)
|
-
disposals, acquisitions and investment in new
businesses
|
(73
|
)
|
-
|
|
-
|
|
(4
|
)
|
(79
|
)
|
(156
|
)
|
-
fair value movement on financial instruments
|
-
|
|
-
|
|
97
|
|
-
|
|
(91
|
)
|
6
|
|
-
currency translation on significant items
|
-
|
|
-
|
|
8
|
|
-
|
|
-
|
|
8
|
|
Adjusted
|
5,213
|
|
3,352
|
|
4,142
|
|
437
|
|
367
|
|
13,511
|
|
LICs
|
|
|
|
|
|
|
Reported
|
(296
|
)
|
3
|
|
20
|
|
(1
|
)
|
38
|
|
(236
|
)
|
Currency
translation
|
(15
|
)
|
7
|
|
1
|
|
-
|
|
3
|
|
(4
|
)
|
Adjusted
|
(311
|
)
|
10
|
|
21
|
|
(1
|
)
|
41
|
|
(240
|
)
|
Operating
expenses
|
|
|
|
|
|
|
Reported
|
(3,276
|
)
|
(1,398
|
)
|
(2,245
|
)
|
(344
|
)
|
(1,065
|
)
|
(8,328
|
)
|
Currency
translation
|
(187
|
)
|
(75
|
)
|
(165
|
)
|
(18
|
)
|
(68
|
)
|
(513
|
)
|
Significant
items
|
367
|
|
(1
|
)
|
53
|
|
-
|
|
801
|
|
1,220
|
|
-
costs to achieve
|
125
|
|
(1
|
)
|
48
|
|
-
|
|
661
|
|
833
|
|
-
costs of structural reform
|
-
|
|
-
|
|
-
|
|
-
|
|
83
|
|
83
|
|
-
customer redress programmes
|
210
|
|
-
|
|
-
|
|
-
|
|
-
|
|
210
|
|
-
currency translation on significant items
|
32
|
|
-
|
|
5
|
|
-
|
|
57
|
|
94
|
|
Adjusted
|
(3,096
|
)
|
(1,474
|
)
|
(2,357
|
)
|
(362
|
)
|
(332
|
)
|
(7,621
|
)
|
Share
of profit in associates and joint ventures
|
|
|
|
|
|
|
Reported
|
9
|
|
-
|
|
-
|
|
-
|
|
523
|
|
532
|
|
Currency
translation
|
-
|
|
-
|
|
-
|
|
-
|
|
28
|
|
28
|
|
Adjusted
|
9
|
|
-
|
|
-
|
|
-
|
|
551
|
|
560
|
|
Profit/(loss)
before tax
|
|
|
|
|
|
|
Reported
|
1,519
|
|
1,796
|
|
1,564
|
|
74
|
|
8
|
|
4,961
|
|
Currency
translation
|
2
|
|
93
|
|
84
|
|
4
|
|
(12
|
)
|
171
|
|
Significant
items
|
294
|
|
(1
|
)
|
158
|
|
(4
|
)
|
631
|
|
1,078
|
|
-
revenue
|
(73
|
)
|
-
|
|
105
|
|
(4
|
)
|
(170
|
)
|
(142
|
)
|
-
operating expenses
|
367
|
|
(1
|
)
|
53
|
|
-
|
|
801
|
|
1,220
|
|
Adjusted
|
1,815
|
|
1,888
|
|
1,806
|
|
74
|
|
627
|
|
6,210
|
|
Reconciliation
of reported and adjusted risk-weighted assets
|
|
At 31 Mar 2018
|
|
Retail Bankingand WealthManagement
|
CommercialBanking
|
Global Banking
and Markets
|
Global PrivateBanking
|
Corporate
Centre
|
Total
|
|
$bn
|
$bn
|
$bn
|
$bn
|
$bn
|
$bn
|
Risk-weighted assets
|
|
|
|
|
|
|
Reported
|
125.8
|
|
314.0
|
|
304.3
|
|
16.9
|
|
133.4
|
|
894.4
|
|
Disposals
|
-
|
|
-
|
|
-
|
|
-
|
|
(2.7
|
)
|
(2.7
|
)
|
- Brazil operations
|
-
|
|
-
|
|
-
|
|
-
|
|
(2.6
|
)
|
(2.6
|
)
|
- Lebanon operations
|
-
|
|
-
|
|
-
|
|
-
|
|
(0.1
|
)
|
(0.1
|
)
|
Adjusted
|
125.8
|
|
314.0
|
|
304.3
|
|
16.9
|
|
130.7
|
|
891.7
|
|
|
|
|
|
|
|
|
|
At 31
Dec 2017
|
Risk-weighted assets
|
|
|
|
|
|
|
Reported
|
121.5
|
|
301.0
|
|
299.3
|
|
16.0
|
|
133.5
|
|
871.3
|
|
Currency translation
|
1.3
|
|
4.1
|
|
2.7
|
|
0.2
|
|
1.7
|
|
10.0
|
|
Disposals
|
-
|
|
-
|
|
-
|
|
-
|
|
(2.7
|
)
|
(2.7
|
)
|
- Brazil operations
|
-
|
|
-
|
|
-
|
|
-
|
|
(2.6
|
)
|
(2.6
|
)
|
- Lebanon operations
|
-
|
|
-
|
|
-
|
|
-
|
|
(0.1
|
)
|
(0.1
|
)
|
Adjusted
|
122.8
|
|
305.1
|
|
302.0
|
|
16.2
|
|
132.5
|
|
878.6
|
|
|
|
|
|
|
|
|
|
At 31
Mar 2017
|
Risk-weighted assets
|
|
|
|
|
|
|
Reported
|
113.5
|
|
280.6
|
|
296.0
|
|
15.4
|
|
152.4
|
|
857.9
|
|
Currency translation
|
3.2
|
|
14.1
|
|
8.8
|
|
0.5
|
|
4.2
|
|
30.8
|
|
Disposals
|
(0.2
|
)
|
(0.4
|
)
|
-
|
|
-
|
|
(5.7
|
)
|
(6.3
|
)
|
- Brazil operations
|
-
|
|
-
|
|
-
|
|
-
|
|
(5.2
|
)
|
(5.2
|
)
|
- Lebanon operations
|
(0.2
|
)
|
(0.4
|
)
|
-
|
|
-
|
|
(0.5
|
)
|
(1.1
|
)
|
Adjusted
|
116.5
|
|
294.3
|
|
304.8
|
|
15.9
|
|
150.9
|
|
882.4
|
|
Reconciliation
of reported and adjusted results - geographical
regions
|
|
Quarter ended 31 Mar 2018
|
|
Europe
|
Asia
|
MENA
|
NorthAmerica
|
LatinAmerica
|
Total
|
UK
|
HongKong
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue
|
|
|
|
|
|
|
|
|
Reported
1
|
4,470
|
|
7,307
|
|
676
|
|
1,625
|
|
797
|
|
13,710
|
|
3,481
|
|
4,667
|
|
Significant
items
|
46
|
|
(12
|
)
|
-
|
|
90
|
|
16
|
|
140
|
|
48
|
|
1
|
|
-
disposals, acquisitions and investment in new
businesses
|
-
|
|
-
|
|
-
|
|
95
|
|
17
|
|
112
|
|
-
|
|
-
|
|
-
fair value movement on financial instruments
|
46
|
|
(12
|
)
|
-
|
|
(5
|
)
|
(1
|
)
|
28
|
|
48
|
|
1
|
|
Adjusted
1
|
4,516
|
|
7,295
|
|
676
|
|
1,715
|
|
813
|
|
13,850
|
|
3,529
|
|
4,668
|
|
ECL
|
|
|
|
|
|
|
|
|
Reported
|
(62
|
)
|
(32
|
)
|
(4
|
)
|
47
|
|
(119
|
)
|
(170
|
)
|
(57
|
)
|
(14
|
)
|
Adjusted
|
(62
|
)
|
(32
|
)
|
(4
|
)
|
47
|
|
(119
|
)
|
(170
|
)
|
(57
|
)
|
(14
|
)
|
Operating expenses
|
|
|
|
|
|
|
|
|
Reported
1
|
(4,437
|
)
|
(2,986
|
)
|
(343
|
)
|
(2,268
|
)
|
(514
|
)
|
(9,383
|
)
|
(3,446
|
)
|
(1,510
|
)
|
Significant
items
|
194
|
|
-
|
|
-
|
|
944
|
|
-
|
|
1,138
|
|
136
|
|
-
|
|
-
costs of structural reform
|
125
|
|
1
|
|
-
|
|
-
|
|
-
|
|
126
|
|
112
|
|
1
|
|
-
customer redress programmes
|
93
|
|
-
|
|
-
|
|
-
|
|
-
|
|
93
|
|
93
|
|
-
|
|
-
disposals, acquisitions and investment in new
businesses
|
2
|
|
-
|
|
-
|
|
-
|
|
-
|
|
2
|
|
-
|
|
-
|
|
-
restructuring and other related costs
|
20
|
|
-
|
|
-
|
|
-
|
|
-
|
|
20
|
|
20
|
|
-
|
|
-
settlements and provisions in connection with legal and regulatory
matters
|
(46
|
)
|
(1
|
)
|
-
|
|
944
|
|
-
|
|
897
|
|
(89
|
)
|
(1
|
)
|
Adjusted
1
|
(4,243
|
)
|
(2,986
|
)
|
(343
|
)
|
(1,324
|
)
|
(514
|
)
|
(8,245
|
)
|
(3,310
|
)
|
(1,510
|
)
|
Share of profit in associates and joint ventures
|
|
|
|
|
|
|
|
|
Reported
|
11
|
|
479
|
|
108
|
|
-
|
|
-
|
|
598
|
|
11
|
|
6
|
|
Adjusted
|
11
|
|
479
|
|
108
|
|
-
|
|
-
|
|
598
|
|
11
|
|
6
|
|
Profit/(loss) before tax
|
|
|
|
|
|
|
|
|
Reported
|
(18
|
)
|
4,768
|
|
437
|
|
(596
|
)
|
164
|
|
4,755
|
|
(11
|
)
|
3,149
|
|
Significant
items
|
240
|
|
(12
|
)
|
-
|
|
1,034
|
|
16
|
|
1,278
|
|
184
|
|
1
|
|
-
revenue
|
46
|
|
(12
|
)
|
-
|
|
90
|
|
16
|
|
140
|
|
48
|
|
1
|
|
-
operating expenses
|
194
|
|
-
|
|
-
|
|
944
|
|
-
|
|
1,138
|
|
136
|
|
-
|
|
Adjusted
|
222
|
|
4,756
|
|
437
|
|
438
|
|
180
|
|
6,033
|
|
173
|
|
3,150
|
|
1 Amounts are non-additive across
geographical regions due to intra-Group transactions.
Reconciliation
of reported and adjusted results - geographical regions
(continued)
|
|
Quarter ended 31 Dec 2017
|
|
Europe
|
Asia
|
MENA
|
NorthAmerica
|
LatinAmerica
|
Total
|
UK
|
HongKong
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue
|
|
|
|
|
|
|
|
|
Reported
1
|
3,983
|
|
6,369
|
|
638
|
|
1,798
|
|
843
|
|
12,301
|
|
2,895
|
|
3,998
|
|
Currency
translation
1
|
216
|
|
48
|
|
1
|
|
2
|
|
(21
|
)
|
236
|
|
164
|
|
(9
|
)
|
Significant
items
|
40
|
|
121
|
|
-
|
|
3
|
|
(19
|
)
|
145
|
|
34
|
|
12
|
|
-
customer redress programmes
|
105
|
|
-
|
|
-
|
|
-
|
|
-
|
|
105
|
|
105
|
|
-
|
|
-
disposals, acquisitions and investment in new
businesses
|
-
|
|
99
|
|
-
|
|
(1
|
)
|
(19
|
)
|
79
|
|
-
|
|
-
|
|
-
fair value movement on financial instruments
|
(71
|
)
|
22
|
|
-
|
|
4
|
|
-
|
|
(45
|
)
|
(77
|
)
|
12
|
|
-
currency translation on significant items
|
6
|
|
-
|
|
-
|
|
-
|
|
-
|
|
6
|
|
6
|
|
-
|
|
Adjusted
1
|
4,239
|
|
6,538
|
|
639
|
|
1,803
|
|
803
|
|
12,682
|
|
3,093
|
|
4,001
|
|
LICs
|
|
|
|
|
|
|
|
|
Reported
|
(506
|
)
|
(26
|
)
|
(32
|
)
|
31
|
|
(125
|
)
|
(658
|
)
|
(380
|
)
|
19
|
|
Currency
translation
|
(24
|
)
|
(1
|
)
|
-
|
|
-
|
|
1
|
|
(24
|
)
|
(18
|
)
|
-
|
|
Adjusted
|
(530
|
)
|
(27
|
)
|
(32
|
)
|
31
|
|
(124
|
)
|
(682
|
)
|
(398
|
)
|
19
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Reported
1
|
(5,874
|
)
|
(3,127
|
)
|
(357
|
)
|
(1,308
|
)
|
(559
|
)
|
(9,895
|
)
|
(4,886
|
)
|
(1,598
|
)
|
Currency
translation
1
|
(211
|
)
|
(33
|
)
|
-
|
|
(1
|
)
|
16
|
|
(219
|
)
|
(167
|
)
|
4
|
|
Significant
items
|
1,051
|
|
186
|
|
13
|
|
(103
|
)
|
26
|
|
1,173
|
|
840
|
|
91
|
|
-
costs to achieve
|
369
|
|
167
|
|
13
|
|
78
|
|
28
|
|
655
|
|
345
|
|
74
|
|
-
costs of structural reform
|
131
|
|
-
|
|
-
|
|
-
|
|
-
|
|
131
|
|
124
|
|
-
|
|
-
customer redress programmes
|
272
|
|
-
|
|
-
|
|
-
|
|
-
|
|
272
|
|
272
|
|
-
|
|
-
disposals, acquisitions and investment in new
businesses
|
32
|
|
-
|
|
-
|
|
7
|
|
-
|
|
39
|
|
-
|
|
-
|
|
-
gain on partial settlement of pension obligation
|
-
|
|
-
|
|
-
|
|
(188
|
)
|
-
|
|
(188
|
)
|
-
|
|
-
|
|
-
settlements and provisions in connection with legal and regulatory
matters
|
211
|
|
17
|
|
-
|
|
-
|
|
-
|
|
228
|
|
64
|
|
17
|
|
-
currency translation on significant items
|
36
|
|
2
|
|
-
|
|
-
|
|
(2
|
)
|
36
|
|
35
|
|
-
|
|
Adjusted
1
|
(5,034
|
)
|
(2,974
|
)
|
(344
|
)
|
(1,412
|
)
|
(517
|
)
|
(8,941
|
)
|
(4,213
|
)
|
(1,503
|
)
|
Share
of profit in associates and joint ventures
|
|
|
|
|
|
|
|
|
Reported
|
11
|
|
454
|
|
84
|
|
-
|
|
7
|
|
556
|
|
11
|
|
9
|
|
Currency
translation
|
-
|
|
18
|
|
-
|
|
-
|
|
-
|
|
18
|
|
-
|
|
-
|
|
Adjusted
|
11
|
|
472
|
|
84
|
|
-
|
|
7
|
|
574
|
|
11
|
|
9
|
|
Profit/(loss)
before tax
|
|
|
|
|
|
|
|
|
Reported
|
(2,386
|
)
|
3,670
|
|
333
|
|
521
|
|
166
|
|
2,304
|
|
(2,360
|
)
|
2,428
|
|
Currency
translation
|
(19
|
)
|
32
|
|
1
|
|
1
|
|
(4
|
)
|
11
|
|
(21
|
)
|
(5
|
)
|
Significant
items
|
1,091
|
|
307
|
|
13
|
|
(100
|
)
|
7
|
|
1,318
|
|
874
|
|
103
|
|
-
revenue
|
40
|
|
121
|
|
-
|
|
3
|
|
(19
|
)
|
145
|
|
34
|
|
12
|
|
-
operating expenses
|
1,051
|
|
186
|
|
13
|
|
(103
|
)
|
26
|
|
1,173
|
|
840
|
|
91
|
|
Adjusted
|
(1,314
|
)
|
4,009
|
|
347
|
|
422
|
|
169
|
|
3,633
|
|
(1,507
|
)
|
2,526
|
|
1 Amounts are non-additive across
geographical regions due to intra-Group transactions.
Reconciliation
of reported and adjusted results - geographical regions
(continued)
|
|
Quarter ended 31 Mar 2017
|
|
Europe
|
Asia
|
MENA
|
NorthAmerica
|
LatinAmerica
|
Total
|
UK
|
HongKong
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue
|
|
|
|
|
|
|
|
|
Reported
1
|
4,213
|
|
6,540
|
|
653
|
|
1,776
|
|
735
|
|
12,993
|
|
3,018
|
|
4,107
|
|
Currency
translation
1
|
579
|
|
100
|
|
(2
|
)
|
17
|
|
(6
|
)
|
660
|
|
406
|
|
(34
|
)
|
Significant
items
|
(48
|
)
|
47
|
|
-
|
|
(142
|
)
|
1
|
|
(142
|
)
|
(55
|
)
|
22
|
|
-
disposals, acquisitions and investment in new
businesses
|
(4
|
)
|
-
|
|
-
|
|
(152
|
)
|
-
|
|
(156
|
)
|
-
|
|
-
|
|
-
fair value movement on financial instruments
|
(51
|
)
|
46
|
|
-
|
|
10
|
|
1
|
|
6
|
|
(60
|
)
|
22
|
|
-
currency translation on significant items
|
7
|
|
1
|
|
-
|
|
-
|
|
-
|
|
8
|
|
5
|
|
-
|
|
Adjusted
1
|
4,744
|
|
6,687
|
|
651
|
|
1,651
|
|
730
|
|
13,511
|
|
3,369
|
|
4,095
|
|
LICs
|
|
|
|
|
|
|
|
|
Reported
|
5
|
|
(167
|
)
|
(57
|
)
|
106
|
|
(123
|
)
|
(236
|
)
|
16
|
|
(155
|
)
|
Currency
translation
|
-
|
|
1
|
|
-
|
|
2
|
|
(7
|
)
|
(4
|
)
|
1
|
|
1
|
|
Adjusted
|
5
|
|
(166
|
)
|
(57
|
)
|
108
|
|
(130
|
)
|
(240
|
)
|
17
|
|
(154
|
)
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Reported
1
|
(4,428
|
)
|
(2,694
|
)
|
(322
|
)
|
(1,310
|
)
|
(498
|
)
|
(8,328
|
)
|
(3,546
|
)
|
(1,393
|
)
|
Currency
translation
1
|
(477
|
)
|
(63
|
)
|
2
|
|
(11
|
)
|
8
|
|
(513
|
)
|
(350
|
)
|
12
|
|
Significant
items
|
944
|
|
171
|
|
8
|
|
83
|
|
14
|
|
1,220
|
|
907
|
|
74
|
|
-
costs to achieve
|
563
|
|
167
|
|
8
|
|
82
|
|
13
|
|
833
|
|
531
|
|
75
|
|
-
costs of structural reform
|
83
|
|
-
|
|
-
|
|
-
|
|
-
|
|
83
|
|
83
|
|
-
|
|
-
customer redress programmes
|
210
|
|
-
|
|
-
|
|
-
|
|
-
|
|
210
|
|
210
|
|
-
|
|
-
currency translation on significant items
|
88
|
|
4
|
|
-
|
|
1
|
|
1
|
|
94
|
|
83
|
|
(1
|
)
|
Adjusted
1
|
(3,961
|
)
|
(2,586
|
)
|
(312
|
)
|
(1,238
|
)
|
(476
|
)
|
(7,621
|
)
|
(2,989
|
)
|
(1,307
|
)
|
Share
of profit in associates and joint ventures
|
|
|
|
|
|
|
|
|
Reported
|
4
|
|
415
|
|
113
|
|
-
|
|
-
|
|
532
|
|
5
|
|
7
|
|
Currency
translation
|
(6
|
)
|
34
|
|
-
|
|
-
|
|
-
|
|
28
|
|
(6
|
)
|
-
|
|
Adjusted
|
(2
|
)
|
449
|
|
113
|
|
-
|
|
-
|
|
560
|
|
(1
|
)
|
7
|
|
Profit/(loss)
before tax
|
|
|
|
|
|
|
|
|
Reported
|
(206
|
)
|
4,094
|
|
387
|
|
572
|
|
114
|
|
4,961
|
|
(507
|
)
|
2,566
|
|
Currency
translation
|
96
|
|
72
|
|
-
|
|
8
|
|
(5
|
)
|
171
|
|
51
|
|
(21
|
)
|
Significant
items
|
896
|
|
218
|
|
8
|
|
(59
|
)
|
15
|
|
1,078
|
|
852
|
|
96
|
|
-
revenue
|
(48
|
)
|
47
|
|
-
|
|
(142
|
)
|
1
|
|
(142
|
)
|
(55
|
)
|
22
|
|
-
operating expenses
|
944
|
|
171
|
|
8
|
|
83
|
|
14
|
|
1,220
|
|
907
|
|
74
|
|
Adjusted
|
786
|
|
4,384
|
|
395
|
|
521
|
|
124
|
|
6,210
|
|
396
|
|
2,641
|
|
1 Amounts are non-additive across
geographical regions due to intra-Group transactions.
First interim dividend for 2018
|
The
Directors of HSBC Holdings plc have declared a first interim
dividend of $0.10 per ordinary share in respect of the financial
year ending 31 December 2018 in accordance with their intention, as
set out in the
Annual Report and Accounts 2017
, to
pay quarterly dividends on the ordinary shares in a pattern of
three equal dividends with a variable fourth interim dividend. The
ordinary shares in London, Hong Kong, Paris and Bermuda and the
American Depositary Shares ('ADSs') in New York will be quoted
ex-dividend on
17 May 2018. The
dividend will be payable on 5 July 2018 to holders of record on 18
May 2018.
The
dividend will be payable in 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 25 June 2018. A scrip dividend will also be offered.
Particulars of these arrangements will be sent to shareholders on
or about 31 May 2018 and elections must be received by
21 June 2018.
The
dividend will be payable on ordinary shares held through Euroclear
France, the settlement and central depositary system for Euronext
Paris, on 5 July 2018 to the holders of record on 18 May 2018. The
dividend will be payable in US dollars or as a scrip dividend.
Particulars of these arrangements will be announced through
Euronext Paris on 7 May, 25 May and 6 July 2018.
The
dividend will be payable on ADSs, each of which represents five
ordinary shares, on 5 July 2018 to holders of record on
18 May 2018. The dividend of $0.50 per ADS will be
payable by the depositary in US dollars or as a scrip dividend of
new ADSs. Particulars of these arrangements will be sent to holders
on or about 31 May 2018 and elections will be required to be made
by 15 June 2018. Alternatively, the cash dividend may be
invested in additional ADSs for participants in the dividend
reinvestment plan operated by the depositary.
Any
person who has acquired ordinary shares registered on the Principal
register in the United Kingdom, the Hong Kong Overseas Branch
register or the Bermuda Overseas Branch register but who has not
lodged the share transfer with the Principal Registrar,
Hong Kong or Bermuda Overseas Branch Registrar should do so
before 4.00pm local time on 18 May 2018 in order to receive the
dividend.
Ordinary
shares may not be removed from or transferred to the Principal
register in the United Kingdom, the Hong Kong Overseas Branch
register or the Bermuda Overseas Branch register on 18 May 2018.
Any person wishing to remove or transfer ordinary shares to or from
each register must do so before 4.00pm local time on 17 May
2018.
Transfer
of ADSs must be lodged with the depositary by 11.00am local time on
18 May 2018 to receive the dividend.
Dividend on 6.20% non-cumulative US dollar preference shares,
series A ('Series A Dollar Preference Shares')
In
2005, 1,450,000 Series A Dollar Preference Shares were issued for a
consideration of $1,000 each, and Series A American Depositary
Shares, each of which represents one-fortieth of a Series A Dollar
Preference Share, were listed on the New York Stock
Exchange.
A
non-cumulative fixed-rate dividend of 6.20% per annum is payable on
the Series A Dollar Preference Shares on 15 March, 15
June,
15
September and 15 December 2018 for the quarter then ended at the
sole and absolute discretion of the Board of HSBC Holdings plc.
Accordingly, the Board of HSBC Holdings plc has declared a dividend
of $0.3875 per Series A American Depositary Share for the quarter
ending 15 June 2018.
The
dividend will be payable on 15 June 2018 to holders of record on 31
May 2018.
Any
person who has acquired Series A American Depositary Shares but who
has not lodged the transfer documentation with the depositary
should do so before 12.00pm local time on 31 May 2018 in order to
receive the dividend.
For and
on behalf of
HSBC
Holdings plc
Ben J S
Mathews
Group
Company Secretary
The
Board of Directors of HSBC Holdings plc as at the date of this
announcement are: Mark Tucker*, John Flint, Kathleen
Casey
†
, Laura
Cha
†
, Henri de
Castries
†
, Lord Evans of
Weardale
†
, Irene
Lee
†
, Iain Mackay,
Heidi Miller
†
, Marc Moses,
David Nish
†
, Jonathan
Symonds
†
, Jackson
Tai
†
and Pauline van der Meer Mohr
†
.
* Non-executive Group
Chairman.
†
Independent
non-executive Director.
1Q18
|
First quarter of 2018
|
1Q17
|
First quarter of 2017
|
4Q17
|
Fourth quarter of 2017
|
Adjusted RoRWA
|
Adjusted return on average risk-weighted assets
|
AFS
|
Available for sale
|
Bps
|
Basis
points. One basis point is equal to one-hundredth of a percentage
point
|
C&L
|
Credit and Lending
|
CET1
|
Common equity tier 1
|
CMB
|
Commercial Banking, a global business
|
CML
|
Consumer and Mortgage Lending (US)
|
Corporate Centre
|
In December 2016, certain functions were combined to create a
Corporate Centre. These include Balance Sheet Management, legacy
businesses and interests in associates and joint ventures. The
Corporate Centre also includes the results of our financing
operations, central support costs with associated recoveries and
the UK bank levy
|
Costs to achieve
|
Transformation costs to deliver the cost reduction and productivity
outcomes outlined in the Investor Update in
June 2015
|
CRD IV
|
Capital Requirements Directive IV
|
D-SIB
|
Domestic systemically important bank
|
EBA
|
European Banking Authority
|
ECL
|
Expected credit losses and other credit impairment
charges
|
FTEs
|
Full-time equivalent staff
|
FVOCI
|
Fair value through other comprehensive income
|
GB&M
|
Global Banking and Markets, a global business
|
GLCM
|
Global
Liquidity and Cash Management
|
GPB
|
Global Private Banking, a global business
|
Group
|
HSBC Holdings together with its subsidiary
undertakings
|
G-SIB
|
Global systemically important bank
|
GTRF
|
Global Trade and Receivables Finance
|
IAS
|
International Accounting Standards
|
IFRSs
|
International Financial Reporting Standards
|
IMA
|
Internal Models Approach
|
IMM
|
Internal Model Method
|
IRB
|
Internal ratings based
|
Jaws
|
The difference between the rate of growth of revenue and the rate
of growth of costs. Positive jaws is where the revenue growth rate
exceeds the cost growth rate. We calculate this on an adjusted
basis
|
JV
|
Joint venture
|
LCR
|
Liquidity coverage ratio
|
Legacy credit
|
A portfolio of assets comprising Solitaire Funding Limited,
securities investment conduits, asset-backed securities trading
portfolios, credit correlation portfolios and derivative
transactions entered into directly with monoline
insurers
|
LICs
|
Loan impairment charges and other credit risk
provisions
|
MENA
|
Middle East and North Africa
|
PBT
|
Profit before tax
|
POCI
|
Purchased or originated credit-impaired
|
RBWM
|
Retail Banking and Wealth Management, a global
business
|
Revenue
|
Net operating income before ECL/LICs
|
RMBS
|
Residential mortgage-backed securities
|
RWAs
|
Risk-weighted assets
|
$m/$bn
|
United States dollar millions/billions
|
VaR
|
Value at risk
|
Click
on, or paste the following link into your web browser, to view the
associated PDF document.
http://www.rns-pdf.londonstockexchange.com/rns/1046N_1-2018-5-3.pdf
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
HSBC
Holdings plc
|
|
|
|
By: /s/
Ben J S Mathews
|
|
Name:
Ben J S Mathews
|
|
Title:
Group Company Secretary
|
|
|
|
Date:
04 May 2018
|
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