TIDMHSBA
RNS Number : 4597C
HSBC Holdings PLC
22 February 2022
Financial review
The financial review gives detailed reporting of our financial
performance at Group level as well as across our different global
businesses and geographical regions.
90 Financial summary
98 Global businesses and geographical regions
117 Reconciliation of alternative performance measures
Expanding opportunities beyond the branches
Mainland China has Asia's largest pool of wealth and is set to
become the world's biggest life insurance market by 2030. Pinnacle
is therefore critical to our ambition to be one of Asia's leading
wealth managers. Colleagues run specialist seminars for our
customers, using digital tablets to facilitate visiting them in
their homes and offices, and are further supported by an
award-winning HSBC River bespoke financial planning mobile app. We
have nearly 700 digitally enabled wealth planners across five
mainland cities, and are looking to accelerate the trajectory of
our hiring towards a target of 3,000 planners, supported by the
recent regulatory approval to take full ownership of our life
insurance manufacturing joint venture.
Financial summary
Page
Use of alternative performance
measures 90
------------------------------- ----
Future accounting developments 90
------------------------------- ----
Critical accounting estimates
and judgements 90
------------------------------- ----
Consolidated income statement 91
------------------------------- ----
Income statement commentary 92
------------------------------- ----
Consolidated balance sheet 95
------------------------------- ----
Use of alternative performance measures
Our reported results are prepared in accordance with IFRSs as
detailed in the financial statements starting on page 308.
To measure our performance, we supplement our IFRSs figures with
non-IFRSs measures, which constitute alternative performance
measures under European Securities and Markets Authority guidance
and non-GAAP financial measures defined in and presented in
accordance with US Securities and Exchange Commission rules and
regulations. These measures include those derived from our reported
results that eliminate factors that distort year-on-year
comparisons. The 'adjusted performance' measure used throughout
this report is described below. Definitions and calculations of
other alternative performance measures are included in our
'Reconciliation of alternative performance measures' on page 117.
All alternative performance measures are reconciled to the closest
reported performance measure.
The global business segmental results are presented on an
adjusted basis in accordance with IFRS 8 'Operating Segments' as
detailed in Note 10 'Segmental analysis' on page 341.
Adjusted performance
Adjusted performance is computed by adjusting reported results
for the effects of foreign currency translation differences and
significant items, which both distort year-on-year comparisons.
We consider adjusted performance provides 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 year-on-year
performance.
Significant items
'Significant items' refers collectively to the items that
management and investors would ordinarily identify and consider
separately to improve the understanding of the underlying trends in
the business.
The tables on pages 98 to 101 and pages 108 to 113 detail the
effects of significant items on each of our global business
segments, geographical regions and selected countries/territories
in 2021, 2020 and 2019.
Foreign currency translation differences
Foreign currency translation differences reflect the movements
of the US dollar against most major currencies during 2021.
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 2021 are computed by retranslating
into US dollars for non-US dollar
branches, subsidiaries, joint ventures
and associates:
* the income statements for 2020 and 2019 at the
average rates of exchange for 2021; and
* the balance sheets at 31 December 2020 and 31
December 2019 at the prevailing rates of exchange on
31 December 2021.
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. The constant currency
data of HSBC's Argentinian subsidiaries
have not been adjusted further for
the impacts of hyperinflation.
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.
========================================
Future accounting developments
IFRS 17 'Insurance Contracts'
IFRS 17 'Insurance Contracts' was issued in May 2017, with
amendments to the standard issued in June 2020. It has been adopted
for use in the EU but not yet for use in the UK. The standard sets
out the requirements that an entity should apply in accounting for
insurance contracts it issues and reinsurance contracts it holds.
Following the amendments, IFRS 17 is effective from 1 January 2023.
The Group is in the process of implementing IFRS 17. Industry
practice and interpretation of the standard are still developing.
Therefore, the likely impact of its implementation remains
uncertain. We expect to provide an update on the likely impacts on
our insurance business at or around our 2022 interim results
announcement. For the purpose of planning the Group's financial
resources, our initial assumption (based on analysis of the
expected 2022 position) is that the accounting changes may result
in a reduction in the reported profit of our insurance business by
approximately two thirds on the transition to IFRS 17, albeit with
a range of expected outcomes. A similar impact is expected on the
equity of the insurance business, primarily reflecting the
elimination of the present value of in-force business ('PVIF')
asset and creation of the contractual service margin (the latter
impacting tangible equity). The return on average ordinary
shareholders' equity ('RoE') of the insurance business is not
expected to be significantly impacted. At 31 December 2021, the
equity associated with our insurance manufacturing operations was
$17.0bn, including PVIF assets of $9.5bn and an associated deferred
tax liability of $1.6bn. These assumptions may change significantly
in the period prior to adoption of the standard.
Critical accounting estimates and
judgements
The results of HSBC reflect the choice of accounting policies,
assumptions and estimates that underlie the preparation of HSBC's
consolidated financial statements. The significant accounting
policies, including the policies which include critical accounting
estimates and judgements, are described in Note 1.2 on the
financial statements. The accounting policies listed below are
highlighted as they involve a high degree of uncertainty and have a
material impact on the financial statements:
-- Impairment of amortised cost financial assets and financial
assets measured at fair value through other comprehensive income
('FVOCI'): The most significant judgements relate to defining what
is considered to be a significant increase in credit risk,
determining the lifetime and point of initial recognition of
revolving facilities, and making assumptions and estimates to
incorporate relevant information about past events, current
conditions and forecasts of economic conditions. A high degree of
uncertainty is involved in making estimations using assumptions
that are highly subjective and very sensitive to the risk factors.
See Note 1.2(i) on page 323.
-- Deferred tax assets: The most significant judgements relate
to judgements made in respect of expected future profitability. See
Note 1.2(l) on page 327.
-- Valuation of financial instruments: In determining the fair
value of financial instruments a variety of valuation techniques
are used, some of which feature significant unobservable inputs and
are subject to substantial uncertainty. See Note 1.2(c) on page
321.
-- Impairment of interests in associates: Impairment testing
involves significant judgement in determining the value in use, and
in particular estimating the present values of cash flows expected
to arise from continuing to hold the investment, based on a number
of management assumptions. The most significant judgements relate
to the impairment testing of our investment in Bank of
Communications Co., Limited ('BoCom'). See Note 1.2(a) on page
319.
-- Impairment of goodwill and non-financial assets: A high
degree of uncertainty is involved in estimating the future cash
flows of the cash-generating units ('CGUs') and the rates used to
discount these cash flows. See Note 1.2(a) on page 319.
-- Provisions: Significant judgement may be required due to the
high degree of uncertainty associated with determining whether a
present obligation exists, and estimating the probability and
amount of any outflows that may arise. See Note 1.2(m) on page
328.
--
Post-employment benefit plans: The calculation of the defined
benefit pension obligation involves the determination of key
assumptions including discount rate, inflation rate, pension
payments and deferred pensions, pay and mortality. See Note 1.2(k)
on page 327.
Given the inherent uncertainties and the high level of
subjectivity involved in the recognition or measurement of the
items above, it is possible that the outcomes in the next financial
year could differ from the expectations on which management's
estimates are based, resulting in the recognition and measurement
of materially different amounts from those estimated by management
in these financial statements.
Consolidated income statement
Summary consolidated income statement
2021 2020 2019 2018 2017
$m $m $m $m $m
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Net interest
income 26,489 27,578 30,462 30,489 28,176
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Net fee income 13,097 11,874 12,023 12,620 12,811
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Net income from
financial
instruments held
for trading or
managed on a
fair value
basis 7,744 9,582 10,231 9,531 8,426
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Net
income/(expense)
from assets and
liabilities
of insurance
businesses,
including
related
derivatives,
measured at fair
value through
profit or loss 4,053 2,081 3,478 (1,488) 2,836
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Change in fair
value of
designated debt
and related
derivatives(1) (182) 231 90 (97) 155
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Changes in fair
value of other
financial
instruments
mandatorily
measured at fair
value through
profit or loss 798 455 812 695 N/A
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Gains less losses
from financial
investments 569 653 335 218 1,150
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Net insurance
premium income 10,870 10,093 10,636 10,659 9,779
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Other operating
income/(expense) 502 527 2,957 960 443
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Total operating
income 63,940 63,074 71,024 63,587 63,776
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Net insurance
claims and
benefits paid
and movement in
liabilities to
policyholders (14,388) (12,645) (14,926) (9,807) (12,331)
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Net operating
income before
change in
expected
credit losses
and other
credit
impairment
charges/Loan
impairment
charges and
other credit
risk
provisions(2) 49,552 50,429 56,098 53,780 51,445
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Change in
expected credit
losses and other
credit
impairment
charges 928 (8,817) (2,756) (1,767) N/A
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Loan impairment
charges and
other credit
risk provisions N/A N/A N/A N/A (1,769)
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Net operating
income 50,480 41,612 53,342 52,013 49,676
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Total operating
expenses
excluding
impairment
of goodwill and
other intangible
assets (33,887) (33,044) (34,955) (34,622) (34,849)
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Impairment of
goodwill and
other intangible
assets (733) (1,388) (7,394) (37) (35)
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Operating profit 15,860 7,180 10,993 17,354 14,792
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Share of profit
in associates
and joint
ventures 3,046 1,597 2,354 2,536 2,375
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Profit before tax 18,906 8,777 13,347 19,890 17,167
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Tax expense (4,213) (2,678) (4,639) (4,865) (5,288)
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Profit for the
year 14,693 6,099 8,708 15,025 11,879
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Attributable to:
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
- ordinary
shareholders of
the parent
company 12,607 3,898 5,969 12,608 9,683
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
- preference
shareholders of
the parent
company 7 90 90 90 90
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
- other equity
holders 1,303 1,241 1,324 1,029 1,025
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
- non-controlling
interests 776 870 1,325 1,298 1,081
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Profit for the
year 14,693 6,099 8,708 15,025 11,879
----------------- ---------------------- -------------------- --------------------- --------------------- ---------------------
Five-year financial information
2021 2020 2019 2018 2017
$ $ $ $ $
-------------- -------------------- -------------------- -------------------- -------------------- --------------------
Basic earnings
per share 0.62 0.19 0.30 0.63 0.48
-------------- -------------------- -------------------- -------------------- -------------------- --------------------
Diluted
earnings per
share 0.62 0.19 0.30 0.63 0.48
-------------- -------------------- -------------------- -------------------- -------------------- --------------------
Dividends per
ordinary
share (paid
in the
period)(3) 0.22 - 0.51 0.51 0.51
-------------- -------------------- -------------------- -------------------- -------------------- --------------------
%% %% %
-------------- -------------------- ------------------- -------------------- ------------------- --------------------
Dividend
payout
ratio(4) 40.3 78.9 100.0 81.0 106.3
-------------- -------------------- -------------------- -------------------- -------------------- --------------------
Post-tax
return on
average total
assets 0.5 0.2 0.3 0.6 0.5
--------------
Return on
average
ordinary
shareholders'
equity 7.1 2.3 3.6 7.7 5.9
-------------- -------------------- -------------------- -------------------- -------------------- --------------------
Return on
average
tangible
equity 8.3 3.1 8.4 8.6 6.8
-------------- -------------------- -------------------- -------------------- -------------------- --------------------
Effective tax
rate 22.3 30.5 34.8 24.5 30.8
-------------- -------------------- -------------------- -------------------- -------------------- --------------------
1 The debt instruments, issued for funding purposes, are
designated under the fair value option to reduce an accounting
mismatch.
2 Net operating income before change in expected credit losses
and other credit impairment charges/Loan impairment charges and
other credit risk provisions, also referred to as revenue.
3 Includes an interim dividend of $0.07 per ordinary share in
respect of the financial year ending 31 December 2021, paid in
September 2021, and an interim dividend of $0.15 per ordinary share
in respect of the financial year ending 31 December 2020, paid in
April 2021.
4 Dividend per ordinary share, in respect of the period,
expressed as a percentage of basic earning per share.
Unless stated otherwise, all tables in the Annual Report and
Accounts 2021 are presented on a reported basis.
For a summary of our financial performance in 2021, see page
27.
For further financial performance data for each global business
and geographical region, see pages 98 to 101 and 106 to 116
respectively. The global business segmental results are presented
on an adjusted basis in accordance with IFRS 8 'Operating
Segments', in Note 10: Segmental analysis on page 341.
Income statement commentary
The following commentary compares Group financial performance
for the year ended 2021 with 2020.
Net interest income
Year ended Quarter ended
------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------
31 Dec 31 Dec 31 Dec 31 Dec 30 Sep 31 Dec
2021 2020 2019 2021 2021 2020
$m $m $m $m $m $m
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Interest income 36,188 41,756 54,695 9,219 9,010 9,301
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Interest expense (9,699) (14,178) (24,233) (2,438) (2,400) (2,682)
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Net interest
income 26,489 27,578 30,462 6,781 6,610 6,619
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Average
interest-earning
assets 2,209,513 2,092,900 1,922,822 2,251,433 2,207,960 2,159,003
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
%% %% %%
----------------- ----------------------------- ---------------------------- ----------------------------- ---------------------------- ----------------------------- ----------------------------
Gross interest
yield(1) 1.64 2.00 2.84 1.62 1.62 1.71
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Less: gross
interest
payable(1) (0.53) (0.81) (1.48) (0.52) (0.53) (0.60)
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Net interest
spread(2) 1.11 1.19 1.36 1.10 1.09 1.11
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Net interest
margin(3) 1.20 1.32 1.58 1.19 1.19 1.22
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
1 Gross interest yield is the average annualised interest rate
earned on average interest-earning assets ('AIEA'). Gross interest
payable is the average annualised interest cost as a percentage on
average interest-bearing liabilities.
2 Net interest spread is the difference between the average
annualised interest rate earned on AIEA, net of amortised premiums
and loan fees, and the average annualised interest rate payable on
average interest-bearing funds.
3 Net interest margin is net interest income expressed as an annualised percentage of AIEA.
Summary of interest income by type of asset
2021 2020 2019
------------------------------------------------ ------------------------------------------------ -------------------------------------------------
Average Interest Average Interest Average Interest
balance income Yield balance income Yield balance income Yield
$m $m % $m $m % $m $m %
----------------- ------------------ ----------- --------------- ------------------- ------------ ------------- ------------------- ------------- -------------
Short-term funds
and
loans and
advances to
banks 450,678 1,105 0.25 298,255 1,264 0.42 212,920 2,411 1.13
------------------ ------------------ ----------- --------------- ------------------- ------------ ------------- ------------------- ------------- -------------
Loans and advances
to
customers 1,060,658 26,071 2.46 1,046,795 29,391 2.81 1,021,554 35,578 3.48
------------------ ------------------ ----------- --------------- ------------------- ------------ ------------- ------------------- ------------- -------------
Reverse repurchase
agreements
- non-trading 206,246 1,019 0.49 221,901 1,819 0.82 224,942 4,690 2.08
------------------ ------------------ ----------- --------------- ------------------- ------------ ------------- ------------------- ------------- -------------
Financial
investments 438,840 6,729 1.53 463,542 8,143 1.76 417,939 10,705 2.56
------------------ ------------------ ----------- --------------- ------------------- ------------ ------------- ------------------- ------------- -------------
Other
interest-earning
assets 53,091 1,264 2.38 62,407 1,139 1.83 45,467 1,311 2.88
------------------ ------------------ ----------- --------------- ------------------- ------------ ------------- ------------------- ------------- -------------
Total
interest-earning
assets 2,209,513 36,188 1.64 2,092,900 41,756 2.00 1,922,822 54,695 2.84
------------------ ------------------ ----------- --------------- ------------------- ------------ ------------- ------------------- ------------- -------------
Summary of interest expense by type of liability
2021 2020 2019
--------------------------------------------------- -------------------------------------------------- ---------------------------------------------------
Average Interest Average Interest Average Interest
balance expense Cost balance expense Cost balance expense Cost
$m $m % $m $m % $m $m %
----------------- ------------------ -------------- --------------- ------------------- -------------- ------------- ------------------- --------------- -------------
Deposits by
banks(1) 75,671 198 0.26 65,536 330 0.50 52,515 702 1.34
----------------- ------------------ -------------- --------------- ------------------- -------------- ------------- ------------------- --------------- -------------
Customer
accounts(2) 1,362,580 4,099 0.30 1,254,249 6,478 0.52 1,149,483 11,238 0.98
----------------- ------------------ -------------- --------------- ------------------- -------------- ------------- ------------------- --------------- -------------
Repurchase
agreements -
non-trading 114,201 363 0.32 125,376 963 0.77 160,850 4,023 2.50
----------------- ------------------ -------------- --------------- ------------------- -------------- ------------- ------------------- --------------- -------------
Debt securities
in issue
- non-trading 193,137 3,603 1.87 219,610 4,944 2.25 211,229 6,522 3.09
----------------- ------------------ -------------- --------------- ------------------- -------------- ------------- ------------------- --------------- -------------
Other
interest-bearing
liabilities 70,929 1,436 2.02 76,395 1,463 1.92 59,980 1,748 2.91
----------------- ------------------ -------------- --------------- ------------------- -------------- ------------- ------------------- --------------- -------------
Total
interest-bearing
liabilities 1,816,518 9,699 0.53 1,741,166 14,178 0.81 1,634,057 24,233 1.48
----------------- ------------------ -------------- --------------- ------------------- -------------- ------------- ------------------- --------------- -------------
1 Including interest-bearing bank deposits only.
2 Including interest-bearing customer accounts only.
Net interest income ('NII') for 2021 was $26.5bn, a decrease of
$1.1bn or 4% compared with 2020. This reflected lower average
market interest rates across the major currencies compared with
2020. This was partly offset by interest income associated with the
increase in average interest-earning assets ('AIEA') of $116.6bn or
5.6%.
Excluding the favourable effects of foreign currency translation
differences, net interest income decreased by $1.8bn or 6.2%.
NII for the fourth quarter was $6.8bn, up 2.4% compared with the
previous year. The increase was driven by a change in funding
composition leading to a reduction of debt securities and an
increase in lower-yielding customer deposits. This was partly
offset by lower interest income on AIEA, primarily driven by a
shift of balances from financial investments to lower yielding
short-term funds, and reduced yields on customer loans. Compared
with the previous quarter, NII was up 2.5%. The increase was mainly
driven by higher interest rates on other interest-earning assets as
well as growth in AIEA.
Net interest margin ('NIM') for 2021 of 1.20% was 12 basis
points ('bps') lower compared with 2020 as the reduction in the
yield on AIEA of 36bps was partly offset by the fall in funding
costs of average interest-bearing liabilities of 28bps. The
decrease in NIM in 2021 included the adverse effects of foreign
currency translation differences. Excluding this, NIM fell by
11bps.
NIM for the fourth quarter of 2021 was 1.19%, down 3bps
year-on-year, predominantly driven by a change in balance sheet
composition towards lower yielding short-term funds and loans and
advances to banks. NIM remained unchanged compared with the
previous quarter.
Interest income for 2021 of $36.2bn decreased by $5.6bn or 13%,
primarily due to the lower average interest rates compared with
2020 as the yield on AIEA fell by 36bps. This was partly offset by
income from balance sheet growth, predominantly in Asia and the UK.
In particular, balances of short-term funds and loans and advances
to banks grew by $152.4bn, and loans and advances to customers grew
by $13.9bn. The decrease in interest income included $0.9bn from
the favourable effects of foreign currency translation differences.
Excluding these, interest income decreased by $6.5bn.
Interest income of $9.2bn in the fourth quarter was down $0.1bn
year-on-year. The decline was predominantly driven by a change in
the balance sheet composition where high-yielding financial
investments decreased by $33.8bn, while low-yielding short-term
funds and loans and advances to banks increased by $138.8bn.
Compared with the previous quarter interest income was up $0.2bn,
mainly due to improved yield on other interest-earning assets, as
well as growth in AIEA.
Interest expense for 2021 of $9.7bn represented a decrease by
$4.5bn or 32% compared with 2020. This reflected a decrease in
funding costs of 28bps, mainly arising from lower interest rates
paid on interest-bearing customer accounts, debt securities in
issue and repurchase agreements. Funding costs further declined due
to a change in funding composition from debt securities to
low-yielding customer deposits, which grew by $108bn, predominantly
in Asia and Europe. The decrease in interest expense included the
adverse effects of foreign currency translation differences of
$0.3bn. Excluding this, interest expense decreased by $4.8bn.
Interest expense of $2.4bn in the fourth quarter of 2021 was
down $0.2bn year-on-year. The decline was predominantly driven by
an improved funding mix, with additional funding from lower costing
customer accounts, coupled with the impact of lower market interest
rates. Compared with the previous quarter, the interest expense was
materially unchanged.
Net fee income of $13.1bn was $1.2bn higher than in 2020, and
included a favourable impact from foreign currency translation
differences of $0.3bn. Net fee income grew in all of our global
businesses.
In WPB, net fee income increased by $0.5bn. Fee income grew,
mainly in Wealth, as improved market sentiment resulted in
increased customer demand. This increase included higher fee income
from funds under management, notably in Hong Kong, the UK and
France, and from unit trusts in Asia. Cards income grew as spending
increased compared with 2020. This also resulted in higher fee
expense.
In CMB, net fee income increased by $0.4bn. Fee income increased
from credit facilities, as well as from trade products, as global
trade volumes recovered during 2021. Income from account services
and remittances also rose as customer activity increased.
In GBM, net fee income increased by $0.3bn. This was driven by
higher fee income from growth in corporate finance activity and in
account services, which included higher activity from transaction
banking clients. Fee income also increased in remittances, credit
facilities, funds under management and global custody, reflecting a
higher level of client activity compared with 2020.
Net income from financial instruments held for trading or
managed on a fair value basis of $7.7bn was $1.8bn lower compared
with 2020 and included adverse fair value movements on
non-qualifying hedges of $0.4bn.
The remaining reduction was mainly in GBM, as 2020 benefited
from higher market volatility supporting a particularly strong
performance within Global Foreign Exchange and Global Debt Markets,
notably in the UK and the US.
Net income from assets and liabilities of insurance businesses,
including related derivatives, measured at fair value through
profit or loss of $4.1bn, compared with $2.1bn in 2020. This
increase primarily reflected favourable equity market performances
in France and Hong Kong and higher gains on unit trust assets,
supporting insurance and investment contracts. This compared with
2020, which was adversely impacted by the onset of the Covid-19
pandemic.
This favourable movement resulted in a corresponding movement in
liabilities to policyholders and the present value of in-force
long-term insurance business ('PVIF') (see 'Other operating income'
below). This reflected the extent to which the policyholders and
shareholders respectively participate in the investment performance
of the associated assets.
Change in fair value of designated debt and related derivatives
was $0.4bn adverse compared with 2020. These movements were driven
by the widening of long-term interest rate curves between the
periods, driven by the gradual recovery of major economies.
All of our financial liabilities designated at fair value are
fixed-rate, long-term debt issuances and are managed in conjunction
with interest rate swaps as part of our interest rate management
strategy. These liabilities are discussed further on page 96.
Changes in fair value of other financial instruments mandatorily
measured at fair value through profit or loss of $0.8bn was $0.3bn
higher compared with 2020. This primarily reflected the impact of
adverse movements in equity markets in the first half of 2020
following the onset of the Covid-19 pandemic, as well as from
favourable equity market movements during 2021.
Gains less losses from financial investments of $0.6bn were
$0.1bn lower compared with 2020, primarily reflecting lower gains
on the disposal of debt securities.
Net insurance premium income of $10.9bn was $0.8bn higher than
in 2020, primarily reflecting higher sales volumes, particularly in
France, the UK and Singapore.
Other operating income of $0.5bn was broadly unchanged compared
with 2020, as a $0.3bn decrease in net favourable movements in PVIF
was broadly offset by the gain on the sale of a property in Germany
and the non-recurrence of revaluation losses on investment
properties in Hong Kong in 2020.
The change in PVIF included a net reduction of $0.7bn from
assumption changes and experience variances, primarily reflecting
increased interest rates and the effect of sharing higher
investment returns with policyholders in Hong Kong and Singapore.
These were partly offset by France where higher interest rates
reduced the cost of guarantees. The net reduction due to assumption
changes was partly offset by a $0.3bn increase in the value of new
business written, primarily in Hong Kong.
PVIF is presented in accordance with IFRS 4 'Insurance
Contracts'. As set out in our Annual Report and Accounts 2020, IFRS
17 'Insurance Contracts' is effective from 1 January 2023. Under
IFRS 17, there will be no PVIF asset recognised. Instead, the
estimated future profit will be included in the measurement of the
insurance contract liability as the contractual service margin and
gradually recognised in revenue as services are provided over the
duration of the insurance contract.
Net insurance claims and benefits paid and movement in
liabilities to policyholders was $1.7bn higher, primarily due to
higher returns on financial assets supporting contracts where the
policyholder is subject to part or all of the investment risk and
higher sales volumes, particularly in France and the UK.
Changes in expected credit losses and other credit impairment
charges ('ECL') were a net release of $0.9bn, compared with a
charge of $8.8bn in 2020. The net release in 2021 reflected an
improvement in the economic outlook, notably in the UK, partly
offset by an increase in allowances in the fourth quarter,
reflecting recent developments in China's commercial real estate
sector. This compared with the significant build-up of stage 1 and
stage 2 allowances in 2020 due to the worsening economic outlook at
the onset of the Covid-19 pandemic. The reduction in ECL also
reflected historically low levels of stage 3 charges, although with
some normalisation during the fourth quarter, as well as the
non-recurrence of a significant charge in 2020 related to a
corporate exposure in Singapore.
For further details on the calculation of ECL, including the
measurement uncertainties and significant judgements applied to
such calculations, the impact of the economic scenarios and
management judgemental adjustments, see pages 144 to 152.
Operating expenses - currency translation and significant items
Year ended
-------------------------------------------------------
2021 2020
$m $m
------------------------------------------------------------ -------------------------- ---------------------------
Significant items 2,472 3,095
- customer redress programmes 49 (54)
------------------------------------------------------------
- impairment of goodwill and other intangibles 587 1,090
------------------------------------------------------------
- past service costs of guaranteed minimum pension benefits
equalisation - 17
------------------------------------------------------------
- restructuring and other related costs(1) 1,836 1,908
------------------------------------------------------------
- settlements and provisions in connection with legal
and regulatory matters - 12
------------------------------------------------------------
- currency translation on significant items 122
------------------------------------------------------------ --------------------------
Currency translation (1,072)
------------------------------------------------------------ -------------------------- ---------------------------
Year ended 31 Dec 2,472 2,023
------------------------------------------------------------ -------------------------- ---------------------------
1 The year ended 2020 included impairment of software intangible
assets of $189m (of the total software intangible asset impairment
of $1,347m) and impairment of tangible assets of $197m.
Operating expenses
Year ended
2021 2020
$m $m
-------------------------------------------------------- ------------------------ ------------------------
Gross employee compensation and benefits 19,612 19,396
-------------------------------------------------------- ------------------------ ------------------------
Capitalised wages and salaries (870) (1,320)
-------------------------------------------------------- ------------------------ ------------------------
Goodwill impairment 587 41
-------------------------------------------------------- ------------------------ ------------------------
Property and equipment 5,145 5,322
-------------------------------------------------------- ------------------------ ------------------------
Amortisation and impairment of intangibles 1,438 2,519
-------------------------------------------------------- ------------------------ ------------------------
UK bank levy 116 802
-------------------------------------------------------- ------------------------ ------------------------
Legal proceedings and regulatory matters 106 289
-------------------------------------------------------- ------------------------ ------------------------
Other operating expenses(1) 8,486 7,383
-------------------------------------------------------- ------------------------ ------------------------
Total operating expenses (reported) 34,620 34,432
-------------------------------------------------------- ------------------------ ------------------------
Total significant items (including currency translation
on significant items) (2,472) (3,095)
-------------------------------------------------------- ------------------------ ------------------------
Currency translation 1,072
-------------------------------------------------------- ------------------------ ------------------------
Total operating expenses (adjusted) 32,148 32,409
-------------------------------------------------------- ------------------------ ------------------------
1 Other operating expenses includes professional fees,
contractor costs, transaction taxes, marketing and travel. The
increase was driven by the spend related to our cost reduction
programme, as well as from the growth in investment in technology
and regulatory programmes.
Staff numbers (full-time equivalents)
2021 2020 2019
---------------------------- ------------------------ ------------------------ -------------------------
Global businesses
---------------------------- ------------------------ ------------------------ -------------------------
Wealth and Personal Banking 130,185 135,727 141,341
---------------------------- ------------------------ ------------------------ -------------------------
Commercial Banking 42,969 43,221 44,706
---------------------------- ------------------------ ------------------------ -------------------------
Global Banking and Markets 46,166 46,729 48,859
---------------------------- ------------------------ ------------------------ -------------------------
Corporate Centre 377 382 445
---------------------------- ------------------------ ------------------------ -------------------------
At 31 Dec 219,697 226,059 235,351
---------------------------- ------------------------ ------------------------ -------------------------
Operating expenses of $34.6bn were broadly unchanged compared
with 2020. This included the impact of our cost saving initiatives,
as well as lower impairments of goodwill and other intangible
assets, as 2021 included a $0.6bn impairment of goodwill related to
our WPB business in Latin America to reflect the macroeconomic
outlook, as well as the impact of foreign exchange rate
deterioration and inflationary pressures, notably on our Argentina
business. However, 2020 included a $1.3bn impairment of intangible
assets, mainly in Europe. There was also a $0.6bn reduction in the
UK bank levy due to a change in the basis of calculation to only
include the UK balance sheet rather than the global balance sheet,
as well as a credit of $0.1bn relating to the 2020 charge.
These decreases were broadly offset by an increase in
performance-related pay of $0.7bn as Group performance improved,
and by an increase in investment in technology of $0.9bn (gross of
cost savings of $0.5bn). The remaining increase primarily reflected
inflationary impacts, non-technology investment in regulatory
programmes, and business growth notably Asia wealth investment. In
addition, there was an adverse impact of foreign currency
translation differences of $1.1bn.
In February 2020, we announced a plan to substantially reduce
the cost base by 2022 and accelerate the pace of change. We
continue to target $5bn to $5.5bn of cost saves for 2020 to 2022,
while spending around $7bn in costs to achieve, which are included
in restructuring and other related costs. Cumulative costs to
achieve spend since the start of the programme in 2020 was $3.6bn,
with related saves of $3.3bn. In 2021, the total cost to achieve
spend was $1.8bn with saves during the year of $2.2bn.
Share of profit in associates and joint ventures of $3.0bn was
$1.4bn higher, primarily reflecting a higher share of profit from
The Saudi British Bank ('SABB') due to the non-recurrence of our
share of its goodwill impairment charge in 2020, and an increased
share of profit from BoCom. Our share of profit also rose from
Business Growth Fund in the UK due to a recovery in asset
valuations relative to 2020.
At 31 December 2021, we performed an impairment review of our
investment in BoCom and concluded that it was not impaired, based
on our value-in-use ('VIU') calculations. The excess of the VIU of
BoCom and its carrying value has increased over the period,
reflecting the impact of BoCom's performance on the VIU.
For more information, see Note 19: Interests in associates and
joint ventures on page 359.
Tax expense
The effective tax rate for 2021 of 22.3% was lower than the
30.5% for 2020. The effective tax rate for 2021 was increased by
the impact of substantively enacted legislation to increase the UK
statutory tax rate from 1 April 2023. The 2020 effective tax rate
was high, due mainly to the non-recognition of deferred tax on
losses in the UK and France.
Consolidated balance sheet
Five-year summary consolidated balance sheet
2021 2020 2019 2018 2017
$m $m $m $m $m
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Assets
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Cash and
balances at
central banks 403,018 304,481 154,099 162,843 180,624
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Trading assets 248,842 231,990 254,271 238,130 287,995
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Financial assets
designated and
otherwise
mandatorily
measured at
fair value
through profit
or loss 49,804 45,553 43,627 41,111 N/A
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Financial assets
designated at
fair
value N/A N/A N/A N/A 29,464
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Derivatives 196,882 307,726 242,995 207,825 219,818
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Loans and
advances to
banks 83,136 81,616 69,203 72,167 90,393
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Loans and
advances to
customers(1) 1,045,814 1,037,987 1,036,743 981,696 962,964
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Reverse
repurchase
agreements -
non-trading 241,648 230,628 240,862 242,804 201,553
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Financial
investments 446,274 490,693 443,312 407,433 389,076
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Other assets 242,521 253,490 230,040 204,115 159,884
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Total assets at
31 Dec 2,957,939 2,984,164 2,715,152 2,558,124 2,521,771
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Liabilities and
equity
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Liabilities
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Deposits by
banks 101,152 82,080 59,022 56,331 69,922
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Customer
accounts 1,710,574 1,642,780 1,439,115 1,362,643 1,364,462
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Repurchase
agreements -
non-trading 126,670 111,901 140,344 165,884 130,002
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Trading
liabilities 84,904 75,266 83,170 84,431 184,361
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Financial
liabilities
designated at
fair value 145,502 157,439 164,466 148,505 94,429
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Derivatives 191,064 303,001 239,497 205,835 216,821
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Debt securities
in issue 78,557 95,492 104,555 85,342 64,546
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Liabilities
under insurance
contracts 112,745 107,191 97,439 87,330 85,667
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Other
liabilities 199,994 204,019 194,876 167,574 113,690
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Total
liabilities at
31 Dec 2,751,162 2,779,169 2,522,484 2,363,875 2,323,900
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Equity
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Total
shareholders'
equity 198,250 196,443 183,955 186,253 190,250
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Non-controlling
interests 8,527 8,552 8,713 7,996 7,621
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Total equity at
31 Dec 206,777 204,995 192,668 194,249 197,871
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
Total
liabilities and
equity at 31
Dec 2,957,939 2,984,164 2,715,152 2,558,124 2,521,771
---------------- --------------------- ----------------------- ----------------------- ----------------------- -----------------------
1 Net of impairment allowances.
A more detailed consolidated balance sheet is contained in the
financial statements on page 310.
Five-year selected financial information
2021 2020 2019 2018 2017
$m $m $m $m $m
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
Called up
share capital 10,316 10,347 10,319 10,180 10,160
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
Capital
resources(1) 177,786 184,423 172,150 173,238 182,383
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
Undated
subordinated
loan capital 1,968 1,970 1,968 1,969 1,969
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
Preferred
securities
and dated
subordinated
loan
capital(2) 28,568 30,721 33,063 35,014 42,147
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
Risk-weighted
assets 838,263 857,520 843,395 865,318 871,337
------------- ------------------------ ------------------------ ------------------------ ------------------------
Total
shareholders'
equity 198,250 196,443 183,955 186,253 190,250
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
Less:
preference
shares and
other
equity
instruments (22,414) (22,414) (22,276) (23,772) (23,655)
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
Total
ordinary
shareholders'
equity 175,836 174,029 161,679 162,481 166,595
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
Less:
goodwill and
intangible
assets
(net of tax) (17,643) (17,606) (17,535) (22,425) (21,680)
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
Tangible
ordinary
shareholders'
equity 158,193 156,423 144,144 140,056 144,915
Financial
statistics
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
Loans and
advances to
customers as
a percentage
of customer
accounts 61.1% 63.2% 72.0% 72.0% 70.6%
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
Average total
shareholders'
equity
to average
total assets 6.62% 6.46% 6.97% 7.16% 7.33%
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
Net asset
value per
ordinary
share
at year-end
($)(3) 8.76 8.62 8.00 8.13 8.35
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
Tangible net
asset value
per ordinary
share at
year-end
($)(4) 7.88 7.75 7.13 7.01 7.26
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
Tangible net
asset value
per fully
diluted share
at year-end
($) 7.84 7.72 7.11 6.98 7.22
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
Number of
$0.50
ordinary
shares in
issue
(millions) 20,632 20,694 20,639 20,361 20,321
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
Basic number
of $0.50
ordinary
shares
outstanding
(millions) 20,073 20,184 20,206 19,981 19,960
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
Basic number
of $0.50
ordinary
shares
outstanding
and dilutive
potential
ordinary
shares
(millions) 20,189 20,272 20,280 20,059 20,065
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
Closing
foreign
exchange
translation
rates to $:
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
$1: GBP 0.739 0.732 0.756 0.783 0.740
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
$1: EUR 0.880 0.816 0.890 0.873 0.834
------------- ----------------------- ------------------------ ------------------------ ------------------------ ------------------------
1 Capital resources are regulatory total capital, the
calculation of which is set out on page 193.
2 Including perpetual preferred securities, details of which can
be found in Note 28: Subordinated liabilities on page 370.
3 The definition of net asset value per ordinary share is total
shareholders' equity, less non-cumulative preference shares and
capital securities, divided by the number of ordinary shares in
issue, excluding own shares held by the company, including those
purchased and held in treasury.
4 The definition of tangible net asset value per ordinary share
is total ordinary shareholder's equity excluding goodwill, PVIF and
other intangible assets (net of deferred tax), divided by the
number of basic ordinary shares in issue, excluding own shares held
by the company, including those purchased and held in treasury.
Balance sheet commentary compared with
31 December 2020
At 31 December 2021, our total assets were $3.0tn, which were
$26bn or 1% lower on a reported basis and $19bn or 1% higher on a
constant currency basis.
The decrease in total assets reflected lower derivative assets
and a fall in financial investments, in part reflecting a
redeployment of our commercial surplus into cash. Reported customer
lending balances were $8bn higher, mainly from growth in mortgage
balances.
Reported loans and advances to customers as a percentage of
customer accounts was 61.1%, which was lower compared with 63.2% at
31 December 2020. This was due to an increase in customer accounts
as corporate customers continued to build up liquidity and personal
customers grew their savings accounts.
Assets
Cash and balances at central banks increased by $99bn or 32%,
mainly in the UK and the US, as we redeployed our commercial
surplus to cash to increase liquidity for our clients and as a
result of deposit inflows.
Trading assets increased by $17bn or 7%, notably from an
increase in equity securities held, particularly in Hong Kong and
the US, largely driven by client demand. These were partly offset
by a reduction of debt securities in the US.
Derivative assets decreased by $111bn or 36%, primarily in the
UK and France. This reflected adverse revaluation movements on
interest rate contracts due to higher long-term yield curve rates
in most major markets. Foreign exchange contracts also decreased as
a result of foreign exchange rate movements in the UK and Hong Kong
and lower client demand in the US. The decrease in derivative
assets was consistent with the decrease in derivative liabilities,
as the underlying risk is broadly matched.
Loans and advances to customers of $1.0tn increased by $8bn on a
reported basis, which included adverse effects of foreign currency
translation differences of $16bn. On a constant currency basis,
customer lending balances were $23bn higher, despite $3bn of loans
and advances to customers being reclassified to assets held for
sale in the US.
The commentary below is on a constant currency basis.
Customer lending increased in WPB by $27bn to $489bn, mainly
from growth in mortgage balances of $23bn, notably in the UK (up
$10bn), Hong Kong (up $7bn) and Canada (up $4bn) as housing market
activity continued to increase.
In CMB, customer lending of $349bn was $11bn higher, as we grew
trade lending by $13bn, reflecting a recovery in global trade
volumes, which more than offset a reduction in other term
lending.
In GBM, lending of $207bn fell by $14bn, due to a reduction in
other term lending mainly in the UK.
Reverse repurchase agreements - non-trading increased by $11bn
or 5%, primarily in Asia due to client demand. This was partly
offset by the redeployment of our commercial surplus to cash in the
US.
There was also an increase in balances eligible for netting in
the UK, resulting in an overall balance reduction.
Financial investments decreased by $44bn or 9%, mainly as we
reduced our holdings of debt securities and treasury bills through
a combination of disposals and maturities. A notable portion of
these funds was redeployed into cash as we managed our commercial
surplus.
Other assets decreased by $11bn due to lower cash collateral as
derivative balances decreased, partly offset by an increase from
the reclassification of loans and advances to customers to assets
held for sale, reflecting our exit of mass market retail banking in
the US.
Liabilities
Customer accounts of $1.7tn increased by $68bn or 4% on a
reported basis, which included adverse effects of foreign currency
translation differences of $23bn. On a constant currency basis,
customer accounts were $90bn higher, with growth across all of our
global businesses, despite a reclassification of $10bn to
liabilities of disposal groups held for sale in the US. The
increase was primarily in the UK, Hong Kong and the rest of Asia,
as corporate customers continued to build up liquidity and personal
customers grew their savings as spending remained below
pre-pandemic levels.
Deposits by banks increased by $19bn or 23%, primarily in the
UK, relating to the utilisation of a Bank of England scheme to
provide loans to corporate customers during the year. There were
also increases in Hong Kong and the US.
Repurchase agreements - non-trading increased by $15bn or 13%,
primarily in Hong Kong, as client demand increased.
Derivative liabilities decreased by $112bn or 37%, which is
consistent with the decrease in derivative assets, since the
underlying risk is broadly matched.
Other liabilities decreased by $4bn or 2% due to lower cash
collateral as derivative balances decreased, partly offset by an
increase from a reclassification of customer accounts to
liabilities held for sale, reflecting our exit of mass market
retail banking in the US.
Equity
Total shareholders' equity, including non-controlling interests,
increased by $2bn or 1% compared with 31 December 2020. This
reflected the effects of profits generated of $15bn, partly offset
by a reduction in other comprehensive income ('OCI') of $5bn,
dividend payments and coupon distributions on securities classified
as equity of $6bn and a $2bn reduction related to our share
buy-back programme. Movements in OCI included fair value losses on
debt instruments of $2bn, driven by unrealised losses on fixed rate
bonds due to higher long-term yield curve rates, and adverse
foreign exchange differences of $2bn.
Risk-weighted assets
Risk-weighted assets ('RWAs') totalled $838.3bn at 31 December
2021, a $19.2bn decrease since 2020. Excluding foreign currency
translation differences, RWAs fell by $6.3bn in 2021. This was due
to the following movements:
-- a $4.7bn asset size increase, mostly caused by CMB and WPB
lending growth in Asia, while lending fell in GBM;
-- a $8.0bn reduction in RWAs due to changes in asset quality
from favourable portfolio mix and credit migration, mostly in CMB
and WPB in Asia and North America; and
-- a $3.0bn fall in RWAs due to changes in methodology and
policy. This was primarily the result of risk parameter refinements
in GBM and CMB, partly offset by higher market risk RWAs following
our adoption of a Pillar 1 approach to the capitalisation of
structural foreign exchange.
--
Customer accounts by country/territory
2021 2020
$m $m
------------------------------------------------------ --------------------- -----------------------
Europe 667,769 629,647
------------------------------------------------------ --------------------- -----------------------
- UK 535,797 504,275
------------------------------------------------------
- France 56,841 55,111
------------------------------------------------------
- Germany 22,509 21,605
------------------------------------------------------
- Switzerland 10,680 10,102
------------------------------------------------------
- other 41,942 38,554
------------------------------------------------------ ---------------------
Asia 792,098 762,406
------------------------------------------------------ --------------------- -----------------------
- Hong Kong 549,429 531,489
------------------------------------------------------
- Singapore 57,572 55,140
------------------------------------------------------
- mainland China 59,266 56,826
------------------------------------------------------
- Australia 28,240 29,286
------------------------------------------------------
- India 24,507 20,199
------------------------------------------------------
- Malaysia 16,500 15,997
------------------------------------------------------
- Taiwan 15,483 16,041
------------------------------------------------------
- Indonesia 6,019 5,198
------------------------------------------------------
- other 35,082 32,230
------------------------------------------------------ ---------------------
Middle East and North Africa (excluding Saudi Arabia) 42,629 41,221
------------------------------------------------------ --------------------- -----------------------
- United Arab Emirates 20,943 20,974
------------------------------------------------------
- Turkey 4,258 3,987
------------------------------------------------------
- Egypt 6,699 5,659
------------------------------------------------------
- other 10,729 10,601
------------------------------------------------------ ---------------------
North America 178,565 182,028
------------------------------------------------------ --------------------- -----------------------
- US(1) 111,921 117,485
------------------------------------------------------
- Canada 58,071 56,520
------------------------------------------------------
- other 8,573 8,023
------------------------------------------------------ ---------------------
Latin America 29,513 27,478
------------------------------------------------------ --------------------- -----------------------
- Mexico 23,583 22,220
------------------------------------------------------
- other 5,930 5,258
------------------------------------------------------ ---------------------
At 31 Dec 1,710,574 1,642,780
------------------------------------------------------ --------------------- -----------------------
1 At 31 December 2021, customer accounts of $8.8bn relating to
the disposal of the US retail banking business met the criteria to
be classified as held for sale and are reported within 'Accruals,
deferred income and other liabilities' on the balance sheet. Refer
to Note 36 on page 387 for further details.
Loans and advances, deposits by currency
At
31 Dec 2021
----------------------------------------------------------------------------------------------------------------------------------------------------------------------
$m USD GBP HKD EUR CNY Others(1) Total
---------- -------------------- ----------------------- ------------------------ ----------------------- ----------------------- -------------------- ---------------------
Loans and
advances
to
banks 21,474 3,991 524 3,970 6,545 46,632 83,136
---------- -------------------- ----------------------- ------------------------ ----------------------- ----------------------- -------------------- ---------------------
Loans and
advances
to
customers 169,055 280,909 223,714 83,457 44,093 244,586 1,045,814
---------- -------------------- ----------------------- ------------------------ ----------------------- ----------------------- -------------------- ---------------------
Total
loans and
advances 190,529 284,900 224,238 87,427 50,638 291,218 1,128,950
Deposits
by banks 37,962 20,909 2,757 24,393 5,049 10,082 101,152
---------- -------------------- ----------------------- ------------------------ ----------------------- ----------------------- -------------------- ---------------------
Customer
accounts 453,864 463,232 318,702 133,604 65,052 276,120 1,710,574
---------- -------------------- ----------------------- ------------------------ ----------------------- ----------------------- -------------------- ---------------------
Total
deposits 491,826 484,141 321,459 157,997 70,101 286,202 1,811,726
---------- -------------------- ----------------------- ------------------------ ----------------------- ----------------------- -------------------- ---------------------
At
31 Dec 2020
----------------------------------------------------------------------------------------------------------------------------------------------------------------------
$m USD GBP HKD EUR CNY Others Total
---------- -------------------- ----------------------- ------------------------ ----------------------- ----------------------- -------------------- ---------------------
Loans and
advances
to
banks 17,959 3,495 7,155 4,601 6,063 42,343 81,616
---------- -------------------- ----------------------- ------------------------ ----------------------- ----------------------- -------------------- ---------------------
Loans and
advances
to
customers 173,117 280,803 222,138 89,851 37,671 234,407 1,037,987
---------- -------------------- ----------------------- ------------------------ ----------------------- ----------------------- -------------------- ---------------------
Total
loans and
advances 191,076 284,298 229,293 94,452 43,734 276,750 1,119,603
Deposits
by banks 30,239 7,856 2,884 25,291 4,904 10,906 82,080
---------- -------------------- ----------------------- ------------------------ ----------------------- ----------------------- -------------------- ---------------------
Customer
accounts 433,647 431,143 310,197 135,851 60,971 270,971 1,642,780
---------- -------------------- ----------------------- ------------------------ ----------------------- ----------------------- -------------------- ---------------------
Total
deposits 463,886 438,999 313,081 161,142 65,875 281,877 1,724,860
---------- -------------------- ----------------------- ------------------------ ----------------------- ----------------------- -------------------- ---------------------
1 'Others' includes items with no currency information available
($11,028m for loans to banks, $64,491m for loans to customers, $23m
for deposits by banks and $5m for customer accounts).
Global businesses and
geographical regions
Page
Summary 98
------------------------------------ ----
Reconciliation of reported and 9
adjusted items - global businesses 8
------------------------------------ ----
Reconciliation of reported and
adjusted risk-weighted assets 101
------------------------------------ ----
Supplementary tables for WPB
and GBM 101
------------------------------------ ----
Analysis of reported results
by geographical regions 106
------------------------------------ ----
Reconciliation of reported and
adjusted items - geographical
regions 108
------------------------------------ ----
Analysis by country 114
------------------------------------ ----
.
Summary
The Group Chief Executive, supported by the rest of the Group
Executive Committee ('GEC'), reviews operating activity on a number
of bases, including by global business and geographical region. Our
global businesses - Wealth and Personal Banking, Commerical
Banking, and Global Banking and Markets - along with Corporate
Centre are our reportable segments under IFRS 8 'Operating
Segments' and are presented below and in Note 10: Segmental
analysis on page 341.
Geographical information is classified by the location of the
principal operations of the subsidiary or, for The Hongkong and
Shanghai Banking Corporation Limited, HSBC Bank plc, HSBC UK Bank
plc, HSBC Bank Middle East Limited and HSBC Bank USA, by the
location of the branch responsible for reporting the results or
providing funding.
The expense of the UK bank levy is included in the Europe
geographical region as HSBC regards the levy as a cost of being
headquartered in the UK. From 2021, the UK bank levy was partially
allocated to global businesses, which was previously retained in
Corporate Centre. Comparative periods have not been
re-presented.
The results of geographical regions are presented on a reported
basis on page 106 and an adjusted basis on page 108.
Reconciliation of reported and adjusted items - global businesses
Supplementary unaudited analysis of significant items by global
business is presented below.
2021
---------------------------------------------------------------------------------------------------------------------------------------------------------------
Global
Wealth Banking
and Personal Commercial and Corporate
Banking Banking Markets Centre Total
$m $m $m $m $m
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
Revenue(1)
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
Reported 22,117 13,431 14,588 (584) 49,552
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
Significant items (7) (16) 414 147 538
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
- customer redress programmes 7 (18) - - (11)
- fair value movements on financial
instruments(2) - (1) 19 224 242
--------------------------------------------
- restructuring and other related
costs(3) (14) 3 395 (77) 307
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- -------------------------
Adjusted 22,110 13,415 15,002 (437) 50,090
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
ECL
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
Reported 288 300 337 3 928
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
Adjusted 288 300 337 3 928
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
Operating expenses
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
Reported (16,306) (7,055) (10,203) (1,056) (34,620)
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
Significant items 922 82 197 1,271 2,472
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
- customer redress programmes 39 1 - 9 49
--------------------------------------------
- impairment of goodwill and other
intangibles 587 - - - 587
* restructuring and other related costs 296 81 197 1,262 1,836
Adjusted (15,384) (6,973) (10,006) 215 (32,148)
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
Share of profit in associates
and joint ventures
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
Reported 34 1 - 3,011 3,046
Adjusted 34 1 - 3,011 3,046
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
Profit before tax
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
Reported 6,133 6,677 4,722 1,374 18,906
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
Significant items 915 66 611 1,418 3,010
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
- revenue (7) (16) 414 147 538
- operating expenses 922 82 197 1,271 2,472
Adjusted 7,048 6,743 5,333 2,792 21,916
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
Loans and advances to customers
(net)
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
Reported 488,786 349,126 207,162 740 1,045,814
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
Adjusted 488,786 349,126 207,162 740 1,045,814
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
Customer accounts
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
Reported 859,029 506,688 344,205 652 1,710,574
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
Adjusted 859,029 506,688 344,205 652 1,710,574
-------------------------------------------- ------------------------------------ ---------------------------- -------------------------------- ------------------------- ------------------------------
1 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
2 Includes fair value movements on non-qualifying hedges and
debt valuation adjustments on derivatives.
3 Comprises losses associated with the RWA reduction commitments
and gains relating to the business update in February 2020.
Reconciliation of reported and adjusted items (continued)
2020
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Global
Wealth Banking
and Personal Commercial and Corporate
Banking Banking Markets Centre Total
$m $m $m $m $m
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Revenue(1)
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Reported 21,999 13,294 14,994 142 50,429
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Currency translation 560 405 456 (28) 1,393
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Significant items 12 19 318 (401) (52)
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
- customer redress programmes 5 16 - - 21
----------------------------------------------------------
- disposals, acquisitions and
investment in new businesses 9 - - 1 10
----------------------------------------------------------
- fair value movements on financial
instruments(2) - 1 2 (267) (264)
----------------------------------------------------------
- restructuring and other related
costs(3) - 1 307 (138) 170
----------------------------------------------------------
- currency translation on significant
items (2) 1 9 3 11
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------
Adjusted 22,571 13,718 15,768 (287) 51,770
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
ECL
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Reported (2,855) (4,754) (1,209) 1 (8,817)
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Currency translation (150) (235) (80) - (465)
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Adjusted (3,005) (4,989) (1,289) 1 (9,282)
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Operating expenses
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Reported (15,446) (6,900) (10,169) (1,917) (34,432)
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Currency translation (432) (214) (451) 25 (1,072)
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Significant items 435 217 980 1,463 3,095
- customer redress programmes (64) 1 - 9 (54)
- impairment of goodwill and
other intangibles 294 45 577 174 1,090
----------------------------------------------------------
* past service costs of guaranteed minimum pension
benefits equalisation - - - 17 17
----------------------------------------------------------
- restructuring and other related
costs(4) 192 165 326 1,225 1,908
----------------------------------------------------------
* settlements and provisions in connection with legal
and regulatory matters - - 2 10 12
----------------------------------------------------------
- currency translation on significant
items 13 6 75 28 122
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------
Adjusted (15,443) (6,897) (9,640) (429) (32,409)
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Share of profit in associates
and joint ventures
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Reported 6 (1) - 1,592 1,597
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Currency translation 1 - - 132 133
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Significant items - - - 462 462
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
- impairment of goodwill(5) - - - 462 462
----------------------------------------------------------
- currency translation on significant - - - - -
items
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------
Adjusted 7 (1) - 2,186 2,192
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Profit/(loss) before tax
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Reported 3,704 1,639 3,616 (182) 8,777
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Currency translation (21) (44) (75) 129 (11)
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Significant items 447 236 1,298 1,524 3,505
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
- revenue 12 19 318 (401) (52)
----------------------------------------------------------
- operating expenses 435 217 980 1,463 3,095
----------------------------------------------------------
- share of profit in associates
and joint ventures - - - 462 462
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------
Adjusted 4,130 1,831 4,839 1,471 12,271
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Loans and advances to customers
(net)
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Reported 469,186 343,182 224,364 1,255 1,037,987
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Currency translation (6,900) (4,989) (3,672) (24) (15,585)
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Adjusted 462,286 338,193 220,692 1,231 1,022,402
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Customer accounts
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Reported 834,759 470,428 336,983 610 1,642,780
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Currency translation (10,768) (6,048) (5,819) (17) (22,652)
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
Adjusted 823,991 464,380 331,164 593 1,620,128
---------------------------------------------------------- --------------------------------- --------------------------------- -------------------------------- -------------------------------- -------------------------------
1 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
2 Includes fair value movements on non-qualifying hedges and
debt valuation adjustments on derivatives.
3 Comprises losses associated with the RWA reduction commitments
and gains relating to the business update in February 2020.
4 Includes impairment of software intangible assets of $189m (of
the total software intangible asset impairment of $1,347m) and
impairment of tangible assets of $197m.
5 In 2020, The Saudi British Bank ('SABB'), an associate of
HSBC, impaired the goodwill that arose following the merger with
Alawwal bank in 2019. HSBC's post-tax share of the goodwill
impairment was $462m.
Reconciliation of reported and adjusted items (continued)
2019
Global
Wealth Banking
and Personal Commercial and Corporate
Banking Banking Markets Centre Total
$m $m $m $m $m
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Revenue(1)
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Reported 25,552 15,256 14,894 396 56,098
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Currency translation 358 327 303 22 1,010
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Significant items 230 11 85 (999) (673)
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
- customer redress programmes 155 7 - 1 163
----------------------------------------------------------
- disposals, acquisitions and investment
in new businesses(2) 52 - - (820) (768)
----------------------------------------------------------
- fair value movements on financial
instruments(3) 7 4 84 (179) (84)
----------------------------------------------------------
- currency translation on significant
items 16 - 1 (1) 16
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ -------------------------------
Adjusted 26,140 15,594 15,282 (581) 56,435
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
ECL
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Reported (1,437) (1,192) (162) 35 (2,756)
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Currency translation 61 (2) 7 3 69
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Adjusted (1,376) (1,194) (155) 38 (2,687)
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Operating expenses
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Reported (17,351) (9,905) (13,790) (1,303) (42,349)
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Currency translation (431) (184) (337) (29) (981)
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Significant items 1,959 3,061 4,236 511 9,767
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
- costs of structural reform(4) - 4 42 112 158
----------------------------------------------------------
- customer redress programmes 1,264 17 - - 1,281
----------------------------------------------------------
- goodwill impairment 431 2,956 3,962 - 7,349
* restructuring and other related costs 180 51 217 379 827
----------------------------------------------------------
* settlements and provisions in connection with legal
and regulatory matters (69) - 2 6 (61)
----------------------------------------------------------
* currency translation on significant items 153 33 13 14 213
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ -------------------------------
Adjusted (15,823) (7,028) (9,891) (821) (33,563)
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Share of profit in associates and
joint ventures
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Reported 55 - - 2,299 2,354
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Currency translation (1) 1 1 141 142
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Adjusted 54 1 1 2,440 2,496
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Profit before tax
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Reported 6,819 4,159 942 1,427 13,347
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Currency translation (13) 142 (26) 137 240
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Significant items 2,189 3,072 4,321 (488) 9,094
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
- revenue 230 11 85 (999) (673)
----------------------------------------------------------
- operating expenses 1,959 3,061 4,236 511 9,767
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ -------------------------------
Adjusted 8,995 7,373 5,237 1,076 22,681
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Loans and advances to customers
(net)
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Reported 443,025 346,105 246,492 1,121 1,036,743
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Currency translation 5,855 2,611 1,570 20 10,056
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Adjusted 448,880 348,716 248,062 1,141 1,046,799
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Customer accounts
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Reported 753,769 388,723 295,880 743 1,439,115
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Currency translation 4,645 3,410 2,738 17 10,810
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
Adjusted 758,414 392,133 298,618 760 1,449,925
---------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- -----------------------------
1 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
2 Includes $0.8bn dilution gain following the merger of The
Saudi British Bank ('SABB') with Alawwal bank.
3 Includes fair value movements on non-qualifying hedges and
debt valuation adjustments on derivatives.
4 Comprises costs associated with preparations for the UK's exit from the European Union.
Reconciliation of reported and adjusted risk-weighted assets
At 31 Dec 2021
---------------------------------------------------------------------------------------------------------------------------------------------
Global
Wealth Banking
and Personal Commercial and Corporate
Banking Banking Markets Centre Total
$bn $bn $bn $bn $bn
-------------- --------------------------- --------------------------- --------------------------- --------------------------- -------------------------
Risk-weighted
assets
-------------- --------------------------- --------------------------- --------------------------- --------------------------- -------------------------
Reported 178.3 332.9 236.2 90.9 838.3
-------------- --------------------------- --------------------------- --------------------------- --------------------------- -------------------------
Adjusted(1) 178.3 332.9 236.2 90.9 838.3
-------------- --------------------------- --------------------------- --------------------------- --------------------------- -------------------------
At 31 Dec 2020
-------------- ---------------------------------------------------------------------------------------------------------------------------------------------
Risk-weighted
assets
-------------- --------------------------- --------------------------- --------------------------- --------------------------- -------------------------
Reported 172.8 327.7 265.1 91.9 857.5
-------------- --------------------------- --------------------------- --------------------------- --------------------------- -------------------------
Currency
translation (2.7) (5.3) (4.1) (0.8) (12.9)
-------------- --------------------------- --------------------------- --------------------------- --------------------------- -------------------------
Adjusted(1) 170.1 322.4 261.0 91.1 844.6
-------------- --------------------------- --------------------------- --------------------------- --------------------------- -------------------------
At 31 Dec 2019
Risk-weighted
assets
-------------- --------------------------- -------------------------- --------------------------- -------------------------- --------------------------
Reported 162.6 325.9 273.4 81.5 843.4
-------------- --------------------------- -------------------------- --------------------------- -------------------------- --------------------------
Currency
translation (0.3) 1.5 (0.6) 0.1 0.7
--------------
Adjusted(1) 162.3 327.4 272.8 81.6 844.1
-------------- --------------------------- -------------------------- --------------------------- -------------------------- --------------------------
1 Adjusted risk-weighted assets are calculated using reported
risk-weighted assets adjusted for the effects of currency
translation differences and significant items.
Supplementary tables for WPB and GBM
WPB adjusted performance by business unit
A breakdown of WPB by business unit is presented below to
reflect the basis of how the revenue performance of the business
units is assessed and managed.
WPB - summary (adjusted basis)
Consists of(1)
-------------------------------------------------------------------------------------------------------------------------
Global
Total Banking Insurance Private Asset
WPB operations manufacturing Banking management
$m $m $m $m $m
----------------- ----------------------------- ----------------------------- ----------------------------- ---------------------------- -----------------------------
2021
----------------- ----------------------------- ----------------------------- ----------------------------- ---------------------------- -----------------------------
Net operating
income before
change
in expected
credit losses
and other
credit
impairment
charges(2) 22,110 16,440 2,625 1,826 1,219
----------------- ----------------------------- ----------------------------- ----------------------------- ---------------------------- -----------------------------
- net interest
income 14,198 11,237 2,316 647 (2)
-----------------
- net fee
income/(expense) 5,894 4,405 (620) 933 1,176
-----------------
- other income 2,018 798 929 246 45
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------
ECL 288 292 (17) 14 (1)
----------------- ----------------------------- ----------------------------- ----------------------------- ---------------------------- -----------------------------
Net operating
income 22,398 16,732 2,608 1,840 1,218
----------------- ----------------------------- ----------------------------- ----------------------------- ---------------------------- -----------------------------
Total operating
expenses(3) (15,384) (12,401) (589) (1,565) (829)
----------------- ----------------------------- ----------------------------- ----------------------------- ---------------------------- -----------------------------
Operating profit 7,014 4,331 2,019 275 389
----------------- ----------------------------- ----------------------------- ----------------------------- ---------------------------- -----------------------------
Share of profit
in associates
and
joint ventures 34 16 18 - -
----------------- ----------------------------- ----------------------------- ----------------------------- ---------------------------- -----------------------------
Profit before tax 7,048 4,347 2,037 275 389
----------------- ----------------------------- ----------------------------- ----------------------------- ---------------------------- -----------------------------
2020
----------------- ----------------------------- ----------------------------- ----------------------------- ---------------------------- -----------------------------
Net operating
income before
change
in expected
credit losses
and other
credit
impairment
charges(2) 22,571 17,840 1,869 1,789 1,073
----------------- ----------------------------- ----------------------------- ----------------------------- ---------------------------- -----------------------------
- net interest
income 15,470 12,536 2,249 688 (3)
-----------------
- net fee
income/(expense) 5,519 4,175 (527) 843 1,028
-----------------
- other income 1,582 1,129 147 258 48
----------------- ----------------------------- ----------------------------- ----------------------------- ----------------------------
ECL (3,005) (2,866) (67) (71) (1)
----------------- ----------------------------- ----------------------------- ----------------------------- ---------------------------- -----------------------------
Net operating
income 19,566 14,974 1,802 1,718 1,072
----------------- ----------------------------- ----------------------------- ----------------------------- ---------------------------- -----------------------------
Total operating
expenses (15,443) (12,774) (486) (1,429) (754)
----------------- ----------------------------- ----------------------------- ----------------------------- ---------------------------- -----------------------------
Operating profit 4,123 2,200 1,316 289 318
----------------- ----------------------------- ----------------------------- ----------------------------- ---------------------------- -----------------------------
Share of profit
in associates
and
joint ventures 7 6 1 - -
----------------- ----------------------------- ----------------------------- ----------------------------- ---------------------------- -----------------------------
Profit before tax 4,130 2,206 1,317 289 318
----------------- ----------------------------- ----------------------------- ----------------------------- ---------------------------- -----------------------------
WPB - summary (adjusted basis) (continued)
Consists of(1)
----------------------------------------------------------------------------------------------------------------------
Global
Total Banking Insurance Private Asset
WPB operations manufacturing Banking management
$m $m $m $m $m
----------------- --------------------------- --------------------------- ---------------------------- ---------------------------- -----------------------------
2019
----------------- --------------------------- --------------------------- ---------------------------- ---------------------------- -----------------------------
Net operating
income before
change
in expected
credit losses
and other
credit
impairment
charges(2) 26,140 20,508 2,663 1,917 1,052
----------------- --------------------------- --------------------------- ---------------------------- ---------------------------- -----------------------------
- net interest
income 17,820 14,737 2,179 911 (7)
-----------------
- net fee
income/(expense) 5,753 4,684 (726) 797 998
-----------------
- other income 2,567 1,087 1,210 209 61
----------------- --------------------------- --------------------------- ---------------------------- ----------------------------
ECL (1,376) (1,286) (66) (24) -
----------------- --------------------------- --------------------------- ---------------------------- ---------------------------- -----------------------------
Net operating
income 24,764 19,222 2,597 1,893 1,052
----------------- --------------------------- --------------------------- ---------------------------- ---------------------------- -----------------------------
Total operating
expenses (15,823) (13,085) (485) (1,480) (773)
----------------- --------------------------- --------------------------- ---------------------------- ---------------------------- -----------------------------
Operating profit 8,941 6,137 2,112 413 279
----------------- --------------------------- --------------------------- ---------------------------- ---------------------------- -----------------------------
Share of profit
in associates
and
joint ventures 54 11 43 - -
----------------- --------------------------- --------------------------- ---------------------------- ---------------------------- -----------------------------
Profit before tax 8,995 6,148 2,155 413 279
----------------- --------------------------- --------------------------- ---------------------------- ---------------------------- -----------------------------
1 The results presented for insurance manufacturing operations
are shown before elimination of inter-company transactions with
HSBC non-insurance operations. These eliminations are presented
within Banking operations.
2 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as revenue.
This differs from the WPB Life insurance manufacturing revenue
shown in the managed view of adjusted revenue on page 31, which
excludes the impact of Argentina hyperinflation and includes the
effect of goodwill adjustments.
3 Operating expenses in Global Private Banking in 2021 included
a one-off charge of $0.1bn, which did not meet the criteria to be
classified as a significant item.
WPB insurance manufacturing adjusted results
The following table shows the results of our insurance
manufacturing operations by income statement line item. It shows
the results of insurance manufacturing operations for WPB and for
all global business segments in aggregate, and separately the
insurance distribution income earned by HSBC bank channels. These
results are prepared in accordance with current IFRSs which will
change following adoption of IFRS 17 'Insurance Contracts',
effective from 1 January 2023. Further information about the
adoption of IFRS 17 is provided on page 90.
Adjusted results of insurance manufacturing operations and insurance
distribution income earned by HSBC bank channels(1, 2)
2021 2020 2019
--------------------------------------------- ---------------------------------------------
All global All global All global
WPB businesses WPB businesses WPB businesses
$m $m $m $m $m $m
------------------ -------------------- -------------------- --------------------- ---------------------- --------------------- ----------------------
Net interest
income 2,316 2,492 2,249 2,414 2,179 2,318
------------------ -------------------- -------------------- --------------------- ---------------------- --------------------- ----------------------
Net fee
income/(expense) (620) (652) (527) (564) (726) (750)
------------------ -------------------- -------------------- --------------------- ---------------------- --------------------- ----------------------
- fee income 105 128 111 132 108 131
------------------
- fee expense (725) (780) (638) (696) (834) (881)
------------------ -------------------- -------------------- --------------------- ---------------------- --------------------- ----------------------
Net
income/(expenses)
from financial
instruments held
for trading or
managed
on a fair value
basis 6 - 66 84 (107) (117)
------------------ -------------------- -------------------- --------------------- ---------------------- --------------------- ----------------------
Net
income/(expense)
from assets and
liabilities of
insurance
businesses,
including related
derivatives,
measured
at fair value
through profit or
loss 4,061 4,100 2,066 2,019 3,671 3,654
------------------ -------------------- -------------------- --------------------- ---------------------- --------------------- ----------------------
Gains less losses
from financial
investments 86 90 13 13 5 5
------------------ -------------------- -------------------- --------------------- ---------------------- --------------------- ----------------------
Net insurance
premium income 10,516 10,998 9,822 10,313 10,572 10,932
------------------ -------------------- -------------------- --------------------- ---------------------- --------------------- ----------------------
Other operating
income 192 175 333 347 1,801 1,814
------------------ -------------------- -------------------- --------------------- ---------------------- --------------------- ----------------------
Of which: PVIF 100 93 368 381 1,724 1,769
------------------ -------------------- -------------------- --------------------- ---------------------- --------------------- ----------------------
Total operating
income 16,557 17,203 14,022 14,626 17,395 17,856
------------------ -------------------- -------------------- --------------------- ---------------------- --------------------- ----------------------
Net insurance
claims and
benefits paid
and movement in
liabilities to
policyholders (13,932) (14,442) (12,153) (12,653) (14,732) (15,115)
------------------ -------------------- -------------------- --------------------- ---------------------- --------------------- ----------------------
Net operating
income before
change
in expected
credit losses and
other
credit impairment
charges(3) 2,625 2,761 1,869 1,973 2,663 2,741
------------------ -------------------- -------------------- --------------------- ---------------------- --------------------- ----------------------
Change in expected
credit losses and
other credit
impairment
charges (17) (20) (67) (78) (66) (70)
------------------ -------------------- -------------------- --------------------- ---------------------- --------------------- ----------------------
Net operating
income 2,608 2,741 1,802 1,895 2,597 2,671
------------------ -------------------- -------------------- --------------------- ---------------------- --------------------- ----------------------
Total operating
expenses (589) (618) (486) (514) (485) (506)
------------------ -------------------- -------------------- --------------------- ---------------------- --------------------- ----------------------
Operating profit 2,019 2,123 1,316 1,381 2,112 2,165
------------------ -------------------- -------------------- --------------------- ---------------------- --------------------- ----------------------
Share of profit in
associates and
joint
ventures 18 18 1 1 43 43
------------------ -------------------- -------------------- --------------------- ---------------------- --------------------- ----------------------
Profit before tax
of insurance
manufacturing
operations(4) 2,037 2,141 1,317 1,382 2,155 2,208
Annualised new
business premiums
of
insurance
manufacturing
operations 2,838 2,892 2,320 2,384 3,348 3,427
Insurance
distribution
income earned
by HSBC bank
channels 762 832 751 816 961 1,057
------------------ -------------------- -------------------- --------------------- ---------------------- --------------------- ----------------------
1 Adjusted results are derived by adjusting for year-on-year
effects of foreign currency translation differences, and the effect
of significant items that distort year-on-year comparisons. There
are no significant items included within insurance manufacturing,
and the impact of foreign currency translation on all global
businesses' profit before tax is 2020: $5m favourable (reported:
$1,377m), 2019: $73m favourable (reported: $2,135m).
2 The results presented for insurance manufacturing operations
are shown before elimination of inter-company transactions with
HSBC non-insurance operations.
3 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
4 The effect on the insurance manufacturing operations of
applying hyperinflation accounting in Argentina resulted in an
increase in adjusted revenue in 2021 of $12m (2020: increase of
$5m, 2019: reduction of $1m) and an increase in profit before tax
in 2021 of $10m (2020: increase of $12m, 2019: increase of $3m).
These effects are recorded within 'All global businesses'.
Insurance manufacturing
The following commentary, unless otherwise specified, relates to
the 'All global businesses' results.
HSBC recognises the present value of long-term in-force
insurance contracts and investment contracts with discretionary
participation features ('PVIF') as an asset on the balance sheet.
The overall balance sheet equity, including PVIF, is therefore a
measure of the embedded value in the insurance manufacturing
entities, and the movement in this embedded value in the period
drives the overall income statement result.
Adjusted profit before tax of $2.1bn increased by $0.8bn or 55%
compared with 2020.
Adjusted net operating income before change in expected credit
losses and other credit impairment changes was $0.8bn or 40% higher
than in 2020. This reflected the following:
-- 'Net income from assets and liabilities of insurance
businesses, including related derivatives, measured at fair value
through profit or loss' of $4.1bn in 2021 compared with $2.0bn in
2020. This increase primarily reflected favourable equity market
performance in France and Hong Kong and higher gains on unit trust
assets, supporting insurance and investment contracts. This
compared with 2020, which was adversely impacted by the onset of
the Covid-19 pandemic.
-- This favourable movement resulted in a corresponding movement
in liabilities to policyholders and PVIF (see 'Other operating
income' below), to the extent to which policyholders and
shareholders respectively participate in the investment performance
of the associated assets.
-- Net insurance premium income of $11bn was $0.7bn higher than
in 2020, primarily reflecting higher sales volumes particularly in
France, the UK and Singapore.
--
Other operating income of $0.2bn decreased by $0.2bn compared
with 2020, mainly from adverse movements in PVIF. This included a
reduction of $0.7bn due to assumption changes and experience
variances, primarily reflecting increased interest rates and the
effect of sharing higher investment returns with policyholders in
Hong Kong and Singapore, partly offset in France where higher
interest rates reduced the cost of guarantees. The net reduction
from assumption changes and experience variances was partly offset
by a $0.3bn increase in the value of new business written,
primarily in Hong Kong.
-- Net insurance claims and benefits paid and movement in
liabilities to policyholders was $1.8bn higher, primarily due to
higher returns on financial assets supporting contracts where the
policyholder is subject to part or all of the investment risk and
higher sales volumes, particularly in France and the UK.
Adjusted operating expenses of $0.6bn increased by 20% compared
with 2020, reflecting investments in core insurance functions and
capabilities during the period.
Annualised new business premiums ('ANP') is used to assess new
insurance premium generation by the business. It is calculated as
100% of annualised first year regular premiums and 10% of single
premiums, before reinsurance ceded. Higher ANP during the period
reflected improved new business volumes, mainly in Hong Kong.
Insurance distribution income from HSBC channels included $486m
(2020: $476m; 2019: $665m) on HSBC manufactured products, for which
a corresponding fee expense is recognised within insurance
manufacturing, and $346m (2020: $340m; 2019: $392m) on products
manufactured by third-party providers. The WPB component of this
distribution income was $433m (2020: $428m; 2019: $589m) from HSBC
manufactured products and $329m (2020: $323m; 2019: $372m) from
third-party products.
WPB: Wealth adjusted revenue by geography
The following table shows the adjusted revenue of our Wealth
business by region. Our Wealth business comprises investment
distribution, life insurance manufacturing, Global Private Banking
and Asset Management.
Wealth adjusted revenue by geography
2021 2020 2019
$m $m $m
-------------- ------------------------ ------------------------- -------------------------
Europe 2,381 1,859 2,402
-------------- ------------------------ ------------------------- -------------------------
Asia 5,780 5,246 5,587
-------------- ------------------------ ------------------------- -------------------------
MENA 180 163 126
-------------- ------------------------ ------------------------- -------------------------
North America 530 520 562
-------------- ------------------------ ------------------------- -------------------------
Latin America 252 216 246
-------------- ------------------------ ------------------------- -------------------------
Total 9,123 8,004 8,923
-------------- ------------------------ ------------------------- -------------------------
WPB: Wealth balances
The following table shows the wealth balances, which include
invested assets and wealth deposits. Invested assets comprise
customer assets either managed by our Asset Management business or
by external third-party investment managers, as well as
self-directed investments by our customers.
WPB - reported wealth balances(1)
2021 2020
$bn $bn
-------------------------------------------------------------- ------------------------ --------------------------
Global Private Banking invested assets 351 326
-------------------------------------------------------------- ------------------------ --------------------------
* managed by Global Asset Management 67 66
--------------------------------------------------------------
* external managers, direct securities and other 284 260
-------------------------------------------------------------- ------------------------
Retail invested assets 434 407
-------------------------------------------------------------- ------------------------ --------------------------
* managed by Global Asset Management 229 219
--------------------------------------------------------------
* external managers, direct securities and other 205 188
-------------------------------------------------------------- ------------------------
Asset Management third-party distribution 334 317
-------------------------------------------------------------- ------------------------ --------------------------
Reported invested assets(1) 1,119 1,050
-------------------------------------------------------------- ------------------------ --------------------------
Wealth deposits (Premier, Jade and Global Private Banking)(2) 551 538
-------------------------------------------------------------- ------------------------ --------------------------
Total reported wealth balances 1,670 1,588
-------------------------------------------------------------- ------------------------ --------------------------
1 Invested assets are not reported on the Group's balance sheet,
except where it is deemed that we are acting as principal rather
than agent in our role as investment manager.
2 Premier, Jade and Global Private Banking deposits, which
include Prestige deposits in Hang Seng Bank, form part of the total
WPB customer accounts balance of $859bn (2020: $835bn) on page
98.
Asset Management: funds under management
The following table shows the funds under management of our
Asset Management business. Funds under management represents assets
managed, either actively or passively, on behalf
of our customers. Funds under management are not reported on the
Group's balance sheet, except where it is deemed that we are acting
as principal rather than agent in our role as investment
manager.
Asset Management - reported funds under management
2021 2020
$bn $bn
---------------------------- --------------------------- ----------------------------
Opening balance 602 506
---------------------------- --------------------------- ----------------------------
Net new invested assets 27 53
---------------------------- --------------------------- ----------------------------
Net market movements 18 17
---------------------------- --------------------------- ----------------------------
Foreign exchange and others (17) 26
Closing balance 630 602
---------------------------- --------------------------- ----------------------------
Asset Management - reported funds under management by geography
2021 2020
$bn $bn
---------------------------- --------------------------- ----------------------------
Europe 367 346
---------------------------- --------------------------- ----------------------------
Asia 180 176
---------------------------- --------------------------- ----------------------------
MENA 5 6
---------------------------- --------------------------- ----------------------------
North America 69 65
---------------------------- --------------------------- ----------------------------
Latin America 9 9
---------------------------- --------------------------- ----------------------------
Closing balance 630 602
---------------------------- --------------------------- ----------------------------
At 31 December 2021, Asset Management funds under management
amounted to $630bn, an increase of $28bn or 5%. The increase
reflected strong net new invested assets, primarily from passive
and managed solutions investment products. There was a positive
market performance, although this was largely offset by adverse
foreign exchange translation.
Global Private Banking: client assets
Global Private Banking client assets comprises invested assets
and deposits, which are translated at the rates of exchange
applicable for their respective year-ends, with the effects of
currency translation reported separately.
Global Private Banking - reported client assets(1)
2021 2020
$bn $bn
-------------------------------- --------------------------- ----------------------------
Opening balance 394 361
-------------------------------- --------------------------- ----------------------------
Net new invested assets 19 3
-------------------------------- --------------------------- ----------------------------
Increase/(decrease) in deposits 4 3
-------------------------------- --------------------------- ----------------------------
Net market movements 17 6
-------------------------------- --------------------------- ----------------------------
Foreign exchange and others (11) 21
-------------------------------- --------------------------- ----------------------------
Closing Balance 423 394
-------------------------------- --------------------------- ----------------------------
Global Private Banking - reported client assets by geography(1)
2021 2020
$bn $bn
---------------- ------------------------- --------------------------
Europe 174 174
---------------- ------------------------- --------------------------
Asia 178 176
---------------- ------------------------- --------------------------
North America 71 44
---------------- --------------------------
Closing balance 423 394
---------------- ------------------------- --------------------------
1 Client assets are not reported on the Group's balance sheet,
except where it is deemed that we are acting as principal rather
than agent in our role as investment manager. Customer deposits
included in these client assets are on balance sheet.
Retail invested assets
The following table shows the invested assets of our retail
customers. These comprise customer assets either managed by our
Asset Management business or by external third-party
investment managers as well as self-directed investments by our
customers. Retail invested assets are not reported on the Group's
balance sheet, except where it is deemed that we are acting as
principal rather than agent in our role as investment manager.
Retail invested assets
2021 2020
$bn $bn
---------------------------- ---------------------------- ----------------------------
Opening balance 407 380
---------------------------- ---------------------------- ----------------------------
Net new invested assets(1) 26 10
---------------------------- ---------------------------- ----------------------------
Net market movements 5 5
---------------------------- ---------------------------- ----------------------------
Foreign exchange and others (4) 12
---------------------------- ---------------------------- ----------------------------
Closing balance 434 407
---------------------------- ---------------------------- ----------------------------
Retail invested assets by geography
2021 2020
$bn $bn
---------------------------- ---------------------------- ----------------------------
Europe 81 71
---------------------------- ---------------------------- ----------------------------
Asia 293 281
---------------------------- ---------------------------- ----------------------------
MENA 4 4
---------------------------- ---------------------------- ----------------------------
North America 47 42
---------------------------- ---------------------------- ----------------------------
Latin America 9 9
---------------------------- ---------------------------- ----------------------------
Closing balance 434 407
---------------------------- ---------------------------- ----------------------------
1 'Retail net new invested assets' covers nine markets,
comprising Hong Kong including Hang Seng Bank (Hong Kong), mainland
China, Malaysia, Singapore, HSBC Bank UK, UAE, US, Canada and
Mexico. The net new invested assets related to all other
geographies is reported in 'exchange and other'.
WPB invested assets
Net new invested assets represents the net customer inflows from
retail invested assets, Asset Management third-party distribution
and Global Private Banking invested assets. It excludes all
customer deposits. The net new invested assets in the table
below is non-additive from the tables above, as net new invested
assets managed by Asset Management that is generated by retail
clients or Global Private Banking will be recorded in both
businesses.
WPB: Invested assets
2021 2020
$bn $bn
---------------------------- --------------------------- ----------------------------
Opening balance 1,050 925
---------------------------- --------------------------- ----------------------------
Net new invested assets 64 53
---------------------------- --------------------------- ----------------------------
Net market movements 33 21
---------------------------- --------------------------- ----------------------------
Foreign exchange and others (28) 51
---------------------------- --------------------------- ----------------------------
Closing balance 1,119 1,050
---------------------------- --------------------------- ----------------------------
WPB: Net new invested assets by geography
2021 2020
$bn $bn
---------------------------- --------------------------- ----------------------------
Europe 17 21
---------------------------- --------------------------- ----------------------------
Asia 36 15
---------------------------- --------------------------- ----------------------------
MENA - -
---------------------------- --------------------------- ----------------------------
North America 10 16
---------------------------- --------------------------- ----------------------------
Latin America 1 1
---------------------------- --------------------------- ----------------------------
Total 64 53
---------------------------- --------------------------- ----------------------------
GBM: Securities Services and Issuer Services
Assets held in custody
Custody is the safekeeping and servicing of securities and other
financial assets on behalf of clients. Assets held in custody are
not reported on the Group's balance sheet, except where it is
deemed that we are acting as principal rather than agent in our
role as investment manager. At 31 December 2021, we held $10.8tn of
assets as custodian, 7% higher than at 31 December 2020. The
balance comprised $10.0tn of assets in Securities Services, which
were recorded at market value, and $0.8tn of assets in Issuer
Services, recorded at book value.
The growth was driven by Securities Services balances, from net
client asset inflows, including increases from new client mandates,
notably in Asia, the US and the UK, and favourable market
movements. These increases were partly offset by the adverse impact
of currency translation differences.
Assets under administration
Our assets under administration business, which includes the
provision of bond and loan administration services, transfer agency
services and the valuation of portfolios of securities and other
financial assets on behalf of clients, complements the custody
business. At 31 December 2021, the value of assets held under
administration by the Group amounted to $4.9tn, which was 10%
higher than at 31 December 2020. The balance comprised $3.0tn of
assets in Securities Services, which were recorded at market value,
and $1.9tn of assets in Issuer Services, recorded at book
value.
The increase was mainly driven by Securities Services balances,
from a net inflow of client assets, particularly in the UK and Hong
Kong, and from favourable market movements.
Analysis of reported results by geographical regions
HSBC reported profit/(loss) before tax and balance sheet data
2021
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------
North Latin
Europe Asia MENA America America Intra-HSBC Total
$m $m $m $m $m $m $m
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Net interest income 6,454 12,596 1,299 2,845 2,195 1,100 26,489
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Net fee income 3,882 5,871 774 2,056 514 - 13,097
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Net income from
financial
instruments
held for trading or
managed
on a fair value
basis 2,602 3,643 431 426 476 166 7,744
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Net income from
assets and
liabilities of
insurance
businesses,
including related
derivatives,
measured at fair
value through
profit and loss 1,670 2,340 - - 45 (2) 4,053
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Changes in fair
value of other
financial
instruments
mandatorily
measured at fair
value through
profit or loss 1,973 (3) (3) 54 40 (1,263) 798
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Other
income/(expense)(1) 3,523 1,316 59 673 (212) (7,988) (2,629)
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Net operating income
before
change in
expected credit
losses and
other credit
impairment
charges(2) 20,104 25,763 2,560 6,054 3,058 (7,987) 49,552
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Change in expected
credit losses
and other credit
impairment charges 1,601 (840) 132 238 (203) - 928
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Net operating income 21,705 24,923 2,692 6,292 2,855 (7,987) 50,480
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Total operating
expenses excluding
impairment of
goodwill and
other intangible
assets (18,099) (15,136) (1,536) (4,905) (2,198) 7,987 (33,887)
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Impairment of
goodwill and
other intangible
assets (95) (24) (8) (13) (593) - (733)
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Operating
profit/(loss) 3,511 9,763 1,148 1,374 64 - 15,860
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Share of
profit/(loss) in
associates
and joint ventures 268 2,486 275 - 17 - 3,046
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Profit/(loss) before
tax 3,779 12,249 1,423 1,374 81 - 18,906
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
%% %% % %
-------------------- ----------------------- ---------------------- ---------------------- ---------------------- ---------------------- ----------------------- -------------------
Share of HSBC's
profit before
tax 20.0 64.8 7.5 7.3 0.4 100.0
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Cost efficiency
ratio 90.5 58.8 60.3 81.2 91.3 69.9
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Balance sheet data $m $m $m $m $m $m $m
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Loans and advances
to customers
(net) 397,090 492,525 26,375 108,717 21,107 - 1,045,814
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Total assets 1,354,483 1,261,707 70,974 362,150 46,602 (137,977) 2,957,939
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Customer accounts 667,769 792,098 42,629 178,565 29,513 - 1,710,574
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Risk-weighted
assets(3) 261,115 396,206 60,223 110,412 35,915 838,263
2020
Net interest income 5,695 14,318 1,465 2,836 1,960 1,304 27,578
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Net fee income 3,499 5,418 695 1,795 467 - 11,874
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Net income from
financial
instruments
held for trading or
managed
on a fair value
basis 3,266 4,273 402 997 593 51 9,582
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Net income from
assets and
liabilities of
insurance
businesses,
including related
derivatives,
measured at fair
value through
profit and loss 327 1,699 - - 55 - 2,081
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Changes in fair
value of other
financial
instruments
mandatorily
measured at fair
value through
profit or loss 1,747 17 3 2 40 (1,354) 455
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Other
income/(expense)(1) 3,885 1,197 63 745 (95) (6,936) (1,141)
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Net operating income
before
change in expected
credit losses
and other credit
impairment
charges(2) 18,419 26,922 2,628 6,375 3,020 (6,935) 50,429
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Change in expected
credit losses
and other credit
impairment charges (3,751) (2,284) (758) (900) (1,124) - (8,817)
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Net operating income 14,668 24,638 1,870 5,475 1,896 (6,935) 41,612
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Total operating
expenses excluding
impairment of
goodwill and
other intangible
assets (17,860) (13,584) (1,521) (5,081) (1,933) 6,935 (33,044)
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Impairment of
goodwill and
other intangible
assets 1,014 (78) (65) (226) (5) - (1,388)
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Operating
profit/(loss) (4,206) 10,976 284 168 (42) - 7,180
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Share of
profit/(loss) in
associates
and joint ventures 1 1,856 (265) - 5 - 1,597
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Profit/(loss) before
tax (4,205) 12,832 19 168 (37) - 8,777
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
%% %% % %
-------------------- ----------------------- ---------------------- ---------------------- ---------------------- ---------------------- ----------------------- -------------------
Share of HSBC's
profit before
tax (47.9) 146.2 0.2 1.9 (0.4) 100.0
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Cost efficiency
ratio 102.5 50.7 60.4 83.2 64.2 68.3
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Balance sheet data $m $m $m $m $m $m $m
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Loans and advances
to customers
(net) 408,495 473,165 28,700 107,969 19,658 - 1,037,987
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Total assets 1,416,111 1,206,404 68,860 373,167 49,703 (130,081) 2,984,164
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Customer accounts 629,647 762,406 41,221 182,028 27,478 - 1,642,780
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
Risk-weighted
assets(3) 284,322 384,228 60,181 117,755 35,240 - 857,520
-------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- --------------------
HSBC reported profit/(loss) before tax and balance sheet data (continued)
2019
---------------------------------------------------------------------------------------------------------------------------------------------------------------------
North Latin Intra-HSBC/global
Europe Asia MENA America America impairment(4) Total
$m $m $m $m $m $m $m
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Net interest income 5,601 16,607 1,781 3,241 2,061 1,171 30,462
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Net fee income 3,668 5,325 685 1,804 540 1 12,023
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Net income from
financial
instruments
held for trading or
managed
on a fair value
basis 3,785 4,735 327 873 883 (372) 10,231
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Net income/(expense)
from assets
and liabilities of
insurance
businesses,
including related
derivatives,
measured at fair
value through profit
and loss 1,656 1,803 - - 14 5 3,478
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Changes in fair value
of other
financial
instruments
mandatorily
measured at fair
value through
profit or loss 1,516 28 1 31 41 (805) 812
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Other
income/(expense)(1) 1,830 1,921 916 638 (23) (6,190) (908)
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Net operating income
before
loan impairment
(charges)/recoveries
and other credit
risk provisions(2) 18,056 30,419 3,710 6,587 3,516 (6,190) 56,098
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Change in expected
credit losses
and other credit
impairment
(charges)/recoveries (938) (724) (117) (237) (740) - (2,756)
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Net operating income 17,118 29,695 3,593 6,350 2,776 (6,190) 53,342
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Total operating
expenses excluding
impairment of
goodwill and
other intangible
assets (19,209) (13,284) (1,452) (5,150) (2,050) 6,190 (34,955)
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Impairment of
goodwill and
other intangible
assets (2,550) (13) (97) (433) (339) (3,962) (7,394)
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Operating
profit/(loss) (4,641) 16,398 2,044 767 387 (3,962) 10,993
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Share of profit in
associates
and joint ventures (12) 2,070 283 - 13 - 2,354
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Profit/(loss) before
tax (4,653) 18,468 2,327 767 400 (3,962) 13,347
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
%% %% % %
--------------------- ---------------------- --------------------- ----------------------- -------------------- ---------------------- ----------------------- -------------------
Share of HSBC's
profit before
tax (34.9) 138.4 17.4 5.7 3.0 (29.6) 100.0
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Cost efficiency ratio 120.5 43.7 41.8 84.8 67.9 75.5
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Balance sheet data $m $m $m $m $m $m $m
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Loans and advances to
customers
(net) 393,850 477,727 28,556 113,474 23,136 - 1,036,743
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Total assets 1,248,205 1,102,805 65,369 377,095 52,879 (131,201) 2,715,152
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Customer accounts 528,718 697,358 38,126 146,676 28,237 - 1,439,115
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
Risk-weighted
assets(3) 280,983 366,375 57,492 121,953 38,460 - 843,395
--------------------- ---------------------- ---------------------- ----------------------- --------------------- ---------------------- ----------------------- --------------------
1 'Other income/(expense)' in this context comprises where
applicable net income/expense from other financial instruments
designated at fair value, 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 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
3 Risk-weighted assets are non-additive across geographical
regions due to market risk diversification effects within the
Group.
4 Includes the impact of goodwill impairment. As per Group
accounting policy, HSBC's cash-generating units are based on
geographical regions subdivided by global business, except for
Global Banking and Markets, for which goodwill is monitored on a
global basis.
Reconciliation of reported and adjusted items - geographical regions
Reconciliation of reported and adjusted items
2021
-------------------------------------------------------------------------------------------------------------------------------
North Latin
Europe Asia MENA America America Total
$m $m $m $m $m $m
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
Revenue(1)
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
Reported(2) 20,104 25,763 2,560 6,054 3,058 49,552
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
Significant items(2) 125 (164) - 10 5 538
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
- customer redress programmes (11) - - - - (11)
- fair value movements on financial
instruments(3) 226 11 - 5 - 242
-----------------------------------------------
- restructuring and other related costs(2,4) (90) (175) - 5 5 307
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- --------------------
Adjusted(2) 20,229 25,599 2,560 6,064 3,063 50,090
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
ECL
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
Reported 1,601 (840) 132 238 (203) 928
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
Adjusted 1,601 (840) 132 238 (203) 928
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
Operating expenses
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
Reported(2) (18,194) (15,160) (1,544) (4,918) (2,791) (34,620)
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
Significant items(2) 1,367 509 56 432 670 2,472
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
* customer redress programmes 49 - - - - 49
-----------------------------------------------
- impairment of goodwill and other
intangibles - - - - 587 587
* restructuring and other related costs(2) 1,318 509 56 432 83 1,836
Adjusted(2) (16,827) (14,651) (1,488) (4,486) (2,121) (32,148)
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
Share of profit in associates and joint
ventures
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
Reported 268 2,486 275 - 17 3,046
Adjusted 268 2,486 275 - 17 3,046
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
Profit before tax
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
Reported 3,779 12,249 1,423 1,374 81 18,906
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
Significant items 1,492 345 56 442 675 3,010
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
* revenue(2) 125 (164) - 10 5 538
* operating expenses(2) 1,367 509 56 432 670 2,472
Adjusted 5,271 12,594 1,479 1,816 756 21,916
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
Loans and advances to customers (net)
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
Reported 397,090 492,525 26,375 108,717 21,107 1,045,814
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
Adjusted 397,090 492,525 26,375 108,717 21,107 1,045,814
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
Customer accounts
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
Reported 667,769 792,098 42,629 178,565 29,513 1,710,574
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
Adjusted 667,769 792,098 42,629 178,565 29,513 1,710,574
----------------------------------------------- ------------------- ------------------- ------------------- -------------------- -------------------- --------------------
1 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
2 Amounts are non-additive across geographical regions due to
inter-company transactions within the Group.
3 Includes fair value movements on non-qualifying hedges and
debt valuation adjustments on derivatives.
4 Comprises losses associated with the RWA reduction commitments
and gains relating to the business update in February 2020.
Reconciliation of reported and adjusted items (continued)
2021
----------------------------------------------------------------------------------------------------------------
Hong Mainland
UK Kong China US Mexico
$m $m $m $m $m
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
Revenue(1)
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
Reported 16,415 14,463 3,734 4,006 2,341
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
Significant items (18) 61 (41) 14 15
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
(11) - - - -
* customer redress programmes
* fair value movements on financial instruments(2) 220 7 - 5 -
-------------------------------------------------------
* restructuring and other related costs(3) (227) 54 (41) 9 15
------------------------------------------------------- -------------------- --------------------- ---------------------- ---------------------
Adjusted 16,397 14,524 3,693 4,020 2,356
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
ECL
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
Reported 1,645 (608) (89) 205 (224)
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
Adjusted 1,645 (608) (89) 205 (224)
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
Operating expenses
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
Reported (14,808) (7,955) (2,773) (3,683) (1,565)
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
Significant items 1,193 227 32 355 59
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
49 - - - -
* customer redress programmes
-------------------------------------------------------
* restructuring and other related costs 1,144 227 32 355 59
Adjusted (13,615) (7,728) (2,741) (3,328) (1,506)
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
Share of profit in associates and joint
ventures
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
Reported 267 16 2,461 - 17
Adjusted 267 16 2,461 - 17
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
Profit before tax
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
Reported 3,519 5,916 3,333 528 569
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
Significant items 1,175 288 (9) 369 74
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
* revenue (18) 61 (41) 14 15
* operating expenses 1,193 227 32 355 59
Adjusted 4,694 6,204 3,324 897 643
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
Loans and advances to customers (net)
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
Reported 306,464 311,947 54,239 52,678 18,043
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
Adjusted 306,464 311,947 54,239 52,678 18,043
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
Customer accounts
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
Reported 535,797 549,429 59,266 111,921 23,583
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
Adjusted 535,797 549,429 59,266 111,921 23,583
------------------------------------------------------- -------------------- --------------------- ---------------------- --------------------- --------------------
1 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
2 Includes fair value movements on non-qualifying hedges and
debt valuation adjustments on derivatives.
3 Comprises losses associated with the RWA reduction commitments
and gains relating to the business update in February 2020.
Reconciliation of reported and adjusted
items (continued)
--------------------- --------------------- --------------------- --------------------- --------------------- --------------------
2020
---------------------------------------------------------------------------------------------------------------------------------------
North Latin
Europe Asia MENA America America Total
$m $m $m $m $m $m
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Revenue(1)
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Reported(2) 18,419 26,922 2,628 6,375 3,020 50,429
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Currency translation(2) 1,171 335 (58) 109 (69) 1,393
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Significant items(2) (233) (36) (1) 42 - (52)
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
- customer redress programmes 21 - - - - 21
----------------------------------------------------------
* disposals, acquisitions and investment in new
businesses - - - 10 - 10
----------------------------------------------------------
- fair value movements on financial
instruments(3) (254) (5) - (2) (3) (264)
----------------------------------------------------------
- restructuring and other related costs(2,4) (9) (32) - 35 - 170
----------------------------------------------------------
- currency translation on significant
items 9 1 (1) (1) 3 11
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted(2) 19,357 27,221 2,569 6,526 2,951 51,770
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
ECL
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Reported (3,751) (2,284) (758) (900) (1,124) (8,817)
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Currency translation (337) (57) 3 (24) (50) (465)
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Adjusted (4,088) (2,341) (755) (924) (1,174) (9,282)
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Operating expenses
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Reported (2) (18,874) (13,662) (1,586) (5,307) (1,938) (34,432)
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Currency translation(2) (1,000) (198) 39 (69) 61 (1,072)
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Significant items(2) 2,335 171 81 603 81 3,095
- customer redress programmes (54) - - - - (54)
----------------------------------------------------------
* impairment of goodwill and other intangibles 803 - 64 223 - 1,090
----------------------------------------------------------
- past service costs of guaranteed
minimum pension benefits equalisation 17 - - - - 17
----------------------------------------------------------
* restructuring and other related costs(2,5) 1,425 171 19 378 91 1,908
----------------------------------------------------------
* settlements and provisions in connection with legal
and regulatory matters 12 - - - - 12
----------------------------------------------------------
- currency translation on significant
items 132 - (2) 2 (10) 122
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted(2) (17,539) (13,689) (1,466) (4,773) (1,796) (32,409)
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Share of profit/(loss) in associates
and joint ventures
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Reported 1 1,856 (265) - 5 1,597
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Currency translation - 133 - - - 133
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Significant items - - 462 - - 462
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
- impairment of goodwill(6) - - 462 - - 462
----------------------------------------------------------
- currency translation on significant - - - - - -
items
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 1 1,989 197 - 5 2,192
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Profit/(loss) before tax
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Reported (4,205) 12,832 19 168 (37) 8,777
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Currency translation (166) 213 (16) 16 (58) (11)
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Significant items 2,102 135 542 645 81 3,505
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
- revenue(2) (233) (36) (1) 42 - (52)
----------------------------------------------------------
- operating expenses(2) 2,335 171 81 603 81 3,095
----------------------------------------------------------
- share of profit in associates and
joint ventures - - 462 - - 462
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted (2,269) 13,180 545 829 (14) 12,271
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Loans and advances to customers (net)
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Reported 408,495 473,165 28,700 107,969 19,658 1,037,987
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Currency translation (9,176) (4,397) (1,423) 199 (788) (15,585)
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Adjusted 399,319 468,768 27,277 108,168 18,870 1,022,402
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Customer accounts
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Reported 629,647 762,406 41,221 182,028 27,478 1,642,780
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Currency translation (12,835) (6,887) (1,748) 234 (1,416) (22,652)
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Adjusted 616,812 755,519 39,473 182,262 26,062 1,620,128
---------------------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
1 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
2 Amounts are non-additive across geographical regions due to
inter-company transactions within the Group.
3 Includes fair value movements on non-qualifying hedges and
debt valuation adjustments on derivatives.
4 Comprises losses associated with the RWA reduction commitments
and gains relating to the business update in February 2020.
5 Includes impairment of software intangible assets of $189m (of
the total software intangible asset impairment of $1,347m) and
impairment of tangible assets of $197m.
6 In 2020, The Saudi British Bank ('SABB'), an associate of
HSBC, impaired the goodwill that arose following the merger with
Alawwal bank in 2019. HSBC's post-tax share of the goodwill
impairment was $462m.
Reconciliation of reported and adjusted items (continued)
2020
----------------------------------------------------------------------------------------------------------------
Hong Mainland
UK Kong China US Mexico
$m $m $m $m $m
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Revenue(1)
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Reported 13,886 16,345 3,088 4,590 2,234
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation 1,048 (29) 220 - 124
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Significant
items (180) 14 (5) 41 (11)
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
- customer 21 - - - -
redress
programmes
---------------
- disposals, - - - 10 -
acquisitions
and investment
in new
businesses
---------------
- fair value
movements on
financial
instruments(2) (256) - (1) (2) (1)
---------------
- restructuring
and other
related
costs(3) 48 15 (4) 33 (12)
---------------
- currency
translation on
significant
items 7 (1) - - 2
--------------- -------------------- --------------------- --------------------- ---------------------
Adjusted 14,754 16,330 3,303 4,631 2,347
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
ECL
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Reported (3,256) (824) (114) (622) (1,050)
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (306) 2 (9) - (69)
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted (3,562) (822) (123) (622) (1,119)
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Operating
expenses
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Reported (14,855) (7,312) (2,211) (4,194) (1,376)
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (875) 14 (152) - (74)
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Significant
items 1,430 99 20 556 42
- customer (54) - - - -
redress
programmes
---------------
- impairment of
goodwill and
other
intangibles 650 - - 223 -
---------------
- past service 17 - - - -
costs of
guaranteed
minimum
pension
benefits
equalisation
---------------
- restructuring
and other
related costs 693 100 19 333 42
---------------
- settlements 12 - - - -
and provisions
in connection
with legal and
regulatory
matters
---------------
- currency
translation on
significant
items 112 (1) 1 - -
--------------- -------------------- --------------------- --------------------- ---------------------
Adjusted (14,300) (7,199) (2,343) (3,638) (1,408)
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Share of
profit/(loss)
in associates
and
joint ventures
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Reported 1 (2) 1,849 - 5
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Currency - - 132 - -
translation
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 1 (2) 1,981 - 5
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Profit/(loss)
before tax
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Reported (4,224) 8,207 2,612 (226) (187)
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (133) (13) 191 - (19)
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Significant
items 1,250 113 15 597 31
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
- revenue (180) 14 (5) 41 (11)
---------------
- operating
expenses 1,430 99 20 556 42
--------------- -------------------- --------------------- --------------------- ---------------------
Adjusted (3,107) 8,307 2,818 371 (175)
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Loans and
advances to
customers (net)
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Reported 314,530 302,454 46,113 58,082 17,296
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (2,764) (1,741) 1,278 - (471)
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 311,766 300,713 47,391 58,082 16,825
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Customer
accounts
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Reported 504,275 531,489 56,826 117,485 22,220
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Currency
translation (4,432) (3,060) 1,575 - (605)
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 499,843 528,429 58,401 117,485 21,615
--------------- -------------------- --------------------- --------------------- --------------------- ---------------------
1 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
2 Includes fair value movements on non-qualifying hedges and
debt valuation adjustments on derivatives.
3 Comprises losses associated with the RWA reduction commitments
and gains relating to the business update in February 2020.
Reconciliation of reported and adjusted items (continued)
2019
---------------------------------------------------------------------------------------------------------------------------------------
North Latin
Europe Asia MENA America America Total
$m $m $m $m $m $m
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Revenue(1)
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Reported(2) 18,056 30,419 3,710 6,587 3,516 56,098
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Currency translation(2) 1,353 354 (72) 99 (666) 1,010
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Significant items 41 35 (827) 68 10 (673)
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
- customer redress programmes 163 - - - - 163
--------------------------------------------
- disposals, acquisitions and investment
in new businesses(3) - - (828) 59 1 (768)
--------------------------------------------
- fair value movements on financial
investments(4) (137) 35 - 9 9 (84)
--------------------------------------------
- currency translation on significant
items 15 - 1 - - 16
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted(2) 19,450 30,808 2,811 6,754 2,860 56,435
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
ECL
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Reported (938) (724) (117) (237) (740) (2,756)
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Currency translation (69) (11) 4 (4) 149 69
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Adjusted (1,007) (735) (113) (241) (591) (2,687)
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Operating expenses
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Reported(2,6) (21,759) (13,297) (1,549) (5,583) (2,389) (42,349)
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Currency translation(2) (1,246) (177) 59 (61) 386 (981)
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Significant items(6) 4,655 127 112 544 367 9,767
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
- costs of structural reform(5) 154 4 - - - 158
--------------------------------------------
- customer redress programmes 1,281 - - - - 1,281
--------------------------------------------
- goodwill impairment(6) 2,522 - 97 431 337 7,349
--------------------------------------------
* restructuring and other related costs 538 123 15 113 38 827
--------------------------------------------
- settlements and provisions in connection
with legal and regulatory matters (60) (1) - - - (61)
--------------------------------------------
- currency translation on significant
items 220 1 - - (8) 213
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted(2,6) (18,350) (13,347) (1,378) (5,100) (1,636) (33,563)
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Share of profit/(loss) in associates
and joint ventures
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Reported (12) 2,070 283 - 13 2,354
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Currency translation 1 142 - - (1) 142
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Adjusted (11) 2,212 283 - 12 2,496
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Profit/(loss) before tax
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Reported(6) (4,653) 18,468 2,327 767 400 13,347
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Currency translation(6) 39 308 (9) 34 (132) 240
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Significant items(6) 4,696 162 (715) 612 377 9,094
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
- revenue 41 35 (827) 68 10 (673)
--------------------------------------------
- operating expenses(6) 4,655 127 112 544 367 9,767
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- ---------------------
Adjusted 82 18,938 1,603 1,413 645 22,681
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Loans and advances to customers (net)
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Reported 393,850 477,727 28,556 113,474 23,136 1,036,743
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Currency translation 8,549 4,264 (1,482) 1,165 (2,440) 10,056
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Adjusted 402,399 481,991 27,074 114,639 20,696 1,046,799
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Customer accounts
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Reported 528,718 697,358 38,126 146,676 28,237 1,439,115
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Currency translation 11,240 4,003 (2,091) 1,183 (3,525) 10,810
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
Adjusted 539,958 701,361 36,035 147,859 24,712 1,449,925
-------------------------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------
1 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
2 Amounts are non-additive across geographical regions due to
inter-company transactions within the Group.
3 Includes $0.8bn dilution gain following the merger of The
Saudi British Bank ('SABB') with Alawwal bank.
4 Includes fair value movements on non-qualifying hedges and
debt valuation adjustments on derivatives.
5 Comprises costs associated with preparations for the UK's exit from the European Union.
6 Amounts are non-additive across geographical regions due to
goodwill impairment recognised on the Global Banking and Markets
cash-generating unit, which is monitored on a global basis.
Reconciliation of reported and adjusted items (continued)
2019
---------------------------------------------------------------------------------------------------------------------------
Hong Mainland
UK Kong China US Mexico
$m $m $m $m $m
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Revenue(1)
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Reported 13,538 19,412 3,101 4,638 2,555
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Currency
translation 1,148 153 219 - (129)
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Significant
items 40 26 1 66 7
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
- customer 162 - - - -
redress
programmes
---------------
- disposals, - - - 59 -
acquisitions
and investment
in new
businesses
---------------
- fair value
movements on
financial
instruments(2) (139) 26 1 7 8
---------------
- currency
translation on
significant
items 17 - - - (1)
--------------- ----------------------- ----------------------- ----------------------- -----------------------
Adjusted 14,726 19,591 3,321 4,704 2,433
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
ECL
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Reported (714) (459) (129) (170) (491)
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Currency
translation (58) (3) (9) - 25
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Adjusted (772) (462) (138) (170) (466)
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Operating
expenses
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Reported (16,157) (6,935) (2,111) (4,033) (1,390)
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Currency
translation (1,010) (51) (153) - 71
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Significant
items 1,941 65 7 93 19
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
- costs of
structural
reform(3) 101 4 - - -
---------------
- customer 1,281 - - - -
redress
programmes
- restructuring
and other
related costs 405 61 6 93 20
---------------
- settlements
and provisions
in connection
with legal and
regulatory
matters 8 (1) - - -
---------------
- currency
translation on
significant
items 146 1 1 - (1)
--------------- ----------------------- ----------------------- ----------------------- -----------------------
Adjusted (15,226) (6,921) (2,257) (3,940) (1,300)
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Share of profit
in associates
and joint
ventures
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Reported (12) 31 2,016 - 13
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Currency
translation 1 - 143 - (1)
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Adjusted (11) 31 2,159 - 12
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Profit/(loss)
before tax
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Reported (3,345) 12,049 2,877 435 687
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Currency
translation 81 99 200 - (34)
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Significant
items 1,981 91 8 159 26
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
- revenue 40 26 1 66 7
---------------
- operating
expenses 1,941 65 7 93 19
--------------- ----------------------- ----------------------- ----------------------- -----------------------
Adjusted (1,283) 12,239 3,085 594 679
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Loans and
advances to
customers (net)
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Reported 303,041 306,964 42,380 63,588 20,426
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Currency
translation 7,175 (372) 4,054 - (1,561)
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Adjusted 310,216 306,592 46,434 63,588 18,865
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Customer
accounts
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Reported 419,642 499,955 48,323 90,834 23,051
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Currency
translation 9,935 (606) 4,622 - (1,762)
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
Adjusted 429,577 499,349 52,945 90,834 21,289
--------------- ----------------------- ----------------------- ----------------------- ----------------------- -----------------------
1 Net operating income before change in expected credit losses
and other credit impairment charges, also referred to as
revenue.
2 Includes fair value movements on non-qualifying hedges and
debt valuation adjustments on derivatives.
3 Comprises costs associated with preparations for the UK's exit from the European Union.
Analysis by country
Profit/(loss) before tax by country/territory within global businesses
Wealth
and Global
Personal Commercial Banking Corporate
Banking Banking and Markets Centre Total
$m $m $m $m $m
----------------------------------------------------- ------------------------------ ------------------------------ ----------------------------- ------------------------------- ----------------------------
Europe 1,817 2,893 (299) (632) 3,779
----------------------------------------------------- ------------------------------ ------------------------------ ----------------------------- ------------------------------- ----------------------------
- UK(1) 1,511 2,475 (487) 20 3,519
-----------------------------------------------------
* of which: HSBC UK Bank plc (ring-fenced bank) 2,047 2,929 127 (318) 4,785
-----------------------------------------------------
* of which: HSBC Bank plc (non-ring-fenced bank) 176 259 220 (17) 638
-----------------------------------------------------
* of which: Holdings and other (712) (713) (834) 355 (1,904)
-----------------------------------------------------
- France 236 163 (97) (133) 169
-----------------------------------------------------
- Germany 17 82 155 67 321
-----------------------------------------------------
- Switzerland 46 10 - (12) 44
-----------------------------------------------------
- other 7 163 130 (574) (274)
----------------------------------------------------- ------------------------------ ------------------------------ ----------------------------- -------------------------------
Asia 4,366 2,364 3,193 2,326 12,249
----------------------------------------------------- ------------------------------ ------------------------------ ----------------------------- ------------------------------- ----------------------------
- Hong Kong 4,076 1,303 920 (383) 5,916
-----------------------------------------------------
- Australia 146 132 131 (26) 383
-----------------------------------------------------
- India 20 265 593 232 1,110
-----------------------------------------------------
- Indonesia 14 12 111 (8) 129
-----------------------------------------------------
- mainland China (95) 288 586 2,554 3,333
-----------------------------------------------------
- Malaysia 37 (23) 145 (20) 139
-----------------------------------------------------
- Singapore 145 107 231 (13) 470
-----------------------------------------------------
- Taiwan 14 16 106 (5) 131
-----------------------------------------------------
- other 9 264 370 (5) 638
----------------------------------------------------- ------------------------------ ------------------------------ ----------------------------- -------------------------------
Middle East and North Africa 194 235 805 189 1,423
----------------------------------------------------- ------------------------------ ------------------------------ ----------------------------- ------------------------------- ----------------------------
- Egypt 79 42 163 (2) 282
-----------------------------------------------------
- UAE 91 3 342 (61) 375
-----------------------------------------------------
- Saudi Arabia 17 - 65 274 356
-----------------------------------------------------
- other 7 190 235 (22) 410
----------------------------------------------------- ------------------------------ ------------------------------ ----------------------------- -------------------------------
North America 60 1,023 697 (406) 1,374
----------------------------------------------------- ------------------------------ ------------------------------ ----------------------------- ------------------------------- ----------------------------
- US (131) 472 524 (337) 528
-----------------------------------------------------
- Canada 141 544 145 (62) 768
-----------------------------------------------------
- other 50 7 28 (7) 78
----------------------------------------------------- ------------------------------ ------------------------------ ----------------------------- -------------------------------
Latin America (304) 162 326 (103) 81
----------------------------------------------------- ------------------------------ ------------------------------ ----------------------------- ------------------------------- ----------------------------
- Mexico 305 88 222 (46) 569
-----------------------------------------------------
- other(2) (609) 74 104 (57) (488)
----------------------------------------------------- ------------------------------ ------------------------------ ----------------------------- -------------------------------
Year ended 31 Dec 2021 6,133 6,677 4,722 1,374 18,906
----------------------------------------------------- ------------------------------ ------------------------------ ----------------------------- ------------------------------- ----------------------------
1 UK includes results from the ultimate holding company, HSBC
Holdings plc, and the separately incorporated group of service
companies ('ServCo Group').
2 Includes the impact of goodwill impairment of $587m. As per Group accounting policy, HSBC's cash-generating units are based on geographical regions, subdivided by global business.
Profit/(loss) before tax by country/territory within
global businesses (continued)
------------------------------- ------------------------------
Wealth
and Global
Personal Commercial Banking Corporate
Banking Banking and Markets Centre Total
$m $m $m $m $m
----------------------------------------------------- ------------------------------- ------------------------------- ----------------------------- ------------------------------- ------------------------------
Europe (680) (529) (1,809) (1,187) (4,205)
----------------------------------------------------- ------------------------------- ------------------------------- ----------------------------- ------------------------------- ------------------------------
- UK(1) (357) (543) (1,769) (1,555) (4,224)
-----------------------------------------------------
- of which: HSBC UK Bank plc (ring-fenced
bank) 113 167 90 (124) 246
-----------------------------------------------------
* of which: HSBC Bank plc (non-ring-fenced bank) 109 36 (1,030) (454) (1,339)
-----------------------------------------------------
* of which: Holdings and other (579) (746) (829) (977) (3,131)
-----------------------------------------------------
- France (340) (168) (347) (310) (1,165)
-----------------------------------------------------
- Germany 17 16 197 (15) 215
-----------------------------------------------------
- Switzerland (2) (4) - (10) (16)
-----------------------------------------------------
- other 2 170 110 703 985
----------------------------------------------------- ------------------------------- ------------------------------- ----------------------------- -------------------------------
Asia 5,031 1,944 4,002 1,855 12,832
----------------------------------------------------- ------------------------------- ------------------------------- ----------------------------- ------------------------------- ------------------------------
- Hong Kong 4,927 1,787 1,674 (181) 8,207
-----------------------------------------------------
- Australia 108 76 138 (7) 315
-----------------------------------------------------
- India 16 187 593 228 1,024
-----------------------------------------------------
- Indonesia (6) (14) 147 (13) 114
-----------------------------------------------------
- mainland China (34) 295 506 1,845 2,612
-----------------------------------------------------
- Malaysia 8 33 141 (55) 127
-----------------------------------------------------
- Singapore 45 (644) 239 (12) (372)
-----------------------------------------------------
- Taiwan 9 18 104 (2) 129
-----------------------------------------------------
- other (42) 206 460 52 676
----------------------------------------------------- ------------------------------- ------------------------------- ----------------------------- -------------------------------
Middle East and North Africa (15) (120) 478 (324) 19
----------------------------------------------------- ------------------------------- ------------------------------- ----------------------------- ------------------------------- ------------------------------
- Egypt 68 46 185 (1) 298
-----------------------------------------------------
- UAE (21) (210) 102 (39) (168)
-----------------------------------------------------
- Saudi Arabia 21 - 26 (264) (217)
-----------------------------------------------------
- other (83) 44 165 (20) 106
----------------------------------------------------- ------------------------------- ------------------------------- ----------------------------- -------------------------------
North America (449) 366 712 (461) 168
----------------------------------------------------- ------------------------------- ------------------------------- ----------------------------- ------------------------------- ------------------------------
- US (547) 139 573 (391) (226)
-----------------------------------------------------
- Canada 52 225 100 (67) 310
-----------------------------------------------------
- other 46 2 39 (3) 84
----------------------------------------------------- ------------------------------- ------------------------------- ----------------------------- -------------------------------
Latin America (183) (22) 233 (65) (37)
----------------------------------------------------- ------------------------------- ------------------------------- ----------------------------- ------------------------------- ------------------------------
- Mexico (115) (106) 59 (25) (187)
-----------------------------------------------------
- other (68) 84 174 (40) 150
Year ended 31 Dec 2020 3,704 1,639 3,616 (182) 8,777
----------------------------------------------------- ------------------------------- ------------------------------- ----------------------------- ------------------------------- ------------------------------
1 UK includes results from the ultimate holding company, HSBC
Holdings plc, and the separately incorporated group of service
companies ('ServCo Group').
Profit/(loss) before tax by country/territory within global businesses
(continued)
Wealth Global
and Personal Commercial Banking Corporate
Banking Banking and Markets Centre Total
$m $m $m $m $m
----------------------------------------------------- ------------------------------- ------------------------------- ------------------------------- ------------------------------- -----------------------------
Europe (841) (1,324) (997) (1,491) (4,653)
----------------------------------------------------- ------------------------------- ------------------------------- ------------------------------- ------------------------------- -----------------------------
- UK(1) (1,053) 904 (1,217) (1,979) (3,345)
-----------------------------------------------------
* of which: HSBC UK Bank plc (ring-fenced bank) (331) 1,555 70 13 1,307
-----------------------------------------------------
* of which: HSBC Bank plc (non-ring fenced bank) 245 278 (186) (467) (130)
-----------------------------------------------------
* of which: Holdings and other (967) (929) (1,101) (1,525) (4,522)
-----------------------------------------------------
- France 55 120 (65) (74) 36
-----------------------------------------------------
- Germany 18 46 95 2 161
-----------------------------------------------------
- Switzerland 93 7 (3) (6) 91
-----------------------------------------------------
- other(2) 46 (2,401) 193 566 (1,596)
----------------------------------------------------- ------------------------------- ------------------------------- ------------------------------- -------------------------------
Asia 7,715 4,519 4,083 2,151 18,468
----------------------------------------------------- ------------------------------- ------------------------------- ------------------------------- ------------------------------- -----------------------------
- Hong Kong 7,220 3,242 1,729 (142) 12,049
-----------------------------------------------------
- Australia 130 127 199 (12) 444
-----------------------------------------------------
- India 67 201 533 205 1,006
-----------------------------------------------------
- Indonesia 20 55 127 14 216
-----------------------------------------------------
- mainland China (73) 317 512 2,121 2,877
-----------------------------------------------------
- Malaysia 102 73 189 (22) 342
-----------------------------------------------------
- Singapore 154 105 250 (31) 478
-----------------------------------------------------
- Taiwan 43 25 97 (4) 161
-----------------------------------------------------
- other 52 374 447 22 895
----------------------------------------------------- ------------------------------- ------------------------------- ------------------------------- -------------------------------
Middle East and North Africa 254 212 761 1,100 2,327
----------------------------------------------------- ------------------------------- ------------------------------- ------------------------------- ------------------------------- -----------------------------
- Egypt 73 81 245 11 410
-----------------------------------------------------
- UAE 139 94 246 (54) 425
-----------------------------------------------------
- Saudi Arabia (3) - 13 1,145 1,155
-----------------------------------------------------
- other(2) 45 37 257 (2) 337
----------------------------------------------------- ------------------------------- ------------------------------- ------------------------------- -------------------------------
North America (573) 855 729 (244) 767
----------------------------------------------------- ------------------------------- ------------------------------- ------------------------------- ------------------------------- -----------------------------
- US (277) 386 547 (221) 435
-----------------------------------------------------
- Canada 70 427 143 (22) 618
-----------------------------------------------------
- other(2) (366) 42 39 (1) (286)
----------------------------------------------------- ------------------------------- ------------------------------- ------------------------------- -------------------------------
Latin America 264 (103) 328 (89) 400
----------------------------------------------------- ------------------------------- ------------------------------- ------------------------------- ------------------------------- -----------------------------
- Mexico 311 176 229 (29) 687
-----------------------------------------------------
- other(2) (47) (279) 99 (60) (287)
----------------------------------------------------- ------------------------------- ------------------------------- ------------------------------- -------------------------------
GBM goodwill impairment(2) - - (3,962) - (3,962)
----------------------------------------------------- ------------------------------- ------------------------------- ------------------------------- ------------------------------- -----------------------------
Year ended 31 Dec 2019 6,819 4,159 942 1,427 13,347
----------------------------------------------------- ------------------------------- ------------------------------- ------------------------------- ------------------------------- -----------------------------
1 UK includes results from the ultimate holding company, HSBC
Holdings plc, and the separately incorporated group of service
companies ('ServCo Group').
2 Includes the impact of goodwill impairment. As per Group
accounting policy, HSBC's cash-generating units are based on
geographical regions, subdivided by global business.
Reconciliation of alternative performance
measures
Page
Use of alternative performance
measures 117
----------------------------------------- ----
Return on average ordinary shareholders'
equity and return on average
tangible equity 117
----------------------------------------- ----
Net asset value and tangible
net asset value per ordinary
share 118
----------------------------------------- ----
Post-tax return and average total
shareholders' equity on average
total assets 119
----------------------------------------- ----
Expected credit losses and other
credit impairment charges as
% of average gross loans and
advances to customers 119
----------------------------------------- ----
Use of alternative performance measures
Our reported results are prepared in accordance with IFRSs as
detailed in our financial statements starting on page 308.
As described on page 90, we use a combination of reported and
alternative performance measures, including those derived from our
reported results that eliminate factors that distort year-on-year
comparisons. These are considered alternative performance measures
(non-GAAP financial measures).
The following information details the adjustments made to the
reported results and the calculation of other alternative
performance measures. All alternative performance measures are
reconciled to the closest reported performance measure.
Return on average ordinary shareholders'
equity and return on average tangible
equity
Return on average ordinary shareholders' equity ('RoE') is
computed by taking profit attributable to the ordinary shareholders
of the parent company ('reported results'), divided by average
ordinary shareholders' equity ('reported equity') for the period.
The adjustment to reported results and reported equity excludes
amounts attributable to non-controlling interests and holders of
preference shares and other equity instruments.
Return on average tangible equity ('RoTE') is computed by
adjusting reported results for the movements in the present value
of in-force long-term insurance business ('PVIF') and for
impairment of goodwill and other intangible assets (net of tax),
divided by average reported equity adjusted for goodwill,
intangibles and PVIF for the period.
Return on average tangible equity excluding significant items is
annualised profit attributable to ordinary shareholders, excluding
changes in PVIF and significant items (net of tax), divided by
average tangible shareholders' equity excluding fair value of own
debt, debt valuation adjustment ('DVA') and other adjustments for
the period. Since 1 January 2021, the UK bank levy has no longer
been excluded from the calculation of this measure. Comparative
data have not been re-presented.
We provide RoTE ratios in addition to RoE as a way of assessing
our performance, which is closely aligned to our capital
position.
Return on average ordinary shareholders' equity and return on average
tangible equity
2021 2020 2019
$m $m $m
---------------------------------------------- ----------------------- ---------------------- ---------------------
Profit
---------------------------------------------- ----------------------- ---------------------- ---------------------
Profit attributable to the ordinary
shareholders
of the parent company 12,607 3,898 5,969
---------------------------------------------- ----------------------- ---------------------- ---------------------
Impairment of goodwill and other intangible
assets
(net of tax) 608 1,036 7,349
---------------------------------------------- ----------------------- ---------------------- ---------------------
Decrease/(increase) in PVIF (net of tax) (58) (253) (1,248)
---------------------------------------------- ----------------------- ---------------------- ---------------------
Profit attributable to the ordinary
shareholders,
excluding goodwill, other
intangible assets impairment and PVIF 13,157 4,681 12,070
---------------------------------------------- ----------------------- ---------------------- ---------------------
Significant items (net of tax) and other
adjustments(1) 2,086 2,402 2,251
---------------------------------------------- ----------------------- ---------------------- ---------------------
Profit attributable to the ordinary
shareholders,
excluding goodwill impairment, PVIF and
significant
items(1) 15,243 7,083 14,321
---------------------------------------------- ----------------------- ---------------------- ---------------------
Equity
---------------------------------------------- ----------------------- ---------------------- ---------------------
Average total shareholders' equity 199,295 189,719 189,035
---------------------------------------------- ----------------------- ---------------------- ---------------------
Effect of average preference shares and other
equity
instruments (22,814) (22,326) (23,614)
---------------------------------------------- ----------------------- ---------------------- ---------------------
Average ordinary shareholders' equity 176,481 167,393 165,421
---------------------------------------------- ----------------------- ---------------------- ---------------------
Effect of goodwill, PVIF and other intangibles
(net
of deferred tax) (17,705) (17,292) (22,574)
---------------------------------------------- ----------------------- ---------------------- ---------------------
Average tangible equity 158,776 150,101 142,847
---------------------------------------------- ----------------------- ---------------------- ---------------------
Fair value of own debt, DVA and other
adjustments 1,278 422 1,032
---------------------------------------------- ----------------------- ---------------------- ---------------------
Average tangible equity excluding fair value
of own
debt, DVA and other adjustments 160,054 150,523 143,879
---------------------------------------------- ----------------------- ---------------------- ---------------------
%% %
---------------------------------------------- ----------------------- --------------------- ---------------------
Ratio
---------------------------------------------- ----------------------- ---------------------- ---------------------
Return on average ordinary shareholders'
equity 7.1 2.3 3.6
---------------------------------------------- ----------------------- ---------------------- ---------------------
Return on average tangible equity 8.3 3.1 8.4
---------------------------------------------- ----------------------- ---------------------- ---------------------
Return on average tangible equity excluding
significant
items(1) 9.5 4.7 10.0
---------------------------------------------- ----------------------- ---------------------- ---------------------
1 Since 1 January 2021, the UK bank levy has no longer been
excluded from the calculation of this measure. Comparative data
have not been re-presented.
The following table details the adjustments made to reported
results by global business:
Return on average tangible equity by global business
Year ended 31 Dec 2021
--------------------------------------------------------------------------------------------------------------------------------------------------
Wealth Global
and Banking
Personal Commercial and Corporate
Banking Banking Markets Centre Total
$m $m $m $m $m
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Profit before
tax 6,133 6,677 4,722 1,374 18,906
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Tax expense (1,540) (1,783) (1,020) 130 (4,213)
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Profit after tax 4,593 4,894 3,702 1,504 14,693
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Less
attributable
to: preference
shareholders,
other equity
holders,
non-controlling
interests (735) (665) (618) (68) (2,086)
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Profit
attributable to
ordinary
shareholders
of the parent
company 3,858 4,229 3,084 1,436 12,607
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Increase in PVIF
(net of tax) (65) 4 - 3 (58)
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Significant
items (net of
tax)(1) 850 51 517 1,269 2,687
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Other
adjustments 3 (4) (3) 11 7
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Profit
attributable to
ordinary
shareholders,
excluding PVIF,
significant
items(1) 4,646 4,280 3,598 2,719 15,243
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Average tangible
shareholders'
equity
excluding fair
value of own
debt,
DVA and other
adjustments 30,587 39,487 41,816 48,164 160,054
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Return on
average
tangible equity
excluding
significant
items (%)(1) 15.2 10.8 8.6 5.6 9.5
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Year ended 31 Dec 2020
---------------- --------------------------------------------------------------------------------------------------------------------------------------------------
Profit before
tax 3,704 1,639 3,616 (182) 8,777
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Tax expense (509) (661) (977) (531) (2,678)
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Profit after tax 3,195 978 2,639 (713) 6,099
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Less
attributable
to: preference
shareholders,
other equity
holders,
non-controlling
interests (736) (673) (784) (8) (2,201)
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Profit
attributable to
ordinary
shareholders
of the parent
company 2,459 305 1,855 (721) 3,898
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Increase in PVIF
(net of tax) (242) (10) - (1) (253)
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Significant
items (net of
tax) and
UK bank levy 190 208 958 2,041 3,397
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Other
adjustments 20 (14) (25) 60 41
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Profit
attributable to
ordinary
shareholders,
excluding PVIF,
significant
items
and bank levy 2,427 489 2,788 1,379 7,083
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Average tangible
shareholders'
equity
excluding fair
value of own
debt,
DVA and other
adjustments 26,551 37,826 41,566 44,580 150,523
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
Return on
average
tangible equity
excluding
significant
items and UK
bank levy (%) 9.1 1.3 6.7 3.1 4.7
---------------- --------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------
1 Since 1 January 2021, the UK bank levy has no longer been
excluded from the calculation of this measure. Comparative data
have not been re-presented.
Net asset value and tangible net
asset value per ordinary share
Net asset value per ordinary share is total shareholders' equity
less non-cumulative preference shares and capital securities
('total ordinary shareholders' equity'), divided by the number of
ordinary shares in issue excluding shares that the company has
purchased and are held in treasury.
Tangible net asset value per ordinary share is total ordinary
shareholders' equity excluding goodwill, PVIF and other intangible
assets (net of deferred tax) ('tangible ordinary shareholders'
equity'), divided by the number of basic ordinary shares in issue
excluding shares that the company has purchased and are held in
treasury.
Net asset value and tangible net asset value per ordinary share
2021 2020 2019
$m $m $m
-------------------------------------------------- -------------------- --------------------- ---------------------
Total shareholders' equity 198,250 196,443 183,955
-------------------------------------------------- -------------------- --------------------- ---------------------
Preference shares and other equity instruments (22,414) (22,414) (22,276)
-------------------------------------------------- -------------------- --------------------- ---------------------
Total ordinary shareholders' equity 175,836 174,029 161,679
-------------------------------------------------- -------------------- --------------------- ---------------------
Goodwill, PVIF and intangible assets (net of
deferred
tax) (17,643) (17,606) (17,535)
-------------------------------------------------- -------------------- --------------------- ---------------------
Tangible ordinary shareholders' equity 158,193 156,423 144,144
-------------------------------------------------- -------------------- --------------------- ---------------------
Basic number of $0.50 ordinary shares outstanding 20,073 20,184 20,206
-------------------------------------------------- -------------------- --------------------- ---------------------
$ $ $
-------------------------------------------------- -------------------- --------------------- ---------------------
Value per share
-------------------------------------------------- -------------------- --------------------- ---------------------
Net asset value per ordinary share 8.76 8.62 8.00
-------------------------------------------------- -------------------- --------------------- ---------------------
Tangible net asset value per ordinary share 7.88 7.75 7.13
-------------------------------------------------- -------------------- --------------------- ---------------------
Post-tax return and average total
shareholders'
equity on average total assets
Post-tax return on average total assets is profit after tax
divided by average total assets for the period.
Average total shareholders' equity to average total assets is
average total shareholders' equity divided by average total assets
for the period.
Post-tax return and average total shareholders' equity
on average total assets
----------------- ------------------- --------------------
2021 2020 2019
$m $m $m
------------------------------------------------------- ----------------- ------------------- --------------------
Profit after tax 14,693 6,099 8,708
------------------------------------------------------- ----------------- ------------------- --------------------
Average total shareholders' equity 199,295 189,719 189,035
------------------------------------------------------- ----------------- ------------------- --------------------
Average total assets 3,012,437 2,936,939 2,712,376
------------------------------------------------------- ----------------- ------------------- --------------------
Ratio %% %
------------------------------------------------------- ----------------- ------------------ --------------------
Post-tax return on average total assets 0.5 0.2 0.3
------------------------------------------------------- ----------------- ------------------- --------------------
Average total shareholders' equity to average total
assets 6.62 6.46 6.97
------------------------------------------------------- ----------------- ------------------- --------------------
Expected credit losses and other
credit impairment charges as % of
average gross loans and advances
to customers
Expected credit losses and other credit impairment charges
('ECL') as % of average gross loans and advances to customers is
the
annualised adjusted ECL divided by adjusted average gross loans
and advances to customers for the period.
The adjusted numbers are derived by adjusting reported ECL and
loans and advances to customers for the effects of foreign currency
translation differences.
Expected credit losses and other credit impairment charges as % of
average gross loans and advances to customers
2021 2020 2019
$m $m $m
-------------------------------------- ----------------------------- ---------------------- -----------------------
Expected credit losses and other
credit impairment
charges ('ECL') 928 (8,817) (2,756)
-------------------------------------- ----------------------------- ---------------------- -----------------------
Currency translation (465) 69
-------------------------------------- ----------------------------- ---------------------- -----------------------
Adjusted ECL 928 (9,282) (2,687)
-------------------------------------- ----------------------------- ---------------------- -----------------------
Average gross loans and advances to
customers 1,057,412 1,047,114 1,021,238
-------------------------------------- ----------------------------- ---------------------- -----------------------
Currency translation (8,487) 20,243 22,292
-------------------------------------- ----------------------------- ---------------------- -----------------------
Average gross loans and advances to
customers - at
most recent balance sheet foreign
exchange rates 1,048,925 1,067,357 1,043,530
-------------------------------------- ----------------------------- ---------------------- -----------------------
%% %
-------------------------------------- ----------------------------- --------------------- -----------------------
Ratio
-------------------------------------- ----------------------------- ---------------------- -----------------------
Expected credit losses and other
credit impairment
charges as % of average gross loans
and advances
to customers (0.09) 0.87 0.26
-------------------------------------- ----------------------------- ---------------------- -----------------------
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END
ACSEALAAAENAEFA
(END) Dow Jones Newswires
February 22, 2022 11:30 ET (16:30 GMT)
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