Contents
100
|
Changes to presentation from
1 January 2023
|
100
|
Use of alternative performance
measures
|
101
|
Critical estimates and
judgements
|
101
|
Impact of hyperinflationary
accounting
|
103
|
Consolidated income
statement
|
104
|
Income statement
commentary
|
107
|
Supplementary table for planned
disposals
|
109
|
Consolidated balance
sheet
|
Changes to presentation from
1 January 2023
Changes to our reporting
framework
On 1 January 2023, we updated our
financial reporting framework. We no longer report 'adjusted'
results, which excluded the impact of both foreign currency
translation differences and significant items. Instead, we compute
constant currency performance by adjusting comparative reported
results only for the effects of foreign currency translation
differences between the relevant periods. This will enable users to
understand the impact of foreign currency translation differences
on the Group's performance. We separately disclose 'notable items',
which are components of our income statement that management would
consider as outside the normal course of business and generally
non-recurring in nature. While our primary segmental reporting by
global business remains unchanged, effective from 1 January 2023,
the Group changed the supplementary presentation of results from
geographical regions to main legal entities to better reflect the
Group's structure.
IFRS 17 'Insurance
Contracts'
On 1 January 2023, HSBC adopted IFRS
17 'Insurance Contracts'. As required by the standard, the Group
applied the requirements retrospectively with comparative data
previously published under IFRS 4 'Insurance Contracts' restated
from the 1 January 2022 transition date. As required by IAS 1
'Presentation of Financial Statements' a third statement of
financial position as at the transition date of 1 January 2022 has
been disclosed (for further details, see page 331). Under IFRS 17 there is no present value of
in-force business ('PVIF') asset recognised up front. Instead the
measurement of the insurance contract liability takes into account
fulfilment cash flows and a contractual service margin ('CSM')
representing the unearned profit. In contrast to the Group's
previous IFRS 4 accounting where profits are recognised up front,
under IFRS 17 they are deferred and systematically recognised in
revenue as services are provided over the expected coverage period.
The CSM also includes directly attributable costs, which had
previously been expensed as incurred and which are now incorporated
within the insurance liability measurement and recognised over the
expected coverage period.
In conjunction with the
implementation of IFRS 17, the Group has made use of the option to
re-designate to fair value through profit or loss assets that were
previously held at amortised cost totalling $55.1bn, and eligible
assets previously held at fair value through other comprehensive
income totalling $1.1bn. The re-designation of amortised cost
assets generated a net increase to assets of $4.9bn because the
fair value measurement on transition was higher than the previous
amortised cost carrying amount.
The impact of the transition was a
reduction of $1.1bn on the Group's full-year 2022 reported revenue
and a reduction of $0.5bn on full-year 2022 reported profit before
tax. The Group's total equity at 1 January 2022 reduced by $10.5bn
to $196.3bn on the transition, and tangible equity reduced by
$2.4bn to $146.9bn. For further details of our adoption of IFRS 17,
see Note 38 'Effects of adoption of IFRS
17' on page 422.
Cost target
At our full-year 2022 results, we
set a target for our 'adjusted' operating expenses of growth for
2023 compared with 2022. Under our new reporting framework we no
longer present 'adjusted' results. The exception to this is for
operating expenses, where our 'target basis' will adjust reported
results for notable items and the period-on-period effects of
foreign currency translation differences. We also exclude the
impact of retranslating comparative period financial information at
the latest rates of foreign exchange in hyperinflationary
economies, which is not within our control. We consider that this
measure provides useful information to investors by quantifying and
excluding the items that management considered when setting and
assessing cost-related targets. In our target basis, we also
exclude the costs related to the acquisition of SVB UK and related
investments internationally, which are expected to add
approximately 1% to our cost growth compared with 2022.
Our 2022 baseline for operating
expenses on this basis is $29.8bn, which has been retranslated at
the average rates of foreign exchange for 2023.
Resegmentation
In the first quarter of 2023,
following an internal review to assess which global businesses were
best suited to serve our customers' respective needs, a portfolio
of our Global Banking customers within our entities in Latin
America was transferred from GBM to CMB for reporting purposes.
Comparative data have been re-presented accordingly. Similar
smaller transfers from GBM to CMB were also undertaken within our
entities in Australia and Indonesia, where comparative data have
not been re-presented.
Banking NII
At our interim 2023 results, we
introduced banking net interest income. This alternative
performance measure is reconciled on page 104, and deducts from Group reported net interest
income: the impact of the cost of funding reported in net interest
income used to fund trading and fair value net assets; the impact
of foreign exchange swaps in Markets Treasury, where an offsetting
income or loss is recorded in trading and fair value income, and
third-party net interest income from our insurance
business.
This resulting measure is intended
to approximate the Group's banking revenue that is directly
impacted by changes in interest rates.
Use of alternative performance
measures
Our reported results are prepared in
accordance with International Financial Reporting
Standards as issued by the International Accounting Standards Board
('IFRS Accounting Standards'), as detailed in the
financial statements starting on page 329.
To measure our performance, we
supplement our IFRS Accounting Standards figures with non-IFRS
Accounting Standards 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 'constant currency 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 130. In addition,
insurance-specific non-GAAP measures including 'Insurance
manufacturing value of new business', 'Insurance manufacturing
proxy embedded value', and 'Insurance equity plus CSM net of tax'
are provided on pages 116 to 117, together with their definitions and
reconciliation to GAAP measures. All alternative performance
measures are reconciled to the closest reported performance
measure.
The global business segmental
results are presented on a constant currency basis in accordance
with IFRS 8 'Operating Segments' as detailed in Note 10 'Segmental analysis' on page 372.
Constant currency
performance
Constant currency performance is
computed by adjusting reported results for the effects of foreign
currency translation differences, which distort year-on-year
comparisons.
We consider constant currency
performance to provide useful information for investors by aligning
internal and external reporting, and reflecting how management
assesses year-on-year performance.
Notable items
We separately disclose 'notable
items', which are components of our income statement that
management would consider as outside the normal course of business
and generally non-recurring in nature.
The tables on pages 112 to 113 and pages
123 to 128 detail
the effects of notable items on each of our global business
segments, legal entities and selected countries/territories in
2023, 2022 and
2021.
Foreign currency translation
differences
Foreign currency translation
differences reflect the movements of the US dollar against most
major currencies during 2023.
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 to better
understand the underlying trends in the business.
Foreign currency translation
differences for 2023 are computed by
retranslating into US dollars for non-US dollar branches,
subsidiaries, joint ventures and associates:
- the income
statements for 2022 and 2021 at the average rates of exchange for 2023; and
- the balance
sheets at 31 December 2022 and 31 December
2021 at the prevailing rates of exchange
on 31 December 2023.
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 Argentina subsidiaries have not been
adjusted further for the impacts of hyperinflation. Since
1 June 2022, Türkiye has been deemed a hyperinflationary
economy for accounting purposes. HSBC has an operating entity in
Türkiye and the constant currency data 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.
Critical 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 material accounting policies, including the
policies which include critical 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, selecting and
calibrating the probability of default ('PD'), the loss given
default ('LGD') and the exposure at default ('EAD') models, as well
as selecting model inputs and economic forecasts, making
assumptions and estimates to incorporate relevant information about
late-breaking and past events, current conditions and forecasts of
economic conditions, and selecting applicable recovery strategies
for certain wholesale credit-impaired loans. 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 348.
- Deferred tax
assets: The most significant judgements relate to those made in
respect of recoverability, which are based on expected future
profitability. See Note 1.2(l) on
page 353.
- 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 345.
- Impairment of
investment in subsidiaries: Impairment testing, including testing
for reversal of impairment, 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.
See Note 1.2(a) on page 343.
- Impairment of
interests in associates: Impairment testing, including testing for
reversal of impairment, 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 343.
- 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 343 and Note 1.2(n) on page 353.
- 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 353.
- 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 352.
- Non-current
assets and disposal groups held for sale: Management judgement is
required in determining the likelihood of the sale to occur, and
the anticipated timing in assessing whether the held for sale
criteria have been met. See Note 1.2(o) on page 354.
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.
Impact of hyperinflationary
accounting
We continue to treat Argentina and
Türkiye as hyperinflationary economies for accounting purposes. The
impact of applying IAS 29 'Financial Reporting in Hyperinflationary
Economies' and the hyperinflation provisions of IAS 21 'The Effects
of Changes in Foreign Exchange Rates' in the current period for our
operations in both Argentina and Türkiye was a decrease in the
Group's profit before tax of $1,297m (2022: $548m), comprising a
decrease in revenue, including loss on net monetary position, of
$1,586m (2022: $541m) and a decrease in ECL and operating
expenses of $289m (2022: increase of $7m). The CPI at 31
December for Argentina was 3,576, with an increase in the year of
2,429.13 (2022: 563.92 increase). The CPI for Türkiye was 1,859
with an increase in the year of 730.89 (2022: 359.94
increase).
Banking net interest income is an alternative performance measure, and is defined as
Group reported net interest income after deducting:
- the internal
cost to fund trading and fair value net assets for which associated
revenue is reported in 'Net income from financial instruments held
for trading or managed on a fair value basis', also referred to as
'trading and fair value income'. These funding costs reflect proxy
overnight or term interest rates as applied by internal funds
transfer pricing;
- the funding
costs of foreign exchange swaps in Markets Treasury, where an
offsetting income or loss is recorded in trading and fair value
income. These instruments are used to manage foreign currency
deployment and funding in our entities; and
- third-party net
interest income in our insurance business.
In our segmental disclosures, the
funding costs of trading and fair value net assets are
predominantly recorded in GBM in 'net income from financial
instruments held for trading or managed on a fair value basis'. On
consolidation, this funding is eliminated in Corporate Centre,
resulting in an increase in the funding costs reported in net
interest income with an equivalent offsetting increase in 'net
income from financial instruments held for trading or managed on a
fair value basis' in this segment. In the second quarter of 2023 we
implemented a consistent reporting approach across our most
material entities that contribute to our trading and fair value net
assets, which resulted in an increase to the first half of 2023
associated funding costs reported through the intersegment
elimination in Corporate Centre of approximately $0.4bn, recognised
in the second quarter of 2023. In the consolidated Group results,
the cost to fund these trading and fair value net assets is
reported in net interest income.
The internally allocated funding
cost of $8.7bn, which was incurred in 2023 to generate trading and
fair value income, related to trading, fair value and associated
net asset balances predominantly in GBM. At 31 December 2023, these
stood at approximately $164bn.
Net
fee income of $11.8bn was $0.1bn
higher than in 2022, and included an adverse impact from foreign
currency translation differences of $0.1bn. The rise in net fee
income in CMB and WPB was partly offset by a reduction in
GBM.
In CMB, net fee income increased by
$0.2bn driven by higher fees from credit facilities, notably in
Europe and the UK due to an increase in trade products.
Fee income also grew in account services,
reflecting greater client activity in transaction banking, mainly
in Global Payments Solutions ('GPS'), and in cards, as spending
increased compared with 2022. These increases were partly offset by
a reduction in fees from funds under management and broking
activities.
In WPB, net fee income increased by
$0.1bn. The rise was mainly due to higher cards income, mainly in
our legal entities in Hong Kong and in Mexico, as customer spending
increased. However, income from broking
fell, notably in Hong Kong, due to weaker equity markets and muted
customer sentiment. The rise in cards activity resulted in higher
fee expenses.
In GBM, net fee income decreased by
$0.2bn. This was driven by higher fee expense, notably in our main
entities in Hong Kong, mainly relating to GBM products sold to
customers in other global businesses. In Europe, fee expense grew
in our private credit business, and we incurred higher interbank
and clearing fee expense. There was a
decrease in corporate finance fee income, reflecting lower client
activity in Europe, and a fall in broking income due to lower
equity turnover. Global custody income also fell. This was partly
offset by an increase in underwriting income, from an increase in
syndicated fees in Europe and a rise in fees in the US following
historical lows in 2022.
Net
income from financial instruments held for trading or managed on a
fair value basis of $16.7bn was
$6.4bn higher compared with 2022. This reflected a rise in income,
primarily relating to trading activities in GBM, for which the
associated funding costs are reported in net interest income,
notably in our main legal entities in Hong Kong and Europe. The
rise also included a favourable movement on non-qualifying hedges
of $0.5bn due to the non-recurrence of fair value losses in 2022.
These increases were partly offset by an adverse fair value
movement on foreign exchange hedges related to the planned sale of
our banking business in Canada.
Net
income from assets and liabilities of insurance businesses,
including related derivatives, measured at fair value through
profit or loss of $7.9bn compared
with a net expense of $13.8bn in 2022. This increase reflected
favourable movements on debt securities, due to movements in
interest rates, and equities. The increases were notably in our
portfolios in Hong Kong and France.
This favourable movement resulted in
a corresponding movement in insurance finance expense, which has an
offsetting impact for the related liabilities to
policyholders.
Insurance finance expense of
$7.8bn compared with an income of $13.8bn in 2022, reflecting the
impact of investment returns on underlying assets on the value of
liabilities to policyholders, which moves inversely with 'net
income from assets and liabilities of insurance businesses,
including related derivatives, measured at fair value through
profit or loss'.
Insurance service result of
$1.1bn increased by $0.3bn compared with 2022, primarily due to an
increase in the release of the contractual service margin ('CSM').
This primarily reflected a higher CSM balance from higher new
business written and favourable assumption updates, primarily from
updates to lapse rate assumptions. The increase also reflected a
reduction in losses from onerous contracts. Under IFRS 17, the
measurement of the insurance contract liability takes into account
fulfilment cash flows and a CSM representing the unearned profit.
In contrast to the Group's previous IFRS 4 accounting where profits
are recognised up front, under IFRS 17 they are deferred and
systematically recognised in revenue as services are provided over
the life of the contract. The CSM also includes attributable cost,
which had previously been expensed as incurred and which is now
incorporated within the insurance liability measurement and
recognised over the life of the contract.
Gain on acquisition of $1.6bn
related to the provisional gain recognised in respect of the
acquisition of Silicon Valley Bank UK Limited.
Impairment loss relating to the sale of the retail banking
operations in France was a net
impairment reversal of $0.2bn in 2023, compared with an impairment
of $2.3bn in 2022.
In accordance with IFRS 5
'Non-current Assets Held for Sale and Discontinued Operations', the
disposal group was classified as held for sale on 30 September
2022, at which point the Group recognised the estimated impairment
of $2.3bn, which included impairment of goodwill of $0.4bn and
related transaction costs. In the first
quarter of 2023, $2.1bn of this impairment loss was reversed as the
sale became less certain. It was reinstated in the fourth quarter
of 2023 as we reclassified these operations as held for sale and
remeasured the disposal group at the lower of carrying value and
fair value less costs to sell, resulting in a $2.0bn impairment
loss, reflecting the final terms of the sale. The sale completed on
1 January 2024.
Other operating expense of
$1.1bn was $0.9bn higher than in 2022. The increase primarily
related to losses in 2023 in Markets Treasury on asset disposals of
$1.0bn relating to repositioning and risk management activities in
our hold-to-collect-and-sell portfolio in certain key legal
entities. These actions are accretive to net interest income and
reduce the consumption of the Group's financial
resources.
The increased expense also included
a loss of $0.3bn in 2023 relating to corrections to historical
valuation estimates in our life insurance business, and losses
related to the disposal of our New Zealand retail mortgage loan
portfolio and the merger of HSBC Bank Oman in 2023 with Sohar
International. These were partly offset by losses in 2022 relating
to the disposal of our branch operations in Greece and the planned
disposal of our business in Russia.
Change in expected credit losses and other credit impairment
charges ('ECL') were a charge of
$3.4bn, a decrease of $0.1bn or 4% compared with 2022.
The charge in 2023 primarily
comprised stage 3 net charges, notably related to mainland China
commercial real estate sector exposures. ECL charges in this sector
were $1.0bn in 2023. The charge in 2023 also reflected the impact
of continued economic uncertainty, rising interest rates and
inflationary pressures. The charge in 2022 of $3.6bn included
charges related to mainland China commercial real estate exposures
of $1.3bn.
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 156 to 168.
Operating expenses of $32.1bn
were $0.6bn or 2% lower than in 2022,
including a favourable impact of $0.4bn from foreign currency
translation differences.
This was driven by lower
restructuring and other related costs following the completion of
our cost to achieve programme, which concluded at the end of 2022,
as well as a $0.2bn reduction due to a reversal of historical asset
impairments, and the effects of our continued cost discipline.
There was also a favourable impact of $0.2bn due to the impact of
hyperinflationary accounting in Argentina in 2023.
These reductions were partly offset
by an increase in technology costs, the impacts of inflation, a
higher performance-related pay accrual and severance
payments. In addition, the UK bank levy
increased by $0.3bn, which included adjustments related to prior
years, and we incurred a $0.2bn charge in the US relating to the
FDIC special assessment.
The number of employees expressed in
full-time equivalent staff ('FTE') at 31 December 2023 was 220,861,
an increase of 1,662 compared with
31 December 2022. The number of contractors at 31 December 2023
was 4,676, a decrease of
1,371.
Share of profit in associates and joint
ventures of $2.8bn was $0.1bn or 3%
higher than in 2022, reflecting an increase in the share of profit
from Saudi Awwal Bank ('SAB').
Impairment of interest in associate
of $3.0bn related to our investment in
BoCom.
We maintain a 19.03% interest in
BoCom. Since our investment in 2004, BoCom has grown its business
significantly to the extent that it has recently been designated as
a global systemically important bank ('GSIB').
For accounting purposes, the balance
sheet carrying value attributed to BoCom represents our share of
its net assets. We perform quarterly impairment tests incorporating
a value-in-use calculation, recognising the gap between this
carrying value and the fair value (based on the list share price).
We have previously disclosed that the excess of the value-in-use
calculation over its carrying value has been marginal in recent
years, and that reasonably possible changes in assumptions could
generate an impairment.
Recent macroeconomic, policy and
industry factors resulted in a wider range of reasonably possible
value-in-use outcomes for our BoCom valuation. At 31 December 2023,
the Group performed an impairment test on the carrying value which
resulted in an impairment of $3.0bn, as
the recoverable amount as determined by a value-in-use calculation
was lower than the carrying value. Our
value-in-use calculation uses both historical experience and market
participant views to estimate future cash flows, relevant discount
rates and associated capital
assumptions.
This impairment will have no
material impact on HSBC's capital, capital ratios or distribution
capacity, and therefore no impact on dividends or share buy-backs.
The insignificant impact on HSBC's capital and CET1 ratio is due to
the compensating release of regulatory capital deductions to offset
the impairment charge.
We remain strategically committed to
mainland China as demonstrated by our recent announcements to
acquire Citi's retail wealth management portfolio and the
investments made into mainland China in recent years. BoCom remains
a strong partner in China, and we remain focused on maximising the
mutual value of our partnership. Our positive views on the medium-
and long-term structural growth opportunities in mainland China are
unchanged.
For further details, see Note
18: Interests in associates and joint
ventures on page 391.
Tax expense
|
|
Year
ended
|
|
2023
|
2022
|
|
$m
|
$m
|
Tax
(charge)/credit
|
|
|
Reported
|
(5,789)
|
(809)
|
Currency translation
|
-
|
160
|
Constant currency tax (charge)/credit
|
(5,789)
|
(649)
|
Notable items
|
|
Year
ended
|
|
2023
|
2022
|
|
$m
|
$m
|
Tax
|
|
|
Tax (charge)/credit on notable
items
|
207
|
1,026
|
Recognition of losses
|
-
|
2,333
|
Uncertain tax positions
|
427
|
(142)
|
|
|
|
Tax
expense
The effective tax rate for 2023 of
19.1% was higher than
the 4.7% in 2022. The effective tax rate for 2023 was
increased by 2.3 percentage points by the non-deductible impairment
of investments in associates, and reduced by 1.6 percentage points
by the release of provisions for uncertain tax positions and
reduced by 1.5 percentage points by the non-taxable accounting gain
on the acquisition of SVB UK. The effective tax rate for 2022 was
reduced by 12.8 percentage points by the recognition of a deferred
tax asset on historical tax losses of HSBC Holdings as a result of
improved profit forecasts for the UK tax group. Excluding these
items, the effective tax rates were 19.9% for 2023 and 17.5% for
2022.
Return on average tangible equity
In 2023, RoTE was 14.6%, compared
with 10.0% in 2022. Excluding the impact of strategic transactions
and the impairment of BoCom, RoTE was 15.6%.
Supplementary table for planned
disposals
The income statements and selected
balance sheet metrics for the year ended 31 December 2023 of our
banking business in Canada and our retail banking operations in
France are shown below.
The asset and liability balances
relating to these planned disposals are reported on the Group
balance sheet within 'Assets held for sale' and 'Liabilities of
disposal groups held for sale', respectively, as at
31 December 2023.
Income statement and selected
balance sheet metrics of disposal groups held for sale
|
|
Year ended 2023
|
|
Canada1
|
France
retail2
|
|
$bn
|
$bn
|
Revenue
|
2.0
|
0.3
|
ECL
|
-
|
-
|
Operating expenses
|
(1.0)
|
(0.6)
|
of
which: costs expected to be exited
|
(0.7)
|
(0.4)
|
Profit before tax
|
0.9
|
(0.2)
|
|
|
|
Loans and advances to
customers
|
56.1
|
16.9
|
Customer accounts
|
63.0
|
22.3
|
RWA3
|
31.9
|
4.1
|
1 Under the terms of the sale agreement, the
pre-tax profit on sale will be recognised through a combination of
the consolidation of HSBC Canada's results into the Group's
financial statements from 30 June 2022 until completion, and the
remaining gain on sale recognised at completion.
2 France retail includes the transferring of the
retail banking business, HSBC SFH and associated supporting
services. For further details, see Note 23: Assets held for sale and liabilities of disposal
groups held for sale on page 401.
3 Includes $3.5bn in Canada in respect of
operational risk RWAs, and $0.6bn associated with our retail
banking business in France.
Combined view of customer lending
and customer deposits
|
|
2023
|
2022
|
|
$m
|
$m
|
Loans and advances to
customers
|
938,535
|
923,561
|
- of which: HSBC Innovation Bank Limited (formerly SVB
UK)
|
7,955
|
-
|
Loans and advances to customers of
disposal groups reported in 'Assets held for sale'
|
73,285
|
80,576
|
- banking business in Canada
|
56,129
|
55,197
|
- retail banking operations in France
|
16,902
|
25,029
|
- other
|
254
|
350
|
Non-current assets held for
sale
|
92
|
112
|
Combined customer lending
|
1,011,912
|
1,004,249
|
Currency translation
|
-
|
20,454
|
Combined customer lending at constant
currency
|
1,011,912
|
1,024,703
|
Customer accounts
|
1,611,647
|
1,570,303
|
- of which: HSBC Innovation Bank Limited (formerly SVB
UK)
|
6,019
|
-
|
Customer accounts reported in
'Liabilities of disposal groups held for sale'
|
85,950
|
85,274
|
- banking business in Canada
|
63,001
|
60,606
|
- retail banking operations in France
|
22,307
|
22,348
|
- other
|
642
|
2,320
|
Combined customer deposits
|
1,697,597
|
1,655,577
|
Currency translation
|
-
|
30,773
|
Combined customer deposits at constant
currency
|
1,697,597
|
1,686,350
|
Balance sheet commentary compared
with 31 December 2022
At 31 December 2023, total assets of
$3.0tn were $89bn or 3% higher on a reported basis and increased by
$31bn or 1% on a constant currency basis.
Reported loans and advances to
customers as a percentage of customer accounts was 58.2% compared
with 58.8% at 31 December 2022. The movement in this ratio
reflected a higher growth in customer accounts than in
lending.
Assets
Cash and balances at central banks decreased by $41bn or 13%, which included a $13bn favourable
impact of foreign currency translation differences. The decrease
was mainly in HSBC UK, reflecting a reduction in customer accounts
and repurchase agreements, as well as an increase in the deployment
of our cash surplus into financial investments. Cash fell in HSBC Bank plc as our European branches managed
liquidity requirements and due to the completion of the sale of our
retail banking operations in France. Cash also decreased in the UK
as we deployed our commercial surplus into reverse repurchase
agreements and financial investments.
Trading assets increased by
$71bn or 33%, mainly as we captured increased client activity in
equity and debt securities, particularly in Hong Kong and HSBC Bank
plc. The increase in trading assets also
reflected the use of surplus liquidity to fund trading activities
given the subdued demand for customer lending.
Derivative assets decreased
by $54bn or 19%, mainly in Europe, reflecting adverse revaluation
movements on interest rate contracts due to a stabilisation and
downward shift in long-term yield curve rates in most major
markets. Foreign exchange contracts also
fell, primarily in HSBC Bank plc, as a result of reduced volatility
in foreign exchange rate movements in 2023. 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 $939bn increased by $15bn or 2% on a reported basis. This
included a favourable impact of foreign currency translation differences of
$18bn.
On a constant currency basis, loans
and advances to customers fell by $3bn, reflecting the following
movements.
In WPB, customer lending increased
by $21bn, reflecting growth in mortgage balances, notably in our
main legal entities in Hong Kong (up $6bn), the UK (up $5bn),
Mexico (up $1bn) and Australia (up $1bn). There was an increase of
$7.8bn in secured lending in our main entity in Europe following
the reclassification of a portfolio of home loans previously
classified as assets held for sale, relating to the sale of our
retail banking operations in France. The increase also included
growth of $3bn in credit card balances, mainly in our entities in
Hong Kong, the UK and Mexico. These increases were partly offset by
reductions due to business divestments in Oman and New
Zealand.
In GBM, lending fell by $16bn due to
a reduction in term lending, primarily in our main legal entities
in Hong Kong, including a reduction in the commercial real estate
sector, and in Europe, reflecting muted client demand. Lending also
fell by $1bn due to the merger of our operations in Oman with Sohar
International. In addition there was a transfer of GBM customers to
CMB in Australia and Indonesia, resulting in a $3bn
reduction.
In CMB, customer lending was $7bn
lower, mainly in our main legal entities in Hong Kong, including in
the commercial real estate sector, and in the US, as well as in
HSBC Bank plc, reflecting weaker client demand in a higher interest
rate environment. Lending also fell by $1bn due to the sale of our
business in Oman. In HSBC UK, lending grew by $4bn, as an increase
from the acquisition of SVB UK of $8bn partly mitigated reductions
from clients repaying their facilities. The transfer of customers
to CMB from GBM in Australia and Indonesia, referred to above, led
to an increase of $3bn.
Financial investments increased by $78bn or 21%, mainly in Asia and Europe from the
purchase of debt securities, treasury and other eligible bills, as
we redeployed our commercial surplus to benefit from higher yield
curves and enhance our hedging activities on net interest income.
The increase was across both debt instruments held at fair value
through other comprehensive income and instruments held at
amortised cost.
Assets held for sale of
$114bn primarily comprised the assets relating to the sale of our
retail banking operations in France and the planned sale of our
banking business in Canada. This balance was broadly stable
compared with 2022, as a decrease of $8bn relating to the transfer
to loans and advances to customers of a portfolio of secured home
loans in France was largely offset by a transfer of cash into
assets held for sale, related to the completion of the sale of our
retail banking operations there.
Liabilities
Customer accounts of $1.6tn
increased by $41bn or 3% on a reported basis. This included a
favourable impact of foreign currency translation differences of
$28bn.
On a constant currency basis,
customer accounts increased by $13bn,
reflecting the following
movements.
In WPB, customer accounts grew by
$12bn, reflecting higher interest-bearing term and money market
deposit balances, as interest rates rose, primarily in our main
legal entity in Asia, notably Hong Kong (up $10bn, or 3%),
Singapore (up $5bn, or 15%), Australia (up $3bn, or 19%), mainland
China (up $3bn, or 19%) and Taiwan up ($2bn, or 34%). However,
customer accounts fell by $14bn in HSBC UK, reflecting cost of
living and competitive pressures. There was also a reduction due to
the sale of our business in Oman.
In CMB, customer accounts increased
by $3bn. The growth included an increase of $6bn related to our
acquisition of SVB UK, as well as increases in our entities in
Asia, excluding Hong Kong, and in continental Europe, mainly in
term and money market deposits. In addition, a transfer of
customers from GBM to CMB in Australia and Indonesia resulted in a
rise of $4bn. These increases mitigated
reductions in our main entities in
Hong Kong and the UK and a reduction of $2bn due to the sale of our
business in Oman.
In GBM, customer accounts were
marginally lower, falling $2bn. Balances fell in Hong Kong and the
UK, although there was growth in continental Europe and Singapore.
Balances fell by $1bn following the sale of our business in Oman,
and by $4bn due to the transfer of customers from GBM to CMB in
Australia and Indonesia.
Repurchase agreements - non-trading
increased by $44bn or 35%, notably in HSBC Bank
plc, reflecting higher client demand, and in our main entity in
Asia due to a higher requirement for short-term funding.
Derivative liabilities decreased by $51bn or 18%, which is consistent with the
reduction in derivative assets, since the underlying risk is
broadly matched.
Debt securities in issue increased by $16bn or 20%, due to a net increase in debt
issuances.
Liabilities of disposal groups held for sale
of $108bn primarily comprised the liabilities
relating to the sale of our retail banking operations in France and
the planned sale of our banking business in Canada.
Equity
Total shareholders' equity, including non-controlling interests, increased by $7bn or 4%
compared with 31 December 2022.
Shareholders' equity was increased
by profits generated of $25bn and net gains through other
comprehensive income ('OCI') of $5bn. These increases were partly
offset by the impact of dividends paid of $12bn, the redemption of
perpetual subordinated contingent convertible capital securities of
$4bn and the impact of our $7bn share buy-back activities in
2023.
The net gains through OCI of $5bn
included favourable movements of $3bn on financial instruments
designated as hold-to-collect-and-sell, which are held as hedges to
our exposure to interest rate movements. The favourable movement
was a result of the fall in long-term market yield curves in
2023. The net gain also included a
favourable movement on cash flow hedges of $3bn and from the
effects of hyperinflation of $2bn. These gains were partly offset
by fair value losses on liabilities related to changes in own
credit risk of $1bn, as well as other smaller losses.
Financial investments
As part of our interest rate hedging
strategy, we hold a portfolio of debt instruments, reported within
financial investments, which are classified as
hold-to-collect-and-sell. As a result, the change in value of these
instruments is recognised through 'debt instruments at fair value
through other comprehensive income' in equity.
At 31 December 2023, we recognised a
pre-tax cumulative unrealised loss reserve through other
comprehensive income of $3.9bn related to these
hold-to-collect-and-sell positions. This reflected a $2.6bn pre-tax
gain in 2023, inclusive of movements on related fair value hedges.
The gain in 2023 included a reduction in unrealised losses due to
the disposal of securities as part of repositioning actions taken
in this portfolio of $1.0bn. Overall, the Group is positively
exposed to rising interest rates through net interest income,
although there is an adverse impact on our capital base in the
early stages of a rising interest rate environment due to the fair
value of hold-to collect-and-sell instruments.
Over time, these adverse movements
will unwind as the instruments reach maturity, although not all
will necessarily be held to maturity.
We also hold a portfolio of
financial investments measured at amortised cost, which are
classified as hold-to-collect. At 31 December 2023, there was
a cumulative unrealised loss of $1.7bn, although the unrealised
loss is not reflected on our balance sheet. This included $1.0bn
that related to debt instruments held to manage our interest rate
exposure, representing a $0.8bn improvement during 2023.
Risk-weighted assets ('RWAs')
totalled $854.1bn at 31
December 2023, a $14.4bn increase since 2022, including foreign currency
translation differences of $2.0bn. This
was mainly due to:
- a $26.2bn increase in asset size, which
was mostly attributed to WPB lending growth and a rise in
operational risk RWAs, offset by reduced lending in CMB and
GBM;
- a $6.2bn
increase from acquisitions, mainly from SVB UK, partly offset by a
disposal of our Oman business; and
- a
$19.9bn decrease in RWAs
due to changes in methodology and policy.
-
|
|
|
Customer accounts by
country/territory
|
|
2023
|
20221
|
|
$m
|
$m
|
Hong Kong
|
543,504
|
542,543
|
UK
|
508,181
|
493,028
|
US
|
99,607
|
100,404
|
Singapore
|
73,547
|
61,475
|
Mainland China
|
56,006
|
56,948
|
France1
|
42,666
|
33,726
|
Australia
|
32,071
|
28,506
|
Germany
|
30,641
|
28,949
|
Mexico
|
29,423
|
25,531
|
UAE
|
24,882
|
23,331
|
India
|
24,377
|
22,636
|
Taiwan
|
16,949
|
15,316
|
Malaysia
|
15,983
|
16,008
|
Switzerland
|
8,047
|
5,167
|
Egypt
|
5,858
|
6,045
|
Indonesia
|
5,599
|
5,840
|
Türkiye
|
3,510
|
3,497
|
Other2
|
90,796
|
101,353
|
At
31 Dec
|
1,611,647
|
1,570,303
|
1
From 1 January 2023, we adopted IFRS 17
'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'.
We have restated 2022 comparative data.
2 At 31 December 2023, customer
accounts of $86bn (2022: $85bn) met the
criteria to be classified as held for sale and are reported within
'Liabilities of disposal groups held for sale' on the balance
sheet, of which $63bn (2022: $61bn) and
$22bn (2022: $22bn) belongs to the planned
sale of the banking business in Canada and sale of our retail
banking operations in France, respectively. Refer to Note
23 on page 401
for further details.
Loans and advances, deposits by
currency
|
|
At
|
|
31 Dec
2023
|
$m
|
USD
|
GBP
|
HKD
|
EUR
|
CNY
|
Others1
|
Total
|
Loans and advances to
banks
|
33,231
|
15,632
|
7,106
|
4,688
|
8,772
|
43,473
|
112,902
|
Loans and advances to
customers
|
170,274
|
284,261
|
213,079
|
68,655
|
49,594
|
152,672
|
938,535
|
Total loans and advances
|
203,505
|
299,893
|
220,185
|
73,343
|
58,366
|
196,145
|
1,051,437
|
Deposits by banks
|
28,744
|
18,231
|
2,597
|
6,997
|
4,517
|
12,077
|
73,163
|
Customer accounts
|
441,967
|
423,725
|
305,520
|
128,444
|
63,535
|
248,456
|
1,611,647
|
Total deposits
|
470,711
|
441,956
|
308,117
|
135,441
|
68,052
|
260,533
|
1,684,810
|
|
|
|
|
|
|
|
|
|
31 Dec
20222
|
Loans and advances to
banks
|
34,495
|
12,292
|
5,188
|
6,328
|
7,833
|
38,339
|
104,475
|
Loans and advances to
customers
|
182,719
|
265,988
|
221,150
|
57,077
|
49,036
|
147,591
|
923,561
|
Total loans and advances
|
217,214
|
278,280
|
226,338
|
63,405
|
56,869
|
185,930
|
1,028,036
|
Deposits by banks
|
23,133
|
16,963
|
4,002
|
8,830
|
4,707
|
9,087
|
66,722
|
Customer accounts
|
430,866
|
422,087
|
312,052
|
112,399
|
63,032
|
229,867
|
1,570,303
|
Total deposits
|
453,999
|
439,050
|
316,054
|
121,229
|
67,739
|
238,954
|
1,637,025
|
1
'Others' includes items with no currency
information available of $1,592m for loans
to banks (2022: $1,112m), $1,904m for loans to customers (2022: $2,112m), $11m for deposits by
banks (2022: $13m) and $8m for customer accounts (2022: $6m).
2
From 1 January 2023, we adopted IFRS 17
'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'.
Comparative data have been restated accordingly.
RWAs by currency
|
|
At
|
|
31 Dec
2023
|
$m
|
USD
|
GBP
|
HKD
|
EUR
|
CNY
|
Others
|
Total
|
RWAs1
|
202,697
|
155,231
|
135,701
|
69,996
|
57,907
|
232,582
|
854,114
|
|
|
|
|
|
|
|
|
|
31 Dec
2022
|
RWAs1
|
223,657
|
143,474
|
152,804
|
60,843
|
49,867
|
209,075
|
839,720
|
1
RWAs includes credit risk, market risk and
operational risk RWAs.
Global businesses and legal
entities
|
Contents
114
|
Summary
|
114
|
Supplementary analysis of constant
currency results and notable items by global business
|
117
|
Reconciliation of reported and
constant currency risk-weighted assets
|
118
|
Supplementary tables for WPB and
GBM
|
124
|
Analysis of reported results by
legal entities
|
127
|
Summary information - legal entities
and selected countries/territories
|
132
|
Analysis by
country/territory
|
|
|
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 legal entities. Our global businesses - Wealth and
Personal Banking, Commercial 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 372.
On 1 January 2023, we updated our
financial reporting framework and changed the supplementary
presentation of results from geographical regions to main legal
entities to better reflect the Group's structure.
The results of main legal entities
are presented on a reported and constant currency basis, including
HSBC UK Bank plc, HSBC Bank plc, The Hongkong and Shanghai Banking
Corporation Limited, HSBC Bank Middle East Limited, HSBC North
America Holdings Inc., HSBC Bank Canada and Grupo Financiero HSBC,
S.A. de C.V.
The results of legal entities are
presented on a reported basis on page
120 and a constant currency basis on page
123.
Basis of preparation
The Group Chief Executive, supported
by the rest of the GEC, is considered the Chief Operating Decision
Maker ('CODM') for the purposes of identifying the Group's
reportable segments. Global business results are assessed by the
CODM on the basis of constant currency performance. We separately
disclose 'notable items', which are components of our income
statement that management would consider as outside the normal
course of business and generally non-recurring in nature. Constant
currency performance information for 2022 and 2021 are presented as
described on page 101. As required by IFRS 8, reconciliations of
the total constant currency global business results to the Group's
reported results are presented on page 373.
Supplementary reconciliations from
reported to constant currency results by global business are
presented on pages 111 to 113 for information purposes.
Global business performance is also
assessed using return on tangible equity ('RoTE'). A reconciliation
of global business RoTE to the Group's RoTE is provided on page
132.
Our operations are closely
integrated and, accordingly, the presentation of data includes
internal allocations of certain items of income and expense. These
allocations include the costs of certain support services and
global functions to the extent that they can be meaningfully
attributed to global businesses and legal entities. While such
allocations have been made on a systematic and consistent basis,
they necessarily involve a degree of subjectivity. Costs that are
not allocated to global businesses are included in Corporate
Centre.
Where relevant, income and expense
amounts presented include the results of inter-segment funding
along with inter-company and inter-business line transactions. All
such transactions are undertaken on arm's length terms. The
intra-Group elimination items for the global businesses are
presented in Corporate Centre.
HSBC Holdings incurs the liability
of the UK bank levy, with the cost being recharged to its UK
operating subsidiaries. The current year expense will be reflected
in the fourth quarter as it is assessed on our balance sheet
position as at 31 December.
In the first quarter of 2023,
following an internal review to assess which global businesses were
best suited to serve our customers' respective needs, a portfolio
of our customers within our entities in Latin America was
transferred from Global Banking and Markets to Commercial Banking
for reporting purposes. Comparative data have been re-presented
accordingly. Similar smaller transfers from Global Banking and
Markets to Commercial Banking were also undertaken within our
entities in Australia and Indonesia, where comparative data have
not been re-presented.
|
Supplementary analysis of constant
currency results and notable items by global business
Constant currency
results1
|
|
2023
|
|
Wealth and
Personal
Banking
|
Commercial
Banking2
|
Global
Banking
and
Markets2
|
Corporate
Centre
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue3
|
27,275
|
22,867
|
16,115
|
(199)
|
66,058
|
ECL
|
(1,058)
|
(2,062)
|
(326)
|
(1)
|
(3,447)
|
Operating expenses
|
(14,738)
|
(7,524)
|
(9,865)
|
57
|
(32,070)
|
Share of profit in associates and
joint ventures
|
65
|
(1)
|
-
|
(257)
|
(193)
|
Profit/(loss) before tax
|
11,544
|
13,280
|
5,924
|
(400)
|
30,348
|
Loans and advances to customers
(net)
|
454,878
|
309,422
|
173,966
|
269
|
938,535
|
Customer accounts
|
804,863
|
475,666
|
330,522
|
596
|
1,611,647
|
1 In the current period constant
currency results are equal to reported as there is no currency
translation.
2 In the first quarter of 2023,
following an internal review to assess which global businesses were
best suited to serve our customers' respective needs, a portfolio
of our customers within our markets in Latin America was
transferred from GBM to CMB for reporting purposes. Comparative
data have been re-presented accordingly.
3 Net operating income before change in expected
credit losses and other credit impairment charges, also referred to
as revenue.
Notable items
|
|
2023
|
|
Wealth and Personal
Banking
|
Commercial
Banking
|
Global
Banking and
Markets
|
Corporate
Centre
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
Notable items
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
Disposals, acquisitions and related
costs1,2,3
|
4
|
1,591
|
-
|
(297)
|
1,298
|
Fair value movements on financial
instruments4
|
-
|
-
|
-
|
14
|
14
|
Disposal losses on Markets Treasury
repositioning
|
(391)
|
(316)
|
(270)
|
-
|
(977)
|
Operating expenses
|
|
|
|
|
|
Disposals, acquisitions and related
costs
|
(53)
|
(55)
|
3
|
(216)
|
(321)
|
Restructuring and other related
costs5
|
20
|
32
|
21
|
63
|
136
|
Impairment of interest in
associate6
|
-
|
-
|
-
|
(3,000)
|
(3,000)
|
1 Includes the impact of the sale of our retail
banking operations in France.
2 Includes the provisional gain of $1.6bn
recognised in respect of the acquisition of SVB
UK.
3 Includes fair value movements on the foreign
exchange hedging of the expected proceeds from the planned sale of
our banking operations in Canada.
4 Fair value movements on non-qualifying hedges
in HSBC Holdings.
5 Amounts relate to reversals of restructuring
provisions recognised during 2022.
6 Relates to an impairment loss of $3.0bn
recognised in respect of the Group's investment in BoCom. See Note
18 on page 391.
Reconciliation of reported results
to constant currency results - global businesses
(continued)
|
|
20221
|
|
Wealth
and Personal Banking
|
Commercial
Banking1
|
Global
Banking and Markets2
|
Corporate
Centre
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue3
|
|
|
|
|
|
Reported
|
21,103
|
16,494
|
14,899
|
(1,876)
|
50,620
|
Currency translation
|
(219)
|
(211)
|
(297)
|
(22)
|
(749)
|
Constant currency
|
20,884
|
16,283
|
14,602
|
(1,898)
|
49,871
|
ECL
|
|
|
|
|
|
Reported
|
(1,130)
|
(1,849)
|
(595)
|
(10)
|
(3,584)
|
Currency translation
|
(56)
|
(13)
|
22
|
1
|
(46)
|
Constant currency
|
(1,186)
|
(1,862)
|
(573)
|
(9)
|
(3,630)
|
Operating expenses
|
|
|
|
|
|
Reported
|
(14,415)
|
(7,052)
|
(9,383)
|
(1,851)
|
(32,701)
|
Currency translation
|
167
|
158
|
45
|
29
|
399
|
Constant currency
|
(14,248)
|
(6,894)
|
(9,338)
|
(1,822)
|
(32,302)
|
Share of profit/(loss) in associates
and joint ventures
|
|
|
|
|
|
Reported
|
30
|
-
|
(2)
|
2,695
|
2,723
|
Currency translation
|
-
|
-
|
-
|
(121)
|
(121)
|
Constant currency
|
30
|
-
|
(2)
|
2,574
|
2,602
|
Profit/(loss) before tax
|
|
|
|
|
|
Reported
|
5,588
|
7,593
|
4,919
|
(1,042)
|
17,058
|
Currency translation
|
(108)
|
(66)
|
(230)
|
(113)
|
(517)
|
Constant currency
|
5,480
|
7,527
|
4,689
|
(1,155)
|
16,541
|
Loans and advances to customers
(net)
|
|
|
|
|
|
Reported
|
422,309
|
311,957
|
188,940
|
355
|
923,561
|
Currency translation
|
11,813
|
4,906
|
1,262
|
6
|
17,987
|
Constant currency
|
434,122
|
316,863
|
190,202
|
361
|
941,548
|
Customer accounts
|
|
|
|
|
|
Reported
|
779,310
|
463,928
|
326,630
|
435
|
1,570,303
|
Currency translation
|
14,000
|
8,496
|
5,673
|
23
|
28,192
|
Constant currency
|
793,310
|
472,424
|
332,303
|
458
|
1,598,495
|
1 From 1 January 2023, we adopted IFRS 17
'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'.
Comparative data for the financial year ended 31 December 2022 have
been restated accordingly.
2 In the first quarter of 2023, following
an internal review to assess which global businesses were best
suited to serve our customers' respective needs, a portfolio of our
customers within our entities in Latin America was transferred from
GBM to CMB for reporting purposes. Comparative data have been
re-presented accordingly.
3 Net operating income before change
in expected credit losses and other credit impairment charges, also
referred to as revenue.
Notable items (continued)
|
|
20221
|
|
Wealth
and Personal Banking
|
Commercial Banking
|
Global
Banking
and Markets
|
Corporate Centre
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
Notable items
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
Disposals, acquisitions and related
costs2
|
(2,212)
|
-
|
-
|
(525)
|
(2,737)
|
Fair value movements on financial
instruments3
|
-
|
-
|
-
|
(618)
|
(618)
|
Restructuring and other related
costs4
|
98
|
(16)
|
(184)
|
(145)
|
(247)
|
Operating expenses
|
|
|
|
|
|
Disposals, acquisitions and related
costs
|
(7)
|
-
|
-
|
(11)
|
(18)
|
Restructuring and other related
costs
|
(357)
|
(266)
|
(252)
|
(2,007)
|
(2,882)
|
1 From 1 January 2023, we adopted IFRS 17
'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'.
Comparative data for the financial year ended 31 December 2022 have
been restated accordingly.
2 Includes losses from classifying businesses as
held for sale as part of a broader restructuring of our European
business, of which $2.3bn (inclusive of $0.4bn in goodwill
impairments) related to the planned sale of the retail banking
operations in France.
3 Fair value movements on non-qualifying hedges
in HSBC Holdings.
4 Comprises gains and losses relating to the
business update in February 2020, including losses associated with
the RWA reduction programme.
Reconciliation of reported results
to constant currency results - global businesses
(continued)
|
|
20211
|
|
Wealth
and Personal Banking
|
Commercial
Banking
|
Global
Banking and Markets
|
Corporate
Centre
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue2
|
|
|
|
|
|
Reported
|
22,117
|
13,743
|
14,276
|
(584)
|
49,552
|
Currency translation
|
(1,145)
|
(1,044)
|
(1,190)
|
(94)
|
(3,473)
|
Constant currency
|
20,972
|
12,699
|
13,086
|
(678)
|
46,079
|
ECL
|
|
|
|
|
|
Reported
|
288
|
397
|
240
|
3
|
928
|
Currency translation
|
(93)
|
(58)
|
(19)
|
-
|
(170)
|
Constant currency
|
195
|
339
|
221
|
3
|
758
|
Operating expenses
|
|
|
|
|
|
Reported
|
(16,306)
|
(7,213)
|
(10,045)
|
(1,056)
|
(34,620)
|
Currency translation
|
968
|
522
|
790
|
96
|
2,376
|
Constant currency
|
(15,338)
|
(6,691)
|
(9,255)
|
(960)
|
(32,244)
|
Share of profit/(loss) in associates
and joint ventures
|
|
|
|
|
|
Reported
|
34
|
1
|
-
|
3,011
|
3,046
|
Currency translation
|
2
|
-
|
-
|
(241)
|
(239)
|
Constant currency
|
36
|
1
|
-
|
2,770
|
2,807
|
Profit/(loss) before tax
|
|
|
|
|
|
Reported
|
6,133
|
6,928
|
4,471
|
1,374
|
18,906
|
Currency translation
|
(268)
|
(580)
|
(419)
|
(239)
|
(1,506)
|
Constant currency
|
5,865
|
6,348
|
4,052
|
1,135
|
17,400
|
Loans and advances to customers
(net)
|
|
|
|
|
|
Reported
|
488,786
|
353,182
|
203,106
|
740
|
1,045,814
|
Currency translation
|
(15,482)
|
(12,579)
|
(6,913)
|
(28)
|
(35,002)
|
Constant currency
|
473,304
|
340,603
|
196,193
|
712
|
1,010,812
|
Customer accounts
|
|
|
|
|
|
Reported
|
859,029
|
511,195
|
339,698
|
652
|
1,710,574
|
Currency translation
|
(24,262)
|
(15,703)
|
(17,392)
|
(30)
|
(57,387)
|
Constant currency
|
834,767
|
495,492
|
322,306
|
622
|
1,653,187
|
1 Comparative data for the year ended
31 December 2021 are prepared on an IFRS 4 basis.
2 Net operating income/(expense) before
change in expected credit losses and other credit impairment
charges, also referred to as revenue.
Notable items (continued)
|
|
20211
|
|
Wealth
and Personal Banking
|
Commercial Banking
|
Global
Banking
and Markets
|
Corporate Centre
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
Notable items
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
Fair value movements on financial
instruments2
|
-
|
-
|
-
|
(221)
|
(221)
|
Restructuring and other related
costs3
|
14
|
(3)
|
(395)
|
77
|
(307)
|
Operating expenses
|
|
|
|
|
|
Impairment of non-financial
items
|
(587)
|
-
|
-
|
-
|
(587)
|
Restructuring and other related
costs
|
(296)
|
(83)
|
(195)
|
(1,262)
|
(1,836)
|
1 Comparative data for the year ended
31 December 2021 are prepared on an IFRS 4 basis.
2 Fair value movements on non-qualifying hedges
in HSBC Holdings.
3 Comprises gains and losses relating to the
business update in February 2020, including losses associated with
the RWA reduction programme.
Reconciliation of reported and
constant currency risk-weighted assets
|
At 31 Dec
2023
|
|
Wealth and Personal
Banking
|
Commercial
Banking1
|
Global
Banking
and
Markets1
|
Corporate
Centre
|
Total
|
|
$bn
|
$bn
|
$bn
|
$bn
|
$bn
|
Risk-weighted assets
|
|
|
|
|
|
Reported
|
192.9
|
354.5
|
218.5
|
88.2
|
854.1
|
Constant currency
|
192.9
|
354.5
|
218.5
|
88.2
|
854.1
|
|
|
|
|
|
|
|
At 31
Dec 2022
|
Risk-weighted assets
|
|
|
|
|
|
Reported
|
182.9
|
342.4
|
225.9
|
88.5
|
839.7
|
Currency translation
|
1.7
|
1.8
|
(0.1)
|
-
|
3.4
|
Constant currency
|
184.6
|
344.2
|
225.8
|
88.5
|
843.1
|
|
At 31
Dec 2021
|
Risk-weighted assets
|
|
|
|
|
|
Reported
|
178.3
|
340.0
|
229.1
|
90.9
|
838.3
|
Currency translation
|
(6.1)
|
(15.9)
|
(8.4)
|
(1.4)
|
(31.8)
|
Constant currency
|
172.2
|
324.1
|
220.7
|
89.5
|
806.5
|
1 In the first quarter of 2023, following
an internal review to assess which global businesses were best
suited to serve our customers' respective needs, a portfolio of our
customers within our entities in Latin America was transferred from
GBM to CMB for reporting purposes. Comparative data have been
re-presented accordingly.
Supplementary tables for WPB and
GBM
WPB constant currency 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 (constant currency
basis)
|
|
|
Consists
of1
|
|
Total
WPB
|
Banking
operations
|
Life
insurance
|
Global Private
Banking
|
Asset
management
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
2023
|
|
|
|
|
|
Net operating income before change
in expected credit losses and other credit impairment
charges2
|
27,275
|
22,279
|
1,462
|
2,252
|
1,282
|
- net interest
income
|
20,491
|
19,055
|
282
|
1,155
|
(1)
|
- net fee
income/(expense)
|
5,355
|
3,213
|
151
|
794
|
1,197
|
- other income
|
1,429
|
11
|
1,029
|
303
|
86
|
ECL
|
(1,058)
|
(1,056)
|
4
|
(6)
|
-
|
Net
operating income
|
26,217
|
21,223
|
1,466
|
2,246
|
1,282
|
Total operating expenses
|
(14,738)
|
(11,474)
|
(682)
|
(1,627)
|
(955)
|
Operating profit
|
11,479
|
9,749
|
784
|
619
|
327
|
Share of profit in associates and
joint ventures
|
65
|
15
|
50
|
-
|
-
|
Profit before tax
|
11,544
|
9,764
|
834
|
619
|
327
|
|
|
|
|
|
|
2022
|
|
|
|
|
|
Net operating income before change
in expected credit losses and other credit impairment
charges2
|
20,884
|
16,383
|
1,354
|
2,016
|
1,131
|
- net interest
income
|
15,971
|
14,673
|
339
|
965
|
(6)
|
- net fee
income/(expense)
|
5,307
|
3,260
|
154
|
788
|
1,105
|
- other income
|
(394)
|
(1,550)
|
861
|
263
|
32
|
ECL
|
(1,186)
|
(1,173)
|
(8)
|
(4)
|
(1)
|
Net operating income
|
19,698
|
15,210
|
1,346
|
2,012
|
1,130
|
Total operating expenses
|
(14,248)
|
(11,132)
|
(785)
|
(1,477)
|
(854)
|
Operating profit
|
5,450
|
4,078
|
561
|
535
|
276
|
Share of profit in associates and
joint ventures
|
30
|
13
|
17
|
-
|
-
|
Profit before tax
|
5,480
|
4,091
|
578
|
535
|
276
|
WPB - summary (constant currency
basis) (continued)
|
|
Total
WPB
|
Consists of1
|
|
Banking
operations
|
Life
insurance manufacturing3
|
Global
Private Banking
|
Asset
management
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
2021
|
|
|
|
|
|
Net operating income before change
in expected credit losses and other credit impairment
charges2
|
20,972
|
15,527
|
2,512
|
1,777
|
1,156
|
- net interest
income
|
13,447
|
10,563
|
2,256
|
630
|
(2)
|
- net fee
income/(expense)
|
5,677
|
4,249
|
(603)
|
916
|
1,115
|
- other income
|
1,848
|
715
|
859
|
231
|
43
|
ECL
|
195
|
204
|
(21)
|
13
|
(1)
|
Net operating income
|
21,167
|
15,731
|
2,491
|
1,790
|
1,155
|
Total operating expenses
|
(15,338)
|
(12,379)
|
(629)
|
(1,538)
|
(792)
|
Operating profit
|
5,829
|
3,352
|
1,862
|
252
|
363
|
Share of profit in associates and
joint ventures
|
36
|
19
|
17
|
-
|
-
|
Profit before tax
|
5,865
|
3,371
|
1,879
|
252
|
363
|
1 Net operating income before change in expected
credit losses and other credit impairment charges, also referred to
as revenue.
2 From 1 January 2023, we adopted
IFRS 17 'Insurance Contracts', which replaced IFRS 4 'Insurance
Contracts'. Comparative data for the year ended 31 December 2022
have been restated accordingly. Comparative data for the year ended
31 December 2021 is prepared on an IFRS 4 basis.
3 We adopted IFRS 17 from 1 January 2023 and have
restated 2022 financial data. Data for 2021 has not restated, and
'Life insurance manufacturing' is disclosed on the basis of
preparation prevailing in 2021, which includes results from our
manufacturing business only, with insurance distribution presented
in 'banking operations'.
Life insurance business
performance
The following table provides an
analysis of the performance of our life insurance business for the
period. It comprises income earned by our insurance manufacturing
operations within our WPB business, as well as income earned and
costs incurred within our Wealth insurance distribution channels,
consolidation and inter-company elimination entries.
Results of WPB's life insurance
business unit (constant currency basis)
|
|
Year ended 31 Dec
2023
|
|
Insurance manufac-turing
operations
|
Wealth insurance and
other1
|
Life
insurance
|
|
$m
|
$m
|
$m
|
Net interest income
|
283
|
(1)
|
282
|
Net fee income/(expense)
|
(27)
|
178
|
151
|
Other income
|
990
|
39
|
1,029
|
- insurance service
results
|
1,127
|
(34)
|
1,093
|
- net investment returns
(excluding net interest income)
|
(119)
|
30
|
(89)
|
- other operating
income
|
(18)
|
43
|
25
|
Net
operating income before change in expected credit losses and other
credit impairment charges2
|
1,246
|
216
|
1,462
|
ECL
|
4
|
-
|
4
|
Net
operating income
|
1,250
|
216
|
1,466
|
Total operating expenses
|
(571)
|
(111)
|
(682)
|
Operating profit
|
679
|
105
|
784
|
Share of profit/(loss) in associates
and joint ventures
|
50
|
-
|
50
|
Profit before tax
|
729
|
105
|
834
|
|
|
|
|
|
Year
ended 31 Dec 20223
|
Net interest income
|
345
|
(6)
|
339
|
Net fee income/(expense)
|
(31)
|
185
|
154
|
Other income
|
847
|
14
|
861
|
- insurance service
results
|
861
|
(18)
|
843
|
- net investment returns
(excluding net interest income)
|
(176)
|
(28)
|
(204)
|
- other operating
income
|
162
|
60
|
222
|
Net operating income before change
in expected credit losses and other credit impairment
charges2
|
1,161
|
193
|
1,354
|
ECL
|
(8)
|
-
|
(8)
|
Net operating income
|
1,153
|
193
|
1,346
|
Total operating expenses
|
(594)
|
(191)
|
(785)
|
Operating profit
|
559
|
2
|
561
|
Share of profit/(loss) in associates
and joint ventures
|
17
|
-
|
17
|
Profit before tax
|
576
|
2
|
578
|
1 'Wealth insurance and other' includes fee
income earned and operating expenses incurred within our Wealth
distribution channels. It also includes the IFRS 17 consolidation
entries arising from transactions between our insurance
manufacturing operations and Wealth distribution channels and with
the wider Group, as well as allocations of central costs benefiting
life insurance.
2 Net operating income before change
in expected credit losses and other credit impairment charges, also
referred to as revenue.
3 From 1 January 2023, we adopted
IFRS 17 'Insurance Contracts', which replaced IFRS 4 'Insurance
Contracts'. Comparative data have been restated accordingly. This
table presents an IFRS 17-specific analysis of results and
therefore does not include 2021 comparatives.
WPB
insurance manufacturing (constant currency basis)
The following table shows the
results of our insurance manufacturing operations for our WPB
business and for all global business segments in
aggregate.
Results of insurance manufacturing
operations1,2,3
|
|
2023
|
2022
|
2021
|
|
WPB
|
All global
businesses
|
WPB
|
All
global
businesses
|
WPB
|
All
global
businesses
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Net interest income
|
283
|
320
|
345
|
370
|
2,255
|
2,430
|
Net fee expense
|
(27)
|
(14)
|
(31)
|
(16)
|
(599)
|
(629)
|
Other income
|
990
|
981
|
847
|
847
|
14,257
|
14,745
|
Insurance service result
|
1,127
|
1,125
|
861
|
866
|
-
|
-
|
- release of contractual service margin
|
1,094
|
1,094
|
902
|
902
|
-
|
-
|
- risk adjustment release
|
44
|
44
|
45
|
45
|
-
|
-
|
- experience variance and other
|
30
|
28
|
42
|
47
|
-
|
-
|
- loss from onerous contracts
|
(41)
|
(41)
|
(128)
|
(128)
|
-
|
-
|
Net investment returns (excluding
net interest income)4
|
(119)
|
(125)
|
(176)
|
(187)
|
3,948
|
3,980
|
- insurance finance income/(expense)
|
(7,809)
|
(7,809)
|
13,850
|
13,853
|
-
|
-
|
- other investment income
|
7,690
|
7,684
|
(14,026)
|
(14,040)
|
3,948
|
3,980
|
Net insurance premium
income
|
-
|
-
|
-
|
-
|
10,145
|
10,617
|
Other operating income
|
(18)
|
(19)
|
162
|
168
|
164
|
148
|
Total operating income
|
1,246
|
1,287
|
1,161
|
1,201
|
15,913
|
16,546
|
Net insurance claims and benefits
paid and movement in liabilities to
policyholders
|
-
|
-
|
-
|
-
|
(13,366)
|
(13,863)
|
Net
operating income before change in expected credit losses and other
credit impairment charges5
|
1,246
|
1,287
|
1,161
|
1,201
|
2,547
|
2,683
|
Change in expected credit losses and
other credit impairment charges
|
4
|
4
|
(8)
|
(9)
|
(18)
|
(22)
|
Net
operating income
|
1,250
|
1,291
|
1,153
|
1,192
|
2,529
|
2,661
|
Total operating expenses
|
(571)
|
(581)
|
(594)
|
(589)
|
(564)
|
(590)
|
Operating profit
|
679
|
710
|
559
|
603
|
1,965
|
2,071
|
Share of profit in associates and
joint ventures
|
50
|
50
|
17
|
17
|
17
|
17
|
Profit before tax of insurance business
operations6
|
729
|
760
|
576
|
620
|
1,982
|
2,088
|
Additional information
|
|
|
|
|
|
|
Insurance manufacturing new business
contractual service margin (reported basis)
|
1,686
|
1,686
|
1,111
|
1,111
|
-
|
-
|
Consolidated Group new business
contractual service margin (reported basis)
|
1,812
|
1,812
|
1,229
|
1,229
|
-
|
-
|
Annualised new business premiums of
insurance manufacturing operations
|
3,797
|
3,797
|
2,354
|
2,354
|
2,777
|
2,830
|
1 From 1 January 2023, we adopted
IFRS 17 'Insurance Contracts', which replaced IFRS 4 'Insurance
Contracts'. Comparative data for 2022 have been restated
accordingly; comparative data for 2021 are reported under IFRS 4
'Insurance Contracts'.
2 Constant currency results are
derived by adjusting for period-on-period effects of foreign
currency translation differences. The impact of foreign currency
translation differences on 'All global businesses' profit before
tax was a $13m increase for 2022 and a $53m decrease in
2021.
3 The results presented for insurance
manufacturing operations are shown before elimination of
inter-company transactions with HSBC non-insurance operations. The
'All global businesses' result consists primarily of WPB business,
as well as a small proportion of CMB business.
4 Net investment return under IFRS 17
for all global businesses for 2023 was $195m (2022: $183m), which
consisted of net interest income, net income/(expenses) on assets
held at fair value through profit or loss, and insurance finance
income/(expense).
5 Net operating income before change
in expected credit losses and other credit impairment charges, also
referred to as revenue.
6 The effect of applying
hyperinflation accounting in Argentina on insurance manufacturing
operations in all global business resulted in a decrease of $41m in
revenue in 2023 (2022: decrease of $7m, 2021: increase of $1m) and
a decrease of $41m in profit before tax in 2023
(2022: decrease of $6m, 2021: increase of
$1m).
Insurance manufacturing
The following commentary, unless
otherwise specified, relates to the 'All global businesses'
results.
Profit before tax of $0.8bn
increased by $0.1bn compared with 2022. This primarily reflected
the following:
- Insurance
service result of $1.1bn increased by $0.3bn compared with 2022.
This was driven by an increase in the release of CSM of $0.2bn as a
result of a higher closing CSM balance from the effect of new
business written and favourable assumption updates primarily from
updates to lapse rate assumptions. The improved insurance service
result also reflected a reduction to losses from onerous contracts
of $0.1bn, mainly in Hong Kong and Singapore, in part due to
improved market conditions in 2023.
- Net investment
return (excluding net interest income) increased by $0.1bn, with
positive asset returns in 2023 compared with losses in the prior
period.
- Other operating
income reduced by $0.2bn compared with 2022, and included a $0.3bn
loss from corrections to historical valuation estimates, partly
offset by gains of $0.2bn from reinsurance contracts in Hong
Kong.
Profit before tax of $0.6bn in 2022
reduced by $1.5bn compared with 2021, primarily reflecting the
change in reporting basis from IFRS 4 'Insurance Contracts' in 2021
to IFRS 17 'Insurance Contracts' in 2022. Further information
regarding the impact of transition is provided in Note 38 'Effects of adoption of IFRS 17' on page
422.
Annualised new business premiums
('ANP') is used to assess new insurance premiums generated by the
business. It is calculated as 100% of annualised first year regular
premiums and 10% of single premiums, before reinsurance ceded. ANP
in 2023 increased by 61% compared with 2022, primarily from strong
new business sales in Hong Kong and a shift in product mix from
single to multi-premium products.
Insurance manufacturing value of new
business
Insurance manufacturing value of new
business is a non-GAAP alternative performance measure that
provides information about value generation from new business sold
during the period. Since transitioning to IFRS 17, insurance
manufacturing value of new business is a metric used internally to
measure the long-term profitability of new business sold, and its
disclosure supports the consistent communication of this
performance measure, albeit on a new calculation basis. Insurance
manufacturing value of new business is calculated as the sum of the
IFRS 17 new business CSM and loss component adjusted
for:
- a full
attribution of expenses incurred within our insurance manufacturing
operations. IFRS 17 considers only directly attributable expenses
within the new business CSM measurement; and
- long-term asset
spreads expected to be generated over the contract term. Under IFRS
17, new business CSM is in contrast calculated on a market
consistent risk neutral basis. This also necessitates changes to
the underlying economic scenario models used in the valuation of
policyholder guarantees to reflect this basis.
There were no other adjustments
made, with demographic and expense assumptions remaining unchanged,
except for inclusion of future non-attributable expenses as
described above. The IFRS 17 risk adjustment remained unchanged,
with no additional allowances made for market risks. Insurance
manufacturing value of new business was measured before tax and
after inclusion of the impact of reinsurance.
Insurance manufacturing value of new
business
|
|
2023
|
2022
|
|
|
|
$m
|
$m
|
Insurance manufacturing operations new business CSM and loss
component1
|
1,678
|
1,095
|
Inclusion of incremental expenses
not attributable to the contractual service margin
|
(342)
|
(285)
|
Long-term asset spreads
|
|
238
|
362
|
Insurance manufacturing value of new
business
|
1,574
|
1,172
|
1
Insurance manufacturing new business contractual service margin was
$1,686m (2022: $1,111m) and the loss component was $8m (2022:
$16m).
Insurance equity plus CSM net of
tax
Insurance equity plus CSM net of tax
is a non-GAAP alternative performance measure that provides
information about our insurance manufacturing operations' net asset
value plus the future earnings from in-force business. At 31
December 2023, insurance equity plus CSM net of tax was $16,583m
(31 December 2022: $14,646m).
At 31 December 2023, insurance
equity plus CSM net of tax was calculated as insurance
manufacturing operations equity of $7,731m plus CSM of $10,786m
less tax of $1,934m. At 31 December 2022, it was calculated as
insurance manufacturing operations equity of $7,236m plus CSM of
$9,058m less tax of $1,648m.
Insurance manufacturing proxy
embedded value
Insurance manufacturing proxy
embedded value is a non-GAAP alternative performance measure that
provides information about the value of the insurance manufacturing
operations and is defined as total shareholders' equity plus the
present value of projected future profits. It is not comparable
with peer embedded value disclosure as there is no single industry
standard basis of calculation.
The present value of projected
future profits is calculated as the CSM net of tax adjusted
for:
- a full
attribution of expenses incurred within our insurance manufacturing
operations, net of tax. IFRS 17 considers only directly
attributable expenses within the CSM measurement; and
- long-term asset
spreads expected to be generated over the contract term, net of
tax. Under IFRS 17, CSM is in contrast calculated on a market
consistent risk neutral basis. This also necessitates changes to
the underlying economic scenario models used in the valuation of
policyholder guarantees to reflect this basis.
There are no other adjustments made,
with demographic and expense assumptions remaining unchanged,
except for inclusion of future non-attributable expenses as
described above. The IFRS 17 risk adjustment remained unchanged,
with no additional allowances made for market risks. Insurance
manufacturing proxy embedded value was measured after tax and after
inclusion of the impact of reinsurance.
Insurance manufacturing proxy
embedded value
|
|
At 31 Dec
2023
|
At 31
Dec 2022
|
|
$m
|
$m
|
Total shareholders' equity and contractual service margin net
of tax
|
16,583
|
14,646
|
Inclusion of incremental expenses
not attributable to the contractual service margin, net of
tax
|
(582)
|
(559)
|
Long-term asset spreads, net of
tax
|
2,368
|
2,369
|
Insurance manufacturing proxy embedded
value
|
18,369
|
16,456
|
|
|
|
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
balances1
|
|
2023
|
2022
|
|
$bn
|
$bn
|
Global Private Banking invested
assets
|
363
|
312
|
- managed by Global Asset
Management
|
61
|
57
|
- external managers, direct
securities and other
|
302
|
255
|
Retail invested assets
|
383
|
363
|
- managed by Global Asset
Management
|
178
|
198
|
- external managers, direct
securities and other
|
205
|
165
|
Asset Management third-party
distribution
|
445
|
340
|
Reported invested assets1
|
1,191
|
1,015
|
Wealth deposits (Premier, Jade and
Global Private Banking)2
|
536
|
503
|
Total reported wealth balances
|
1,727
|
1,518
|
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. At 31 December 2023, $32bn of invested assets were
classified as held for sale and are not included in the table
above.
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
$805bn (2022: $779bn) on page 111. At 31
December 2023, $42bn of wealth deposits were classified as held for
sale and are not included in the table above.
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 management1
|
|
2023
|
2022
|
|
$bn
|
$bn
|
Opening balance
|
595
|
630
|
Net new invested assets
|
54
|
45
|
Net market movements
|
23
|
(36)
|
Foreign exchange and
others
|
12
|
(44)
|
Closing balance
|
684
|
595
|
|
|
|
|
|
|
Asset Management - reported funds
under management by legal entities
|
|
2023
|
2022
|
|
$bn
|
$bn
|
HSBC Bank plc
|
162
|
134
|
The Hongkong and Shanghai Banking
Corporation Limited
|
198
|
184
|
HSBC North America Holdings
Inc.
|
71
|
60
|
Grupo Financiero HSBC, S.A. de
C.V.
|
15
|
8
|
Other trading
entities2
|
238
|
209
|
Closing balance
|
684
|
595
|
1 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.
2 Funds under
management of $177bn in 2023 and $143bn in 2022 relating to our
Asset Management entity in the UK are reported under 'other trading
entities' in the table above.
At 31 December 2023, Asset
Management funds under management amounted to $684bn, an increase
of $89bn or 15%. The
increase reflected net new invested assets of $54bn and a positive
impact from market performances and foreign exchange
translation. Net new invested assets were notably from
additions in money market and exchange traded funds, as well as
passive and private equity products.
Global Private Banking: client
balances
Global Private Banking client
balances 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 balances1
|
|
2023
|
2022
|
|
$bn
|
$bn
|
Opening balance
|
383
|
423
|
Net new invested assets
|
17
|
18
|
Increase/(decrease) in
deposits
|
9
|
(1)
|
Net market movements
|
19
|
(53)
|
Foreign exchange and
others
|
19
|
(4)
|
Closing balance
|
447
|
383
|
Global Private Banking - reported
client balances by legal entities
|
|
2023
|
2022
|
|
$bn
|
$bn
|
HSBC UK Bank plc
|
32
|
28
|
HSBC Bank plc
|
54
|
58
|
The Hongkong and Shanghai Banking
Corporation Limited
|
209
|
174
|
HSBC North America Holdings
Inc.
|
64
|
56
|
Grupo Financiero HSBC, S.A. de
C.V.
|
3
|
-
|
Other trading entities
|
85
|
67
|
Closing balance
|
447
|
383
|
1 Client balances 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 balances are on
balance sheet.
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
|
|
2023
|
2022
|
|
$bn
|
$bn
|
Opening balance
|
363
|
434
|
Net new invested
assets1
|
26
|
26
|
Net market movements
|
7
|
(47)
|
Foreign exchange and
others
|
(13)
|
(50)
|
Closing balance
|
383
|
363
|
|
|
|
Retail invested assets by legal
entities
|
|
2023
|
2022
|
|
$bn
|
$bn
|
HSBC UK Bank plc
|
29
|
27
|
HSBC Bank plc
|
31
|
27
|
The Hongkong and Shanghai Banking
Corporation Limited
|
292
|
284
|
HSBC Bank Middle East
Limited
|
3
|
2
|
HSBC North America Holdings
Inc.
|
14
|
12
|
Grupo Financiero HSBC, S.A. de
C.V.
|
9
|
7
|
Other trading entities
|
5
|
4
|
Closing balance
|
383
|
363
|
1 'Retail net new invested assets'
covers nine markets, comprising Hong Kong including Hang Seng Bank
(Hong Kong), mainland China, Malaysia, Singapore, HSBC UK, UAE, US,
Canada and Mexico. The net new invested assets relating to all
other geographies is reported in 'foreign exchange and
others'.
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 are
generated by retail clients or Global Private Banking will be
recorded in both businesses.
WPB: Invested assets
|
|
2023
|
2022
|
|
$bn
|
$bn
|
Opening balance
|
1,015
|
1,119
|
Net new invested assets
|
84
|
80
|
Net market movements
|
43
|
(118)
|
Foreign exchange and
others
|
49
|
(66)
|
Closing balance
|
1,191
|
1,015
|
|
|
|
WPB: Net new invested assets by
legal entities
|
|
2023
|
2022
|
|
$bn
|
$bn
|
HSBC UK Bank plc
|
1
|
2
|
HSBC Bank plc
|
3
|
6
|
The Hongkong and Shanghai Banking
Corporation Limited
|
47
|
59
|
HSBC Bank Middle East
Limited
|
1
|
-
|
HSBC North America Holdings
Inc.
|
7
|
8
|
HSBC Bank Canada
|
-
|
(1)
|
Grupo Financiero HSBC, S.A. de
C.V.
|
5
|
1
|
Other trading entities
|
20
|
5
|
Total
|
84
|
80
|
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 2023, we held $9.7tn of assets as
custodian, an increase of 6% compared with 31 December 2022.
The balance comprised $8.8tn of assets in Securities Services,
which were recorded at market value, and $0.9tn of assets in Issuer
Services, recorded at book value.
The increase was mainly in
Securities Services balances. This was driven by net asset inflows
in Europe and Asia, favourable market movements in Asia, North
America and Latin America, and a positive impact of currency
translation differences in Europe.
Assets under administration
Our assets under administration
business 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 and
complements the custody business. At
31 December 2023, the value of assets held under
administration by the Group amounted to $4.9tn, which was 9% higher
than at 31 December 2022. The balance comprised $2.9tn of
assets in Securities Services, which were recorded at market value,
and $2.0tn of assets in Issuer Services, recorded at book
value.
The increase was mainly driven by
Securities Services balances due to net asset inflows in Europe and
Asia together with a favourable impact of currency translation
differences, market movements and onboarding of new clients in
Europe. Issuer Services balances also rose driven by new issuances,
notably in the US and the UK, as well as a favourable impact of
currency translation differences in the UK.
Analysis of reported results by
legal entities
HSBC reported profit/(loss) before
tax and balance sheet data
|
|
2023
|
|
HSBC UK Bank
plc
|
HSBC Bank
plc
|
The Hongkong and Shanghai
Banking Corporation Limited
|
HSBC Bank Middle East
Limited
|
HSBC North America Holdings
Inc.
|
HSBC Bank
Canada
|
Grupo Financiero HSBC, S.A.
de C.V.
|
Other trading
entities
|
Holding companies, shared
service centres and intra-Group eliminations
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Net interest income
|
9,684
|
2,674
|
16,705
|
1,551
|
1,712
|
1,275
|
2,148
|
3,765
|
(3,718)
|
35,796
|
Net fee income
|
1,597
|
1,527
|
4,859
|
475
|
1,237
|
559
|
581
|
1,225
|
(215)
|
11,845
|
Net income from financial
instruments held for trading or managed on a fair value
basis
|
516
|
4,220
|
9,507
|
397
|
729
|
110
|
437
|
1,054
|
(309)
|
16,661
|
Net income from assets and
liabilities of insurance businesses, including related derivatives,
measured at fair value through profit and loss
|
-
|
1,438
|
6,258
|
-
|
-
|
-
|
39
|
323
|
(171)
|
7,887
|
Insurance finance
income/(expense)
|
-
|
(1,460)
|
(6,237)
|
-
|
-
|
-
|
(44)
|
(166)
|
98
|
(7,809)
|
Insurance service result
|
-
|
154
|
838
|
-
|
-
|
-
|
87
|
9
|
(10)
|
1,078
|
Other
income/(expense)1
|
1,608
|
736
|
(31)
|
2
|
185
|
22
|
65
|
(1,481)
|
(506)
|
600
|
Net
operating income before change in expected credit losses and other
credit impairment charges2
|
13,405
|
9,289
|
31,899
|
2,425
|
3,863
|
1,966
|
3,313
|
4,729
|
(4,831)
|
66,058
|
Change in expected credit losses and
other credit impairment charges
|
(523)
|
(212)
|
(1,641)
|
(90)
|
(94)
|
(46)
|
(696)
|
(279)
|
134
|
(3,447)
|
Net
operating income
|
12,882
|
9,077
|
30,258
|
2,335
|
3,769
|
1,920
|
2,617
|
4,450
|
(4,697)
|
62,611
|
Total operating expenses excluding
impairment of goodwill and other intangible assets
|
(4,602)
|
(6,483)
|
(13,379)
|
(1,095)
|
(3,473)
|
(1,049)
|
(1,823)
|
(2,631)
|
2,180
|
(32,355)
|
Impairment of goodwill and other
intangible assets
|
(10)
|
97
|
(16)
|
(1)
|
222
|
-
|
(3)
|
(4)
|
-
|
285
|
Operating profit/(loss)
|
8,270
|
2,691
|
16,863
|
1,239
|
518
|
871
|
791
|
1,815
|
(2,517)
|
30,541
|
Share of profit in associates and
joint ventures less impairment3
|
-
|
(52)
|
(696)
|
-
|
-
|
-
|
14
|
544
|
(3)
|
(193)
|
Profit/(loss) before tax
|
8,270
|
2,639
|
16,167
|
1,239
|
518
|
871
|
805
|
2,359
|
(2,520)
|
30,348
|
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
Share of HSBC's profit before
tax
|
27.2
|
8.7
|
53.3
|
4.1
|
1.7
|
2.9
|
2.6
|
7.8
|
(8.3)
|
100.0
|
Cost efficiency ratio
|
34.4
|
68.7
|
42.0
|
45.2
|
84.2
|
53.4
|
55.1
|
55.7
|
45.1
|
48.5
|
Balance sheet data
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Loans and advances to customers
(net)
|
270,208
|
95,750
|
455,315
|
20,072
|
54,829
|
-
|
26,410
|
15,951
|
-
|
938,535
|
Total assets
|
423,029
|
896,682
|
1,333,911
|
50,612
|
252,339
|
90,731
|
47,309
|
59,051
|
(114,987)
|
3,038,677
|
Customer accounts
|
339,611
|
274,733
|
801,430
|
31,341
|
99,607
|
-
|
29,423
|
35,326
|
176
|
1,611,647
|
Risk-weighted
assets4,5
|
129,211
|
131,468
|
396,677
|
24,294
|
72,248
|
31,890
|
32,639
|
59,574
|
6,704
|
854,114
|
|
HSBC reported profit/(loss) before
tax and balance sheet data (continued)
|
|
20226
|
|
HSBC UK
Bank plc
|
HSBC
Bank plc
|
The
Hongkong and Shanghai Banking Corporation Limited
|
HSBC
Bank Middle East Limited
|
HSBC
North America Holdings Inc.
|
HSBC
Bank Canada
|
Grupo
Financiero HSBC, S.A. de C.V.
|
Other
trading entities
|
Holding
companies, shared service centres and intra-Group
eliminations
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Net interest income
|
7,615
|
2,357
|
14,031
|
903
|
1,922
|
1,251
|
1,796
|
2,244
|
(1,742)
|
30,377
|
Net fee income
|
1,536
|
1,601
|
4,924
|
458
|
1,223
|
598
|
455
|
1,127
|
(152)
|
11,770
|
Net income from financial
instruments held for trading or managed on a fair value
basis
|
472
|
3,564
|
5,270
|
360
|
485
|
76
|
351
|
639
|
(939)
|
10,278
|
Net income from assets and
liabilities of insurance businesses, including related derivatives,
measured at fair value through profit and loss
|
-
|
(1,761)
|
(12,117)
|
-
|
-
|
-
|
(9)
|
66
|
(10)
|
(13,831)
|
Insurance finance
income/(expense)
|
-
|
1,431
|
12,407
|
-
|
-
|
-
|
3
|
(32)
|
(10)
|
13,799
|
Insurance service result
|
-
|
149
|
636
|
-
|
-
|
-
|
50
|
(20)
|
(6)
|
809
|
Other
income/(expense)1
|
148
|
(1,920)
|
491
|
22
|
533
|
29
|
67
|
(521)
|
(1,431)
|
(2,582)
|
Net operating income before change
in expected credit losses and other credit impairment
charges2
|
9,771
|
5,421
|
25,642
|
1,743
|
4,163
|
1,954
|
2,713
|
3,503
|
(4,290)
|
50,620
|
Change in expected credit losses and
other credit
impairment charges
|
(563)
|
(292)
|
(2,090)
|
21
|
(20)
|
(84)
|
(507)
|
(61)
|
12
|
(3,584)
|
Net operating income
|
9,208
|
5,129
|
23,552
|
1,764
|
4,143
|
1,870
|
2,206
|
3,442
|
(4,278)
|
47,036
|
Total operating expenses excluding
impairment of goodwill and other intangible assets
|
(4,667)
|
(6,497)
|
(13,011)
|
(1,033)
|
(3,429)
|
(1,017)
|
(1,631)
|
(2,359)
|
1,090
|
(32,554)
|
Impairment of goodwill and other
intangible assets
|
(54)
|
11
|
(42)
|
(3)
|
(9)
|
(21)
|
(5)
|
(2)
|
(22)
|
(147)
|
Operating profit/(loss)
|
4,487
|
(1,357)
|
10,499
|
728
|
705
|
832
|
570
|
1,081
|
(3,210)
|
14,335
|
Share of profit in associates and
joint ventures less impairment
|
-
|
(38)
|
2,400
|
-
|
-
|
-
|
13
|
351
|
(3)
|
2,723
|
Profit/(loss) before tax
|
4,487
|
(1,395)
|
12,899
|
728
|
705
|
832
|
583
|
1,432
|
(3,213)
|
17,058
|
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
Share of HSBC's profit before
tax
|
26.3
|
(8.2)
|
75.6
|
4.3
|
4.1
|
4.9
|
3.4
|
8.4
|
(18.8)
|
100.0
|
Cost efficiency ratio
|
48.3
|
119.6
|
50.9
|
59.4
|
82.6
|
53.1
|
60.3
|
67.4
|
24.9
|
64.6
|
Balance sheet data
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Loans and advances to customers
(net)
|
245,921
|
86,964
|
473,985
|
19,762
|
54,159
|
-
|
20,446
|
22,325
|
(1)
|
923,561
|
Total assets
|
412,522
|
863,308
|
1,297,806
|
48,086
|
239,117
|
94,604
|
39,939
|
67,345
|
(113,441)
|
2,949,286
|
Customer accounts
|
336,086
|
253,075
|
784,236
|
29,893
|
100,404
|
-
|
25,531
|
41,078
|
-
|
1,570,303
|
Risk-weighted
assets4,5
|
110,919
|
127,017
|
406,985
|
22,490
|
72,446
|
31,876
|
26,744
|
60,289
|
8,144
|
839,720
|
HSBC reported profit/(loss) before
tax and balance sheet data (continued)
|
|
2021
|
|
HSBC UK
Bank plc
|
HSBC
Bank plc
|
The
Hongkong and Shanghai Banking Corporation Limited
|
HSBC
Bank Middle East Limited
|
HSBC
North America Holdings Inc.
|
HSBC
Bank Canada
|
Grupo
Financiero HSBC, S.A. de C.V.
|
Other
trading entities
|
Holding
companies, shared service centres and intra-Group
eliminations
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Net interest income
|
6,397
|
2,411
|
12,623
|
633
|
1,809
|
978
|
1,542
|
1,586
|
(1,490)
|
26,489
|
Net fee income
|
1,484
|
1,945
|
5,828
|
445
|
1,426
|
634
|
406
|
1,044
|
(115)
|
13,097
|
Net income from financial
instruments held for trading or managed on a fair value
basis
|
437
|
2,382
|
3,649
|
275
|
226
|
89
|
272
|
474
|
(60)
|
7,744
|
Net income/(expense) from assets and
liabilities of insurance businesses, including related derivatives,
measured at fair value through profit and loss
|
-
|
1,670
|
2,340
|
-
|
-
|
-
|
4
|
44
|
(5)
|
4,053
|
Insurance finance
income/(expense)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Insurance service result
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Other income/(expense)
|
278
|
16
|
(1,446)
|
55
|
595
|
67
|
136
|
(152)
|
(1,380)
|
(1,831)
|
Net operating income before loan
impairment (charges)/recoveries and other credit risk
provisions2
|
8,596
|
8,424
|
22,994
|
1,408
|
4,056
|
1,768
|
2,360
|
2,996
|
(3,050)
|
49,552
|
Change in expected credit losses and
other credit impairment (charges)/recoveries
|
1,362
|
239
|
(840)
|
142
|
205
|
37
|
(224)
|
2
|
5
|
928
|
Net operating income
|
9,958
|
8,663
|
22,154
|
1,550
|
4,261
|
1,805
|
2,136
|
2,998
|
(3,045)
|
50,480
|
Total operating expenses excluding
impairment of goodwill and other intangible assets
|
(5,147)
|
(7,448)
|
(12,975)
|
(955)
|
(3,678)
|
(1,036)
|
(1,558)
|
(2,060)
|
970
|
(33,887)
|
Impairment of goodwill and other
intangible assets
|
(25)
|
(63)
|
(24)
|
(3)
|
(5)
|
(8)
|
(7)
|
(6)
|
(592)
|
(733)
|
Operating profit/(loss)
|
4,786
|
1,152
|
9,155
|
592
|
578
|
761
|
571
|
932
|
(2,667)
|
15,860
|
Share of profit in associates and
joint ventures less impairment
|
-
|
263
|
2,486
|
-
|
-
|
-
|
17
|
280
|
-
|
3,046
|
Profit/(loss) before tax
|
4,786
|
1,415
|
11,641
|
592
|
578
|
761
|
588
|
1,212
|
(2,667)
|
18,906
|
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
Share of HSBC's profit before
tax
|
25.3
|
7.5
|
61.6
|
3.1
|
3.1
|
4.0
|
3.1
|
6.4
|
(14.1)
|
100.0
|
Cost efficiency ratio
|
60.2
|
89.2
|
56.5
|
68.0
|
90.8
|
59.0
|
66.3
|
69.0
|
12.4
|
69.9
|
Balance sheet data
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Loans and advances to customers
(net)
|
264,624
|
122,954
|
492,523
|
18,623
|
52,678
|
54,226
|
18,043
|
22,142
|
1
|
1,045,814
|
Total assets
|
468,362
|
807,541
|
1,259,270
|
46,773
|
261,335
|
94,570
|
35,525
|
66,425
|
(81,862)
|
2,957,939
|
Customer accounts
|
381,482
|
270,975
|
792,099
|
26,802
|
111,921
|
58,071
|
23,583
|
45,643
|
(2)
|
1,710,574
|
Risk-weighted
assets4,5
|
113,501
|
136,038
|
393,742
|
22,855
|
77,775
|
30,198
|
24,578
|
56,112
|
9,072
|
838,263
|
1 Other income/(expense) in this
context comprises gain on acquisitions, impairment gain/(loss)
relating to the sale of our retail banking operations in France,
and other operating income/(expense).
2 Net operating income before change in expected
credit losses and other credit impairment charges, also referred to
as revenue.
3 Includes an impairment loss of $3.0bn
recognised in respect of the Group's investment in
BoCom.
4 Risk-weighted assets are
non-additive across the principal entities due to market risk
diversification effects within the Group.
5 Balances are on a third-party Group
consolidated basis.
6 From 1 January 2023, we adopted IFRS 17
'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'.
Comparative data for the financial year ended 31 December 2022 have
been restated accordingly. Comparative data for the year ended 31
December 2021 are prepared on an IFRS 4 basis.
Summary information - legal entities
and selected countries/territories
Legal entity reported and constant
currency results¹
|
|
2023
|
|
HSBC UK Bank
plc
|
HSBC Bank
plc
|
The Hongkong and Shanghai
Banking Corpo-
ration
Limited
|
HSBC Bank Middle East
Limited
|
HSBC North America Holdings
Inc.
|
HSBC Bank
Canada
|
Grupo
Financiero
HSBC, S.A.
de C.V.
|
Other trading
entities2
|
Holding
companies,
shared
service
centres
and
intra-Group
eliminations
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue3
|
13,405
|
9,289
|
31,899
|
2,425
|
3,863
|
1,966
|
3,313
|
4,729
|
(4,831)
|
66,058
|
ECL
|
(523)
|
(212)
|
(1,641)
|
(90)
|
(94)
|
(46)
|
(696)
|
(279)
|
134
|
(3,447)
|
Operating expenses
|
(4,612)
|
(6,386)
|
(13,395)
|
(1,096)
|
(3,251)
|
(1,049)
|
(1,826)
|
(2,635)
|
2,180
|
(32,070)
|
Share of profit in associates and
joint ventures
|
-
|
(52)
|
(696)
|
-
|
-
|
-
|
14
|
544
|
(3)
|
(193)
|
Profit/(loss) before tax
|
8,270
|
2,639
|
16,167
|
1,239
|
518
|
871
|
805
|
2,359
|
(2,520)
|
30,348
|
Loans and advances to customers
(net)
|
270,208
|
95,750
|
455,315
|
20,072
|
54,829
|
-
|
26,410
|
15,951
|
-
|
938,535
|
Customer accounts
|
339,611
|
274,733
|
801,430
|
31,341
|
99,607
|
-
|
29,423
|
35,326
|
176
|
1,611,647
|
1 In the current period, constant
currency results are equal to reported, as there is no currency
translation.
2 Other trading entities includes the
results of entities located in Oman, Türkiye, Egypt and Saudi
Arabia (including our share of the results of Saudi Awwal Bank)
which do not consolidate into HSBC Bank Middle East Limited. These
entities had an aggregated impact on the Group's reported profit
before tax of $1,286m. Supplementary
analysis is provided on page 130 to
provide a fuller picture of the MENAT regional
performance.
3 Net operating income before change
in expected credit losses and other credit impairment charges, also
referred to as revenue.
Legal entity results: notable
items
|
|
2023
|
|
HSBC UK Bank
plc
|
HSBC Bank
plc
|
The Hongkong and Shanghai
Banking Corpo-
ration
Limited
|
HSBC Bank Middle East
Limited
|
HSBC North America Holdings
Inc.
|
HSBC Bank
Canada
|
Grupo
Financiero
HSBC, S.A.
de C.V.
|
Other trading
entities
|
Holding
companies,
shared
service
centres
and
intra-Group
eliminations
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
Disposals, acquisitions and related
costs1,2,3
|
1,591
|
(14)
|
-
|
-
|
-
|
-
|
-
|
-
|
(279)
|
1,298
|
Fair value movements on financial
instruments4
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
14
|
14
|
Restructuring and other related
costs
|
-
|
361
|
-
|
-
|
-
|
-
|
-
|
-
|
(361)
|
-
|
Disposal losses on Markets Treasury
repositioning
|
(145)
|
(94)
|
(473)
|
(20)
|
(246)
|
-
|
-
|
-
|
1
|
(977)
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
Disposals, acquisitions and related
costs
|
(45)
|
(111)
|
-
|
-
|
(11)
|
(115)
|
-
|
-
|
(39)
|
(321)
|
Restructuring and other related
costs5
|
20
|
30
|
10
|
2
|
10
|
-
|
6
|
2
|
56
|
136
|
Impairment of interest in
associate6
|
-
|
-
|
(3,000)
|
-
|
-
|
-
|
-
|
-
|
-
|
(3,000)
|
1 Includes the impacts of the sale of our retail
banking operations in France.
2 Includes the provisional gain of $1.6bn
recognised in respect of the acquisition of SVB
UK.
3 Includes fair value movements on the foreign
exchange hedging of the expected proceeds from the planned sale of
our banking operations in Canada.
4 Fair value movements on non-qualifying hedges
in HSBC Holdings.
5 Balances relate to reversals of restructuring
provisions recognised during 2022.
6 Includes an impairment loss of $3.0bn
recognised in respect of the Group's investment in
BoCom.
Selected countries/territories
results1
|
|
2023
|
|
UK2
|
Hong
Kong
|
Mainland
China
|
US
|
Mexico
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue3
|
19,092
|
20,611
|
3,923
|
3,796
|
3,313
|
ECL
|
(594)
|
(1,529)
|
(93)
|
(94)
|
(696)
|
Operating expenses
|
(12,485)
|
(8,244)
|
(2,713)
|
(3,251)
|
(1,826)
|
Share of profit/(loss) in associates
and joint ventures
|
(53)
|
30
|
(746)
|
-
|
14
|
Profit before tax
|
5,960
|
10,868
|
371
|
451
|
805
|
Loans and advances to customers
(net)
|
309,262
|
279,551
|
44,275
|
54,829
|
26,410
|
Customer accounts
|
508,181
|
543,504
|
56,006
|
99,607
|
29,423
|
1 In the current period, constant
currency results are equal to reported, as there is no currency
translation.
2 UK includes HSBC UK Bank plc (ring-fenced bank)
and HSBC Bank plc (non-ring-fenced bank).
3 Net operating income before change
in expected credit losses and other credit impairment charges, also
referred to as revenue.
Selected countries/territories
results: notable items
|
|
2023
|
|
UK1
|
Hong
Kong
|
Mainland
China
|
US
|
Mexico
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue
|
|
|
|
|
|
Disposals, acquisitions and related
costs1,2,3,4
|
1,272
|
-
|
-
|
-
|
-
|
Fair value movements on financial
instruments5
|
14
|
-
|
-
|
-
|
-
|
Disposal losses on Markets Treasury
repositioning
|
(239)
|
(473)
|
-
|
(246)
|
-
|
Operating expenses
|
|
|
|
|
|
Disposals, acquisitions and related
costs
|
(71)
|
(1)
|
(5)
|
(11)
|
-
|
Restructuring and other related
costs6
|
75
|
9
|
4
|
10
|
6
|
Impairment of interest in
associate7
|
-
|
-
|
(3,000)
|
-
|
-
|
1 UK includes HSBC UK Bank plc
(ring-fenced bank) and HSBC Bank plc (non-ring-fenced
bank).
2 Includes the provisional gain of $1.6bn
recognised in respect of the acquisition of SVB
UK.
3 Includes the impairment gain relating to the
sale of our retail banking operations in France.
4 Includes fair value movements on the foreign
exchange hedging of the expected proceeds from the planned sale of
our banking operations in Canada.
5 Fair value movements on non-qualifying hedges
in HSBC Holdings.
6 Balances relates to reversals of restructuring
provisions recognised during 2022.
7 Includes an impairment loss of $3.0bn
recognised in respect of the Group's investment in
BoCom.
Legal entity reported and
constant currency results (continued)
|
|
20221
|
|
HSBC UK
Bank plc
|
HSBC
Bank plc
|
The
Hongkong and Shanghai Banking Corpo-
ration
Limited
|
HSBC
Bank Middle East Limited
|
HSBC
North America Holdings Inc.
|
HSBC
Bank Canada
|
Grupo
Financiero
HSBC,
S.A.
de
C.V.
|
Other
trading entities2
|
Holding
companies,
shared
service
centres
and
intra-Group
eliminations
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue3
|
|
|
|
|
|
|
|
|
|
|
Reported
|
9,771
|
5,421
|
25,642
|
1,743
|
4,163
|
1,954
|
2,713
|
3,503
|
(4,290)
|
50,620
|
Currency translation
|
125
|
(11)
|
(278)
|
3
|
-
|
(67)
|
370
|
(789)
|
(102)
|
(749)
|
Constant currency
|
9,896
|
5,410
|
25,364
|
1,746
|
4,163
|
1,887
|
3,083
|
2,714
|
(4,392)
|
49,871
|
ECL
|
|
|
|
|
|
|
|
|
|
|
Reported
|
(563)
|
(292)
|
(2,090)
|
21
|
(20)
|
(84)
|
(507)
|
(61)
|
12
|
(3,584)
|
Currency translation
|
(43)
|
14
|
6
|
-
|
-
|
2
|
(67)
|
41
|
1
|
(46)
|
Constant currency
|
(606)
|
(278)
|
(2,084)
|
21
|
(20)
|
(82)
|
(574)
|
(20)
|
13
|
(3,630)
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
Reported
|
(4,721)
|
(6,486)
|
(13,053)
|
(1,036)
|
(3,438)
|
(1,038)
|
(1,636)
|
(2,361)
|
1,068
|
(32,701)
|
Currency translation
|
(45)
|
(81)
|
134
|
(1)
|
-
|
37
|
(221)
|
500
|
76
|
399
|
Constant currency
|
(4,766)
|
(6,567)
|
(12,919)
|
(1,037)
|
(3,438)
|
(1,001)
|
(1,857)
|
(1,861)
|
1,144
|
(32,302)
|
Share of profit/(loss) in associates
and joint ventures
|
|
|
|
|
|
|
|
|
|
|
Reported
|
-
|
(38)
|
2,400
|
-
|
-
|
-
|
13
|
351
|
(3)
|
2,723
|
Currency translation
|
-
|
1
|
(123)
|
-
|
-
|
-
|
1
|
-
|
-
|
(121)
|
Constant currency
|
-
|
(37)
|
2,277
|
-
|
-
|
-
|
14
|
351
|
(3)
|
2,602
|
Profit/(loss) before tax
|
|
|
|
|
|
|
|
|
|
|
Reported
|
4,487
|
(1,395)
|
12,899
|
728
|
705
|
832
|
583
|
1,432
|
(3,213)
|
17,058
|
Currency translation
|
37
|
(77)
|
(261)
|
2
|
-
|
(28)
|
83
|
(248)
|
(25)
|
(517)
|
Constant currency
|
4,524
|
(1,472)
|
12,638
|
730
|
705
|
804
|
666
|
1,184
|
(3,238)
|
16,541
|
Loans and advances to customers
(net)
|
|
|
|
|
|
|
|
|
|
|
Reported
|
245,921
|
86,964
|
473,985
|
19,762
|
54,159
|
-
|
20,446
|
22,325
|
(1)
|
923,561
|
Currency translation
|
14,412
|
4,009
|
(2,105)
|
22
|
-
|
-
|
3,044
|
(1,396)
|
1
|
17,987
|
Constant currency
|
260,333
|
90,973
|
471,880
|
19,784
|
54,159
|
-
|
23,490
|
20,929
|
-
|
941,548
|
Customer accounts
|
|
|
|
|
|
|
|
|
|
|
Reported
|
336,086
|
253,075
|
784,236
|
29,893
|
100,404
|
-
|
25,531
|
41,078
|
-
|
1,570,303
|
Currency translation
|
19,697
|
12,400
|
(2,671)
|
35
|
-
|
-
|
3,802
|
(5,072)
|
1
|
28,192
|
Constant currency
|
355,783
|
265,475
|
781,565
|
29,928
|
100,404
|
-
|
29,333
|
36,006
|
1
|
1,598,495
|
1 From 1 January 2023, we adopted IFRS 17
'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'.
Comparative data for the financial year ended 31 December 2022 have
been restated
accordingly.
2 Other trading entities includes the results of
entities located in Oman, Türkiye, Egypt and Saudi Arabia
(including our share of the results of Saudi Awwal Bank) which do
not consolidate into HSBC Bank Middle East Limited. These entities
had an aggregated impact on the Group's reported profit before tax
of $997m and constant currency profit
before tax of $840m. Supplementary
analysis is provided on page 130 to
provide a fuller picture of the MENAT regional
performance.
3 Net operating income before change
in expected credit losses and other credit impairment charges, also
referred to as revenue.
Legal entity results: notable items
(continued)
|
|
20221
|
|
HSBC UK
Bank plc
|
HSBC
Bank plc
|
The
Hongkong and
Shanghai
Banking
Corporation
Limited
|
HSBC
Bank Middle East Limited
|
HSBC
North America Holdings Inc.
|
HSBC
Bank Canada
|
Grupo
Financiero
HSBC,
S.A.
de
C.V.
|
Other
trading entities
|
Holding
companies,
shared
service
centres
and
intra-Group
eliminations
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
Disposals, acquisitions and related
costs2
|
-
|
(2,242)
|
-
|
-
|
-
|
-
|
-
|
-
|
(495)
|
(2,737)
|
Fair value movements on financial
instruments3
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(618)
|
(618)
|
Restructuring and other related
costs4
|
1
|
(278)
|
46
|
(13)
|
98
|
1
|
(17)
|
-
|
(85)
|
(247)
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
Disposals, acquisitions and related
costs
|
-
|
(18)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(18)
|
Restructuring and other related
costs
|
(521)
|
(656)
|
(741)
|
(64)
|
(421)
|
(87)
|
(115)
|
(150)
|
(127)
|
(2,882)
|
1 From 1 January 2023, we adopted IFRS 17
'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'.
Comparative data for the financial year ended 31 December 2022 have
been restated accordingly.
2 Includes losses from classifying
businesses as held for sale as part of a broader restructuring of
our European business, of which $2.3bn (inclusive of $0.4bn in
goodwill impairments) relates to the planned sale of the retail
banking operations in France.
3 Fair value movements on
non-qualifying hedges in HSBC Holdings.
4 Comprises gains and losses relating
to the business update in February 2020, including losses
associated with the RWA reduction programme.
Selected countries/territories
results (continued)
|
|
20221
|
|
UK2
|
Hong
Kong
|
Mainland
China
|
US
|
Mexico
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue3
|
|
|
|
|
|
Reported
|
17,268
|
15,712
|
4,104
|
4,107
|
2,713
|
Currency translation
|
223
|
8
|
(212)
|
-
|
370
|
Constant currency
|
17,491
|
15,720
|
3,892
|
4,107
|
3,083
|
ECL
|
|
|
|
|
|
Reported
|
(712)
|
(1,683)
|
(326)
|
(20)
|
(507)
|
Currency translation
|
(36)
|
(2)
|
16
|
-
|
(67)
|
Constant currency
|
(748)
|
(1,685)
|
(310)
|
(20)
|
(574)
|
Operating expenses
|
|
|
|
|
|
Reported
|
(13,232)
|
(7,935)
|
(2,757)
|
(3,438)
|
(1,636)
|
Currency translation
|
(140)
|
(1)
|
139
|
-
|
(221)
|
Constant currency
|
(13,372)
|
(7,936)
|
(2,618)
|
(3,438)
|
(1,857)
|
Share of profit/(loss) in associates
and joint ventures
|
|
|
|
|
|
Reported
|
(41)
|
5
|
2,386
|
-
|
12
|
Currency translation
|
1
|
-
|
(122)
|
-
|
2
|
Constant currency
|
(40)
|
5
|
2,264
|
-
|
14
|
Profit before tax
|
|
|
|
|
|
Reported
|
3,283
|
6,099
|
3,407
|
649
|
582
|
Currency translation
|
48
|
5
|
(179)
|
-
|
84
|
Constant currency
|
3,331
|
6,104
|
3,228
|
649
|
666
|
Loans and advances to customers
(net)
|
|
|
|
|
|
Reported
|
286,032
|
294,580
|
50,481
|
54,159
|
20,446
|
Currency translation
|
16,763
|
(626)
|
(1,476)
|
-
|
3,044
|
Constant currency
|
302,795
|
293,954
|
49,005
|
54,159
|
23,490
|
Customer accounts
|
|
|
|
|
|
Reported
|
493,028
|
542,543
|
56,948
|
100,404
|
25,531
|
Currency translation
|
28,895
|
(1,153)
|
(1,664)
|
-
|
3,802
|
Constant currency
|
521,923
|
541,390
|
55,284
|
100,404
|
29,333
|
1 From 1 January 2023, we adopted IFRS 17
'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'.
Comparative data for the financial year ended 31 December 2022 have
been restated accordingly.
2 UK includes HSBC UK Bank plc
(ring-fenced bank) and HSBC Bank plc (non-ring-fenced
bank).
3 Net operating income before change
in expected credit losses and other credit impairment charges, also
referred to as revenue.
Selected countries/territories
results: notable items (continued)
|
|
20221
|
|
UK2
|
Hong
Kong
|
Mainland
China
|
US
|
Mexico
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue
|
|
|
|
|
|
Disposals, acquisitions and related
costs
|
(60)
|
-
|
-
|
-
|
-
|
Fair value movements on financial
instruments3
|
(617)
|
-
|
-
|
-
|
-
|
Restructuring and other related
costs4
|
407
|
(124)
|
71
|
99
|
(17)
|
Operating expenses
|
|
|
|
|
|
Restructuring and other related
costs
|
(1,741)
|
(393)
|
(70)
|
(424)
|
(115)
|
1 From 1 January 2023, we adopted IFRS 17
'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'.
Comparative data for the financial year ended 31 December 2022 have
been restated accordingly.
2 UK includes HSBC UK Bank plc
(ring-fenced bank) and HSBC Bank plc (non-ring-fenced
bank).
3 Fair value movements on
non-qualifying hedges in HSBC Holdings.
4 Comprises gains and losses relating
to the business update in February 2020, including losses
associated with RWA reduction commitments.
Legal entity reported and
constant currency results (continued)
|
|
20211
|
|
HSBC UK
Bank plc
|
HSBC
Bank plc
|
The
Hongkong and Shanghai Banking Corpo-
ration
Limited
|
HSBC
Bank Middle East Limited
|
HSBC
North America Holdings Inc.
|
HSBC
Bank Canada
|
Grupo
Financiero
HSBC,
S.A.
de
C.V.
|
Other
trading entities1
|
Holding
companies,
shared
service
centres
and
intra-Group
eliminations
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue2
|
|
|
|
|
|
|
|
|
|
|
Reported
|
8,596
|
8,424
|
22,994
|
1,408
|
4,056
|
1,768
|
2,360
|
2,996
|
(3,050)
|
49,552
|
Currency translation
|
(824)
|
(737)
|
(841)
|
1
|
-
|
(127)
|
344
|
(871)
|
(418)
|
(3,473)
|
Constant currency
|
7,772
|
7,687
|
22,153
|
1,409
|
4,056
|
1,641
|
2,704
|
2,125
|
(3,468)
|
46,079
|
ECL
|
|
|
|
|
|
|
|
|
|
|
Reported
|
1,362
|
239
|
(840)
|
142
|
205
|
37
|
(224)
|
2
|
5
|
928
|
Currency translation
|
(128)
|
(25)
|
24
|
-
|
-
|
(3)
|
(36)
|
(3)
|
1
|
(170)
|
Constant currency
|
1,234
|
214
|
(816)
|
142
|
205
|
34
|
(260)
|
(1)
|
6
|
758
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
Reported
|
(5,172)
|
(7,511)
|
(12,999)
|
(958)
|
(3,683)
|
(1,044)
|
(1,565)
|
(2,066)
|
378
|
(34,620)
|
Currency translation
|
499
|
677
|
471
|
(1)
|
1
|
75
|
(250)
|
582
|
322
|
2,376
|
Constant currency
|
(4,673)
|
(6,834)
|
(12,528)
|
(959)
|
(3,682)
|
(969)
|
(1,815)
|
(1,484)
|
700
|
(32,244)
|
Share of profit/(loss) in associates
and joint ventures
|
|
|
|
|
|
|
|
|
|
|
Reported
|
-
|
263
|
2,486
|
-
|
-
|
-
|
17
|
280
|
-
|
3,046
|
Currency translation
|
-
|
(27)
|
(214)
|
-
|
-
|
-
|
3
|
-
|
(1)
|
(239)
|
Constant currency
|
-
|
236
|
2,272
|
-
|
-
|
-
|
20
|
280
|
(1)
|
2,807
|
Profit/(loss) before tax
|
|
|
|
|
|
|
|
|
|
|
Reported
|
4,786
|
1,415
|
11,641
|
592
|
578
|
761
|
588
|
1,212
|
(2,667)
|
18,906
|
Currency translation
|
(453)
|
(112)
|
(560)
|
-
|
1
|
(55)
|
61
|
(292)
|
(96)
|
(1,506)
|
Constant currency
|
4,333
|
1,303
|
11,081
|
592
|
579
|
706
|
649
|
920
|
(2,763)
|
17,400
|
Loans and advances to customers
(net)
|
|
|
|
|
|
|
|
|
|
|
Reported
|
264,624
|
122,954
|
492,523
|
18,623
|
52,678
|
54,226
|
18,043
|
22,142
|
1
|
1,045,814
|
Currency translation
|
(15,280)
|
(4,501)
|
(13,319)
|
22
|
-
|
(2,183)
|
3,749
|
(3,491)
|
1
|
(35,002)
|
Constant currency
|
249,344
|
118,453
|
479,204
|
18,645
|
52,678
|
52,043
|
21,792
|
18,651
|
2
|
1,010,812
|
Customer accounts
|
|
|
|
|
|
|
|
|
|
|
Reported
|
381,482
|
270,975
|
792,099
|
26,802
|
111,921
|
58,071
|
23,583
|
45,643
|
(2)
|
1,710,574
|
Currency translation
|
(22,028)
|
(12,400)
|
(16,539)
|
19
|
-
|
(2,338)
|
4,900
|
(9,003)
|
2
|
(57,387)
|
Constant currency
|
359,454
|
258,575
|
775,560
|
26,821
|
111,921
|
55,733
|
28,483
|
36,640
|
-
|
1,653,187
|
1 Comparative data for the year ended
31 December 2021 are prepared on an IFRS 4 basis.
2 Net operating income before change in expected
credit losses and other credit impairment charges, also referred to
as revenue.
Legal entity results: notable items
(continued)
|
|
20211
|
|
HSBC UK
Bank plc
|
HSBC
Bank plc
|
The
Hongkong and
Shanghai
Banking
Corporation
Limited
|
HSBC
Bank Middle East Limited
|
HSBC
North America Holdings Inc.
|
HSBC
Bank Canada
|
Grupo
Financiero
HSBC,
S.A.
de
C.V.
|
Other
trading entities
|
Holding
companies,
shared
service
centres
and
intra-Group
eliminations
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
Fair value movements on financial
instruments2
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(221)
|
(221)
|
Restructuring and other related
costs3
|
4
|
(280)
|
1
|
1
|
(6)
|
2
|
(15)
|
2
|
(16)
|
(307)
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
Impairment of non-financial
items
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1)
|
(586)
|
(587)
|
Restructuring and other related
costs
|
(356)
|
(473)
|
(406)
|
(31)
|
(355)
|
(68)
|
(59)
|
(78)
|
(10)
|
(1,836)
|
1 Comparative data for the year ended
31 December 2021 are prepared on an IFRS 4 basis.
2 Fair value movements on
non-qualifying hedges in HSBC Holdings.
3 Comprises gains and losses relating
to the business update in February 2020, including losses
associated with the RWA reduction programme.
Selected countries/territories
results (continued)
|
|
20211
|
|
UK2
|
Hong
Kong
|
Mainland
China
|
US
|
Mexico
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue3
|
|
|
|
|
|
Reported
|
16,415
|
14,463
|
3,734
|
4,006
|
2,341
|
Currency translation
|
(1,571)
|
(101)
|
(340)
|
(1)
|
343
|
Constant currency
|
14,844
|
14,362
|
3,394
|
4,005
|
2,684
|
ECL
|
|
|
|
|
|
Reported
|
1,645
|
(608)
|
(89)
|
205
|
(224)
|
Currency translation
|
(154)
|
3
|
11
|
-
|
(36)
|
Constant currency
|
1,491
|
(605)
|
(78)
|
205
|
(260)
|
Operating expenses
|
|
|
|
|
|
Reported
|
(14,808)
|
(7,955)
|
(2,773)
|
(3,683)
|
(1,565)
|
Currency translation
|
1,212
|
51
|
255
|
1
|
(250)
|
Constant currency
|
(13,596)
|
(7,904)
|
(2,518)
|
(3,682)
|
(1,815)
|
Share of profit/(loss) in associates
and joint ventures
|
|
|
|
|
|
Reported
|
267
|
16
|
2,461
|
-
|
17
|
Currency translation
|
(27)
|
-
|
(213)
|
-
|
3
|
Constant currency
|
240
|
16
|
2,248
|
-
|
20
|
Profit before tax
|
|
|
|
|
|
Reported
|
3,519
|
5,916
|
3,333
|
528
|
569
|
Currency translation
|
(540)
|
(47)
|
(287)
|
-
|
60
|
Constant currency
|
2,979
|
5,869
|
3,046
|
528
|
629
|
Loans and advances to customers
(net)
|
|
|
|
|
|
Reported
|
306,464
|
311,947
|
54,239
|
52,678
|
18,043
|
Currency translation
|
(17,696)
|
(553)
|
(5,689)
|
-
|
3,749
|
Constant currency
|
288,768
|
311,394
|
48,550
|
52,678
|
21,792
|
Customer accounts
|
|
|
|
|
|
Reported
|
535,797
|
549,429
|
59,266
|
111,921
|
23,583
|
Currency translation
|
(30,939)
|
(974)
|
(6,217)
|
-
|
4,900
|
Constant currency
|
504,858
|
548,455
|
53,049
|
111,921
|
28,483
|
1 Comparative data for the year ended
31 December 2021 are prepared on an IFRS 4 basis.
2 UK includes HSBC UK Bank plc
(ring-fenced bank) and HSBC Bank plc (non-ring-fenced
bank).
3 Net operating income before change
in expected credit losses and other credit impairment charges, also
referred to as revenue.
Selected countries/territories
results: notable items (continued)
|
|
20211
|
|
UK2
|
Hong
Kong
|
Mainland
China
|
US
|
Mexico
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
Revenue
|
|
|
|
|
|
Fair value movements on financial
instruments3
|
(221)
|
-
|
-
|
-
|
-
|
Restructuring and other related
costs4
|
227
|
(54)
|
41
|
(9)
|
(15)
|
Operating expenses
|
|
|
|
|
|
Restructuring and other related
costs
|
(1,121)
|
(225)
|
(32)
|
(355)
|
(59)
|
1 Comparative data for the year ended
31 December 2021 are prepared on an IFRS 4 basis.
2 UK includes HSBC UK Bank plc
(ring-fenced bank) and HSBC Bank plc (non-ring-fenced
bank).
3 Fair value movements on
non-qualifying hedges in HSBC Holdings.
4 Comprises gains and losses relating
to the business update in February 2020, including losses
associated with RWA reduction commitments.
Analysis by
country/territory
Profit/(loss) before tax by
country/territory within global businesses
|
|
2023
|
|
Wealth and
Personal
Banking
|
Commercial
Banking
|
Global Banking and
Markets
|
Corporate
Centre
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
UK1
|
2,415
|
4,437
|
(692)
|
(200)
|
5,960
|
- of which: HSBC UK Bank plc (ring-fenced
bank)
|
2,754
|
5,282
|
144
|
90
|
8,270
|
- of which: HSBC Bank plc (non-ring-fenced
bank)
|
396
|
295
|
121
|
177
|
989
|
- of which: Holdings and other
|
(735)
|
(1,140)
|
(957)
|
(467)
|
(3,299)
|
France
|
(35)
|
235
|
128
|
10
|
338
|
Germany
|
44
|
144
|
128
|
4
|
320
|
Switzerland
|
25
|
29
|
-
|
5
|
59
|
Hong Kong
|
6,808
|
2,970
|
1,394
|
(304)
|
10,868
|
Australia
|
177
|
319
|
85
|
(15)
|
566
|
India
|
56
|
398
|
774
|
289
|
1,517
|
Indonesia
|
23
|
124
|
68
|
(7)
|
208
|
Mainland China
|
(90)
|
339
|
662
|
(540)
|
371
|
Malaysia
|
111
|
158
|
219
|
(21)
|
467
|
Singapore
|
233
|
436
|
444
|
(31)
|
1,082
|
Taiwan
|
99
|
72
|
198
|
(7)
|
362
|
Egypt
|
141
|
98
|
303
|
(11)
|
531
|
UAE
|
387
|
212
|
377
|
(83)
|
893
|
Saudi Arabia2
|
-
|
-
|
118
|
539
|
657
|
US
|
225
|
513
|
111
|
(398)
|
451
|
Canada
|
293
|
561
|
120
|
(96)
|
878
|
Mexico
|
317
|
504
|
15
|
(31)
|
805
|
Other3
|
315
|
1,731
|
1,472
|
497
|
4,015
|
Year ended 31 Dec 2023
|
11,544
|
13,280
|
5,924
|
(400)
|
30,348
|
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 results of HSBC Saudi Arabia and
our share of the profits of our associate, Saudi Awwal
Bank.
3 Corporate Centre includes the profit and loss
impact of inter-company debt eliminations of
$571m.
Profit/(loss) before tax by
country/territory within global businesses (continued)
|
|
20221
|
|
Wealth
and
Personal
Banking
|
Commercial
Banking
|
Global
Banking
and
Markets
|
Corporate
Centre
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
UK2
|
1,764
|
2,094
|
(534)
|
(41)
|
3,283
|
- of which: HSBC UK Bank plc (ring-fenced
bank)
|
2,112
|
2,662
|
143
|
(430)
|
4,487
|
- of which: HSBC Bank plc (non-ring-fenced
bank)
|
294
|
315
|
141
|
(473)
|
277
|
- of which: Holdings and other
|
(642)
|
(883)
|
(818)
|
862
|
(1,481)
|
France3
|
(2,248)
|
210
|
81
|
(231)
|
(2,188)
|
Germany
|
17
|
8
|
133
|
(147)
|
11
|
Switzerland
|
25
|
17
|
13
|
(30)
|
25
|
Hong Kong
|
4,435
|
1,278
|
955
|
(568)
|
6,100
|
Australia
|
147
|
180
|
157
|
(36)
|
448
|
India
|
45
|
304
|
622
|
306
|
1,277
|
Indonesia
|
4
|
71
|
100
|
(8)
|
167
|
Mainland China
|
(100)
|
303
|
526
|
2,678
|
3,407
|
Malaysia
|
110
|
89
|
219
|
(36)
|
382
|
Singapore
|
218
|
255
|
351
|
(77)
|
747
|
Taiwan
|
36
|
43
|
137
|
(17)
|
199
|
Egypt
|
101
|
76
|
194
|
(4)
|
367
|
UAE
|
128
|
107
|
320
|
(86)
|
469
|
Saudi Arabia4
|
30
|
-
|
94
|
345
|
469
|
US
|
209
|
557
|
270
|
(387)
|
649
|
Canada
|
243
|
548
|
140
|
(89)
|
842
|
Mexico
|
241
|
414
|
39
|
(112)
|
582
|
Other5
|
183
|
1,039
|
1,102
|
(2,502)
|
(178)
|
Year ended 31 Dec 2022
|
5,588
|
7,593
|
4,919
|
(1,042)
|
17,058
|
1 From 1 January 2023, we adopted IFRS 17
'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'.
Comparative data for financial year ended 31 December 2022 have
been restated accordingly.
2 UK includes results
from the ultimate holding company, HSBC Holdings plc, and the
separately incorporated group of service companies ('ServCo
Group').
3 Includes the impact of goodwill impairment of
$425m as a result of the reclassification of our retail banking
operations in France to held for sale. At 31 December 2022, HSBC's
cash-generating units were based on geographical regions,
sub-divided by global businesses.
4 Includes the results of HSBC Saudi Arabia and
our share of the profits of our associate, Saudi Awwal
Bank.
5 Corporate Centre includes the profit and loss impact
of inter-company debt eliminations of $1,850m.
Profit/(loss) before tax by
country/territory within global businesses (continued)
|
|
2021
|
|
Wealth
and Personal Banking
|
Commercial
Banking
|
Global
Banking
and
Markets
|
Corporate
Centre
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
UK1
|
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
|
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
|
Egypt
|
79
|
42
|
163
|
(2)
|
282
|
UAE
|
91
|
3
|
342
|
(61)
|
375
|
Saudi Arabia2
|
17
|
-
|
65
|
274
|
356
|
US
|
(131)
|
472
|
524
|
(337)
|
528
|
Canada
|
141
|
544
|
145
|
(62)
|
768
|
Mexico
|
305
|
88
|
222
|
(46)
|
569
|
Other3
|
(536)
|
698
|
867
|
(665)
|
364
|
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 results of HSBC Saudi Arabia and
our share of the profits of our associate, Saudi Awwal
Bank.
3 Includes the impact of goodwill impairment of
$587m. At 31 December 2021, HSBC's cash-generating units were based
on geographical regions, sub-divided by global
businesses.
Middle East, North Africa and
Türkiye supplementary information
The following tables show the
results of our Middle East, North Africa and Türkiye business
operations on a regional basis (including results of all the legal
entities operating in the region and our share of the results of
Saudi Awwal Bank). They also show the profit before tax of each of
the global businesses.
Middle East, North Africa and
Türkiye regional performance
|
|
|
|
2023
|
2022
|
|
$m
|
$m
|
Revenue1
|
3,688
|
2,936
|
Change in expected credit losses and
other credit impairment charges
|
(133)
|
8
|
Operating expenses
|
(1,592)
|
(1,586)
|
Share of profit in associates and
joint ventures
|
538
|
342
|
Profit before tax
|
2,501
|
1,700
|
Loans and advances to customers
(net)2
|
22,766
|
26,475
|
Customer
accounts2
|
40,708
|
43,933
|
1 Net operating income before change
in expected credit losses and other credit impairment charges, also
referred to as revenue.
2 In the second quarter of 2023,
loans and advances to customers of $2,975m were classified as
'Assets held for sale', and customer accounts of $4,878m were
classified as 'Liabilities of disposal groups held for sale' in
respect of the planned merger of our business in Oman. The merger
was subsequently completed in August 2023.
Profit before tax by global
business
|
|
2023
|
2022
|
|
$m
|
$m
|
Wealth and Personal
Banking
|
612
|
313
|
Commercial Banking
|
400
|
290
|
Global Banking and
Markets
|
1,104
|
861
|
Corporate Centre
|
385
|
236
|
Total
|
2,501
|
1,700
|
Reconciliation of alternative
performance measures
|
Contents
130
|
Use of alternative performance
measures
|
131
|
Alternative performance measure
definitions
|
133
|
Return on average ordinary
shareholders' equity and return on average tangible
equity
|
133
|
Net asset value and tangible net
asset value per ordinary share
|
133
|
Post-tax return and average total
shareholders' equity on average total assets
|
133
|
Expected credit losses and other
credit impairment charges as % of average gross loans and advances
to customers
|
133
|
Target basis operating
expenses
|
134
|
Basic earnings per share excluding
material notable items and related impacts
|
134
|
Multi-jurisdictional client
revenue
|
Use of alternative performance
measures
Our reported results are prepared in
accordance with IFRS Accounting Standards as detailed in our
financial statements starting on page 329.
As described on page 100, 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.
On 1 January 2023, HSBC adopted IFRS
17 'Insurance Contracts'. As required by the standard, the Group
applied the requirements retrospectively with comparative data
previously published under IFRS 4 'Insurance Contracts' restated
from the 1 January 2022 transition date.
In addition to the alternative
performance measures set out in this section, further alternative
performance measures in relation to the Group's insurance
manufacturing operations are set out on pages 116 to
117.
Alternative performance measure
definitions
|
|
|
|
Return on average ordinary
shareholders' equity ('RoE')
|
|
Profit
attributable to the ordinary shareholders
|
|
|
Average
ordinary shareholders' equity
|
|
|
|
|
|
Return on average tangible equity
('RoTE')
|
Profit
attributable to the ordinary shareholders, excluding impairment of
goodwill and other intangible assets
|
|
Average
ordinary shareholders' equity adjusted for goodwill and
intangibles
|
|
|
|
|
|
Return on average tangible equity
('RoTE') excluding strategic transactions and impairment of
BoCom
|
Profit
attributable to the ordinary shareholders, excluding impairment of
goodwill and other intangible assets, the impact of strategic
transactions and impairment of BoCom1
|
|
Average
ordinary shareholders' equity adjusted for goodwill and
intangibles, the impact of strategic transactions and impairment of
BoCom1
|
|
|
|
|
|
Net asset value per ordinary
share
|
|
Total
ordinary shareholders' equity2
|
|
|
Basic
number of ordinary shares in issue excluding treasury
shares
|
|
|
|
|
|
Tangible net asset value per
ordinary share
|
|
Tangible ordinary shareholders' equity3
|
|
|
Basic
number of ordinary shares in issue excluding treasury
shares
|
|
|
|
|
|
Post-tax return on average total
assets
|
|
Profit
after tax
|
|
|
Average
total assets
|
|
|
|
|
|
Average total shareholders' equity
on average total assets
|
|
Average
total shareholders' equity
|
|
|
Average
total assets
|
|
|
|
|
|
Expected credit losses and other
credit impairment charges ('ECL') as % of average gross loans and
advances to customers
|
|
Annualised constant currency ECL4
|
|
Constant currency average gross loans and advances to
customers4
|
|
|
|
|
Expected credit losses and other
credit impairment charges ('ECL') as % of average gross loans and
advances to customers, including held for sale
|
|
Annualised constant currency ECL4
|
|
|
Constant currency average gross loans and advances to
customers, including held for sale4
|
|
|
|
|
|
Target basis operating
expenses
|
|
Reported operating expenses excluding notable items, foreign
exchange translation and other excluded
items5
|
|
|
|
|
|
Basic earnings per share excluding
material notable items and related impacts
|
|
Profit
attributable to ordinary shareholders excluding material notable
items and related impacts6
|
|
Weighted average number of ordinary shares outstanding,
excluding own shares held
|
|
|
|
|
Multi-jurisdictional client
revenue
|
|
Total
client revenue we generate from clients that hold a relationship
with us that generates revenue in more than one market
|
|
1 Excluding the impacts of the sale
of our retail banking operations in France, the provisional gain of
$1.6bn recognised in respect of the acquisition of SVB UK and the
impairment loss of $3.0bn recognised in respect of the Group's
investment in BoCom.
2 Total ordinary shareholders' equity is
total shareholders' equity less non-cumulative preference shares
and capital securities.
3 Tangible ordinary shareholders'
equity is total ordinary shareholders' equity excluding goodwill
and other intangible assets (net of deferred
tax).
4 The constant currency numbers are
derived by adjusting reported ECL and average loans and advances to
customers for the effects of foreign currency translation
differences.
5 Includes impact of re-translating
comparative period financial information at the latest rates of
foreign exchange in hyperinflationary economies, which we consider
to be outside of our control, and the incremental costs associated
with our acquisition of SVB UK and related international
investments.
6 Excluding the impacts of material
M&A transactions, the 2022 deferred tax adjustment in HSBC
Holdings and the impairment loss of $3.0bn recognised in 2023 in
respect of the Group's investment in BoCom.
Return on average ordinary
shareholders' equity, return on average tangible equity and return
on average tangible equity excluding strategic transactions and
impairment of BoCom
|
|
2023
|
2022¹
|
2021
|
|
$m
|
$m
|
$m
|
Profit
|
|
|
|
Profit attributable to the ordinary
shareholders of the parent company
|
22,432
|
14,346
|
12,607
|
Impairment of goodwill and other
intangible assets (net of tax)
|
43
|
535
|
608
|
Decrease/(increase) in PVIF (net of
tax)1
|
-
|
-
|
(58)
|
Profit attributable to the ordinary shareholders, excluding
goodwill, other
intangible assets impairment and PVIF
|
22,475
|
14,881
|
13,157
|
Impact of strategic transactions and
impairment of BoCom2,3,4
|
1,275
|
1,886
|
N/A
|
Profit attributable to the ordinary shareholders, excluding
goodwill, other intangible assets impairment, strategic
transactions and impairment of BoCom
|
23,750
|
16,767
|
N/A
|
Equity
|
|
|
|
Average total shareholders'
equity
|
184,029
|
180,263
|
199,295
|
Effect of average preference shares
and other equity instruments
|
(18,794)
|
(21,202)
|
(22,814)
|
Average ordinary shareholders' equity
|
165,235
|
159,061
|
176,481
|
Effect of goodwill, other
intangibles and PVIF (net of deferred tax)
|
(11,480)
|
(10,786)
|
(17,705)
|
Average tangible equity
|
153,755
|
148,275
|
158,776
|
Average impact of strategic
transactions and impairment of BoCom
|
(1,277)
|
748
|
N/A
|
Average tangible equity excluding strategic transactions and
impairment of BoCom
|
152,478
|
149,023
|
N/A
|
|
%
|
%
|
%
|
Ratio
|
|
|
|
Return on average ordinary
shareholders' equity
|
13.6
|
9.0
|
7.1
|
Return on average tangible
equity
|
14.6
|
10.0
|
8.3
|
Return on average tangible equity
excluding strategic transactions and impairment of BoCom
|
15.6
|
11.3
|
N/A
|
1 From 1 January 2023, we adopted
IFRS 17 'Insurance Contracts', which replaced IFRS 4 'Insurance
Contracts'. Comparative data for the financial year ended 31
December 2022 have been restated accordingly. Comparative data for
the year ended 31 December 2021 are prepared on an IFRS 4
basis.
2 Includes the impacts of the sale of our retail
banking operations in France.
3 Includes the provisional gain of $1.6bn
recognised in respect of the acquisition of SVB
UK.
4 Includes the impairment loss of $3.0bn
recognised in respect of the Group's investment in BoCom. See Note
18 on page 394.
From 2024, we intend to revise the
adjustments made to return on average tangible equity ('RoTE') to
exclude all notable items, improving alignment with the treatment
of notable items in our other income statement disclosures. On this
basis, we continue to target a RoTE in the mid-teens for 2024. If
this basis had been adopted for 2023, our RoTE excluding notable
items would have been 16.2%.
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
2023
|
|
Wealth and
Personal
Banking
|
Commercial
Banking
|
Global
Banking
and
Markets
|
Corporate
Centre
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
Profit before tax
|
11,544
|
13,280
|
5,924
|
(400)
|
30,348
|
Tax expense
|
(2,141)
|
(2,945)
|
(1,165)
|
462
|
(5,789)
|
Profit after tax
|
9,403
|
10,335
|
4,759
|
62
|
24,559
|
Less attributable to: preference
shareholders, other equity holders, non-controlling
interests
|
(828)
|
(485)
|
(588)
|
(226)
|
(2,127)
|
Profit attributable to ordinary shareholders of the parent
company
|
8,575
|
9,850
|
4,171
|
(164)
|
22,432
|
Other adjustments
|
(221)
|
364
|
168
|
(268)
|
43
|
Profit attributable to ordinary
shareholders
|
8,354
|
10,214
|
4,339
|
(432)
|
22,475
|
Average tangible shareholders'
equity
|
29,352
|
43,687
|
38,036
|
42,680
|
153,755
|
Return on average tangible equity
(%)
|
28.5
|
23.4
|
11.4
|
(1.0)
|
14.6
|
|
|
Year
ended 31 Dec 2022
|
Profit before tax
|
5,588
|
7,593
|
4,919
|
(1,042)
|
17,058
|
Tax expense
|
(1,150)
|
(1,796)
|
(761)
|
2,898
|
(809)
|
Profit after tax
|
4,438
|
5,797
|
4,158
|
1,856
|
16,249
|
Less attributable to: preference
shareholders, other equity holders, non-controlling
interests
|
(688)
|
(344)
|
(510)
|
(362)
|
(1,903)
|
Profit attributable to ordinary
shareholders of the parent company
|
3,750
|
5,453
|
3,648
|
1,494
|
14,346
|
Other adjustments
|
432
|
328
|
255
|
(499)
|
515
|
Profit attributable to ordinary
shareholders
|
4,182
|
5,781
|
3,903
|
995
|
14,861
|
Average tangible shareholders'
equity
|
30,290
|
42,271
|
39,935
|
35,780
|
148,276
|
Return on average tangible equity
(%)
|
13.8
|
13.7
|
9.8
|
2.8
|
10.0
|
Net asset value and tangible net
asset value per ordinary share
|
|
2023
|
2022¹
|
2021
|
|
$m
|
$m
|
$m
|
Total shareholders'
equity
|
185,329
|
177,833
|
198,250
|
Preference shares and other equity
instruments
|
(17,719)
|
(19,746)
|
(22,414)
|
Total ordinary shareholders' equity
|
167,610
|
158,087
|
175,836
|
Goodwill, PVIF and intangible assets
(net of deferred tax)
|
(11,900)
|
(11,160)
|
(17,643)
|
Tangible ordinary shareholders' equity
|
155,710
|
146,927
|
158,193
|
Basic number of $0.50 ordinary
shares outstanding
|
19,006
|
19,739
|
20,073
|
|
$
|
$
|
$
|
Value per share
|
|
|
|
Net asset value per ordinary
share
|
8.82
|
8.01
|
8.76
|
Tangible net asset value per
ordinary share
|
8.19
|
7.44
|
7.88
|
1 From 1 January 2023, we adopted
IFRS 17 'Insurance Contracts', which replaced IFRS 4 'Insurance
Contracts'. We have restated 2022 comparative
data.
Post-tax return and average total
shareholders' equity on average total assets
|
|
2023
|
2022¹
|
2021
|
|
$m
|
$m
|
$m
|
Profit after tax
|
24,559
|
16,249
|
14,693
|
Average total shareholders'
equity
|
184,029
|
180,263
|
199,295
|
Average total assets
|
3,059,887
|
3,017,495
|
3,012,437
|
|
|
|
|
Ratio
|
%
|
%
|
%
|
Post-tax return on average total
assets
|
0.8
|
0.5
|
0.5
|
Average total shareholders' equity
to average total assets
|
6.01
|
5.97
|
6.62
|
1 From 1 January 2023, we adopted
IFRS 17 'Insurance Contracts', which replaced IFRS 4 'Insurance
Contracts'. Comparative data for the financial year ended 31
December 2022 have been restated accordingly. Comparative data for
the year ended 31 December 2021 are prepared on an IFRS 4
basis.
Expected credit losses and other
credit impairment charges as % of average gross loans and advances
to customers and expected credit
losses and other credit impairment
charges as % of average gross loans and advances to customers,
including held for sale
|
|
2023
|
2022¹
|
2021
|
|
$m
|
$m
|
$m
|
Expected credit losses and other
credit impairment charges ('ECL')
|
(3,447)
|
(3,584)
|
928
|
Currency translation
|
-
|
(46)
|
(170)
|
Constant currency
|
(3,447)
|
(3,630)
|
758
|
Average gross loans and advances to
customers
|
955,585
|
1,014,148
|
1,057,412
|
Currency translation
|
11,629
|
6,701
|
(43,098)
|
Constant currency
|
967,214
|
1,020,849
|
1,014,314
|
Average gross loans and advances to
customers, including held for sale
|
1,020,992
|
1,035,678
|
1,058,947
|
Currency translation
|
12,688
|
7,837
|
(43,098)
|
Constant currency
|
1,033,680
|
1,043,515
|
1,015,849
|
|
|
|
|
Ratio
|
%
|
%
|
%
|
Expected credit losses and other
credit impairment charges as % of average gross loans and advances
to customers
|
0.36
|
0.36
|
(0.07)
|
Expected credit losses and other
credit impairment charges as % of average gross loans and advances
to customers, including held for sale
|
0.33
|
0.35
|
(0.07)
|
1 From 1 January 2023, we adopted
IFRS 17 'Insurance Contracts', which replaced IFRS 4 'Insurance
Contracts'. Comparative data for the financial year ended 31
December 2022 have been restated accordingly. Comparative data for
the year ended 31 December 2021 are prepared on an IFRS 4
basis.
Target basis operating
expenses
Target basis operating expenses is
computed by excluding the impact of notable items and foreign
exchange translation impacts from reported results. We also exclude
the impact of retranslating comparative period financial
information at the latest rates of foreign exchange in
hyperinflationary economies, which we consider to be outside of our
control. Our target basis also excludes the impact of
the acquisition of SVB UK and
related investments internationally, which added approximately 1%
to our cost growth in 2023 compared with 2022. We consider this
measure to provide useful information to investors by quantifying
and excluding the notable items that management considered when
setting and assessing cost-related targets.
Target basis operating
expenses
|
|
2023
|
2022
|
|
$m
|
$m
|
Reported operating
expenses
|
32,070
|
32,701
|
Notable items
|
(185)
|
(2,900)
|
Disposals, acquisitions and related
costs
|
(321)
|
(18)
|
Impairment of non-financial
items
|
-
|
-
|
Restructuring and other related
costs1
|
136
|
(2,882)
|
Excluding the impact of SVB UK and
related international investments
|
(271)
|
-
|
Currency
translation2
|
|
(430)
|
Excluding the impact of
retranslating prior year costs of hyperinflationary economies at a
constant currency foreign exchange rate
|
|
440
|
Target basis operating expenses
|
31,614
|
29,811
|
1 Amounts in 2023 relate to reversals
of restructuring provisions recognised during
2022.
2 Currency translation on reported operating
expenses, excluding currency translation on notable
items.
Basic earnings per share excluding
material notable items and related impacts
Material notable items are a subset
of notable items. Material notable items are components of our
income statement that management would consider as outside the
normal course of business and generally non-recurring in nature,
which are excluded from our dividend payout ratio calculation and
our earnings per share measure, along with related impacts.
Categorisation as a material notable item is dependent on the
nature of each item in conjunction with the financial impact on the
Group's income statement.
Related impacts include those items
that do not qualify for designation as notable items but whose
adjustment is considered by management to be appropriate for the
purposes of determining the basis for our dividend payout ratio
calculation.
In 2023, material notable items
comprised the impacts of the sale of our retail banking operations
in France, the planned sale of our
banking business in Canada, the
acquisition of SVB UK and the impairment of BoCom. The impairment
of BoCom is included within material notables given that the
impairment relates to the accounting assessment of the future
value-in-use. The impairment has no material impact on our
distribution capacity, dividends or share buy-backs. Related items
comprised HSBC Bank Canada's financial results from the 30 June
2022 net asset reference date onwards, as a component of the gain
on sale will be recognised through the consolidation of HSBC Bank
Canada's results in the Group's results, with the remainder
recognised at completion.
Commencing in 2024, we will
establish a dividend payout ratio on a 'target basis'. We will
disclose at each quarter the adjustments that we will designate as
material notable items and related impacts.
Basic earnings per share excluding
material notable items and related impacts
|
|
20231
|
|
$m
|
Profit attributable to shareholders of
company
|
23,533
|
Coupon payable on capital securities
classified as equity
|
(1.1)
|
Profit attributable to ordinary shareholders of
company
|
22.4
|
Impairment of interest in
associate2
|
3.0
|
Provisional gain on acquisition of
SVB UK
|
(1.5)
|
Impairment loss relating to the sale
of our retail banking operations in France (net of tax)
|
0.1
|
Impact of the planned sale of our
banking business in Canada3
|
(0.3)
|
Profit attributable to ordinary shareholders of company
excluding material notable items and related
impacts
|
23.7
|
|
|
Number of shares
|
|
Weighted average basic number of
ordinary shares (millions)
|
19,478
|
Basic earnings per share excluding material notable items and
related impacts
|
1.22
|
Basic earnings per
share
|
1.15
|
Dividend per ordinary share (in
respect of the period) ($)
|
0.61
|
Dividend payout ratio (%) (dividend
per ordinary share divided by basic earnings per share excluding
material notable items and related impacts)
|
50%
|
1 In 2023, earnings per share ('EPS')
was adjusted for material notable items and related impacts. 2022
comparatives have not been provided due to the change our reporting
framework and restatement due to the adoption of the IFRS 17. See
our Annual Report and Accounts 2022
for details of the impacts of
adjustments to our EPS in 2022.
2 Represents an impairment loss of
$3bn recognised in respect of the Group's
investment in BoCom. See Note 18 on page
392.
3 Represents the earnings recognised by the
banking business in Canada, net of gains and losses on foreign
exchange hedges held at Group level, that will reduce the gain on
sale recognised by the Group on completion.
Multi-jurisdictional
revenue
Multi-jurisdictional revenue is a
financial metric we use to assess our ability to drive value from
our international network.
In our wholesale businesses, we
identify a client as multi-jurisdictional if they hold a
relationship with us that generates revenue in any market outside
of where the primary relationship is managed. A client is defined
as a mastergroup (HSBC's own client groupings) that includes both
the parent and, where relevant, any subsidiaries.
Multi-jurisdictional client revenue
is a component of wholesale client revenue and represents the total
client revenue we generate from multi-jurisdictional clients.
Wholesale client revenue is derived by excluding from CMB and GBM
reported revenue the revenue we generate from client facilitation
in fixed income and equities, the 2023 provisional gain on the
acquisition of SVB UK, as well as other non-client
revenue.
In WPB, we identify a customer as
multi-jurisdictional if they bank with us in more than one of our
11 key markets. It is derived by excluding from WPB reported
revenue the revenue from Canada and our retail business in France,
as well as other non-customer income.
Wholesale multi-jurisdictional
client revenue
|
|
2023
|
|
$bn
|
CMB
and GBM revenue
|
39.0
|
Allocated revenue and
other1
|
0.9
|
Client facilitation in Fixed Income
and Equities
|
(4.8)
|
Provisional gain on acquisition of
SVB UK
|
(1.6)
|
Wholesale client revenue
|
33.5
|
- clients banked in multiple
jurisdictions ('multi-jurisdictional')
|
20.4
|
- domestic only clients
|
13.1
|
WPB multi-jurisdictional customer
revenue
|
|
2023
|
|
$bn
|
WPB
revenue
|
27.3
|
Allocated revenue and
other1
|
(0.5)
|
France retail and Canada
|
(1.4)
|
WPB
customer revenue
|
25.4
|
- international customer
revenue
|
10.2
|
of
which: customers banked in multiple jurisdictions
('multi-jurisdictional')
|
5.3
|
of
which: non-resident and resident foreigner
|
4.9
|
- domestic only clients
|
15.2
|
1 including allocations of Market Treasury revenue,
HSBC Holdings interest expense and hyperinflationary accounting
adjustments, and interest earned on capital held in the global
businesses.