HSBC Holdings plc's (HSBC) India branch has announced a strategic partnership with Bajaj Allianz General Insurance, one of the leading private general insurers in India. The aim of the bancassurance partnership is to offer Bajaj Allianz's comprehensive suite of insurance products and services to HSBC's vast customer base in India, based on a shared vision of financial inclusion and customer empowerment across the country. Notably, bancassurance is an insurance distribution model in which an insurance compan ...

Financial Performance - HSBC reported a pre-tax profit of $21.6 billion for the first half of 2024, a slight decrease from $21.7 billion in the same period of 2023[14]. - The net profit after tax for the first half of 2024 is $17,665 million, compared to $18,071 million in the same period of 2023[71]. - The pre-tax profit for the first half of the year was $21.6 billion, stable compared to the same period in 2023, including a $4.8 billion gain from the sale of the Canadian banking business[35]. - The reported pre-tax profit for the first half of 2024 is $21.6 billion, similar to the first half of 2023, with a gain of $4.8 billion from the sale of the Canadian banking business included[101]. - The company reported a net profit of $17,665 million for the period ending June 30, 2024[192]. - The total comprehensive income for the period reached $12,510 million, driven by strong performance across various segments[173]. Revenue and Income - Revenue increased to $33.7 billion, a 2% rise on a constant currency basis, primarily driven by growth in wealth management and personal banking[23]. - The reported revenue for the first half of 2024 was $37.3 billion, an increase of 1% compared to the first half of 2023, and a 3% increase when adjusted for constant currency[41]. - The total revenue for the first half of 2024 was $10.9 billion, a decrease of $1.2 billion or 10% compared to the same period in 2023, primarily due to the non-recurrence of a $1.6 billion gain from the acquisition of UK Silicon Valley Bank[150]. - The wealth management and personal banking segment saw non-interest income increase by 38% to $6.5 billion, reflecting strong growth in private banking and investment products[109]. - The company reported a total revenue of $8,158 million, with net income after expenses amounting to $6,200 million[177]. Operating Expenses - The bank's operating expenses increased by 7% to $16.3 billion compared to $15.5 billion in the first half of 2023[14]. - Operating expenses for the first half of 2024 were $16.3 billion, an increase of $0.8 billion or 5% due to technology investments and inflation[101]. - Operating expenses rose by 5% to $7.4 billion, driven by continued investment in Asian wealth management and technology[114]. Capital and Ratios - The bank's common equity tier 1 capital ratio stood at 15%[14]. - The common equity tier 1 capital ratio was 15%, up 0.2 percentage points from Q4 2023, due to a reduction in risk-weighted assets[23]. - The leverage ratio stands at 5.7%[74]. - The average liquidity coverage ratio is 137%[74]. - The cost-to-income ratio for the first half of 2024 is 43.7%, an increase from 41.9% in the first half of 2023[71]. Customer and Market Growth - Customer accounts reached $16 trillion, reflecting growth across all business segments, particularly in Asia[23]. - The international client base reached 7 million in H1 2024, generating revenue three times that of domestic clients[45]. - The number of international retail customers grew by approximately 11%, reaching a total of 7 million, with a 6% increase in revenue from these customers[52]. - In Hong Kong, the bank opened accounts for 345,000 new customers in the first half of 2024, a 77% increase compared to the first half of 2023[57]. Sustainable Financing and Investment - The total sustainable financing and investment facilitated by HSBC reached $339.9 billion since January 2020[14]. - The company aims to provide and facilitate between $750 billion to $1 trillion in sustainable financing and investment by 2030[20]. - The company has provided and facilitated $45.5 billion in sustainable financing and investment in the first half of 2024, with a cumulative total of $339.9 billion since January 1, 2020[20]. - HSBC aims to support clients in transitioning to net-zero carbon emissions by providing $750 billion to $1 trillion in sustainable financing by 2030[85]. Strategic Initiatives - The bank aims to enhance customer service and increase shareholder returns through a clear strategy focused on revenue generation and profit growth[13]. - HSBC's strategy emphasizes becoming the preferred international financial partner for customers, supporting long-term sustainable operations[13]. - The company plans to sell its operations in Argentina, with a pre-tax loss of $1.2 billion recognized in the first quarter of 2024[18]. - The company completed the sale of its retail banking operations in France, Canada, and Russia in the first half of 2024, with a gain of $4.8 billion from the Canadian sale[18]. Digital Transformation - HSBC's digital service usage among customers increased, reflecting a growing trend towards digital banking solutions[14]. - The company continues to invest in digital services to enhance customer engagement and streamline processes[83]. - As of May 2024, 83.9% of commercial banking clients regularly used digital services, up 1.2 percentage points from May 2023[47]. - In H1 2024, 80% of wealth management and personal banking international accounts were opened digitally, a significant increase of 34 percentage points compared to H1 2023[47]. Diversity and Inclusion - The bank's commitment to diversity is evident, with 34.4% of senior leadership positions held by women, up from 34.1% at the end of 2023[14]. - HSBC's commitment to diversity is reflected in its leadership, with 34.4% of senior leadership positions held by women and 3.1% by individuals from Black ethnic backgrounds as of mid-2024[93]. Future Outlook - The expected net interest income for 2024 is approximately $43 billion, contingent on global interest rate trends[18]. - The company aims to achieve an average tangible equity return of approximately 15% for both 2024 and 2025, excluding significant items[18]. - The company has established a new variable compensation structure to enhance transparency and maintain performance-based rewards[20].

Investment Rating - The report maintains an "Add" rating for the company [1][3] Core Views - The company aims to achieve an average tangible equity return of approximately 15% for both 2024 and 2025, excluding notable items [3] - The expected net interest income for the banking business in 2024 is projected to be around $43 billion, an increase from previous estimates [3][19] - The company plans to maintain a dividend payout ratio of 50% for 2024 and has announced a share buyback program of up to $3 billion, expected to be completed within three months [3][5] Financial Highlights - Total revenue for 2023 is projected at $66.1 billion, with a year-on-year growth of 30.5% [2] - Net profit attributable to ordinary shareholders is expected to be $22.4 billion in 2023, reflecting a 56.4% increase year-on-year [2] - Earnings per share (EPS) is forecasted to be $1.15 for 2023, with dividends per share expected to be $0.61 [2] - For the first half of 2024, the company reported a stable pre-tax profit of $21.6 billion, with total revenue increasing by $0.4 billion to $37.3 billion, a growth of 1% [5] - The average tangible equity return for the first half of 2024 is reported at 21.4%, while the adjusted figure excluding notable items is 17% [5] Future Projections - The company anticipates total revenue to reach $67.7 billion in 2024, with a modest growth rate of 2.5% [2] - The net profit attributable to ordinary shareholders is expected to grow to $22.9 billion in 2024, a 1.9% increase [2] - The EPS is projected to rise to $1.22 in 2024, while dividends per share are expected to increase to $0.81 [2]

BERK OZDEMIR Investment Thesis HSBC Holdings plc (NYSE:HSBC) is one of the largest investments in our portfolio. It has also been with us for nearly ten years. In our previous article in March this year, we looked past Q1 results and continued our line of buy stances for this large financial institution. This was based on the anticipation that HSBC should be able to grow EPS and the dividend per share from improvements in productivity and successful execution of business, especially in wealth and corporate ...

HSBC Holdings (HSBC) reported a second-quarter 2024 pre-tax profit of $8.9 billion, up 1.5% from the prioryear quarter. The reported quarter included a loss related to the recycling of reserves following the completion of the sale of the business in Russia. This was partly offset by growth in Securities Financing and Equities in Global Banking and Markets, and from Wealth in Wealth and Personal Banking. Results were aided by a decline in expected credit losses and other credit impairment charges (ECL). Howe ...

[Overview](index=5&type=section&id=Overview) [Performance in 1H24](index=5&type=section&id=Performance%20in%201H24) HSBC's first half of 2024 was characterized by a strong return on average tangible equity of 21.4%, a stable profit before tax of $21.6 billion, and significant strategic progress 1H24 Key Performance Indicators | Indicator | Value | Note | | :--- | :--- | :--- | | **Financial Performance** | | | | Return on average tangible equity (annualised) | 21.4% | 1H23: 22.4% | | Profit before tax | $21.6 bn | 1H23: $21.7 bn | | Operating expenses | $16.3 bn | 1H23: $15.5 bn | | Common equity tier 1 capital ratio | 15.0% | 1H23: 14.7% | | Second interim dividend per share | $0.10 | Same as 2023 second interim | | **Strategic Performance** | | | | Net new invested assets | $32 bn | $38bn were in Asia | | Digitally active Commercial Banking customers | 84% | 1H23: 82% | | Wholesale multi-jurisdictional client revenue | 61% | Same as 31 Dec 2023 | | Women in senior leadership roles | 34.4% | 31 Dec 2023: 34.1% | | Cumulative sustainable finance and investment | $339.9 bn | Since Jan 2020 | [Highlights](index=6&type=section&id=Highlights) HSBC reported stable financial performance in 1H24 with a profit before tax of $21.6 billion, announced a new $3 billion share buy-back, and upgraded its banking NII guidance for 2024 Financial Performance in 1H24 vs 1H23 | Metric | 1H24 | 1H23 | Change | | :--- | :--- | :--- | :--- | | Profit before tax | $21.6bn | $21.7bn | Stable | | Profit after tax | $17.7bn | $18.1bn | -2% | | Revenue | $37.3bn | $36.9bn | +1% | | Net Interest Income (NII) | $16.9bn | $18.3bn | -7% | | Net Interest Margin (NIM) | 1.62% | 1.70% | -8 bps | | Expected Credit Losses (ECL) | $1.1bn | $1.4bn | -$0.3bn | | Operating Expenses | $16.3bn | $15.5bn | +5% | | CET1 Capital Ratio | 15.0% | 14.7% | +0.3 p.p. | - The Board approved a **second interim dividend of $0.10 per share** and initiated a **new share buy-back of up to $3 billion**[40](index=40&type=chunk) - The bank updated its outlook, now targeting a **mid-teens RoTE** (excluding notable items) for both 2024 and 2025, with banking NII guidance for 2024 raised to **around $43 billion**[42](index=42&type=chunk)[43](index=43&type=chunk) - HSBC continued to reshape its portfolio by completing the sales of its businesses in Canada (recognizing a **$4.8bn gain**), France, and Russia, while also announcing the planned sale of its Argentina business (recognizing a **$1.2bn impairment**)[44](index=44&type=chunk)[46](index=46&type=chunk) - The Group advanced its ESG goals by providing and facilitating **$45.5bn in sustainable finance and investments** in 1H24, bringing the cumulative total since January 2020 to $339.9bn[47](index=47&type=chunk) [Who we are](index=8&type=section&id=Who%20we%20are) HSBC is a leading global financial services organization with a strategy centered around four pillars and operations structured into three global businesses - HSBC's core values are: **We value difference**, **We succeed together**, **We take responsibility**, and **We get it done**[48](index=48&type=chunk) Strategic Pillars | Pillar | Key Focus Areas | | :--- | :--- | | **Focus** | Maintain leadership in scale markets, double-down on international connectivity, diversify revenue, maintain cost discipline and reshape portfolio. | | **Digitise** | Deliver seamless customer experiences, ensure resilience and security, embrace disruptive technologies, automate and simplify at scale. | | **Energise** | Inspire leaders to drive performance, unlock our edge to enable success, deliver a unique colleague experience, prepare our workforce for the future. | | **Transition** | Support our customers, embed net zero into operations, partner for systemic change, become net zero in operations by 2030 and financed emissions by 2050. | - The Group operates through three global businesses: **Wealth and Personal Banking (WPB)**, **Commercial Banking (CMB)**, and **Global Banking and Markets (GBM)**[51](index=51&type=chunk)[52](index=52&type=chunk)[54](index=54&type=chunk) [Group Chief Executive's review](index=9&type=section&id=Group%20Chief%20Executive's%20review) The Group Chief Executive highlighted a strong first-half financial performance, a new $3 billion share buy-back, and confidence in achieving a mid-teens RoTE for 2025 1H24 Performance Highlights | Metric | Value | | :--- | :--- | | Return on average tangible equity (annualised) | 21.4% | | Reported Revenue | $37.3 bn | | Profit before tax | $21.6 bn | - The bank announced a second interim dividend of $0.10 per share and a new share buy-back of up to $3 billion, bringing total announced distributions to **$4.8 billion**[62](index=62&type=chunk) - The 2024 banking net interest income guidance was upgraded from at least $41 billion to **around $43 billion**[66](index=66&type=chunk)[72](index=72&type=chunk) - HSBC is confident in its ability to achieve a **mid-teens RoTE** (excluding notable items) for both 2024 and 2025, driven by international connectivity, home market leadership, and revenue diversification[73](index=73&type=chunk)[74](index=74&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) [Our strategy](index=11&type=section&id=Our%20strategy) HSBC's strategy drove strong 1H24 results, with progress across its 'Focus', 'Digitise', 'Energise', and 'Transition' pillars - **Focus:** The bank is capturing growth from diversified revenue streams, with **global wealth revenue up 12%** to $4.3bn and transaction banking market share increasing[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - **Focus on Home Markets:** Profit before tax reached **$6.1bn in Hong Kong** and **$3.7bn in the UK**, with strong customer and loan growth[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) - **Focus on International Connectivity:** Wholesale multi-jurisdictional client revenue increased by 4%, and WPB revenue from international customers grew by **6% to $5.4bn**[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) - **Digitise:** Customer adoption of digital services continued to rise, with **83.9% of CMB customers digitally active**, supported by investments in AI and blockchain[97](index=97&type=chunk)[98](index=98&type=chunk)[101](index=101&type=chunk) - **Energise:** The bank advanced its diversity goals, achieving **34.4% female representation in senior leadership**, on track for its 35% target by 2025[102](index=102&type=chunk)[103](index=103&type=chunk) - **Transition:** HSBC supported the transition to net zero by providing and facilitating **$45.5bn of sustainable finance and investments** in 1H24[106](index=106&type=chunk)[108](index=108&type=chunk) [ESG overview](index=14&type=section&id=ESG%20overview) HSBC's ESG strategy focuses on transitioning to net zero, building inclusion, and acting responsibly, with progress in sustainable finance and diversity goals - HSBC's ESG approach focuses on three core areas: the **transition to net zero**, **building inclusion and resilience**, and **acting responsibly**[115](index=115&type=chunk) - To support the transition to net zero, the bank has established a new business, **HSBC Infrastructure Finance**, to focus on infrastructure and project finance opportunities[117](index=117&type=chunk) - HSBC UK has partnered with Greenly to help **SME customers measure and reduce their carbon footprint**[118](index=118&type=chunk) - The bank is progressing towards its diversity goals, with **34.4% of senior leadership roles held by women** and 3.1% by Black heritage colleagues in the UK and US combined as of 1H24[122](index=122&type=chunk) - HSBC continues to invest in employee skills through initiatives like the **Sustainability Academy** and the **Accelerating Wealth Programme** to support strategic priorities[124](index=124&type=chunk)[125](index=125&type=chunk) [Financial overview](index=15&type=section&id=Financial%20overview) HSBC's 1H24 financial performance was strong, with an annualized RoTE of 21.4%, a stable profit before tax of $21.6 billion, and a robust CET1 ratio of 15.0% Group Financial Targets and 1H24 Performance | Target | 1H24 Performance | Outlook/Guidance | | :--- | :--- | :--- | | **RoTE excluding notable items** | 17.0% (annualised) | Target mid-teens for 2024 and 2025 | | **Cost Growth (Target Basis)** | 7% vs 1H23 | Approx. 5% for 2024 vs 2023 | | **CET1 Ratio** | 15.0% | Manage within 14% to 14.5% medium-term range | | **Dividend Payout Ratio** | $0.10 second interim dividend | Target 50% payout ratio for 2024 | 1H24 Reported Results vs 1H23 | Metric | 1H24 | 1H23 | | :--- | :--- | :--- | | Profit before tax | $21,556m | $21,657m | | Profit after tax | $17,665m | $18,071m | | Net interest margin | 1.62% | 1.70% | | Basic earnings per share | $0.89 | $0.86 | | Total assets | $2,975bn | $3,041bn (at 30 Jun 23) | - Reported profit before tax of **$21.6bn was stable**, including a $4.8bn gain on the Canada disposal, offset by a $1.2bn impairment on the planned Argentina sale[156](index=156&type=chunk) - Reported operating expenses **increased by 5% to $16.3bn**, driven by higher technology costs, inflation, and an increased performance-related pay accrual[162](index=162&type=chunk)[166](index=166&type=chunk) - The balance sheet remains strong with **total assets of $3.0tn**, customer loans stable at $0.9tn, and customer accounts at $1.6tn[185](index=185&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk) [Global businesses](index=21&type=section&id=Global%20businesses) This section provides an overview of the performance of HSBC's three global businesses and the Corporate Centre for 1H24 [Risk overview](index=28&type=section&id=Risk%20overview) HSBC's risk overview highlights a complex global environment with persistent inflation, geopolitical tensions, and challenges in the real estate sector - The global economy grew faster than expected in 1H24, but **persistent services inflation** has made the path of central bank interest rate cuts volatile[271](index=271&type=chunk) - Significant geopolitical risks remain, including the **Russia-Ukraine and Israel-Hamas wars**, complex sanctions regimes, and strategic competition between China and other countries[272](index=272&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk)[279](index=279&type=chunk) - The real estate sector faces challenges, with softness in Hong Kong's commercial market and a **subdued commercial real estate sector in mainland China**[277](index=277&type=chunk) Key Risk Appetite Metrics (1H24) | Component | Measure | Risk Appetite | 1H24 Status | | :--- | :--- | :--- | :--- | | **Capital** | CET1 ratio | ≥13.0% | 15.0% | | **ECL** | Retail (WPB) ECL as % of advances | ≤0.50% | 0.22% | | **ECL** | Wholesale (GBM, CMB) ECL as % of advances | ≤0.45% | 0.38% | - Top risks with a heightened trend in 1H24 include **Technology and cybersecurity**, **ESG risks**, **Financial crime risk**, and **Model risk**[303](index=303&type=chunk) [Interim management report](index=31&type=section&id=Interim%20management%20report) [Financial summary](index=31&type=section&id=Financial%20summary) This section details HSBC's 1H24 financial performance, including a net interest income of $16.9 billion, a 5% rise in operating expenses, and a robust balance sheet with $3.0 trillion in assets 1H24 Income Statement Summary | Metric | 1H24 | 1H23 | | :--- | :--- | :--- | | Net interest income | $16,911m | $18,264m | | Net fee income | $6,200m | $6,085m | | Net operating income (Revenue) | $37,292m | $36,876m | | Total operating expenses | ($16,296m) | ($15,457m) | | Profit before tax | $21,556m | $21,657m | | Profit after tax | $17,665m | $18,071m | | Basic earnings per share | $0.89 | $0.86 | - Net interest income (NII) **decreased by 8% to $16.9bn**, and Net Interest Margin (NIM) fell by 8 basis points to 1.62%[343](index=343&type=chunk)[345](index=345&type=chunk) - **Banking NII**, which adjusts for the impact of funding trading activities, was **$22.2bn in 1H24**, up from $21.9bn in 1H23[351](index=351&type=chunk)[353](index=353&type=chunk) - Operating expenses **rose 5% to $16.3bn**, driven by higher technology costs ($0.3bn), inflation, and an increased performance-related pay accrual ($0.3bn)[371](index=371&type=chunk) Balance Sheet Summary (at period end) | Metric | 30 Jun 2024 | 31 Dec 2023 | | :--- | :--- | :--- | | Total assets | $2,975bn | $3,039bn | | Net loans and advances to customers | $938bn | $939bn | | Customer accounts | $1,594bn | $1,612bn | | Total shareholders' equity | $183bn | $185bn | [Global businesses](index=41&type=section&id=Global%20businesses_2) This section provides supplementary financial analysis for HSBC's global businesses, detailing profit contributions and the significant impact of strategic transactions 1H24 Constant Currency Profit Before Tax by Global Business | Global Business | Profit Before Tax ($m) | | :--- | :--- | | Wealth and Personal Banking | 6,458 | | Commercial Banking | 6,463 | | Global Banking and Markets | 3,813 | | Corporate Centre | 4,822 | | **Total** | **21,556** | - Strategic transactions had a significant positive impact on 1H24 results, contributing **$3.9bn to revenue** and **$3.7bn to profit before tax**, mainly driven by the gain on the sale of the Canada business[435](index=435&type=chunk) - WPB's life insurance manufacturing operations generated a profit before tax of $543m in 1H24, with a **new business contractual service margin of $1.3bn**, a 77% increase from 1H23[445](index=445&type=chunk)[449](index=449&type=chunk) WPB Wealth Balances (Reported) | Metric | 30 Jun 2024 | 31 Dec 2023 | | :--- | :--- | :--- | | Reported invested assets | $1,271bn | $1,191bn | | Wealth deposits | $530bn | $536bn | | **Total reported wealth balances** | **$1,801bn** | **$1,727bn** | - Net new invested assets for WPB in 1H24 were **$32bn**, with The Hongkong and Shanghai Banking Corporation Limited contributing $38bn[470](index=470&type=chunk)[471](index=471&type=chunk) [Legal entities](index=52&type=section&id=Legal%20entities) This section breaks down HSBC's financial results by its main legal entities and key geographic markets, highlighting the significant profit contributions from its Hong Kong and UK operations 1H24 Reported Profit Before Tax by Major Legal Entity | Legal Entity | Profit Before Tax ($m) | | :--- | :--- | | The Hongkong and Shanghai Banking Corporation Limited | 10,893 | | HSBC UK Bank plc | 3,734 | | Holding companies, shared service centres and intra-Group eliminations | 2,848 | | HSBC Bank plc | 1,436 | | Other trading entities | 1,034 | | HSBC Bank Middle East Limited | 536 | | Grupo Financiero HSBC, S.A. de C.V. | 466 | | HSBC North America Holdings Inc. | 423 | | HSBC Bank Canada | 186 | - The 'Holding companies' segment profit includes a **$4.8bn gain on the disposal of the Canada business**, partly offset by a $1.2bn impairment related to the planned sale of the Argentina business[336](index=336&type=chunk) 1H24 Profit Before Tax by Key Country/Territory | Country/Territory | Profit Before Tax ($m) | | :--- | :--- | | Hong Kong | 6,216 | | Canada | 4,714 | | UK | 4,108 | | Mainland China | 1,910 | | India | 798 | | Singapore | 732 | - The Middle East, North Africa and Türkiye (MENAT) region generated a **profit before tax of $1,260m** in 1H24, down from $1,349m in 1H23[503](index=503&type=chunk) [Reconciliation of alternative performance measures](index=58&type=section&id=Reconciliation%20of%20alternative%20performance%20measures) This section provides definitions and reconciliations for the alternative performance measures (non-GAAP) that HSBC uses to supplement its IFRS-based reporting Reconciliation of RoTE to RoTE excluding Notable Items (annualised) | Metric | 1H24 | 1H23 | | :--- | :--- | :--- | | Return on average ordinary shareholders' equity | 19.8% | 20.8% | | Return on average tangible equity (RoTE) | 21.4% | 22.4% | | **RoTE excluding notable items** | **17.0%** | **18.5%** | Reconciliation to Target Basis Operating Expenses | Metric ($m) | 1H24 | 1H23 | | :--- | :--- | :--- | | Reported operating expenses | 16,296 | 15,457 | | Less: Notable items & other adjustments | (244) | (474) | | **Target basis operating expenses** | **16,052** | **14,983** | Reconciliation of Basic EPS | Metric ($) | 1H24 | 1H23 | | :--- | :--- | :--- | | Basic earnings per share | 0.89 | 0.86 | | **Basic EPS excluding material notable items** | **0.68** | **0.70** | - Wholesale multi-jurisdictional clients generated **$9.7 billion in revenue** in 1H24, representing 61% of total wholesale client revenue[538](index=538&type=chunk) [Risk](index=64&type=section&id=Risk) This section provides a comprehensive analysis of HSBC's risk management framework, key exposures, and developments in managing geopolitical, credit, and climate risks [Interim condensed consolidated financial statements](index=110&type=section&id=Interim%20condensed%20consolidated%20financial%20statements) [Notes on the interim condensed consolidated financial statements](index=117&type=section&id=Notes%20on%20the%20interim%20condensed%20consolidated%20financial%20statements) The notes provide detailed explanations supporting the interim financial statements, including disclosures on dividends, segmental analysis, and significant legal matters - The financial statements were prepared in accordance with **IAS 34 'Interim Financial Reporting'**, with accounting policies consistent with the 2023 Annual Report[931](index=931&type=chunk)[935](index=935&type=chunk) Dividends Paid to Shareholders of HSBC Holdings plc (1H24) | Dividend Type | Per Share ($) | Total ($m) | | :--- | :--- | :--- | | 2023 Fourth interim | 0.31 | 5,872 | | 2024 First interim | 0.10 | 1,877 | | Special dividend (Canada sale) | 0.21 | 3,942 | | **Total Ordinary Shares** | **0.62** | **11,691** | | Coupons on capital securities | - | 526 | | **Total Dividends** | - | **12,217** | - A **second interim dividend for 2024 of $0.10 per share** was approved on July 31, 2024, to be paid on September 27, 2024[946](index=946&type=chunk) - The Group's investment in Bank of Communications Co., Limited ('BoCom') had a carrying amount of $22.1bn against a fair value of $11.1bn, with **no further impairment recognized in 1H24**[993](index=993&type=chunk)[996](index=996&type=chunk)[999](index=999&type=chunk) - As of June 30, 2024, **assets held for sale totaled $5.8bn**, primarily related to the Argentina business, a significant decrease from $114.1bn at year-end 2023[1060](index=1060&type=chunk)[1061](index=1061&type=chunk)[1064](index=1064&type=chunk) [Additional information](index=139&type=section&id=Additional%20information) [Shareholder information](index=139&type=section&id=Shareholder%20information) This section provides key information for shareholders, including details on share buy-back programs, dividend policy, and significant shareholdings - During 1H24, HSBC conducted multiple share buy-backs, repurchasing a total of **652,656,004 ordinary shares** for an aggregate consideration of £2.12bn and HK$20.76bn[1107](index=1107&type=chunk)[1108](index=1108&type=chunk)[1109](index=1109&type=chunk)[1110](index=1110&type=chunk) - A **second interim dividend for 2024 of $0.10 per ordinary share** was approved, payable on 27 September 2024[1119](index=1119&type=chunk) - The dividend policy targets a **payout ratio of 50%** of earnings per share for 2024, excluding material notable items[1129](index=1129&type=chunk) - The largest notifiable interests in HSBC's share capital are held by **BlackRock, Inc. (8.89%)** and **Ping An Asset Management Co., Ltd. (7.98%)**[1117](index=1117&type=chunk)

Core Viewpoint - HSBC is focusing on growing and investing in its international retail and wealth business to diversify revenue streams, as stated by outgoing CEO Noel Quinn [1] Financial Performance - HSBC reported a pretax profit of $21.56 billion for the first half of the year, slightly down from $21.66 billion in the same period last year, but above the broker estimates average of $20.5 billion [2][4] - The bank's performance was positively influenced by a high-interest rate environment, contributing to a good revenue performance in the first half of 2024 [4][5]

Financial Performance - HSBC reported a pre-tax profit of $21.6 billion for the first half of 2024, consistent with the same period in 2023, despite a net profit decrease of $400 million, or 2%, to $17.7 billion[4]. - Total revenue increased to $37.3 billion, a rise of $400 million or 1% compared to the first half of 2023, driven by growth in wealth management and personal banking[5]. - The pre-tax profit for the first half of 2024 was $21,556 million, slightly down from $21,657 million in the previous year, indicating a decrease of 0.5%[12]. - The net profit after tax for the same period was $17,665 million, compared to $18,071 million in 2023, reflecting a decline of 2.2%[12]. - Revenue for the six months ended June 30, 2024, was $37,292 million, an increase from $36,876 million for the same period in 2023, representing a growth of 1.1%[12]. - The company reported a net profit of $17,665 million, down 2.2% from $18,071 million in the same period last year[35]. - The average return on tangible equity decreased to 21.4% from 22.4%, reflecting a decline in profitability metrics[10]. Operating Expenses and Costs - Operating expenses rose to $16.3 billion, an increase of $800 million or 5%, primarily due to higher technology spending and inflationary pressures[5]. - The cost-to-income ratio increased to 43.7% in 2024 from 41.9% in 2023, indicating a rise in operational costs relative to income[10]. - Operating expenses for the first half were $16.3 billion, an increase of about 5% compared to 2023, primarily due to rising technology costs and inflationary pressures[15]. - The cost growth guidance for 2024 is approximately 5% compared to 2023, with expected credit loss provisions projected to be between 30 to 40 basis points of average loans[8]. Credit Quality and Provisions - Expected credit loss provisions were $1.1 billion, down $300 million from the first half of 2023, indicating improved credit quality in various markets[5]. - Expected credit losses were $300 million, a decrease of $600 million, reflecting reduced provisions in the mainland China commercial real estate sector[6]. - The expected credit loss and other credit impairment charges decreased to $1,066 million from $1,345 million, showing a reduction of 20.7%[12]. - The company expects the average expected credit loss as a percentage of total loans to return to a mid-term range of 30 to 40 basis points in 2024[15]. Capital and Dividends - The common equity tier 1 capital ratio improved to 15%, up 20 basis points from Q4 2023, due to a reduction in risk-weighted assets[5]. - The board approved a second interim dividend of $0.10 per share and plans to initiate a share buyback of up to $3 billion, expected to be completed within three months[5]. - The company aims to maintain a common equity tier 1 capital ratio of 14% to 14.5% and a dividend payout ratio target of 50% for 2024, excluding significant items[8]. - The total dividends distributed to shareholders for the current year is $12,217 million, compared to $7,133 million in the previous year[54]. Customer and Market Activity - Customer loans stood at $938 billion, stable on a reported basis, with a $12 billion increase on a constant currency basis since December 31, 2023[5]. - Customer accounts increased by $24 billion on a reported basis and $27 billion on a constant currency basis compared to Q1 2024, with growth seen across all businesses, particularly in Asia[7]. - The number of new banking customers in Hong Kong reached 345,000, reflecting strong capital inflows[17]. - The international customer base in the UK increased by 8% to 2.7 million, indicating the unique position of the group's UK operations[17]. Legal Matters - HSBC is involved in multiple lawsuits in the UK and Luxembourg, with claims totaling up to $5.6 billion plus interest related to cash and securities recovery[68]. - Since 2014, HSBC has faced lawsuits in the US federal courts related to alleged violations of the Anti-Terrorism Act, with several cases still pending[69]. - HSBC was fined by the European Commission for anti-competitive behavior regarding Euro interest rate derivatives, with the fine amount still under appeal[70]. - HSBC has reached a settlement with plaintiffs in Israel regarding alleged misconduct related to foreign exchange, pending court approval[71]. Strategic Initiatives - HSBC's strategy includes ongoing market expansion and investment in new technologies to enhance customer service and operational efficiency[30]. - The company aims to maintain its leadership position in key markets, particularly in Hong Kong and the UK, with a focus on further growth opportunities[17]. - The bank announced a share buyback program worth up to $3 billion, expected to commence shortly and complete within three months[86]. Future Outlook - HSBC aims for an average return on tangible equity of approximately 15% by 2025[4]. - The bank targets an average tangible equity return of approximately 15% for 2024 and 2025, excluding significant items[8]. - HSBC anticipates releasing its earnings report for the three months ending September 30, 2024, on October 29, 2024[91].

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Leadership Change - HSBC has appointed Georges Elhedery as the new CEO, effective September 2, following the resignation of Noah Quinn after 37 years with the bank [2][3] - Elhedery, who has been with HSBC since 2005, previously served as CFO and co-CEO of global banking and markets, and has a strong background in leading through change and driving growth [4] Strategic Focus - The new CEO aims to deliver exceptional value to clients and investors by focusing on sustainable growth and strong performance [2] - HSBC is currently implementing cost-reduction measures, including slowing hiring and encouraging investment bankers to consolidate client meetings to optimize business travel [5][6] Product Development - HSBC's Zing has partnered with Visa to develop an international payments app, which allows users to hold funds in multiple currencies and transact globally [7][8]