Financial Performance - The company reported a profit of $17,508 million for the current period, contributing to a total comprehensive income of $16,528 million[3]. - The profit before tax for the six months ended June 30, 2023, was $21,657 million, a significant increase from $8,780 million in the same period of 2022, representing a growth of approximately 146%[11]. - The net profit after tax for the six months ended June 30, 2023, was $18,071 million, compared to $8,931 million in the same period of 2022, representing an increase of 102%[36]. - The total comprehensive income for the period was $17,032 million, compared to a loss of $(3,598) million in the previous year[97]. - The company reported a significant loss from the sale of subsidiaries and joint ventures amounting to $(3,604) million, compared to a loss of $(71) million in the prior year[11]. - The company recognized a temporary gain of $1.5 billion related to the acquisition of UK Silicon Valley Bank[95]. - The company reversed an impairment loss of $2.1 billion associated with the planned sale of its French retail banking business, which is no longer classified as held for sale[95]. Assets and Liabilities - Total assets increased to $3,041,476 million as of June 30, 2023, up from $2,949,286 million at December 31, 2022, representing a growth of approximately 3.1%[1]. - Total liabilities reached $2,849,825 million, reflecting an increase of 3.1% from $2,764,089 million at the end of 2022[1]. - The total equity attributable to shareholders at the end of the period was $184,170 million, up from $178,975 million year-over-year[73]. - The total risk-weighted assets were $859,545 million, slightly up from $851,743 million, indicating a stable capital position[73]. - The company’s cash and balances with central banks decreased to $307,733 million from $327,002 million, a decline of about 5.1%[1]. Revenue and Income - Total revenue for the six months ended June 30, 2023, was $36,876 million, up from $24,545 million in the same period of 2022, reflecting a 50% increase[36]. - Net interest income for the first half of 2023 was $18,264 million, up from $12,846 million in the first half of 2022, representing a significant increase of 42%[77]. - The bank's total revenue for the first half of 2023 was $30 billion, reflecting a 15% year-over-year growth driven by higher interest rates and increased customer activity[67]. Dividends and Shareholder Returns - The company declared dividends amounting to $4.497 million to shareholders during the period[6]. - The total dividend for the year is $0.33 per share, amounting to $6.591 billion, compared to $0.18 per share and $3.576 billion in the previous year[22]. - The board approved a second interim dividend of $0.10 per share and plans to initiate a share buyback of up to $2 billion[82]. - The company paid $7,508 million in dividends to shareholders, which is an increase from $4,497 million in the previous year, indicating a rise of approximately 67%[11]. Regulatory and Compliance - The company has implemented IFRS 17 "Insurance Contracts" starting January 1, 2023, replacing IFRS 4, which may impact future financial reporting[1]. - The company has confirmed that there are no significant impacts from new standards or amendments on its financial statements[17]. - HSBC has complied with applicable provisions of the UK Corporate Governance Code as of June 30, 2023[58]. Legal Matters - HSBC is involved in various legal proceedings and regulatory matters across multiple jurisdictions, but considers none to be significant at this time[39]. - HSBC has faced multiple lawsuits since November 2014, with plaintiffs alleging the bank assisted sanctioned parties in illegal activities, with significant potential impacts still pending resolution[43]. - HSBC's management has indicated that predicting the resolution of ongoing legal matters is not feasible, but the potential impacts could be significant[43][45]. Strategic Initiatives - The company plans to expand its market presence and invest in new technologies to enhance customer experience and operational efficiency[2]. - HSBC is exploring strategic acquisitions in Asia to strengthen its market position and expand its customer base[67]. - The company is investing $3 billion in technology and innovation over the next three years to enhance its service offerings and operational capabilities[67]. Operational Efficiency - The bank's cost-to-income ratio improved to 52%, down from 55% in the previous year, showcasing enhanced operational efficiency[67]. - The company’s operating liabilities increased significantly by $72,836 million, compared to a decrease of $(35,752) million in the previous year, indicating a substantial shift in financial position[11]. - The company’s technology spending increased by 12.8% in the first half of 2023, now accounting for nearly one-quarter of total operating expenses[71].

FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the month of June HSBC Holdings plc 42nd Floor, 8 Canada Square, London E14 5HQ, England (Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F). HSBC Holdings plc ("HSBC" or the "Company") announces that it has purchased for cancellation the following number of its ...

1Q23 results Appendix 4Q22 1Q23 2.7 2.7 0.4 3.0 4.1 0.5 3.6 o/w notables $0.3bn Notable items of $3.6bn ($2.1bn part-reversal of France impairment and $1.5bn provisional gain on acquisition of SVB UK) Other income of $0.5bn, up $0.2bn vs. 1Q22, including higher income in Wealth. NNIA in the last 12 months of $93bn, including $22bn during the quarter Total 432 1,455 ECL charge trend, $m | --- | --- | --- | --- | |-----------|-------|---------|-------| | Stage | 1-2 | Stage 3 | Total | | Wholesale | (0.1) | 0 ...

HSBC Holdings PLC (NYSE:HSBC) Q1 2023 Earnings Conference Call May 2, 2023 2:30 AM ET Company Participants Richard O'Connor - Global Head, IR Noel Quinn - Group CEO Georges Elhedery - Group CFO Conference Call Participants Joseph Dickerson - Jefferies Raul Sinha - JPMorgan Chase & Co. Manus Costello - Bernstein Autonomous Omar Keenan - Crédit Suisse Perlie Mong - KBW Andrew Coombs - Citigroup Tom Rayner - Numis Martin Leitgeb - Goldman Sachs Group Guy Stebbings - BNP Paribas Exane Amandeep Rakkar - Barclays ...

Financial Performance - In Q1 2023, HSBC reported a significant impairment reversal of $2.1 billion related to the planned sale of its French retail banking business, which was previously classified as held for sale[9]. - The acquisition of Silicon Valley Bank UK in March 2023 resulted in a preliminary acquisition gain of $1.511 billion, with HSBC UK providing $2.8 billion in funding for the acquisition[9]. - The earnings per share for Q1 2023 included an impact of $0.08 from the acquisition of Silicon Valley Bank UK and a $0.08 reversal related to the French retail banking impairment[10]. - The bank's net interest income for Q1 2023 was reported at $21.16 billion, reflecting a stable performance despite market fluctuations[10]. - Operating profit for Q1 2023 reached $12,153 million, significantly higher than $4,356 million in Q1 2022[14]. - The basic earnings per share for Q1 2023 was $0.52, compared to $0.22 in Q1 2022[14]. - The return on average ordinary shareholders' equity for Q1 2023 was 25.5%, up from 11.3% in Q1 2022[14]. - The net interest margin for Q1 2023 was 1.69%, an increase of 50 basis points compared to Q1 2022[27]. - The total operating expenses (excluding goodwill and other intangible asset impairments) were $7,588 million, down from $8,717 million in Q1 2022[14]. - The company reported a gain from acquisitions of $1,511 million in Q1 2023[14]. - Pre-tax profit was $2 billion, an increase of $900 million or 86% compared to Q1 2022, driven by a $700 million increase in revenue, a 20% rise[36]. - Revenue for the capital markets and securities services business increased by $300 million, a 12% rise[36]. - The expected credit losses and other credit impairment charges were $(432) million, an improvement from $(1,430) million in Q1 2022[14]. - The average tangible equity return rate for Q1 2023 was 27.4%, compared to 12.3% in Q1 2022[14]. - The profit attributable to common shareholders for Q1 2023 was $10,327 million, a significant increase from $4,378 million in Q4 2022 and $2,755 million in Q1 2022[89]. - The adjusted profit before tax for Q1 2023 was $12.886 billion, a significant increase from $5.049 billion in Q1 2022, representing a growth of 155%[169]. - The adjusted profit after tax for Q1 2023 reached $11.026 billion, up from $4.661 billion in the same quarter last year, marking an increase of 136%[169]. Customer Loans and Accounts - HSBC's total customer loans classified as held for sale averaged $16 billion, excluding the impact of the impairment reversal related to the French retail banking business[10]. - Customer loans amounted to $1 trillion, with an increase of $40 billion, impacted by a negative currency translation effect of $8 billion and an increase of $7 billion due to the acquisition of UK Silicon Valley Bank[30]. - Customer accounts reached $1.6 trillion, increasing by $34 billion, affected by a negative currency translation effect of $12 billion and an increase of $8 billion from the acquisition of UK Silicon Valley Bank[30]. - The total amount of customer loans in personal loans reached $445 billion, an increase of $30.2 billion from December 31, 2022, driven by favorable foreign exchange movements of $4.6 billion and a reclassification of $22.6 billion in the French retail banking business[50]. - Customer loans (net) amounted to $963,394 million, up from $923,561 million in the previous year, reflecting a growth of 4%[111]. - Net customer loans reached $963,394 million, with Wealth Management and Personal Banking contributing $455,266 million, Commercial Banking $323,268 million, and Global Banking and Markets $184,492 million[112]. Expected Credit Losses - The expected credit losses for Q1 2023 were $32 million, compared to $300 million in Q1 2022, reflecting improved economic conditions[37]. - The expected credit loss sensitivity analysis indicates that the retail portfolio has not undergone significant changes, while the wholesale portfolio's downside risk has increased compared to December 31, 2022[49]. - The expected credit loss provisions for customer loans measured at amortized cost were $11,658 million, compared to $11,447 million at the end of 2022, indicating an increase of 1.8%[73]. - The expected credit loss provisions for financial assets measured at amortized cost were $12,135 million as of March 31, 2023, compared to $12,009 million at the end of 2022, reflecting a rise of 1.0%[73]. - The expected credit losses decreased by $200 million to $400 million, reflecting improved economic conditions[140]. Operating Expenses - Operating expenses were $2.4 billion, an increase of $100 million or 2%, influenced by inflation but partially offset by cost management[37]. - The total operating expenses (excluding goodwill and other intangible asset impairments) were $7,588 million, down from $8,717 million in Q1 2022[14]. - Operating expenses for Q1 2023 were $1.7 billion, remaining stable compared to the previous year[67]. - Operating expenses decreased to $7.6 billion, a 7% decline, primarily due to cost-saving measures and restructuring efforts[140]. - The company recorded a decrease in operating expenses of $1.4 billion, a reduction of 15%, due to the end of cost-saving initiatives and a decline in performance-linked compensation[187]. Capital and Equity - The Common Equity Tier 1 (CET1) capital ratio improved to 14.7% as of March 31, 2023, up from 14.2% on December 31, 2022[84]. - The total equity attributable to ordinary shareholders increased to $170,703 million from $158,087 million year-over-year, marking a growth of 8%[108]. - The tangible common equity increased to $159,458 million, compared to $146,927 million in the same period last year, showing an increase of 8.5%[108]. - The total shareholder equity increased to $190.1 billion from $177.8 billion year-over-year[149]. - The common equity tier 1 capital ratio stood at 14.7%, up from 14.2% in the previous year[149]. Strategic Initiatives - HSBC plans to complete the sale of its Canadian banking business in Q1 2024, maintaining the business as held for sale until the transaction is finalized[9]. - HSBC is considering a special dividend of $0.21 per share as a priority use of proceeds from the Canadian banking sale, with remaining funds allocated to common equity tier 1 capital[5]. - The bank's strategy includes focusing on international clients while divesting non-core assets, such as the Canadian banking business[5]. - The company aims to enhance its sustainable financing capabilities and meet evolving regulatory expectations regarding climate-related products[109]. - The company is actively managing and monitoring risks associated with the transition from LIBOR, including regulatory compliance risks and market risks, which are gradually diminishing as existing contracts are transitioned[40]. Economic Outlook - The projected GDP growth rate for Hong Kong is expected to be 3.0% in 2023, with a forecast of 3.2% in 2024[76]. - The unemployment rate in Hong Kong is projected to be 3.4% in 2023, with a slight increase to 3.5% in 2024[76]. - The inflation rate in Hong Kong is anticipated to be 2.1% for the next five years, with a peak of 4.3% expected in the first quarter of 2024[76]. - The economic outlook for Q1 2023 has improved compared to December 31, 2022, although inflation and interest rate risks remain significant concerns for most markets[200]. Risks and Challenges - The company is facing challenges due to geopolitical tensions, including the ongoing Russia-Ukraine conflict, which may adversely affect its financial condition and operational performance[123]. - The geopolitical and economic impacts of the Russia-Ukraine conflict continue to be profound, with sanctions imposed by the US, UK, EU, and others against Russia, leading to potential regulatory and market risks for the group and its clients[200]. - The group is prepared to adjust expected credit losses to reflect ongoing uncertainties posed by inflation and interest rate risks across various sectors[200].

[SEC Filing Information](index=1&type=section&id=SEC%20Filing%20Information) HSBC Holdings plc filed a Form 6-K on March 31, 2023, as a foreign private issuer under Form 20-F [Filing Details](index=1&type=section&id=Filing%20Details) HSBC Holdings plc filed a Form 6-K on March 31, 2023, as a foreign private issuer under Form 20-F - **Filing Type:** Form 6-K[1](index=1&type=chunk) - **Annual Report Form:** Form 20-F[2](index=2&type=chunk) - **Filing Date:** 31 March 2023[4](index=4&type=chunk) [Publication Announcement](index=1&type=section&id=Publication%20Announcement) HSBC Holdings plc announced the publication of its FCA-approved Base Prospectus and Registration Document [Documents Published](index=1&type=section&id=Documents%20Published) HSBC Holdings plc announced the publication of its FCA-approved Base Prospectus and Registration Document - **Documents Published:**[5](index=5&type=chunk) * Base Prospectus dated 31 March 2023 for the HSBC Holdings plc Debt Issuance Programme * Registration Document dated 31 March 2023 in respect of HSBC Holdings plc - **Approval Authority:** Financial Conduct Authority[5](index=5&type=chunk) [Access and Contact Information](index=1&type=section&id=Access%20and%20Contact%20Information) Published documents are available on HSBC's investor relations website and National Storage Mechanism - **Access URLs:**[5](index=5&type=chunk) * **HSBC Investor Relations:** http://www.hsbc.com/investors/fixed-income-investors/issuance-programmes * **National Storage Mechanism:** https://data.fca.org.uk//nsm/nationalstoragemechanism - **Investor Enquiries:**[6](index=6&type=chunk) * **Contact:** Greg Case * **Phone:** +44 (0) 20 7992 3825 * **Email:** investorrelations@hsbc.com - **Media Enquiries:**[6](index=6&type=chunk) * **Contact:** Gillian James * **Phone:** +44 (0) 20 7992 0516 * **Email:** gillian.james@hsbc.com [Company Overview](index=2&type=section&id=Company%20Overview) HSBC Holdings plc is a London-headquartered global banking and financial services organization with significant global assets [About HSBC Holdings plc](index=2&type=section&id=About%20HSBC%20Holdings%20plc) HSBC Holdings plc is a London-headquartered global banking and financial services organization with significant global assets - **Headquarters:** London[7](index=7&type=chunk) - **Global Presence:** Serves customers worldwide from offices in 62 countries and territories across Europe, Asia, North America, Latin America, the Middle East and North Africa[7](index=7&type=chunk) HSBC Holdings plc Key Financial Metric | Metric | Value | | :----- | :---- | | Assets (as of 31 Dec 2022) | US$2,967bn | [Important Disclaimers and Restrictions](index=2&type=section&id=Important%20Disclaimers%20and%20Restrictions) The Base Prospectus is subject to strict distribution and transfer restrictions, primarily for non-U.S. persons or QIBs [Intended Addressees and Distribution Restrictions](index=2&type=section&id=Intended%20Addressees%20and%20Distribution%20Restrictions) The Base Prospectus has strict distribution and transfer restrictions for non-U.S. persons or QIBs - **Distribution Restrictions:** May not be forwarded or distributed other than as provided and may not be reproduced in any manner whatsoever[9](index=9&type=chunk) - **Target Audience (Outside US):** Persons that are not U.S. Persons as defined in, and in reliance on, Regulation S under the U.S. Securities Act of 1933[9](index=9&type=chunk)[10](index=10&type=chunk)[12](index=12&type=chunk) - **Target Audience (Within US):** Qualified Institutional Buyers (QIBs) in accordance with Rule 144A under the Securities Act[9](index=9&type=chunk)[10](index=10&type=chunk)[12](index=12&type=chunk) - **Legal Status:** Nothing in this electronic publication constitutes an offer of securities for sale in any jurisdiction where it is unlawful to do so[10](index=10&type=chunk) [Securities Act Compliance](index=2&type=section&id=Securities%20Act%20Compliance) Notes under the Debt Issuance Programme are unregistered, with transfers restricted to QIBs or non-U.S. persons - **Registration Status:** Any notes issued or to be issued pursuant to the Base Prospectus have not been, and will not be, registered under the Securities Act or the securities laws of any state of the United States or any other jurisdiction[10](index=10&type=chunk) - **Transfer Restrictions:** May not be offered, sold, pledged or otherwise transferred except (1) in accordance with Rule 144A to QIBs or (2) in an offshore transaction to a person that is not a U.S. Person in accordance with Regulation S[10](index=10&type=chunk) - **Viewer Representation:** By accessing the Base Prospectus, viewers are deemed to have represented that they and any customers they represent are not a U.S. person or that they are a QIB[12](index=12&type=chunk) [Electronic Publication Disclaimer](index=2&type=section&id=Electronic%20Publication%20Disclaimer) HSBC Holdings plc disclaims liability for electronic transmission alterations of the Base Prospectus - **Disclaimer:** None of HSBC Holdings plc, its advisers, or affiliates accepts any liability or responsibility whatsoever in respect of any difference between the Base Prospectus made available in electronic format and the original version[15](index=15&type=chunk) - **Risk:** Documents transmitted via electronic medium may be altered or changed during the process of electronic transmission[15](index=15&type=chunk) [Signature](index=3&type=section&id=Signature) Aileen Taylor, Group Company Secretary, signed the report on March 31, 2023, per the Securities Exchange Act of 1934 [Authorized Signatory](index=3&type=section&id=Authorized%20Signatory) Aileen Taylor, Group Company Secretary, signed the report on March 31, 2023, per the Securities Exchange Act of 1934 - **Signatory:** Aileen Taylor[18](index=18&type=chunk) - **Title:** Group Company Secretary and Chief Governance Officer[18](index=18&type=chunk) - **Date:** 31 March 2023[18](index=18&type=chunk) - **Authority:** Pursuant to the requirements of the Securities Exchange Act of 1934[17](index=17&type=chunk)

[Strategic Report](index=8&type=section&id=Strategic%20report) This section provides an overview of HSBC's strategic priorities, financial performance highlights, and key risk management approaches [Cautionary Statements](index=10&type=section&id=Cautionary%20statement%20regarding%20forward-looking%20statements) Forward-looking statements in this report are subject to inherent risks from economic, geopolitical, regulatory, and ESG factors - Forward-looking statements are subject to numerous risks, including economic downturns, geopolitical tensions like the Russia-Ukraine war and China-US relations, regulatory changes, and the effectiveness of ESG risk mitigation[33](index=33&type=chunk) - HSBC-specific risks include the ability to manage loan losses, achieve strategic and ESG targets, model limitations in high inflation environments, cyber-attack threats, and the ability to recruit and retain skilled personnel[34](index=34&type=chunk) - ESG and climate-related data, metrics, and forward-looking statements are highlighted as having additional inherent risk due to evolving methodologies, data quality issues, and the uncertain nature of climate change, which may require future recalculations and amendments to disclosures[36](index=36&type=chunk)[37](index=37&type=chunk) [Highlights](index=15&type=section&id=Highlights) HSBC achieved strong adjusted profit and strategic progress in 2022, driven by net interest income growth and cost discipline 2022 Financial Performance vs 2021 | Metric | 2022 | Change vs 2021 | | :--- | :--- | :--- | | **Reported Profit Before Tax** | $17.5 billion | -$1.4 billion | | **Adjusted Profit Before Tax** | $24.0 billion | +$3.4 billion | | **Reported Revenue** | $51.7 billion | +4% | | **Net Interest Margin (NIM)** | 1.48% | +28 bps | | **Expected Credit Losses (ECL)** | $3.6 billion charge | vs $0.9 billion release in 2021 | | **CET1 Capital Ratio** | 14.2% | -1.6 ppt | - Strategic actions in 2022 included the planned sale of the Canadian banking business, surpassing the gross RWA reduction target with **$128 billion** in cumulative reductions, and achieving **$5.6 billion** in gross cost savings since the program began in 2020[69](index=69&type=chunk) - The company has set interim 2030 financed emissions targets for eight sectors and has provided and facilitated **$210.7 billion** in sustainable finance and investment since January 2020[69](index=69&type=chunk) - HSBC is targeting a Return on Tangible Equity (RoTE) of at least **12%** for 2023 onwards and establishing a dividend payout ratio of **50%** for 2023 and 2024. A special dividend of **$0.21 per share** will be considered upon completion of the Canada sale[67](index=67&type=chunk) [Who We Are](index=17&type=section&id=Who%20we%20are) HSBC is a global financial services organization serving 39 million customers across 62 markets, structured around three core businesses and a four-pillar strategy - HSBC serves around **39 million customers** in **62 countries and territories**, with total assets of **$3.0 trillion**[77](index=77&type=chunk)[79](index=79&type=chunk)[81](index=81&type=chunk) - The company's strategy is built on four key pillars: Focus on our strengths, Digitise at scale, Energise for growth, and Transition to net zero[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) - Operations are structured into three global businesses: Wealth and Personal Banking (WPB), Commercial Banking (CMB), and Global Banking and Markets (GBM)[82](index=82&type=chunk)[83](index=83&type=chunk)[85](index=85&type=chunk) [Group Chairman's Statement](index=21&type=section&id=Group%20Chairman%27s%20statement) The Chairman highlights strong adjusted profit, strategic transformation completion, and commitment to shareholder returns, while reaffirming the current strategy - Adjusted profit before tax was **$24.0 billion**, an increase of **$3.4 billion** from 2021, while reported profit before tax was **$17.5 billion**, impacted by a **$2.4 billion** impairment on the planned sale of the French retail operations[99](index=99&type=chunk) - The Board is committed to higher capital distributions, setting a dividend payout ratio of **50%** for 2023 and 2024, and intends to restore quarterly dividends from Q1 2023[100](index=100&type=chunk) - A special dividend of **$0.21 per share** will be considered as a priority use of proceeds following the completion of the planned sale of the Canadian banking business, expected in late 2023[101](index=101&type=chunk) - The Board has examined alternative structural options and concluded they would not deliver increased shareholder value, reaffirming that the current strategy is working effectively[106](index=106&type=chunk)[109](index=109&type=chunk) [Group Chief Executive's Review](index=23&type=section&id=Group%20Chief%20Executive%27s%20review) The CEO reviews the completed transformation, highlighting strategic repositioning, RWA reductions, strong asset growth, and improved financial targets - The transformation program has structurally repositioned the business by exiting non-strategic assets in the Americas and Europe, including the US mass market retail business and the planned sales of operations in France and Canada[122](index=122&type=chunk) - The bank exceeded its RWA reduction target, achieving cumulative savings of **$128 billion**, which enabled capital reallocation towards Asia and the Middle East[123](index=123&type=chunk) - Significant investment in growth areas, particularly Asian Wealth, attracted **$80 billion** of net new invested assets in 2022, of which **$59 billion** were in Asia[125](index=125&type=chunk)[132](index=132&type=chunk) 2022 Financial Performance Summary | Metric | 2022 Value | | :--- | :--- | | **Adjusted Profit Before Tax** | $24.0 billion | | **Reported Profit Before Tax** | $17.5 billion | | **Reported Return on Tangible Equity (RoTE)** | 9.9% | | **Adjusted Revenue Growth** | 18% | - HSBC is on track to achieve a RoTE of at least **12%** from 2023 onwards and has set a dividend payout ratio of **50%** for 2023 and 2024, with consideration of buy-backs brought forward to Q1 2023[140](index=140&type=chunk)[142](index=142&type=chunk) [Our Strategy](index=26&type=section&id=Our%20strategy) HSBC's four-pillar strategy drives portfolio reshaping, capital reallocation to Asia, RWA reductions, and aims for over 12% RoTE from 2023 - The strategy is built on four pillars: Focus on our strengths, Digitise at scale, Energise for growth, and Transition to net zero[158](index=158&type=chunk) Strategic Transformation Progress | Metric | Achievement | | :--- | :--- | | **Gross RWA Reduction** | $128 billion (Target: >$110 billion) | | **Capital Allocation to Asia** | 47% of Group tangible equity | | **Technology Investment (2022)** | $6.1 billion (up from $5.1 billion in 2019) | - The company has reshaped its portfolio through strategic exits in Europe and the Americas, including the US mass market retail business and planned sales of operations in France, Canada, Russia, and Greece[150](index=150&type=chunk) - In 2022, Wealth and Personal Banking attracted **$80 billion** in net new invested assets, with **$59 billion** from Asia. Commercial Banking's fee income grew **8%** to **$3.7 billion**[160](index=160&type=chunk)[164](index=164&type=chunk)[166](index=166&type=chunk) - The strategy is expected to deliver a Return on Tangible Equity (RoTE) of over **12%** from 2023 onwards, with substantial distribution capacity for 2023 and 2024[184](index=184&type=chunk) [ESG Overview](index=31&type=section&id=ESG%20overview) HSBC's ESG strategy focuses on net zero transition, inclusion, and responsible conduct, with progress in financed emissions targets and diversity - The ESG strategy is focused on three pillars: Transition to net zero, Build inclusion and resilience, and Act responsibly[187](index=187&type=chunk) Key ESG Metrics and Targets (2022 Performance) | Metric | 2022 Status | Target/Ambition | | :--- | :--- | :--- | | **Financed Emissions Targets** | 8 sectors | Achieve net zero in financed emissions by 2050 | | **Sustainable Finance & Investment** | $210.7 billion (cumulative) | $750 billion to $1 trillion by 2030 | | **Net Zero in Own Operations** | 58.5% GHG reduction | Achieve net zero by 2030 | | **Women in Senior Leadership** | 33.3% | 35% by 2025 | | **Black Colleagues in Senior Leadership** | 37% increase from 2020 | Double the number between 2020 and 2025 | - HSBC has made disclosures consistent with TCFD recommendations but notes exceptions, such as not setting 2025 financed emissions targets (focusing on 2030) and limitations in fully quantifying the financial impacts of climate-related risks and opportunities due to data challenges[221](index=221&type=chunk)[223](index=223&type=chunk) - The company is actively supporting customers facing rising cost of living pressures, particularly in the UK, through digital resources, financial health checks, and tailored support like temporary reductions in overdraft costs and early closure of fixed-rate savers without penalty[199](index=199&type=chunk)[201](index=201&type=chunk)[202](index=202&type=chunk) [Remuneration](index=41&type=section&id=Remuneration) HSBC's 2022 remuneration reflects strong performance with a reduced variable pay pool and targeted fixed pay increases for junior staff Executive Director Remuneration (2022 vs 2021) | Director (£'000) | 2022 Total | 2021 Total | | :--- | :--- | :--- | | **Noel Quinn (Group CEO)** | 5,562 | 4,895 | | **Ewen Stevenson (Group CFO)** | 4,701 | 3,665 | - The overall variable pay pool for Group employees was set at **$3,359 million** for 2022, compared to **$3,495 million** in 2021[261](index=261&type=chunk) - For 2023, fixed pay increases were targeted at junior and middle management colleagues to address inflation, with an overall Group increase of **5.5%**. Most senior leaders, including executive Directors, received no fixed pay increase[263](index=263&type=chunk) - The company provided specific support for cost of living pressures, including a **£1,500** one-off payment to nearly **17,000** junior colleagues in the UK and regular fixed pay adjustments in high-inflation markets like Argentina and Türkiye[266](index=266&type=chunk) [Financial Overview](index=43&type=section&id=Financial%20overview) HSBC's 2022 financial performance saw adjusted profit growth driven by rising interest rates, despite reported profit impacts from impairments and ECLs Key Financial Metrics (2022 vs 2021) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | **Reported Profit Before Tax** | $17,528 million | $18,906 million | | **Adjusted Profit Before Tax** | $24,010 million | $20,603 million | | **Reported Profit After Tax** | $16,670 million | $14,693 million | | **Return on Avg. Tangible Equity (RoTE)** | 9.9% | 8.3% | | **Net Interest Margin (NIM)** | 1.48% | 1.20% | | **Basic Earnings Per Share (EPS)** | $0.75 | $0.62 | | **Common Equity Tier 1 (CET1) Ratio** | 14.2% | 15.8% | - Reported profit before tax decreased by **7%** to **$17.5 billion**, mainly due to a **$2.4 billion** impairment on the planned sale of French retail operations and a **$3.6 billion** ECL charge, contrasting with a **$0.9 billion** release in 2021[271](index=271&type=chunk)[291](index=291&type=chunk) - Adjusted profit before tax grew **17%** to **$24.0 billion**, driven by an **18%** increase in adjusted revenue to **$55.3 billion** from higher net interest income[311](index=311&type=chunk)[313](index=313&type=chunk) - The company achieved its financial targets by delivering a RoTE of **9.9%**, surpassing its RWA reduction goal with **$128 billion** in cumulative saves, and containing adjusted operating expense growth to **1%**[273](index=273&type=chunk)[274](index=274&type=chunk)[277](index=277&type=chunk) [Global Businesses](index=51&type=section&id=Global%20businesses) HSBC's global businesses, WPB, CMB, and GBM, delivered strong adjusted profit growth in 2022, driven by diverse revenue streams Adjusted Profit Before Tax by Global Business (2022 vs 2021) | Global Business | 2022 ($m) | 2021 ($m) | Change (%) | | :--- | :--- | :--- | :--- | | **Wealth and Personal Banking** | 8,533 | 6,721 | +27% | | **Commercial Banking** | 7,716 | 6,210 | +24% | | **Global Banking and Markets** | 5,445 | 5,045 | +8% | | **Corporate Centre** | 2,316 | 2,627 | -12% | [Wealth and Personal Banking (WPB)](index=51&type=section&id=Wealth%20and%20Personal%20Banking) WPB's adjusted profit rose 27% to $8.5 billion, driven by strong Personal Banking net interest income and $80 billion in new invested assets WPB Adjusted Financial Performance (2022) | Metric | Value ($m) | Change vs 2021 | | :--- | :--- | :--- | | **Profit Before Tax** | 8,533 | +27% | | **Net Operating Income** | 24,367 | +16% | | **ECL Charge** | (1,137) | vs $213 release | | **Operating Expenses** | 14,726 | +2% | - Personal Banking revenue grew **37%** to **$15.9 billion**, driven by a **$4.4 billion** increase in net interest income due to rising interest rates and balance sheet growth in the UK, Asia, Mexico, and the Middle East[339](index=339&type=chunk) - Wealth revenue decreased by **8%** to **$8.1 billion**, impacted by a **$1.4 billion** adverse movement in market impacts in life insurance manufacturing. However, the business attracted **$80 billion** in net new invested assets, a **25%** increase from 2021[333](index=333&type=chunk)[339](index=339&type=chunk)[343](index=343&type=chunk) [Commercial Banking (CMB)](index=54&type=section&id=Commercial%20Banking) CMB's adjusted profit increased 24% to $7.7 billion, driven by strong revenue growth across products and regions, especially GPS CMB Adjusted Financial Performance (2022) | Metric | Value ($m) | Change vs 2021 | | :--- | :--- | :--- | | **Profit Before Tax** | 7,716 | +24% | | **Net Operating Income** | 16,215 | +29% | | **ECL Charge** | (1,858) | vs $225 release | | **Operating Expenses** | 6,642 | +1% | - Global Payments Solutions (GPS) revenue grew by over **100%** to **$6.8 billion**, driven by a **149%** increase in net interest income from higher rates and a **19%** rise in fee income[349](index=349&type=chunk)[352](index=352&type=chunk) - Global Trade and Receivables Finance (GTRF) revenue increased by **14%** to **$2.1 billion**, supported by a **17%** growth in average balances at improved margins[349](index=349&type=chunk)[352](index=352&type=chunk) [Global Banking and Markets (GBM)](index=57&type=section&id=Global%20Banking%20and%20Markets) GBM's adjusted profit rose 8% to $5.4 billion, driven by strong GPS and Global Foreign Exchange performance, despite capital markets decline GBM Adjusted Financial Performance (2022) | Metric | Value ($m) | Change vs 2021 | | :--- | :--- | :--- | | **Profit Before Tax** | 5,445 | +8% | | **Net Operating Income** | 15,359 | +10% | | **ECL Charge** | (587) | vs $313 release | | **Operating Expenses** | 9,325 | +1% | - Markets and Securities Services revenue grew **14%**, driven by a **33%** increase in Global Foreign Exchange revenue to **$4.2 billion** due to elevated market volatility and client activity[361](index=361&type=chunk)[368](index=368&type=chunk) - Banking revenue increased **17%**, with Global Payments Solutions (GPS) revenue up **81%** to **$3.1 billion** due to margin growth from rising interest rates. However, Capital Markets and Advisory revenue fell **37%** in line with the reduced global fee pool[361](index=361&type=chunk)[368](index=368&type=chunk) [Corporate Centre](index=60&type=section&id=Corporate%20Centre) Corporate Centre's adjusted profit decreased 12% to $2.3 billion, primarily due to a lower share of profit from associates Corporate Centre Adjusted Financial Performance (2022) | Metric | Value ($m) | Change vs 2021 | | :--- | :--- | :--- | | **Profit Before Tax** | 2,316 | -12% | | **Net Operating Income** | (596) | -29% | | **Share of profit in associates and JVs** | 2,695 | -7% | - The decrease in profit was primarily driven by a **$0.2 billion (7%)** reduction in the adjusted share of profit from associates and joint ventures, mainly from a lower share of profit from Business Growth Fund (BGF) compared to 2021[371](index=371&type=chunk)[372](index=372&type=chunk) [Risk Overview](index=61&type=section&id=Risk%20overview) HSBC's 2022 risk management focused on geopolitical, macroeconomic, and climate risks, maintaining a robust risk appetite framework and stress testing - The primary external risks managed in 2022 were geopolitical tensions, global economic slowdown, and high inflation stemming from the Russia-Ukraine war and supply chain disruptions[379](index=379&type=chunk)[380](index=380&type=chunk) Key Risk Appetite Metrics (2022) | Component | Measure | Risk Appetite | 2022 Performance | | :--- | :--- | :--- | :--- | | **Capital** | CET1 ratio | ≥13.0% | 14.2% | | **ECL (WPB)** | % of advances | ≤0.50% | 0.24% | | **ECL (Wholesale)** | % of advances | ≤0.45% | 0.40% | - Top externally driven risks include geopolitical and macroeconomic risks, technology and cybersecurity, evolving regulations, financial crime, Ibor transition, ESG risks, and digitalization[416](index=416&type=chunk) - Top internally driven risks include workforce capability, risks from third-party services, model risk, data risk, and change execution risk[416](index=416&type=chunk) [Environmental, Social and Governance ('ESG') Review](index=65&type=section&id=Environmental%2C%20social%20and%20governance%20%28%27ESG%27%29%20review) This section provides a comprehensive review of HSBC's environmental, social, and governance strategies and performance [Our Approach to ESG](index=67&type=section&id=Our%20approach%20to%20ESG) HSBC's ESG approach integrates into its strategy, focusing on net zero, inclusion, and responsible conduct, with robust reporting standards - HSBC's ESG strategy is built on three pillars: Transition to net zero, Building inclusion and resilience, and Acting responsibly[422](index=422&type=chunk)[425](index=425&type=chunk)[428](index=428&type=chunk) - Key progress includes facilitating **$210.7 billion** in sustainable finance, updating energy and thermal coal policies, setting financed emissions targets for eight sectors, and achieving **33.3%** female representation in senior leadership[431](index=431&type=chunk) - The company identifies material ESG topics for reporting through stakeholder engagement and consideration of standards like TCFD, SASB, and the Hong Kong Stock Exchange's ESG Guide[433](index=433&type=chunk)[434](index=434&type=chunk) - Specific ESG metrics, including financed emissions, sustainable finance progress, and operational GHG emissions, are subject to independent third-party limited assurance to enhance data quality and transparency[443](index=443&type=chunk) [Environmental](index=70&type=section&id=Environmental) HSBC's environmental strategy targets net zero by 2050, setting financed emissions targets and updating policies, despite data challenges - HSBC has set interim 2030 targets for on-balance sheet financed emissions for eight sectors, including oil and gas, power and utilities, cement, iron, steel and aluminium, aviation, automotive, thermal coal power, and thermal coal mining[477](index=477&type=chunk)[487](index=487&type=chunk) - The company has updated its energy policy to no longer provide new finance for new oil and gas fields and has expanded its thermal coal phase-out policy[461](index=461&type=chunk)[474](index=474&type=chunk) - HSBC acknowledges significant reporting challenges, including data quality limitations, evolving methodologies, and the need for enhanced governance, which have led to the deferral of disclosures on facilitated emissions and thermal coal exposures[462](index=462&type=chunk)[468](index=468&type=chunk)[470](index=470&type=chunk) - A Group-wide climate transition plan will be published in 2023, detailing the strategy, targets, and how these will be embedded into processes, governance, and capabilities[473](index=473&type=chunk) [Social](index=73&type=section&id=Social) HSBC's social strategy focuses on inclusion and resilience for employees, customers, and communities through diversity, well-being, and financial support - HSBC is on track to meet its goal of **35%** women in senior leadership by 2025, having reached **33.3%** in 2022. The number of Black senior leaders has increased by **37%** since 2020[711](index=711&type=chunk)[718](index=718&type=chunk) - Employee engagement remains strong, with a **73%** score in the 2022 Snapshot survey, and the new Inclusion index scored **76%**, both above the financial services benchmark[752](index=752&type=chunk)[728](index=728&type=chunk) - The company is investing in future skills, launching a Sustainability Academy and an Accelerating Wealth Programme in Asia to support strategic priorities[810](index=810&type=chunk)[813](index=813&type=chunk) - To support customer inclusion, HSBC launched a **$1 billion** Female Entrepreneur Fund and introduced processes to help Ukrainian refugees open bank accounts in the UK[834](index=834&type=chunk)[823](index=823&type=chunk) - In 2022, the company donated **$116.8 million** to charitable programs and employees volunteered over **67,000 hours** during work time[843](index=843&type=chunk)[841](index=841&type=chunk) [Governance](index=85&type=section&id=Governance) HSBC maintains high governance standards, focusing on human rights, customer experience, financial crime, data privacy, and tax responsibility - The Board has overall responsibility for ESG strategy, supported by an executive-level ESG Committee. Governance activities are managed through a combination of specialist forums and regular committees[853](index=853&type=chunk)[854](index=854&type=chunk) - In 2022, HSBC reviewed and identified five salient human rights issues inherent to its business: the right to decent work, right to equality, right to privacy, cultural and land rights, and right to dignity and justice[863](index=863&type=chunk) - The company monitors over **1.2 billion** transactions monthly for financial crime, filed over **73,000** suspicious activity reports in 2022, and screens **117 million** customer records monthly for sanctions exposure[928](index=928&type=chunk) - HSBC is committed to data privacy and cybersecurity, with over **97%** of employees completing mandatory cybersecurity training and investment in controls to prevent, detect, and mitigate cyber threats[958](index=958&type=chunk)[971](index=971&type=chunk)[980](index=980&type=chunk) [Financial Review](index=97&type=section&id=Financial%20review) This section provides a detailed analysis of HSBC's financial performance, including key metrics, business segment results, and regulatory disclosures [Financial Summary](index=98&type=section&id=Financial%20summary) HSBC's 2022 financial summary shows increased net interest income, strong adjusted profit, and a robust balance sheet, despite reported profit impacts Consolidated Income Statement Summary (2022 vs 2021) | Metric ($m) | 2022 | 2021 | | :--- | :--- | :--- | | **Net Interest Income** | 32,610 | 26,489 | | **Total Operating Income** | 51,727 | 49,552 | | **ECL Charge/(Release)** | (3,592) | 928 | | **Total Operating Expenses** | (33,330) | (34,620) | | **Profit Before Tax** | 17,528 | 18,906 | | **Profit After Tax** | 16,670 | 14,693 | - Net interest income (NII) increased by **23%** to **$32.6 billion**, and net interest margin (NIM) rose by **28 basis points** to **1.48%**, driven by global interest rate hikes[1020](index=1020&type=chunk)[1021](index=1021&type=chunk) - A net ECL charge of **$3.6 billion** was recorded, reflecting charges related to mainland China's commercial real estate sector and heightened economic uncertainty, compared to a **$0.9 billion** net release in 2021[1039](index=1039&type=chunk)[1040](index=1040&type=chunk) - Total assets remained stable at **$3.0 trillion**. Loans and advances to customers decreased by **$121 billion** to **$925 billion**, primarily due to the reclassification of **$81 billion** of balances to held for sale (Canada and France retail)[1066](index=1066&type=chunk)[1071](index=1071&type=chunk) - The implementation of IFRS 17 'Insurance Contracts' from January 2023 is expected to reduce the earnings of the insurance business by approximately **two-thirds** on transition[1004](index=1004&type=chunk) [Global Businesses and Geographical Regions](index=119&type=section&id=Global%20businesses%20and%20geographical%20regions) This section details HSBC's financial performance by global business and geographical region, highlighting Asia's contribution and Europe's loss Adjusted Profit Before Tax by Global Business (2022) | Global Business | Adjusted PBT ($m) | | :--- | :--- | | **Wealth and Personal Banking** | 8,533 | | **Commercial Banking** | 7,716 | | **Global Banking and Markets** | 5,445 | | **Corporate Centre** | 2,316 | | **Total** | 24,010 | Reported Profit Before Tax by Geographical Region (2022) | Region | Reported PBT ($m) | | :--- | :--- | | **Asia** | 13,724 | | **Middle East and North Africa** | 1,700 | | **North America** | 1,666 | | **Latin America** | 853 | | **Europe** | (415) | - Significant items impacting reported results included a **$2.8 billion** charge for disposals and acquisitions (mainly the French retail impairment) and a **$3.1 billion** charge for restructuring costs[312](index=312&type=chunk) [Reconciliation of Alternative Performance Measures](index=138&type=section&id=Reconciliation%20of%20alternative%20performance%20measures) This section reconciles key alternative performance measures, such as RoTE, to reported IFRS figures, detailing adjustments for non-GAAP metrics RoTE Calculation (2022) | Metric | Value ($m) | | :--- | :--- | | **Profit attributable to ordinary shareholders** | 14,822 | | *Adjustments for goodwill impairment & PVIF* | 267 | | **Profit for RoTE calculation** | 15,089 | | **Average ordinary shareholders' equity** | 170,796 | | *Adjustment for goodwill, PVIF & intangibles* | (17,935) | | **Average tangible equity** | 152,861 | | **Return on average tangible equity (RoTE)** | **9.9%** | - Return on average tangible equity (RoTE) excluding significant items was **11.6%** in 2022, compared to **9.5%** in 2021[1214](index=1214&type=chunk) Net Asset Value per Share (2022) | Metric | Value ($) | | :--- | :--- | | **Net asset value per ordinary share** | 8.50 | | **Tangible net asset value per ordinary share** | 7.57 | [Other Information](index=141&type=section&id=Other%20information) This section covers governance, regulatory disclosures, internal controls, and compliance with various global financial regulations - Management concluded that the Group's disclosure controls and internal controls over financial reporting were effective as of December 31, 2022[1225](index=1225&type=chunk)[1228](index=1228&type=chunk) - HSBC Group's lead consolidated regulator is the UK's Prudential Regulation Authority (PRA), with significant supervision also from the FCA (UK), HKMA (Hong Kong), ECB (Europe), and FRB/OCC/FDIC (US)[1234](index=1234&type=chunk)[1235](index=1235&type=chunk)[1250](index=1250&type=chunk) - The Group is subject to extensive prudential regulations, including the UK CRR, Basel 3.1 implementation (phased, with final elements expected in 2025), and MREL requirements for resolution planning[1245](index=1245&type=chunk)[1246](index=1246&type=chunk)[1247](index=1247&type=chunk) - Disclosures pursuant to Section 13(r) of the Securities Exchange Act detail legacy guarantees involving Iranian banks, a pension scheme for employees of a sanctioned Iranian bank, and other minor transactions, with no measurable gross revenue reported for most activities in 2022[1334](index=1334&type=chunk)[1336](index=1336&type=chunk)[1341](index=1341&type=chunk) [Risk Review](index=150&type=section&id=Risk%20review) This section provides a comprehensive review of HSBC's risk management approach, top risks, and material banking risks [Our Approach to Risk](index=151&type=section&id=Our%20approach%20to%20risk) HSBC's risk approach is based on a three-lines-of-defence model, guided by risk appetite and robust stress testing for resilience - The risk management approach is guided by principles for financial position (strong capital), business practice (no appetite for customer detriment or inappropriate market conduct), and operating model (sustainable earnings)[2043](index=2043&type=chunk)[2044](index=2044&type=chunk) - The risk management framework is built on a three-lines-of-defence model: 1) Risk owners in the business, 2) The independent Group Risk and Compliance function, and 3) Global Internal Audit[2050](index=2050&type=chunk)[2066](index=2066&type=chunk) - Stress testing is a core component, used to understand vulnerabilities, inform capital and liquidity planning, and support recovery and resolution plans[2070](index=2070&type=chunk)[2071](index=2071&type=chunk) [Top and Emerging Risks](index=154&type=section&id=Top%20and%20emerging%20risks) HSBC manages top and emerging risks, including geopolitical, macroeconomic, cybersecurity, and internal operational challenges - Key externally driven risks include: Geopolitical and macroeconomic instability (Russia-Ukraine war, inflation, China property sector), Technology and cybersecurity threats, complex Evolving regulatory environments, and Financial crime[2079](index=2079&type=chunk)[2099](index=2099&type=chunk)[2101](index=2101&type=chunk) - Key internally driven risks include: Workforce capability and retention challenges, risks from third-party service providers, Model risk exacerbated by economic volatility, Data risk from increasing data volumes, and Change execution risk for strategic initiatives[2139](index=2139&type=chunk)[2144](index=2144&type=chunk)[2145](index=2145&type=chunk) - The Russia-Ukraine war has led to significant sanctions, commodity price increases, and economic slowdown, while China's property sector and US-China tensions create further uncertainty[2079](index=2079&type=chunk)[2083](index=2083&type=chunk)[2088](index=2088&type=chunk) - Mitigating actions involve close monitoring of geopolitical events, stress testing portfolios, investing in technology and cyber defenses, enhancing third-party risk management, and continuous engagement with regulators[2097](index=2097&type=chunk)[2100](index=2100&type=chunk)[2103](index=2103&type=chunk) [Risk Factors](index=161&type=section&id=Risk%20factors) This section details key risk factors, including macroeconomic, geopolitical, regulatory, operational, and business-specific challenges - **Macroeconomic & Geopolitical:** The Russia-Ukraine war and COVID-19 pandemic continue to impact global economies, causing inflation, rising interest rates, and supply chain disruptions, which may increase ECLs and affect financial results[2159](index=2159&type=chunk)[2160](index=2160&type=chunk) - **Regulatory & Legal:** The Group is subject to numerous, evolving regulations (e.g., Basel 3.1, UK Consumer Duty, ESG rules) and faces risks of significant fines and litigation. The transition from IBOR to new benchmark rates presents legal, operational, and market risks[2225](index=2225&type=chunk)[2228](index=2228&type=chunk)[2232](index=2232&type=chunk) - **Operational & Technology:** The business is highly dependent on IT systems and faces significant cybersecurity threats. Failures could lead to service disruption and data breaches. The company also faces risks from model limitations, third-party suppliers, and data privacy controls[2251](index=2251&type=chunk)[2254](index=2254&type=chunk)[2258](index=2258&type=chunk) - **Business & Financial:** Inherent risks include reputational damage, deterioration in borrower credit quality, market fluctuations affecting income and portfolios, and the uncertainty of accounting judgements and estimates, particularly for ECLs and goodwill impairment[2281](index=2281&type=chunk)[2298](index=2298&type=chunk)[2304](index=2304&type=chunk) [Areas of Special Interest](index=174&type=section&id=Areas%20of%20special%20interest) This section highlights the ongoing risks from the COVID-19 pandemic, particularly its economic impact in mainland China and Hong Kong - The impact of the COVID-19 pandemic remains a risk, particularly in mainland China and Hong Kong, where public health restrictions adversely affected economic activity for much of 2022[2318](index=2318&type=chunk)[2319](index=2319&type=chunk) - China's relaxation of COVID-19 restrictions in late 2022 could boost global growth but also poses risks of renewed inflation and potential new virus variants, which could dampen confidence and activity[2320](index=2320&type=chunk) [Our Material Banking Risks](index=174&type=section&id=Our%20material%20banking%20risks) HSBC identifies and manages material banking risks, including credit, treasury, market, climate, resilience, regulatory, financial crime, and model risks - Key banking risks include Credit, Treasury, Market, Climate, Resilience, Regulatory Compliance, Financial Crime, and Model Risk[2322](index=2322&type=chunk) - Credit risk arises from lending and is managed via a framework of policies, limits, and risk rating systems[2322](index=2322&type=chunk) - Treasury risk involves capital, liquidity, and funding, managed through risk appetite metrics, stress testing, and control of resources[2322](index=2322&type=chunk) - Climate risk is broken down into physical, transition, and greenwashing risks, and is managed through specific policies and stress testing[2324](index=2324&type=chunk) - Insurance-specific risks include Financial Risk (asset-liability mismatch) and Insurance Risk (underwriting losses)[2326](index=2326&type=chunk) [Corporate Governance Report](index=271&type=section&id=Corporate%20governance%20report) This section details HSBC's corporate governance framework, Board structure, activities, effectiveness, and remuneration practices [The Board and Senior Management](index=272&type=section&id=The%20Board%20and%20Senior%20management) HSBC's Board and senior management comprise diverse, experienced members responsible for strategy and operations, with a focus on diversity - The Board is led by Group Chairman Mark E Tucker and includes Group CEO Noel Quinn and, as of January 2023, Group CFO Georges Elhedery[1354](index=1354&type=chunk)[1356](index=1356&type=chunk)[1357](index=1357&type=chunk) - The Board is composed of **12 members** (as of Dec 31, 2022), with **67%** male and **33%** female representation[1419](index=1419&type=chunk)[1420](index=1420&type=chunk) - The Board meets the Parker Review target with three members (**25%**) from a minority ethnic group[1423](index=1423&type=chunk)[1418](index=1418&type=chunk) - Senior management, including the Group Executive Committee, supports the Group CEO in implementing strategy and managing day-to-day business[1395](index=1395&type=chunk) [Governance Framework](index=280&type=section&id=How%20we%20are%20governed) HSBC's governance framework ensures high standards, with the Board overseeing strategy and risk, supported by committees and a subsidiary framework - The Board is responsible for strategy, risk appetite, and overall corporate governance, with day-to-day management delegated to the Group Chief Executive[1427](index=1427&type=chunk)[1434](index=1434&type=chunk) - The Board delegates specific oversight to four main committees: Nomination & Corporate Governance, Group Audit, Group Risk, and Group Remuneration[1454](index=1454&type=chunk) - A subsidiary accountability framework ensures high governance standards are maintained across the Group's six principal subsidiaries, which oversee regional operations[1439](index=1439&type=chunk)[1440](index=1440&type=chunk)[1441](index=1441&type=chunk) - In 2022, José Antonio Meade Kuribreña was appointed as the designated non-executive Director for workforce engagement to strengthen the employee voice at the Board level[1480](index=1480&type=chunk) [Board Activities in 2022](index=287&type=section&id=Board%20activities%20during%202022) In 2022, the Board focused on strategic progress, ESG, financial planning, risk frameworks, and extensive shareholder engagement - The Board actively monitored the Group's strategy, including the conclusion of the transformation program and progress on the four strategic pillars[1503](index=1503&type=chunk)[1504](index=1504&type=chunk) - Significant time was dedicated to ESG, with the Board retaining overall responsibility for the strategy, overseeing reviews of net-zero policies and financed emissions target setting[1506](index=1506&type=chunk)[1507](index=1507&type=chunk) - The Board approved a dividend policy targeting a **50%** payout ratio for 2023 and 2024, reflecting confidence in the Group's returns trajectory[1510](index=1510&type=chunk) - Key risk and regulatory frameworks were reviewed, including the Group's risk appetite, ICAAP, ILAAP, and the resolvability assessment framework[1513](index=1513&type=chunk) - Board members engaged extensively with shareholders, holding over **100 meetings** with investors to discuss financial performance, strategy, and geopolitical risks[1524](index=1524&type=chunk) [Board Effectiveness and Performance](index=289&type=section&id=Board%20and%20committee%20effectiveness%2C%20performance%20and%20accountability) The 2022 internal evaluation found the Board effective, with recommendations for enhanced strategy tracking and stakeholder engagement - The 2022 internal evaluation found the Board and its committees to be operating effectively, with strong leadership from the Chairs[1530](index=1530&type=chunk)[1532](index=1532&type=chunk) - Key areas for focus in 2023 include enhancing the tracking of strategy execution, clarifying ESG and technology deliverable timelines, and increasing focus on customer engagement[1532](index=1532&type=chunk)[1539](index=1539&type=chunk) - Progress was made on 2021 actions, including strengthening Board composition, appointing a dedicated non-executive Director for workforce engagement, and holding joint committee meetings[1536](index=1536&type=chunk)[1538](index=1538&type=chunk) - An externally facilitated evaluation of the Board and its committees is planned for 2023, in line with best practice[1529](index=1529&type=chunk) [Board Committees](index=291&type=section&id=Board%20committees) Board committees (Nomination, Audit, Risk, Remuneration) provided oversight on succession, financial reporting, risk management, and collaborated on key strategic areas - **Nomination & Corporate Governance Committee:** Focused on Board succession, appointing a new Group CFO and a new independent non-executive Director to strengthen Asia and banking experience. It also established a designated non-executive Director role for workforce engagement[1544](index=1544&type=chunk)[1546](index=1546&type=chunk)[1548](index=1548&type=chunk) - **Group Audit Committee (GAC):** Oversaw financial reporting, internal controls, and regulatory reporting assurance. A key activity was managing the statutory audit tender, which concluded with a recommendation to reappoint PwC for the 2025 year-end[1582](index=1582&type=chunk)[1585](index=1585&type=chunk)[1601](index=1601&type=chunk) - **Group Risk Committee (GRC):** Monitored significant geopolitical and macroeconomic risks, including the Russia-Ukraine war and rising inflation. It reviewed the Group's risk appetite, stress tests, and progress on the Resolvability Assessment Framework[1669](index=1669&type=chunk)[1671](index=1671&type=chunk) - The GAC and GRC held joint meetings with the Technology Governance Working Group to ensure coordinated oversight on critical areas like the 'Finance on the Cloud' transformation program and the Group's data strategy[1639](index=1639&type=chunk)[1640](index=1640&type=chunk) [Directors' Remuneration Report](index=308&type=section&id=Directors%27%20remuneration%20report) This report details the 2022 Directors' remuneration, reflecting strong performance, a reduced variable pay pool, and targeted fixed pay increases - The total Group variable pay pool for 2022 was **$3,359 million**, slightly down from **$3,495 million** in 2021[1706](index=1706&type=chunk) 2022 Executive Director Single Figure of Remuneration | Director | Total Remuneration (£'000) | Annual Incentive (£'000) | | :--- | :--- | :--- | | **Noel Quinn (Group CEO)** | 5,562 | 2,164 | | **Ewen Stevenson (Group CFO)** | 4,701 | 1,091 | - The Committee applied a downward risk and compliance adjustment of **5%** for the Group CEO and **15%** for the Group CFO to their annual incentive outcomes due to specific capital management matters[1767](index=1767&type=chunk) - For 2023, there will be no fixed pay increases for executive Directors. Fixed pay increases averaging **5.5%** across the Group were targeted at junior and middle management to address cost of living pressures[1709](index=1709&type=chunk)[1725](index=1725&type=chunk) - The TSR peer group for the 2023-2025 LTI award was updated to include more Asian peers (Bank of China HK, China Merchants Bank, OCBC) to better reflect the Group's strategic focus[1722](index=1722&type=chunk)[1784](index=1784&type=chunk) [Financial Statements](index=346&type=section&id=Financial%20statements) This section presents the consolidated financial statements of HSBC Holdings plc and its subsidiaries [Additional Information](index=443&type=section&id=Additional%20information) This section provides supplementary information relevant to the financial report

HSBC Holdings PLC (NYSE:HSBC) Q4 2022 Earnings Conference Call February 21, 2023 3:30 AM ET Company Participants Noel Quinn - Group CEO Georges Elhedery - Group CFO Richard O'Connor - Global Head, IR Conference Call Participants Martin Leitgeb - Goldman Sachs Group Amandeep Rakkar - Barclays Bank Andrew Coombs - Citigroup Omar Keenan - Crédit Suisse Jason Napier - UBS Guy Stebbings - BNP Paribas Exane Tom Rayner - Numis Securities Manus Costello - Bernstein Autonomous Operator Good morning, ladies and gentl ...

HSBC Holdings plc (NYSE:HSBC) Q3 2022 Earnings Conference Call October 25, 2022 3:30 AM ET Company Participants Noel Quinn - Group Chief Executive Officer Ewen Stevenson - Group Chief Financial Officer Conference Call Participants Omar Keenan - Credit Suisse Robert Noble - Deutsche Bank Joseph Dickerson - Jefferies Fahed Kunwar - Redburn Yafei Tian - Citigroup Tom Rayner - Numis Manus Costello - Autonomous Research Martin Leitgeb - Goldman Sachs Raul Sinha - J P Morgan Aman Rakkar - Barclays Bank PLC Operat ...

Financial Performance - HSBC Holdings plc reported a net profit of $2.6 billion for Q3 2022, a decrease of $1.7 billion compared to Q3 2021, primarily due to a $2.4 billion impairment related to the planned sale of its French retail banking business[2]. - The adjusted pre-tax profit for Q3 2022 increased by $1 billion to $6.5 billion, reflecting strong growth in net interest income driven by rising interest rates[2]. - The total revenue for the first nine months of 2022 was $36.9 billion, a decrease of 2% year-over-year, impacted by unfavorable currency translation effects[2]. - Total revenue for Q3 2022 was $36,852 million, a decrease of 1.9% compared to $37,563 million in Q3 2021[4]. - Adjusted pre-tax profit for Q3 2022 was $17,182 million, up from $17,046 million in Q3 2021, reflecting a growth of 0.8%[5]. - Net profit for the nine months ended September 30, 2022, was $11,776 million, compared to $12,664 million in the same period of 2021, reflecting a decline of 7.0%[16]. - The company reported a total of $2,676,167 million in financial guarantees as of December 31, 2021, with a second-level credit risk coverage of 22.1%[76]. Revenue and Income Sources - HSBC's adjusted revenue for the first nine months of 2022 increased by 11% to $40 billion, driven by growth in net interest income across all global businesses[2]. - Adjusted revenue for Global Business reached $39,993 million for the nine months ended September 30, 2022, compared to $35,931 million in the same period of 2021, representing an increase of 5.9%[17]. - Wealth Management and Personal Banking segment generated adjusted revenue of $17,208 million, up from $16,017 million year-over-year, reflecting a growth of 7.4%[17]. - Commercial Banking adjusted revenue increased to $11,526 million from $9,436 million, marking a significant rise of 20.0%[17]. - Global Banking and Markets segment reported adjusted revenue of $11,664 million, compared to $10,803 million, an increase of 8.0%[17]. Interest Income and Margins - The net interest margin improved to 1.57%, an increase of 38 basis points year-over-year and 22 basis points quarter-over-quarter[2]. - HSBC expects net interest income for 2022 to reach $32 billion, with a forecast of at least $36 billion for 2023, reflecting the impact of currency depreciation and rising funding costs[2]. - Net interest income was $23.0 billion for the first nine months of 2022, compared to $19.7 billion in the same period of 2021, reflecting an increase in net interest margin to 1.39%[41]. Credit Losses and Provisions - The expected credit loss charge for 2022 is projected to be around 30 basis points of average loans, influenced by macroeconomic factors such as inflation and economic uncertainty[2]. - The expected credit loss for Q3 2022 was a net provision of $1.075 billion, compared to a net reversal of $659 million in Q3 2021, reflecting increased economic uncertainty[22]. - Adjusted expected credit losses for the first nine months were $900 million, compared to a $200 million reversal in the same period of 2021[55]. - The expected credit loss provision for customer loans was $10,433 million, indicating a coverage ratio of 1.1%[75]. Capital and Equity - The common equity tier 1 capital ratio stood at 13.4%, down 20 basis points from Q2 2022, impacted by the reclassification of the French retail banking business[2]. - The total capital ratio was 18.1% as of September 30, 2022, compared to 18.6% as of June 30, 2022[5]. - The total equity attributable to shareholders was $177.659 billion, down from $188.382 billion as of June 30, 2022[48]. - The average return on common equity (ROE) was 8.0% for the nine months ended September 30, 2022, compared to 8.2% in the previous year[16]. Operational Efficiency and Expenses - The adjusted operating expenses for 2022 are expected to be controlled at a level similar to 2021, with a target increase of about 2% for 2023[2]. - The cost-to-income ratio improved to 66.2% from 66.8% year-over-year, indicating better operational efficiency[16]. - The total operating expenses for Q3 2022 remained stable at $7.975 billion, with cost-saving measures offsetting increases due to technology investments[22]. - The company continues to maintain strict cost discipline, targeting a 2% increase in adjusted costs for 2023 compared to 2022[39]. Strategic Initiatives and Future Outlook - HSBC aims to achieve a return on tangible equity of at least 12% starting in 2023, with a target payout ratio of 50% for 2023 and 2024[2]. - The company is exploring the potential sale of its entire stake in HSBC Canada, with no decisions made yet[9]. - HSBC plans to sell its French retail banking business, resulting in a $2.4 billion impairment, with the sale expected to be completed in the second half of 2023[9]. - The company is set to announce a climate transition plan in 2023, detailing its climate strategy and science-based targets for 2030 and 2050[9]. Economic and Market Conditions - HSBC's global economic environment has been negatively impacted by inflation and rising interest rates due to the ongoing effects of the Russia-Ukraine war and the COVID-19 pandemic[9]. - The company is closely monitoring the impact of recent UK economic policies on the British pound and government securities yields, which adds uncertainty to future interest rate movements[9]. - Geopolitical risks from the ongoing Russia-Ukraine war have led to significant sanctions and trade restrictions, impacting financial institutions and businesses globally[68]. - The ongoing COVID-19 pandemic continues to pose risks to economic activity in mainland China, affecting the broader Asian tourism sector and global supply chains[69]. Sustainability and Climate Goals - HSBC is committed to achieving net-zero carbon emissions in its operations and supply chain by 2030, and for its customer portfolio by 2050[70]. - The company is enhancing its climate risk management capabilities and integrating climate risk factors into its governance processes[70]. - HSBC's commitment to reducing financing emissions in oil, gas, and utility sectors is part of its broader climate strategy, which may face challenges due to evolving regulatory expectations[133].