HSBC Holdings PLC (NYSE:HSBC) Q4 2020 Earnings Conference Call February 23, 2021 2:30 AM ET Company Participants Peter Wong - Deputy Chairman & CEO, The Hongkong and Shanghai Banking Corp Ltd Richard O'Connor - Global Head, IR Ewen Stevenson - Group CFO & Executive Director John Hinshaw - Group COO Noel Quinn - Group CEO Nuno Matos - CEO, Europe and Head, Wealth & Personal Banking Division Conference Call Participants Martin Leitgeb - Goldman Sachs Group Adrian Cighi - Crédit Suisse Tom Rayner - Numis Secur ...

HSBC Holdings plc (NYSE:HSBC) Q3 2020 Earnings Conference Call October 27, 2020 3:30 AM ET Company Participants Noel Quinn - Group Chief Executive Ewen Stevenson - Group Chief Financial Officer Conference Call Participants Raul Sinha - JPMorgan Martin Leitgeb - Goldman Sachs Manus Costello - Autonomous Aman Rakkar - Barclays Jason Napier - UBS Edward Firth - KBW Tom Rayner - Numis Guy Stebbings - Exane BNP Paribas Joseph Dickerson - Jefferies Operator This presentation and subsequent discussion may contain ...

Financial Performance - Reported profit before tax (PBT) decreased by $1.8 billion (36%) to $3.1 billion compared to 3Q19[1] - Adjusted PBT decreased by $1.1 billion (21%) to $4.3 billion compared to 3Q19[1] - Adjusted revenue decreased by $1.3 billion (10%) to $12.1 billion compared to 3Q19[11] - Costs decreased by $0.2 billion (3%) to $7.4 billion compared to 3Q19[11] - Expected credit losses (ECL) decreased by $3.2 billion (80%) to $0.8 billion compared to 2Q20[11, 27] Capital and Restructuring - CET1 ratio increased by 0.6 percentage points to 15.6% compared to 2Q20[10, 11] - Customer deposits increased by $164 billion (12%) to $1.6 trillion compared to 3Q19[1, 11] - $41 billion of risk-weighted assets (RWA) saves have been delivered year-to-date (YTD)[4] - The company expects to exceed its original FY22 targets of $100 billion of gross RWA reductions[1, 8] Regional Focus - Deposits in Asia are up 7% year-over-year to $732 billion[5] - Loans in Asia are broadly stable year-over-year at $484 billion[5] - Hong Kong's 3Q20 adjusted ECL is down 49% year-over-year to $0.1 billion[5]

Financial Performance - Adjusted profit after tax for the first half of 2020 was $3.1 billion, down from $9.9 billion in the first half of 2019, representing a decline of 68.8%[10] - The reported net profit after tax for the first half of 2020 decreased by 69% to $3.1 billion, reflecting an increase in expected credit losses and a decrease in revenue[13] - The reported revenue for the first half of 2020 fell by 9% to $26.7 billion, impacted by declining interest rates and adverse market conditions affecting life insurance product business[13] - Adjusted pre-tax profit for the first half of 2020 was $5,635 million, down from $27,815 million in the first half of 2019, representing a decline of 79.8%[18] - The reported pre-tax profit for the first half of 2020 was $4.3 billion, a decrease of 65% compared to the same period in 2019[42] - The total operating income for the first half of 2020 was $31,147 million, down 18.2% from $38,032 million in the first half of 2019[141] - The company reported a significant decline in adjusted operating profit, which was $4.7 billion, down $6.3 billion or 57% from the previous year[63] - The company reported a significant impact from restructuring costs, totaling $49 million in the first half of 2020[195] Credit Losses and Provisions - The expected credit loss provisions increased by $5.7 billion to $6.9 billion due to the COVID-19 pandemic and deteriorating economic outlook[15] - Total expected credit losses for the first half of 2020 amounted to $6.9 billion, significantly higher than $1.1 billion in the same period of 2019[44] - The expected credit losses and other credit impairment charges increased to $6,858 million for the first half of 2020, compared to $1,140 million in the same period of 2019[141] - The expected credit loss ratio for retail business was 1.08%, exceeding the target of 0.50%[117] - The company anticipates expected credit loss provisions could range from $8 billion to $13 billion for 2020, reflecting significant uncertainty due to the ongoing impact of the COVID-19 pandemic[148] Revenue and Income Trends - The reported revenue for Q2 2020 was $13.1 billion, a decrease of $1.9 billion or 13% compared to Q2 2019, influenced by the non-recurrence of prior year gains[59] - Adjusted revenue for the first half of 2020 was $26.5 billion, a decrease of $1.3 billion or 5% compared to the first half of 2019, impacted by declines in wealth management and personal banking, as well as commercial banking[65] - The company experienced a significant decrease in revenue compared to the same period in 2019, with a decline of approximately 10%[170] - The company reported a significant increase in credit pressure due to the unprecedented global economic slowdown caused by the COVID-19 pandemic, leading to enhanced monitoring activities at the group level[135] Customer Support and Assistance - HSBC provided over $27 billion in loan, credit card, and mortgage payment deferral arrangements for individual customers during the pandemic[11] - The company approved over 700,000 personal customer repayment deferrals in the first half of 2020[26] - HSBC provided over $52 billion in financial support to more than 172,000 wholesale customers during the first half of 2020[21] - The company has implemented measures such as mortgage support, repayment deferrals, and fee waivers to assist customers during the COVID-19 pandemic[126] Operational Adjustments and Cost Management - The company plans to accelerate its transformation initiatives and implement additional cost control measures to mitigate revenue pressures[16] - The cost-to-income ratio increased to 61.8% in the first half of 2020, compared to 58.4% in the same period of 2019[18] - The company implemented cost-saving measures that reduced operating expenses by 4%[23] - The company is focusing on restructuring and cost management strategies to improve profitability moving forward[170] Digital Transformation and Technology Investment - The bank launched a new digital banking service application, HSBC Kinetic, for small and medium-sized enterprises in the UK[11] - The company invested $2.8 billion in technology development in the first half of 2020[23] - HSBC's digital service capabilities were enhanced to provide remote services to more customers, ensuring a seamless banking experience during the pandemic[20] - The company is investing in advanced analytics and artificial intelligence technologies to improve financial crime prevention tools, particularly during the crisis when fraudulent activities tend to increase[135] Market and Economic Outlook - The ongoing geopolitical risks, particularly between the US and China, are expected to have economic impacts on the group[9] - The outlook remains highly uncertain, depending on the path and speed of economic recovery[12] - The financial impact of the COVID-19 pandemic has led to significant declines in local GDP across multiple markets[126] - The company is closely monitoring capital adequacy and liquidity in response to emerging geopolitical and economic risks[122] Asset and Capital Management - The common equity tier 1 capital ratio increased by 30 basis points to 15% due to an increase in common equity capital[17] - The total assets as of June 30, 2020, were $2,922,798 million, up from $2,751,273 million a year earlier, reflecting a growth of 6.2%[18] - The liquidity coverage ratio stood at 148% as of June 30, 2020[126] - The company reduced its total risk-weighted assets by $21 billion in the first half of 2020[104] Employee and Community Engagement - The company launched a global multi-ethnic inclusion program in May 2020 to enhance support for employees from diverse ethnic backgrounds[33] - The bank is committed to improving the representation of Black talent in senior positions through targeted development interventions[33] - The company has committed over $20 million to various programs supporting vulnerable communities during the pandemic[38] Regional Performance - The company’s Asian business accounted for over 170% of the group’s profit before tax, highlighting its importance to the overall performance[48] - The revenue from the UK market was $6.329 billion, while Hong Kong contributed $9.075 billion, indicating strong regional performance[196]

Financial Data and Key Metrics Changes - The company reported pretax profits of $1.1 billion, down 82% year-on-year, with adjusted profits down 57% [10][32] - Expected credit losses (ECLs) were $3.8 billion, reflecting a significant increase from the first quarter, driven by updated economic guidance [10][35] - The capital ratio improved to 15%, indicating a strong capital position [12][48] Business Line Data and Key Metrics Changes - Wealth and Personal Banking revenues decreased by 12%, with Retail Banking revenues falling by $809 million due to lower interest rates [37] - Global Banking and Markets revenues increased by 24%, with Global Markets growing by 55% and fixed income franchises up 79% [9][38] - Commercial Banking revenues were down 14%, primarily due to lower margins and volumes in Trade Finance [37] Market Data and Key Metrics Changes - Asia businesses contributed $3.6 billion in reported pretax profit, demonstrating resilience amid challenges [9] - Asia lending increased by 1% and deposits rose by 7% over the last 12 months [14] - The company granted around $30 billion in debt relief to personal lending customers and over $52 billion to wholesale customers [16][17] Company Strategy and Development Direction - The company plans to accelerate its transformation in response to the pandemic, focusing on cost reductions and operational efficiency [6][22] - There is a commitment to reducing risk-weighted assets (RWAs) and reallocating capital towards the Asian franchise [53] - The company aims to enhance its wealth management business, particularly in Asia, with a focus on digital transformation [27][29] Management's Comments on Operating Environment and Future Outlook - The management acknowledged the unpredictable environment due to COVID-19 and geopolitical tensions, particularly between the U.S. and China [4][8] - There is cautious optimism regarding the recovery of customer activity and the potential for improved profitability in 2021 [62] - The company expects continued pressure on net interest income due to low interest rates, with a significant impact anticipated in 2021 [40][76] Other Important Information - The company has seen a substantial increase in digital engagement, with mobile app downloads up 157% and mobile payments up over 200% year-on-year [19] - The company maintained a strong balance sheet with $133 billion in deposit growth during the first half [21] Q&A Session Summary Question: What could be potential offsets to the tougher revenue outlook? - Management highlighted strong performance in the U.S. business and ongoing transformation efforts, including branch closures and cost reductions [58][60] Question: Should most of the credit migration occur this year? - Management indicated that credit migration is expected to peak this year, with a potential reversal in 2021 [65] Question: Can you provide more color on net interest income guidance? - Management confirmed no change in net interest income guidance, but cautioned about the impact of lower interest rates [72][74] Question: How do you expect U.S.-China tensions to impact profitability? - Management noted that the first half performance was primarily impacted by COVID-19, with no significant effects from geopolitical tensions [91][123] Question: How do you balance customer satisfaction with shareholder returns? - Management emphasized the importance of digital transformation and cost structure adjustments to improve returns while maintaining customer satisfaction [108][110]

HSBC Holdings plc 2Q20 Results Presentation to Investors and Analysts Noel Quinn Group Chief Executive Strategy 2Q20 results Appendix Highlights 1 Resilient Asia and strong Global Markets performance; 1H20 profits challenged in Europe, the US and the NRFB due to high ECL. Reported 2Q20 PBT of $1.1bn, down 82% vs. 2Q19; adjusted PBT of $2.6bn down 57% 2 2Q20 ECL of $3.8bn, primarily reflecting forward economic guidance updates, particularly in the UK 3 Good cost control and discipline, 2Q20 adjusted costs of ...

HSBC Holdings PLC (NYSE:HSBC) Q1 2020 Earnings Conference Call April 28, 2020 2:30 AM ET Company Participants Noel Quinn - Group CEO Ewen Stevenson - Group CFO Conference Call Participants Joseph Dickerson - Jefferies Fahed Kunwar - Redburn Thomas Rayner - Numis Securities Limited Martin Leitgeb - Goldman Sachs Group Guy Stebbings - Exane BNP Paribas Manus Costello - Autonomous Research Edward Firth - KBW Raul Sinha - JPMorgan Chase & Co. Amandeep Rakkar - Barclays Bank Operator This presentation and subseq ...

Financial Performance - The reported profit attributable to ordinary shareholders was $6 billion, down 53% primarily due to goodwill impairment of $7.3 billion[7]. - Adjusted revenue was $55.4 billion, an increase of 5.9%, with adjusted profit before tax at $22.2 billion, up 5%[10]. - The group's reported pre-tax profit decreased by 33% compared to 2018, primarily due to a $7.3 billion goodwill impairment[29]. - Adjusted pre-tax profit increased by 5%, reflecting revenue growth in three of the four global businesses[29]. - The average tangible equity return was 8.4%, a decrease of 20 basis points compared to the previous year[11]. - The expected credit losses and other credit impairment provisions amounted to $2.8 billion, an increase of $1.1 billion due to higher provisions in commercial banking and retail banking[7]. - The reported baseline income is $56.1 billion, reflecting a growth of $2.3 billion or 4% from 2018, primarily from retail banking and wealth management[112]. - The reported profit before tax for 2019 was $13.35 billion, a decrease of 33% compared to 2018, primarily due to increased operating expenses and goodwill impairment of $7.3 billion[116]. Capital and Liquidity - Total assets increased to $2.7 trillion in 2019, up from $2.6 trillion in 2018[3]. - Common equity tier 1 ratio improved to 14.7% in 2019, compared to 14% in 2018[3]. - The diversified business model of HSBC supports its strong capital and liquidity position[3]. - High-quality liquid assets amounted to $601 billion in 2019, an increase from $567 billion in 2018[40]. - The common equity tier 1 ratio for HSBC Holdings was 14.7% in 2019, up from 14.0% in 2018[39]. - The group plans to reduce risk-weighted assets by over $100 billion by the end of 2022[7]. - The company aims to maintain a common equity tier 1 ratio target of 14% to 15%[31]. Revenue Sources - Retail Banking and Wealth Management contributed 41% to the reported revenue, followed by Commercial Banking at 27% and Global Banking and Markets also at 27%[3]. - Asia accounted for 49% of the reported revenue, with Europe at 29%, North America at 11%, Latin America at 5%, and the Middle East and North Africa at 6%[3]. - Adjusted revenue for Hong Kong and HSBC UK increased by 7% and 3% respectively, despite facing uncertainties[29]. - Retail banking and wealth management adjusted revenue increased by 9%, driven by improved customer service and growth investments, particularly strong in mortgage lending in the UK and Hong Kong[31]. - Global banking and capital markets adjusted revenue decreased by only 1% compared to 2018, despite significant challenges, supported by strong performance in transaction banking[31]. - The global private banking business attracted a net inflow of $23 billion in new funds, with adjusted revenue rising by 5%[31]. Digital Transformation and Innovation - HSBC is investing in blockchain technology to enhance global trade efficiency, exemplified by the digital trade completed using R3's Corda blockchain[5]. - The bank is committed to digital solutions, including the development of paperless trade financing methods[5]. - The company introduced over 160 new digital features in 2019, enhancing customer experience with improved digital account opening and loan applications[31]. - The company plans to continue investing in digital banking services to enhance customer value and efficiency[154]. - The company is focused on enhancing digital banking services while managing financial crime risks to drive growth[51]. Cost Management and Efficiency - The cost-to-income ratio improved to 59.2%, down from 61.0%[10]. - The adjusted income growth rate exceeded the expense growth rate by 3.1%, reflecting improved cost control[7]. - The adjusted operating expenses for 2019 were $32.8 billion, up $900 million or 3% from 2018, with significant investments in retail banking and wealth management[122]. - The company aims to streamline operations and reduce costs through efficiency improvements and investment in automation and digital technology[31]. Sustainability and ESG Initiatives - The company is committed to achieving its $100 billion sustainable financing target and enhancing its environmental, social, and governance (ESG) initiatives[46]. - HSBC aims to provide and facilitate $100 billion in sustainable financing and investment by the end of 2025, with cumulative progress reaching $52.4 billion as of 2019[49]. - The bank's carbon emissions per full-time employee were reported at 2.26 tons, slightly above the target of 2 tons by the end of 2020[49]. - HSBC aims to achieve 100% renewable energy usage by 2030, with a mid-term target of 90% by 2025[76]. - The company is actively working on reducing business activities related to coal and promoting the transition of other high-carbon industries[77]. Employee Engagement and Well-being - Employee recommendation rate for HSBC as an ideal workplace was 66% at the end of 2018, with a target to increase this by 3 percentage points annually[49]. - 98% of employees completed annual compliance training, slightly above the 98.2% completion rate in 2019[49]. - The company launched online educational courses on mental health for all employees in September 2019[67]. - Employee well-being, diversity, inclusion, and engagement are key focus areas for the company[63]. Risk Management and Governance - The company is committed to responsible business practices and maintaining financial system integrity through collaboration with regulatory bodies[97]. - HSBC has implemented measures to combat financial crime, enhancing its capabilities in detection and prevention[100]. - The company is enhancing its cybersecurity measures, including threat detection and data protection, to improve resilience against network threats[185]. - The company is integrating climate-related risks into its internal risk management framework, with a focus on assessing wholesale credit portfolios[185]. Strategic Focus and Market Position - The company is focused on expanding its presence in high-growth markets, particularly in Asia and the Middle East[3]. - HSBC aims to leverage its extensive international network to drive long-term value for shareholders[3]. - The company plans to transform its U.S. operations into an international business-focused corporate bank, targeting international and upper-middle clients with sustainable financing and investment of $100 billion[45]. - The company is focused on restructuring underperforming segments, particularly in Europe and the US[28].

As filed with the Securities and Exchange Commission on February 19, 2020. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 Or þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 Or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Or SHELL COMPANY REPORT PURSUANT TO SECTION 13 ...

Financial Performance - The reported profit before tax for the first half of 2019 increased by 15.8% to $12.4 billion compared to the second half of 2018[12]. - The adjusted profit before tax for the first half of 2019 rose by 6.8% to $6.1 billion, reflecting strong growth in retail banking and wealth management[12]. - Revenue for the first half of 2019 increased by 7.6%, with adjusted revenue growth at 8%[12]. - The adjusted profit before tax for the first half of 2019 was 12.516 billion, compared to 11.723 billion in the same period of 2018, representing a year-over-year increase of 6.8%[15]. - Revenue for the first half of 2019 reached $28,232 million, an increase from $26,880 million in the same period of 2018, representing a growth of 5%[30]. - Operating profit for the first half of 2019 was $11,083 million, up from $9,331 million in the first half of 2018, reflecting a growth of 18%[30]. - Net profit after tax for the first half of 2019 was $9,937 million, compared to $8,416 million in the same period of 2018, indicating an increase of 18%[30]. - The company reported a pre-tax profit of $12,407 million for the first half of 2019, up from $10,712 million in the first half of 2018, marking a growth of 16%[30]. - The company reported a net income of $6,200 million for the first half of 2019, reflecting a significant increase from the previous year[34]. - The effective tax rate for 2019 was reported at 19.9%, compared to 21.4% in 2018[34]. Customer Engagement and Satisfaction - Customer satisfaction in retail banking and wealth management improved significantly during the first half of 2019[11]. - HSBC's customer accounts reached 238,000, with a significant increase in digital banking usage, highlighting a shift towards online services[14]. - The company reported a 27% increase in customer deposits year-over-year, indicating strong growth in its banking operations[57]. - The company is committed to enhancing customer-centric services, achieving an 84% customer satisfaction rate[24]. - The number of active users for PayMe increased significantly, contributing to the growth in digital banking services[55]. - User data showed a significant increase in customer engagement, contributing to overall revenue growth[36]. - Customer accounts rose by $17 billion, marking a 1% increase, with a customer loan to customer account ratio rising from 72% to 74%[142]. Investment and Technology - Investment in new technologies reached $2.2 billion in the first half of 2019, a 17% increase from the same period in 2018[11]. - The company is prioritizing cost control and investment management to enhance operational efficiency and profitability[13]. - HSBC's strategy includes leveraging technology to improve customer experience and streamline operations, aiming for a competitive edge in the global banking sector[22]. - The company plans to invest in new technologies and product development to enhance its service offerings[74]. - The company is focusing on enhancing its digital banking services to improve customer engagement and retention[30]. - The company is investing in new technologies to enhance customer experience and operational efficiency[55]. Market Expansion and Growth Strategy - The company aims to expand its operations in high-growth markets, focusing on Asia and Latin America for future growth opportunities[23]. - The company plans to allocate $100 billion for sustainable financing and investment by the end of 2025[5]. - The company is actively pursuing strategies for market expansion and potential acquisitions[25]. - The company plans to expand its market presence and invest in new product development to drive future growth[30]. - The company aims to enhance the performance of low-return businesses, targeting a 6% return on equity by 2020[24]. - The company is focused on expanding its market presence globally, with a commitment to sustainable practices and responsible growth strategies[76]. Financial Stability and Capital Management - The common equity tier 1 ratio improved to 14.3% as of June 30, 2019, compared to 12.3% at the end of 2018[12]. - The company's capital ratio stood at 14.3% as of June 30, 2019, slightly up from 14.2% a year prior, indicating stable capital management[15]. - The company's capital strength and liquidity remain robust, with a reported capital adequacy ratio of 8%[24]. - The total equity attributable to shareholders increased to 145.441 billion as of June 30, 2019, from 139.754 billion a year earlier, reflecting a growth of approximately 4.8%[16]. - The company's capital strength ratio was 14.3% as of June 30, 2019, compared to 14% at the end of 2018[44]. - The company reported a total asset value of 2.751 trillion as of June 30, 2019, up from 2.607 trillion a year earlier, reflecting a growth of approximately 5.5%[16]. Operational Efficiency - The company is focusing on cost control and operational efficiency to enhance profitability[13]. - The company experienced a decrease in operating expenses, which were $16,163 million in 2019, down from $15,615 million in 2018[33]. - The adjusted cost-to-income ratio improved to 62.5% in the first half of 2019 from 64.4% in the same period of 2018, indicating better operational efficiency[154]. - The company has implemented cost-reduction strategies that are expected to save approximately $50 million annually, improving overall profitability[88]. - The company is focusing on enhancing its digital banking services to improve customer engagement and retention[30]. Risk Management - The expected credit loss for the first half of 2019 was $11 million, compared to $7 million in the same period of 2018, showing an increase of 57%[30]. - The expected credit loss provision was $(1,140) million, compared to $(407) million in the same period last year, indicating an increase in credit risk provisions[99]. - The company anticipates continued growth in user data and market expansion strategies for 2019[39]. - The company is actively managing risks associated with its operations to ensure long-term sustainability and growth[81]. Sustainability and Corporate Responsibility - The company is focused on sustainable practices, with a commitment to improve its sustainability rating as per Sustainalytics[26]. - The management emphasized the importance of sustainability initiatives, aiming to reduce carbon emissions by 40% by 2025[87]. - The company has set a goal to improve its ESG (Environmental, Social, and Governance) ratings, with a focus on responsible resource management[75]. - The company is committed to responsible corporate culture and aims to enhance the benefits of its products while ensuring sustainable practices[77].