Core Viewpoint - HSBC Holdings PLC is strategically shifting its focus towards enhancing its investment banking operations in Asia and the Middle East, following its exit from significant businesses in Europe and the United States [1][3]. Group 1: HSBC's Strategic Focus - The bank will concentrate on debt financing activities globally, as well as mergers and acquisitions and equity capital markets specifically in Asia and the Middle East [2]. - HSBC aims to invest in areas where it has a competitive advantage to generate "quality" revenues [2][3]. - The ongoing withdrawal from Europe and the Americas is intended to allow HSBC to provide differentiated services to its customers [3]. Group 2: Investment and Restructuring Plans - HSBC plans to continue investing in Hong Kong, which is viewed as a central hub for the bank and a future cross-border wealth center [4]. - The restructuring initiative led by CEO Georges Elhedery aims to merge the commercial banking division with the global banking and markets unit by January 2025, targeting nearly $1.5 billion in annualized savings by the end of 2026 [5]. - The bank anticipates incurring approximately $1.8 billion in severance and upfront charges to facilitate these business simplification efforts [5]. Group 3: Recent Business Developments - HSBC is currently negotiating the sale of its German fund administration business to BlackFin Capital Partners and has already sold its private client trust business to Ludlow Trust [6]. - The bank is reducing its workforce by about 900 employees in its China digital wealth business and plans to close its M&A and some equities businesses in Europe, the UK, and the Americas by January 2025 [7]. - In October 2024, HSBC announced a simplification of its organizational structure into four distinct lines of business [8]. Group 4: Market Performance - Over the past year, HSBC shares have increased by 49.7%, outperforming the industry growth of 24.1% [9].

American investors are feeling the impact of tariff threats, as hedge funds funnel money away from domestic tech to international competitors. However, it isn’t just Chinese competitors who are benefiting from the inflationary and tariff squeeze concerns facing the United States—investors are also taking a renewed interest in top European stocks.  In January, the pan-European STOXX 600 rose by 6.3%, beating out the 2.7% increase seen by the S&P 500 index in the same time period. This momentum has continued ...

Core Viewpoint - HSBC shareholders are currently benefiting from strong profitability and a significant re-rate in the market, with shares returning approximately 60% over the past year [1] Group 1: Company Performance - HSBC's profitability remains robust, contributing to its strong market performance [1] - The bank's shares have been standout performers, reflecting a positive market response [1] Group 2: Investment Strategy - The investment approach favors a long-term, buy-and-hold strategy, particularly in stocks that can consistently deliver high-quality earnings [1]

Company Overview - Quantexa is a global leader in Decision Intelligence (DI) solutions, focusing on empowering organizations to make trusted operational decisions using contextual data [5] - Founded in 2016, Quantexa has over 800 employees and thousands of platform users, managing billions of transactions and data points globally [6] Leadership Appointment - Stuart Riley has been appointed to Quantexa's board of directors, replacing Colin Bell [1] - Riley brings 30 years of experience in business and technology strategy, currently serving as Group Chief Information Officer at HSBC [2] Strategic Impact - As Group CIO at HSBC, Riley leads the bank's global technology strategy, focusing on innovative and customer-centric digital solutions [2] - His experience includes roles at Citi, where he led AI initiatives, and senior positions at Deutsche Bank and a technology consulting firm [3] Vision and Goals - Riley emphasizes the importance of fast and intelligent decision-making in today's dynamic business environment, aligning with Quantexa's mission to empower organizations with the right data [4] - Quantexa aims to enhance operational performance with over 90% more accuracy and 60 times faster analytical model resolution compared to traditional methods [6] Financial Performance - An independently commissioned Forrester TEI study found that Quantexa's Decision Intelligence Platform delivered a three-year ROI of 228% for customers [6]

Group 1 - The largest position in the portfolio is HSBC Holdings plc, attributed to a 39% increase in share price over the last 12 months [1] - The investment in HSBC is held through stock ownership, options, or other derivatives [1] Group 2 - The article does not provide specific recommendations or advice regarding investment suitability for individual investors [2] - The performance of HSBC in the past does not guarantee future results [2]

Presentation to Investors and Analysts HSBC Holdings plc 4Q24 Results Business update Georges Elhedery Group CEO Our FY24 performance Business update 4Q24 results Appendix FY24 performance $26.9bn of distributions to shareholders1, on the back of our strong performance Record PBT Earnings Return on tangible equity Distributions Unless otherwise stated, this presentation is presented on a constant currency basis. denotes a measure shown on a reported FX basis. In this presentation, % changes relating to ECL ...

Financial Data and Key Metrics Changes - The company reported a record profit before tax of $32.3 billion, or $34.1 billion excluding notable items, with a return on tangible equity of 14.6%, or 16% excluding notable items, aligning with mid-teens targets [7][22][23] - A total of $26.9 billion was distributed to shareholders for 2024, including $0.87 per share in dividends and $11 billion in share buybacks [7][22] Business Line Data and Key Metrics Changes - Banking net interest income (NII) remained stable, with expectations of around $42 billion in 2025, despite lower interest rates impacting growth [40][41] - Wealth management saw a significant increase, with a 27% year-on-year growth in the fourth quarter, marking the fourth consecutive quarter of double-digit growth [44][48] Market Data and Key Metrics Changes - The company attracted approximately 800,000 new personal banking customers in Hong Kong in 2024, indicating strong market growth [45][46] - The deposit base increased to $1.7 trillion, with a 3% rise in deposits during the fourth quarter, supported by customer growth and seasonality [57][58] Company Strategy and Development Direction - The company is focusing on simplifying its structure and reallocating $1.5 billion from non-strategic activities to priority growth areas, particularly in Asia and the Middle East [13][54] - Plans include expanding wealth centers in Hong Kong and enhancing transaction banking capabilities in high-growth markets [26][28] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in achieving mid-teens return on tangible equity in 2025, 2026, and 2027, despite challenges in the operating environment [24][60] - The outlook for global trade remains positive, with expectations of low-single-digit growth, benefiting from the bank's strong presence in key markets [105] Other Important Information - The company plans to incur approximately $1.8 billion in severance and upfront costs related to organizational simplification, with expected annualized savings of $1.5 billion by the end of 2025 [12][52] - The CET1 ratio stands at 14.9%, above the target range of 14% to 14.5%, providing a strong capital position for future growth [58][95] Q&A Session Summary Question: CIB Return on Tangible Equity Outlook - Management indicated that while specific medium-term returns for CIB were not provided, the business would benefit from cost synergies and improved capital allocation efficiencies [66][67] Question: Incremental Technology in International Wealth - Management emphasized the importance of investing in technology to enhance market share in cross-border wealth management, with a focus on integrating new platforms into existing services [70][72] Question: Cost Reallocation and Revenue Expectations - Management clarified that reallocating $1.5 billion from low-return activities is expected to yield higher returns, particularly in wealth and transaction banking, which are low capital-consuming businesses [82][84] Question: CET1 Ratio and Future Capital Management - Management confirmed comfort with the CET1 ratio target of 14% to 14.5%, with no immediate plans to lower it further, focusing instead on growth opportunities [94][95] Question: Loan Growth Challenges - Management acknowledged recent flat loan growth but expressed optimism for stabilization and potential growth as interest rates stabilize [121][122]

Shareholder Information - HSBC Holdings plc reported a total of 17,946,950,582 ordinary shares outstanding as of December 31, 2024[11]. - The company repurchased 11% of the issued share count since the start of 2023, leading to a total shareholder return of over 30% for the year[102]. - The total dividend announced for 2024 is $0.87 per share, which includes a special dividend of $0.21 per share paid in June[101]. - The Board approved a fourth interim dividend of $0.36 per share, totaling $0.87 per share for 2024, including a special dividend of $0.21[63]. - The company paid $5.5 billion in ordinary dividends for 2024 and plans to repurchase $11 billion of shares for cancellation[188]. - The company announced $26.9 billion in returns to shareholders through dividends and share buy-backs in 2024[121]. Financial Performance - Profit before tax increased by $2.0 billion to $32.3 billion, compared to $30.3 billion in 2023[48]. - In 2024, the company reported a profit before tax of $32.3 billion, up from $30.3 billion in 2023, achieving a return on average tangible equity (RoTE) of 14.6%[125]. - Revenue for 2024 was $65.9 billion, stable compared to 2023, but grew by 5% on a constant currency basis[155]. - Net interest income decreased to $32.7 billion from $35.8 billion in 2023[48]. - Operating expenses rose by 3% to $33.0 billion, primarily due to increased technology investment and inflation[62]. - Revenue in the Wealth segment grew by 18% in 2024, with a 21% increase in fee and other income[105]. - Transaction banking revenue was $26.3 billion, stable compared to 2023, facilitating over $850 billion in trade[162]. - Customer deposit balances reached $1.65 trillion, an increase from $1.61 trillion in 2023, while customer loans decreased slightly to $0.93 trillion from $0.94 trillion[179]. Capital and Risk Management - Common equity tier 1 capital ratio improved to 14.9% from 14.8% in 2023[50]. - The common equity tier 1 (CET1) capital ratio was reported at 14.9%, reflecting the company's financial strength[125]. - The common equity tier 1 (CET1) capital ratio increased from 14.8% to 14.9% as of December 31, 2024, with a target range of 14% to 14.5% over the medium term[188]. - Expected credit losses (ECL) were stable at $3.4 billion, with ECL as a percentage of average gross loans at 36 basis points[62]. Strategic Initiatives - HSBC's strategic priorities include successful execution of planned acquisitions and the integration of acquired businesses into its operations[31]. - The company is focusing on long-term strategic growth by optimizing cost and capital allocation, including the planned sale of several businesses[104]. - HSBC completed the acquisition of Citi's retail wealth management portfolio in mainland China and SilkRoad Property Partners Group in Singapore[174]. - The Group plans to further reshape its operations to align with its four new business segments effective January 1, 2025[175]. - HSBC aims to create a simpler and more dynamic organization by restructuring into four new business units[127]. Economic and Market Conditions - HSBC's financial performance is influenced by changes in economic conditions, including inflationary pressures and fluctuations in employment levels[27]. - Forward-looking statements indicate potential impacts from geopolitical tensions, including the Russia-Ukraine war and conflicts in the Middle East, on HSBC's financial condition and operations[23]. Customer Growth and Engagement - The company added approximately 800,000 new-to-bank customers in Hong Kong, indicating strong customer growth[105]. - In Hong Kong, reported revenue was $21.2 billion, an increase of 6%, with 799,000 new-to-bank customers in WPB, a 66% growth compared to 2023[163]. - Customer accounts increased by $43bn on a reported basis and $75bn on a constant currency basis, primarily driven by growth in Asia[63]. Environmental, Social, and Governance (ESG) Commitments - HSBC is committed to its ESG ambitions, including targets to reduce financed emissions and achieve net zero carbon emissions[31]. - The company is focused on developing sustainable finance and ESG-related products to meet evolving regulatory expectations[31]. - HSBC is on track to achieve a reduction in scope 1 and 2 emissions of over 90% by 2030 compared to the 2019 baseline[198]. - HSBC aims to support customers transitioning to a net zero economy, adapting financing choices to promote resilience and sustainability[200]. - HSBC's reporting currency is U.S. dollars, and it has embedded ESG reporting within its annual financial disclosures[20]. Operational Efficiency - HSBC plans to achieve an annualized reduction of $1.5 billion in its cost base by the end of 2026[58]. - The company targets a mid-teens return on average tangible equity (RoTE) from 2025 to 2027, excluding notable items[64]. - HSBC plans to generate approximately $0.3 billion in cost reductions in 2025, with an annualized reduction of $1.5 billion expected by the end of 2026[184]. - Target basis operating expenses rose by 5%, reflecting higher spend in technology and inflation impact[63]. Market Presence - HSBC has a significant presence in the global market, with shares traded on multiple international exchanges[5]. - The company is registered under the Securities Exchange Act of 1934, ensuring transparency and regulatory compliance[3]. - HSBC's securities are registered on multiple exchanges, including the London Stock Exchange and the New York Stock Exchange[5].

Financial Performance - Profit before tax for 2024 increased by $2.0 billion to $32.3 billion, with notable items contributing a net favorable impact of $1.0 billion[4]. - Revenue for 2024 was stable at $65.9 billion, with constant currency revenue excluding notable items rising by $2.9 billion to $67.4 billion[6]. - In 2024, the profit before tax was $32.3 billion, an increase of $2.0 billion compared to 2023[43]. - Profit before tax for the year ended December 31, 2024, was $32,309 million, an increase of 6.4% from $30,348 million in 2023[85]. - Profit before tax for 2024 was reported at $32.309 billion, compared to $30.348 billion in 2023, indicating a growth in profitability[164]. - Constant currency profit before tax for 2024 reached $32,309 million, an increase from $30,348 million in 2023, representing a growth of 6.5%[96]. - Profit attributable to ordinary shareholders of the parent company was $22,917 million, up from $22,432 million, reflecting a growth of 2.2%[85]. - Basic earnings per share increased to $1.25 in 2024 from $1.15 in 2023, reflecting an increase of 8.7%[85]. - The return on average tangible equity (RoTE) was 14.6%, or 16.0% excluding notable items[63]. Revenue and Income - Revenue for 2024 was reported at $65.854 billion, a slight decrease from $66.058 billion in 2023[34]. - Net operating income before change in expected credit losses for 2024 was $65,854 million, slightly down from $66,058 million in 2023, a decrease of 0.3%[97]. - Total interest received rose to $110,106 million in 2024, compared to $98,910 million in 2023[122]. - Strategic investments in Wealth generated an 18% revenue growth in 2024, with a 21% increase in fee and other income[48]. Expenses and Costs - Net interest income decreased by $3.1 billion to $43.7 billion, reflecting higher funding costs and business disposals[7]. - Operating expenses grew by $1.0 billion or 3% to $33.0 billion, primarily due to higher technology investments and inflation[10]. - Total operating expenses for 2024 were $33,043 million, up from $32,070 million in 2023, an increase of 3.0%[97]. - The constant currency cost efficiency ratio improved to 50.2% in 2024 from 48.5% in 2023[96]. - The company plans to achieve approximately $0.3 billion in cost reductions in 2025, with an annualized reduction of $1.5 billion expected by the end of 2026[22]. Customer Growth - Customer accounts rose by $43 billion on a reported basis, and $75 billion on a constant currency basis, indicating growth across all global businesses[12]. - Customer accounts increased to $1,654,955 million in 2024, compared to $1,611,647 million in 2023, marking an increase of 2.7%[85]. - Customer accounts rose to $1.654 trillion in 2024, up from $1.579 trillion in 2023, showing strong customer growth[162]. Capital and Dividends - The common equity tier 1 (CET1) capital ratio increased to 14.9%, up by 0.1 percentage points, supported by capital generation and reduced risk-weighted assets[13]. - The Board approved a total dividend of $0.87 per share for 2024, including a special dividend of $0.21 per share[14]. - Total dividends paid to shareholders for 2024 amounted to $15.348 billion, an increase from $10.492 billion in 2023, reflecting a per share increase from $0.53 to $0.82[150]. - Dividends on ordinary shares increased significantly to $15,348 million in 2024 from $10,492 million in 2023, representing a growth of 46.5%[85]. Assets and Liabilities - Total assets decreased slightly to $3,017,048 million in 2024 from $3,038,677 million in 2023, a decline of 0.7%[85]. - Total external assets for 2024 were $3,017,048 million, compared to $2,972,547 million in 2023, reflecting a growth of 1.5%[93]. - Total liabilities decreased to $2,824,775 million in 2024 from $2,846,067 million in 2023, a decline of about 0.7%[106]. Taxation - The effective tax rate for 2024 was 22.6%, up from 19.1% in 2023, primarily due to a non-deductible loss from the sale of HSBC Argentina[138]. - The Group recorded a Pillar Two global minimum tax charge of $221 million, related to non-taxation of dividends and income on government bonds in Hong Kong[139]. - The tax impact of the sale of HSBC Argentina increased the tax charge by $1,536 million, while the non-taxable gain from the sale of HSBC Canada reduced it by $1,174 million[137]. Legal and Regulatory Matters - HSBC is involved in various legal proceedings and regulatory matters, with significant claims including $543 million from Madoff Securities and $2.5 billion from Herald Fund SPC[178][180]. - HSBC is defending against claims from the Fairfield Funds seeking $382 million, with some claims dismissed but others ongoing[179]. - HSBC faces litigation from Alpha Prime Fund Limited for $1.16 billion, with actions pending in the Luxembourg District Court[181]. - HSBC is involved in a class action lawsuit related to the manipulation of silver prices, which seeks unspecified damages and is currently pending appeal[193]. - The company is also defending against allegations of anti-competitive behavior in the foreign exchange market, with claims seeking approximately £3 billion in damages[191].

Core Viewpoint - HSBC Holdings reported a significant increase in pre-tax profit for Q4 2024, reaching $2.23 billion, compared to $977 million in the same quarter last year [1] Financial Performance - Total revenues for HSBC were $11.56 billion, reflecting an 11.2% decrease year over year, primarily due to lower other operating income [3] - Operating expenses slightly declined to $8.6 billion [3] - Expected credit losses (ECL) amounted to $1.36 billion, marking a 32.1% increase year over year [3] Business Segment Performance - Wealth and Personal Banking segment reported a pre-tax profit of $2.5 billion, a substantial increase from $175 million in the previous year, driven by higher total operating income [4] - Commercial Banking segment's pre-tax profit was $2.4 billion, down 3.9% from the prior year due to higher ECL charges and increased expenses [4] - Global Banking and Markets saw a pre-tax profit of $1.4 billion, up 37.4% year over year, attributed to higher total operating income [5] - Corporate Centre reported a pre-tax loss of $4 billion, compared to a $2.7 billion loss in the same quarter last year [5] Future Outlook - For 2025, HSBC anticipates banking net interest income (NII) of $42 billion and targets a 3% year-over-year growth in operating expenses [6] - The company expects to incur $1.8 billion in expenses related to business overhaul by the end of 2026, which is projected to yield annualized cost savings of $1.5 billion by the end of next year [6] - ECL charges are expected to be between 30 and 40 basis points as a percentage of average gross loans for 2025 [6] Capital Management - HSBC aims for a return on average tangible equity in the mid-teens from 2025 to 2027, excluding notable items [7] - The company plans to maintain its common equity tier 1 (CET1) ratio within a medium-term target of 14-14.5% [7] - A dividend payout ratio of 50% is expected for 2025, along with a share buyback program of up to $2 billion, likely to be completed by the end of April [7] Competitive Landscape - Competitors like Barclays and UBS reported improved financial results in Q4 2024, driven by increased revenues and lower operating expenses, although they also faced rising credit impairment charges [9][10]