HSBC HOLDINGS(HSBC) - 2024 Q4 - Annual Report

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].