2023-08-17 08:30Diversity and Inclusion - As of the end of the first half of 2023, the proportion of women in senior leadership positions at HSBC has increased to 33.6%, with a target of reaching 35% by the end of 2025[1]. - The company is committed to fostering an inclusive work environment to attract and retain diverse talent[1]. Climate and Sustainability Initiatives - HSBC has invested $30 million in climate technology risk capital strategies to support innovations in key areas such as electric vehicle routing and technology[1]. - The company aims to achieve net-zero carbon emissions for its own operations and supply chain by 2030, and for its financed projects by 2050[1]. - HSBC is expanding the number of industries covered by its 2030 financing emissions targets, including shipping, agriculture, commercial real estate, and residential properties[1]. - HSBC's revised energy policy, released in December 2022, now encompasses a broader range of energy sectors, including upstream oil and gas, hydrogen, and renewable energy[1]. - HSBC has launched a sustainable development academy in 2022 to enhance employee skills in support of the net-zero carbon emissions goal[1]. - The group is committed to managing climate risks across all businesses and integrating climate factors into existing risk categories, with detailed disclosures available in the 2022 Annual Report[11]. Financial Performance - Net interest income for the first half of 2023 was $18.3 billion, an increase of $4.9 billion or 36% compared to the same period in 2022[25]. - The total pre-tax profit for the first half of 2023 was $21.657 billion, significantly higher than $8.780 billion in the same period of 2022[21]. - The bank's business net interest income for the first half of 2023 was $21.9 billion, up from $13.6 billion in the same period of 2022, reflecting a growth of 61%[23]. - The effective tax rate for the first half of 2023 was 16.6%, with a decrease of 1.9 percentage points attributed to non-taxable gains from the acquisition of the UK Silicon Valley Bank[33]. - The profit attributable to ordinary shareholders for the six months ended June 30, 2023, was $16,966 million, compared to $7,966 million for the same period in 2022, representing a 113% increase[97]. Risk Management - The company is committed to addressing environmental, social, and governance (ESG) risks, which have increased due to global regulatory developments and stakeholder expectations[15]. - The company continues to monitor evolving regulatory environments, especially following recent bank failures that may lead to changes in overall regulatory scrutiny[15]. - The company is actively managing model risk as regulatory requirements evolve, particularly concerning capital models and the use of artificial intelligence[15]. - The group is closely monitoring credit quality changes and potential risks of defaults in various sectors[117]. - The company continues to enhance risk management frameworks, particularly in third-party risk policies and climate risk assessments[113]. Economic Outlook - The economic outlook remains uncertain, particularly in the UK, which may adversely affect profitability and growth prospects in that market[117]. - The risk of economic recession persists, with mixed signals from the commercial property market in mainland China[117]. - The anticipated credit losses and other credit impairment provisions were impacted by global inflation and rising interest rates in the first half of 2023[117]. - The unemployment rate in the UK is expected to rise to 4.2% in 2023, with a gradual increase from 2022 levels, while China and Hong Kong are anticipated to see a decrease in unemployment rates as the economy recovers[149]. - The overall economic outlook reflects a significant risk of recession, with potential increases in unemployment and declines in asset prices[163]. Customer Engagement and Technology - The company is focused on enhancing digital technology to innovate and improve customer service, while also managing associated risks[15]. - The company is actively simplifying banking procedures and providing tools to help customers manage their finances effectively[1]. - HSBC plans to continue expanding its market presence and investing in new technologies to enhance customer experience[79]. Credit Losses and Provisions - Expected credit losses and other credit impairment charges amounted to $1.3 billion in the first half of 2023, including $1.1 billion in stage three provisions, with $300 million related to the commercial property sector in mainland China[29]. - The expected credit loss provision as of June 30, 2023, is $12.8 billion, an increase of $0.2 billion from December 31, 2022, including $1 billion from adverse foreign exchange movements[123]. - The expected credit loss for retail loans increased by $100 million compared to December 31, 2022, while wholesale loans saw a decrease of $400 million[192]. Strategic Transactions - The acquisition gain recognized from the purchase of the UK Silicon Valley Bank was $1.5 billion, contributing positively to the financial results[28]. - The company recognized a temporary gain of $1,500 million related to the acquisition of Silicon Valley Bank in the UK[81]. Workforce and Employee Engagement - A 2022 reward survey indicated a 9 percentage point increase in employees who believe their compensation is fair[1]. - Employee turnover rates have eased, but inflation remains high in certain regions, impacting talent retention and recruitment efforts[15]. - The number of employees as of June 30, 2023, was 221,764, an increase of 2,565 from December 31, 2022, indicating growth in workforce[33].