2020-03-10 14:00Financial 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].