2022-03-24 14:00Financial Performance - The adjusted pre-tax profit increased by $10.1 billion to $18.9 billion, driven by favorable changes in expected credit losses and increased profits from associates[14]. - HSBC reported a pre-tax profit of $18.9 billion for 2021, an increase of $10.1 billion compared to 2020, while adjusted pre-tax profit rose to $21.9 billion, up 79%[36]. - The group recorded a reported pre-tax profit of $18.9 billion, an increase of $10.1 billion compared to the previous year, with adjusted profit rising to $21.9 billion, up 79%[44]. - The group reported a 79% increase in adjusted pre-tax profit for 2021, amounting to $3,495 million compared to $2,659 million in 2020[127][128]. - The reported profit before tax for 2021 was $18.9 billion, an increase of $10.1 billion from 2020, primarily due to the reversal of expected credit losses[135]. - The adjusted return on tangible equity (ROTE) was 15.2% in 2021, compared to 9.1% in 2020[160]. - The average tangible equity return improved by 5.2 percentage points to 8.3%[133]. - The adjusted return on tangible equity (ROTE) for 2021 was 8.6%, up from 6.7% in 2020[180]. Capital and Equity - The common equity tier 1 capital ratio stood at 15.8%, with a medium-term target of maintaining it between 14% and 14.5%[11]. - The common equity tier 1 ratio for 2021 was 15.8%, exceeding the target of over 14%[56]. - The common equity tier 1 ratio was 15.8% as of December 31, 2021, indicating robust capital strength[133]. - The common equity tier 1 capital ratio was 15.8%, a decrease of 0.1 percentage points[14]. - The total capital ratio was 21.2%, a decrease from 21.5% in 2020[19]. Risk Management and Credit Losses - The group recorded a credit loss reversal due to improved global economic conditions, reflecting a strong performance in the Asian business[8]. - The expected credit loss provisions are projected to return to average levels of 30 basis points in 2022, with ongoing uncertainties due to inflation and developments in the Chinese commercial real estate sector[15]. - The expected credit loss reversal amounted to $900 million, reflecting an improved economic outlook, particularly in the UK, despite increased provisions in China[139]. - Adjusted expected credit losses recorded a net reversal of $0.9 billion, compared to a provision of $9.3 billion in 2020, reflecting improved economic outlook[148]. Revenue and Expenses - Adjusted revenue decreased by 3% to $50.1 billion, reflecting a decline in global interest rates and reduced capital markets and securities services income[14]. - The adjusted operating expenses were $32.1 billion, with a target to align with 2021 levels in 2022[11]. - The adjusted operating expenses for 2022 are expected to remain flat compared to 2021, with a target of $3.4 billion in spending to achieve over $2 billion in cost savings[15]. - The group successfully reduced adjusted operating expenses by 1%, offsetting technology investments and performance-related compensation growth[44]. - The company achieved cumulative cost savings of $3.3 billion since the start of its cost reduction plan in 2020, with a target of $5 to $5.5 billion in savings by 2022[134]. Dividends and Shareholder Returns - The dividend per share was $0.25, with a target to maintain a sustainable cash dividend payout ratio between 40% and 55% starting in 2022[11]. - The board declared a second interim dividend of $0.18 per ordinary share, bringing the total dividend for 2021 to $0.25 per ordinary share[36]. - The total dividend for the year was $0.25 per ordinary share, with plans to continue dividend payments in 2022[44]. - The board decided to resume dividend payments after previously suspending them in 2020, with a dividend declared for the first half of 2021[124]. Wealth Management and Growth Strategy - The Asian wealth management business attracted $36 billion in new net investment assets in 2021, with acquisitions planned in Singapore and India[15]. - The company aims to become a leader in wealth management, focusing on opportunities in Asia and the Middle East[29]. - Wealth management revenue increased by $1.1 billion, driven by favorable market impacts on life insurance products and growth in investment distribution, asset management, and new insurance business[138]. - The wealth management and personal banking business had a wealth balance of $1.7 trillion as of December 31, 2021, representing a 5% increase from December 31, 2020[163]. Sustainability and ESG Commitment - HSBC aims to assist in achieving net-zero carbon emissions by 2030, with a policy to phase out financing for thermal coal[10]. - The company aims to achieve net-zero carbon emissions in its operations and supply chain by 2030, aligning with the Paris Agreement[79]. - The bank has reduced its absolute greenhouse gas emissions by 50.3% from 2019 levels, with a target to achieve net zero emissions in its operations and supply chain by 2030[86]. - The company aims to provide and facilitate sustainable financing and investment of $750 billion to $1 trillion by 2030[89]. - The company plans to disclose its climate transition plan in 2023 and report on progress annually thereafter[90]. Customer Engagement and Satisfaction - Customer satisfaction ratings improved, with six out of ten markets in wealth management and personal banking achieving top three ratings[12]. - HSBC assisted nearly 269,000 individual customers in purchasing their first homes in 2021[41]. - The bank lent $47 billion to business clients to support operations, expansion, and digital transformation[41]. - The mobile banking application has been improved and is now available to users in 24 markets, with over 900 million payments processed through HSBCnet[46]. Digital Transformation and Technology Investment - The company is committed to digital transformation and aims to lead in the transition to net-zero carbon emissions[36]. - In 2021, the group invested $6 billion in technology, with approximately 97% of transactions fully automated[46]. - Technology spending accounted for 19% of adjusted operating expenses in 2021, approximately $6 billion, up from about $5.7 billion in 2020, with a target to increase this ratio to over 21% by 2025[68]. - The adoption rate of cloud technology increased from 20% in 2020 to 27% in 2021[70]. Employee Engagement and Corporate Culture - Employee engagement index stands at 72%, 4 percentage points higher than the financial services industry average[49]. - The company aims to increase the representation of women in leadership roles to 35% by 2025, having surpassed the previous target of 30%[46]. - The company has achieved a 31.7% representation of women in senior leadership roles, aiming for 35% by the end of 2025[86]. - Average training hours per full-time equivalent employee increased from 23 hours in 2020 to 26.7 hours in 2021[71].