$12.1bn. $865bn. $1,356bn. $973bn

Transcription

1 Connecting customers to opportunities HSBC aims to be where the growth is, enabling business to thrive and economies to prosper, and ultimately helping people to fulfil their hopes and realise their ambitions. Denotes an adjusted measure Long-term strategy Our long-term strategy positions us to capture value from our international network, capitalising on global trends affecting the industry and our unique combination of strategic advantages: Leading international bank Unparalleled access to high-growth markets Balance Sheet strength Group (1H18) Adjusted PBT (1H17: $12.4bn) $12.1bn RWAs (1H17: $876bn) $865bn Customer Accounts (1H17: $1,311bn) $1,356bn Net customer advances (1H17: $919bn) (1H18) Adjusted PBT (1H17: $8.2bn) $9.4bn RWAs (1H17: $347bn) $364bn Customer Accounts (1H17: $634bn) $657bn Net customer advances (1H17: $399bn) $973bn For reported results and further information, please refer to the Interim Report 2018 $446bn HSBC s history is founded on financing trade with, and the region remains central to its strategy. The Group now generates more than two-thirds of its profits in, and continues to pivot towards the region, where it is uniquely positioned to reap the benefits of s growth story. HSBC has around 3,800 offices in 66 countries and territories worldwide. 54% of the Group s approximate 230,000 employees are based in. 1H18 Key financial metrics : an integral part of the HSBC group Revenue 53% ECL / LICs Loan impairment charges and other credit risk provisions 29% Costs 37% PBT 77% RWAs 42% $14.5bn $116m $6.1bn $9.4bn $364bn 47% 71% 63% 23% 58%

2 The Hongkong and Shanghai Banking Corporation Limited The founding member of the modern HSBC Group. The company opened in on 3 March 1865 and in Shanghai one month later. HSBC s founders started with a clear and simple aim to establish a bank in and Shanghai for the support of local and foreign trade. Wayfoong Since the late 19 th century, the Chinese population of has known The Hongkong and Shanghai Banking Corporation Limited by the rather more nimble nickname Wayfoong, represented by the Chinese characters 滙豐 (hui-feng). In popular Cantonese romanisation, hui-feng became Wayfoong and translates as abundance of remittances or focus of wealth. Trade finance was a strong feature of the new bank s local and international business It expanded rapidly, establishing branches in ports Yokohama (1866) Kolkata (1867) Ho Chi Minh City (1870) Manila (1875) HSBC today - strongly positioned to capture growth opportunities in Bangladesh India China Taiwan Macau South Korea Japan 152years of history and presence in 17 Of the 25 Group Business Corridors are -linked Maldiv es Mauritius Sri Lanka Thailand Vietnam Malay sia Philippines Singapore Indonesia Australia Proportion of the Group s employees (FTES) in (2017) 54% 19 Markets w ith dedicated incountry management teams New Zealand

3 HSBC s opportunity in continues to drive global economic growth in the 21 st century Rest of the world Global GDP 1 (USDtrn) Global Trade 2 (USDtrn) CAGR CAGR 5% 8% 67% 62% 65% 61% 33% 38% 8% 35% 39% 10% The urban population in is expected to grow from 36% (2013) to 44% by 2030, an increase of more than 550m people Increased urbanisation 3 44% By 2030, is Rising middle expected to account for classes 4 66% of the world s middle-class population 66% HSBC driven by a leading market position in Leading position in supported by tw o brands Market shares 7 s Best Bank s Best Investment Bank Note issuing bank in since H18 key metrics 5 USD9.2bn Revenue USD6.0bn PBT CER of 34.7% 2018 Market excl. HSBC HSBC 26% Loans 8 73% 27% 29% Deposits 71% 29% 46% Best Domestic Bank in th consecutive year Established 1933, majority-owned by HSBC Group since 1965 Leading domestic bank in Recognised brand, owner of Hang Seng Index 1H18 key metrics 6 HKD29.6bn Revenue HKD14.9bn PBT CER of 27.7% RBWM customers 9 million, HSBC Hong Kong 7.4 Population of Hong Kong Nominal GDP; Source: Global Insights 2. Source: Global Insights 3. Source: No ordinary disruption: The forces reshaping McKinsey, Sept Middle class is defined as households with daily income between USD10 and USD100 per person; Source: Hitting the sweet spot - Ernst & Young, HSBC numbers include Hang Seng; on an adjusted basis 6. On a reported basis 7. HKMA, as at MAY18, HSBC includes Hang Seng 8. For use in 9. As at DEC17. Active customers. HSBC excludes Hang Seng 10. Year-end 2017, The Government of the SAR, Census and Statistics Department

4 priorities Leverage HSBC s international connectivity and continue to capture emerging opportunities International connectivity Business corridors Belt & Road Initiative (BRI) China RMB Internationalisation China / Pearl River Delta (PRD) Cross-business collaboration Digital & Innovation Growth / Domestic scale ASEAN Wealth management HSBC is well-positioned to capture BRI opportunities The Belt and Road Initiative is made up of The Silk Road Economic Belt and The 21st Century Maritime Silk Road Seek to connect > 65 countries across, Middle East, Africa and Europe, c.30% of global GDP and 62% of world population 1 By improving the global infrastructure and network connectivity, China can better facilitate international trade and development China s trade with countries along the Belt and Road is expected to surpass USD2.5tn by World Bank, 2. Xi Jinping in 2015 Boao Forum, Xinhuanet, 29MAR15

5 Mainland China HSBC s founders recognised the region s potential as long ago as 1865, when they set up the Hongkong and Shanghai Banking Corporation to finance trade between and the West More than 150 years later, HSBC is the leading foreign bank in mainland China and widely recognised as the leading international bank for renminbi Largest foreign bank network: 227 outlets in 57 cities, 23 provinces / municipalities H18 Reported PBT, USDbn H18 Customer accounts, USDbn Tier 1 cities with HSBC China outlets Other cities with HSBC China outlets Province / municipality with branch presence 1. Includes Hang Seng Bank China, as at December 2017

6 RMB Internationalisation RMB is the 6 th most widely used payments currency 1 Top world payments currency by value Rank JAN12 EUR 44.0% USD 29.7% GBP 9.0% JPY 2.5% AUD 2.1% CAD 1.8% CHF 1.4% SEK 1.1% JAN17 USD EUR GBP JPY CAD RMB CHF AUD Market share of 40.7% 32.9% 7.5% 3.1% 1.9% 1.7% #6 1.5% 1.5% Leading offshore RMB capabilities, with 24 China desks Capabilities in over 50 markets Leading onshore custodian Market share of bank in the RQFII scheme 53% 2 Leader in offshore RMB Market share of bond underwriting 3 28% Ranked For 6 th consecutive year in money Offshore RMB Poll #1 SGD 1.0% HKD 1.0% RMB 0.3% #20 HKD SEK 1.2% 1.0% Total RMBI Revenue (FY17) $1.2bn Pearl River Delta The Pearl River Delta (PRD) is home to 9 mainland cities in the Guangdong province (including Shenzhen and Guangzhou); including the special administrative regions of and Macau, the PRD has a GDP of more than USD1.2trn The PRD accounts for less than 1% of China s territory and 5% of its population, it generates more than a tenth of its GDP and a quarter of its exports. It soaks up a fifth of China s foreign direct investment and has attracted over a trillion dollars-worth of FDI since 1980 The Economist 8 April 2017 HSBC has presence in all 21 prefecture-level cities of Guangdong, w ith a strong focus on PRD cities FY17 7 Maoming HSBC Group presence Zhanjiang Qingyuan Zhaoqing (1) Foshan (8) Yunfu Yangjiang Guangzhou (20) Zhongshan (5) Jiangmen (5) Shaoguan Guangdong PRD Heyuan Huizhou (4) Dongguan (6) Shenzhen (19) Zhuhai (4) Meizhou Jieyang Chaozhou Shanwei Shantou +23% Guangdong loans: USD6.2bn FY % Number of new RBWM clients +50% Guangdong loan Trade book corridors from 2014 to 2017 Wechat banking launched July Trade corridors 2016 HSBC Qianhai Securities launched December 2017 Qianhai securities JV Approved June 2017 HSBC Group outlets Guangdong PRD HSBC Hang Seng Innovation Fund launched December HSBC will allocate RMB 2 billion of lending to Commercial Banking clients in Guangdong to finance the innovation initiatives of high-tech start-ups as well as traditional or manufacturing companies with transformative technology products or services 1. Source: SWIFT - Triennial Central Bank Survey Source: State Administration of Foreign Exchange published data AUG17 3. Bloomberg league table AUG17 4. money 5. As at JAN17; HSBC includes HSBC China (64) and HSBC China Rural Banks (1) in Guangdong 6. As at JAN17 7. Versus FY16 unless otherwise stated 8. Versus FY15

7 Wealth Management accelerating the pivot of Insurance and Asset Management towards Key opportunities for HSBC 2 Wealth management Significant market c.usd62tn in private financial wealth in 1 Private Banking solutions, tapping into connections from GB&M and CMB franchises Expansion through Jade (focussed on clients with USD1m-5m in assets) Strong Premier franchise (customers with USD100k- USD1m in assets) Insurance Protection gap in ; growth opportunities in China, ASEAN Growing life insurance market share in 3 8% Y-o-Y growth in insurance manufacturing annualised new business premiums in Opportunity to grow through our footprint Asset management HSBC Asset Management with c.usd170bn AUM in (2017) Opportunity to serve retail and institutional clients 1. BCG Global Wealth All numbers quoted are on a full year 2017 basis and Y-o-Y comparatives are with FY Source: Market position based on industry statistics published by IA (Insurance Authority),, FY17. Market rank #4 and market share of 16.4% across HSBC and Hang Seng Digitisation: transforming customer experience and improving staff s productivity Area Streamlining / upgrading our platforms Innov ation / Partnerships Staff enablement Description Enhanced our key digital channels with improvements to online and mobile banking platforms Digital Transformation for Corporates Retail Transformation Programme Pursue opportunities in the FinTech space and deploy solutions with a higher level of agility than our traditional model E.g. Kyriba, Tradeshift, WeChat, BlockChain, ecommerce Investment in digital transformation, reshaping the branch network and increase sales force capacity E.g. Tablet on-boarding, Wealth dashboards, end-toend credit decisioning tools Enhance customer experience Select highlights Trade Transaction Tracker Mobile App Biometric authentication (facial, fingerprint and voice), mobile security key, Easy Pay (in Hong Kong), Easy Invest App PayMe (P2P payments) Send money instantly to anyone for free in Hong Kong Global view of documentary credits, collections and payments across markets and countries worldwide in one single app Live in Bangladesh, Australia,, India, Korea, Sri Lanka and Maldives, Japan, Singapore 1. PwC Report Asset Management 2020 A Brave New World EY -Pacific insurance outlook EY Waves of change

8 India 1H18 Reported Financial highlights Reported PBT by global business: PBT (1H17: $0.5bn) $0.4bn Customer accounts (1H17: $13.6bn) $12.9bn Gross customer advances (2017) $9.2bn 39% 18% PBT - $0.4bn 43% RBWM CMB GB&M Corporate Centre CMB / GB&M: Leadership in international banking Hold top 3 market positions Liquidity and Cash Management Trade and Receivables Finance Securities Services Foreign Exchange Debt capital markets Focus on key trade and investment corridors Grow GLCM and investment in technology Focus on domestic trade Invest in Business Banking Upper segment through supply chain financing and targeting Priority Sector Lending RBWM: Be a leading bank for internationally aspirant customers Accounts for 50% of revenue Top tier Premier Customers > 85k Branch network 26 branches across 14 cities Advance >140k Chandigarh Personal Banking >500k Jaipur New Delhi, Gurgaon, Noida Ahmedabad Kolkata Rationalised the branch network, with focus now on our largest cities and retaining key international clients Top 6 cities have a population of > 89m Focused offering for mass and emerging affluent clients Mumbai Pune Bangalore Kochi Hyderabad Chennai Coimbatore

9 Financial highlights (1H18) Denotes an adjusted measure PBT 1H17: $8.2bn Revenue 1H17: $13.0bn Costs 1H17: $5.4bn Jaws Cost efficiency ratio 1H17: 41.2% $9.4bn $14.5bn $6.1bn -2.7% 42.2% Net interest income 3,801 2,353 1, , Net f ee income 1, , Other income* , ,180 3,532 5 Revenue 5,894 3,356 3, ,347 14, ECL / LICs (138) (116) 74 Costs (2,555) (1,145) (1,520) (216) (674) (6,110) (14) Share of profit in assoc. and joint ventures Key adjusted financials: $m RBWM CMB GB&M GPB CC Total % change vs. 1H ,077 1,094 9 Profit before tax 3,218 2,216 1, ,752 9, Key adjusted financials: RBWM CMB GB&M GPB CC Total % change vs. 1H17 2,871 1, (145) 4, , , , ,481 2,213 1, , (58) (20) 95 (1,372) (609) (754) (153) (290) (3,178) (15) ,067 1, , Customer lending (net), $bn Customer accounts, $bn RWAs, $bn Adjusted revenue by country: Indonesia other Malay sia Australia Singapore India Mainland China $14.5bn adjusted Revenue $9.2bn Reported balance sheet Customer lending (USD bn) +5% % % H18 Adjusted PBT by country: Other Customer accounts (USD bn) Indonesia other Malay sia Australia Singapore India Mainland China $9.4bn adjusted PBT $6.0bn H18 Other * Includes Net income from financial instruments measured at fair value and Other income

10 ASEAN ASEAN Adjusted Revenue (FY17) $2.9bn For almost 150 years, HSBC has played an active role in the development of the economies and infrastructures of ASEAN countries Singapore Est branches Malaysia Est over 60 branches Indonesia Est Fully integrated with Bank Ekonomi Vietnam Opened first office in 1870 Philippines Operating for over 140 years Thailand Est Leading capabilities and expertise Important notice and forward looking statements Important notice The information set out in this presentation and subsequent discussion does not constitute a public offer for the purposes of any applicable law or an offer to sell or solicitation of any offer to purchase any securities or other financial instruments or any recommendation in respect of such securities or instruments. Forward-looking statements This presentation and subsequent discussion may contain projections, estimates, forecasts, targets, opinions, prospects, resu lts, returns and forward-looking statements with respect to the financial condition, results of operations, capital position and business of the Group (together, forward-looking statements ). Any such forward-looking statements are not a reliable indicator of future performance, as they may involve significant assumptions and subjective judgements which may or may not prove to be correct and there can be no assurance that any of the matters set out in forward-looking statements are attainable, will actually occur or will be realised or are complete or accurate. Forward-looking statements are statements about the future and are inherently uncertain and generally based on stated or implied assumptions. The assumptions may prove to be incorrect and involve known and unknown risks, uncertainties, contingencies and other important factors, many of which are ou tside the control of the Group. Actual achievements, results, performance or other future events or conditions may differ materially from those stated, implied and/or reflected in any forward -looking statements due to a variety of risks, uncertainties and other factors (including without limitation those which are referable to general market conditions or regulatory changes). Any such forward-looking statements are based on the beliefs, expectations and opinions of the Group at the date the statements are made, and the Group does not assume, and hereby disclaims, any obligation or duty to update them if circumstances or management s beliefs, expectations or opinions should change. For these reasons, recipients should not place reliance on, and are cautioned about relying on, any forward-looking statements. Additional detailed information concerning important factors that co uld cause actual results to differ materially is available in our 2017 Annual Report and Accounts. This presentation contains non-gaap financial information. The primary non-gaap financial measure we use is adjusted performance which is computed by adjusting reported results for the period-on-period effects of foreign currency translation differences and significant items which distort period -on-period comparisons. Significant items are those items which management and investors would ordinarily identify and consider separately when assessing performance in order to better understand the underlying trends in the business. Reconciliations between non -GAAP financial measurements and the most directly comparable measures under GAAP are provided in the 2017 Annual Report and Accounts and the Reconciliations of Non-GAAP Financial Measures document which are both available at