|
|
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
|
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
N/A
|
|
United Kingdom
|
(Translation of Registrant’s name into English)
|
|
(Jurisdiction of incorporation or organisation)
|
Title of each class
|
|
Name of each exchange on which registered
|
Ordinary Shares, nominal value US$0.50 each.
|
|
London Stock Exchange
|
|
|
Hong Kong Stock Exchange
|
|
|
Euronext Paris
|
|
|
Bermuda Stock Exchange
|
|
|
New York Stock Exchange*
|
American Depository Shares, each representing 5
Ordinary Shares of nominal value US$0.50 each.
|
|
New York Stock Exchange
|
6.20% Non-Cumulative Dollar Preference Shares, Series A
|
|
New York Stock Exchange*
|
American Depositary Shares evidenced by American Depositary receipts, each representing one-fortieth of a Share of 6.20% Non-Cumulative Dollar Preference Shares, Series A
|
|
New York Stock Exchange
|
5.10% Senior Unsecured Notes Due 2021
|
|
New York Stock Exchange
|
4.00% Senior Unsecured Notes Due 2022
|
|
New York Stock Exchange
|
4.875% Senior Unsecured Notes Due 2022
|
|
New York Stock Exchange
|
7.625% Subordinated Notes due 2032
|
|
New York Stock Exchange
|
7.35% Subordinated Notes due 2032
|
|
New York Stock Exchange
|
|
|
|
6.5% Subordinated Notes 2036
|
|
New York Stock Exchange
|
6.5% Subordinated Notes 2037
|
|
New York Stock Exchange
|
6.8% Subordinated Notes Due 2038
|
|
New York Stock Exchange
|
6.100% Senior Unsecured Notes due 2042
|
|
New York Stock Exchange
|
8.125% Perpetual Subordinated Capital Securities Exchangeable at the Issuer’s Option into Non-Cumulative Dollar Preference Shares
|
|
New York Stock Exchange
|
8.00% Perpetual Subordinated Capital Securities Exchangeable at the Issuer’s Option into Non-
Cumulative Dollar Preference Shares, Series 2
|
|
New York Stock Exchange
|
4.250% Subordinated Notes due 2024
|
|
New York Stock Exchange
|
5.250% Subordinated Notes due 2044
|
|
New York Stock Exchange
|
4.250% Subordinated Notes due 2025
|
|
New York Stock Exchange
|
3.400% Senior Unsecured Notes due 2021
|
|
New York Stock Exchange
|
4.300% Senior Unsecured Notes due 2026
|
|
New York Stock Exchange
|
Floating Rate Senior Unsecured Notes due 2021
|
|
New York Stock Exchange
|
2.950% Senior Unsecured Notes due 2021
|
|
New York Stock Exchange
|
3.600% Senior Unsecured Notes due 2023
|
|
New York Stock Exchange
|
3.900% Senior Unsecured Notes due 2026
|
|
New York Stock Exchange
|
Floating Rate Senior Unsecured Notes due 2021
|
|
New York Stock Exchange
|
2.650% Senior Unsecured Notes due 2022
|
|
New York Stock Exchange
|
Floating Rate Senior Unsecured Notes due 2022
|
|
New York Stock Exchange
|
4.375% Subordinated Notes due 2026
|
|
New York Stock Exchange
|
3.262% Fixed Rate/Floating Rate Senior Unsecured Notes due 2023
|
|
New York Stock Exchange
|
3.033% Fixed Rate/Floating Rate Senior Unsecured Notes due 2023
|
|
New York Stock Exchange
|
4.041% Fixed Rate/Floating Rate Senior Unsecured Notes due 2028
|
|
New York Stock Exchange
|
Large accelerated filer
þ
|
|
Accelerated filer
|
|
Non-accelerated filer
|
U.S. GAAP
|
|
International Financial Reporting Standards as issued by the
International Accounting Standards Board
þ
|
|
Other
|
*
|
Not for trading, but only in connection with the registration of American Depositary Shares.
|
|
|
|
|
HSBC Holdings plc
|
1
|
|
•
|
Changes in general economic conditions in the markets in which we operate, such as continuing or deepening recessions and fluctuations in employment beyond those factored into consensus forecasts; changes in foreign exchange rates and interest rates; volatility in equity markets; lack of liquidity in wholesale funding markets; illiquidity and downward price pressure in national real estate markets; adverse changes in central banks’ policies with respect to the provision of liquidity support to financial markets; heightened market concerns over sovereign creditworthiness in over-indebted countries; adverse changes in the funding status of public or private defined benefit pensions; and consumer perception as to the continuing availability of credit and price competition in the market segments we serve.
|
•
|
Changes in government policy and regulation, including the monetary, interest rate and other policies of central banks and other regulatory authorities; initiatives to change the size, scope of activities and interconnectedness of financial institutions in connection with the implementation of stricter regulation of financial institutions in key markets worldwide; revised capital and liquidity benchmarks which could serve to deleverage bank balance sheets and lower returns available from the current business model and portfolio mix; imposition of levies or taxes designed to change business mix and risk appetite; the practices, pricing or responsibilities of financial institutions serving their consumer markets; expropriation, nationalisation, confiscation of assets and changes in legislation relating to foreign ownership; changes in bankruptcy legislation in the principal markets in which we operate and the consequences thereof; general changes in government policy that may significantly influence investor decisions; extraordinary government actions as a result of current market turmoil; other unfavourable political or diplomatic developments producing social instability or legal uncertainty which in turn may affect demand for our products and services; the costs, effects and outcomes of product regulatory reviews, actions or litigation, including any additional compliance requirements; and the effects of competition in the markets where we operate including increased competition from non-bank financial services companies, including securities firms.
|
•
|
Factors specific to HSBC, including our success in adequately identifying the risks we face, such as the incidence of loan losses or delinquency, and managing those risks (through account management, hedging and other techniques). Effective risk management depends on, among other things, our ability through stress testing and other techniques to prepare for events that cannot be captured by the statistical models it uses; and our success in addressing operational, legal and regulatory, and litigation challenges; and other risks and uncertainties we identify in ‘top and emerging risks’ on pages
95
to
106
.
|
HSBC Holdings plc
|
1a
|
–
|
Delivered growth from our international network with a 6% increase in transaction banking product revenue and a 13% rise in revenue synergies between global businesses compared with 2016.
|
–
|
Achieved annualised run-rate savings of $6.1bn since our Investor Update in 2015, while continuing to invest in growth, and regulatory programmes and compliance; 2017 exit run-rate in line with 2014 cost base.
|
–
|
Exceeded our risk-weighted assets (‘RWAs’) reduction target; extracting a total of $338bn of RWAs from the business since the start of 2015.
|
–
|
Pivot to Asia generating returns and driving over 75% of Group reported and adjusted profit in 2017.
|
–
|
Delivered a return on equity of 5.9% in 2017, up from 0.8% in 2016. We will continue to invest for growth and manage our capital efficiently to achieve our medium-term ROE target of >10%.
|
2
|
HSBC Holdings plc
|
Return on equity
5.9%
|
Adjusted jaws
<
>
+1%
|
Dividends per ordinary share in respect of 2017
$0.51
|
HSBC Holdings plc
|
3
|
|
4
|
HSBC Holdings plc
|
HSBC Holdings plc
|
5
|
|
6
|
HSBC Holdings plc
|
HSBC Holdings plc
|
7
|
|
8
|
HSBC Holdings plc
|
HSBC Holdings plc
|
9
|
|
10
|
HSBC Holdings plc
|
|
Required by 2050 as per IEA 66% 2°C scenario
|
|
|
|
Current (2016)
|
HSBC Holdings plc
|
11
|
|
12
|
HSBC Holdings plc
|
HSBC Holdings plc
|
13
|
|
Reported results
|
2017
$m
|
|
2016
$m
|
|
2015
$m
|
|
Net interest income
|
28,176
|
|
29,813
|
|
32,531
|
|
Net fee income
|
12,811
|
|
12,777
|
|
14,705
|
|
Net trading income
|
7,719
|
|
9,452
|
|
8,723
|
|
Other income
|
2,739
|
|
(4,076
|
)
|
3,841
|
|
Net operating income before loan impairment charges and other credit risk provisions (‘revenue’)
|
51,445
|
|
47,966
|
|
59,800
|
|
Loan impairment charges and other credit risk provisions
|
(1,769
|
)
|
(3,400
|
)
|
(3,721
|
)
|
Net operating income
|
49,676
|
|
44,566
|
|
56,079
|
|
Total operating expenses
|
(34,884
|
)
|
(39,808
|
)
|
(39,768
|
)
|
Operating profit
|
14,792
|
|
4,758
|
|
16,311
|
|
Share of profit in associates and joint ventures
|
2,375
|
|
2,354
|
|
2,556
|
|
Profit before tax
|
17,167
|
|
7,112
|
|
18,867
|
|
–
|
in 2016, unfavourable fair value movements on our own debt designated at fair value reflecting changes in our own credit spread of
$1.8bn
, which are now reported in other comprehensive income, following our partial early adoption of IFRS 9 ‘Financial Instruments’ on 1 January 2017; and
|
–
|
favourable fair value movements in 2017 of
$0.1bn
on non-qualifying hedges, compared with adverse movements of
$0.7bn
in 2016.
|
–
|
in 2016, a
$0.7bn
gain on the disposal of our membership interests in Visa Europe and Visa Inc. This compared with a
$0.3bn
gain on the disposal of our shares in Visa Inc. during 2017;
|
–
|
adverse debit value adjustments on derivative contracts in 2017 of
$0.4bn
, compared with minimal movements in 2016; and
|
–
|
in 2017, a
$0.1bn
provision related to customer redress programmes in the UK, and a $0.1bn charge arising from the opportunity to increase our investment in new businesses.
|
–
|
a
$3.2bn
write-off of goodwill in our GPB business in Europe in 2016;
|
–
|
a net release of
$0.4bn
in settlements and provisions in connection with legal matters, compared with charges in 2016 of
$0.7bn
;
|
–
|
operating expenses of
$1.1bn
in 1H16 incurred by the operations in Brazil that we sold; and
|
–
|
costs to achieve of
$3.0bn
, compared with
$3.1bn
in 2016.
|
14
|
HSBC Holdings plc
|
–
|
the year-on-year effects of foreign currency translation differences; and
|
–
|
the effect of significant items that distort year-on-year comparisons and are excluded in order to improve understanding of the underlying trends in the business.
|
Adjusted results
<
>
|
2017
$m
|
|
2016
$m
|
|
(%)
|
|
Net operating income before loan impairment charges and other credit risk provisions (adjusted revenue)
|
51,524
|
|
49,290
|
|
5
|
%
|
Loan impairment charges and other credit risk provisions
|
(1,769
|
)
|
(2,594
|
)
|
32
|
%
|
Total operating expenses
|
(31,140
|
)
|
(30,084
|
)
|
(4
|
)%
|
Operating profit
|
18,615
|
|
16,612
|
|
12
|
%
|
Share of profit in associates and joint ventures
|
2,375
|
|
2,322
|
|
2
|
%
|
Profit before tax
|
20,990
|
|
18,934
|
|
11
|
%
|
HSBC Holdings plc
|
15
|
|
–
|
In RBWM, revenue increased by
$1.7bn
or
9%
, driven by growth in Retail Banking from current accounts, savings and deposits, reflecting balance growth and wider spreads primarily in Hong Kong, and also in the US and Mexico, partly offset by lower personal lending revenue. Revenue also increased in Wealth Management, mainly in insurance manufacturing driven by favourable market impacts compared with adverse market impacts in 2016, notably in Asia. In addition, investment distribution income increased, reflecting increased investor confidence in Hong Kong.
|
–
|
In CMB, revenue increased by
$0.6bn
or
5%
, driven by growth in Global Liquidity and Cash Management (‘GLCM’), notably in Asia. This primarily reflected wider spreads and increased average deposit balances. Revenue in Credit and Lending (‘C&L’)
|
–
|
In GB&M, revenue increased by
$0.4bn
or
3%
, mainly in GLCM and Securities Services. In Global Markets, revenue was marginally higher as growth in Equities, reflecting increased market share in Prime Financing, was partly offset by lower revenue in Fixed Income, Currencies and Commodities that reflected lower market volatility, as well as a net adverse movement on credit and funding valuations adjustments.
|
–
|
In GPB, revenue was
$45m
or
3%
lower, reflecting the impact of our customer repositioning actions. This was partly offset by increased revenue in the markets that we have targeted for growth, notably Hong Kong, due to higher investment revenue reflecting increased client activity and growth in deposit revenue as we benefited from wider spreads.
|
–
|
In Corporate Centre, revenue decreased by
$0.4bn
, with reductions in the US run-off portfolio (down
$0.7bn
), following the disposal of the remaining portfolio during 2017, and in Central Treasury (down
$0.1bn
). These decreases were partly offset in other income (up
$0.4
bn), which included revaluation gains on investment properties.
|
|
2017
$m
|
|
2016
$m
|
|
Variance
$m
|
|
%
|
|
Retail Banking and Wealth Management
|
20,287
|
|
18,542
|
|
1,745
|
|
9
|
%
|
Commercial Banking
|
13,223
|
|
12,619
|
|
604
|
|
5
|
%
|
Global Banking and Markets
|
15,091
|
|
14,715
|
|
376
|
|
3
|
%
|
Global Private Banking
|
1,703
|
|
1,748
|
|
(45
|
)
|
(3
|
)%
|
Corporate Centre
|
1,220
|
|
1,666
|
|
(446
|
)
|
(27
|
)%
|
Total
|
51,524
|
|
49,290
|
|
2,234
|
|
5
|
%
|
–
|
CMB (
$0.5bn
lower), notably in the UK and North America, primarily as 2016 included charges against exposures in the oil and gas sector. In addition, there were reductions in France, Spain and Singapore as we incurred individually assessed LICs against a small number of corporate exposures in 2016.
|
–
|
RBWM (
$0.2bn
lower), primarily in Turkey and the US, reflecting improved credit quality, partly offset by increases in Mexico, notably from growth in unsecured lending which resulted in an associated increase in delinquency rates.
|
–
|
LICs in GB&M of
$0.5bn
were broadly unchanged from the prior year. LICs in the current year related to two large corporate exposures in Europe. This compared with a small number of individually assessed LICs, notably on exposures in the oil and gas, and mining sectors in the US in 2016.
|
|
UK bank levy
|
|
Adjusted operating expenses (excluding bank levy)
|
16
|
HSBC Holdings plc
|
Adjusted revenue up
|
|
|
|
5
|
%
|
Adjusted jaws
|
|
|
1
|
%
|
|
Adjusted costs up
|
|
|
|
4
|
%
|
|
HSBC Holdings plc
|
17
|
|
–
|
Significant investment in digital transformation across our
six
core markets, reshaping the branch network and sales force, and improving customer engagement, including the launch of a payment app in Hong Kong (PayMe) and voice biometrics in the UK.
|
–
|
Continued to attract customer deposits (up
5%
), providing the potential to benefit from future interest rate rises; lending balances increased by
7%
.
|
–
|
Strong growth in sales of investment products, notably equities (up
45%
) and mutual funds (up
22%
), and growth in insurance annualised new business premiums (up
7%
), primarily in Asia.
|
–
|
Growth in revenue from current accounts, savings and deposits (up
$1.1bn
) due to wider spreads and higher balances primarily in Hong Kong, and also in the US and Mexico.
|
–
|
Lower personal lending revenue (down
$0.3bn
), reflecting mortgage spread compression, primarily in Hong Kong, mainland China and the US. This was partly offset by lending growth of
$22.2bn
, notably driven by mortgages in the UK and Hong Kong, where we grew our market share.
|
–
|
Growth in life insurance manufacturing revenue (up
$0.5bn
) including favourable movements in market impacts of
$0.3bn
in 2017 compared with adverse movements of
$0.4bn
in 2016, due to interest rate and equity market movements, notably in Asia and France, and to a lesser extent higher insurance sales in Asia.
|
–
|
Higher investment distribution revenue (up
$0.4bn
), primarily from higher sales of mutual funds and retail securities in Hong Kong, reflecting increased investor confidence.
|
|
|
|
|
|
2017 vs 2016
|
||||||
Management view of adjusted revenue
<
>
|
Footnotes
|
2017
$m
|
|
2016
$m
|
|
2015
$m
|
|
$m
|
|
%
|
|
Net operating income
|
3
|
|
|
|
|
|
|||||
Retail Banking
|
|
13,495
|
|
12,695
|
|
12,508
|
|
800
|
|
6
|
%
|
– c
urrent accounts, savings and deposits
|
|
6,344
|
|
5,213
|
|
4,814
|
|
1,131
|
|
22
|
%
|
–
personal lending
|
|
7,151
|
|
7,482
|
|
7,694
|
|
(331
|
)
|
(4
|
)%
|
mortgages
|
|
2,337
|
|
2,546
|
|
2,648
|
|
(209
|
)
|
(8
|
)%
|
credit cards
|
|
2,899
|
|
3,034
|
|
3,218
|
|
(135
|
)
|
(4
|
)%
|
other personal lending
|
4
|
1,915
|
|
1,902
|
|
1,828
|
|
13
|
|
1
|
%
|
Wealth Management
|
|
6,224
|
|
5,292
|
|
5,748
|
|
932
|
|
18
|
%
|
– investment distribution
|
5
|
3,276
|
|
2,904
|
|
3,230
|
|
372
|
|
13
|
%
|
– life insurance manufacturing
|
|
1,893
|
|
1,401
|
|
1,544
|
|
492
|
|
35
|
%
|
– asset management
|
|
1,055
|
|
987
|
|
974
|
|
68
|
|
7
|
%
|
Other
|
6
|
568
|
|
555
|
|
582
|
|
13
|
|
2
|
%
|
Year ended 31 Dec
|
|
20,287
|
|
18,542
|
|
18,838
|
|
1,745
|
|
9
|
%
|
Adjusted RoRWA (%)
|
7
|
5.5
|
|
4.6
|
|
4.8
|
|
|
|
18
|
HSBC Holdings plc
|
–
|
Corporate customer value from our international subsidiary banking proposition grew
19%
*
compared with 2016, continuing to demonstrate the value of our global network.
|
–
|
In GLCM we launched a number of mobile solutions, including the government sponsored Unified Payments Interface in India, and Omni-Channel mobile collections in China. We also rolled out Voice and Touch ID in
37
markets and launched the next generation of HSBCnet.
|
–
|
HSBC was named the world’s Best Trade Finance Bank and Most Innovative Bank by
Global Trade Review
magazine. We also announced a strategic partnership with Tradeshift, the world’s largest business commerce platform, which will enable companies of all sizes to manage their global supply chains and working capital requirements from one simple online platform, from any device.
|
–
|
In GLCM, revenue increased by
$536m
or
13%
, notably in Hong Kong and mainland China, reflecting wider spreads. Average balances grew 5%, reflecting customer deposit retention and new customer acquisitions. In the UK, average balance sheet growth of
10%
was more than offset by narrower spreads due to the impact of the base rate reduction in 2016.
|
–
|
In C&L, revenue increased by
$52m
or
1%
. In the UK, revenue increased as lending growth more than offset narrower spreads. By contrast, revenue in Asia was lower, as balance growth in Hong Kong was more than offset by the effects of spread compression in Hong Kong and mainland China, in part reflecting competitive pressures. Revenue in the US was lower, as we reposition the portfolio towards higher returns.
|
–
|
In GTRF, revenue was
$21m
or
1%
lower, representing a stabilisation in performance following a challenging 2016. Notably, revenue increased in both Asia and the UK, reflecting balance sheet growth. However, this was more than offset by a reduction in revenue in the Middle East and North Africa (‘MENA’), reflecting the effect of managed customer exits in the UAE.
|
|
|
|
|
|
2017 vs 2016
|
||||||
Management view of adjusted revenue
<
>
|
Footnotes
|
2017
$m
|
|
2016
$m
|
|
2015
$m
|
|
$m
|
|
%
|
|
Net operating income
|
3
|
|
|
|
|
|
|||||
Global Trade and Receivables Finance
|
|
1,817
|
|
1,838
|
|
2,039
|
|
(21
|
)
|
(1
|
)%
|
Credit and Lending
|
|
5,061
|
|
5,009
|
|
4,934
|
|
52
|
|
1
|
%
|
Global Liquidity and Cash Management
|
|
4,783
|
|
4,247
|
|
4,077
|
|
536
|
|
13
|
%
|
Markets products, Insurance and Investments and Other
|
8
|
1,562
|
|
1,525
|
|
1,457
|
|
37
|
|
2
|
%
|
Year ended 31 Dec
|
|
13,223
|
|
12,619
|
|
12,507
|
|
604
|
|
5
|
%
|
Adjusted RoRWA (%)
|
7
|
2.3
|
|
2.1
|
|
1.9
|
|
|
|
*
|
Analysis relates to corporate client income which includes total income from GB&M synergy products, including Foreign Exchange and Debt Capital Markets. This measure differs from reported revenue in that it excludes Business Banking and Other and internal cost of funds.
|
HSBC Holdings plc
|
19
|
|
–
|
The first foreign bank with a majority-owned securities joint venture in China, Qianhai Securities Limited, which will allow us to provide GB&M and CMB clients with a broad spectrum of investment banking and markets services in China.
|
–
|
Issued the world’s first corporate sustainable development bond.
|
–
|
Revenue growth in all of our transaction banking products, notably GLCM (up
$0.3bn
) and Securities Services (up
$0.2bn
). These increases reflected continued momentum as we won and retained client mandates, and benefited from higher interest rates, particularly in Asia and the US.
|
–
|
Global Markets revenue was resilient (up
$33m
), despite lower volatility in 2017, compared with more robust trading conditions in 2016. In Equities revenue increased by
$0.3bn
, as we continued to capture market share from Prime Financing products. This was largely offset by Fixed Income, Currencies and Commodities, where revenue decreased by
$0.2bn
, reflecting subdued trading conditions.
|
–
|
Global Banking revenue was marginally higher than 2016 (up
$16m
), reflecting growth in lending balances and continued momentum in investment banking products, which broadly offset the effects of tightening spreads on lending in Asia.
|
|
|
|
|
|
2017 vs 2016
|
||||||
Management view of adjusted revenue
<
>
|
Footnotes
|
2017
$m
|
|
2016
$m
|
|
2015
$m
|
|
$m
|
|
%
|
|
Net operating income
|
3
|
|
|
|
|
|
|||||
Global Markets
|
|
6,689
|
|
6,656
|
|
6,010
|
|
33
|
|
—
|
%
|
Foreign Exchange
|
|
2,568
|
|
2,764
|
|
2,658
|
|
(196
|
)
|
(7
|
)%
|
Rates
|
|
1,970
|
|
2,120
|
|
1,404
|
|
(150
|
)
|
(7
|
)%
|
Credit
|
|
900
|
|
781
|
|
606
|
|
119
|
|
15
|
%
|
– FICC
|
|
5,438
|
|
5,665
|
|
4,668
|
|
(227
|
)
|
(4
|
)%
|
– Equities
|
|
1,251
|
|
991
|
|
1,342
|
|
260
|
|
26
|
%
|
Global Banking
|
|
3,807
|
|
3,791
|
|
3,757
|
|
16
|
|
—
|
%
|
Global Liquidity and Cash Management
|
|
2,197
|
|
1,885
|
|
1,744
|
|
312
|
|
17
|
%
|
Securities Services
|
|
1,746
|
|
1,561
|
|
1,600
|
|
185
|
|
12
|
%
|
Global Trade and Receivables Finance
|
|
700
|
|
689
|
|
682
|
|
11
|
|
2
|
%
|
Principal Investments
|
|
318
|
|
226
|
|
226
|
|
92
|
|
41
|
%
|
Credit and funding valuation adjustments
|
9
|
(262
|
)
|
(51
|
)
|
186
|
|
(211
|
)
|
(414
|
)%
|
Other
|
10
|
(104
|
)
|
(42
|
)
|
73
|
|
(62
|
)
|
(148
|
)%
|
Year ended 31 Dec
|
|
15,091
|
|
14,715
|
|
14,278
|
|
376
|
|
3
|
%
|
Adjusted RoRWA (%)
|
7
|
1.9
|
|
1.7
|
|
1.5
|
|
|
|
20
|
HSBC Holdings plc
|
–
|
Net new money inflows of
$15bn
in key markets targeted for growth, especially in Hong Kong.
|
–
|
Significant progress made with repositioning, with outflows of over
$15b
n in 2017.
|
–
|
Positive momentum with significant growth in discretionary and advisory mandates in 2017.
|
|
|
|
|
|
2017 vs 2016
|
||||||
Management view of adjusted revenue
<
>
|
Footnotes
|
2017
$m
|
|
2016
$m
|
|
2015
$m
|
|
$m
|
|
%
|
|
Net operating income
|
3
|
|
|
|
|
|
|||||
Investment revenue
|
|
693
|
|
733
|
|
902
|
|
(40
|
)
|
(5
|
)%
|
Lending
|
|
387
|
|
411
|
|
411
|
|
(24
|
)
|
(6
|
)%
|
Deposit
|
|
401
|
|
342
|
|
354
|
|
59
|
|
17
|
%
|
Other
|
|
222
|
|
262
|
|
299
|
|
(40
|
)
|
(15
|
)%
|
Year ended 31 Dec
|
|
1,703
|
|
1,748
|
|
1,966
|
|
(45
|
)
|
(3
|
)%
|
Adjusted RoRWA (%)
|
7
|
1.8
|
|
1.6
|
|
2.1
|
|
|
|
–
|
higher interest on our debt (up
$0.3
bn), mainly from higher costs of debt issued to meet regulatory requirements; and
|
–
|
a reduction in revenue in BSM (down
$0.3
bn) reflecting lower yield rates and increased utilisation of the Group’s surplus liquidity by the global businesses; partly offset by:
|
–
|
favourable fair value movements relating to the economic hedging of interest and exchange rate risk on our long-term debt with long-term derivatives of
$0.1
bn, compared with adverse movements of
$0.3
bn in 2016.
|
|
|
|
|
|
2017 vs 2016
|
||||||
Management view of adjusted revenue
<
>
|
Footnotes
|
2017
$m
|
|
2016
$m
|
|
2015
$m
|
|
$m
|
|
%
|
|
Net operating income
|
3
|
|
|
|
|
|
|||||
Central Treasury
|
11
|
1,340
|
|
1,454
|
|
1,760
|
|
(114
|
)
|
(8
|
)%
|
Legacy portfolios
|
|
8
|
|
724
|
|
1,233
|
|
(716
|
)
|
(99
|
)%
|
– US run-off portfolio
|
|
40
|
|
692
|
|
1,165
|
|
(652
|
)
|
(94
|
)%
|
– Legacy credit
|
|
(32
|
)
|
32
|
|
68
|
|
(64
|
)
|
(200
|
)%
|
Other
|
12
|
(128
|
)
|
(512
|
)
|
(160
|
)
|
384
|
|
(75
|
)%
|
Year ended 31 Dec
|
|
1,220
|
|
1,666
|
|
2,833
|
|
(446
|
)
|
(27
|
)%
|
HSBC Holdings plc
|
21
|
|
–
|
How customers feel about recommending us; and
|
–
|
The speed and quality of complaint handling.
|
Our largest global business
|
|
RBWM
|
Supports approximately 37 million customers worldwide
|
Our largest markets
|
|
United Kingdom
|
More than $401bn in customer accounts
|
Hong Kong
|
More than $477bn in customer accounts
|
|
Same day or next working day
|
|
Between 2-5 days
|
|
Longer than 5 days
|
22
|
HSBC Holdings plc
|
HSBC Holdings plc
|
23
|
|
|
Male
|
|
Female
|
24
|
HSBC Holdings plc
|
–
|
Allegations of internal fraud by staff.
|
–
|
Issues with staff behaviour and personal conduct.
|
–
|
Weaknesses in adherence to information security protocols.
|
–
|
The US Foreign Account Tax Compliance Act (‘FATCA’);
|
–
|
The OECD Standard for Automatic Exchange of Financial Account Information (also known as the Common Reporting Standard);
|
–
|
The Capital Requirements Directive IV (‘CRD IV’) Country by Country Reporting; and
|
–
|
The OECD Base Erosion and Profit Shifting (‘BEPS’) initiative.
|
HSBC Holdings plc
|
25
|
|
–
|
new thermal coal mines or new customers dependent on thermal coal mining; and
|
–
|
new coal-fired power plants in developed countries.
|
–
|
routinely reinforce lending criteria in developing countries, taking into account the state of climate transition and access to alternative sources of energy in individual countries; and
|
–
|
actively engage with clients in high-carbon sectors to support and influence their transition strategies, review their approach to reduce greenhouse gas emissions and assess their exposure to potentially stranded assets.
|
–
|
Establish a Centre of Sustainable Finance to provide thought leadership about climate change and the role of the financial services sector.
|
–
|
Drive the sustainable finance agenda by promoting the development of sector activities (such as industry-wide definitions, standards, tools and metrics) to improve market analysis of sustainability issues and impacts.
|
26
|
HSBC Holdings plc
|
HSBC Holdings plc
|
27
|
|
–
|
risks that we accept as part of doing business, such as credit risk and market risk;
|
–
|
risks that we incur as part of doing business, such as operational risk, which are actively managed to remain below an acceptable tolerance; and
|
–
|
risks for which we have zero tolerance, such as knowingly engaging in activities where foreseeable reputational risk has not been considered.
|
28
|
HSBC Holdings plc
|
|
Risk
|
Trend
|
Mitigants
|
|
Externally driven
|
|
|
|
Economic outlook and capital flows
|
^
|
We actively monitor our wholesale credit and trading portfolios, including undertaking stress tests, to identify sectors and clients that may come under stress due to economic conditions in the eurozone, mainland China and in the UK as negotiations to exit from the EU continue.
|
|
Geopolitical risk
|
^
|
We continually assess the impact of geopolitical events on our businesses and exposures, and take steps to mitigate them, where required, to help ensure we remain within our risk appetite. We have also strengthened physical security at our premises where the risk of terrorism is heightened.
|
l
|
The credit cycle
|
>
|
We continue to undertake detailed reviews of our portfolios and are proactively assessing customers and sectors likely to come under stress as a result of geopolitical or macroeconomic events, reducing limits where appropriate.
|
|
Cyber threat and unauthorised access to systems
|
^
|
We continue to strengthen our cyber control framework and implement initiatives to improve our resilience and cybersecurity capabilities, including threat detection and analysis, access control, payment systems controls, data protection and backup and recovery.
|
l
|
Regulatory, technological and sustainability developments including conduct, with adverse impact on business model and profitability
|
>
|
We proactively engage with regulators wherever possible to help ensure new regulatory requirements are effectively implemented, and work with them in relation to their investigations into historical activities. We also engage with non-governmental organisations to help ensure our policies address environmental concerns.
|
|
Financial crime risk environment
|
>
|
We continue to develop and enhance the Financial Crime Risk function and augment our risk management capabilities to further improve our financial crime detection and compliance capabilities. We will continue to take steps to enhance our defences against financial crime across our operations globally to help ensure our Global Standards are sustainable over the long term.
|
|
Internally driven
|
|
|
|
IT systems infrastructure and resilience
|
>
|
We continue to monitor and improve service resilience across our technology infrastructure, enhancing our problem diagnosis/resolution and change execution capabilities, reducing service disruption to our customers.
|
|
Impact of organisational change and regulatory demands on employees
|
>
|
We continue to focus on resourcing and employee development to meet regulatory changes as well as to maintain and enhance our leadership succession strength.
|
|
Execution risk
|
>
|
The Group Change Committee oversees the progress of the highest priority programmes, underpinning the implementation of our strategic actions to help ensure that we achieve a consistent on time, on budget and on quality delivery across these critical initiatives.
|
l
|
Risks arising from the receipt of services from third parties
|
>
|
We have strengthened essential governance processes and relevant policies relating to how we identify, assess, mitigate and manage risks across the range of third parties with which we do business. This includes control monitoring and assurance throughout the third-party lifecycle.
|
|
Enhanced model risk management expectations
|
>
|
We have strengthened our model risk management framework by establishing an independent second line of defence Model Risk Management sub-function, and we continue to enhance our existing policy and standards in order to address evolving regulatory, external and internal requirements.
|
|
Data management
|
^
|
We continue to improve our insights, consistency of data aggregation, reporting and decisions through ongoing enhancement of our data governance, data quality and architecture framework.
|
^
|
Risk heightened during 2017
|
>
|
Risk remained at the same level as 2016
|
•
|
Thematic risk renamed during 2017
|
HSBC Holdings plc
|
29
|
|
–
|
Focus on total compensation with a strong link between pay and performance
|
–
|
Judge not only what is achieved, but also how it is achieved, in line with the HSBC Values
|
–
|
Operate a thorough performance management and HSBC Values assessment process
|
–
|
Recognise and reward our employees for outstanding positive behaviour
|
–
|
Design our policy to align compensation with long-term stakeholder interests
|
–
|
Apply consequence management to strengthen the alignment between risk and reward
|
–
|
Reward inappropriate or excessive risk taking or short-term performance at the expense of long-term company sustainability
|
–
|
Use only a formulaic approach to determine bonuses for our executives
|
–
|
Award discretionary bonuses to employees rated unacceptable against the HSBC Values and behaviours
|
–
|
Allow our employees to hedge against their unvested or retained awards
|
–
|
Offer employment contracts with a notice period of more than 12 months
|
–
|
Have pre-arranged individual severance agreements
|
30
|
HSBC Holdings plc
|
(in £000)
|
Base salary
|
|
Fixed pay allowance
|
|
Cash in lieu of pension
|
|
Annual incentive
|
|
LTI
1
|
|
Sub-total
|
|
Taxable benefits
|
|
Non-taxable benefits
|
|
Notional returns
|
|
Total
|
|
|
Douglas Flint
2
|
2017
|
1,125
|
|
—
|
|
338
|
|
—
|
|
—
|
|
1,463
|
|
83
|
|
64
|
|
—
|
|
1,610
|
|
2016
|
1,500
|
|
—
|
|
450
|
|
—
|
|
—
|
|
1,950
|
|
100
|
|
86
|
|
—
|
|
2,136
|
|
|
Stuart Gulliver
3
|
2017
|
1,250
|
|
1,700
|
|
375
|
|
2,127
|
|
—
|
|
5,452
|
|
500
|
|
71
|
|
63
|
|
6,086
|
|
2016
|
1,250
|
|
1,700
|
|
375
|
|
1,695
|
|
—
|
|
5,020
|
|
557
|
|
71
|
|
27
|
|
5,675
|
|
|
Iain Mackay
|
2017
|
700
|
|
950
|
|
210
|
|
1,334
|
|
—
|
|
3,194
|
|
64
|
|
37
|
|
42
|
|
3,337
|
|
2016
|
700
|
|
950
|
|
210
|
|
987
|
|
—
|
|
2,847
|
|
52
|
|
37
|
|
17
|
|
2,953
|
|
|
Marc Moses
|
2017
|
700
|
|
950
|
|
210
|
|
1,358
|
|
—
|
|
3,218
|
|
16
|
|
38
|
|
42
|
|
3,314
|
|
2016
|
700
|
|
950
|
|
210
|
|
1,005
|
|
—
|
|
2,865
|
|
15
|
|
38
|
|
18
|
|
2,936
|
|
1.
|
The first LTI award was made in February 2017, with a performance period ending in 2019. Vesting of the first LTI award will be included in the single figure table for the financial year ending on 31 December 2019.
|
2.
|
Douglas Flint stepped down from the Board on 30 September 2017 and his remuneration reflects time served as an executive Director. Details on retirement arrangements are provided on page
196
.
|
3.
|
To meet regulatory deferral requirements for 2017,
60%
of the annual incentive award of Stuart Gulliver has been deferred in shares and will vest in five equal instalments between the third and seventh anniversary of the grant date.
|
HSBC Holdings plc
|
31
|
|
Financial summary
|
|
|
Page
|
Use of non-GAAP financial measures
|
|
Critical accounting estimates and judgements
|
|
Consolidated income statement
|
|
Group performance by income and expense item
|
|
Net interest income
|
|
Net fee income
|
|
Net trading income
|
|
Net income/(expense) from financial instruments designated at fair value
|
|
Gains less losses from financial investments
|
|
Net insurance premium income
|
|
Other operating income
|
|
Net insurance claims and benefits paid and movement
in liabilities to policyholders
|
|
Loan impairment charges and other credit risk provisions
|
|
Operating expenses
|
|
Share of profit in associates and joint ventures
|
|
Tax expense
|
|
2016 compared with 2015
|
|
Consolidated balance sheet
|
|
Movement in 2017
|
|
Average balance sheet
|
|
Average balance sheet and net interest income
|
|
Analysis of changes in net interest income and net interest expense
|
|
Short-term borrowings
|
|
Contractual obligations
|
60
|
Loan maturity and interest sensitivity analysis
|
60
|
Deposits
|
61
|
Certificates of deposit and other time deposits
|
Use of non-GAAP financial measures
|
Foreign currency translation differences
Foreign currency translation differences for 2017 are computed by retranslating into US dollars for non-US dollar branches, subsidiaries, joint ventures and associates:
•
the income statements for 2016 and 2015 at the average rates of exchange for 2017; and
•
the balance sheets at 31 December 2016 and 31 December 2015 at the prevailing rates of exchange on 31 December 2017.
No adjustment has been made to the exchange rates used to translate foreign currency denominated assets and liabilities into the functional currencies of any HSBC branches, subsidiaries, joint ventures or associates. When reference is made to foreign currency translation differences in tables or commentaries, comparative data reported in the functional currencies of HSBC’s operations have been translated at the appropriate exchange rates applied in the current period on the basis described above.
|
Critical accounting estimates and judgements
|
•
|
Impairment of loans and advances: For collective impairment allowances, estimation methods include the use of historical information supplemented by significant management judgement about whether current economic and credit conditions are such that actual incurred losses are likely to be greater or less than experienced in the past. For individually assessed loans, judgements are made about the financial condition of individual borrowers, which can involve a wide range of factors relating to their business and the value of any
|
32
|
HSBC Holdings plc
|
•
|
Deferred tax assets: The most significant judgements relate to those made in respect of expected future profitability. See Note
1.2(h)
on page
230
.
|
•
|
Valuation of financial instruments: In determining the fair value of financial instruments a variety of valuation techniques are used, some of which feature significant unobservable inputs and are subject to substantial uncertainty. See Note
1.2(c)
on page
225
.
|
•
|
Impairment of interests in associates: Impairment testing involves significant judgement in determining the value in use, and in particular estimating the present values of cash flows expected to arise from continuing to hold the investment,
|
•
|
Goodwill impairment: A high degree of uncertainty is involved in estimating the future cash flows of the cash generating units (‘CGUs’) and the rates used to discount these cash flows. See Note
1.2(a)
on page
224
.
|
•
|
Provisions: A high degree of judgement may be required due to the high degree of uncertainty associated with determining whether a present obligation exists, and estimating the probability and amount of any outflows that may arise. See Note
1.2(i)
on page
230
.
|
Consolidated income statement
|
Summary consolidated income statement
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Net interest income
|
28,176
|
|
29,813
|
|
32,531
|
|
34,705
|
|
35,539
|
|
Net fee income
|
12,811
|
|
12,777
|
|
14,705
|
|
15,957
|
|
16,434
|
|
Net trading income
|
7,719
|
|
9,452
|
|
8,723
|
|
6,760
|
|
8,690
|
|
Net income/(expense) from financial instruments designated at fair value
|
3,698
|
|
(2,666
|
)
|
1,532
|
|
2,473
|
|
768
|
|
Gains less losses from financial investments
|
1,150
|
|
1,385
|
|
2,068
|
|
1,335
|
|
2,012
|
|
Dividend income
|
106
|
|
95
|
|
123
|
|
311
|
|
322
|
|
Net insurance premium income
|
9,779
|
|
9,951
|
|
10,355
|
|
11,921
|
|
11,940
|
|
Other operating income/(expense)
|
337
|
|
(971
|
)
|
1,055
|
|
1,131
|
|
2,632
|
|
Total operating income
|
63,776
|
|
59,836
|
|
71,092
|
|
74,593
|
|
78,337
|
|
Net insurance claims and benefits paid and movement in liabilities to policyholders
|
(12,331
|
)
|
(11,870
|
)
|
(11,292
|
)
|
(13,345
|
)
|
(13,692
|
)
|
Net operating income before loan impairment charges and other
credit risk provisions |
51,445
|
|
47,966
|
|
59,800
|
|
61,248
|
|
64,645
|
|
Loan impairment charges and other credit risk provisions
|
(1,769
|
)
|
(3,400
|
)
|
(3,721
|
)
|
(3,851
|
)
|
(5,849
|
)
|
Net operating income
|
49,676
|
|
44,566
|
|
56,079
|
|
57,397
|
|
58,796
|
|
Total operating expenses
|
(34,884
|
)
|
(39,808
|
)
|
(39,768
|
)
|
(41,249
|
)
|
(38,556
|
)
|
Operating profit
|
14,792
|
|
4,758
|
|
16,311
|
|
16,148
|
|
20,240
|
|
Share of profit in associates and joint ventures
|
2,375
|
|
2,354
|
|
2,556
|
|
2,532
|
|
2,325
|
|
Profit before tax
|
17,167
|
|
7,112
|
|
18,867
|
|
18,680
|
|
22,565
|
|
Tax expense
|
(5,288
|
)
|
(3,666
|
)
|
(3,771
|
)
|
(3,975
|
)
|
(4,765
|
)
|
Profit for the year
|
11,879
|
|
3,446
|
|
15,096
|
|
14,705
|
|
17,800
|
|
Attributable to:
|
|
|
|
|
|
|||||
– ordinary shareholders of the parent company
|
9,683
|
|
1,299
|
|
12,572
|
|
13,115
|
|
15,631
|
|
– preference shareholders of the parent company
|
90
|
|
90
|
|
90
|
|
90
|
|
90
|
|
– other equity holders
|
1,025
|
|
1,090
|
|
860
|
|
483
|
|
483
|
|
– non-controlling interests
|
1,081
|
|
967
|
|
1,574
|
|
1,017
|
|
1,596
|
|
Profit for the year
|
11,879
|
|
3,446
|
|
15,096
|
|
14,705
|
|
17,800
|
|
Five-year financial information
|
|||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|
Footnotes
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Basic earnings per share
|
|
0.48
|
|
0.07
|
|
0.65
|
|
0.69
|
|
0.84
|
|
Diluted earnings per share
|
|
0.48
|
|
0.07
|
|
0.64
|
|
0.69
|
|
0.84
|
|
Dividends per ordinary share
|
13
|
0.51
|
|
0.51
|
|
0.50
|
|
0.49
|
|
0.48
|
|
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
Dividend payout ratio
|
14
|
106.3
|
|
728.6
|
|
76.5
|
|
71.0
|
|
57.1
|
|
Post-tax return on average total assets
|
|
0.5
|
|
0.1
|
|
0.6
|
|
0.5
|
|
0.7
|
|
Return on average risk-weighted assets
|
15
|
2.0
|
|
0.7
|
|
1.6
|
|
1.5
|
|
2.0
|
|
Return on average ordinary shareholders’ equity
|
|
5.9
|
|
0.8
|
|
7.2
|
|
7.3
|
|
9.2
|
|
Average foreign exchange translation rates to $:
|
|
|
|
|
|
|
|||||
$1: £
|
|
0.777
|
|
0.741
|
|
0.654
|
|
0.607
|
|
0.639
|
|
$1: €
|
|
0.887
|
|
0.904
|
|
0.902
|
|
0.754
|
|
0.753
|
|
HSBC Holdings plc
|
33
|
Group performance by income and expense item
|
|
|
2017
|
|
2016
|
2015
|
||
|
Footnotes
|
$m
|
|
$m
|
|
$m
|
|
Interest income
|
|
40,995
|
|
42,414
|
|
47,189
|
|
Interest expense
|
|
(12,819
|
)
|
(12,601
|
)
|
(14,658
|
)
|
Net interest income
|
|
28,176
|
|
29,813
|
|
32,531
|
|
Average interest-earning assets
|
|
1,726,120
|
|
1,723,702
|
|
1,726,949
|
|
|
|
%
|
|
%
|
|
%
|
|
Gross interest yield
|
16
|
2.37
|
|
2.46
|
|
2.73
|
|
Less: cost of funds
|
|
(0.88
|
)
|
(0.87
|
)
|
(1.00
|
)
|
Net interest spread
|
17
|
1.49
|
|
1.59
|
|
1.73
|
|
Net interest margin
|
18
|
1.63
|
|
1.73
|
|
1.88
|
|
34
|
HSBC Holdings plc
|
Significant items and currency translation
|
||||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Significant items
|
(108
|
)
|
1,110
|
|
– customer redress programmes
|
(108
|
)
|
2
|
|
– trading results from disposed-of operations in Brazil
|
—
|
|
949
|
|
– currency translation on significant items
|
|
|
159
|
|
Currency translation
|
|
524
|
|
|
Year ended 31 Dec
|
(108
|
)
|
1,634
|
|
•
|
Asia, mainly due to growth in term lending and mortgage balances, although term lending yields decreased as a result of competitive pressures; and
|
•
|
Latin America, notably in Mexico reflecting higher yields on mortgages and term lending driven by central bank rate rises, and growth in mortgage balances.
|
•
|
North America, primarily as a result of the continuing run-off of the higher-yielding CML portfolio in the US; and
|
•
|
Europe, as the effects of decreased lending yields more than offset balance growth in mortgages, term lending and overdrafts, resulting from lower central bank rates, negative interest rates in continental Europe, and market competition.
|
•
|
rate rises in North America and Mexico; partly offset by,
|
•
|
the 2016 reduction in the UK base rate and negative interest rates in continental Europe on current and savings and deposit accounts; and
|
•
|
central bank rate reductions in Asia, notably in India and Australia, and a change in portfolio mix.
|
HSBC Holdings plc
|
35
|
Net fee income
|
||||||
|
2017
|
|
2016
|
|
2015
|
|
|
$m
|
|
$m
|
|
$m
|
|
Account services
|
2,244
|
|
2,417
|
|
2,745
|
|
Funds under management
|
2,188
|
|
2,076
|
|
2,570
|
|
Cards
|
1,994
|
|
1,970
|
|
2,281
|
|
Credit facilities
|
1,718
|
|
1,795
|
|
1,919
|
|
Broking income
|
1,191
|
|
1,060
|
|
1,441
|
|
Unit trusts
|
1,010
|
|
863
|
|
1,007
|
|
Underwriting
|
829
|
|
705
|
|
762
|
|
Remittances
|
759
|
|
766
|
|
772
|
|
Imports/exports
|
736
|
|
820
|
|
971
|
|
Global custody
|
692
|
|
662
|
|
721
|
|
Insurance agency commission
|
410
|
|
419
|
|
519
|
|
Other
|
2,082
|
|
2,116
|
|
2,308
|
|
Fee income
|
15,853
|
|
15,669
|
|
18,016
|
|
Less: fee expense
|
(3,042
|
)
|
(2,892
|
)
|
(3,311
|
)
|
Year ended 31 Dec
|
12,811
|
|
12,777
|
|
14,705
|
|
Significant items and currency translation
|
||||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Significant items
|
—
|
|
271
|
|
– trading results from disposed-of operations in Brazil
|
—
|
|
233
|
|
– currency translation on significant items
|
|
|
38
|
|
Currency translation
|
|
|
111
|
|
Year ended 31 Dec
|
—
|
|
382
|
|
Net trading income
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|
|
Footnote
|
$m
|
|
$m
|
|
$m
|
|
Trading activities
|
|
5,990
|
|
8,702
|
|
7,285
|
|
Net interest income on trading activities
|
|
1,621
|
|
1,386
|
|
1,775
|
|
Gain/(loss) on termination of hedges
|
|
3
|
|
1
|
|
(11
|
)
|
Other trading income – hedge ineffectiveness
|
|
|
|
|
|
|
|
– on cash flow hedges
|
|
(5
|
)
|
(5
|
)
|
15
|
|
– on fair value hedges
|
|
4
|
|
23
|
|
(11
|
)
|
Fair value movement on non-qualifying hedges
|
24
|
106
|
|
(655
|
)
|
(330
|
)
|
Year ended 31 Dec
|
|
7,719
|
|
9,452
|
|
8,723
|
|
Significant items and currency translation
|
|||||
|
|
2017
|
|
2016
|
|
|
Footnote
|
$m
|
|
$m
|
|
Significant items
|
|
(245
|
)
|
(475
|
)
|
– debit valuation adjustment on derivative contracts
|
|
(373
|
)
|
26
|
|
– fair value movement on non-qualifying hedges
|
24
|
128
|
|
(687
|
)
|
– trading results from disposed-of operations in Brazil
|
|
—
|
|
179
|
|
– currency translation on significant items
|
|
|
|
7
|
|
Currency translation
|
|
|
|
219
|
|
Year ended 31 Dec
|
|
(245
|
)
|
(256
|
)
|
36
|
HSBC Holdings plc
|
•
|
adverse movements on assets held as economic hedges of foreign currency debt designated at fair value of
$0.3bn
in 2017 compared with favourable movements of
$1.6bn
in 2016. These
|
•
|
decreases in GB&M (
$0.2bn
), notably in Foreign Exchange and Rates, reflecting subdued trading activity in the fourth quarter, partly offset by Credit and Equities, where we gained market share in Prime Financing. We also recorded adverse movements of
$262m
in credit and funding valuation adjustments compared with adverse movements of
$51m
in the prior year, primarily relating to movements in our own credit spread on structured liabilities.
|
Significant items and currency translation
|
|||||
|
|
2017
|
|
2016
|
|
|
Footnote
|
$m
|
|
$m
|
|
Significant items
|
|
—
|
|
(1,477
|
)
|
– own credit spread
|
25
|
—
|
|
(1,792
|
)
|
– trading results from disposed-of operations in Brazil
|
|
—
|
|
304
|
|
– currency translation on significant items
|
|
|
11
|
|
|
Currency translation
|
|
|
|
(186
|
)
|
Year ended 31 Dec
|
|
—
|
|
(1,663
|
)
|
•
|
favourable movements of
$0.3bn
compared with adverse movements of
$1.6bn
in 2016 on foreign currency debt designated at fair value and issued as part of our overall funding strategy (offset in ‘Net trading income’ by assets held as economic hedges); and
|
•
|
favourable movements of
$0.1bn
compared with adverse movements of
$0.3bn
in 2016 relating to the economic hedging of interest and exchange rate risk on our long-term debt, reported in Corporate Centre.
|
HSBC Holdings plc
|
37
|
Gains less losses from financial investments
|
||||||
|
2017
|
|
2016
|
|
2015
|
|
|
$m
|
|
$m
|
|
$m
|
|
Net gains from disposal
|
1,248
|
|
1,421
|
|
2,179
|
|
– debt securities
|
403
|
|
357
|
|
345
|
|
– equity securities
|
838
|
|
1,058
|
|
1,829
|
|
– other financial investments
|
7
|
|
6
|
|
5
|
|
Impairment of available-for-sale equity securities
|
(98
|
)
|
(36
|
)
|
(111
|
)
|
Year ended 31 Dec
|
1,150
|
|
1,385
|
|
2,068
|
|
Significant items and currency translation
|
||||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Significant items
|
434
|
|
648
|
|
– gain on disposal of our membership interest in Visa – Europe
|
—
|
|
584
|
|
– gain on disposal of our membership interest in Visa – US
|
308
|
|
116
|
|
– gain on disposal of our investment in Vietnam Technological and Commercial Joint Stock Bank
|
126
|
|
—
|
|
– trading results from disposed-of operations in Brazil
|
—
|
|
1
|
|
– currency translation on significant items
|
|
|
(53
|
)
|
Currency translation
|
|
|
70
|
|
Year ended 31 Dec
|
434
|
|
718
|
|
Net insurance premium income
|
||||||
|
2017
|
|
2016
|
|
2015
|
|
|
$m
|
|
$m
|
|
$m
|
|
Gross insurance premium income
|
10,802
|
|
10,588
|
|
11,012
|
|
Reinsurance premiums
|
(1,023
|
)
|
(637
|
)
|
(657
|
)
|
Year ended 31 Dec
|
9,779
|
|
9,951
|
|
10,355
|
|
Significant items and currency translation
|
||||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Significant items
|
—
|
|
420
|
|
– trading results from disposed-of operations in Brazil
|
—
|
|
362
|
|
– currency translation on significant items
|
|
58
|
|
|
Currency translation
|
|
(33
|
)
|
|
Year ended 31 Dec
|
—
|
|
387
|
|
•
|
growth in Hong Kong driven by increased gross premium income, partly offset by the effect of a new reinsurance agreement;
|
•
|
an increase in France, driven by higher volumes of unit-linked products.
|
•
|
lower sales through third-party channels in Singapore.
|
38
|
HSBC Holdings plc
|
Other operating income
|
||||||
|
2017
|
|
2016
|
|
2015
|
|
|
$m
|
|
$m
|
|
$m
|
|
Rent received
|
171
|
|
157
|
|
171
|
|
Gains/(losses) recognised on assets held for sale
|
214
|
|
(1,949
|
)
|
(244
|
)
|
Gains on investment properties
|
48
|
|
4
|
|
61
|
|
Gain on disposal of property, plant and equipment, intangible assets and non-financial investments
|
46
|
|
35
|
|
53
|
|
Change in present value of in-force long-term insurance business
|
24
|
|
902
|
|
799
|
|
Other
|
(166
|
)
|
(120
|
)
|
215
|
|
Year ended 31 Dec
|
337
|
|
(971
|
)
|
1,055
|
|
Significant items and currency translation
|
||||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Significant items
|
(160
|
)
|
(1,928
|
)
|
– portfolio disposals
|
(158
|
)
|
(163
|
)
|
– gain/(loss) and trading results from disposed-of operations in Brazil
|
19
|
|
(1,763
|
)
|
– investment in new businesses
|
(99
|
)
|
—
|
|
– other acquisitions, disposals and dilutions
|
78
|
|
—
|
|
– currency translation on significant items
|
|
|
(2
|
)
|
Currency translation
|
|
|
(14
|
)
|
Year ended 31 Dec
|
(160
|
)
|
(1,942
|
)
|
•
|
adverse movements in Hong Kong of $0.4bn, reflecting the future sharing of investment returns with policyholders; and
|
•
|
adverse movements in Hong Kong and Singapore of $0.4bn, reflecting adjustments offsetting the impact of regulatory-driven changes in the valuation of liabilities (the corresponding movement is recorded in ‘Net insurance claims and benefits paid and movement in liabilities to policyholders’).
|
Significant items and currency translation
|
||||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Significant items
|
—
|
|
627
|
|
– trading results from disposed-of operations in Brazil
|
—
|
|
538
|
|
– currency translation on significant items
|
|
|
89
|
|
Currency translation
|
|
|
(89
|
)
|
Year ended 31 Dec
|
—
|
|
538
|
|
HSBC Holdings plc
|
39
|
Loan impairment charges and other credit risk provisions
|
||||||
|
2017
|
|
2016
|
|
2015
|
|
|
$m
|
|
$m
|
|
$m
|
|
New allowances net of allowance releases
|
2,636
|
|
3,977
|
|
4,400
|
|
Recoveries of amounts previously written off
|
(644
|
)
|
(627
|
)
|
(808
|
)
|
Loan impairment charges
|
1,992
|
|
3,350
|
|
3,592
|
|
– individually assessed allowances
|
1,114
|
|
1,831
|
|
1,505
|
|
– collectively assessed allowances
|
878
|
|
1,519
|
|
2,087
|
|
Releases of impairment on available-for-sale debt securities
|
(190
|
)
|
(63
|
)
|
(17
|
)
|
Other credit risk provisions
|
(33
|
)
|
113
|
|
146
|
|
Year ended 31 Dec
|
1,769
|
|
3,400
|
|
3,721
|
|
Impairment charges on loans and advances to customers as a percentage of average gross loans and advances to customers
|
0.22%
|
|
0.39%
|
|
0.39%
|
|
Significant items and currency translation
|
||||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Significant items
|
—
|
|
867
|
|
– trading results from disposed-of operations in Brazil
|
—
|
|
748
|
|
– currency translation on significant items
|
|
|
119
|
|
Currency translation
|
|
|
(61
|
)
|
Year ended 31 Dec
|
—
|
|
806
|
|
•
|
In CMB (down
$0.5bn
), notably in North America primarily against exposures in the oil and gas sector, as well as reductions in France, Spain and Singapore, as 2016 included a small number of specific charges in relation to corporate exposures. This was partly offset by higher individually assessed LICs in Hong Kong relating to a small number of customers across various sectors.
|
•
|
In GB&M, individually assessed LICs were broadly unchanged, with LICs in 2017 primarily related to two large corporate exposures in Europe, partly offset by a net release of allowances in the US. In 2016, individually assessed LICs included charges in the US against exposures in the oil and gas sector, as well as a single mining-related corporate client.
|
•
|
In Corporate Centre (down
$0.1bn
), driven by the run-off of the CML portfolio in the US.
|
•
|
In RBWM (down
$0.1bn
), notably in Turkey reflecting improved credit quality and lower lending balances, and in the US and Hong Kong from improvements in credit quality. These decreases were partly offset by increased collective allowances in Mexico, reflecting growth in unsecured lending balances and an increase in delinquencies. In addition, we increased collective allowances in the UK against our mortgages and cards exposures, in part offset by a release following the sale of a portfolio of loans. LICs in the UK remain at low levels, representing approximately 10bps of the overall portfolio.
|
•
|
In GB&M (up
$0.1bn
), notably in the UK, as 2016 included net releases of collective allowances.
|
•
|
In CMB (up
$38m
), notably in Hong Kong in part due to asset growth and an increase in historical loss rates, partly offset by lower charges in the UK relating to reduced exposures in the oil and gas sector.
|
40
|
HSBC Holdings plc
|
Operating expenses
|
||||||
|
2017
|
|
2016
|
|
2015
|
|
|
$m
|
|
$m
|
|
$m
|
|
By expense category
|
|
|
|
|||
Employee compensation and benefits
|
17,315
|
|
18,089
|
|
19,900
|
|
Premises and equipment (excluding depreciation and impairment)
|
3,530
|
|
3,758
|
|
3,830
|
|
General and administrative expenses
|
12,177
|
|
12,715
|
|
13,832
|
|
Administrative expenses
|
33,022
|
|
34,562
|
|
37,562
|
|
Depreciation and impairment of property, plant and equipment
|
1,166
|
|
1,229
|
|
1,269
|
|
Amortisation and impairment of intangible assets
|
696
|
|
777
|
|
937
|
|
Goodwill impairment
|
—
|
|
3,240
|
|
—
|
|
Year ended 31 Dec
|
34,884
|
|
39,808
|
|
39,768
|
|
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
By expense group
|
|
|
||
Run-the-bank – front office
|
14,254
|
|
13,240
|
|
Run-the-bank – back office
|
12,974
|
|
13,003
|
|
Change-the-bank
|
2,996
|
|
2,919
|
|
Bank levy
|
916
|
|
922
|
|
Significant items
|
3,744
|
|
9,393
|
|
Currency translation
|
|
|
331
|
|
Year ended 31 Dec
|
34,884
|
|
39,808
|
|
•
|
a $3.2bn write-off of the goodwill in our GPB business in Europe in 2016 (please see Note
20
on the Financial Statements for further details);
|
•
|
a net release of
$0.4bn
in settlements and provisions in connection with legal matters, compared with charges in 2016 of
$0.7bn
;
|
•
|
the operating expenses incurred by our Brazil business of
$1.1bn
in 2016; and
|
•
|
costs to achieve of
$3.0bn
, compared with
$3.1bn
in 2016.
|
HSBC Holdings plc
|
41
|
Significant items and currency translation
|
||||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Significant items
|
3,744
|
|
9,393
|
|
– costs associated with portfolio disposals
|
53
|
|
28
|
|
– costs associated with the UK’s exit from the EU
|
28
|
|
—
|
|
– costs to achieve
|
3,002
|
|
3,118
|
|
– costs to establish UK ring-fenced bank
|
392
|
|
223
|
|
– customer redress programmes
|
655
|
|
559
|
|
– gain on partial settlement of pension obligation
|
(188
|
)
|
—
|
|
– impairment of GPB – Europe goodwill
|
—
|
|
3,240
|
|
– regulatory provisions in GPB
|
164
|
|
344
|
|
– settlements and provisions in connection with legal matters
|
(362
|
)
|
681
|
|
– trading results from disposed-of operations in Brazil
|
—
|
|
1,059
|
|
– currency translation on significant items
|
|
141
|
|
|
Currency translation
|
|
|
331
|
|
Year ended 31 Dec
|
3,744
|
|
9,724
|
|
•
|
In global businesses, savings of $0.6bn reflected the impact of our branch optimisation programme enabled by our digital initiatives as well as transformation of online and mobile banking for corporates.
|
•
|
In Operations and Technology, savings of $1.1bn reflected migrations to lower cost locations, automation, the simplification of our IT structure and the implementation of target operating models.
|
•
|
In our back office functions, savings of $0.4bn were realised as a result of the re-engineering and simplification of processes and the implementation of global operating models.
|
42
|
HSBC Holdings plc
|
Tax expense
|
||||||
|
2017
|
|
2016
|
|
2015
|
|
|
$m
|
|
$m
|
|
$m
|
|
Profit before tax
|
17,167
|
|
7,112
|
|
18,867
|
|
Tax expense
|
(5,288
|
)
|
(3,666
|
)
|
(3,771
|
)
|
Profit after tax for the year ended 31 Dec
|
11,879
|
|
3,446
|
|
15,096
|
|
Effective tax rate
|
30.80%
|
|
51.55%
|
|
19.99%
|
|
2016 compared with 2015
|
HSBC Holdings plc
|
43
|
•
|
favourable movements on assets held as economic hedges of foreign currency debt designated at fair value of $1.7bn in 2016 compared to minimal movements in 2015. These movements were offset by adverse movements in foreign currency debt designated at fair value in ‘Net income/(expense) from financial instruments designated at fair value’; and
|
•
|
increases in GB&M ($0.2bn), notably in Rates and in Credit, as we gained market share in Europe, partly offset by a decrease in Equities, reflecting lower trading volumes in Europe and Asia. In addition, we recorded adverse movements of $70m in credit and funding valuation adjustments compared with favourable movements of $227m in 2015, primarily relating to movements in our own credit spread on structured liabilities.
|
•
|
higher adverse movements of $1.7bn in 2016 compared with minimal movements in 2015 on foreign currency debt designated at fair value and issued as part of our overall funding strategy (offset by assets held as economic hedges in ‘Net trading income’); and
|
•
|
higher adverse movements of $0.2bn relating to the economic hedging of interest and exchange rate risk on our long-term debt.
|
44
|
HSBC Holdings plc
|
•
|
In CMB (down $226m), a net release of collectively assessed LICs compared with a net charge in 2015. The net release of allowances in 2016 was mainly on exposures related to the oil and gas sector, notably in the US and Canada, the UAE and Asia. This reflected a more positive outlook for this sector. By contrast, in 2015 we increased our collective allowances on exposures related to the oil and gas sector. The reduction in collectively assessed LICs was partly offset by an increase in the UK, mainly from new allowances against exposures in the oil and gas sector.
|
•
|
In GB&M, a net release of collectively assessed LICs, notably in the UK and US, compared with a net charge in 2015.
|
•
|
In RBWM, where collectively assessed LICs rose by $75m. The increase was mainly in Mexico reflecting our strategic focus on growing unsecured lending, as well as an increase in delinquency rates. By contrast, collectively assessed LICs decreased in a small number of markets in the Middle East and North Africa and Asia.
|
•
|
In Corporate Centre, LICs increased in our US CML run-off portfolio by $67m.
|
•
|
In GB&M (up $0.6bn), an increase primarily in the US, related to a significant specific charge against a mining-related corporate exposure, as well as charges relating to exposures in the oil and gas sector. Additionally, in Hong Kong, an increase in individually assessed LICs in 2016 was largely related to a single corporate exposure. This compared with a net release of LICs in 2015.
|
•
|
In CMB, where lower individually assessed LICs (down $261m), included favourable currency translation differences between 2016 and 2015 of $70m and a net favourable effect of $45m attributable to the disposal of our operations in Brazil. The decrease also reflected lower individually assessed LICs in Indonesia, where charges in 2015 related to a small number of exposures across a number of sectors. Lower charges in both the UK and the UAE also contributed to the reduction. These decreases were partly offset by higher LICs in Hong Kong, arising in various sectors including manufacturing, and in Canada due to a rise in the number of exposures in the oil and gas sector migrating to default. Notably, the increase in individually assessed LICs in Canada was more than offset by the movement in collective allowances related to the oil and gas sector, discussed above.
|
•
|
the $3.2bn write-off of goodwill in our GPB business in Europe (please see Note 20 on the Financial Statements of the
2016 Form 20-F
for further details);
|
•
|
costs to achieve of $3.1bn, compared with $0.9bn in 2015; partly offset by
|
•
|
the operating expenses incurred in our Brazil business of $1.1bn in 2016, compared with $2.5bn in 2015; and
|
•
|
a reduction of $1.0bn in settlements and provisions in connection with legal matters.
|
•
|
In RBWM, savings of $0.4bn reflected the impact of our branch optimisation programme enabled by our digital initiatives.
|
•
|
In Operations and Technology, savings of $1.2bn reflected migrations to lower cost locations, the simplification of our IT structure and the implementation of target operating models.
|
•
|
In our back office functions, savings of $0.4bn were realised as a result of the re-engineering and simplification of processes and the implementation of global operating models.
|
HSBC Holdings plc
|
45
|
46
|
HSBC Holdings plc
|
Consolidated balance sheet
|
Five-year summary consolidated balance sheet
|
|||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|
Footnote
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Assets
|
|
|
|
|
|
|
|||||
Cash and balances at central banks
|
|
180,624
|
|
128,009
|
|
98,934
|
|
129,957
|
|
166,599
|
|
Trading assets
|
|
287,995
|
|
235,125
|
|
224,837
|
|
304,193
|
|
303,192
|
|
Financial assets designated at fair value
|
|
29,464
|
|
24,756
|
|
23,852
|
|
29,037
|
|
38,430
|
|
Derivatives
|
|
219,818
|
|
290,872
|
|
288,476
|
|
345,008
|
|
282,265
|
|
Loans and advances to banks
|
|
90,393
|
|
88,126
|
|
90,401
|
|
112,149
|
|
120,046
|
|
Loans and advances to customers
|
26
|
962,964
|
|
861,504
|
|
924,454
|
|
974,660
|
|
992,089
|
|
Reverse repurchase agreements – non-trading
|
|
201,553
|
|
160,974
|
|
146,255
|
|
161,713
|
|
179,690
|
|
Financial investments
|
|
389,076
|
|
436,797
|
|
428,955
|
|
415,467
|
|
425,925
|
|
Other assets
|
|
159,884
|
|
148,823
|
|
183,492
|
|
161,955
|
|
163,082
|
|
Total assets at 31 Dec
|
|
2,521,771
|
|
2,374,986
|
|
2,409,656
|
|
2,634,139
|
|
2,671,318
|
|
Liabilities and equity
|
|
|
|
|
|
|
|||||
Liabilities
|
|
|
|
|
|
|
|||||
Deposits by banks
|
|
69,922
|
|
59,939
|
|
54,371
|
|
77,426
|
|
86,507
|
|
Customer accounts
|
|
1,364,462
|
|
1,272,386
|
|
1,289,586
|
|
1,350,642
|
|
1,361,297
|
|
Repurchase agreements – non-trading
|
|
130,002
|
|
88,958
|
|
80,400
|
|
107,432
|
|
164,220
|
|
Trading liabilities
|
|
184,361
|
|
153,691
|
|
141,614
|
|
190,572
|
|
207,025
|
|
Financial liabilities designated at fair value
|
|
94,429
|
|
86,832
|
|
66,408
|
|
76,153
|
|
89,084
|
|
Derivatives
|
|
216,821
|
|
279,819
|
|
281,071
|
|
340,669
|
|
274,284
|
|
Debt securities in issue
|
|
64,546
|
|
65,915
|
|
88,949
|
|
95,947
|
|
104,080
|
|
Liabilities under insurance contracts
|
|
85,667
|
|
75,273
|
|
69,938
|
|
73,861
|
|
74,181
|
|
Other liabilities
|
|
113,690
|
|
109,595
|
|
139,801
|
|
121,459
|
|
120,181
|
|
Total liabilities at 31 Dec
|
|
2,323,900
|
|
2,192,408
|
|
2,212,138
|
|
2,434,161
|
|
2,480,859
|
|
Equity
|
|
|
|
|
|
|
|||||
Total shareholders’ equity
|
|
190,250
|
|
175,386
|
|
188,460
|
|
190,447
|
|
181,871
|
|
Non-controlling interests
|
|
7,621
|
|
7,192
|
|
9,058
|
|
9,531
|
|
8,588
|
|
Total equity at 31 Dec
|
|
197,871
|
|
182,578
|
|
197,518
|
|
199,978
|
|
190,459
|
|
Total liabilities and equity at 31 Dec
|
|
2,521,771
|
|
2,374,986
|
|
2,409,656
|
|
2,634,139
|
|
2,671,318
|
|
HSBC Holdings plc
|
47
|
•
|
favourable currency translation of $45bn, primarily affecting Europe; partly offset by
|
•
|
the $5bn transfer to ‘Assets held for sale’, and subsequent disposal, of the US first lien mortgage balance in Corporate Centre.
|
•
|
$21.3bn from the accelerated sell-down of our consumer mortgage portfolio in the US and our legacy credit book; and
|
•
|
$40.0bn from process improvements, exposure reductions, trade actions and refined calculations.
|
•
|
$40.4bn lending growth, mainly in GB&M and CMB in Asia and Europe; and
|
•
|
new transactions and movements in market parameters increasing counterparty credit risk and market risk by $9.0bn.
|
48
|
HSBC Holdings plc
|
Customer accounts by country
|
||||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Europe
|
505,182
|
|
446,615
|
|
– UK
|
401,733
|
|
361,278
|
|
– France
|
45,833
|
|
35,996
|
|
– Germany
|
17,355
|
|
13,925
|
|
– Switzerland
|
7,936
|
|
9,474
|
|
– other
|
32,325
|
|
25,942
|
|
Asia
|
657,395
|
|
631,723
|
|
– Hong Kong
|
477,104
|
|
461,626
|
|
– mainland China
|
45,991
|
|
46,576
|
|
– Singapore
|
41,144
|
|
39,062
|
|
– Australia
|
20,212
|
|
18,030
|
|
– Malaysia
|
14,027
|
|
12,904
|
|
– Taiwan
|
13,459
|
|
11,731
|
|
– India
|
13,228
|
|
11,289
|
|
– Indonesia
|
4,211
|
|
5,092
|
|
– other
|
28,019
|
|
25,413
|
|
Middle East and North Africa (excluding Saudi Arabia)
|
34,658
|
|
34,766
|
|
– United Arab Emirates
|
16,602
|
|
16,532
|
|
– Turkey
|
3,772
|
|
4,122
|
|
– Egypt
|
3,912
|
|
3,790
|
|
– other
|
10,372
|
|
10,322
|
|
North America
|
143,432
|
|
138,790
|
|
– US
|
89,887
|
|
88,751
|
|
– Canada
|
45,510
|
|
42,096
|
|
– other
|
8,035
|
|
7,943
|
|
Latin America
|
23,795
|
|
20,492
|
|
– Mexico
|
17,809
|
|
14,423
|
|
– other
|
5,986
|
|
6,069
|
|
At 31 Dec
|
1,364,462
|
|
1,272,386
|
|
HSBC Holdings plc
|
49
|
Average balance sheet
|
Assets
|
||||||||||||||||||||
|
|
2017
|
2016
|
2015
|
||||||||||||||||
|
|
Average
balance
|
|
Interest
income
|
|
Yield
|
|
Average
balance
|
|
Interest
income
|
|
Yield
|
|
Average
balance
|
|
Interest
income
|
|
Yield
|
|
|
|
|
$m
|
|
$m
|
|
%
|
|
$m
|
|
$m
|
|
%
|
|
$m
|
|
$m
|
|
%
|
|
|
Summary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets measured at amortised cost (itemised below)
|
|
1,726,120
|
|
40,995
|
|
2.37
|
|
1,723,702
|
|
42,414
|
|
2.46
|
|
1,726,949
|
|
47,189
|
|
2.73
|
|
|
Trading assets and financial assets designated at fair value
|
|
186,673
|
|
4,245
|
|
2.27
|
|
179,780
|
|
3,897
|
|
2.17
|
|
195,285
|
|
4,626
|
|
2.37
|
|
|
Impairment allowances
|
|
(7,841
|
)
|
|
|
|
|
(9,127
|
)
|
|
|
|
|
(10,606
|
)
|
|
|
|
|
|
Non-interest-earning assets
|
|
616,688
|
|
|
|
|
|
653,115
|
|
|
|
|
|
682,143
|
|
|
|
|
|
|
Total assets and interest income
|
|
2,521,640
|
|
45,240
|
|
1.79
|
|
2,547,470
|
|
46,311
|
|
1.82
|
|
2,593,771
|
|
51,815
|
|
2.00
|
|
|
Average yield on all interest-earning assets
|
|
|
|
|
|
2.37
|
|
|
|
|
|
2.43
|
|
|
|
|
|
2.70
|
|
|
Short-term funds and loans and advances to banks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
HSBC Bank
|
|
83,855
|
|
256
|
|
0.31
|
|
68,015
|
|
276
|
|
0.41
|
|
79,101
|
|
827
|
|
1.05
|
|
|
HSBC Private Banking Holdings (Suisse)
|
|
11,815
|
|
1
|
|
0.01
|
|
10,597
|
|
—
|
|
—
|
|
11,498
|
|
4
|
|
0.03
|
|
|
HSBC France
|
|
13,260
|
|
41
|
|
0.31
|
|
5,705
|
|
27
|
|
0.47
|
|
5,242
|
|
40
|
|
0.76
|
|
Asia
|
Hang Seng Bank
|
|
10,865
|
|
201
|
|
1.85
|
|
10,533
|
|
133
|
|
1.26
|
|
14,379
|
|
210
|
|
1.46
|
|
|
The Hongkong and Shanghai
Banking Corporation |
|
53,502
|
|
604
|
|
1.13
|
|
50,741
|
|
490
|
|
0.97
|
|
55,951
|
|
536
|
|
0.96
|
|
|
HSBC Bank Malaysia
|
|
1,906
|
|
55
|
|
2.89
|
|
3,680
|
|
99
|
|
2.69
|
|
3,994
|
|
121
|
|
3.03
|
|
MENA
|
HSBC Bank Middle East
|
|
2,556
|
|
39
|
|
1.53
|
|
3,658
|
|
30
|
|
0.82
|
|
5,038
|
|
30
|
|
0.60
|
|
North America
|
HSBC Bank USA
|
|
40,476
|
|
461
|
|
1.14
|
|
34,858
|
|
214
|
|
0.61
|
|
35,271
|
|
134
|
|
0.38
|
|
|
HSBC Bank Canada
|
|
366
|
|
3
|
|
0.82
|
|
745
|
|
2
|
|
0.27
|
|
767
|
|
2
|
|
0.26
|
|
Latin America
|
HSBC Mexico
|
|
2,164
|
|
150
|
|
6.93
|
|
2,217
|
|
92
|
|
4.15
|
|
2,463
|
|
76
|
|
3.09
|
|
|
Brazilian operations
|
|
–
|
|
–
|
|
–
|
|
—
|
|
—
|
|
—
|
|
1,717
|
|
193
|
|
11.24
|
|
|
HSBC Bank Argentina
|
|
1,083
|
|
1
|
|
0.09
|
|
818
|
|
8
|
|
0.98
|
|
1,050
|
|
4
|
|
0.38
|
|
Other operations
|
|
|
14,278
|
|
218
|
|
1.53
|
|
12,232
|
|
139
|
|
1.14
|
|
5,453
|
|
100
|
|
1.83
|
|
|
|
236,126
|
|
2,030
|
|
0.86
|
|
203,799
|
|
1,510
|
|
0.74
|
|
221,924
|
|
2,277
|
|
1.03
|
|
50
|
HSBC Holdings plc
|
Assets (continued)
|
||||||||||||||||||||
|
|
2017
|
2016
|
2015
|
||||||||||||||||
|
|
Average
balance
|
|
Interest
income
|
|
Yield
|
|
Average
balance
|
|
Interest
income
|
|
Yield
|
|
Average
balance
|
|
Interest
income
|
|
Yield
|
|
|
|
|
$m
|
|
$m
|
|
%
|
|
$m
|
|
$m
|
|
%
|
|
$m
|
|
$m
|
|
%
|
|
|
Loans and advances to customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
HSBC Bank
|
|
280,689
|
|
8,046
|
|
2.87
|
|
277,995
|
|
9,203
|
|
3.31
|
|
291,311
|
|
9,916
|
|
3.40
|
|
|
HSBC Private Banking Holdings (Suisse)
|
|
8,921
|
|
152
|
|
1.70
|
|
10,528
|
|
143
|
|
1.36
|
|
12,006
|
|
136
|
|
1.13
|
|
|
HSBC France
|
|
51,480
|
|
920
|
|
1.79
|
|
42,676
|
|
1,026
|
|
2.40
|
|
41,257
|
|
1,252
|
|
3.03
|
|
Asia
|
Hang Seng Bank
|
|
94,943
|
|
2,695
|
|
2.84
|
|
87,073
|
|
2,540
|
|
2.92
|
|
86,149
|
|
2,579
|
|
2.99
|
|
|
The Hongkong and Shanghai
Banking Corporation |
|
289,819
|
|
8,506
|
|
2.93
|
|
253,802
|
|
7,630
|
|
3.01
|
|
261,705
|
|
8,082
|
|
3.09
|
|
|
HSBC Bank Malaysia
|
|
11,523
|
|
536
|
|
4.65
|
|
11,636
|
|
546
|
|
4.69
|
|
12,517
|
|
589
|
|
4.71
|
|
MENA
|
HSBC Bank Middle East
|
|
20,498
|
|
861
|
|
4.20
|
|
23,595
|
|
883
|
|
3.74
|
|
27,240
|
|
1,041
|
|
3.82
|
|
North America
|
HSBC Bank USA
|
|
67,317
|
|
2,210
|
|
3.28
|
|
73,002
|
|
2,187
|
|
3.00
|
|
74,013
|
|
1,981
|
|
2.68
|
|
|
HSBC Finance
|
|
1,939
|
|
173
|
|
8.92
|
|
13,169
|
|
1,089
|
|
8.27
|
|
21,529
|
|
1,705
|
|
7.92
|
|
|
HSBC Bank Canada
|
|
36,557
|
|
1,205
|
|
3.30
|
|
35,894
|
|
1,070
|
|
2.98
|
|
33,280
|
|
1,086
|
|
3.26
|
|
Latin America
|
HSBC Mexico
|
|
14,923
|
|
1,766
|
|
11.83
|
|
14,050
|
|
1,427
|
|
10.16
|
|
14,304
|
|
1,319
|
|
9.22
|
|
|
Brazilian operations
|
|
–
|
|
–
|
|
–
|
|
—
|
|
—
|
|
—
|
|
10,388
|
|
1,915
|
|
18.43
|
|
|
HSBC Bank Argentina
|
|
3,284
|
|
706
|
|
21.50
|
|
2,642
|
|
715
|
|
27.06
|
|
3,381
|
|
880
|
|
26.03
|
|
Other operations
|
|
|
20,321
|
|
975
|
|
4.80
|
|
19,294
|
|
813
|
|
4.21
|
|
20,627
|
|
623
|
|
3.02
|
|
|
|
902,214
|
|
28,751
|
|
3.19
|
|
865,356
|
|
29,272
|
|
3.38
|
|
909,707
|
|
33,104
|
|
3.64
|
|
|
Reverse repurchase agreements – non-trading
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
HSBC Bank
|
|
40,082
|
|
502
|
|
1.25
|
|
47,663
|
|
305
|
|
0.64
|
|
53,036
|
|
354
|
|
0.67
|
|
|
HSBC France
|
|
16,907
|
|
1
|
|
0.01
|
|
10,338
|
|
1
|
|
0.01
|
|
12,986
|
|
7
|
|
0.05
|
|
Asia
|
The Hongkong and Shanghai
Banking Corporation |
|
41,829
|
|
596
|
|
1.42
|
|
33,257
|
|
298
|
|
0.90
|
|
26,714
|
|
273
|
|
1.02
|
|
|
HSBC Bank Malaysia
|
|
531
|
|
16
|
|
3.01
|
|
1,141
|
|
35
|
|
3.07
|
|
1,001
|
|
32
|
|
3.20
|
|
MENA
|
HSBC Bank Middle East
|
|
1,101
|
|
14
|
|
1.27
|
|
650
|
|
9
|
|
1.38
|
|
272
|
|
2
|
|
0.74
|
|
North America
|
HSBC Bank USA
|
|
5,442
|
|
124
|
|
2.28
|
|
11,632
|
|
131
|
|
1.13
|
|
4,589
|
|
23
|
|
0.50
|
|
|
HSBC Bank Canada
|
|
5,225
|
|
44
|
|
0.84
|
|
5,985
|
|
30
|
|
0.50
|
|
5,814
|
|
40
|
|
0.69
|
|
Latin America
|
HSBC Mexico
|
|
882
|
|
61
|
|
6.92
|
|
754
|
|
33
|
|
4.38
|
|
877
|
|
27
|
|
3.08
|
|
|
Brazilian operations
|
|
–
|
|
–
|
|
–
|
|
—
|
|
—
|
|
—
|
|
3,248
|
|
421
|
|
12.96
|
|
|
HSBC Bank Argentina
|
|
70
|
|
15
|
|
21.43
|
|
59
|
|
13
|
|
22.03
|
|
42
|
|
7
|
|
16.67
|
|
Other operations
|
|
|
61,691
|
|
818
|
|
1.33
|
|
56,728
|
|
372
|
|
0.66
|
|
53,729
|
|
115
|
|
0.21
|
|
|
|
173,760
|
|
2,191
|
|
1.26
|
|
168,207
|
|
1,227
|
|
0.73
|
|
162,308
|
|
1,301
|
|
0.80
|
|
|
Financial investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
HSBC Bank
|
|
53,754
|
|
715
|
|
1.33
|
|
71,215
|
|
965
|
|
1.36
|
|
73,043
|
|
753
|
|
1.03
|
|
|
HSBC Private Banking Holdings (Suisse)
|
|
4,826
|
|
60
|
|
1.24
|
|
5,905
|
|
57
|
|
0.97
|
|
7,479
|
|
75
|
|
1.00
|
|
|
HSBC France
|
|
10,657
|
|
(9
|
)
|
(0.08
|
)
|
14,753
|
|
10
|
|
0.07
|
|
13,608
|
|
17
|
|
0.12
|
|
Asia
|
Hang Seng Bank
|
|
50,129
|
|
776
|
|
1.55
|
|
49,469
|
|
686
|
|
1.39
|
|
39,891
|
|
647
|
|
1.62
|
|
|
The Hongkong and Shanghai
Banking Corporation |
|
136,232
|
|
2,235
|
|
1.64
|
|
154,087
|
|
2,079
|
|
1.35
|
|
128,922
|
|
1,909
|
|
1.48
|
|
|
HSBC Bank Malaysia
|
|
2,899
|
|
96
|
|
3.31
|
|
1,766
|
|
61
|
|
3.45
|
|
2,864
|
|
104
|
|
3.63
|
|
MENA
|
HSBC Bank Middle East
|
|
6,406
|
|
83
|
|
1.30
|
|
6,654
|
|
68
|
|
1.02
|
|
8,186
|
|
70
|
|
0.86
|
|
North America
|
HSBC Bank USA
|
|
47,018
|
|
945
|
|
2.01
|
|
52,479
|
|
952
|
|
1.81
|
|
49,268
|
|
893
|
|
1.81
|
|
|
HSBC Bank Canada
|
|
17,304
|
|
214
|
|
1.24
|
|
17,769
|
|
209
|
|
1.18
|
|
17,486
|
|
199
|
|
1.14
|
|
Latin America
|
HSBC Mexico
|
|
5,537
|
|
296
|
|
5.35
|
|
4,709
|
|
234
|
|
4.97
|
|
6,301
|
|
286
|
|
4.54
|
|
|
Brazilian operations
|
|
–
|
|
–
|
|
–
|
|
—
|
|
—
|
|
—
|
|
3,520
|
|
515
|
|
14.63
|
|
|
HSBC Bank Argentina
|
|
378
|
|
67
|
|
17.72
|
|
627
|
|
142
|
|
22.65
|
|
650
|
|
149
|
|
22.92
|
|
Other operations
|
|
|
54,667
|
|
1,962
|
|
3.59
|
|
51,342
|
|
1,785
|
|
3.48
|
|
44,895
|
|
1,891
|
|
4.21
|
|
|
|
389,807
|
|
7,440
|
|
1.91
|
|
430,775
|
|
7,248
|
|
1.68
|
|
396,113
|
|
7,508
|
|
1.90
|
|
HSBC Holdings plc
|
51
|
Assets (continued)
|
||||||||||||||||||||
|
|
2017
|
2016
|
2015
|
||||||||||||||||
|
Footnote
|
Average
balance
|
|
Interest
income
|
|
Yield
|
|
Average
balance
|
|
Interest
income
|
|
Yield
|
|
Average
balance
|
|
Interest
income
|
|
Yield
|
|
|
|
|
$m
|
|
$m
|
|
%
|
|
$m
|
|
$m
|
|
%
|
|
$m
|
|
$m
|
|
%
|
|
|
Other interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Europe
|
HSBC Bank
|
1
|
52,575
|
|
188
|
|
0.36
|
|
65,884
|
|
105
|
|
0.16
|
|
61,355
|
|
100
|
|
0.16
|
|
|
HSBC Private Banking Holdings (Suisse)
|
|
1,579
|
|
24
|
|
1.52
|
|
1,874
|
|
24
|
|
1.28
|
|
2,200
|
|
24
|
|
1.09
|
|
|
HSBC France
|
1
|
2,546
|
|
344
|
|
13.51
|
|
2,106
|
|
245
|
|
11.60
|
|
2,818
|
|
145
|
|
5.14
|
|
Asia
|
Hang Seng Bank
|
|
1,009
|
|
17
|
|
1.68
|
|
1,828
|
|
15
|
|
0.82
|
|
3,551
|
|
14
|
|
0.39
|
|
|
The Hongkong and Shanghai
Banking Corporation |
1
|
106,511
|
|
1,066
|
|
1.00
|
|
92,650
|
|
617
|
|
0.67
|
|
82,422
|
|
451
|
|
0.55
|
|
|
HSBC Bank Malaysia
|
|
223
|
|
1
|
|
0.45
|
|
242
|
|
—
|
|
—
|
|
92
|
|
—
|
|
—
|
|
MENA
|
HSBC Bank Middle East
|
|
4,044
|
|
66
|
|
1.63
|
|
1,942
|
|
80
|
|
4.12
|
|
1,263
|
|
37
|
|
2.93
|
|
North America
|
HSBC Bank USA
|
|
5,221
|
|
83
|
|
1.59
|
|
7,930
|
|
130
|
|
1.64
|
|
4,012
|
|
132
|
|
3.29
|
|
|
HSBC Finance
|
|
5,641
|
|
84
|
|
1.49
|
|
2,975
|
|
6
|
|
0.20
|
|
5,538
|
|
7
|
|
0.13
|
|
|
HSBC Bank Canada
|
|
1,060
|
|
10
|
|
0.94
|
|
352
|
|
6
|
|
1.70
|
|
249
|
|
5
|
|
2.01
|
|
Latin America
|
HSBC Mexico
|
|
843
|
|
8
|
|
0.95
|
|
587
|
|
1
|
|
0.17
|
|
517
|
|
1
|
|
0.19
|
|
|
Brazilian operations
|
|
–
|
|
–
|
|
–
|
|
25,783
|
|
2,705
|
|
10.49
|
|
20,972
|
|
2,744
|
|
13.08
|
|
|
HSBC Bank Argentina
|
|
58
|
|
1
|
|
1.72
|
|
76
|
|
—
|
|
—
|
|
69
|
|
—
|
|
—
|
|
Other operations
|
1
|
(157,097
|
)
|
(1,309
|
)
|
|
|
(148,664
|
)
|
(777
|
)
|
|
(148,161
|
)
|
(661
|
)
|
|
|||
|
|
24,213
|
|
583
|
|
2.41
|
|
55,565
|
|
3,157
|
|
5.68
|
|
36,897
|
|
2,999
|
|
8.13
|
|
|
Total interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Europe
|
HSBC Bank
|
|
510,955
|
|
9,707
|
|
1.90
|
|
530,772
|
|
10,833
|
|
2.04
|
|
557,846
|
|
11,950
|
|
2.14
|
|
|
HSBC Private Banking Holdings (Suisse)
|
|
27,141
|
|
237
|
|
0.87
|
|
28,904
|
|
224
|
|
0.77
|
|
33,183
|
|
239
|
|
0.72
|
|
|
HSBC France
|
|
94,850
|
|
1,297
|
|
1.37
|
|
75,578
|
|
1,109
|
|
1.47
|
|
75,911
|
|
1,377
|
|
1.81
|
|
Asia
|
Hang Seng Bank
|
|
156,946
|
|
3,689
|
|
2.35
|
|
148,903
|
|
3,374
|
|
2.27
|
|
143,970
|
|
3,450
|
|
2.40
|
|
|
The Hongkong and Shanghai
Banking Corporation |
|
627,893
|
|
13,007
|
|
2.07
|
|
584,537
|
|
11,112
|
|
1.90
|
|
555,714
|
|
11,251
|
|
2.02
|
|
|
HSBC Bank Malaysia
|
|
17,082
|
|
704
|
|
4.12
|
|
18,465
|
|
741
|
|
4.01
|
|
20,468
|
|
846
|
|
4.13
|
|
MENA
|
HSBC Bank Middle East
|
|
34,605
|
|
1,063
|
|
3.07
|
|
36,499
|
|
1,070
|
|
2.93
|
|
41,999
|
|
1,180
|
|
2.81
|
|
North America
|
HSBC Bank USA
|
|
165,474
|
|
3,823
|
|
2.31
|
|
179,901
|
|
3,614
|
|
2.01
|
|
167,153
|
|
3,163
|
|
1.89
|
|
|
HSBC Finance
|
|
7,580
|
|
257
|
|
3.39
|
|
16,144
|
|
1,095
|
|
6.78
|
|
27,067
|
|
1,712
|
|
6.33
|
|
|
HSBC Bank Canada
|
|
60,512
|
|
1,476
|
|
2.44
|
|
60,745
|
|
1,317
|
|
2.17
|
|
57,596
|
|
1,332
|
|
2.31
|
|
Latin America
|
HSBC Mexico
|
|
24,349
|
|
2,281
|
|
9.37
|
|
22,317
|
|
1,787
|
|
8.01
|
|
24,462
|
|
1,709
|
|
6.99
|
|
|
Brazilian operations
|
|
–
|
|
–
|
|
–
|
|
25,783
|
|
2,705
|
|
10.49
|
|
39,845
|
|
5,788
|
|
14.53
|
|
|
HSBC Bank Argentina
|
|
4,873
|
|
790
|
|
16.21
|
|
4,222
|
|
878
|
|
20.80
|
|
5,192
|
|
1,040
|
|
20.03
|
|
Other operations
|
|
(6,140
|
)
|
2,664
|
|
|
|
(9,068
|
)
|
2,555
|
|
|
(23,457
|
)
|
2,152
|
|
|
|||
|
|
|
1,726,120
|
|
40,995
|
|
2.37
|
|
1,723,702
|
|
42,414
|
|
2.46
|
|
1,726,949
|
|
47,189
|
|
2.73
|
|
1
|
Comparatives have been restated for changes in assumptions relating to interest income for other interest-earning assets.
|
Equity and liabilities
|
||||||||||||||||||
|
2017
|
2016
|
2015
|
|||||||||||||||
|
Average
balance
|
|
Interest
expense
|
|
Cost
|
|
Average
balance
|
|
Interest
expense
|
|
Cost
|
|
Average
balance
|
|
Interest
expense
|
|
Cost
|
|
|
$m
|
|
$m
|
|
%
|
|
$m
|
|
$m
|
|
%
|
|
$m
|
|
$m
|
|
%
|
|
Summary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities measured at amortised cost (itemised below)
|
1,455,070
|
|
12,819
|
|
0.88
|
|
1,442,004
|
|
12,601
|
|
0.87
|
|
1,465,635
|
|
14,658
|
|
1.00
|
|
Trading liabilities and financial liabilities designated at fair value (excluding own debt issued)
|
153,776
|
|
2,325
|
|
1.51
|
|
138,486
|
|
1,986
|
|
1.43
|
|
151,294
|
|
2,071
|
|
1.37
|
|
Non-interest bearing current accounts
|
197,104
|
|
|
|
|
|
184,016
|
|
|
|
190,914
|
|
|
|
||||
Total equity and other non-interest bearing liabilities
|
715,690
|
|
|
|
|
|
782,964
|
|
|
|
785,928
|
|
|
|
||||
Total equity and liabilities
|
2,521,640
|
|
15,144
|
|
0.60
|
|
2,547,470
|
|
14,587
|
|
0.57
|
|
2,593,771
|
|
16,729
|
|
0.64
|
|
Average cost on all interest-bearing liabilities
|
|
|
|
|
0.94
|
|
|
|
0.92
|
|
|
|
1.03
|
|
52
|
HSBC Holdings plc
|
Equity and liabilities (continued)
|
||||||||||||||||||||
|
|
2017
|
2016
|
2015
|
||||||||||||||||
|
|
Average
balance
|
|
Interest
expense
|
|
Cost
|
|
Average
balance
|
|
Interest
expense
|
|
Cost
|
|
Average
balance
|
|
Interest
expense
|
|
Cost
|
|
|
|
Footnotes
|
$m
|
|
$m
|
|
%
|
|
$m
|
|
$m
|
|
%
|
|
$m
|
|
$m
|
|
%
|
|
|
Deposits by banks
|
44a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
HSBC Bank
|
|
9,402
|
|
48
|
|
0.51
|
|
12,408
|
|
49
|
|
0.39
|
|
16,333
|
|
75
|
|
0.46
|
|
|
HSBC Private Banking Holdings (Suisse)
|
|
189
|
|
2
|
|
1.06
|
|
186
|
|
2
|
|
1.08
|
|
400
|
|
1
|
|
0.25
|
|
|
HSBC France
|
|
9,175
|
|
29
|
|
0.32
|
|
7,520
|
|
33
|
|
0.44
|
|
7,323
|
|
41
|
|
0.56
|
|
Asia
|
Hang Seng Bank
|
|
589
|
|
8
|
|
1.36
|
|
587
|
|
11
|
|
1.87
|
|
1,098
|
|
19
|
|
1.73
|
|
|
The Hongkong and Shanghai
Banking Corporation |
|
19,191
|
|
164
|
|
0.85
|
|
19,867
|
|
125
|
|
0.63
|
|
19,426
|
|
80
|
|
0.41
|
|
|
HSBC Bank Malaysia
|
|
272
|
|
5
|
|
1.84
|
|
360
|
|
4
|
|
1.11
|
|
974
|
|
26
|
|
2.67
|
|
MENA
|
HSBC Bank Middle East
|
|
695
|
|
10
|
|
1.44
|
|
492
|
|
4
|
|
0.81
|
|
737
|
|
3
|
|
0.41
|
|
North America
|
HSBC Bank USA
|
|
3,627
|
|
41
|
|
1.13
|
|
5,316
|
|
30
|
|
0.56
|
|
5,503
|
|
17
|
|
0.31
|
|
|
HSBC Bank Canada
|
|
231
|
|
1
|
|
0.43
|
|
358
|
|
1
|
|
0.28
|
|
319
|
|
1
|
|
0.31
|
|
Latin America
|
HSBC Mexico
|
|
1,820
|
|
120
|
|
6.59
|
|
1,631
|
|
70
|
|
4.29
|
|
1,506
|
|
55
|
|
3.65
|
|
|
Brazilian operations
|
|
–
|
|
–
|
|
–
|
|
—
|
|
—
|
|
—
|
|
1,024
|
|
49
|
|
4.79
|
|
|
HSBC Bank Argentina
|
|
3
|
|
1
|
|
33.33
|
|
2
|
|
—
|
|
—
|
|
10
|
|
2
|
|
20.00
|
|
Other operations
|
|
2,143
|
|
22
|
|
1.03
|
|
1,055
|
|
13
|
|
1.23
|
|
1,210
|
|
9
|
|
0.74
|
|
|
|
|
47,337
|
|
451
|
|
0.95
|
|
49,782
|
|
342
|
|
0.69
|
|
55,863
|
|
378
|
|
0.68
|
|
|
Financial liabilities designated at fair value – own debt issued
|
44b
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
HSBC Holdings
|
|
30,506
|
|
944
|
|
3.09
|
|
26,900
|
|
609
|
|
2.26
|
|
18,816
|
|
263
|
|
1.40
|
|
|
HSBC Bank
|
|
12,598
|
|
220
|
|
1.75
|
|
15,548
|
|
225
|
|
1.45
|
|
20,758
|
|
316
|
|
1.52
|
|
|
HSBC France
|
|
8,769
|
|
17
|
|
0.19
|
|
8,821
|
|
15
|
|
0.17
|
|
8,472
|
|
31
|
|
0.37
|
|
North America
|
HSBC Bank USA
|
|
2,115
|
|
44
|
|
2.08
|
|
2,039
|
|
38
|
|
1.86
|
|
2,100
|
|
32
|
|
1.52
|
|
|
HSBC Finance
|
|
696
|
|
13
|
|
1.87
|
|
1,498
|
|
19
|
|
1.27
|
|
5,169
|
|
47
|
|
0.91
|
|
Other operations
|
|
|
5,882
|
|
23
|
|
0.39
|
|
7,236
|
|
36
|
|
0.50
|
|
3,174
|
|
28
|
|
0.88
|
|
|
|
|
60,566
|
|
1,261
|
|
2.08
|
|
62,042
|
|
942
|
|
1.52
|
|
58,489
|
|
717
|
|
1.23
|
|
Customer accounts
|
44c
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Europe
|
HSBC Bank
|
|
342,776
|
|
1,186
|
|
0.35
|
|
352,318
|
|
1,613
|
|
0.46
|
|
364,503
|
|
2,051
|
|
0.56
|
|
|
HSBC Private Banking Holdings
(Suisse) |
|
6,598
|
|
70
|
|
1.06
|
|
6,128
|
|
31
|
|
0.51
|
|
7,201
|
|
29
|
|
0.40
|
|
|
HSBC France
|
|
17,199
|
|
84
|
|
0.49
|
|
14,697
|
|
93
|
|
0.63
|
|
15,900
|
|
116
|
|
0.73
|
|
Asia
|
Hang Seng Bank
|
|
115,705
|
|
300
|
|
0.26
|
|
111,457
|
|
339
|
|
0.30
|
|
106,783
|
|
464
|
|
0.43
|
|
|
The Hongkong and Shanghai
Banking Corporation |
|
439,356
|
|
1,926
|
|
0.44
|
|
421,711
|
|
1,981
|
|
0.47
|
|
394,313
|
|
2,446
|
|
0.62
|
|
|
HSBC Bank Malaysia
|
|
10,572
|
|
205
|
|
1.94
|
|
11,055
|
|
228
|
|
2.06
|
|
11,865
|
|
264
|
|
2.23
|
|
MENA
|
HSBC Bank Middle East
|
|
9,807
|
|
40
|
|
0.41
|
|
10,780
|
|
27
|
|
0.25
|
|
14,360
|
|
53
|
|
0.37
|
|
North America
|
HSBC Bank USA
|
|
66,711
|
|
375
|
|
0.56
|
|
64,546
|
|
205
|
|
0.32
|
|
61,314
|
|
147
|
|
0.24
|
|
|
HSBC Bank Canada
|
|
38,150
|
|
305
|
|
0.80
|
|
37,125
|
|
194
|
|
0.52
|
|
35,998
|
|
197
|
|
0.55
|
|
Latin America
|
HSBC Mexico
|
|
11,662
|
|
406
|
|
3.48
|
|
10,996
|
|
227
|
|
2.06
|
|
12,568
|
|
201
|
|
1.60
|
|
|
Brazilian operations
|
|
–
|
|
–
|
|
–
|
|
—
|
|
—
|
|
—
|
|
6,938
|
|
830
|
|
11.96
|
|
|
HSBC Bank Argentina
|
|
3,292
|
|
245
|
|
7.44
|
|
2,574
|
|
351
|
|
13.64
|
|
2,989
|
|
436
|
|
14.59
|
|
Other operations
|
|
|
33,092
|
|
263
|
|
0.79
|
|
31,274
|
|
203
|
|
0.65
|
|
41,169
|
|
167
|
|
0.41
|
|
|
|
|
1,094,920
|
|
5,405
|
|
0.49
|
|
1,074,661
|
|
5,492
|
|
0.51
|
|
1,075,901
|
|
7,401
|
|
0.69
|
|
Repurchase agreements – non-trading
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
HSBC Bank
|
|
39,444
|
|
340
|
|
0.86
|
|
29,171
|
|
88
|
|
0.30
|
|
31,782
|
|
119
|
|
0.37
|
|
|
HSBC France
|
|
6,664
|
|
–
|
|
–
|
|
7,145
|
|
—
|
|
—
|
|
8,965
|
|
2
|
|
0.02
|
|
Asia
|
Hang Seng Bank
|
|
837
|
|
23
|
|
2.75
|
|
410
|
|
9
|
|
2.20
|
|
203
|
|
4
|
|
1.97
|
|
|
The Hongkong and Shanghai
Banking Corporation |
|
6,028
|
|
118
|
|
1.96
|
|
5,130
|
|
111
|
|
2.16
|
|
3,022
|
|
70
|
|
2.32
|
|
|
HSBC Bank Malaysia
|
|
18
|
|
–
|
|
–
|
|
23
|
|
1
|
|
4.35
|
|
43
|
|
1
|
|
2.33
|
|
MENA
|
HSBC Bank Middle East
|
|
32
|
|
1
|
|
3.13
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
North America
|
HSBC Bank USA
|
|
3,690
|
|
57
|
|
1.54
|
|
3,543
|
|
30
|
|
0.85
|
|
6,828
|
|
26
|
|
0.38
|
|
|
HSBC Bank Canada
|
|
3,702
|
|
30
|
|
0.81
|
|
2,933
|
|
14
|
|
0.48
|
|
2,534
|
|
17
|
|
0.67
|
|
Latin America
|
HSBC Mexico
|
|
3,845
|
|
259
|
|
6.74
|
|
2,085
|
|
94
|
|
4.51
|
|
2,127
|
|
62
|
|
2.91
|
|
|
Brazilian operations
|
|
–
|
|
–
|
|
–
|
|
—
|
|
—
|
|
—
|
|
334
|
|
6
|
|
1.80
|
|
|
HSBC Bank Argentina
|
|
15
|
|
3
|
|
20.00
|
|
7
|
|
2
|
|
28.57
|
|
5
|
|
—
|
|
—
|
|
Other operations
|
|
|
72,286
|
|
834
|
|
1.15
|
|
68,342
|
|
277
|
|
0.41
|
|
62,104
|
|
48
|
|
0.08
|
|
|
|
|
136,561
|
|
1,665
|
|
1.22
|
|
118,789
|
|
626
|
|
0.53
|
|
117,947
|
|
355
|
|
0.30
|
|
HSBC Holdings plc
|
53
|
Equity and liabilities (continued)
|
||||||||||||||||||||
|
|
2017
|
2016
|
2015
|
||||||||||||||||
|
|
Average
balance
|
|
Interest
expense
|
|
Cost
|
|
Average
balance
|
|
Interest
expense
|
|
Cost
|
|
Average
balance
|
|
Interest
expense
|
|
Cost
|
|
|
|
Footnotes
|
$m
|
|
$m
|
|
%
|
|
$m
|
|
$m
|
|
%
|
|
$m
|
|
$m
|
|
%
|
|
|
Debt securities in issue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
HSBC Holdings
|
|
43,121
|
|
1,533
|
|
3.56
|
|
25,145
|
|
1,087
|
|
4.32
|
|
16,230
|
|
904
|
|
5.57
|
|
|
HSBC Bank
|
|
15,590
|
|
355
|
|
2.28
|
|
27,290
|
|
397
|
|
1.45
|
|
41,413
|
|
359
|
|
0.87
|
|
|
HSBC France
|
|
7,367
|
|
4
|
|
0.05
|
|
7,471
|
|
11
|
|
0.15
|
|
12,379
|
|
40
|
|
0.32
|
|
Asia
|
Hang Seng Bank
|
|
78
|
|
3
|
|
3.85
|
|
208
|
|
6
|
|
2.88
|
|
428
|
|
7
|
|
1.64
|
|
|
The Hongkong and Shanghai
Banking Corporation |
|
3,588
|
|
75
|
|
2.09
|
|
4,245
|
|
88
|
|
2.07
|
|
5,520
|
|
123
|
|
2.23
|
|
|
HSBC Bank Malaysia
|
|
259
|
|
11
|
|
4.25
|
|
363
|
|
15
|
|
4.13
|
|
385
|
|
17
|
|
4.42
|
|
MENA
|
HSBC Bank Middle East
|
|
1,329
|
|
20
|
|
1.50
|
|
1,793
|
|
20
|
|
1.12
|
|
2,199
|
|
33
|
|
1.50
|
|
North America
|
HSBC Bank USA
|
|
27,017
|
|
678
|
|
2.51
|
|
35,571
|
|
690
|
|
1.94
|
|
31,089
|
|
542
|
|
1.74
|
|
|
HSBC Finance
|
|
2,512
|
|
168
|
|
6.69
|
|
4,577
|
|
266
|
|
5.81
|
|
8,961
|
|
407
|
|
4.54
|
|
|
HSBC Bank Canada
|
|
7,466
|
|
163
|
|
2.18
|
|
8,026
|
|
192
|
|
2.39
|
|
8,718
|
|
211
|
|
2.42
|
|
Latin America
|
HSBC Mexico
|
|
1,198
|
|
77
|
|
6.43
|
|
928
|
|
60
|
|
6.47
|
|
2,005
|
|
90
|
|
4.49
|
|
|
Brazilian operations
|
|
–
|
|
–
|
|
–
|
|
—
|
|
—
|
|
—
|
|
4,795
|
|
782
|
|
16.31
|
|
|
HSBC Bank Argentina
|
|
55
|
|
15
|
|
27.27
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Other operations
|
|
|
(903
|
)
|
28
|
|
–
|
|
(1,274
|
)
|
(25
|
)
|
|
|
(5,083
|
)
|
6
|
|
|
|
|
|
108,677
|
|
3,130
|
|
2.88
|
|
114,343
|
|
2,807
|
|
2.45
|
|
129,039
|
|
3,521
|
|
2.73
|
|
|
Other interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
HSBC Bank
|
|
72,281
|
|
942
|
|
1.30
|
|
79,358
|
|
732
|
|
0.92
|
|
77,583
|
|
471
|
|
0.61
|
|
|
HSBC Private Banking Holdings (Suisse)
|
|
7,358
|
|
122
|
|
1.66
|
|
6,885
|
|
100
|
|
1.45
|
|
8,347
|
|
94
|
|
1.13
|
|
|
HSBC France
|
|
12,081
|
|
453
|
|
3.75
|
|
8,371
|
|
276
|
|
3.30
|
|
10,481
|
|
112
|
|
1.07
|
|
Asia
|
Hang Seng Bank
|
|
921
|
|
27
|
|
2.93
|
|
1,338
|
|
30
|
|
2.24
|
|
1,899
|
|
35
|
|
1.84
|
|
|
The Hongkong and Shanghai
Banking Corporation |
|
106,795
|
|
1,133
|
|
1.06
|
|
81,764
|
|
598
|
|
0.73
|
|
78,630
|
|
412
|
|
0.52
|
|
|
HSBC Bank Malaysia
|
|
784
|
|
18
|
|
2.30
|
|
771
|
|
14
|
|
1.82
|
|
1,158
|
|
15
|
|
1.30
|
|
MENA
|
HSBC Bank Middle East
|
|
2,414
|
|
73
|
|
3.02
|
|
2,994
|
|
82
|
|
2.74
|
|
2,429
|
|
46
|
|
1.89
|
|
North America
|
HSBC Bank USA
|
|
19,479
|
|
241
|
|
1.24
|
|
20,187
|
|
152
|
|
0.75
|
|
16,250
|
|
81
|
|
0.50
|
|
|
HSBC Finance
|
|
1,059
|
|
50
|
|
4.72
|
|
4,936
|
|
173
|
|
3.50
|
|
5,807
|
|
241
|
|
4.15
|
|
|
HSBC Bank Canada
|
|
3,478
|
|
67
|
|
1.93
|
|
3,759
|
|
63
|
|
1.68
|
|
2,539
|
|
7
|
|
0.28
|
|
Latin America
|
HSBC Mexico
|
|
61
|
|
25
|
|
40.98
|
|
782
|
|
22
|
|
2.81
|
|
837
|
|
16
|
|
1.91
|
|
|
Brazilian operations
|
|
–
|
|
–
|
|
–
|
|
18,936
|
|
1,748
|
|
9.23
|
|
16,943
|
|
1,897
|
|
11.20
|
|
|
HSBC Bank Argentina
|
|
97
|
|
4
|
|
4.12
|
|
53
|
|
5
|
|
9.43
|
|
22
|
|
4
|
|
18.18
|
|
Other operations
|
|
|
(219,799
|
)
|
(2,248
|
)
|
|
|
(207,747
|
)
|
(1,603
|
)
|
|
|
(194,529
|
)
|
(1,145
|
)
|
|
|
|
|
7,009
|
|
907
|
|
12.94
|
|
22,387
|
|
2,392
|
|
10.68
|
|
28,396
|
|
2,286
|
|
8.05
|
|
|
Total interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
HSBC Holdings
|
|
73,627
|
|
2,477
|
|
3.36
|
|
52,045
|
|
1,696
|
|
3.26
|
|
35,046
|
|
1,167
|
|
3.33
|
|
|
HSBC Bank
|
|
492,091
|
|
3,091
|
|
0.63
|
|
516,093
|
|
3,104
|
|
0.60
|
|
552,372
|
|
3,391
|
|
0.61
|
|
|
HSBC Private Banking Holdings (Suisse)
|
|
14,145
|
|
194
|
|
1.37
|
|
13,199
|
|
133
|
|
1.01
|
|
15,948
|
|
124
|
|
0.78
|
|
|
HSBC France
|
|
61,255
|
|
587
|
|
0.96
|
|
54,025
|
|
428
|
|
0.79
|
|
63,520
|
|
342
|
|
0.54
|
|
Asia
|
Hang Seng Bank
|
|
118,130
|
|
361
|
|
0.31
|
|
114,000
|
|
395
|
|
0.35
|
|
110,411
|
|
533
|
|
0.48
|
|
|
The Hongkong and Shanghai
Banking Corporation |
|
574,958
|
|
3,416
|
|
0.59
|
|
532,717
|
|
2,903
|
|
0.54
|
|
500,911
|
|
3,131
|
|
0.63
|
|
|
HSBC Bank Malaysia
|
|
11,905
|
|
239
|
|
2.01
|
|
12,572
|
|
262
|
|
2.08
|
|
14,425
|
|
323
|
|
2.24
|
|
MENA
|
HSBC Bank Middle East
|
|
14,277
|
|
144
|
|
1.01
|
|
16,059
|
|
133
|
|
0.83
|
|
20,580
|
|
148
|
|
0.72
|
|
North America
|
HSBC Bank USA
|
|
122,639
|
|
1,436
|
|
1.17
|
|
131,202
|
|
1,145
|
|
0.87
|
|
123,084
|
|
845
|
|
0.69
|
|
|
HSBC Finance
|
|
4,267
|
|
231
|
|
5.41
|
|
11,011
|
|
458
|
|
4.16
|
|
19,937
|
|
695
|
|
3.49
|
|
|
HSBC Bank Canada
|
|
53,027
|
|
566
|
|
1.07
|
|
52,201
|
|
464
|
|
0.89
|
|
50,108
|
|
433
|
|
0.86
|
|
Latin America
|
HSBC Mexico
|
|
18,586
|
|
887
|
|
4.77
|
|
16,422
|
|
473
|
|
2.88
|
|
19,043
|
|
424
|
|
2.23
|
|
|
Brazilian operations
|
|
–
|
|
–
|
|
–
|
|
18,936
|
|
1,748
|
|
9.23
|
|
30,034
|
|
3,564
|
|
11.87
|
|
|
HSBC Bank Argentina
|
|
3,462
|
|
268
|
|
7.74
|
|
2,636
|
|
358
|
|
13.58
|
|
3,026
|
|
442
|
|
14.61
|
|
Other operations
|
|
|
(107,299
|
)
|
(1,078
|
)
|
|
|
(101,114
|
)
|
(1,099
|
)
|
|
|
(92,810
|
)
|
(904
|
)
|
|
|
|
|
1,455,070
|
|
12,819
|
|
0.88
|
|
1,442,004
|
|
12,601
|
|
0.87
|
|
1,465,635
|
|
14,658
|
|
1.00
|
|
54
|
HSBC Holdings plc
|
HSBC Holdings plc
|
55
|
56
|
HSBC Holdings plc
|
HSBC Holdings plc
|
57
|
58
|
HSBC Holdings plc
|
Repos and short-term bonds
|
||||||
|
2017
|
|
2016
|
|
2015
|
|
|
$m
|
|
$m
|
|
$m
|
|
Securities sold under agreements to repurchase
|
|
|
|
|
|
|
Outstanding at 31 December
|
132,257
|
|
90,386
|
|
80,842
|
|
Average amount outstanding during the year
|
138,957
|
|
119,850
|
|
120,241
|
|
Maximum quarter-end balance outstanding during the year
|
148,259
|
|
110,362
|
|
120,141
|
|
Weighted average interest rate during the year
|
1.2%
|
|
0.5%
|
|
0.4%
|
|
Weighted average interest rate at the year-end
|
1.4%
|
|
0.8%
|
|
0.8%
|
|
Short-term bonds
|
|
|
|
|
||
Outstanding at 31 December
|
25,874
|
|
24,580
|
|
36,614
|
|
Average amount outstanding during the year
|
27,283
|
|
24,359
|
|
40,449
|
|
Maximum quarter-end balance outstanding during the year
|
29,885
|
|
25,946
|
|
42,483
|
|
Weighted average interest rate during the year
|
1.3%
|
|
1.4%
|
|
1.3%
|
|
Weighted average interest rate at the year-end
|
1.7%
|
|
1.4%
|
|
1.2%
|
|
HSBC Holdings plc
|
59
|
|
Payments due by period
|
|||||||||
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Long-term debt obligations
|
196,844
|
|
38,449
|
|
37,040
|
|
46,348
|
|
75,007
|
|
Term deposits and certificates of deposit
|
97,696
|
|
85,479
|
|
8,963
|
|
1,533
|
|
1,721
|
|
Capital (finance) lease obligations
|
26
|
|
3
|
|
4
|
|
4
|
|
15
|
|
Operating lease obligations
|
3,950
|
|
850
|
|
1,231
|
|
780
|
|
1,089
|
|
Purchase obligations
|
1,131
|
|
1,040
|
|
5
|
|
34
|
|
52
|
|
Short positions in debt securities and equity shares
|
67,735
|
|
67,572
|
|
48
|
|
26
|
|
89
|
|
Current tax liability
|
928
|
|
928
|
|
—
|
|
—
|
|
—
|
|
Pension/healthcare obligation
|
15,302
|
|
1,341
|
|
2,876
|
|
3,090
|
|
7,995
|
|
|
383,612
|
|
195,662
|
|
50,167
|
|
51,815
|
|
85,968
|
|
|
Europe
|
|
Asia
|
|
MENA
|
|
North America
|
|
Latin America
|
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Maturity of 1 year or less
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and advances to banks
|
9,806
|
|
50,364
|
|
6,347
|
|
10,703
|
|
3,471
|
|
80,691
|
|
Commercial loans to customers
|
|
|
|
|
|
|
||||||
– manufacturing and international trade and services
|
47,957
|
|
91,713
|
|
8,912
|
|
9,479
|
|
3,874
|
|
161,935
|
|
– real estate and other property related
|
10,496
|
|
26,843
|
|
1,562
|
|
6,593
|
|
388
|
|
45,882
|
|
– non-bank financial institutions
|
21,123
|
|
17,150
|
|
457
|
|
7,470
|
|
367
|
|
46,567
|
|
– governments
|
1,152
|
|
884
|
|
1,239
|
|
282
|
|
192
|
|
3,749
|
|
– other commercial
|
26,010
|
|
19,349
|
|
1,701
|
|
5,545
|
|
1,723
|
|
54,328
|
|
|
106,738
|
|
155,939
|
|
13,871
|
|
29,369
|
|
6,544
|
|
312,461
|
|
Maturity after 1 year but within 5 years
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and advances to banks
|
4,107
|
|
3,951
|
|
156
|
|
76
|
|
—
|
|
8,290
|
|
Commercial loans to customers
|
|
|
|
|
|
|
||||||
– manufacturing and international trade and services
|
36,673
|
|
22,483
|
|
3,405
|
|
13,400
|
|
2,087
|
|
78,048
|
|
– real estate and other property related
|
20,769
|
|
50,317
|
|
574
|
|
8,542
|
|
906
|
|
81,108
|
|
– non-bank financial institutions
|
7,803
|
|
8,142
|
|
614
|
|
3,352
|
|
913
|
|
20,824
|
|
– governments
|
1,427
|
|
4,413
|
|
121
|
|
53
|
|
5
|
|
6,019
|
|
– other commercial
|
15,232
|
|
18,463
|
|
1,612
|
|
5,044
|
|
952
|
|
41,303
|
|
|
81,904
|
|
103,818
|
|
6,326
|
|
30,391
|
|
4,863
|
|
227,302
|
|
Interest rate sensitivity of loans and advances to banks and commercial loans to customers
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed interest rate
|
17,759
|
|
1,192
|
|
2,037
|
|
4,393
|
|
610
|
|
25,991
|
|
Variable interest rate
|
68,254
|
|
106,576
|
|
4,446
|
|
26,074
|
|
4,253
|
|
209,603
|
|
|
86,013
|
|
107,768
|
|
6,483
|
|
30,467
|
|
4,863
|
|
235,594
|
|
Maturity after 5 years
|
|
|
|
|
|
|
|
|
|
|
||
Loans and advances to banks
|
268
|
|
1,103
|
|
—
|
|
41
|
|
—
|
|
1,412
|
|
Commercial loans to customers
|
|
|
|
|
|
|
||||||
– manufacturing and international trade and services
|
9,617
|
|
2,419
|
|
649
|
|
1,896
|
|
520
|
|
15,101
|
|
– real estate and other property related
|
2,675
|
|
9,249
|
|
371
|
|
1,781
|
|
581
|
|
14,657
|
|
– non-bank financial institutions
|
3,167
|
|
1,019
|
|
36
|
|
104
|
|
2
|
|
4,328
|
|
– governments
|
1,040
|
|
470
|
|
6
|
|
71
|
|
373
|
|
1,960
|
|
– other commercial
|
9,470
|
|
4,345
|
|
1,370
|
|
2,226
|
|
747
|
|
18,158
|
|
|
25,969
|
|
17,502
|
|
2,432
|
|
6,078
|
|
2,223
|
|
54,204
|
|
Interest rate sensitivity of loans and advances to banks and commercial loans to customers
|
|
|
|
|
|
|
|
|
|
|
||
Fixed interest rate
|
5,654
|
|
1,281
|
|
855
|
|
994
|
|
90
|
|
8,874
|
|
Variable interest rate
|
20,583
|
|
17,324
|
|
1,577
|
|
5,126
|
|
2,133
|
|
46,743
|
|
|
26,237
|
|
18,605
|
|
2,432
|
|
6,120
|
|
2,223
|
|
55,617
|
|
60
|
HSBC Holdings plc
|
Deposits by banks
|
|
|
|
|
|
|
||||
|
2017
|
2016
|
2015
|
|||||||
|
Average
balance |
|
Average
rate |
Average balance
|
|
Average
rate |
Average
balance
|
|
Average
rate
|
|
|
$m
|
|
%
|
$m
|
|
%
|
$m
|
|
%
|
|
Europe
|
33,483
|
|
|
32,232
|
|
|
32,297
|
|
|
|
–
demand and other – non-interest bearing
|
12,825
|
|
—
|
11,696
|
|
—
|
8,076
|
|
—
|
|
–
demand – interest bearing
|
6,780
|
|
0.4
|
6,730
|
|
0.2
|
5,412
|
|
0.3
|
|
–
time
|
11,747
|
|
0.3
|
8,426
|
|
0.4
|
9,833
|
|
0.8
|
|
–
other
|
2,131
|
|
1.1
|
5,380
|
|
0.5
|
8,976
|
|
0.2
|
|
Asia
|
25,253
|
|
|
26,945
|
|
|
27,618
|
|
|
|
–
demand and other – non-interest bearing
|
5,201
|
|
—
|
5,835
|
|
—
|
6,114
|
|
—
|
|
–
demand – interest bearing
|
12,521
|
|
0.5
|
13,230
|
|
0.4
|
16,107
|
|
0.5
|
|
–
time
|
3,355
|
|
1.5
|
3,593
|
|
1.9
|
2,209
|
|
1.5
|
|
–
other
|
4,176
|
|
1.6
|
4,287
|
|
0.6
|
3,188
|
|
0.5
|
|
Middle East and North Africa
|
1,311
|
|
|
1,158
|
|
|
1,548
|
|
|
|
–
demand and other – non-interest bearing
|
430
|
|
—
|
391
|
|
—
|
748
|
|
—
|
|
–
demand – interest bearing
|
2
|
|
—
|
8
|
|
—
|
3
|
|
—
|
|
–
time
|
871
|
|
3.0
|
742
|
|
2.2
|
775
|
|
0.8
|
|
–
other
|
8
|
|
—
|
17
|
|
—
|
22
|
|
—
|
|
North America
|
5,721
|
|
|
7,594
|
|
|
9,327
|
|
|
|
–
demand and other – non-interest bearing
|
1,853
|
|
—
|
1,916
|
|
—
|
3,499
|
|
—
|
|
–
demand – interest bearing
|
1,744
|
|
0.5
|
2,402
|
|
0.3
|
1,956
|
|
0.2
|
|
–
time
|
2,116
|
|
1.6
|
3,185
|
|
0.8
|
3,746
|
|
0.4
|
|
–
other
|
8
|
|
—
|
91
|
|
—
|
126
|
|
—
|
|
Latin America
|
2,042
|
|
|
1,820
|
|
|
2,719
|
|
|
|
–
demand and other – non-interest bearing
|
164
|
|
—
|
129
|
|
—
|
88
|
|
—
|
|
–
demand – interest bearing
|
376
|
|
6.9
|
313
|
|
5.4
|
205
|
|
7.8
|
|
–
time
|
1,502
|
|
6.5
|
1,378
|
|
5.7
|
1,905
|
|
4.5
|
|
–
other
|
—
|
|
—
|
—
|
|
—
|
521
|
|
10.4
|
|
Total
|
67,810
|
|
|
69,749
|
|
|
73,509
|
|
|
|
–
demand and other – non-interest bearing
|
20,473
|
|
—
|
19,967
|
|
—
|
18,525
|
|
—
|
|
–
demand – interest bearing
|
21,423
|
|
0.6
|
22,683
|
|
0.4
|
23,683
|
|
0.5
|
|
–
time
|
19,591
|
|
1.2
|
17,324
|
|
1.3
|
18,468
|
|
1.2
|
|
–
other
|
6,323
|
|
0.4
|
9,775
|
|
0.5
|
12,833
|
|
0.6
|
|
HSBC Holdings plc
|
61
|
Customer accounts
|
||||||||||||
|
2017
|
2016
|
2015
|
|||||||||
|
Average
balance |
|
Average
rate |
|
Average
balance |
|
Average
rate |
|
Average
balance
|
|
Average
rate
|
|
|
$m
|
|
%
|
|
$m
|
|
%
|
|
$m
|
|
%
|
|
Europe
|
458,710
|
|
|
|
449,033
|
|
|
|
469,799
|
|
|
|
– demand and other – non-interest bearing
|
76,205
|
|
—
|
|
64,779
|
|
—
|
|
72,841
|
|
—
|
|
– demand – interest bearing
|
310,887
|
|
0.3
|
|
312,808
|
|
0.3
|
|
316,055
|
|
0.4
|
|
– savings
|
39,488
|
|
0.4
|
|
39,032
|
|
0.5
|
|
44,010
|
|
0.6
|
|
– time
|
30,939
|
|
0.8
|
|
31,309
|
|
0.7
|
|
35,198
|
|
0.8
|
|
– other
|
1,191
|
|
1.8
|
|
1,105
|
|
2.4
|
|
1,695
|
|
2.0
|
|
Asia
|
639,925
|
|
|
613,303
|
|
|
|
590,436
|
|
|
||
– demand and other – non-interest bearing
|
73,704
|
|
—
|
|
68,772
|
|
—
|
|
67,460
|
|
—
|
|
– demand – interest bearing
|
459,067
|
|
0.1
|
|
433,656
|
|
0.1
|
|
399,209
|
|
0.2
|
|
– savings
|
87,551
|
|
1.8
|
|
90,175
|
|
2.0
|
|
100,801
|
|
2.3
|
|
– time
|
17,183
|
|
1.0
|
|
19,530
|
|
0.8
|
|
22,035
|
|
0.9
|
|
– other
|
2,420
|
|
0.3
|
|
1,170
|
|
0.4
|
|
931
|
|
3.7
|
|
Middle East and North Africa
|
35,105
|
|
|
40,036
|
|
|
|
44,826
|
|
|
||
– demand and other – non-interest bearing
|
17,977
|
|
—
|
|
19,548
|
|
—
|
|
19,989
|
|
—
|
|
– demand – interest bearing
|
6,586
|
|
0.5
|
|
9,558
|
|
0.3
|
|
11,303
|
|
0.3
|
|
– savings
|
9,734
|
|
2.9
|
|
10,034
|
|
3.5
|
|
12,178
|
|
3.9
|
|
– time
|
808
|
|
1.6
|
|
896
|
|
4.1
|
|
1,356
|
|
4.1
|
|
– other
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
North America
|
141,192
|
|
|
140,491
|
|
|
|
136,773
|
|
|
||
– demand and other – non-interest bearing
|
28,542
|
|
—
|
|
30,350
|
|
—
|
|
29,390
|
|
—
|
|
– demand – interest bearing
|
39,050
|
|
0.3
|
|
37,382
|
|
0.2
|
|
37,234
|
|
0.2
|
|
– savings
|
63,786
|
|
0.7
|
|
64,464
|
|
0.4
|
|
60,157
|
|
0.4
|
|
– time
|
9,769
|
|
1.1
|
|
8,251
|
|
0.5
|
|
9,927
|
|
0.4
|
|
– other
|
45
|
|
—
|
|
44
|
|
—
|
|
65
|
|
—
|
|
Latin America
|
21,865
|
|
|
20,699
|
|
|
|
32,097
|
|
|
||
– demand and other – non-interest bearing
|
5,451
|
|
—
|
|
5,454
|
|
—
|
|
8,349
|
|
—
|
|
– demand – interest bearing
|
7,217
|
|
2.1
|
|
6,629
|
|
1.3
|
|
6,848
|
|
0.9
|
|
– savings
|
3,830
|
|
6.2
|
|
3,451
|
|
32.9
|
|
10,896
|
|
18.3
|
|
– time
|
5,346
|
|
5.3
|
|
5,145
|
|
3.2
|
|
5,952
|
|
2.5
|
|
– other
|
21
|
|
—
|
|
20
|
|
10.0
|
|
52
|
|
9.6
|
|
Total
|
1,296,797
|
|
|
1,263,562
|
|
|
|
1,273,931
|
|
|
||
– demand and other – non-interest bearing
|
201,879
|
|
—
|
|
188,903
|
|
—
|
|
198,029
|
|
—
|
|
– demand – interest bearing
|
822,807
|
|
0.2
|
|
800,033
|
|
0.2
|
|
770,649
|
|
0.3
|
|
– savings
|
204,389
|
|
1.3
|
|
207,156
|
|
1.8
|
|
228,042
|
|
2.3
|
|
– time
|
64,045
|
|
1.3
|
|
65,131
|
|
1.0
|
|
74,468
|
|
0.9
|
|
– other
|
3,677
|
|
1.0
|
|
2,339
|
|
1.9
|
|
2,743
|
|
1.9
|
|
62
|
HSBC Holdings plc
|
|
At 31 December 2017
|
|||||||||
|
3 months
or less |
|
After
3 months but within 6 months |
|
After
6 months but within 12 months |
|
After
12 months |
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Europe
|
31,893
|
|
2,526
|
|
6,733
|
|
8,812
|
|
49,964
|
|
– certificates of deposit
|
629
|
|
—
|
|
4,102
|
|
—
|
|
4,731
|
|
– time deposits:
|
|
|
|
|
|
|||||
banks
|
3,864
|
|
412
|
|
425
|
|
7,518
|
|
12,219
|
|
customers
|
27,400
|
|
2,114
|
|
2,206
|
|
1,294
|
|
33,014
|
|
Asia
|
20,550
|
|
1,175
|
|
671
|
|
392
|
|
22,788
|
|
– certificates of deposit
|
281
|
|
529
|
|
193
|
|
390
|
|
1,393
|
|
– time deposits:
|
|
|
|
|
|
|||||
banks
|
3,625
|
|
72
|
|
155
|
|
—
|
|
3,852
|
|
customers
|
16,644
|
|
574
|
|
323
|
|
2
|
|
17,543
|
|
Middle East and North Africa
|
254
|
|
35
|
|
114
|
|
369
|
|
772
|
|
– certificates of deposit
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
– time deposits:
|
|
|
|
|
|
|||||
banks
|
251
|
|
35
|
|
112
|
|
160
|
|
558
|
|
customers
|
3
|
|
—
|
|
2
|
|
209
|
|
214
|
|
North America
|
9,155
|
|
2,284
|
|
3,217
|
|
888
|
|
15,544
|
|
– certificates of deposit
|
1,208
|
|
1,725
|
|
2,065
|
|
—
|
|
4,998
|
|
– time deposits:
|
|
|
|
|
|
|||||
banks
|
1,620
|
|
1
|
|
—
|
|
—
|
|
1,621
|
|
customers
|
6,327
|
|
558
|
|
1,152
|
|
888
|
|
8,925
|
|
Latin America
|
5,720
|
|
720
|
|
432
|
|
1,756
|
|
8,628
|
|
– certificates of deposit
|
437
|
|
235
|
|
338
|
|
512
|
|
1,522
|
|
– time deposits:
|
|
|
|
|
|
|||||
banks
|
500
|
|
—
|
|
15
|
|
1,232
|
|
1,747
|
|
customers
|
4,783
|
|
485
|
|
79
|
|
12
|
|
5,359
|
|
Total
|
67,572
|
|
6,740
|
|
11,167
|
|
12,217
|
|
97,696
|
|
– certificates of deposit
|
2,555
|
|
2,489
|
|
6,698
|
|
902
|
|
12,644
|
|
– time deposits:
|
|
|
|
|
|
|||||
banks
|
9,860
|
|
520
|
|
707
|
|
8,910
|
|
19,997
|
|
customers
|
55,157
|
|
3,731
|
|
3,762
|
|
2,405
|
|
65,055
|
|
HSBC Holdings plc
|
63
|
Global businesses and
geographical regions
|
|
|
Page
|
Change in reportable segments
|
64
|
Analysis of adjusted results by global business
|
64
|
Reconciliation of reported and adjusted items
|
66
|
Reconciliation of reported and adjusted items - global businesses
|
67
|
Retail Banking and Wealth Management
|
73
|
Commercial Banking
|
54
|
Global Banking and Markets
|
54
|
Global Private Banking
|
75
|
Corporate Centre
|
55
|
Analysis of reported results by geographical regions
|
76
|
Reconciliation of reported and adjusted items - geographical regions
|
78
|
Analysis of reported results by country
|
81
|
Summary
|
Basis of preparation
The Group Chief Executive, supported by the rest of the GMB, is considered the Chief Operating Decision Maker (‘CODM’) for the purposes of identifying the Group’s reportable segments.
Analysis by global business is considered more prominent than the geographical region view in the way the CODM assesses performance and allocates resources. The global businesses are therefore considered our reportable segments under IFRS 8.
|
Global business results are assessed by the CODM on the basis of adjusted performance that removes the effects of significant items and currency translation from reported results. We therefore present these results on an adjusted basis as required by IFRSs. The 2016 and 2015 adjusted performance information is presented on a constant currency basis as described on page 32.
As required by IFRS 8, reconciliations of the total adjusted global business results to the Group reported results are presented on page 64. Supplementary reconciliations from reported to adjusted results by global business are presented on pages 67 to 69 for information purposes.
Our operations are closely integrated and, accordingly, the presentation of data includes internal allocations of certain items of income and expense. These allocations include the costs of certain support services and global functions to the extent that they can be meaningfully attributed to operational business lines and geographical regions. While such allocations have been made on a systematic and consistent basis, they necessarily involve a degree of subjectivity. Costs which are not allocated to global businesses are included in the Corporate Centre.
Where relevant, income and expense amounts presented include the results of inter-segment funding along with inter-company and inter-business line transactions. All such transactions are undertaken on arm’s length terms. The intra-Group elimination items for the global businesses are presented in the Corporate Centre.
The expense of the UK bank levy is included in the Europe geographical region as HSBC regards the levy as a cost of being headquartered in the UK. For the purposes of the presentation by global business, the cost of the levy is included in the Corporate Centre.
The results of geographical regions are presented on a reported basis.
Geographical information is classified by the location of the principal operations of the subsidiary or, for The Hongkong and Shanghai Banking Corporation, HSBC Bank plc, HSBC Bank Middle East and HSBC Bank USA, by the location of the branch responsible for reporting the results or providing funding.
|
Analysis of adjusted results by global business
|
64
|
HSBC Holdings plc
|
HSBC adjusted profit before tax and balance sheet data (continued)
|
|||||||||||||
|
|
2016
|
|||||||||||
|
|
Retail
Banking
and Wealth Management |
|
Commercial
Banking |
|
Global
Banking and Markets |
|
Global
Private Banking |
|
Corporate Centre
|
|
Total
|
|
|
Footnotes
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Net interest income
|
|
12,919
|
|
8,491
|
|
4,798
|
|
801
|
|
1,170
|
|
28,179
|
|
Net fee income/(expense)
|
|
4,756
|
|
3,559
|
|
3,394
|
|
749
|
|
(63
|
)
|
12,395
|
|
Net trading income
|
31
|
426
|
|
442
|
|
6,231
|
|
183
|
|
2,426
|
|
9,708
|
|
Other income/(expense)
|
33
|
441
|
|
127
|
|
292
|
|
15
|
|
(1,867
|
)
|
(992
|
)
|
Net operating income before loan impairment charges and other credit risk provisions
|
3
|
18,542
|
|
12,619
|
|
14,715
|
|
1,748
|
|
1,666
|
|
49,290
|
|
– external
|
|
16,052
|
|
12,641
|
|
17,412
|
|
1,487
|
|
1,698
|
|
49,290
|
|
– inter-segment
|
|
2,490
|
|
(22
|
)
|
(2,697
|
)
|
261
|
|
(32
|
)
|
—
|
|
Loan impairment charges and other credit risk provisions
|
|
(1,142
|
)
|
(969
|
)
|
(461
|
)
|
—
|
|
(22
|
)
|
(2,594
|
)
|
Net operating income
|
|
17,400
|
|
11,650
|
|
14,254
|
|
1,748
|
|
1,644
|
|
46,696
|
|
Total operating expenses
|
|
(12,184
|
)
|
(5,746
|
)
|
(8,745
|
)
|
(1,476
|
)
|
(1,933
|
)
|
(30,084
|
)
|
Operating profit/(loss)
|
|
5,216
|
|
5,904
|
|
5,509
|
|
272
|
|
(289
|
)
|
16,612
|
|
Share of profit in associates and joint ventures
|
|
20
|
|
—
|
|
—
|
|
—
|
|
2,302
|
|
2,322
|
|
Adjusted profit before tax
|
|
5,236
|
|
5,904
|
|
5,509
|
|
272
|
|
2,013
|
|
18,934
|
|
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
Share of HSBC’s adjusted profit before tax
|
|
27.7
|
|
31.2
|
|
29.1
|
|
1.4
|
|
10.6
|
|
100.0
|
|
Adjusted cost efficiency ratio
|
|
65.7
|
|
45.5
|
|
59.4
|
|
84.4
|
|
116.0
|
|
61.0
|
|
Adjusted balance sheet data
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Loans and advances to customers (net)
|
|
323,986
|
|
294,952
|
|
237,655
|
|
36,972
|
|
12,494
|
|
906,059
|
|
Interests in associates and joint ventures
|
|
394
|
|
—
|
|
—
|
|
—
|
|
20,340
|
|
20,734
|
|
Total external assets
|
|
435,839
|
|
320,173
|
|
981,893
|
|
43,234
|
|
708,320
|
|
2,489,459
|
|
Customer accounts
|
|
611,846
|
|
356,885
|
|
272,159
|
|
72,730
|
|
15,037
|
|
1,328,657
|
|
Adjusted risk-weighted assets
|
34
|
114,683
|
|
286,912
|
|
307,736
|
|
15,649
|
|
153,324
|
|
878,304
|
|
|
|
2015
|
|||||||||||
Net interest income
|
|
12,299
|
|
8,287
|
|
4,422
|
|
819
|
|
2,167
|
|
27,994
|
|
Net fee income/(expense)
|
|
5,446
|
|
3,672
|
|
3,514
|
|
939
|
|
(121
|
)
|
13,450
|
|
Net trading income
|
31
|
427
|
|
460
|
|
5,960
|
|
206
|
|
721
|
|
7,774
|
|
Other income
|
33
|
666
|
|
88
|
|
382
|
|
2
|
|
66
|
|
1,204
|
|
Net operating income before loan impairment charges and other credit risk provisions
|
3
|
18,838
|
|
12,507
|
|
14,278
|
|
1,966
|
|
2,833
|
|
50,422
|
|
– external
|
|
16,451
|
|
12,585
|
|
16,633
|
|
1,689
|
|
3,064
|
|
50,422
|
|
– inter-segment
|
|
2,387
|
|
(78
|
)
|
(2,355
|
)
|
277
|
|
(231
|
)
|
—
|
|
Loan impairment charges and other credit risk provisions
|
|
(1,023
|
)
|
(1,447
|
)
|
(71
|
)
|
(11
|
)
|
(27
|
)
|
(2,579
|
)
|
Net operating income
|
|
17,815
|
|
11,060
|
|
14,207
|
|
1,955
|
|
2,806
|
|
47,843
|
|
Total operating expenses
|
|
(12,332
|
)
|
(5,826
|
)
|
(8,903
|
)
|
(1,582
|
)
|
(2,814
|
)
|
(31,457
|
)
|
Operating profit/(loss)
|
|
5,483
|
|
5,234
|
|
5,304
|
|
373
|
|
(8
|
)
|
16,386
|
|
Share of profit/(loss) in associates and joint ventures
|
|
23
|
|
—
|
|
(1
|
)
|
—
|
|
2,387
|
|
2,409
|
|
Adjusted profit before tax
|
|
5,506
|
|
5,234
|
|
5,303
|
|
373
|
|
2,379
|
|
18,795
|
|
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
Share of HSBC’s adjusted profit before tax
|
|
29.3
|
|
27.8
|
|
28.2
|
|
2.0
|
|
12.7
|
|
100.0
|
|
Adjusted cost efficiency ratio
|
|
65.5
|
|
46.6
|
|
62.4
|
|
80.5
|
|
99.3
|
|
62.4
|
|
Adjusted balance sheet data
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Loans and advances to customers (net)
|
|
313,927
|
|
281,826
|
|
243,662
|
|
42,592
|
|
23,690
|
|
905,697
|
|
Interests in associates and joint ventures
|
|
391
|
|
—
|
|
—
|
|
—
|
|
18,673
|
|
19,064
|
|
Total external assets
|
|
422,322
|
|
309,266
|
|
886,750
|
|
51,190
|
|
651,847
|
|
2,321,378
|
|
Customer accounts
|
|
569,183
|
|
341,717
|
|
256,374
|
|
80,442
|
|
13,956
|
|
1,261,672
|
|
Adjusted risk-weighted assets
|
34
|
116,047
|
|
282,149
|
|
318,818
|
|
17,661
|
|
313,100
|
|
1,047,775
|
|
HSBC Holdings plc
|
65
|
Reconciliation of reported and adjusted items
|
1
|
Includes effects of foreign currency translation.
|
Adjusted profit reconciliation
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|
|
Footnotes
|
$m
|
|
$m
|
|
$m
|
|
For the year ended 31 Dec
|
|
|
|
|
|||
Adjusted profit before tax
|
|
20,990
|
|
18,934
|
|
18,795
|
|
Significant items
|
|
(3,823
|
)
|
(12,321
|
)
|
(1,243
|
)
|
– customer redress programmes (revenue)
|
|
(108
|
)
|
2
|
|
(10
|
)
|
– DVA on derivative contracts
|
|
(373
|
)
|
26
|
|
230
|
|
– fair value movements on non-qualifying hedges
|
32
|
128
|
|
(687
|
)
|
(327
|
)
|
– gain on disposal of our investment in Vietnam Technological and Commercial Joint Stock Bank
|
|
126
|
|
—
|
|
—
|
|
– gain on disposal of our membership interest in Visa – Europe
|
|
—
|
|
584
|
|
—
|
|
– gain on disposal of our membership interest in Visa – US
|
|
308
|
|
116
|
|
—
|
|
– gain on the partial sale of shareholding in Industrial Bank
|
|
—
|
|
—
|
|
1,372
|
|
– gain/(loss) and trading results from disposed-of operations in Brazil
|
|
19
|
|
(2,081
|
)
|
(13
|
)
|
– investment in new businesses
|
|
(99
|
)
|
—
|
|
—
|
|
– other acquisitions, disposals and dilutions
|
|
78
|
|
—
|
|
—
|
|
– own credit spread
|
25
|
—
|
|
(1,792
|
)
|
1,002
|
|
– portfolio disposals
|
|
(158
|
)
|
(163
|
)
|
(214
|
)
|
– costs associated with portfolio disposals
|
|
(53
|
)
|
(28
|
)
|
—
|
|
– costs associated with the UK’s exit from the EU
|
|
(28
|
)
|
—
|
|
—
|
|
– costs to achieve
|
|
(3,002
|
)
|
(3,118
|
)
|
(908
|
)
|
– costs to establish UK ring-fenced bank
|
|
(392
|
)
|
(223
|
)
|
(89
|
)
|
– customer redress programmes (operating expenses)
|
|
(655
|
)
|
(559
|
)
|
(541
|
)
|
– gain on partial settlement of pension obligation
|
|
188
|
|
—
|
|
—
|
|
– impairment of GPB – Europe goodwill
|
|
—
|
|
(3,240
|
)
|
—
|
|
– regulatory provisions in GPB
|
|
(164
|
)
|
(344
|
)
|
(172
|
)
|
– restructuring and other related costs
|
|
—
|
|
—
|
|
(117
|
)
|
– settlements and provisions in connection with legal matters
|
|
362
|
|
(681
|
)
|
(1,649
|
)
|
– currency translation on significant items
|
|
|
|
(133
|
)
|
193
|
|
Currency translation
|
|
|
|
499
|
|
1,315
|
|
Reported profit before tax
|
|
17,167
|
|
7,112
|
|
18,867
|
|
66
|
HSBC Holdings plc
|
Reconciliation of reported and adjusted items – global businesses
|
HSBC Holdings plc
|
67
|
Reconciliation of reported and adjusted items (continued)
|
|||||||||||||
|
|
2016
|
|||||||||||
|
|
Retail
Banking and Wealth Management |
|
Commercial
Banking |
|
Global
Banking and Markets |
|
Global
Private Banking |
|
Corporate Centre
|
|
Total
|
|
|
Footnotes
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Revenue
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
20,338
|
|
13,405
|
|
15,213
|
|
1,745
|
|
(2,735
|
)
|
47,966
|
|
Currency translation
|
|
(257
|
)
|
(242
|
)
|
(182
|
)
|
(7
|
)
|
(48
|
)
|
(736
|
)
|
Significant items
|
|
(1,539
|
)
|
(544
|
)
|
(316
|
)
|
10
|
|
4,449
|
|
2,060
|
|
– customer redress programmes
|
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
(2
|
)
|
– DVA on derivative contracts
|
|
—
|
|
—
|
|
(26
|
)
|
—
|
|
—
|
|
(26
|
)
|
– fair value movements on non-qualifying hedges
|
32
|
—
|
|
—
|
|
—
|
|
—
|
|
687
|
|
687
|
|
– gain on disposal of our membership interest in
Visa – Europe |
|
(354
|
)
|
(230
|
)
|
—
|
|
—
|
|
—
|
|
(584
|
)
|
– gain on disposal of our membership interest in
Visa – US |
|
(72
|
)
|
—
|
|
—
|
|
—
|
|
(44
|
)
|
(116
|
)
|
– own credit spread
|
25
|
—
|
|
—
|
|
—
|
|
—
|
|
1,792
|
|
1,792
|
|
– portfolio disposals
|
|
—
|
|
—
|
|
—
|
|
26
|
|
137
|
|
163
|
|
– loss and trading results from disposed-of operations in Brazil
|
|
(987
|
)
|
(288
|
)
|
(268
|
)
|
(12
|
)
|
1,828
|
|
273
|
|
– currency translation on significant items
|
|
(126
|
)
|
(26
|
)
|
(22
|
)
|
(2
|
)
|
49
|
|
(127
|
)
|
Adjusted
|
|
18,542
|
|
12,619
|
|
14,715
|
|
1,748
|
|
1,666
|
|
49,290
|
|
LICs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
(1,633
|
)
|
(1,272
|
)
|
(471
|
)
|
1
|
|
(25
|
)
|
(3,400
|
)
|
Currency translation
|
|
(45
|
)
|
(12
|
)
|
(6
|
)
|
(1
|
)
|
3
|
|
(61
|
)
|
Significant items
|
|
536
|
|
315
|
|
16
|
|
—
|
|
—
|
|
867
|
|
– trading results from disposed-of operations in Brazil
|
|
462
|
|
272
|
|
14
|
|
—
|
|
—
|
|
748
|
|
– currency translation on significant items
|
|
74
|
|
43
|
|
2
|
|
—
|
|
—
|
|
119
|
|
Adjusted
|
|
(1,142
|
)
|
(969
|
)
|
(461
|
)
|
—
|
|
(22
|
)
|
(2,594
|
)
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
(14,138
|
)
|
(6,087
|
)
|
(9,302
|
)
|
(5,074
|
)
|
(5,207
|
)
|
(39,808
|
)
|
Currency translation
|
|
133
|
|
69
|
|
125
|
|
(8
|
)
|
12
|
|
331
|
|
Significant items
|
|
1,821
|
|
272
|
|
432
|
|
3,606
|
|
3,262
|
|
9,393
|
|
– costs associated with portfolio disposals
|
|
—
|
|
—
|
|
—
|
|
10
|
|
18
|
|
28
|
|
– costs to achieve
|
|
393
|
|
62
|
|
233
|
|
6
|
|
2,424
|
|
3,118
|
|
– costs to establish UK ring-fenced bank
|
|
2
|
|
1
|
|
—
|
|
—
|
|
220
|
|
223
|
|
– customer redress programmes
|
|
497
|
|
34
|
|
28
|
|
—
|
|
—
|
|
559
|
|
– impairment of GPB – Europe goodwill
|
|
—
|
|
—
|
|
—
|
|
3,240
|
|
—
|
|
3,240
|
|
– regulatory provisions in GPB
|
|
—
|
|
—
|
|
—
|
|
341
|
|
3
|
|
344
|
|
– settlements and provisions in connection with legal matters
|
|
—
|
|
—
|
|
94
|
|
—
|
|
587
|
|
681
|
|
– trading results from disposed-of operations in Brazil
|
|
805
|
|
155
|
|
82
|
|
8
|
|
9
|
|
1,059
|
|
– currency translation on significant items
|
|
124
|
|
20
|
|
(5
|
)
|
1
|
|
1
|
|
141
|
|
Adjusted
|
|
(12,184
|
)
|
(5,746
|
)
|
(8,745
|
)
|
(1,476
|
)
|
(1,933
|
)
|
(30,084
|
)
|
Share of profit in associates and joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
20
|
|
—
|
|
—
|
|
—
|
|
2,334
|
|
2,354
|
|
Currency translation
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(33
|
)
|
(33
|
)
|
Significant items
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
1
|
|
– trading results from disposed-of operations in Brazil
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
1
|
|
– currency translation on significant items
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Adjusted
|
|
20
|
|
—
|
|
—
|
|
—
|
|
2,302
|
|
2,322
|
|
Profit/(loss) before tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
4,587
|
|
6,046
|
|
5,440
|
|
(3,328
|
)
|
(5,633
|
)
|
7,112
|
|
Currency translation
|
|
(169
|
)
|
(185
|
)
|
(63
|
)
|
(16
|
)
|
(66
|
)
|
(499
|
)
|
Significant items
|
|
818
|
|
43
|
|
132
|
|
3,616
|
|
7,712
|
|
12,321
|
|
– revenue
|
|
(1,539
|
)
|
(544
|
)
|
(316
|
)
|
10
|
|
4,449
|
|
2,060
|
|
– LICs
|
|
536
|
|
315
|
|
16
|
|
—
|
|
—
|
|
867
|
|
– operating expenses
|
|
1,821
|
|
272
|
|
432
|
|
3,606
|
|
3,262
|
|
9,393
|
|
– share of profit in associates and joint ventures
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
1
|
|
Adjusted
|
|
5,236
|
|
5,904
|
|
5,509
|
|
272
|
|
2,013
|
|
18,934
|
|
68
|
HSBC Holdings plc
|
Reconciliation of reported and adjusted items (continued)
|
|||||||||||||
|
|
2015
|
|||||||||||
|
|
Retail
Banking and Wealth Management |
|
Commercial
Banking |
|
Global
Banking and Markets |
|
Global
Private Banking |
|
Corporate Centre
|
|
Total
|
|
|
Footnotes
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Revenue
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
22,624
|
|
14,198
|
|
15,972
|
|
2,076
|
|
4,930
|
|
59,800
|
|
Currency translation
|
|
(1,486
|
)
|
(969
|
)
|
(984
|
)
|
(55
|
)
|
(233
|
)
|
(3,727
|
)
|
Significant items
|
|
(2,300
|
)
|
(722
|
)
|
(710
|
)
|
(55
|
)
|
(1,864
|
)
|
(5,651
|
)
|
– customer redress programmes
|
|
22
|
|
18
|
|
—
|
|
(30
|
)
|
—
|
|
10
|
|
– DVA on derivative contracts
|
|
—
|
|
—
|
|
(230
|
)
|
—
|
|
—
|
|
(230
|
)
|
– fair value movements on non-qualifying hedges
|
32
|
—
|
|
—
|
|
—
|
|
—
|
|
327
|
|
327
|
|
– gain on the partial sale of shareholding in Industrial
Bank |
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,372
|
)
|
(1,372
|
)
|
– own credit spread
|
25
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,002
|
)
|
(1,002
|
)
|
– portfolio disposals
|
|
—
|
|
—
|
|
—
|
|
—
|
|
214
|
|
214
|
|
– trading results from disposed-of operations in Brazil
|
|
(2,239
|
)
|
(712
|
)
|
(483
|
)
|
(29
|
)
|
(69
|
)
|
(3,532
|
)
|
– currency translation on significant items
|
|
(83
|
)
|
(28
|
)
|
3
|
|
4
|
|
38
|
|
(66
|
)
|
Adjusted
|
|
18,838
|
|
12,507
|
|
14,278
|
|
1,966
|
|
2,833
|
|
50,422
|
|
LICs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
(1,878
|
)
|
(1,761
|
)
|
(47
|
)
|
(13
|
)
|
(22
|
)
|
(3,721
|
)
|
Currency translation
|
|
82
|
|
40
|
|
8
|
|
2
|
|
(5
|
)
|
127
|
|
Significant items
|
|
773
|
|
274
|
|
(32
|
)
|
—
|
|
—
|
|
1,015
|
|
– trading results from disposed-of operations in Brazil
|
|
731
|
|
262
|
|
(28
|
)
|
—
|
|
—
|
|
965
|
|
– currency translation on significant items
|
|
42
|
|
12
|
|
(4
|
)
|
—
|
|
—
|
|
50
|
|
Adjusted
|
|
(1,023
|
)
|
(1,447
|
)
|
(71
|
)
|
(11
|
)
|
(27
|
)
|
(2,579
|
)
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
(15,970
|
)
|
(6,852
|
)
|
(10,767
|
)
|
(1,840
|
)
|
(4,339
|
)
|
(39,768
|
)
|
Currency translation
|
|
1,119
|
|
403
|
|
768
|
|
29
|
|
115
|
|
2,434
|
|
Significant items
|
|
2,519
|
|
623
|
|
1,096
|
|
229
|
|
1,410
|
|
5,877
|
|
– costs to achieve
|
|
153
|
|
163
|
|
69
|
|
16
|
|
507
|
|
908
|
|
– costs to establish UK ring-fenced bank
|
|
—
|
|
—
|
|
—
|
|
—
|
|
89
|
|
89
|
|
– customer redress programmes
|
|
541
|
|
18
|
|
(19
|
)
|
—
|
|
1
|
|
541
|
|
– regulatory provisions in GPB
|
|
—
|
|
—
|
|
—
|
|
171
|
|
1
|
|
172
|
|
– restructuring and other related costs
|
|
9
|
|
5
|
|
22
|
|
18
|
|
63
|
|
117
|
|
– settlements and provisions in connection with legal matters
|
|
—
|
|
—
|
|
949
|
|
—
|
|
700
|
|
1,649
|
|
– trading results from disposed-of operations in Brazil
|
|
1,822
|
|
434
|
|
222
|
|
23
|
|
78
|
|
2,579
|
|
– currency translation on significant items
|
|
(6
|
)
|
3
|
|
(147
|
)
|
1
|
|
(29
|
)
|
(178
|
)
|
Adjusted
|
|
(12,332
|
)
|
(5,826
|
)
|
(8,903
|
)
|
(1,582
|
)
|
(2,814
|
)
|
(31,457
|
)
|
Share of profit in associates and joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
23
|
|
—
|
|
—
|
|
—
|
|
2,533
|
|
2,556
|
|
Currency translation
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
(148
|
)
|
(149
|
)
|
Significant items
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
2
|
|
– trading results from disposed-of operations in Brazil
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
1
|
|
– currency translation on significant items
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
1
|
|
Adjusted
|
|
23
|
|
—
|
|
(1
|
)
|
—
|
|
2,387
|
|
2,409
|
|
Profit/(loss) before tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
4,799
|
|
5,585
|
|
5,158
|
|
223
|
|
3,102
|
|
18,867
|
|
Currency translation
|
|
(285
|
)
|
(526
|
)
|
(209
|
)
|
(24
|
)
|
(271
|
)
|
(1,315
|
)
|
Significant items
|
|
992
|
|
175
|
|
354
|
|
174
|
|
(452
|
)
|
1,243
|
|
– revenue
|
|
(2,300
|
)
|
(722
|
)
|
(710
|
)
|
(55
|
)
|
(1,864
|
)
|
(5,651
|
)
|
– LICs
|
|
773
|
|
274
|
|
(32
|
)
|
—
|
|
—
|
|
1,015
|
|
– operating expenses
|
|
2,519
|
|
623
|
|
1,096
|
|
229
|
|
1,410
|
|
5,877
|
|
– share of profit in associates and joint ventures
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
2
|
|
Adjusted
|
|
5,506
|
|
5,234
|
|
5,303
|
|
373
|
|
2,379
|
|
18,795
|
|
HSBC Holdings plc
|
69
|
|
At 31 Dec 2015
|
|||||||||||
Risk-weighted assets
|
|
|
|
|
|
|
||||||
Reported
|
130.7
|
|
302.2
|
|
330.3
|
|
18.0
|
|
321.8
|
|
1,103.0
|
|
Currency translation
|
(1.0
|
)
|
(3.5
|
)
|
1.4
|
|
(0.1
|
)
|
(5.0
|
)
|
(8.2
|
)
|
Disposals
|
(13.7
|
)
|
(16.5
|
)
|
(12.9
|
)
|
(0.2
|
)
|
(3.7
|
)
|
(47.0
|
)
|
– Brazil operations
|
(13.5
|
)
|
(16.1
|
)
|
(12.9
|
)
|
(0.2
|
)
|
(3.1
|
)
|
(45.8
|
)
|
– Lebanon operations
|
(0.2
|
)
|
(0.4
|
)
|
—
|
|
—
|
|
(0.6
|
)
|
(1.2
|
)
|
Adjusted
|
116.0
|
|
282.2
|
|
318.8
|
|
17.7
|
|
313.1
|
|
1,047.8
|
|
Retail Banking and Wealth Management
|
•
|
Growth in revenue from current accounts, savings and deposits (up
$1.1bn
to
$6.3bn
) from higher net interest income due to wider spreads and higher balances, primarily in Hong Kong and also in the US and Mexico.
|
•
|
Lower personal lending revenue (down
$0.3bn
to
$7.2bn
), reflecting mortgage spread compression, primarily in Hong Kong, mainland China and the US. This was partly offset by lending growth of
$22.2bn
, notably driven by mortgages in the UK and Hong Kong, where we grew our market share.
|
•
|
Growth in insurance manufacturing revenue (up
$0.5bn
to
$1.9bn
) was a significant factor in the rise in other income. This included favourable movements in market impacts of
$0.3bn
in 2017 compared with adverse movements of
$0.4bn
in 2016, due to interest rate and equity market movements, notably in Asia and France, and to a lesser extent higher insurance sales in Asia
|
•
|
Higher investment distribution revenue (up
$0.4bn
to
$3.3bn
), driven by an increase in fee income, primarily from higher sales of mutual funds and retail securities in Hong Kong, reflecting increased investor confidence.
|
70
|
HSBC Holdings plc
|
•
|
lower investment distribution revenue (down
$0.3bn
to
$2.9bn
), mainly in Hong Kong as a result of lower fee income from mutual fund and retail securities turnover reflecting weaker market sentiment. This compared with a strong performance in the first half of 2015.
|
•
|
lower revenue in insurance manufacturing (down
$0.1bn
or
9%
to
$1.4bn
), mainly in other income reflecting higher adverse market impacts compared with 2015. This was partly offset by the value of new business.
|
•
|
income in current accounts, savings and deposits of
$5.2bn
increased by
$0.4bn
or
8%
, reflecting increased net interest income as a result of strong growth in balances, notably in Hong Kong and the UK. We also benefited from wider deposit spreads in Hong Kong and Mexico.
|
•
|
lower personal lending revenue of
$7.5bn
fell by
$0.2bn
or
3%
, despite growth in balances, notably in Hong Kong, the UK and Mexico. The reduction in revenue primarily reflected spread compression, mainly in the UK.
|
RBWM – adjusted profit before tax data
|
|||||||||
|
|
Consists of
|
|||||||
|
|
Total
RBWM
|
|
Banking
operations
|
|
Insurance manufacturing
|
|
Asset
management
|
|
|
Footnote
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Year ended 31 Dec 2017
|
|
|
|
|
|
||||
Net operating income before loan impairment charges and other credit risk provisions
|
3
|
20,287
|
|
17,235
|
|
1,997
|
|
1,055
|
|
– net interest income
|
|
13,959
|
|
11,947
|
|
2,012
|
|
—
|
|
– net fee income/(expense)
|
|
5,156
|
|
4,642
|
|
(494
|
)
|
1,008
|
|
– other income
|
|
1,172
|
|
646
|
|
479
|
|
47
|
|
LICs
|
|
(980
|
)
|
(980
|
)
|
—
|
|
—
|
|
Net operating income
|
|
19,307
|
|
16,255
|
|
1,997
|
|
1,055
|
|
Total operating expenses
|
|
(12,847
|
)
|
(11,748
|
)
|
(408
|
)
|
(691
|
)
|
Operating profit
|
|
6,460
|
|
4,507
|
|
1,589
|
|
364
|
|
Income from associates
|
|
18
|
|
7
|
|
11
|
|
—
|
|
Profit before tax
|
|
6,478
|
|
4,514
|
|
1,600
|
|
364
|
|
|
|
|
|
|
|
||||
Year ended 31 Dec 2016
|
|
|
|
|
|
||||
Net operating income before loan impairment charges and other credit risk provisions
|
3
|
18,542
|
|
16,029
|
|
1,526
|
|
987
|
|
– net interest income
|
|
12,919
|
|
11,015
|
|
1,895
|
|
9
|
|
– net fee income/(expense)
|
|
4,755
|
|
4,361
|
|
(538
|
)
|
932
|
|
– other income
|
|
868
|
|
653
|
|
169
|
|
46
|
|
LICs
|
|
(1,142
|
)
|
(1,142
|
)
|
—
|
|
—
|
|
Net operating income
|
|
17,400
|
|
14,887
|
|
1,526
|
|
987
|
|
Total operating expenses
|
|
(12,181
|
)
|
(11,147
|
)
|
(374
|
)
|
(660
|
)
|
Operating profit
|
|
5,219
|
|
3,740
|
|
1,152
|
|
327
|
|
Income from associates
|
|
20
|
|
—
|
|
20
|
|
—
|
|
Profit before tax
|
|
5,239
|
|
3,740
|
|
1,172
|
|
327
|
|
HSBC Holdings plc
|
71
|
Commercial Banking
|
•
|
In GLCM, revenue increased by
$536m
or
13%
to
$4.8bn
, notably in Hong Kong and mainland China, as higher net interest income reflected wider spreads. Average balances grew 5%, reflecting customer deposit retention and new customer acquisitions. In the UK, average balance sheet growth of
10%
was more than offset by narrower spreads due to the impact of the base rate reduction in 2016.
|
•
|
In C&L, revenue increased by
$52m
or
1%
to
$5.1bn
. In the UK, net interest income increased as lending growth more than offset narrower spreads. By contrast, revenue in Asia was lower, mainly driven by lower net interest income, as balance growth in Hong Kong was more than offset by the effects of spread compression in Hong Kong and mainland China, in part reflecting competitive pressures. Revenue in the US was lower, as we reposition the portfolio towards higher returns.
|
•
|
In GTRF, revenue was
$21m
or
1%
lower at
$1.8bn
, representing a stabilisation in performance following a challenging 2016. Notably, revenue increased in both Asia and the UK, reflecting balance sheet growth. However, this was more than offset by a reduction in revenue in the Middle East and North Africa (‘MENA’), reflecting the effect of managed customer exits in the UAE.
|
•
|
In GLCM revenue increased by
$170m
(or
4%
) to
$4.2bn
, from growth in net interest income arising from increased balances and wider spreads in Hong Kong, also higher in the UK from strong balance growth, partly offset by narrower spreads. Net interest income fell in Canada and France as a result of narrower spreads.
|
•
|
Revenue in C&L increased by
$75m
(or
2%
) to
$5.0bn
, reflecting increased net interest income from continued loan growth in the UK, also higher in Mexico as a result of balance growth and wider spreads.
|
•
|
In GTRF, revenue decreased by
$201m
(or
10%
) to
$1.8bn
, mainly reflecting lower net fee income as a result of customer and product repositioning in Hong Kong, also lower in the UAE from managed customer exits.
|
72
|
HSBC Holdings plc
|
Global Banking and Markets
|
•
|
Revenue growth in all of our transaction banking products, notably GLCM (up
$0.3bn
to
$2.2bn
) and Securities Services (up
$0.2bn
to
$1.7bn
). These increases reflected continued momentum as we won and retained client mandates, and benefited from higher interest rates, particularly in Asia and the US.
|
•
|
Global Markets revenue was resilient, (up
$33m
to
$6.7bn
), despite lower volatility in 2017, compared with more robust trading conditions in 2016. In Equities revenue increased by
$0.3bn
to
$1.3bn
, as we continued to capture market share from Prime Financing products. This was largely offset by Fixed Income, Currencies and Commodities, where revenue decreased by
$0.2bn
to
$5.4bn
, reflecting subdued trading conditions.
|
•
|
Global Banking revenue was marginally higher than 2016 (up
$16m
to
$3.8bn
), reflecting growth in lending balances and continued momentum in investment banking products, which broadly offset the effects of tightening spreads on lending in Asia.
|
•
|
Global Markets revenue increased by
$0.6bn
or
11%
, mainly in Rates (up
$0.7bn
) and Credit (up
$0.2bn
), as we gained market share in Europe. This was partly in Equities where revenue fell by
$0.4bn
, primarily reflecting lower trading volumes in Europe and Asia.
|
•
|
In GLCM, revenue increased by
$0.1bn
from growth in average balances reflecting an increase in client mandates. We also benefited from wider deposit spreads.
|
Global Private Banking
|
HSBC Holdings plc
|
73
|
74
|
HSBC Holdings plc
|
GPB – reported client assets
35
|
||||||
|
2017
|
|
2016
|
|
2015
|
|
|
$bn
|
|
$bn
|
|
$bn
|
|
At 1 Jan
|
298
|
|
349
|
|
365
|
|
Net new money
|
—
|
|
(17
|
)
|
1
|
|
– of which: areas targeted for growth
|
15
|
|
2
|
|
14
|
|
Value change
|
21
|
|
(1
|
)
|
1
|
|
Disposals
|
(10
|
)
|
(24
|
)
|
—
|
|
Exchange and other
|
21
|
|
(9
|
)
|
(18
|
)
|
At 31 Dec
|
330
|
|
298
|
|
349
|
|
Corporate Centre
|
•
|
higher interest on our debt (up
$0.3
bn), mainly from higher costs of debt issued to meet regulatory requirements; and
|
•
|
a reduction in revenue in BSM (
$0.3
bn)
reflecting lower yield rates and increased utilisation of the Group’s surplus liquidity by the global businesses; partly offset by:
|
•
|
favourable fair value movements relating to the economic hedging of interest and exchange rate risk on our long-term debt with long-term derivatives of
$0.1
bn, compared with adverse movements of
$0.3
bn in 2016.
|
•
|
higher adverse fair value movements relating to the economic hedging of interest and exchange rate risk on our long-term debt with long-term derivatives ($0.2bn); and
|
•
|
higher interest expense on our debt (up $0.3bn), mainly reflecting a higher cost of debt.
|
HSBC Holdings plc
|
75
|
Analysis of reported results by geographical regions
|
76
|
HSBC Holdings plc
|
|
|
|
|
|
|
|
|
|
|||||||
HSBC reported profit/(loss) before tax and balance sheet data (continued)
|
|
|
|
|
|
||||||||||
|
|
2016
|
|||||||||||||
|
|
Europe
|
|
Asia
|
|
MENA
|
|
North America
|
|
Latin America
|
|
Intra-HSBC
items
|
|
Total
|
|
|
Footnotes
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Net interest income
|
|
8,346
|
|
12,490
|
|
1,831
|
|
4,220
|
|
3,006
|
|
(80
|
)
|
29,813
|
|
Net fee income
|
|
4,247
|
|
5,200
|
|
709
|
|
1,898
|
|
723
|
|
—
|
|
12,777
|
|
Net trading income
|
|
4,949
|
|
3,127
|
|
385
|
|
462
|
|
449
|
|
80
|
|
9,452
|
|
Other income/(expense)
|
33
|
(2,026
|
)
|
2,503
|
|
44
|
|
485
|
|
(1,492
|
)
|
(3,590
|
)
|
(4,076
|
)
|
Net operating income before loan impairment charges and other credit risk provisions
|
3
|
15,516
|
|
23,320
|
|
2,969
|
|
7,065
|
|
2,686
|
|
(3,590
|
)
|
47,966
|
|
Loan impairment charges and other credit risk provisions
|
|
(446
|
)
|
(677
|
)
|
(316
|
)
|
(732
|
)
|
(1,229
|
)
|
—
|
|
(3,400
|
)
|
Net operating income
|
|
15,070
|
|
22,643
|
|
2,653
|
|
6,333
|
|
1,457
|
|
(3,590
|
)
|
44,566
|
|
Total operating expenses
|
|
(21,845
|
)
|
(10,785
|
)
|
(1,584
|
)
|
(6,147
|
)
|
(3,037
|
)
|
3,590
|
|
(39,808
|
)
|
Operating profit/(loss)
|
|
(6,775
|
)
|
11,858
|
|
1,069
|
|
186
|
|
(1,580
|
)
|
—
|
|
4,758
|
|
Share of profit/(loss) in associates and joint ventures
|
|
1
|
|
1,921
|
|
434
|
|
(1
|
)
|
(1
|
)
|
—
|
|
2,354
|
|
Profit/(loss) before tax
|
|
(6,774
|
)
|
13,779
|
|
1,503
|
|
185
|
|
(1,581
|
)
|
—
|
|
7,112
|
|
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
|
%
|
|
|
Share of HSBC’s profit before tax
|
|
(95.2
|
)
|
193.7
|
|
21.1
|
|
2.6
|
|
(22.2
|
)
|
|
|
100.0
|
|
Cost efficiency ratio
|
|
140.8
|
|
46.2
|
|
53.4
|
|
87.0
|
|
113.1
|
|
|
|
83.0
|
|
Balance sheet data
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Loans and advances to customers (net)
|
|
336,670
|
|
365,430
|
|
30,740
|
|
111,710
|
|
16,954
|
|
—
|
|
861,504
|
|
– reported in held for sale
|
|
1,057
|
|
—
|
|
474
|
|
2,092
|
|
—
|
|
—
|
|
3,623
|
|
Total assets
|
|
1,068,446
|
|
965,730
|
|
60,472
|
|
409,021
|
|
43,137
|
|
(171,820
|
)
|
2,374,986
|
|
Customer accounts
|
|
446,615
|
|
631,723
|
|
34,766
|
|
138,790
|
|
20,492
|
|
—
|
|
1,272,386
|
|
– reported in held for sale
|
|
2,012
|
|
—
|
|
701
|
|
—
|
|
—
|
|
—
|
|
2,713
|
|
Risk-weighted assets
|
37
|
298,384
|
|
333,987
|
|
59,065
|
|
150,714
|
|
34,341
|
|
—
|
|
857,181
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
2015
|
|||||||||||||
Net interest income
|
|
9,686
|
|
12,184
|
|
1,849
|
|
4,532
|
|
4,318
|
|
(38
|
)
|
32,531
|
|
Net fee income
|
|
4,702
|
|
6,032
|
|
822
|
|
2,018
|
|
1,131
|
|
—
|
|
14,705
|
|
Net trading income
|
|
3,968
|
|
3,090
|
|
418
|
|
545
|
|
664
|
|
38
|
|
8,723
|
|
Other income
|
33
|
2,116
|
|
3,997
|
|
90
|
|
562
|
|
479
|
|
(3,403
|
)
|
3,841
|
|
Net operating income before loan impairment charges and other credit risk provisions
|
3
|
20,472
|
|
25,303
|
|
3,179
|
|
7,657
|
|
6,592
|
|
(3,403
|
)
|
59,800
|
|
Loan impairment charges and other credit risk provisions
|
|
(519
|
)
|
(693
|
)
|
(470
|
)
|
(544
|
)
|
(1,495
|
)
|
—
|
|
(3,721
|
)
|
Net operating income
|
|
19,953
|
|
24,610
|
|
2,709
|
|
7,113
|
|
5,097
|
|
(3,403
|
)
|
56,079
|
|
Total operating expenses
|
|
(19,274
|
)
|
(10,889
|
)
|
(1,721
|
)
|
(6,501
|
)
|
(4,786
|
)
|
3,403
|
|
(39,768
|
)
|
Operating profit
|
|
679
|
|
13,721
|
|
988
|
|
612
|
|
311
|
|
—
|
|
16,311
|
|
Share of profit/(loss) in associates and joint ventures
|
|
9
|
|
2,042
|
|
504
|
|
2
|
|
(1
|
)
|
—
|
|
2,556
|
|
Profit before tax
|
|
688
|
|
15,763
|
|
1,492
|
|
614
|
|
310
|
|
—
|
|
18,867
|
|
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
|
%
|
|
|
Share of HSBC’s profit before tax
|
|
3.6
|
|
83.5
|
|
7.9
|
|
3.3
|
|
1.7
|
|
|
|
100.0
|
|
Cost efficiency ratio
|
|
94.1
|
|
43.0
|
|
54.1
|
|
84.9
|
|
72.6
|
|
|
|
66.5
|
|
Balance sheet data
|
38
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Loans and advances to customers (net)
|
|
385,037
|
|
356,375
|
|
36,898
|
|
128,851
|
|
17,293
|
|
—
|
|
924,454
|
|
– reported in held for sale
|
|
—
|
|
—
|
|
—
|
|
2,020
|
|
17,001
|
|
—
|
|
19,021
|
|
Total assets
|
|
1,121,401
|
|
889,747
|
|
70,157
|
|
393,960
|
|
86,262
|
|
(151,871
|
)
|
2,409,656
|
|
Customer accounts
|
|
491,520
|
|
598,620
|
|
42,824
|
|
135,152
|
|
21,470
|
|
—
|
|
1,289,586
|
|
– reported in held for sale
|
|
—
|
|
—
|
|
—
|
|
1,588
|
|
15,094
|
|
—
|
|
16,682
|
|
Risk-weighted assets
|
37
|
327,219
|
|
459,680
|
|
70,585
|
|
191,611
|
|
73,425
|
|
—
|
|
1,102,995
|
|
HSBC Holdings plc
|
77
|
Reconciliation of reported and adjusted items – geographical regions
|
*
|
Of which US Principal: adjusted revenue $4,737m (RBWM: $1,194m; CMB: $947m; GB&M $1,951m; GPB: $317m); adjusted LICs $118m; adjusted operating expenses $(3,936)m; adjusted PBT $920m (RBWM: $(58)m; CMB: $432m; GB&M $527m; GPB: $64m); adjusted RWAs (RBWM: $11.0bn; CMB: $25.1bn; GB&M $45.2bn; GPB: $4.2bn; Corporate Centre: $10.0bn).
|
†
|
Of which Mexico: adjusted revenue $2,164m (RBWM: $1,442m; CMB: $350m; GB&M $284m); adjusted LICs $(473)m; adjusted operating expenses $(1,251)m; adjusted PBT $440m (RBWM: $147m; CMB: $105m; GB&M $162m); adjusted RWAs (RBWM: $6.9bn; CMB: $5.9bn; GB&M $8.3bn; Corporate Centre: $2.8bn).
|
78
|
HSBC Holdings plc
|
Reconciliation of reported and adjusted items (continued)
|
|||||||||||||||||
|
|
2016
|
|||||||||||||||
|
|
Europe
|
|
Asia
|
|
MENA
|
|
North
America* |
|
Latin
America † |
|
Total
|
|
UK
|
|
Hong
Kong |
|
|
Footnotes
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Revenue
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
39
|
15,516
|
|
23,320
|
|
2,969
|
|
7,065
|
|
2,686
|
|
47,966
|
|
10,893
|
|
14,014
|
|
Currency translation
|
39
|
(545
|
)
|
8
|
|
(363
|
)
|
32
|
|
130
|
|
(736
|
)
|
(668
|
)
|
(53
|
)
|
Significant items
|
|
1,848
|
|
(7
|
)
|
(9
|
)
|
155
|
|
73
|
|
2,060
|
|
1,898
|
|
(1
|
)
|
– customer redress programmes
|
|
(2
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
(2
|
)
|
—
|
|
– DVA on derivative contracts
|
|
(56
|
)
|
(15
|
)
|
—
|
|
9
|
|
36
|
|
(26
|
)
|
(63
|
)
|
(22
|
)
|
– fair value movements on non-qualifying hedges
|
32
|
563
|
|
17
|
|
—
|
|
107
|
|
—
|
|
687
|
|
532
|
|
26
|
|
– gain on the disposal of our membership
interest in Visa – Europe |
|
(573
|
)
|
—
|
|
(11
|
)
|
—
|
|
—
|
|
(584
|
)
|
(441
|
)
|
—
|
|
– gain on disposal of our membership
interest in Visa – US |
|
—
|
|
—
|
|
—
|
|
(116
|
)
|
—
|
|
(116
|
)
|
—
|
|
—
|
|
– own credit spread
|
25
|
1,782
|
|
(8
|
)
|
—
|
|
18
|
|
—
|
|
1,792
|
|
1,769
|
|
(5
|
)
|
– portfolio disposals
|
|
26
|
|
—
|
|
—
|
|
137
|
|
—
|
|
163
|
|
—
|
|
—
|
|
– loss and trading results from disposed-of
operations in Brazil |
|
—
|
|
—
|
|
—
|
|
—
|
|
273
|
|
273
|
|
—
|
|
—
|
|
– currency translation on significant items
|
|
108
|
|
(1
|
)
|
2
|
|
—
|
|
(236
|
)
|
(127
|
)
|
103
|
|
—
|
|
Adjusted
|
39
|
16,819
|
|
23,321
|
|
2,597
|
|
7,252
|
|
2,889
|
|
49,290
|
|
12,123
|
|
13,960
|
|
LICs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
(446
|
)
|
(677
|
)
|
(316
|
)
|
(732
|
)
|
(1,229
|
)
|
(3,400
|
)
|
(245
|
)
|
(321
|
)
|
Currency translation
|
|
27
|
|
(3
|
)
|
27
|
|
1
|
|
(113
|
)
|
(61
|
)
|
33
|
|
1
|
|
Significant items
|
|
—
|
|
—
|
|
—
|
|
—
|
|
867
|
|
867
|
|
—
|
|
—
|
|
– trading results from disposed-of operations in Brazil
|
|
—
|
|
—
|
|
—
|
|
—
|
|
748
|
|
748
|
|
—
|
|
—
|
|
– currency translation on significant items
|
|
—
|
|
—
|
|
—
|
|
—
|
|
119
|
|
119
|
|
—
|
|
—
|
|
Adjusted
|
|
(419
|
)
|
(680
|
)
|
(289
|
)
|
(731
|
)
|
(475
|
)
|
(2,594
|
)
|
(212
|
)
|
(320
|
)
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
39
|
(21,845
|
)
|
(10,785
|
)
|
(1,584
|
)
|
(6,147
|
)
|
(3,037
|
)
|
(39,808
|
)
|
(14,562
|
)
|
(5,646
|
)
|
Currency translation
|
39
|
300
|
|
11
|
|
143
|
|
(21
|
)
|
(100
|
)
|
331
|
|
367
|
|
22
|
|
Significant items
|
|
6,611
|
|
434
|
|
90
|
|
991
|
|
1,267
|
|
9,393
|
|
2,642
|
|
182
|
|
– costs associated with portfolio disposals
|
|
28
|
|
—
|
|
—
|
|
—
|
|
—
|
|
28
|
|
—
|
|
—
|
|
– costs to achieve
|
|
2,098
|
|
476
|
|
103
|
|
402
|
|
39
|
|
3,118
|
|
1,838
|
|
229
|
|
– costs to establish UK ring-fenced bank
|
|
223
|
|
—
|
|
—
|
|
—
|
|
—
|
|
223
|
|
223
|
|
—
|
|
– customer redress programmes
|
|
559
|
|
—
|
|
—
|
|
—
|
|
—
|
|
559
|
|
559
|
|
—
|
|
– impairment of GPB – Europe goodwill
|
|
3,240
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,240
|
|
—
|
|
—
|
|
– regulatory provisions in GPB
|
|
390
|
|
(46
|
)
|
—
|
|
—
|
|
—
|
|
344
|
|
—
|
|
(46
|
)
|
– settlements and provisions in connection
with legal matters |
|
94
|
|
—
|
|
—
|
|
587
|
|
—
|
|
681
|
|
50
|
|
—
|
|
– trading results from disposed-of operations
in Brazil |
|
—
|
|
—
|
|
—
|
|
—
|
|
1,059
|
|
1,059
|
|
—
|
|
—
|
|
– currency translation on significant items
|
|
(21
|
)
|
4
|
|
(13
|
)
|
2
|
|
169
|
|
141
|
|
(28
|
)
|
(1
|
)
|
Adjusted
|
39
|
(14,934
|
)
|
(10,340
|
)
|
(1,351
|
)
|
(5,177
|
)
|
(1,870
|
)
|
(30,084
|
)
|
(11,553
|
)
|
(5,442
|
)
|
Share of profit in associates and joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
1
|
|
1,921
|
|
434
|
|
(1
|
)
|
(1
|
)
|
2,354
|
|
1
|
|
22
|
|
Currency translation
|
|
1
|
|
(34
|
)
|
—
|
|
—
|
|
—
|
|
(33
|
)
|
1
|
|
(1
|
)
|
Significant items
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
1
|
|
—
|
|
—
|
|
– trading results from disposed-of operations
in Brazil |
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
1
|
|
—
|
|
—
|
|
– currency translation on significant items
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Adjusted
|
|
2
|
|
1,887
|
|
434
|
|
(1
|
)
|
—
|
|
2,322
|
|
2
|
|
21
|
|
Profit/(loss) before tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
(6,774
|
)
|
13,779
|
|
1,503
|
|
185
|
|
(1,581
|
)
|
7,112
|
|
(3,913
|
)
|
8,069
|
|
Currency translation
|
|
(217
|
)
|
(18
|
)
|
(193
|
)
|
12
|
|
(83
|
)
|
(499
|
)
|
(267
|
)
|
(31
|
)
|
Significant items
|
|
8,459
|
|
427
|
|
81
|
|
1,146
|
|
2,208
|
|
12,321
|
|
4,540
|
|
181
|
|
– revenue
|
|
1,848
|
|
(7
|
)
|
(9
|
)
|
155
|
|
73
|
|
2,060
|
|
1,898
|
|
(1
|
)
|
– LICs
|
|
—
|
|
—
|
|
—
|
|
—
|
|
867
|
|
867
|
|
—
|
|
—
|
|
– operating expenses
|
|
6,611
|
|
434
|
|
90
|
|
991
|
|
1,267
|
|
9,393
|
|
2,642
|
|
182
|
|
– share of profit in associates and joint ventures
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
1
|
|
—
|
|
—
|
|
Adjusted
|
|
1,468
|
|
14,188
|
|
1,391
|
|
1,343
|
|
544
|
|
18,934
|
|
360
|
|
8,219
|
|
*
|
Of which US Principal: adjusted revenue $4,698m (RBWM: $1,161m; CMB: $981m; GB&M $1,979m; GPB: $303m); adjusted LICs $(503)m; adjusted operating expenses $(3,808)m; adjusted PBT $387m (RBWM: $(81)m; CMB: $341m; GB&M $100m; GPB: $67m); adjusted RWAs (RBWM: $11.0bn; CMB: $26.8bn; GB&M $48.3bn; GPB: $4.1bn; Corporate Centre: $13.6bn).
|
†
|
Of which Mexico: adjusted revenue $1,949m (RBWM: $1,285m; CMB: $336m; GB&M $217m; GPB: $13m); adjusted LICs $(450)m; adjusted operating expenses $(1,225)m; adjusted PBT $274m (RBWM: $100m; CMB: $83m; GB&M $79m; GPB: $5m); adjusted RWAs (RBWM: $6.4bn; CMB: $6.3bn; GB&M $6.7bn; Corporate Centre: $1.7bn).
|
HSBC Holdings plc
|
79
|
Reconciliation of reported and adjusted items (continued)
|
|||||||||||||||||
|
|
2015
|
|||||||||||||||
|
|
Europe
|
|
Asia
|
|
MENA
|
|
North
America |
|
Latin
America |
|
Total
|
|
UK
|
|
Hong
Kong |
|
|
Footnotes
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Revenue
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
39
|
20,472
|
|
25,303
|
|
3,179
|
|
7,657
|
|
6,592
|
|
59,800
|
|
15,493
|
|
15,616
|
|
Currency translation
|
39
|
(2,263
|
)
|
(330
|
)
|
(497
|
)
|
(30
|
)
|
(685
|
)
|
(3,727
|
)
|
(2,298
|
)
|
(74
|
)
|
Significant items
|
|
(611
|
)
|
(1,425
|
)
|
(10
|
)
|
98
|
|
(3,703
|
)
|
(5,651
|
)
|
(546
|
)
|
(1,378
|
)
|
– customer redress programmes
|
|
10
|
|
—
|
|
—
|
|
—
|
|
—
|
|
10
|
|
10
|
|
—
|
|
– DVA on derivative contracts
|
|
(95
|
)
|
(58
|
)
|
(1
|
)
|
(21
|
)
|
(55
|
)
|
(230
|
)
|
(78
|
)
|
(13
|
)
|
– fair value movements on non-qualifying hedges
|
32
|
200
|
|
2
|
|
—
|
|
124
|
|
1
|
|
327
|
|
204
|
|
6
|
|
– gain on the partial sale of shareholding in Industrial Bank
|
|
—
|
|
(1,372
|
)
|
—
|
|
—
|
|
—
|
|
(1,372
|
)
|
—
|
|
(1,372
|
)
|
– own credit spread
|
25
|
(771
|
)
|
(3
|
)
|
(9
|
)
|
(219
|
)
|
—
|
|
(1,002
|
)
|
(731
|
)
|
(4
|
)
|
– portfolio disposals
|
|
—
|
|
—
|
|
—
|
|
214
|
|
—
|
|
214
|
|
—
|
|
—
|
|
– trading results from disposed-of operations in Brazil
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(3,532
|
)
|
(3,532
|
)
|
—
|
|
—
|
|
– currency translation on significant items
|
|
45
|
|
6
|
|
—
|
|
—
|
|
(117
|
)
|
(66
|
)
|
49
|
|
5
|
|
Adjusted
|
39
|
17,598
|
|
23,548
|
|
2,672
|
|
7,725
|
|
2,204
|
|
50,422
|
|
12,649
|
|
14,164
|
|
LICs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
(519
|
)
|
(693
|
)
|
(470
|
)
|
(544
|
)
|
(1,495
|
)
|
(3,721
|
)
|
(248
|
)
|
(155
|
)
|
Currency translation
|
|
24
|
|
11
|
|
47
|
|
(5
|
)
|
50
|
|
127
|
|
34
|
|
1
|
|
Significant items
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,015
|
|
1,015
|
|
—
|
|
—
|
|
– trading results from disposed-of operations in Brazil
|
|
—
|
|
—
|
|
—
|
|
—
|
|
965
|
|
965
|
|
—
|
|
—
|
|
– currency translation on significant items
|
|
—
|
|
—
|
|
—
|
|
—
|
|
50
|
|
50
|
|
—
|
|
—
|
|
Adjusted
|
|
(495
|
)
|
(682
|
)
|
(423
|
)
|
(549
|
)
|
(430
|
)
|
(2,579
|
)
|
(214
|
)
|
(154
|
)
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
39
|
(19,274
|
)
|
(10,889
|
)
|
(1,721
|
)
|
(6,501
|
)
|
(4,786
|
)
|
(39,768
|
)
|
(15,555
|
)
|
(5,686
|
)
|
Currency translation
|
39
|
1,668
|
|
191
|
|
223
|
|
13
|
|
417
|
|
2,434
|
|
1,698
|
|
30
|
|
Significant items
|
|
2,115
|
|
131
|
|
14
|
|
851
|
|
2,766
|
|
5,877
|
|
1,858
|
|
48
|
|
– costs to achieve
|
|
600
|
|
122
|
|
14
|
|
103
|
|
69
|
|
908
|
|
536
|
|
43
|
|
– costs to establish the UK ring-fenced bank
|
|
89
|
|
—
|
|
—
|
|
—
|
|
—
|
|
89
|
|
89
|
|
—
|
|
– customer redress programmes
|
|
541
|
|
—
|
|
—
|
|
—
|
|
—
|
|
541
|
|
541
|
|
—
|
|
– regulatory provisions in GPB
|
|
172
|
|
—
|
|
—
|
|
—
|
|
—
|
|
172
|
|
—
|
|
—
|
|
– restructuring and other related costs
|
|
68
|
|
8
|
|
1
|
|
34
|
|
6
|
|
117
|
|
50
|
|
6
|
|
– settlements and provisions in connection with legal matters
|
|
935
|
|
—
|
|
—
|
|
714
|
|
—
|
|
1,649
|
|
935
|
|
—
|
|
– trading results from disposed-of operations in Brazil
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,579
|
|
2,579
|
|
—
|
|
—
|
|
– currency translation on significant items
|
|
(290
|
)
|
1
|
|
(1
|
)
|
—
|
|
112
|
|
(178
|
)
|
(293
|
)
|
(1
|
)
|
Adjusted
|
39
|
(15,491
|
)
|
(10,567
|
)
|
(1,484
|
)
|
(5,637
|
)
|
(1,603
|
)
|
(31,457
|
)
|
(11,999
|
)
|
(5,608
|
)
|
Share of profit in associates and joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
9
|
|
2,042
|
|
504
|
|
2
|
|
(1
|
)
|
2,556
|
|
10
|
|
31
|
|
Currency translation
|
|
—
|
|
(149
|
)
|
—
|
|
—
|
|
—
|
|
(149
|
)
|
(1
|
)
|
—
|
|
Significant items
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
2
|
|
—
|
|
—
|
|
– trading results from disposed-of operations in Brazil
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
1
|
|
—
|
|
—
|
|
– currency translation on significant items
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
1
|
|
—
|
|
—
|
|
Adjusted
|
|
9
|
|
1,893
|
|
504
|
|
2
|
|
1
|
|
2,409
|
|
9
|
|
31
|
|
Profit/(loss) before tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
688
|
|
15,763
|
|
1,492
|
|
614
|
|
310
|
|
18,867
|
|
(300
|
)
|
9,806
|
|
Currency translation
|
|
(571
|
)
|
(277
|
)
|
(227
|
)
|
(22
|
)
|
(218
|
)
|
(1,315
|
)
|
(567
|
)
|
(43
|
)
|
Significant items
|
|
1,504
|
|
(1,294
|
)
|
4
|
|
949
|
|
80
|
|
1,243
|
|
1,312
|
|
(1,330
|
)
|
– revenue
|
|
(611
|
)
|
(1,425
|
)
|
(10
|
)
|
98
|
|
(3,703
|
)
|
(5,651
|
)
|
(546
|
)
|
(1,378
|
)
|
– LICs
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,015
|
|
1,015
|
|
—
|
|
—
|
|
– operating expenses
|
|
2,115
|
|
131
|
|
14
|
|
851
|
|
2,766
|
|
5,877
|
|
1,858
|
|
48
|
|
– share of profit in associates and joint ventures
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
2
|
|
—
|
|
—
|
|
Adjusted
|
|
1,621
|
|
14,192
|
|
1,269
|
|
1,541
|
|
172
|
|
18,795
|
|
445
|
|
8,433
|
|
80
|
HSBC Holdings plc
|
Analysis of reported results by country
|
HSBC Holdings plc
|
81
|
Profit/(loss) before tax by priority markets within global businesses (continued)
|
|
|
|
||||||||||
|
|
Retail Banking
and Wealth Management |
|
Commercial
Banking |
|
Global
Banking and Markets |
|
Global Private Banking
|
|
Corporate
Centre
|
|
Total
|
|
|
Footnotes
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Europe
|
|
914
|
|
1,953
|
|
122
|
|
(93
|
)
|
(2,208
|
)
|
688
|
|
– UK
|
|
560
|
|
1,722
|
|
(361
|
)
|
126
|
|
(2,347
|
)
|
(300
|
)
|
of which: HSBC Holdings
|
41, 42
|
(530
|
)
|
(399
|
)
|
(274
|
)
|
(91
|
)
|
(2,892
|
)
|
(4,186
|
)
|
– France
|
|
357
|
|
130
|
|
84
|
|
14
|
|
54
|
|
639
|
|
– Germany
|
|
23
|
|
66
|
|
137
|
|
20
|
|
(7
|
)
|
239
|
|
– Switzerland
|
|
—
|
|
8
|
|
—
|
|
(267
|
)
|
43
|
|
(216
|
)
|
– other
|
|
(26
|
)
|
27
|
|
262
|
|
14
|
|
49
|
|
326
|
|
Asia
|
|
4,154
|
|
2,843
|
|
3,653
|
|
252
|
|
4,861
|
|
15,763
|
|
– Hong Kong
|
|
3,811
|
|
2,317
|
|
1,629
|
|
177
|
|
1,872
|
|
9,806
|
|
– Australia
|
|
60
|
|
51
|
|
232
|
|
—
|
|
30
|
|
373
|
|
– India
|
|
(25
|
)
|
79
|
|
321
|
|
14
|
|
217
|
|
606
|
|
– Indonesia
|
|
(6
|
)
|
(128
|
)
|
76
|
|
—
|
|
51
|
|
(7
|
)
|
– mainland China
|
|
32
|
|
97
|
|
574
|
|
(3
|
)
|
2,360
|
|
3,060
|
|
– Malaysia
|
|
118
|
|
78
|
|
196
|
|
—
|
|
50
|
|
442
|
|
– Singapore
|
|
105
|
|
81
|
|
193
|
|
65
|
|
63
|
|
507
|
|
– Taiwan
|
|
10
|
|
17
|
|
113
|
|
—
|
|
15
|
|
155
|
|
– other
|
|
49
|
|
251
|
|
319
|
|
(1
|
)
|
203
|
|
821
|
|
Middle East and North Africa
|
|
(1
|
)
|
188
|
|
610
|
|
2
|
|
693
|
|
1,492
|
|
– Egypt
|
|
50
|
|
92
|
|
179
|
|
—
|
|
89
|
|
410
|
|
– UAE
|
|
85
|
|
(24
|
)
|
270
|
|
—
|
|
36
|
|
367
|
|
– Saudi Arabia
|
|
2
|
|
—
|
|
—
|
|
—
|
|
498
|
|
500
|
|
– other
|
|
(138
|
)
|
120
|
|
161
|
|
2
|
|
70
|
|
215
|
|
North America
|
|
(23
|
)
|
445
|
|
444
|
|
59
|
|
(311
|
)
|
614
|
|
– US
|
|
(112
|
)
|
194
|
|
319
|
|
64
|
|
(424
|
)
|
41
|
|
– Canada
|
|
57
|
|
240
|
|
101
|
|
—
|
|
87
|
|
485
|
|
– other
|
|
32
|
|
11
|
|
24
|
|
(5
|
)
|
26
|
|
88
|
|
Latin America
|
|
(245
|
)
|
156
|
|
329
|
|
3
|
|
67
|
|
310
|
|
– Mexico
|
|
70
|
|
(8
|
)
|
(70
|
)
|
(2
|
)
|
42
|
|
32
|
|
– other
|
|
(315
|
)
|
164
|
|
399
|
|
5
|
|
25
|
|
278
|
|
– of which: Brazil
|
|
(344
|
)
|
13
|
|
341
|
|
6
|
|
(11
|
)
|
5
|
|
Year ended 31 Dec 2015
|
|
4,799
|
|
5,585
|
|
5,158
|
|
223
|
|
3,102
|
|
18,867
|
|
82
|
HSBC Holdings plc
|
Other information
|
|
|
Page
|
Funds under management and assets held in custody
|
61
|
Taxes paid by region and country
|
83
|
Conduct-related matters
|
84
|
Carbon dioxide emissions
|
84
|
Disclosure controls
|
78
|
Management’s assessment of internal controls over financial reporting
|
79
|
Funds under management and assets held
in custody
|
Funds under management
|
|||||
|
|
2017
|
|
2016
|
|
|
Footnote
|
$bn
|
|
$bn
|
|
Funds under management
|
43
|
|
|
||
At 1 Jan
|
|
831
|
|
896
|
|
Net new money
|
|
2
|
|
(8
|
)
|
Value change
|
|
77
|
|
25
|
|
Exchange and other
|
|
33
|
|
(40
|
)
|
Disposals
|
|
0
|
|
(42
|
)
|
At 31 Dec
|
|
943
|
|
831
|
|
Funds under management by business
|
|
|
|
||
Global Asset Management
|
|
462
|
|
410
|
|
Global Private Banking
|
|
258
|
|
222
|
|
Affiliates
|
|
4
|
|
2
|
|
Other
|
|
219
|
|
197
|
|
At 31 Dec
|
|
943
|
|
831
|
|
Taxes paid by region and country
|
Taxes paid by country
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|
|
Footnote
|
$m
|
|
$m
|
|
$m
|
|
Europe
|
44
|
3,340
|
|
3,151
|
|
3,644
|
|
– UK
|
|
2,654
|
|
2,385
|
|
2,526
|
|
of which: HSBC Holdings
|
|
1,078
|
|
1,253
|
|
1,348
|
|
– France
|
|
530
|
|
553
|
|
620
|
|
– Germany
|
|
140
|
|
124
|
|
108
|
|
– Switzerland
|
|
(67
|
)
|
34
|
|
92
|
|
– other
|
|
83
|
|
55
|
|
298
|
|
Asia
|
|
2,277
|
|
2,755
|
|
2,780
|
|
– Hong Kong
|
|
1,043
|
|
1,488
|
|
1,415
|
|
– Australia
|
|
142
|
|
147
|
|
173
|
|
– mainland China
|
|
227
|
|
241
|
|
277
|
|
– India
|
|
297
|
|
315
|
|
285
|
|
– Indonesia
|
|
84
|
|
46
|
|
70
|
|
– Malaysia
|
|
81
|
|
99
|
|
92
|
|
– Singapore
|
|
64
|
|
85
|
|
80
|
|
– Taiwan
|
|
42
|
|
35
|
|
53
|
|
– other
|
|
297
|
|
299
|
|
335
|
|
Middle East and North Africa
|
|
419
|
|
293
|
|
449
|
|
– Saudi Arabia
|
|
170
|
|
60
|
|
151
|
|
– UAE
|
|
101
|
|
89
|
|
120
|
|
– Egypt
|
|
58
|
|
97
|
|
136
|
|
– other
|
|
90
|
|
47
|
|
42
|
|
North America
|
|
317
|
|
276
|
|
353
|
|
– US
|
|
134
|
|
135
|
|
127
|
|
– Canada
|
|
182
|
|
141
|
|
226
|
|
– other
|
|
1
|
|
—
|
|
—
|
|
Latin America
|
|
443
|
|
965
|
|
1,184
|
|
– Mexico
|
|
129
|
|
79
|
|
91
|
|
– other
|
|
314
|
|
886
|
|
1,093
|
|
of which: Brazil
|
|
36
|
|
658
|
|
735
|
|
Year ended 31 Dec
|
|
6,796
|
|
7,440
|
|
8,410
|
|
HSBC Holdings plc
|
83
|
Conduct-related matters
|
Conduct-related costs included in significant items
|
||||||
|
2017
|
|
2016
|
|
2015
|
|
|
$m
|
|
$m
|
|
$m
|
|
Income statement
|
|
|
|
|||
Net interest income/(expense)
|
(108
|
)
|
2
|
|
(10
|
)
|
– customer redress programmes
|
(108
|
)
|
2
|
|
(10
|
)
|
Operating expenses
|
|
|
|
|||
Comprising:
|
|
|
|
|
||
Legal proceedings and regulatory matters
|
(198
|
)
|
1,025
|
|
1,821
|
|
– regulatory provisions in GPB
|
164
|
|
344
|
|
172
|
|
– settlements and provisions in connection with legal matters
|
(362
|
)
|
681
|
|
1,649
|
|
Customer redress programmes
|
655
|
|
559
|
|
541
|
|
Total operating expenses
|
457
|
|
1,584
|
|
2,362
|
|
Total charge for the year relating to significant items
|
565
|
|
1,582
|
|
2,372
|
|
– of which:
|
|
|
|
|||
total provisions charge for the year
|
565
|
|
1,584
|
|
2,362
|
|
total provisions utilised during the year
|
1,136
|
|
2,265
|
|
1,021
|
|
Balance sheet at 31 Dec
|
|
|
|
|||
Total provisions
|
2,595
|
|
3,056
|
|
3,926
|
|
– legal proceedings and regulatory matters
|
1,248
|
|
2,060
|
|
2,729
|
|
– customer redress programmes
|
1,347
|
|
996
|
|
1,197
|
|
Accruals, deferred income and other liabilities
|
20
|
|
106
|
|
168
|
|
Carbon dioxide emissions
|
84
|
HSBC Holdings plc
|
Disclosure controls
|
Management’s assessment of internal
controls over financial reporting
|
Footnotes to strategic report, financial
summary, global businesses, geographical
regions and other information
|
|
1
|
Achieved Mexico profit before tax target on a local currency basis; US dollar target set using the 2014 average exchange rate.
|
2
|
Further detail on the Monitor can be found on page 118.
|
3
|
Net operating income before loan impairment charges and other credit risk provisions, also referred to as revenue.
|
4
|
‘Other personal lending’ includes personal non-residential closed-end loans and personal overdrafts.
|
5
|
‘Investment distribution’ includes Investments, which comprises mutual funds (HSBC manufactured and third party), structured products and securities trading, and Wealth Insurance distribution, consisting of HSBC manufactured and third-party life, pension and investment insurance products.
|
6
|
‘Other’ mainly includes the distribution and manufacturing (where applicable) of retail and credit protection insurance.
|
7
|
Adjusted return on average risk-weighted assets (‘RoRWA’) is used to measure the performance of RBWM, CMB, GB&M and GPB. Adjusted RoRWA is calculated using profit before tax and reported average risk-weighted assets at constant currency adjusted for the effects of significant items.
|
8
|
‘Markets products, Insurance and Investments and Other’ includes revenue from Foreign Exchange, insurance manufacturing and distribution, interest rate management and global banking products.
|
9
|
In 2017, credit and funding valuation adjustments included an adverse fair value movement of $546m on the tightening of own credit spreads on structured liabilities (2016: adverse fair value movement of $125m; 2015: favourable fair value movement of $163m).
|
10
|
‘Other’ in GB&M includes net interest earned on free capital held in the global business not assigned to products, allocated funding costs and gains resulting from business disposals. Within the management view of adjusted revenue, notional tax credits are allocated to the businesses to reflect the economic benefit generated by certain activities which is not reflected within operating income; for example, notional credits on income earned from tax-exempt investments where the economic benefit of the activity is reflected in tax expense. In order to reflect the total operating income on an IFRS basis, the offsets to these tax credits are included within ‘Other’.
|
11
|
Central Treasury includes revenue relating to BSM of $2,688m (2016: $3,007m; 2015: $2,805m), interest expense of $1,275m (2016: $967m; 2015: $696m) and favourable valuation differences on issued long-term debt and associated swaps of $122m (2016: loss of $271m; 2015: loss of $63m). Revenue relating to BSM includes other internal allocations, including notional tax credits to reflect the economic benefit generated by certain activities which is not reflected within operating income, for example notional credits on income earned from tax-exempt investments where the economic benefit of the activity is reflected in tax expense. In order to reflect the total operating income on an IFRS basis, the offsets to these tax credits are included in other Central Treasury.
|
12
|
Other miscellaneous items in Corporate Centre includes internal allocations relating to Legacy Credit.
|
13
|
Dividends recorded in the financial statements are dividends per ordinary share declared in a year and are not dividends in respect of, or for, that year.
|
14
|
Dividends per ordinary share expressed as a percentage of basic earnings per share.
|
15
|
Return on average risk-weighted assets is calculated using profit before tax and reported average risk-weighted assets.
|
16
|
Gross interest yield is the average annualised interest rate earned on average interest-earning assets (‘AIEA’).
|
17
|
Net interest spread is the difference between the average annualised interest rate earned on AIEA, net of amortised premiums and loan fees, and the average annualised interest rate payable on average interest-bearing funds.
|
18
|
Net interest margin is net interest income expressed as an annualised percentage of AIEA.
|
19
|
Interest income on trading assets is reported as ‘Net trading income’ in the consolidated income statement.
|
20
|
Interest income on financial assets designated at fair value is reported as ‘Net income/(expense) from financial instruments designated at fair value’ in the consolidated income statement.
|
21
|
Including interest-bearing bank deposits only.
|
22
|
Interest expense on financial liabilities designated at fair value is reported as ‘Net income on financial instruments designated at fair value’ in the consolidated income statement, other than interest on own debt, which is reported in ‘Interest expense’.
|
23
|
Including interest-bearing customer accounts only.
|
24
|
Trading income also includes movements on non-qualifying hedges. These hedges are derivatives entered into as part of a documented interest rate management strategy for which hedge accounting was not, nor could be, applied. They are principally cross-currency and interest rate swaps used to economically hedge fixed rate debt issued by HSBC Holdings and floating rate debt issued by HSBC Finance. The size and direction of the changes in the fair value of non-qualifying hedges that are recognised in the income statement can be volatile from year-to-year, but do not alter the cash flows expected as part of the documented interest rate management strategy for both the instruments and the underlying economically hedged assets and liabilities if the derivative is held to maturity.
|
25
|
‘Own credit spread’ includes the fair value movements on our long-term debt attributable to credit spread where the net result of such movements will be zero upon maturity of the debt. This does not include fair value changes due to own credit risk in respect of trading liabilities or derivative liabilities. From 1 January 2017, HSBC adopted, in its consolidated financial statements, the requirements of IFRS 9 ‘Financial Instruments’ relating to the presentation of gains and losses on financial liabilities designated at fair value. As a result, changes in fair value attributable to changes in own credit risk are presented in other comprehensive income with the remainder of the effect presented in profit and loss.
|
26
|
Net of impairment allowances.
|
27
|
On 1 January 2014, CRD IV came into force and the calculation of capital resources and RWAs for 2014 to 2017 are calculated and presented on this basis. 2013 comparative is on a Basel 2.5 basis.
|
28
|
Capital resources are regulatory capital, the calculation of which is set out on page 162.
|
29
|
Including perpetual preferred securities, details of which can be found in Note 27 on the Financial Statements.
|
30
|
The definition of net asset value per ordinary share is total shareholders’ equity, less non-cumulative preference shares and capital securities, divided by the number of ordinary shares in issue excluding shares the company has purchased and are held in treasury.
|
HSBC Holdings plc
|
85
|
31
|
Net trading income includes interest expense relating to the internal funding of trading assets, in GB&M. In the statutory presentation, internal funding in GB&M net trading income is eliminated through Corporate Centre, and in our other global businesses it is eliminated within net interest income.
|
32
|
Excludes items where there are substantial offsets in the income statement for the same year.
|
33
|
‘Other income’ in this context comprises where applicable net income/expense from other financial instruments designated at fair value, gains less losses from financial investments, dividend income, net insurance premium income and other operating income less net insurance claims and benefits paid and movement in liabilities to policyholders.
|
34
|
Adjusted risk-weighted assets are calculated using reported risk-weighted assets adjusted for the effects of currency translation differences and significant items.
|
35
|
‘Client assets’ are translated at the rates of exchange applicable for their respective period-ends, with the effects of currency translation reported separately. The main components of client assets were funds under management ($258bn at 31 December 2017) which were not reported on the Group’s balance sheet, and customer deposits ($72bn at 31 December 2017), of which $67bn was reported on the Group’s balance sheet and $5bn were off-balance sheet deposits.
|
36
|
Client assets related to our Middle East clients are booked across to various other regions, primarily in Europe.
|
37
|
Risk-weighted assets are non-additive across geographical regions due to market risk diversification effects within the Group.
|
38
|
In the first half of 2015 our operations in Brazil were classified as held for sale. As a result, balance sheet accounts were classified as ‘Assets held for sale’ and ‘Liabilities of disposal groups held for sale’. There was no separate income statement classification. The sale completed on 1 July 2016.
|
39
|
Amounts are non-additive across geographical regions due to inter-company transactions within the Group.
|
40
|
Europe’s adjusted 2017 profit of $1.0bn includes a number of items incurred centrally on behalf of the Group as a whole, but which are disclosed in the Europe segment, including consolidation adjustments and Holdings costs such as interest costs on Group debt and the UK bank levy.
|
41
|
Excludes intra-Group dividend income.
|
42
|
For the purposes of the analysis of reported results by country table, HSBC Holdings profit/(loss) is presented excluding the effect of the early adoption of the requirements of IFRS 9 ‘Financial Instruments’ relating to the presentation of gains and losses on financial liabilities designated at fair value’, which was early adopted in the separate financial statements of HSBC Holdings but not in the consolidated financial statements of HSBC.
|
43
|
Funds under management and assets held in custody are not reported on the Group’s balance sheet, except where it is deemed that we are acting as principal rather than agent in our role as investment manager, and these assets are consolidated as Structured entities (see Note 19 on the Financial Statements).
|
44
|
Taxes paid by HSBC relate to HSBC’s own tax liabilities, including tax on profits earned, employer taxes, the UK bank levy and other duties/levies such as stamp duty. Numbers are reported on a cash flow basis.
|
44a
|
This includes interest-bearing bank deposits only. See page
24
for an analysis of all bank deposits.
|
44b
|
Interest expense on financial liabilities designated at fair value is reported as ‘Net income on financial instruments designated at fair value’ in the consolidated income statement, other than interest on own debt, which is reported in ‘Interest Expense’.
|
44c
|
This includes interest-bearing customer accounts only. See page
25
for an analysis of all customer accounts.
|
44d
|
Net interest margin is calculated as net interest income divided by average interest-earning assets.
|
86
|
HSBC Holdings plc
|
Regulation and supervision
|
HSBC Holdings plc
|
87
|
•
|
changes to UK law and regulation following the UK's decision to leave the EU;
|
•
|
the UK’s implementation of the final reforms to Basel III including the changes to the market risk framework and the implementation of revised approaches to calculate credit, counterparty, operational and credit valuation adjustment (‘CVA’) risk, RWAs, changes to the leverage ratio framework and the application of capital floors;
|
•
|
the UK’s implementation of the outstanding elements of Basel III reforms, including the sovereign risk regime and the long-term treatment of International Financial Reporting Standard 9, Financial Instruments (‘IFRS 9’) provisions;
|
•
|
the UK’s implementation of the FSB’s principles and standards relating to resolution regimes and including TLAC requirements for G-SIBS and changes to UK law and regulation following changes in European legislation revising the European requirements in the area of prudential rules and including recovery and resolution and TLAC/MREL requirements;
|
•
|
ongoing implementation of requirements regarding resolution plans (see further details outlined below under ‘Recovery and resolution’);
|
•
|
implementation and operation of the ring-fencing requirements to separate retail banking activities;
|
•
|
implementation of revisions to the PRA’s approach to groups policy (and including double-leverage) and large exposures/intra-group regimes;
|
•
|
post implementation review and monitoring of the revised EU Markets in Financial Instruments Directive and Regulation (MiFID II), which became effective in January 2018 and which is intended to result in substantial changes to market transparency requirements and other obligations for trading in financial instruments, as well as enhanced client conduct of business obligations;
|
•
|
embedding of the Senior Managers and Certification Regime, aimed at strengthening accountability in banking and its extension to all UK authorised firms during 2019;
|
•
|
standards issued by the Fixed Income, Currencies and Commodities Market Standards Board aimed at improving conduct in the fixed income, commodities and currency markets. The FCA expects firms to adhere to these standards, many of which have global application;
|
•
|
proposed plans to increase consumer access to financial advice;
|
•
|
proposals driven by the UK Competition and Markets Authority’s (‘CMA’) investigation into the supply of retail banking services that are designed to deliver increased transparency and innovation;
|
•
|
continued high level of focus by the FCA on management of conduct of business and customer outcomes as well as on controls to combat financial crime (including market abuse and fraud); and
|
•
|
cyber risk, financial technology and data security initiatives which may require changes to systems and processes.
|
88
|
HSBC Holdings plc
|
•
|
setting resolution standards for authorised institutions ('AIs');
|
•
|
undertaking resolution planning and resolvability assessments for AIs;
|
•
|
identifying, and requiring AIs to remove, impediments to their orderly resolution; and
|
•
|
executing, where necessary, the orderly resolution of any failing AIs through the application of resolution powers under the Ordinance.
|
HSBC Holdings plc
|
89
|
90
|
HSBC Holdings plc
|
HSBC Holdings plc
|
91
|
92
|
HSBC Holdings plc
|
HSBC Holdings plc
|
93
|
•
|
We maintain several accounts in the UK for an Iranian-owned, UK-regulated financial institution. These accounts are generally no longer restricted under UK law, though we maintain restrictions on the accounts as a matter of policy. We are seeking to exit these accounts and have begun transferring the funds to the clients' accounts at other financial institutions. Estimated gross revenue in 2017 on these accounts, which includes fees and/or commissions, was approximately $109,090.
|
•
|
We act as the trustee and administrator for a pension scheme involving eight employees of a US-sanctioned Iranian bank in Hong Kong, six of whom joined the scheme during 2017. Under the rules of this scheme, we accept contributions from the Iranian bank each month and allocate the funds into the pension accounts of the Iranian bank’s employees. We run and operate this pension scheme in accordance with Hong Kong laws and regulations. Estimated gross revenue, which includes fees and/or commissions, generated by this pension scheme in 2017 was approximately $2,910.
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94
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|
Risk
|
|
|
Page
|
Our conservative risk appetite
|
|
Top and emerging risks
|
|
Externally driven
|
|
Internally driven
|
|
Risk factors
|
|
Areas of special interest
|
|
Process of UK withdrawal from the European Union
|
|
Risk management
|
|
Our risk management framework
|
|
Our material banking and insurance risks
|
|
Credit risk management
|
|
Liquidity and funding risk management
|
|
Market risk management
|
|
Operational risk management
|
|
Regulatory compliance risk management
|
|
Financial crime risk management
|
|
Insurance manufacturing operations risk management
|
|
Other material risks
|
|
– Reputational risk management
|
|
– Sustainability risk management
|
|
– Pension risk management
|
|
Key developments and risk profile in 2017
|
|
Key developments in 2017
|
|
Credit risk profile
|
|
Liquidity and funding risk profile
|
|
Market risk profile
|
|
Operational risk profile
|
|
Insurance manufacturing operations risk profile
|
Our conservative risk appetite
|
•
|
Our risk appetite encapsulates consideration of financial and non-financial risks and is expressed in both quantitative and qualitative terms.
|
•
|
It is applied at the global business level, at the regional level, and to material operating entities.
|
•
|
Strong capital position, defined by regulatory and internal capital ratios.
|
•
|
Liquidity and funding management for each operating entity, on a stand-alone basis.
|
•
|
Returns generated in line with risk taken.
|
•
|
Sustainable and diversified earnings mix, delivering consistent returns for shareholders.
|
•
|
Zero tolerance for knowingly engaging in any business, activity or association where foreseeable reputational risk or damage has not been considered and/or mitigated.
|
•
|
No appetite for deliberately or knowingly causing detriment to consumers, or incurring a breach of the letter or spirit of regulatory requirements.
|
•
|
No appetite for inappropriate market conduct by a member of staff or by any Group business.
|
Top and emerging risks
|
•
|
We actively assess the impact of economic developments in key markets on specific customer segments and portfolios and take appropriate mitigating actions. These actions include revising risk appetite and/or limits, as circumstances evolve.
|
•
|
We use internal stress testing and scenario analysis, as well as regulatory stress test programmes, to evaluate the potential impact of macroeconomic shocks on our businesses and portfolios. Our approach to stress testing is described on page
109
.
|
•
|
We have carried out detailed reviews and stress tests of our wholesale credit and trading portfolios to determine those sectors and customers most vulnerable to the UK’s exit from the EU, in order to proactively manage and mitigate this risk.
|
HSBC Holdings plc
|
95
|
•
|
We continually monitor the geopolitical outlook, in particular in countries where we have material exposures and/or a physical presence. We have also established dedicated forums to monitor geopolitical developments.
|
•
|
We use internal stress tests and scenario analysis as well as regulatory stress test programmes, to adjust limits and exposures to reflect our risk appetite and mitigate risks as appropriate. Our internal credit risk ratings of sovereign counterparties take into account geopolitical developments that could potentially disrupt our portfolios and businesses.
|
•
|
Contingency planning for the UK’s exit from the EU continues and we are assessing the potential impact on our portfolios, operations and staff.
|
•
|
We have taken steps to enhance physical security in those geographical areas deemed to be at high risk from terrorism and military conflicts.
|
•
|
We closely monitor economic developments in key markets and sectors and undertake scenario analysis. This enables us to take portfolio actions where necessary, including enhanced monitoring, amending our risk appetite and/or reducing limits and exposures.
|
•
|
We stress test portfolios of particular concern to identify sensitivity to loss under a range of scenarios, with management actions being taken to rebalance exposures and manage risk appetite where necessary.
|
•
|
Reviews of key portfolios are undertaken regularly to help ensure that individual customer or portfolio risks are understood and our ability to manage the level of facilities offered through any downturn is appropriate.
|
•
|
We continue to strengthen and significantly invest in our ability to prevent, detect and respond to the ever-increasing and sophisticated threat of cyber-attacks. Specifically, we continue to enhance our capabilities to protect against increasingly sophisticated malware, denial of service attacks and data leakage prevention, as well as enhancing our security event detection and incident response processes.
|
•
|
Cyber risk is a priority area for the Board and is regularly reported at Board level to ensure appropriate visibility, governance and executive support for our ongoing cybersecurity programme.
|
•
|
We participate in intelligence sharing with both law enforcement and industry schemes to help improve our understanding of, and ability to respond to, the evolving threats faced by us and our peers.
|
•
|
We are fully engaged with governments and regulators in the countries in which we operate to help ensure that new requirements are considered properly by regulatory authorities and the financial sector and can be implemented effectively. Significant regulatory programmes, such as Global Standards (see page
13
) and the establishment of the UK ring-fenced bank, are overseen by the Group Change Committee (‘GCC’).
|
•
|
We hold regular meetings with UK authorities to discuss strategic contingency plans covering a wide range of scenarios relating to the UK’s exit from the EU.
|
•
|
We have invested significant resources and have taken, and will continue to take, a number of steps to improve our compliance systems and controls relating to global markets activities.
For
|
96
|
HSBC Holdings plc
|
•
|
The HSBC Digital Solutions team is actively pursuing opportunities in the fintech space and is deploying solutions with a higher level of agility than our traditional model, helping to enable us to be more competitive in this area.
|
•
|
We continue to work with NGOs to enhance our policies to support sustainable finance.
|
•
|
We continued to enhance our Financial Crime Risk function which brings together all areas of financial crime risk management at HSBC (see page
118
).
|
•
|
We strengthened governance processes during 2017 by establishing formal financial crime risk governance committees at region, global business and country levels of the organisation. This will help to ensure appropriate oversight and escalation of issues to the Financial Crime Risk Management Meeting of the Group Management Board.
|
•
|
We are working to develop enhanced risk management capabilities through better use of sophisticated analytical techniques.
|
•
|
We are working to ensure that the reforms we have put in place are both effective and sustainable over the long term. Work in these areas will continue to be consistent with the terms of the orders by which we
are bound and the strategic objectives of the Group.
|
•
|
Strategic initiatives are transforming how technology is developed, delivered and maintained, with a particular focus on providing high-quality, stable and secure services. As part of this, we are concentrating on materially improving system resilience and service continuity testing. In addition, we have enhanced the security of our development life cycle and improved our testing processes and tools.
|
•
|
During 2017, we continued to monitor and upgrade our IT systems, simplifying our service provision and replacing older IT infrastructure and applications. These enhancements led to a further improvement in service availability during the year for our customers and employees.
|
•
|
Risks related to organisational change are subject to close management oversight. A range of actions are being developed to address the risks associated with the Group’s major change initiatives, including recruitment, development and extensive relocation support to existing employees in the UK ring-fenced bank.
|
•
|
Through dedicated work streams, we continue to develop succession plans using a broad array of talent-sourcing channels for key management roles, which are reviewed on a regular basis.
|
•
|
Contingency planning to address the potential impacts of the UK’s exit from the EU on our staff is underway with regular updates provided to the UK authorities.
|
•
|
The GCC, chaired by the Group Chief Operating Officer, oversees these key regulatory and strategic initiatives, managing interdependencies and providing direction and support to help ensure their effective and timely delivery.
|
•
|
In 2017, we continued to manage execution risks through closely monitoring the punctual delivery of critical initiatives, internal and external dependencies, and key risks, to allow better portfolio management across Group. The GCC also monitors the ongoing completion of material deliverables across these programmes in order to address any resourcing challenges.
|
•
|
The GCC escalates any necessary issues to the Group Risk Management Meeting of the Group Management Board.
|
HSBC Holdings plc
|
97
|
•
|
In the fourth quarter, we commenced the deployment of our delivery model in the first line of defence by establishing a dedicated team and developing associated processes, controls and technology for undertaking assessments of third-party service providers against key criteria throughout the third-party life cycle. In addition, we started to roll out associated control monitoring, testing and assurance processes.
|
•
|
We established a dedicated oversight forum in the second line of defence to monitor the embedding of policy requirements and performance against risk appetite.
|
•
|
We have established a model risk management sub-function in the second line of defence to strengthen governance and oversight of this risk type.
|
•
|
We further strengthened our model risk management framework throughout 2017 by establishing additional global model oversight committees and implementing policies and standards in accordance with key regulatory requirements.
|
•
|
As we adopt new modelling technologies, we are updating our model risk management framework and governance standards to help address any new risks arising.
|
•
|
We continue to improve data quality across a large number of systems globally. Our data management and aggregation continues to strengthen and enhance the effectiveness of internal systems and processes. We are implementing data controls for critical processes in the ‘front-office’ systems to improve our data capture at the point of entry.
|
•
|
We continue to proactively monitor customer and transaction data resolving any associated data issues. We have also implemented data controls and enhanced reconciliation in order to improve the reliability of data used by our customers and staff.
|
•
|
Our data culture is strengthening with ownership and accountability attributed to our businesses and increased focus on data as a Group asset.
|
•
|
We have deployed risk and finance data aggregation and advanced reporting capabilities to key markets in 2017. We are on track for completing actions for the remaining countries in scope by the end of 2018.
|
•
|
A dedicated programme of work has been mobilised to execute the GDPR requirements in order to enhance our customers’ data protection and privacy.
|
Risk factors
|
•
|
the demand for borrowing from creditworthy customers may diminish if economic activity slows or remains subdued;
|
•
|
if capital flows are disrupted, some emerging markets may impose protectionist measures that could affect financial institutions and their clients, and other emerging, as well as developed markets, may be tempted to follow suit;
|
•
|
if interest rates begin to increase, consumers and businesses may struggle with the additional debt burden which could lead to increased delinquencies and loan impairment charges;
|
•
|
our ability to borrow from other financial institutions or to engage in funding transactions may be adversely affected by market disruption;
|
•
|
market developments may depress consumer and business confidence beyond expected levels. If economic growth is subdued, for example, asset prices and payment patterns may be adversely affected, leading to greater than expected increases in delinquencies, default rates and loan impairment charges. However, if growth is too rapid, new asset valuation bubbles could appear, particularly in the real estate sector, with potentially negative consequences for banks; and
|
•
|
a rise in protectionism, including as may be driven by populist sentiment and structural challenges facing developed economies. This rise could contribute to weaker global trade, potentially affecting HSBC’s traditional lines of business.
|
98
|
HSBC Holdings plc
|
•
|
our operating costs could increase, and we could be forced to relocate UK staff and businesses to other jurisdictions;
|
•
|
the demand for borrowing from creditworthy customers may diminish if economic activity slows or remains subdued;
|
•
|
if capital flows are disrupted, some emerging markets may impose protectionist measures that could affect financial institutions and their clients;
|
•
|
our ability to borrow from other financial institutions or to engage in funding transactions may be adversely affected by market disruption; for example, in the event of contagion from stress in the eurozone and global sovereign and financial sectors;
|
•
|
market developments may depress consumer and business confidence beyond expected levels. If economic growth remains subdued, for example, asset prices and payment patterns may be adversely affected, leading to greater than expected increases in delinquencies, default rates, write-offs and loan impairment charges. However, if growth is too rapid, new asset valuation bubbles could appear, particularly in the real estate sector, with potentially negative consequences for banks; and
|
•
|
the other challenges due to uncertain and at times volatile economic conditions, as described under 'Current economic
|
HSBC Holdings plc
|
99
|
•
|
Legal risks, as changes required to documentation for new and existing transactions may be required;
|
•
|
Financial risks, arising from any changes in the valuation of financial instruments linked to benchmark rates;
|
•
|
Pricing risks, as changes to benchmark indices could impact pricing mechanisms on some instruments;
|
•
|
Operational risks, due to the potential requirement to adapt IT systems, trade reporting infrastructure and operational processes; and
|
•
|
Conduct risks, relating to communication with potential impact on customers, and engagement during the transition period.
|
•
|
general changes in government, central bank, regulatory or competition policy, or changes in regulatory regimes that may influence investor decisions in particular markets in which we operate;
|
•
|
the structural separation of certain banking and other activities proposed or enacted in a number of jurisdictions;
|
•
|
requirements flowing from arrangements for the resolution strategy of the Group and its individual operating entities, that may have different effects in different countries;
|
•
|
the implementation of extra-territorial laws, including initiatives to share tax information;
|
•
|
the implementation in January 2018 of Directive 2014/65/EU and Regulation 600/2014/EU (collectively referred to as 'MiFID II'), which impose (among others) enhanced transparency
|
100
|
HSBC Holdings plc
|
•
|
the implementation of Directive 2014/59/EU establishing the framework for the recovery and resolution of credit institutions and investment firms (the ‘BRRD’), including minimum requirements for own funds and eligible liabilities or MREL, by the Bank of England (‘BoE’) and its interaction with TLAC requirements for G-SIBs in other jurisdictions discussed on page
86
;
|
•
|
the UK’s exit from the EU, which could result in significant changes to those EU laws (including taxation laws) applicable in the UK;
|
•
|
the implementation of the European Commission’s proposals for amendments to the BRRD and CRD IV, designed to implement various changes to the EU prudential framework and the implementation of the remaining reforms to the Basel III package including the approaches to credit risk, operational risk, credit valuation adjustment capital charges and the application of capital floors;
|
•
|
the proposal that EU banking groups with two or more institutions in the EU, but whose ultimate parent is outside the EU, must establish an EU parent undertaking that would be subject to consolidated prudential supervision in the EU and subject to capital requirements, recovery and resolution measures and separate reporting and disclosure requirements. It is unclear, particularly in light of the UK’s exit from the EU, how these requirements will affect the Group or how the Group will arrange any required restructuring in order to comply with the requirements;
|
•
|
the completion of the outstanding work by the Basel Committee in relation to the Basel II framework, including the treatment of sovereign risk and the long-term regulatory treatment for International Financial Reporting Standard 9, Financial Instruments (‘IFRS 9’) provisions;
|
•
|
the corporate governance, business conduct, capital, margin, reporting, clearing, execution and other regulatory requirements to which HSBC Bank USA and certain of our affiliates are or may become subject to in their role as a swap dealer, including as imposed by the CFTC and the SEC;
|
•
|
the increasing focus by regulators on how institutions conduct business, particularly with regard to the delivery of fair outcomes for customers and orderly/transparent markets, promoting effective competition in the interests of consumers and ensuring the orderly and transparent operation of global financial markets;
|
•
|
restrictions on the structure of remuneration and increasing requirements to detail management accountability within the Group (e.g. the requirements of the Senior Managers and Certification Regime in the UK and similar regimes in Hong Kong and elsewhere that are under consideration/implementation);
|
•
|
the implementation of any conduct measures as a result of regulators’ increased focus on institutional culture, employee behaviour and whistleblowing, including measures resulting from ongoing thematic work into the workings of the retail, SME and wholesale banking sectors and the provision of financial advice to consumers;
|
•
|
the focus globally on data (including on data processing and subject rights / transfer of information) and financial technology risks and cybersecurity and the introduction of new and/or enhanced standards in this area;
|
•
|
changes in national or supra-national requirements regarding the ability to offshore or outsource the provision of services and resources or transfer material risk to financial services companies located in other countries, that impact our ability to implement globally consistent and efficient operating models;
|
•
|
external bodies applying or interpreting standards or laws differently to us;
|
•
|
further requirements relating to financial reporting, corporate governance and employee compensation; and
|
•
|
expropriation, nationalisation, confiscation of assets and changes in legislation or regulations relating to foreign ownership.
|
HSBC Holdings plc
|
101
|
102
|
HSBC Holdings plc
|
HSBC Holdings plc
|
103
|
104
|
HSBC Holdings plc
|
HSBC Holdings plc
|
105
|
Areas of special interest
|
Risk management
|
106
|
HSBC Holdings plc
|
Key components of our risk management framework
|
||||||||||
HSBC Values and risk culture
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
Risk governance
|
|
Non-executive risk governance
|
|
The Board approves the Group’s risk appetite, plans and performance targets. It sets the ‘tone from the top’ and is advised by the Group Risk Committee, the Financial System Vulnerabilities Committee, and the Conduct & Values Committee (see page 172).
|
||||||
|
|
|
|
|||||||
|
|
|
|
|||||||
|
Executive risk governance
|
|
Responsible for the enterprise-wide management of all risks, including key policies and frameworks for the management of risk within the Group (see pages 107 and 109).
|
|||||||
|
|
|
|
|
||||||
|
|
|
|
|
||||||
Roles and responsibilities
|
|
Three lines of defence model
|
|
Our three lines of defence model defines roles and responsibilities for risk management. An independent Global Risk function helps ensure the necessary balance in risk/return decisions (see page 108).
|
||||||
|
|
|
|
|
||||||
|
|
|
|
|
||||||
Processes and tools
|
|
Risk appetite
|
|
Processes to identify/assess, monitor, manage and report risks to ensure we remain within our risk appetite (see pages 107 to 109).
|
||||||
|
|
|
||||||||
|
Enterprise-wide risk management tools
|
|
||||||||
|
|
|
||||||||
|
Active risk management: identification/assessment, monitoring, management and reporting
|
|
||||||||
|
|
|
|
|
||||||
|
|
|
|
|
||||||
Internal controls
|
|
Policies and procedures
|
|
Policies and procedures define the minimum requirements for the controls required to manage our risks.
|
||||||
|
|
|
|
|||||||
|
Control activities
|
|
The operational risk management framework defines minimum standards and processes for managing operational risks and internal controls (see page 117).
|
|||||||
|
|
|
|
|||||||
|
Systems and infrastructure
|
|
Systems and/or processes that support the identification, capture and exchange of information to support risk management activities.
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Systems and tools
|
HSBC Holdings plc
|
107
|
Governance structure for the management of risk
|
||
Authority
|
Membership
|
Responsibilities include:
|
|
|
|
Risk Management Meeting of the Group Management Board
|
Group Chief Risk Officer
Chief Legal Officer
Group Chief Executive
Group Finance Director
All other Group Managing Directors
|
•
Supporting the Group Chief Risk Officer in exercising Board-delegated risk management authority
•
Overseeing the implementation of risk appetite and the enterprise risk management framework
•
Forward-looking assessment of the risk environment, analysing possible risk impacts and taking appropriate action
•
Monitoring all categories of risk and determining appropriate mitigating action
•
Promoting a supportive Group culture in relation to risk management and conduct
|
Global Risk Management Board
|
Group Chief Risk Officer
Chief Risk Officers of HSBC’s global businesses and regions
Heads of Global Risk sub-functions
|
•
Supporting the Group Chief Risk Officer in providing strategic direction for the Global Risk function, setting priorities and providing oversight
•
Overseeing a consistent approach to accountability for, and mitigation of, risk across the Global Risk function
|
Global business/regional risk management meetings
|
Global Business/Regional Chief Risk Officer
Global Business/Regional Chief Executive
Global Business/Regional Chief Financial Officer
Global Business/Regional Heads of global functions
|
•
Supporting the Chief Risk Officer in exercising Board-delegated risk management authority
•
Forward-looking assessment of the risk environment, analysing the possible risk impact and taking appropriate action
•
Implementation of risk appetite and the enterprise risk management framework
•
Monitoring all categories of risk and determining appropriate mitigating actions
•
Embedding a supportive culture in relation to risk management and controls
|
•
|
The first line of defence owns the risks and is responsible for identifying, recording, reporting and managing them, and ensuring that the right controls and assessments are in place to mitigate them.
|
•
|
The second line of defence sets the policy and guidelines for managing specific risk areas, provides advice and guidance in relation to the risk, and challenges the first line of defence on effective risk management.
|
•
|
The third line of defence is our Internal Audit function, which provides independent and objective assurance of the adequacy of the design and operational effectiveness of the Group’s risk management framework and control governance process.
|
108
|
HSBC Holdings plc
|
HSBC Holdings plc
|
109
|
110
|
HSBC Holdings plc
|
|
|
|
Description of risks – banking operations (continued)
|
||
Risks
|
Arising from
|
Measurement, monitoring and management of risk
|
Other material risks
|
||
Reputational risk (see page 119)
|
||
Reputational risk is the risk of failure to meet stakeholder expectations as a result of any event, behaviour, action or inaction, either by HSBC itself, our employees or those with whom we are associated, that might cause stakeholders to form a negative view of the Group.
|
Primary reputational risks arise directly from an action or inaction by HSBC, its employees or associated parties that are not the consequence of another type of risk. Secondary reputational risks are those arising indirectly and are a result of a failure to control any other risks.
|
Reputational risk is:
•
measured by reference to our reputation as indicated by our dealings with all relevant stakeholders, including media, regulators, customers and employees;
•
monitored through a reputational risk management framework that is integrated into the Group’s broader risk management framework; and
•
managed by every member of staff, and covered by a number of policies and guidelines. There is a clear structure of committees and individuals charged with mitigating reputational risk.
|
Pension risk (see page 120)
|
||
Pension risk is the risk of increased costs to HSBC from offering post-employment benefit plans to its employees.
|
Pension risk arises from investments delivering an inadequate return, adverse changes in interest rates or inflation, or members living longer than expected. Pension risk also includes operational and reputational risk of sponsoring pension plans.
|
Pension risk is:
•
measured in terms of the scheme’s ability to generate sufficient funds to meet the cost of their accrued benefits;
•
monitored through the specific risk appetite that has been developed at both Group and regional levels; and
•
managed locally through the appropriate pension risk governance structure and globally through the Global Pensions Oversight Forum and ultimately the RMM.
|
Sustainability risk (see page 120)
|
||
Sustainability risk is the risk that financial services provided to customers by the Group indirectly result in unacceptable impacts on people or the environment.
|
Sustainability risk arises from the provision of financial services to companies or projects which indirectly result in unacceptable impacts on people or on the environment.
|
Sustainability risk is:
•
measured by assessing the potential sustainability effect of a customer’s activities and assigning a sustainability risk rating to all high-risk transactions;
•
monitored quarterly by the RMM and monthly by the Group’s sustainability risk function; and
•
managed using sustainability risk policies covering project finance lending and sector-based sustainability policies for sectors and themes with potentially large environmental or social impacts.
|
HSBC Holdings plc
|
111
|
•
|
to maintain across HSBC a strong culture of responsible lending, and robust risk policies and control frameworks;
|
•
|
to both partner and challenge our businesses in defining, implementing and continually re-evaluating our risk appetite under actual and scenario conditions; and
|
•
|
to ensure there is independent, expert scrutiny of credit risks, their costs and their mitigation.
|
1
|
Customer risk rating (‘CRR’).
|
2
|
Expected loss (‘EL’).
|
3
|
The EL percentage is derived through a combination of probability of default (‘PD’) and loss given default (‘LGD’), and may exceed 100% in circumstances where the LGD is above 100% reflecting the cost of recoveries.
|
Quality classification definitions
•
‘Strong’ exposures demonstrate a strong capacity to meet financial commitments, with negligible or low probability of default and/or low levels of expected loss.
•
‘Good’ exposures require closer monitoring and demonstrate a good capacity to meet financial commitments, with low default risk.
•
‘Satisfactory’ exposures require closer monitoring and demonstrate an average-to-fair capacity to meet financial commitments, with moderate default risk.
•
‘Sub-standard’ exposures require varying degrees of special attention and default risk is of greater concern.
•
‘Impaired’ exposures have been assessed as impaired, as described on page 126. These also include retail accounts classified as EL 1 to EL 8 that are delinquent by more than 90 days, unless individually they have been assessed as not impaired, and renegotiated loans that have met the requirements to be disclosed as impaired and have not yet met the criteria to be returned to the unimpaired portfolio (see following page
)
.
|
112
|
HSBC Holdings plc
|
•
|
stand-alone management of liquidity and funding by operating entity;
|
•
|
operating entity classification by inherent liquidity risk (‘ILR’) categorisation;
|
•
|
minimum LCR requirement depending on ILR categorisation;
|
•
|
minimum NSFR requirement depending on ILR categorisation;
|
•
|
legal entity depositor concentration limit;
|
•
|
three-month and 12-month cumulative rolling term contractual maturity limits covering deposits from banks, deposits from non-bank financial institutions and securities issued;
|
•
|
annual individual liquidity adequacy assessment by principal operating entity;
|
•
|
minimum LCR requirement by currency;
|
•
|
management and monitoring of intra-day liquidity;
|
•
|
liquidity funds transfer pricing; and
|
•
|
forward-looking funding assessments.
|
HSBC Holdings plc
|
113
|
•
|
Group, regional and entity level asset and liability management committees (‘ALCOs’).
|
•
|
Annual internal liquidity adequacy assessment process (‘ILAAP’) for principal operating entities used to validate risk tolerance and set risk appetite.
|
Risk types
|
Trading risk
|
Non-trading risk
|
|||
•
Foreign exchange and commodities
•
Interest rates
•
Credit spreads
•
Equities
|
•
Structural foreign exchange
•
Interest rates
1
•
Credit spreads
|
||||
Global business
|
GB&M and BSM
2
|
GB&M, BSM
2
, GPB, CMB and RBWM
|
|||
Risk measure
|
VaR | Sensitivity | Stress Testing
|
VaR | Sensitivity | Stress Testing
|
1
|
The interest rate risk on the fixed-rate securities issued by HSBC Holdings is not included in the Group VaR. The management of this risk is described on page
145
.
|
2
|
BSM, for external reporting purposes, forms part of Corporate Centre while daily operations and risk are managed within GB&M.
|
114
|
HSBC Holdings plc
|
•
|
historical market rates and prices are calculated with reference to foreign exchange rates, commodity prices, interest rates, equity prices and the associated volatilities;
|
•
|
potential market movements utilised for VaR are calculated with reference to data from the past two years; and
|
•
|
VaR measures are calculated to a 99% confidence level and use a one-day holding period.
|
•
|
use of historical data as a proxy for estimating future events may not encompass all potential events, particularly extreme ones;
|
•
|
the use of a holding period assumes that all positions can be liquidated or the risks offset during that period, which may not fully reflect the market risk arising at times of severe illiquidity, when the holding period may be insufficient to liquidate or hedge all positions fully;
|
•
|
the use of a 99% confidence level does not take into account losses that might occur beyond this level of confidence; and
|
•
|
VaR is calculated on the basis of exposures outstanding at the close of business and therefore does not necessarily reflect intra-day exposures.
|
HSBC Holdings plc
|
115
|
•
|
Managed rate risk – the risk that the pricing of products, which are dependent upon business line decisions, do not correlate to movements in market interest rates.
|
•
|
Re-investment risk – risk arising due to change in rates when behaviouralised balances are reinvested as per the transfer pricing policy.
|
•
|
Basis risk – the risk arising from assets and liabilities that are priced referencing different market indices creating a repricing mismatch.
|
•
|
Prepayment risk – the risk that the actual customer prepayment in different interest rate scenarios does not match the profile used to hedge the interest rate risk.
|
•
|
Duration risk – the risk that there are changes in the maturities of assets and liabilities due to changes in interest rate, which create or exacerbate a mismatch.
|
•
|
non-traded VaR;
|
•
|
net Interest Income (‘NII’) sensitivity; and
|
•
|
economic value of equity (‘EVE’).
|
116
|
HSBC Holdings plc
|
•
|
We implemented a number of initiatives to raise our standards in relation to the conduct of our business, as described below under ‘Conduct of business’.
|
•
|
Surveillance capabilities have been strengthened during the year with the deployment of an unauthorised trading detection tool in London, New York and Hong Kong, implementation of a foreign exchange trade analytics platform and expanded coverage of electronic communications surveillance. Infrastructure to support the effective delivery and reporting of surveillance activity continues to mature.
|
•
|
We continued to take steps to enhance our regulatory compliance risk management and controls, and to work with regulators in relation to their investigations into historical activities. This included, in September 2017, matt
ers giving rise to a civil money penalty order with the Federal Reserve Board in connection with its investigation into HSBC’s historical foreign exchange activities, and in January 2018, matters giving rise to HSBC’s entry into a three-year deferred prosecution agreement with the US Department of Justice (‘DoJ’)
regarding fraudulent conduct in connection with two particular transactions in 2010 and 2011 which concluded the DoJ’s investigation into HSBC’s historical foreign exchange activities
. For further details, see Note
34
on the Financial Statements.
|
HSBC Holdings plc
|
117
|
•
|
Ongoing oversight of the breadth, depth and effectiveness of conduct management and governance at country level.
|
•
|
Identification and integration of conduct considerations in the enterprise-wide risk management framework and the Group’s planning processes.
|
•
|
Expansion of conduct management information to identify actual or potential issues for resolution, in the global functions and HSBC Operations Services and Technology, complementing global business conduct management information.
|
•
|
Implementing new conduct-specific global mandatory training modules and an enhanced programme of conduct communications.
|
•
|
Enhancing the assessment of conduct in performance appraisal scorecards and remuneration decision-making processes.
|
118
|
HSBC Holdings plc
|
•
|
For products with discretionary participating features (‘DPF’), adjusting bonus rates to manage the liabilities to policyholders. The effect is that a significant portion of the market risk is borne by the policyholder.
|
•
|
Asset and liability matching where asset portfolios are structured to support projected liability cash flows. The Group manages its assets using an approach that considers asset quality, diversification, cash flow matching, liquidity, volatility and target investment return. It is not always possible to match asset and liability durations, due to uncertainty over the receipt of all future premiums and the timing of claims; and because the forecast payment dates of liabilities may exceed the duration of the longest dated investments available. We use models to assess the effect of a range of future scenarios on the values of financial assets and associated liabilities, and ALCOs employ the outcomes in determining how best to structure asset holdings to support liabilities.
|
•
|
Using derivatives to protect against adverse market movements or better match liability cash flows.
|
•
|
For new products with investment guarantees, considering the cost when determining the level of premiums or the price structure.
|
•
|
Periodically reviewing products identified as higher risk, which contain investment guarantees and embedded optionality features linked to savings and investment products, for active management.
|
•
|
Designing new products to mitigate market risk, such as changing the investment return sharing portion between policyholders and the shareholder.
|
•
|
Exiting, to the extent possible, investment portfolios whose risk is considered unacceptable.
|
•
|
Repricing premiums charged to policyholders.
|
•
|
formalised product approval process covering product design, pricing and overall proposition management (for example, management of lapses by introducing surrender charges);
|
•
|
underwriting policy;
|
•
|
claims management processes; and
|
•
|
reinsurance which cedes risks above our acceptable thresholds to an external reinsurer thereby limiting our exposure.
|
HSBC Holdings plc
|
119
|
•
|
Formulating sustainability risk policies. This includes work in several key areas: overseeing our sustainability risk standards; overseeing our application of the Equator Principles, which provide a framework for banks to assess and manage the social and environmental impact of large projects to which they provide financing; overseeing our application of our sustainability policies, covering agricultural commodities, chemicals, defence, energy, forestry, freshwater infrastructure, mining and metals, UNESCO World Heritage Sites and the Ramsar Convention on Wetlands; undertaking independent reviews of transactions where sustainability risks are assessed to be high; and supporting our operating companies to assess similar risks of a lesser magnitude.
|
•
|
Building and implementing systems-based processes to help ensure consistent application of policies, reduce the costs of sustainability risk reviews, and capture management information to measure and report on the effect of our lending and investment activities on sustainable development.
|
•
|
Providing training and capacity building within our operating companies to ensure sustainability risks are identified and mitigated consistently to appropriate standards.
|
•
|
investments delivering a return below that required to provide the projected plan benefits;
|
120
|
HSBC Holdings plc
|
•
|
the prevailing economic environment leading to corporate failures, thus triggering write-downs in asset values (both equity and debt);
|
•
|
a change in either interest rates or inflation expectations, causing an increase in the value of plan liabilities; and
|
•
|
plan members living longer than expected (known as longevity risk).
|
Key developments and risk profile in 2017
|
•
|
Implementing a new operational risk management framework (‘ORMF’) and system of record (known as Helios), as described on page
117
of the ‘Operational risk management’ section.
|
•
|
We have completed the introduction of the major compliance IT systems, put in place our AML and sanctions policy framework, and assessed our current financial crime risk management capabilities to identify any gaps and enable integration into our day-to-day operations. All of the actions that we committed to in 2013 as part of the Global Standards programme have been completed or superseded. Further improvements are underway to make our reforms more effective and sustainable.
|
•
|
We
continued to take steps to enhance our regulatory compliance risk management and controls, implementing a number of initiatives to raise our standards in relation to the conduct of our business and other regulatory compliance-related initiatives
, as described on page
117
of the ‘Regulatory compliance risk management’ section.
|
•
|
The formation of a new Group Reputational Risk Committee which replaced the Group Reputational Risk Policy Committee and the Global Risk Resolution Committee, as described on page
119
under ‘Reputational risk management’.
|
HSBC Holdings plc
|
121
|
Summary of credit risk
|
||||||
|
2017
|
|
2016
|
|
|
|
|
$bn
|
|
$bn
|
|
Page
|
|
At 31 Dec
|
|
|
|
|||
Maximum exposure to credit risk
|
3,030
|
|
2,898
|
|
123
|
|
– total assets subject to credit risk
|
2,306
|
|
2,205
|
|
|
|
– off-balance sheet commitments subject to credit risk
|
724
|
|
693
|
|
|
|
Gross loans and advances
|
1,060
|
|
958
|
|
|
|
– personal lending
|
376
|
|
340
|
|
136
|
|
– wholesale lending
|
684
|
|
618
|
|
130
|
|
Impaired loans
|
15
|
|
18
|
|
126
|
|
– personal lending
|
5
|
|
6
|
|
|
|
– wholesale lending
|
10
|
|
12
|
|
|
|
|
%
|
|
%
|
|
|
|
Impaired loans as a % of gross loans and advances
|
|
|
|
|
||
Personal lending
|
1.3
|
|
1.8
|
|
|
|
Wholesale lending
|
1.5
|
|
1.9
|
|
|
|
Total
|
1.5
|
|
1.9
|
|
|
|
|
$bn
|
|
$bn
|
|
|
|
Impairment allowances
|
7.5
|
|
7.9
|
|
130
|
|
– personal lending
|
1.7
|
|
2.0
|
|
129
|
|
– wholesale lending
|
5.8
|
|
5.9
|
|
131
|
|
Loans and advances net of
impairment allowances |
1,053
|
|
950
|
|
|
|
For year ended 31 Dec
|
|
|
|
|
||
Loan impairment charge
|
2.0
|
|
3.3
|
|
128
|
|
– personal lending
|
1.0
|
|
1.7
|
|
|
|
– wholesale lending
|
1.0
|
|
1.6
|
|
|
|
Other credit risk provisions
|
(0.2
|
)
|
0.1
|
|
|
|
|
1.8
|
|
3.4
|
|
|
Gross loans to customers and banks over five years ($bn)
|
|
|
Personal
|
|
|
|
Wholesale
|
|
|
|
|
|
|
|
|
Unimpaired
|
|
Impaired
|
122
|
HSBC Holdings plc
|
Loan impairment allowances over five years ($bn)
|
|
|
Personal
|
|
|
|
Wholesale
|
|
|
|
|
|
|
|
–
|
w
|
–
|
Loan impairment allowances as
a percentage of impaired loans
|
|
Loan impairment allowances ($bn)
|
‘Maximum exposure to credit risk’ table
The following table presents our maximum exposure before taking account of any collateral held or other credit enhancements (unless such enhancements meet accounting offsetting requirements). The table excludes financial instruments whose carrying amount best represents the net exposure to credit risk and it excludes equity securities as they are not subject to credit risk. For the financial assets recognised on the balance sheet, the maximum exposure to credit risk equals their carrying amount; for financial guarantees and similar contracts granted, it is the maximum amount that we would have to pay if the guarantees were called upon. For loan commitments and other credit-related commitments, it is generally the full amount of the committed facilities. The offset in the table relates to amounts where there is a legally enforceable right of offset in the event of counterparty default and where, as a result, there is a net exposure for credit risk purposes. However, as there is no intention to settle these balances on a net basis under normal circumstances, they do not qualify for net presentation for accounting purposes. No offset has been applied to off-balance sheet collateral. In the case of derivatives the offset column also includes collateral received in cash and other financial assets. |
Maximum exposure to credit risk
|
|||||||||||||
(Audited)
|
|||||||||||||
|
|
2017
|
2016
|
||||||||||
|
|
Maximum
exposure |
|
Offset
|
|
Net
|
|
Maximum
exposure |
|
Offset
|
|
Net
|
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Derivatives
|
|
219,818
|
|
(204,829
|
)
|
14,989
|
|
290,872
|
|
(262,233
|
)
|
28,639
|
|
Loans and advances to customers held at amortised cost
|
|
962,964
|
|
(35,414
|
)
|
927,550
|
|
861,504
|
|
(33,657
|
)
|
827,847
|
|
– personal
|
|
374,762
|
|
(2,946
|
)
|
371,816
|
|
337,826
|
|
(3,629
|
)
|
334,197
|
|
– corporate and commercial
|
|
516,754
|
|
(29,459
|
)
|
487,295
|
|
460,209
|
|
(27,686
|
)
|
432,523
|
|
– non-bank financial institutions
|
|
71,448
|
|
(3,009
|
)
|
68,439
|
|
63,469
|
|
(2,342
|
)
|
61,127
|
|
Loans and advances to banks held at amortised cost
|
|
90,393
|
|
(273
|
)
|
90,120
|
|
88,126
|
|
(248
|
)
|
87,878
|
|
Reverse repurchase agreements – non-trading
|
|
201,553
|
|
(3,724
|
)
|
197,829
|
|
160,974
|
|
(4,764
|
)
|
156,210
|
|
Total balance sheet exposure to credit risk
|
|
2,305,592
|
|
(244,240
|
)
|
2,061,352
|
|
2,204,751
|
|
(300,902
|
)
|
1,903,849
|
|
Total off-balance sheet
|
|
723,917
|
|
—
|
|
723,917
|
|
692,915
|
|
—
|
|
692,915
|
|
– financial guarantees and similar contracts
|
|
38,328
|
|
—
|
|
38,328
|
|
37,072
|
|
—
|
|
37,072
|
|
– loan and other credit-related commitments
|
|
685,589
|
|
—
|
|
685,589
|
|
655,843
|
|
—
|
|
655,843
|
|
At 31 Dec
|
|
3,029,509
|
|
(244,240
|
)
|
2,785,269
|
|
2,897,666
|
|
(300,902
|
)
|
2,596,764
|
|
HSBC Holdings plc
|
123
|
•
|
financial investments, see Note
15
on the Financial Statements;
|
•
|
trading assets, see Note
10
on the Financial Statements;
|
•
|
derivatives, see page
134
and Note
14
on the Financial Statements; and
|
•
|
loans and advances by industry sector and by the location of the principal operations of the lending subsidiary (or, in the case of the operations of The Hongkong and Shanghai Banking Corporation, HSBC Bank plc, HSBC Bank Middle East Limited and HSBC Bank USA, by the location of the lending branch) see page
130
for wholesale lending and page
135
for personal lending.
|
124
|
HSBC Holdings plc
|
Distribution of financial instruments by credit quality (continued)
|
||||||||||||||||||
|
Neither past due nor impaired
|
Past due
but not
impaired
|
|
Impaired
|
|
Total
gross
amount
|
|
Impairment
allowances
|
|
Total
|
|
|||||||
|
Strong
|
|
Good
|
|
Satisfactory
|
|
Sub-
standard
|
|
||||||||||
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Cash and balances at central banks
|
126,838
|
|
711
|
|
444
|
|
16
|
|
|
|
|
|
128,009
|
|
|
|
128,009
|
|
Items in the course of collection from other banks
|
4,656
|
|
14
|
|
329
|
|
4
|
|
|
|
|
|
5,003
|
|
|
|
5,003
|
|
Hong Kong Government certificates of indebtedness
|
31,228
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
31,228
|
|
|
|
31,228
|
|
Trading assets
|
127,997
|
|
20,345
|
|
21,947
|
|
1,232
|
|
|
|
171,521
|
|
|
171,521
|
|
|||
– treasury and other eligible bills
|
13,595
|
|
672
|
|
138
|
|
46
|
|
|
|
14,451
|
|
|
14,451
|
|
|||
– debt securities
|
73,171
|
|
7,746
|
|
12,741
|
|
396
|
|
|
|
94,054
|
|
|
94,054
|
|
|||
– loans and advances to banks
|
15,356
|
|
6,119
|
|
3,250
|
|
44
|
|
|
|
24,769
|
|
|
24,769
|
|
|||
– loans and advances to customers
|
25,875
|
|
5,808
|
|
5,818
|
|
746
|
|
|
|
38,247
|
|
|
38,247
|
|
|||
Financial assets designated at fair value
|
3,249
|
|
367
|
|
542
|
|
314
|
|
|
|
|
|
4,472
|
|
|
|
4,472
|
|
Derivatives
|
236,693
|
|
45,961
|
|
7,368
|
|
850
|
|
|
|
|
|
290,872
|
|
|
|
290,872
|
|
Loans and advances to customers
held at amortised cost |
437,531
|
|
200,385
|
|
185,717
|
|
18,831
|
|
8,662
|
|
18,228
|
|
869,354
|
|
(7,850
|
)
|
861,504
|
|
– personal
|
290,313
|
|
24,544
|
|
12,505
|
|
884
|
|
5,062
|
|
6,490
|
|
339,798
|
|
(1,972
|
)
|
337,826
|
|
– corporate and commercial
|
111,848
|
|
158,878
|
|
163,107
|
|
17,504
|
|
3,128
|
|
11,362
|
|
465,827
|
|
(5,618
|
)
|
460,209
|
|
– non-bank financial institutions
|
35,370
|
|
16,963
|
|
10,105
|
|
443
|
|
472
|
|
376
|
|
63,729
|
|
(260
|
)
|
63,469
|
|
Loans and advances to banks held at amortised cost
|
73,516
|
|
8,238
|
|
6,293
|
|
73
|
|
6
|
|
—
|
|
88,126
|
|
—
|
|
88,126
|
|
Reverse repurchase agreements – non-trading
|
123,822
|
|
18,223
|
|
18,166
|
|
763
|
|
—
|
|
—
|
|
160,974
|
|
—
|
|
160,974
|
|
Financial investments
|
401,010
|
|
13,579
|
|
13,570
|
|
2,940
|
|
—
|
|
1,031
|
|
432,130
|
|
|
|
432,130
|
|
Other assets
|
12,977
|
|
5,884
|
|
9,619
|
|
1,071
|
|
360
|
|
1,251
|
|
31,162
|
|
(250
|
)
|
30,912
|
|
– endorsements and acceptances
|
1,160
|
|
3,688
|
|
3,125
|
|
474
|
|
35
|
|
92
|
|
8,574
|
|
|
8,574
|
|
|
– accrued income and other
|
10,043
|
|
1,660
|
|
6,102
|
|
331
|
|
89
|
|
129
|
|
18,354
|
|
|
18,354
|
|
|
– assets held for sale
|
1,774
|
|
536
|
|
392
|
|
266
|
|
236
|
|
1,030
|
|
4,234
|
|
(250
|
)
|
3,984
|
|
At 31 Dec 2016
|
1,579,517
|
|
313,707
|
|
263,995
|
|
26,094
|
|
9,028
|
|
20,510
|
|
2,212,851
|
|
(8,100
|
)
|
2,204,751
|
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
|
|
||
Percentage of total gross amount
|
71.4
|
|
14.2
|
|
11.9
|
|
1.2
|
|
0.4
|
|
0.9
|
|
100.0
|
|
|
|
HSBC Holdings plc
|
125
|
•
|
Wholesale loans and advances classified as customer risk rating (‘CRR’) 9 or CRR 10: these grades are assigned when HSBC considers that the customer is either unlikely to pay their credit obligations in full without recourse to security, or is more than 90 days past due on any material credit obligation to HSBC.
|
•
|
Retail loans and advances classified as expected loss (‘EL’) 9 or EL 10: these grades are typically assigned to retail loans and
|
•
|
Renegotiated loans and advances: loans where we have changed the contractual cash flows due to credit distress of the obligor. Renegotiated loans remain classified as impaired until there is sufficient evidence to demonstrate a significant reduction in the risk of non-payment of future cash flows.
|
126
|
HSBC Holdings plc
|
HSBC Holdings plc
|
127
|
128
|
HSBC Holdings plc
|
Movement in impairment allowances by industry sector and by geographical region
|
||||||||||||
|
Europe
|
|
Asia
|
|
MENA
|
|
North
America |
|
Latin
America |
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
At 1 Jan 2017
|
2,789
|
|
1,635
|
|
1,681
|
|
1,272
|
|
473
|
|
7,850
|
|
Amounts written off
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal
|
(438
|
)
|
(366
|
)
|
(329
|
)
|
(100
|
)
|
(487
|
)
|
(1,720
|
)
|
– first lien residential mortgages
|
(8
|
)
|
(6
|
)
|
(42
|
)
|
(26
|
)
|
(9
|
)
|
(91
|
)
|
– other personal
|
(430
|
)
|
(360
|
)
|
(287
|
)
|
(74
|
)
|
(478
|
)
|
(1,629
|
)
|
Corporate and commercial
|
(648
|
)
|
(273
|
)
|
(119
|
)
|
(273
|
)
|
(63
|
)
|
(1,376
|
)
|
– manufacturing and international trade and services
|
(318
|
)
|
(250
|
)
|
(74
|
)
|
(44
|
)
|
(18
|
)
|
(704
|
)
|
– commercial real estate and other property-related
|
(121
|
)
|
(10
|
)
|
(37
|
)
|
(20
|
)
|
(4
|
)
|
(192
|
)
|
– other commercial
|
(209
|
)
|
(13
|
)
|
(8
|
)
|
(209
|
)
|
(41
|
)
|
(480
|
)
|
Financial
|
(74
|
)
|
(1
|
)
|
—
|
|
(2
|
)
|
—
|
|
(77
|
)
|
Total amounts written off
|
(1,160
|
)
|
(640
|
)
|
(448
|
)
|
(375
|
)
|
(550
|
)
|
(3,173
|
)
|
Recoveries of amounts written off in previous years
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal
|
296
|
|
104
|
|
39
|
|
38
|
|
68
|
|
545
|
|
– first lien residential mortgages
|
9
|
|
4
|
|
—
|
|
17
|
|
25
|
|
55
|
|
– other personal
|
287
|
|
100
|
|
39
|
|
21
|
|
43
|
|
490
|
|
Corporate and commercial
|
35
|
|
10
|
|
2
|
|
37
|
|
13
|
|
97
|
|
– manufacturing and international trade and services
|
10
|
|
9
|
|
1
|
|
11
|
|
3
|
|
34
|
|
– commercial real estate and other property-related
|
8
|
|
—
|
|
1
|
|
1
|
|
—
|
|
10
|
|
– other commercial
|
17
|
|
1
|
|
—
|
|
25
|
|
10
|
|
53
|
|
Financial
|
2
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
Total recoveries of amounts written off in previous years
|
333
|
|
114
|
|
41
|
|
75
|
|
81
|
|
644
|
|
Charge to income statement
|
825
|
|
558
|
|
197
|
|
(130
|
)
|
542
|
|
1,992
|
|
Exchange and other movements
|
274
|
|
5
|
|
(10
|
)
|
(51
|
)
|
(47
|
)
|
171
|
|
At 31 Dec 2017
|
3,061
|
|
1,672
|
|
1,461
|
|
791
|
|
499
|
|
7,484
|
|
Impairment allowances against banks:
|
|
|
|
|
|
|
|
|
|
|
|
|
– individually assessed
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Impairment allowances against customers:
|
|
|
|
|
|
|
|
|
|
|
|
|
– individually assessed
|
2,296
|
|
1,056
|
|
1,104
|
|
383
|
|
121
|
|
4,960
|
|
– collectively assessed
|
765
|
|
616
|
|
357
|
|
408
|
|
378
|
|
2,524
|
|
Impairment allowances at 31 Dec 2017
|
3,061
|
|
1,672
|
|
1,461
|
|
791
|
|
499
|
|
7,484
|
|
|
|
|
|
|
|
|
||||||
At 1 Jan 2016
|
3,477
|
|
1,525
|
|
1,810
|
|
2,041
|
|
720
|
|
9,573
|
|
Amounts written off
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal
|
(412
|
)
|
(358
|
)
|
(208
|
)
|
(284
|
)
|
(340
|
)
|
(1,602
|
)
|
– first lien residential mortgages
|
(10
|
)
|
(6
|
)
|
(3
|
)
|
(142
|
)
|
(12
|
)
|
(173
|
)
|
– other personal
|
(402
|
)
|
(352
|
)
|
(205
|
)
|
(142
|
)
|
(328
|
)
|
(1,429
|
)
|
Corporate and commercial
|
(730
|
)
|
(285
|
)
|
(137
|
)
|
(381
|
)
|
(297
|
)
|
(1,830
|
)
|
– manufacturing and international trade and services
|
(380
|
)
|
(172
|
)
|
(78
|
)
|
(125
|
)
|
(10
|
)
|
(765
|
)
|
– commercial real estate and other property-related
|
(109
|
)
|
(31
|
)
|
(54
|
)
|
(35
|
)
|
(223
|
)
|
(452
|
)
|
– other commercial
|
(241
|
)
|
(82
|
)
|
(5
|
)
|
(221
|
)
|
(64
|
)
|
(613
|
)
|
Financial
|
(1
|
)
|
(5
|
)
|
(18
|
)
|
—
|
|
—
|
|
(24
|
)
|
Total amounts written off
|
(1,143
|
)
|
(648
|
)
|
(363
|
)
|
(665
|
)
|
(637
|
)
|
(3,456
|
)
|
Recoveries of amounts written off in previous years
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal
|
225
|
|
124
|
|
34
|
|
54
|
|
78
|
|
515
|
|
– first lien residential mortgages
|
3
|
|
4
|
|
—
|
|
26
|
|
8
|
|
41
|
|
– other persona
l
|
222
|
|
120
|
|
34
|
|
28
|
|
70
|
|
474
|
|
Corporate and commercial
|
35
|
|
24
|
|
10
|
|
18
|
|
22
|
|
109
|
|
– manufacturing and international trade and services
|
15
|
|
23
|
|
5
|
|
9
|
|
16
|
|
68
|
|
– commercial real estate and other property-related
|
9
|
|
—
|
|
—
|
|
2
|
|
—
|
|
11
|
|
– other commercial
|
11
|
|
1
|
|
5
|
|
7
|
|
6
|
|
30
|
|
Financial
|
1
|
|
1
|
|
—
|
|
1
|
|
—
|
|
3
|
|
Total recoveries of amounts written off in previous years
|
261
|
|
149
|
|
44
|
|
73
|
|
100
|
|
627
|
|
Charge to income statement
|
533
|
|
654
|
|
292
|
|
709
|
|
1,162
|
|
3,350
|
|
Exchange and other movements
|
(339
|
)
|
(45
|
)
|
(102
|
)
|
(886
|
)
|
(872
|
)
|
(2,244
|
)
|
At 31 Dec 2016
|
2,789
|
|
1,635
|
|
1,681
|
|
1,272
|
|
473
|
|
7,850
|
|
Impairment allowances against banks:
|
|
|
|
|
|
|
|
|
|
|
|
|
– individually assessed
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Impairment allowances against customers:
|
|
|
|
|
|
|
|
|
|
|
|
|
– individually assessed
|
2,060
|
|
1,038
|
|
1,137
|
|
540
|
|
157
|
|
4,932
|
|
– collectively assessed
|
729
|
|
597
|
|
544
|
|
732
|
|
316
|
|
2,918
|
|
Impairment allowances at 31 Dec 2016
|
2,789
|
|
1,635
|
|
1,681
|
|
1,272
|
|
473
|
|
7,850
|
|
HSBC Holdings plc
|
129
|
Movement in impairment allowances on loans and advances to customers and banks
|
||||||||||||||||
(Audited)
|
||||||||||||||||
|
2017
|
2016
|
||||||||||||||
|
Banks
individually
assessed
|
|
Customers
|
|
Banks
individually
assessed
|
|
Customers
|
|
||||||||
|
Individually
assessed
|
|
Collectively
assessed
|
|
Total
|
|
Individually
assessed
|
|
Collectively
assessed
|
|
Total
|
|
||||
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
At 1 Jan
|
—
|
|
4,932
|
|
2,918
|
|
7,850
|
|
18
|
|
5,402
|
|
4,153
|
|
9,573
|
|
Amounts written off
|
—
|
|
(1,468
|
)
|
(1,705
|
)
|
(3,173
|
)
|
(18
|
)
|
(1,831
|
)
|
(1,607
|
)
|
(3,456
|
)
|
Recoveries of loans and advances previously written off
|
—
|
|
119
|
|
525
|
|
644
|
|
—
|
|
107
|
|
520
|
|
627
|
|
Charge to income statement
|
—
|
|
1,114
|
|
878
|
|
1,992
|
|
—
|
|
1,831
|
|
1,519
|
|
3,350
|
|
Exchange and other movements
|
—
|
|
263
|
|
(92
|
)
|
171
|
|
—
|
|
(577
|
)
|
(1,667
|
)
|
(2,244
|
)
|
At 31 Dec
|
—
|
|
4,960
|
|
2,524
|
|
7,484
|
|
—
|
|
4,932
|
|
2,918
|
|
7,850
|
|
Impairment allowances % of loans and advances
|
—
|
|
0.5%
|
|
0.3%
|
|
0.8%
|
|
—
|
|
0.6%
|
|
0.3%
|
|
0.8%
|
|
130
|
HSBC Holdings plc
|
Total wholesale lending impairment allowances
|
||||||||||||
|
Europe
|
|
Asia
|
|
MENA
|
|
North America
|
|
Latin
America |
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Corporate and commercial
|
2,286
|
|
1,375
|
|
1,092
|
|
557
|
|
184
|
|
5,494
|
|
– manufacturing
|
332
|
|
372
|
|
188
|
|
114
|
|
70
|
|
1,076
|
|
– international trade and services
|
671
|
|
612
|
|
480
|
|
101
|
|
35
|
|
1,899
|
|
– commercial real estate
|
362
|
|
10
|
|
142
|
|
75
|
|
—
|
|
589
|
|
– other property-related
|
347
|
|
44
|
|
161
|
|
41
|
|
42
|
|
635
|
|
– government
|
3
|
|
—
|
|
6
|
|
—
|
|
—
|
|
9
|
|
– other commercial
|
571
|
|
337
|
|
115
|
|
226
|
|
37
|
|
1,286
|
|
Financial
|
183
|
|
27
|
|
39
|
|
22
|
|
—
|
|
271
|
|
– non-bank financial institutions
|
183
|
|
27
|
|
39
|
|
22
|
|
—
|
|
271
|
|
– banks
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Impairment allowances at 31 Dec 2017
|
2,469
|
|
1,402
|
|
1,131
|
|
579
|
|
184
|
|
5,765
|
|
Impairment allowances % of impaired loans
|
41.1%
|
|
85.0%
|
|
70.6%
|
|
58.9%
|
|
61.1%
|
|
54.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and commercial
|
2,048
|
|
1,343
|
|
1,137
|
|
880
|
|
210
|
|
5,618
|
|
– manufacturing
|
411
|
|
342
|
|
174
|
|
139
|
|
38
|
|
1,104
|
|
– international trade and services
|
473
|
|
647
|
|
476
|
|
81
|
|
35
|
|
1,712
|
|
– commercial real estate
|
402
|
|
11
|
|
144
|
|
67
|
|
36
|
|
660
|
|
– other property-related
|
167
|
|
34
|
|
202
|
|
37
|
|
55
|
|
495
|
|
– government
|
2
|
|
—
|
|
1
|
|
—
|
|
1
|
|
4
|
|
– other commercial
|
593
|
|
309
|
|
140
|
|
556
|
|
45
|
|
1,643
|
|
Financial
|
216
|
|
9
|
|
15
|
|
20
|
|
—
|
|
260
|
|
– non-bank financial institutions
|
216
|
|
9
|
|
15
|
|
20
|
|
—
|
|
260
|
|
– banks
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Impairment allowances at 31 Dec 2016
|
2,264
|
|
1,352
|
|
1,152
|
|
900
|
|
210
|
|
5,878
|
|
Impairment allowances % of impaired loans
|
36.7%
|
|
69.9%
|
|
67.8%
|
|
56.7%
|
|
60.9%
|
|
50.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency translation adjustment
|
260
|
|
33
|
|
(5
|
)
|
19
|
|
9
|
|
316
|
|
31 Dec 2016 at 31 Dec 2017 exchange rates
|
2,524
|
|
1,385
|
|
1,147
|
|
919
|
|
219
|
|
6,194
|
|
Movement – on constant currency basis
|
(55
|
)
|
17
|
|
(16
|
)
|
(340
|
)
|
(35
|
)
|
(429
|
)
|
31 Dec 2017 as reported
|
2,469
|
|
1,402
|
|
1,131
|
|
579
|
|
184
|
|
5,765
|
|
Commercial real estate lending
|
||||||||||||||||
|
Europe
|
|
Asia
|
|
MENA
|
|
North America
|
|
Latin America
|
|
Total
|
|
UK
|
|
Hong Kong
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Gross loans and advances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Neither past due nor impaired
|
24,822
|
|
40,175
|
|
500
|
|
8,637
|
|
1,407
|
|
75,541
|
|
18,361
|
|
31,325
|
|
Past due but not impaired
|
56
|
|
55
|
|
5
|
|
197
|
|
34
|
|
347
|
|
2
|
|
49
|
|
Impaired loans
|
1,078
|
|
16
|
|
182
|
|
83
|
|
65
|
|
1,424
|
|
895
|
|
11
|
|
At Dec 2017
|
25,956
|
|
40,246
|
|
687
|
|
8,917
|
|
1,506
|
|
77,312
|
|
19,258
|
|
31,385
|
|
–
of which: renegotiated loans
|
1,112
|
|
—
|
|
190
|
|
97
|
|
79
|
|
1,478
|
|
1,010
|
|
—
|
|
Impairment allowances
|
362
|
|
10
|
|
142
|
|
75
|
|
—
|
|
589
|
|
302
|
|
7
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gross loans and advances
|
|
|
|
|
|
|
|
|
||||||||
Neither past due nor impaired
|
20,208
|
|
32,688
|
|
541
|
|
7,650
|
|
1,255
|
|
62,342
|
|
15,143
|
|
25,561
|
|
Past due but not impaired
|
41
|
|
88
|
|
—
|
|
89
|
|
3
|
|
221
|
|
1
|
|
29
|
|
Impaired loans
|
1,212
|
|
22
|
|
183
|
|
110
|
|
81
|
|
1,608
|
|
1,027
|
|
15
|
|
At Dec 2016
|
21,461
|
|
32,798
|
|
724
|
|
7,849
|
|
1,339
|
|
64,171
|
|
16,171
|
|
25,605
|
|
–
of which: renegotiated loans
|
1,117
|
|
—
|
|
192
|
|
118
|
|
98
|
|
1,525
|
|
997
|
|
—
|
|
Impairment allowances
|
403
|
|
11
|
|
144
|
|
67
|
|
35
|
|
660
|
|
330
|
|
8
|
|
HSBC Holdings plc
|
131
|
132
|
HSBC Holdings plc
|
Commercial real estate loans and advances including loan commitments by level of collateral
|
||||||||||||||||
(Audited)
|
|
|
|
|
||||||||||||
|
Europe
|
|
Asia
|
|
MENA
|
|
North America
|
|
Latin America
|
|
Total
|
|
UK
|
|
Hong Kong
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Rated CRR/EL 1 to 7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not collateralised
|
6,114
|
|
18,338
|
|
315
|
|
590
|
|
397
|
|
25,754
|
|
4,812
|
|
12,678
|
|
Fully collateralised
|
25,958
|
|
30,289
|
|
192
|
|
11,201
|
|
931
|
|
68,571
|
|
20,709
|
|
24,708
|
|
Partially collateralised (A)
|
1,631
|
|
1,623
|
|
—
|
|
1,797
|
|
149
|
|
5,200
|
|
968
|
|
1,229
|
|
– collateral value on A
|
1,270
|
|
975
|
|
—
|
|
1,281
|
|
76
|
|
3,602
|
|
568
|
|
729
|
|
Total
|
33,703
|
|
50,250
|
|
507
|
|
13,588
|
|
1,477
|
|
99,525
|
|
26,489
|
|
38,615
|
|
Rated CRR/EL 8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not collateralised
|
5
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5
|
|
3
|
|
—
|
|
Fully collateralised
|
145
|
|
—
|
|
—
|
|
77
|
|
—
|
|
222
|
|
129
|
|
—
|
|
– LTV ratio: less than 50%
|
64
|
|
—
|
|
—
|
|
3
|
|
—
|
|
67
|
|
64
|
|
—
|
|
– 51% to 75%
|
34
|
|
—
|
|
—
|
|
7
|
|
—
|
|
41
|
|
32
|
|
—
|
|
– 76% to 90%
|
23
|
|
—
|
|
—
|
|
66
|
|
—
|
|
89
|
|
19
|
|
—
|
|
– 91% to 100%
|
24
|
|
—
|
|
—
|
|
1
|
|
—
|
|
25
|
|
14
|
|
—
|
|
Partially collateralised (B)
|
62
|
|
—
|
|
—
|
|
10
|
|
—
|
|
72
|
|
55
|
|
—
|
|
– collateral value on B
|
42
|
|
—
|
|
—
|
|
1
|
|
—
|
|
43
|
|
40
|
|
—
|
|
Total
|
212
|
|
—
|
|
—
|
|
87
|
|
—
|
|
299
|
|
187
|
|
—
|
|
Rated CRR/EL 9 to 10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not collateralised
|
56
|
|
—
|
|
2
|
|
2
|
|
3
|
|
63
|
|
46
|
|
—
|
|
Fully collateralised
|
445
|
|
10
|
|
194
|
|
45
|
|
16
|
|
710
|
|
376
|
|
5
|
|
– LTV ratio: less than 50%
|
82
|
|
6
|
|
19
|
|
26
|
|
15
|
|
148
|
|
60
|
|
—
|
|
– 51% to 75%
|
165
|
|
2
|
|
—
|
|
6
|
|
1
|
|
174
|
|
149
|
|
2
|
|
– 76% to 90%
|
127
|
|
2
|
|
—
|
|
13
|
|
—
|
|
142
|
|
122
|
|
2
|
|
– 91% to 100%
|
71
|
|
—
|
|
175
|
|
—
|
|
—
|
|
246
|
|
45
|
|
1
|
|
Partially collateralised (C)
|
441
|
|
6
|
|
—
|
|
36
|
|
10
|
|
493
|
|
351
|
|
6
|
|
– collateral value on C
|
250
|
|
3
|
|
—
|
|
13
|
|
32
|
|
298
|
|
188
|
|
3
|
|
Total
|
942
|
|
16
|
|
196
|
|
83
|
|
29
|
|
1,266
|
|
773
|
|
11
|
|
At 31 Dec 2017
|
34,857
|
|
50,266
|
|
703
|
|
13,758
|
|
1,506
|
|
101,090
|
|
27,449
|
|
38,626
|
|
|
|
|
|
|
|
|
|
|
||||||||
Rated CRR/EL 1 to 7
|
|
|
|
|
|
|
|
|
||||||||
Not collateralised
|
3,887
|
|
12,714
|
|
391
|
|
561
|
|
760
|
|
18,313
|
|
2,888
|
|
9,971
|
|
Fully collateralised
|
21,815
|
|
27,296
|
|
152
|
|
10,618
|
|
449
|
|
60,330
|
|
18,009
|
|
21,821
|
|
Partially collateralised (A)
|
1,360
|
|
1,106
|
|
—
|
|
1,388
|
|
63
|
|
3,917
|
|
1,004
|
|
644
|
|
– collateral value on A
|
1,021
|
|
552
|
|
—
|
|
991
|
|
7
|
|
2,571
|
|
672
|
|
314
|
|
Total
|
27,062
|
|
41,116
|
|
543
|
|
12,567
|
|
1,272
|
|
82,560
|
|
21,901
|
|
32,436
|
|
Rated CRR/EL 8
|
|
|
|
|
|
|
|
|
||||||||
Not collateralised
|
12
|
|
—
|
|
—
|
|
1
|
|
—
|
|
13
|
|
11
|
|
—
|
|
Fully collateralised
|
190
|
|
—
|
|
—
|
|
6
|
|
—
|
|
196
|
|
158
|
|
—
|
|
– LTV ratio: less than 50%
|
54
|
|
—
|
|
—
|
|
4
|
|
—
|
|
58
|
|
39
|
|
—
|
|
– 51% to 75%
|
76
|
|
—
|
|
—
|
|
1
|
|
—
|
|
77
|
|
70
|
|
—
|
|
– 76% to 90%
|
44
|
|
—
|
|
—
|
|
—
|
|
—
|
|
44
|
|
39
|
|
—
|
|
– 91% to 100%
|
16
|
|
—
|
|
—
|
|
1
|
|
—
|
|
17
|
|
10
|
|
—
|
|
Partially collateralised (B)
|
91
|
|
—
|
|
—
|
|
11
|
|
—
|
|
102
|
|
82
|
|
—
|
|
– collateral value on B
|
70
|
|
—
|
|
—
|
|
1
|
|
—
|
|
71
|
|
61
|
|
—
|
|
Total
|
293
|
|
—
|
|
—
|
|
18
|
|
—
|
|
311
|
|
251
|
|
—
|
|
Rated CRR/EL 9 to 10
|
|
|
|
|
|
|
|
|
||||||||
Not collateralised
|
62
|
|
3
|
|
4
|
|
4
|
|
2
|
|
75
|
|
16
|
|
—
|
|
Fully collateralised
|
764
|
|
14
|
|
194
|
|
85
|
|
61
|
|
1,118
|
|
740
|
|
10
|
|
– LTV ratio: less than 50%
|
79
|
|
7
|
|
19
|
|
5
|
|
31
|
|
141
|
|
62
|
|
4
|
|
– 51% to 75%
|
571
|
|
5
|
|
—
|
|
34
|
|
14
|
|
624
|
|
569
|
|
4
|
|
– 76% to 90%
|
64
|
|
1
|
|
—
|
|
7
|
|
16
|
|
88
|
|
64
|
|
1
|
|
– 91% to 100%
|
50
|
|
1
|
|
175
|
|
39
|
|
—
|
|
265
|
|
45
|
|
1
|
|
Partially collateralised (C)
|
384
|
|
5
|
|
—
|
|
21
|
|
2
|
|
412
|
|
361
|
|
5
|
|
– collateral value on C
|
148
|
|
5
|
|
—
|
|
13
|
|
36
|
|
202
|
|
131
|
|
5
|
|
Total
|
1,210
|
|
22
|
|
198
|
|
110
|
|
65
|
|
1,605
|
|
1,117
|
|
15
|
|
At 31 Dec 2016
|
28,565
|
|
41,138
|
|
741
|
|
12,695
|
|
1,337
|
|
84,476
|
|
23,269
|
|
32,451
|
|
HSBC Holdings plc
|
133
|
Other corporate, commercial and non-bank financial institutions loans and advances including loan commitments by level of
collateral rated CRR/EL 8 to 10 only |
||||||||||||||||
(Audited)
|
||||||||||||||||
|
Europe
|
|
Asia
|
|
MENA
|
|
North
America |
|
Latin America
|
|
Total
|
|
UK
|
|
Hong Kong
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Rated CRR/EL 8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not collateralised
|
1,730
|
|
42
|
|
109
|
|
1,721
|
|
121
|
|
3,723
|
|
320
|
|
15
|
|
Fully collateralised
|
293
|
|
9
|
|
25
|
|
222
|
|
4
|
|
553
|
|
103
|
|
5
|
|
– LTV ratio: less than 50%
|
72
|
|
7
|
|
9
|
|
96
|
|
4
|
|
188
|
|
25
|
|
3
|
|
– 51% to 75%
|
73
|
|
2
|
|
12
|
|
69
|
|
—
|
|
156
|
|
65
|
|
2
|
|
– 76% to 90%
|
16
|
|
—
|
|
4
|
|
19
|
|
—
|
|
39
|
|
11
|
|
—
|
|
– 91% to 100%
|
132
|
|
—
|
|
—
|
|
38
|
|
—
|
|
170
|
|
2
|
|
—
|
|
Partially collateralised (A)
|
94
|
|
140
|
|
34
|
|
224
|
|
—
|
|
492
|
|
91
|
|
135
|
|
– collateral value on A
|
62
|
|
12
|
|
3
|
|
128
|
|
1
|
|
206
|
|
59
|
|
10
|
|
Total
|
2,117
|
|
191
|
|
168
|
|
2,167
|
|
125
|
|
4,768
|
|
514
|
|
155
|
|
Rated CRR/EL 9 to 10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not collateralised
|
1,710
|
|
926
|
|
875
|
|
73
|
|
150
|
|
3,734
|
|
1,508
|
|
511
|
|
Fully collateralised
|
1,520
|
|
365
|
|
180
|
|
460
|
|
54
|
|
2,579
|
|
1,223
|
|
105
|
|
– LTV ratio: less than 50%
|
634
|
|
113
|
|
30
|
|
14
|
|
22
|
|
813
|
|
516
|
|
69
|
|
– 51% to 75%
|
431
|
|
27
|
|
62
|
|
64
|
|
21
|
|
605
|
|
403
|
|
9
|
|
– 76% to 90%
|
256
|
|
39
|
|
88
|
|
11
|
|
3
|
|
397
|
|
235
|
|
20
|
|
– 91% to 100%
|
199
|
|
186
|
|
—
|
|
371
|
|
8
|
|
764
|
|
69
|
|
7
|
|
Partially collateralised (B)
|
452
|
|
343
|
|
404
|
|
517
|
|
27
|
|
1,743
|
|
397
|
|
161
|
|
– collateral value on B
|
243
|
|
208
|
|
68
|
|
337
|
|
18
|
|
874
|
|
210
|
|
119
|
|
Total
|
3,682
|
|
1,634
|
|
1,459
|
|
1,050
|
|
231
|
|
8,056
|
|
3,128
|
|
777
|
|
At 31 Dec 2017
|
5,799
|
|
1,825
|
|
1,627
|
|
3,217
|
|
356
|
|
12,824
|
|
3,642
|
|
932
|
|
|
|
|
|
|
|
|
|
|
||||||||
Rated CRR/EL 8
|
|
|
|
|
|
|
|
|
||||||||
Not collateralised
|
1,766
|
|
405
|
|
51
|
|
2,976
|
|
85
|
|
5,283
|
|
172
|
|
287
|
|
Fully collateralised
|
141
|
|
3
|
|
94
|
|
362
|
|
—
|
|
600
|
|
70
|
|
1
|
|
– LTV ratio: less than 50%
|
86
|
|
2
|
|
10
|
|
151
|
|
—
|
|
249
|
|
30
|
|
1
|
|
– 51% to 75%
|
34
|
|
1
|
|
15
|
|
118
|
|
—
|
|
168
|
|
28
|
|
—
|
|
– 76% to 90%
|
10
|
|
—
|
|
7
|
|
79
|
|
—
|
|
96
|
|
5
|
|
—
|
|
– 91% to 100%
|
11
|
|
—
|
|
62
|
|
14
|
|
—
|
|
87
|
|
7
|
|
—
|
|
Partially collateralised (A)
|
191
|
|
12
|
|
20
|
|
242
|
|
—
|
|
465
|
|
187
|
|
12
|
|
– collateral value on A
|
23
|
|
3
|
|
5
|
|
26
|
|
—
|
|
57
|
|
19
|
|
3
|
|
Total
|
2,098
|
|
420
|
|
165
|
|
3,580
|
|
85
|
|
6,348
|
|
429
|
|
300
|
|
Rated CRR/EL 9 to 10
|
|
|
|
|
|
|
|
|
||||||||
Not collateralised
|
1,439
|
|
848
|
|
900
|
|
154
|
|
167
|
|
3,508
|
|
1,347
|
|
377
|
|
Fully collateralised
|
1,394
|
|
447
|
|
160
|
|
488
|
|
56
|
|
2,545
|
|
1,159
|
|
144
|
|
– LTV ratio: less than 50%
|
570
|
|
126
|
|
54
|
|
59
|
|
29
|
|
838
|
|
449
|
|
54
|
|
– 51% to 75%
|
412
|
|
104
|
|
6
|
|
85
|
|
8
|
|
615
|
|
367
|
|
32
|
|
– 76% to 90%
|
180
|
|
86
|
|
87
|
|
53
|
|
8
|
|
414
|
|
144
|
|
44
|
|
– 91% to 100%
|
232
|
|
131
|
|
13
|
|
291
|
|
11
|
|
678
|
|
199
|
|
14
|
|
Partially collateralised (B)
|
478
|
|
642
|
|
442
|
|
771
|
|
35
|
|
2,368
|
|
454
|
|
305
|
|
– collateral value on B
|
322
|
|
268
|
|
75
|
|
353
|
|
16
|
|
1,034
|
|
300
|
|
150
|
|
Total
|
3,311
|
|
1,937
|
|
1,502
|
|
1,413
|
|
258
|
|
8,421
|
|
2,960
|
|
826
|
|
At 31 Dec 2016
|
5,409
|
|
2,357
|
|
1,667
|
|
4,993
|
|
343
|
|
14,769
|
|
3,389
|
|
1,126
|
|
•
|
Some securities issued by governments, banks and other financial institutions benefit from additional credit enhancement provided by government guarantees that cover the assets.
|
•
|
Debt securities issued by banks and financial institutions include ABSs and similar instruments which are supported by underlying pools of financial assets. Credit risk associated with ABSs is reduced through the purchase of credit default swap (‘CDS’) protection.
|
•
|
Trading loans and advances mainly consist of cash collateral posted to satisfy margin requirements. There is limited credit risk on cash collateral posted since in the event of default of the counterparty these would be set off against the related liability. Reverse repos and stock borrowing are by their nature collateralised.
|
•
|
The Group’s maximum exposure to credit risk includes financial guarantees and similar contracts granted, as well as loan and other credit-related commitments. Depending on the terms of the arrangement, we may use additional credit mitigation if a guarantee is called upon or a loan commitment is drawn and subsequently defaults.
|
134
|
HSBC Holdings plc
|
HSBC Holdings plc
|
135
|
136
|
HSBC Holdings plc
|
UK interest-only mortgage loans
|
||
|
$m
|
|
Expired interest-only mortgage loans
|
216
|
|
Interest-only mortgage loans by maturity
|
|
|
– 2018
|
465
|
|
– 2019
|
520
|
|
– 2020
|
532
|
|
– 2021
|
652
|
|
– 2022-2026
|
3,185
|
|
– Post 2026
|
10,215
|
|
At 31 Dec 2017
|
15,785
|
|
HSBC Holdings plc
|
137
|
|
|
|
|
|
|
|
|
|
||||||||
Residential mortgage loans including loan commitments by level of collateral (continued)
|
|
|
|
|||||||||||||
(Audited)
|
|
|
|
|
|
|
|
|
||||||||
|
Europe
|
|
Asia
|
|
MENA
|
|
North
America
|
|
Latin
America
|
|
Total
|
|
UK
|
|
Hong
Kong
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Non impaired loans and advances
|
|
|
|
|
|
|
|
|
||||||||
Fully collateralised
|
111,799
|
|
104,122
|
|
2,333
|
|
35,773
|
|
1,813
|
|
255,840
|
|
106,006
|
|
65,480
|
|
– LTV ratio:
less than 50%
|
63,404
|
|
63,009
|
|
617
|
|
12,454
|
|
676
|
|
140,160
|
|
61,128
|
|
44,732
|
|
– 51% to 60%
|
19,129
|
|
18,198
|
|
369
|
|
8,124
|
|
316
|
|
46,136
|
|
18,094
|
|
10,656
|
|
– 61% to 70%
|
14,437
|
|
10,908
|
|
505
|
|
9,471
|
|
366
|
|
35,687
|
|
13,222
|
|
3,851
|
|
– 71% to 80%
|
9,029
|
|
7,370
|
|
659
|
|
4,374
|
|
253
|
|
21,685
|
|
8,433
|
|
2,958
|
|
– 81% to 90%
|
4,963
|
|
3,463
|
|
148
|
|
888
|
|
144
|
|
9,606
|
|
4,509
|
|
2,324
|
|
– 91% to 100%
|
837
|
|
1,174
|
|
35
|
|
462
|
|
58
|
|
2,566
|
|
620
|
|
959
|
|
Partially collateralised:
|
|
|
|
|
|
|
|
|
||||||||
Greater than 100% (A)
|
430
|
|
41
|
|
69
|
|
373
|
|
26
|
|
939
|
|
284
|
|
1
|
|
– 101% to110%
|
150
|
|
20
|
|
15
|
|
179
|
|
17
|
|
381
|
|
106
|
|
1
|
|
– 111% to 120%
|
64
|
|
2
|
|
11
|
|
85
|
|
5
|
|
167
|
|
33
|
|
—
|
|
– greater than 120%
|
216
|
|
19
|
|
43
|
|
109
|
|
4
|
|
391
|
|
145
|
|
—
|
|
Collateral on A
|
342
|
|
27
|
|
40
|
|
328
|
|
25
|
|
762
|
|
197
|
|
1
|
|
Non-impaired loans and advances
|
112,229
|
|
104,163
|
|
2,402
|
|
36,146
|
|
1,839
|
|
256,779
|
|
106,290
|
|
65,481
|
|
Impaired loans and advances
|
|
|
|
|
|
|
|
|
||||||||
Fully collateralised
|
1,213
|
|
247
|
|
59
|
|
2,905
|
|
85
|
|
4,509
|
|
1,059
|
|
42
|
|
– LTV ratio:
less than 50%
|
580
|
|
109
|
|
21
|
|
825
|
|
8
|
|
1,543
|
|
521
|
|
34
|
|
– 51% to 60%
|
222
|
|
49
|
|
3
|
|
527
|
|
3
|
|
804
|
|
200
|
|
4
|
|
– 61% to 70%
|
180
|
|
24
|
|
13
|
|
540
|
|
4
|
|
761
|
|
158
|
|
1
|
|
– 71% to 80%
|
122
|
|
29
|
|
4
|
|
449
|
|
3
|
|
607
|
|
101
|
|
1
|
|
– 81% to 90%
|
66
|
|
19
|
|
9
|
|
336
|
|
67
|
|
497
|
|
52
|
|
1
|
|
– 91% to 100%
|
43
|
|
17
|
|
9
|
|
228
|
|
—
|
|
297
|
|
27
|
|
1
|
|
Partially collateralised:
|
|
|
|
|
|
|
|
|
||||||||
Greater than 100% (B)
|
80
|
|
7
|
|
73
|
|
182
|
|
—
|
|
342
|
|
42
|
|
—
|
|
– 101% to110%
|
37
|
|
3
|
|
10
|
|
94
|
|
—
|
|
144
|
|
17
|
|
—
|
|
– 111% to 120%
|
12
|
|
2
|
|
12
|
|
38
|
|
—
|
|
64
|
|
7
|
|
—
|
|
– greater than 120%
|
31
|
|
2
|
|
51
|
|
50
|
|
—
|
|
134
|
|
18
|
|
—
|
|
Collateral value on B
|
66
|
|
5
|
|
64
|
|
152
|
|
—
|
|
287
|
|
33
|
|
—
|
|
Impaired loans
|
1,293
|
|
254
|
|
132
|
|
3,087
|
|
85
|
|
4,851
|
|
1,101
|
|
42
|
|
At 31 Dec 2016
|
113,522
|
|
104,417
|
|
2,534
|
|
39,233
|
|
1,924
|
|
261,630
|
|
107,391
|
|
65,523
|
|
138
|
HSBC Holdings plc
|
Gross loans and advances to customers by country
|
||||||||||
|
First lien residential mortgages
|
|
Other personal
|
|
Property-related
|
|
Commercial, international trade and other
|
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Europe
|
126,685
|
|
43,329
|
|
33,938
|
|
180,656
|
|
384,608
|
|
– UK
|
119,770
|
|
19,790
|
|
26,012
|
|
131,938
|
|
297,510
|
|
– France
|
2,910
|
|
16,650
|
|
6,255
|
|
28,440
|
|
54,255
|
|
– Germany
|
1
|
|
234
|
|
361
|
|
10,485
|
|
11,081
|
|
– Switzerland
|
839
|
|
5,776
|
|
491
|
|
1,284
|
|
8,390
|
|
– other
|
3,165
|
|
879
|
|
819
|
|
8,509
|
|
13,372
|
|
Asia
|
109,502
|
|
40,880
|
|
86,410
|
|
190,851
|
|
427,643
|
|
– Hong Kong
|
70,279
|
|
27,868
|
|
66,668
|
|
104,876
|
|
269,691
|
|
– Australia
|
12,444
|
|
838
|
|
2,851
|
|
10,815
|
|
26,948
|
|
– India
|
1,185
|
|
441
|
|
1,110
|
|
6,437
|
|
9,173
|
|
– Indonesia
|
64
|
|
322
|
|
164
|
|
4,107
|
|
4,657
|
|
– mainland China
|
8,877
|
|
1,170
|
|
5,674
|
|
25,202
|
|
40,923
|
|
– Malaysia
|
3,003
|
|
3,385
|
|
2,144
|
|
5,676
|
|
14,208
|
|
– Singapore
|
5,760
|
|
4,952
|
|
4,727
|
|
13,073
|
|
28,512
|
|
– Taiwan
|
4,877
|
|
822
|
|
19
|
|
5,342
|
|
11,060
|
|
– other
|
3,013
|
|
1,082
|
|
3,053
|
|
15,323
|
|
22,471
|
|
Middle East and North Africa (excluding Saudi Arabia)
|
2,375
|
|
4,496
|
|
2,508
|
|
20,132
|
|
29,511
|
|
– Egypt
|
—
|
|
283
|
|
39
|
|
1,342
|
|
1,664
|
|
– Turkey
|
206
|
|
1,035
|
|
265
|
|
2,702
|
|
4,208
|
|
– UAE
|
1,880
|
|
1,682
|
|
1,727
|
|
11,172
|
|
16,461
|
|
– other
|
289
|
|
1,496
|
|
477
|
|
4,916
|
|
7,178
|
|
North America
|
37,330
|
|
5,227
|
|
16,916
|
|
48,925
|
|
108,398
|
|
– US
|
17,415
|
|
2,278
|
|
11,092
|
|
34,790
|
|
65,575
|
|
– Canada
|
18,639
|
|
2,731
|
|
5,429
|
|
13,583
|
|
40,382
|
|
– other
|
1,276
|
|
218
|
|
395
|
|
552
|
|
2,441
|
|
Latin America
|
2,281
|
|
4,376
|
|
1,875
|
|
11,756
|
|
20,288
|
|
– Mexico
|
2,129
|
|
3,044
|
|
1,702
|
|
8,735
|
|
15,610
|
|
– other
|
152
|
|
1,332
|
|
173
|
|
3,021
|
|
4,678
|
|
At 31 Dec 2017
|
278,173
|
|
98,308
|
|
141,647
|
|
452,320
|
|
970,448
|
|
Europe
|
108,008
|
|
38,491
|
|
28,485
|
|
164,465
|
|
339,449
|
|
– UK
|
101,822
|
|
17,820
|
|
21,707
|
|
124,341
|
|
265,690
|
|
– France
|
2,676
|
|
13,786
|
|
5,220
|
|
22,153
|
|
43,835
|
|
– Germany
|
1
|
|
192
|
|
413
|
|
8,322
|
|
8,928
|
|
– Switzerland
|
506
|
|
5,848
|
|
213
|
|
1,660
|
|
8,227
|
|
– other
|
3,003
|
|
845
|
|
932
|
|
7,989
|
|
12,769
|
|
Asia
|
98,072
|
|
36,628
|
|
70,426
|
|
161,940
|
|
367,066
|
|
– Hong Kong
|
63,566
|
|
24,558
|
|
54,219
|
|
88,921
|
|
231,264
|
|
– Australia
|
10,134
|
|
757
|
|
2,164
|
|
6,804
|
|
19,859
|
|
– India
|
1,280
|
|
388
|
|
1,040
|
|
5,979
|
|
8,687
|
|
– Indonesia
|
63
|
|
334
|
|
165
|
|
4,384
|
|
4,946
|
|
– mainland China
|
7,192
|
|
1,107
|
|
4,788
|
|
20,451
|
|
33,538
|
|
– Malaysia
|
2,719
|
|
3,065
|
|
1,693
|
|
4,179
|
|
11,656
|
|
– Singapore
|
6,194
|
|
4,502
|
|
2,920
|
|
11,832
|
|
25,448
|
|
– Taiwan
|
4,036
|
|
671
|
|
55
|
|
5,074
|
|
9,836
|
|
– other
|
2,888
|
|
1,246
|
|
3,382
|
|
14,316
|
|
21,832
|
|
Middle East and North Africa (excluding Saudi Arabia)
|
2,535
|
|
5,209
|
|
2,580
|
|
22,107
|
|
32,431
|
|
– Egypt
|
—
|
|
272
|
|
73
|
|
1,327
|
|
1,672
|
|
– Turkey
|
301
|
|
1,554
|
|
247
|
|
2,214
|
|
4,316
|
|
– UAE
|
1,981
|
|
1,867
|
|
1,883
|
|
13,037
|
|
18,768
|
|
– other
|
253
|
|
1,516
|
|
377
|
|
5,529
|
|
7,675
|
|
North America
|
39,239
|
|
5,717
|
|
16,672
|
|
51,355
|
|
112,983
|
|
– US
|
22,756
|
|
2,676
|
|
11,835
|
|
38,199
|
|
75,466
|
|
– Canada
|
15,220
|
|
2,831
|
|
4,586
|
|
12,515
|
|
35,152
|
|
– other
|
1,263
|
|
210
|
|
251
|
|
641
|
|
2,365
|
|
Latin America
|
1,924
|
|
3,975
|
|
1,646
|
|
9,880
|
|
17,425
|
|
– Mexico
|
1,803
|
|
2,849
|
|
1,528
|
|
7,118
|
|
13,298
|
|
– other
|
121
|
|
1,126
|
|
118
|
|
2,762
|
|
4,127
|
|
At 31 Dec 2016
|
249,778
|
|
90,020
|
|
119,809
|
|
409,747
|
|
869,354
|
|
HSBC Holdings plc
|
139
|
•
|
financial instruments on the balance sheet (see page
219
); and
|
•
|
financial guarantees and similar contracts, where the maximum exposure is the maximum that we would have to pay if the guarantees were called upon (see Note
32
).
|
140
|
HSBC Holdings plc
|
Risk elements in the loan portfolio
|
•
|
impaired loans;
|
•
|
unimpaired loans contractually more than 90 days past due as to interest or principal; and
|
•
|
troubled debt restructurings not included in the above.
|
•
|
there has been a change in contractual cash flow as a result of a concession that the lender would otherwise not consider; and
|
•
|
it is probable that without the concession, the borrower would be unable to meet contractual payment obligations in full.
|
HSBC Holdings plc
|
141
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Impaired loans
|
|
|
|
|
|
|||||
Europe
|
8,042
|
|
8,062
|
|
9,265
|
|
9,709
|
|
12,654
|
|
Asia
|
2,249
|
|
2,499
|
|
2,375
|
|
2,048
|
|
1,623
|
|
Middle East and North Africa
|
1,949
|
|
2,230
|
|
2,178
|
|
2,514
|
|
2,859
|
|
North America
|
2,606
|
|
4,842
|
|
8,930
|
|
11,694
|
|
15,123
|
|
Latin America
|
624
|
|
595
|
|
1,030
|
|
3,365
|
|
4,244
|
|
|
15,470
|
|
18,228
|
|
23,778
|
|
29,330
|
|
36,503
|
|
Unimpaired loans contractually more than 90 days past due as to principal or interest
|
|
|
|
|
|
|||||
Europe
|
—
|
|
—
|
|
7
|
|
6
|
|
25
|
|
Asia
|
—
|
|
—
|
|
2
|
|
1
|
|
33
|
|
Middle East and North Africa
|
24
|
|
15
|
|
96
|
|
59
|
|
56
|
|
North America
|
—
|
|
3
|
|
27
|
|
3
|
|
13
|
|
Latin America
|
—
|
|
—
|
|
—
|
|
3
|
|
—
|
|
|
24
|
|
18
|
|
132
|
|
72
|
|
127
|
|
Troubled debt restructurings (not included in the classifications above)
|
|
|
|
|
|
|
||||
Europe
|
1,890
|
|
1,900
|
|
1,495
|
|
1,652
|
|
1,427
|
|
Asia
|
273
|
|
269
|
|
284
|
|
267
|
|
277
|
|
Middle East and North Africa
|
459
|
|
549
|
|
584
|
|
778
|
|
406
|
|
North America
|
174
|
|
518
|
|
3,698
|
|
3,932
|
|
4,643
|
|
Latin America
|
83
|
|
130
|
|
164
|
|
353
|
|
482
|
|
|
2,879
|
|
3,366
|
|
6,225
|
|
6,982
|
|
7,235
|
|
Trading loans classified as in default
|
|
|
|
|
|
|
||||
North America
|
—
|
|
—
|
|
—
|
|
4
|
|
133
|
|
Europe
|
56
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
56
|
|
—
|
|
—
|
|
4
|
|
133
|
|
Risk elements on loans
|
|
|
|
|
|
|||||
Europe
|
9,988
|
|
9,962
|
|
10,767
|
|
11,367
|
|
14,106
|
|
Asia
|
2,522
|
|
2,768
|
|
2,661
|
|
2,316
|
|
1,933
|
|
Middle East and North Africa
|
2,432
|
|
2,794
|
|
2,858
|
|
3,351
|
|
3,321
|
|
North America
|
2,780
|
|
5,363
|
|
12,655
|
|
15,633
|
|
19,912
|
|
Latin America
|
707
|
|
725
|
|
1,194
|
|
3,721
|
|
4,726
|
|
|
18,429
|
|
21,612
|
|
30,135
|
|
36,388
|
|
43,998
|
|
Assets held for sale
|
|
|
|
|
|
|||||
Europe
|
14
|
|
16
|
|
23
|
|
28
|
|
44
|
|
Asia
|
51
|
|
46
|
|
19
|
|
14
|
|
10
|
|
Middle East and North Africa
|
—
|
|
1
|
|
1
|
|
1
|
|
2
|
|
North America
|
11
|
|
57
|
|
116
|
|
186
|
|
370
|
|
Latin America
|
18
|
|
22
|
|
20
|
|
16
|
|
27
|
|
|
94
|
|
142
|
|
179
|
|
245
|
|
453
|
|
Total risk elements
|
|
|
|
|
|
|||||
Europe
|
10,002
|
|
9,978
|
|
10,790
|
|
11,395
|
|
14,150
|
|
Asia
|
2,573
|
|
2,814
|
|
2,680
|
|
2,330
|
|
1,943
|
|
Middle East and North Africa
|
2,432
|
|
2,795
|
|
2,859
|
|
3,352
|
|
3,323
|
|
North America
|
2,791
|
|
5,420
|
|
12,771
|
|
15,819
|
|
20,282
|
|
Latin America
|
725
|
|
747
|
|
1,214
|
|
3,737
|
|
4,753
|
|
At 31 Dec
|
18,523
|
|
21,754
|
|
30,314
|
|
36,633
|
|
44,451
|
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
Loan impairment allowances as a percentage of risk elements on loans
|
40.6
|
|
36.3
|
|
31.8
|
|
34.0
|
|
34.7
|
|
142
|
HSBC Holdings plc
|
Gross loans and advances by industry sector over five years
|
|||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Personal
|
|
376,481
|
|
339,798
|
|
374,082
|
|
393,554
|
|
410,728
|
|
–
first lien residential mortgages
|
|
278,173
|
|
249,778
|
|
274,511
|
|
286,524
|
|
299,875
|
|
–
other personal
|
|
98,308
|
|
90,020
|
|
99,571
|
|
107,030
|
|
110,853
|
|
Corporate and commercial
|
|
522,248
|
|
465,827
|
|
499,513
|
|
542,625
|
|
545,981
|
|
–
manufacturing
|
|
81,857
|
|
80,643
|
|
95,858
|
|
106,986
|
|
113,850
|
|
–
international trade and services
|
|
173,227
|
|
150,042
|
|
159,019
|
|
180,791
|
|
184,668
|
|
–
commercial real estate
|
|
77,312
|
|
64,171
|
|
67,926
|
|
73,293
|
|
74,846
|
|
–
other property-related
|
|
64,335
|
|
55,638
|
|
53,464
|
|
52,387
|
|
44,832
|
|
–
government
|
|
11,728
|
|
8,442
|
|
7,455
|
|
6,143
|
|
7,277
|
|
–
other commercial
|
|
113,789
|
|
106,891
|
|
115,791
|
|
123,025
|
|
120,508
|
|
Financial
|
|
162,112
|
|
151,855
|
|
150,833
|
|
163,016
|
|
170,627
|
|
–
non-bank financial institutions
|
|
71,719
|
|
63,729
|
|
60,414
|
|
50,818
|
|
50,523
|
|
–
banks
|
|
90,393
|
|
88,126
|
|
90,419
|
|
112,198
|
|
120,104
|
|
Total gross loans and advances
|
|
1,060,841
|
|
957,480
|
|
1,024,428
|
|
1,099,195
|
|
1,127,336
|
|
Impaired loans and advances to customers
|
|
15,470
|
|
18,228
|
|
23,758
|
|
29,283
|
|
36,428
|
|
Impairment allowances on loans and advances to customers
|
|
7,484
|
|
7,850
|
|
9,555
|
|
12,337
|
|
15,143
|
|
Loan impairment charge
|
|
1,992
|
|
3,350
|
|
3,592
|
|
4,055
|
|
6,048
|
|
–
new allowances net of allowance releases
|
|
2,636
|
|
3,977
|
|
4,400
|
|
5,010
|
|
7,344
|
|
–
recoveries
|
|
(644
|
)
|
(627
|
)
|
(808
|
)
|
(955
|
)
|
(1,296
|
)
|
HSBC Holdings plc
|
143
|
Movement in impairment allowances over five years
|
|||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Impairment allowances at 1 Jan
|
|
7,850
|
|
9,573
|
|
12,386
|
|
15,201
|
|
16,169
|
|
Amounts written off
|
|
(3,173
|
)
|
(3,456
|
)
|
(4,194
|
)
|
(6,379
|
)
|
(6,655
|
)
|
–
personal
|
|
(1,720
|
)
|
(1,602
|
)
|
(2,707
|
)
|
(3,733
|
)
|
(4,367
|
)
|
–
corporate and commercial
|
|
(1,376
|
)
|
(1,830
|
)
|
(1,473
|
)
|
(2,425
|
)
|
(2,229
|
)
|
–
financial
|
|
(77
|
)
|
(24
|
)
|
(14
|
)
|
(221
|
)
|
(59
|
)
|
Recoveries of amounts written off in previous years
|
|
644
|
|
627
|
|
808
|
|
955
|
|
1,296
|
|
–
personal
|
|
545
|
|
515
|
|
681
|
|
818
|
|
1,097
|
|
–
corporate and commercial
|
|
97
|
|
109
|
|
124
|
|
128
|
|
198
|
|
–
financial
|
|
2
|
|
3
|
|
3
|
|
9
|
|
1
|
|
Loan impairment charge
|
|
1,992
|
|
3,350
|
|
3,592
|
|
4,055
|
|
6,048
|
|
E
xchange and other movements
|
|
171
|
|
(2,244
|
)
|
(3,019
|
)
|
(1,446
|
)
|
(1,657
|
)
|
Impairment allowances at 31 Dec
|
|
7,484
|
|
7,850
|
|
9,573
|
|
12,386
|
|
15,201
|
|
Impairment allowances
|
|
|
|
|
|
|
|
|
|
|
|
–
individually assessed
|
|
4,960
|
|
4,932
|
|
5,420
|
|
6,244
|
|
7,130
|
|
–
collectively assessed
|
|
2,524
|
|
2,918
|
|
4,153
|
|
6,142
|
|
8,071
|
|
Impairment allowances at 31 Dec
|
|
7,484
|
|
7,850
|
|
9,573
|
|
12,386
|
|
15,201
|
|
Country distribution of outstandings and
cross-border exposures
|
144
|
HSBC Holdings plc
|
In-country foreign currency and cross-border amounts outstanding
|
|||||||||
|
|
Banks
|
|
Government
and official institutions |
|
Other
|
|
Total
|
|
|
Footnotes
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
At 31 Dec 2017
|
|
|
|
|
|
|
|
|
|
US
|
|
5.8
|
|
29.5
|
|
37.6
|
|
72.9
|
|
Mainland China
|
|
25.5
|
|
10.3
|
|
30.3
|
|
66.1
|
|
UK
|
|
21.4
|
|
4.8
|
|
33.7
|
|
59.9
|
|
Japan
|
|
16.7
|
|
26.5
|
|
13.3
|
|
56.5
|
|
Hong Kong
|
|
4.3
|
|
0.3
|
|
39.3
|
|
43.9
|
|
Germany
|
|
10.8
|
|
8.8
|
|
10.7
|
|
30.3
|
|
France
|
|
6.9
|
|
4.7
|
|
14.1
|
|
25.7
|
|
Singapore
|
1
|
2.9
|
|
5.7
|
|
11.9
|
|
20.5
|
|
Canada
|
1
|
7.3
|
|
6.8
|
|
5.8
|
|
19.9
|
|
|
|
|
|
|
|
|
|
|
|
At 31 Dec 2016
|
|
|
|
|
|
|
|
|
|
US
|
|
4.4
|
|
41.9
|
|
19.5
|
|
65.8
|
|
Mainland China
|
|
20.8
|
|
9.2
|
|
24.3
|
|
54.3
|
|
UK
|
|
21.0
|
|
9.3
|
|
24.0
|
|
54.3
|
|
Japan
|
|
10.5
|
|
22.6
|
|
9.9
|
|
43.0
|
|
Hong Kong
|
|
4.5
|
|
0.4
|
|
32.1
|
|
37.0
|
|
Germany
|
|
12.3
|
|
19.9
|
|
8.1
|
|
40.3
|
|
France
|
|
6.4
|
|
8.1
|
|
12.1
|
|
26.6
|
|
Singapore
|
1
|
4.2
|
|
3.0
|
|
9.6
|
|
16.8
|
|
Canada
|
1
|
5.9
|
|
8.0
|
|
6.7
|
|
20.6
|
|
|
|
|
|
|
|
|
|
|
|
At 31 Dec 2015
|
|
|
|
|
|
|
|
|
|
US
|
|
4.7
|
|
51.3
|
|
24.7
|
|
80.7
|
|
Mainland China
|
|
21.2
|
|
6.8
|
|
26.0
|
|
54.0
|
|
UK
|
|
23.1
|
|
9.2
|
|
25.3
|
|
57.6
|
|
Japan
|
|
7.6
|
|
19.4
|
|
14.4
|
|
41.4
|
|
Hong Kong
|
|
3.1
|
|
0.5
|
|
30.0
|
|
33.6
|
|
Germany
|
|
7.0
|
|
23.1
|
|
6.9
|
|
37.0
|
|
France
|
1
|
4.2
|
|
7.1
|
|
13.0
|
|
24.3
|
|
Singapore
|
1
|
6.4
|
|
0.8
|
|
9.4
|
|
16.6
|
|
Canada
|
1
|
6.2
|
|
8.3
|
|
7.5
|
|
22.0
|
|
1
|
These balances were between 0.75% and 1% of total assets. All other balances were above 1%. Singapore balances in 2016 and 2015 were below 0.75% and have been included for comparative purposes.
|
HSBC Holdings plc
|
145
|
Operating entities’ LCRs
|
|||
|
|
At
|
|
|
|
31 Dec
|
31 Dec
|
|
|
2017
|
2016
|
|
Footnotes
|
%
|
%
|
HSBC UK liquidity group
|
46
|
139
|
123
|
The Hongkong and Shanghai Banking Corporation – Hong Kong Branch
|
47
|
151
|
185
|
The Hongkong and Shanghai Banking Corporation – Singapore Branch
|
47
|
181
|
154
|
HSBC Bank USA
|
|
132
|
130
|
HSBC France
|
48
|
149
|
122
|
Hang Seng Bank
|
|
204
|
218
|
HSBC Canada
|
48
|
123
|
142
|
HSBC Bank China
|
|
162
|
253
|
HSBC Middle East – UAE Branch
|
|
197
|
241
|
HSBC Mexico
|
|
215
|
177
|
HSBC Private Bank
|
|
220
|
178
|
Operating entities’ NSFRs
|
|||
|
|
At
|
|
|
|
31 Dec
|
31 Dec
|
|
|
2017
|
2016
|
|
Footnotes
|
%
|
%
|
HSBC UK liquidity group
|
46
|
108
|
116
|
The Hongkong and Shanghai Banking Corporation – Hong Kong Branch
|
47
|
144
|
157
|
The Hongkong and Shanghai Banking Corporation – Singapore Branch
|
47
|
117
|
112
|
HSBC Bank USA
|
|
129
|
120
|
HSBC France
|
48
|
116
|
120
|
Hang Seng Bank
|
|
155
|
162
|
HSBC Canada
|
48
|
136
|
139
|
HSBC Bank China
|
|
148
|
149
|
HSBC Middle East – UAE Branch
|
|
143
|
141
|
HSBC Mexico
|
|
123
|
128
|
HSBC Private Bank
|
|
185
|
155
|
146
|
HSBC Holdings plc
|
Funding sources and uses
|
||||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Sources
|
|
|
||
Customer accounts
|
1,364,462
|
|
1,272,386
|
|
Deposits by banks
|
69,922
|
|
59,939
|
|
Repurchase agreements – non-trading
|
130,002
|
|
88,958
|
|
Debt securities in issue
|
64,546
|
|
65,915
|
|
Liabilities of disposal groups held for sale
|
1,286
|
|
2,790
|
|
Subordinated liabilities
|
19,826
|
|
20,984
|
|
Financial liabilities designated at fair value
|
94,429
|
|
86,832
|
|
Liabilities under insurance contracts
|
85,667
|
|
75,273
|
|
Trading liabilities
|
184,361
|
|
153,691
|
|
– repos
|
2,255
|
|
1,428
|
|
– stock lending
|
8,363
|
|
3,643
|
|
– settlement accounts
|
11,198
|
|
15,271
|
|
– other trading liabilities
|
162,545
|
|
133,349
|
|
Total equity
|
197,871
|
|
182,578
|
|
At 31 Dec
|
2,212,372
|
|
2,009,346
|
|
Uses
|
|
|
||
Loans and advances to customers
|
962,964
|
|
861,504
|
|
Loans and advances to banks
|
90,393
|
|
88,126
|
|
Reverse repurchase agreements – non-trading
|
201,553
|
|
160,974
|
|
Assets held for sale
|
781
|
|
4,389
|
|
Trading assets
|
287,995
|
|
235,125
|
|
– reverse repos
|
10,224
|
|
4,780
|
|
– stock borrowing
|
6,895
|
|
5,427
|
|
– settlement accounts
|
15,258
|
|
17,850
|
|
– other trading assets
|
255,618
|
|
207,068
|
|
Financial investments
|
389,076
|
|
436,797
|
|
Cash and balances with central banks
|
180,624
|
|
128,009
|
|
Net deployment in other balance sheet assets and liabilities
|
98,986
|
|
94,422
|
|
At 31 Dec
|
2,212,372
|
|
2,009,346
|
|
HSBC Holdings plc
|
147
|
148
|
HSBC Holdings plc
|
HSBC Holdings plc
|
149
|
Cash flows payable by HSBC Holdings under financial liabilities by remaining contractual maturities
|
||||||||||
(Audited)
|
||||||||||
|
On
demand |
|
Due within
3 months |
|
Due between
3 and 12 months |
|
Due between
1 and 5 years |
|
Due after
5 years |
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Amounts owed to HSBC undertakings
|
—
|
|
2,525
|
|
46
|
|
—
|
|
—
|
|
Financial liabilities designated at fair value
|
—
|
|
286
|
|
875
|
|
16,554
|
|
19,465
|
|
Derivatives
|
2,008
|
|
—
|
|
—
|
|
293
|
|
781
|
|
Debt securities in issue
|
—
|
|
232
|
|
1,787
|
|
13,975
|
|
26,452
|
|
Subordinated liabilities
|
—
|
|
2,113
|
|
537
|
|
2,852
|
|
20,944
|
|
Other financial liabilities
|
—
|
|
849
|
|
200
|
|
—
|
|
—
|
|
|
2,008
|
|
6,005
|
|
3,445
|
|
33,674
|
|
67,642
|
|
Loan commitments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Financial guarantees and similar contracts
|
7,778
|
|
—
|
|
—
|
|
—
|
|
—
|
|
At 31 Dec 2017
|
9,786
|
|
6,005
|
|
3,445
|
|
33,674
|
|
67,642
|
|
|
|
|
|
|
|
|||||
Amounts owed to HSBC undertakings
|
—
|
|
2,051
|
|
—
|
|
105
|
|
—
|
|
Financial liabilities designated at fair value
|
—
|
|
314
|
|
960
|
|
11,964
|
|
25,665
|
|
Derivatives
|
3,841
|
|
—
|
|
—
|
|
592
|
|
592
|
|
Debt securities in issue
|
—
|
|
157
|
|
478
|
|
8,393
|
|
19,164
|
|
Subordinated liabilities
|
—
|
|
196
|
|
598
|
|
4,461
|
|
20,899
|
|
Other financial liabilities
|
—
|
|
1,343
|
|
164
|
|
—
|
|
—
|
|
|
3,841
|
|
4,061
|
|
2,200
|
|
25,515
|
|
66,320
|
|
Loan commitments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Financial guarantees and similar contracts
|
7,619
|
|
—
|
|
—
|
|
—
|
|
—
|
|
At 31 Dec 2016
|
11,460
|
|
4,061
|
|
2,200
|
|
25,515
|
|
66,320
|
|
Market risk profile
|
|
|
Page
|
Market risk in 2017
|
|
Trading portfolios
|
|
Non-trading portfolios
|
|
Market risk balance sheet linkages
|
|
Structural foreign exchange exposures
|
|
Net interest income sensitivity
|
|
Sensitivity of capital and reserves
|
|
Third-party assets in Balance Sheet Management
|
|
Defined benefit pension schemes
|
|
Additional market risk measures applicable only to the parent company
|
•
|
trading portfolios; and
|
•
|
non-trading portfolios.
|
150
|
HSBC Holdings plc
|
Daily VaR (trading portfolios), 99% 1 day ($m)
|
HSBC Holdings plc
|
151
|
Daily VaR (non-trading portfolios), 99% 1 day ($m)
|
Fair value of equity securities
|
|||||
(Audited)
|
|||||
|
|
2017
|
|
2016
|
|
|
Footnotes
|
$bn
|
|
$bn
|
|
Private equity holdings
|
53
|
1.0
|
|
1.2
|
|
Investment to facilitate ongoing business
|
54
|
1.6
|
|
1.5
|
|
Other strategic investments
|
|
1.3
|
|
2.0
|
|
At 31 Dec
|
|
3.9
|
|
4.7
|
|
152
|
HSBC Holdings plc
|
1
|
At 31 December, we maintained forward foreign exchange contracts of $5bn (2016: $5bn) in order to manage our sterling structural foreign exchange exposure.
|
•
|
a series of four quarterly parallel shocks of 25 basis points to the current market-implied path of interest rates across all currencies at the beginning of each quarter from 1 January 2018 (effect over 1 year);
|
•
|
an immediate shock of 25 basis points to the current market-implied path of interest rates across all currencies on 1 January 2018 (effects over 1 year and 5 years); and
|
•
|
an immediate shock of 100 basis points to the current market-implied path of interest rates across all currencies on 1 January 2018 (effects over 1 year and 5 years).
|
HSBC Holdings plc
|
153
|
NII sensitivity to an instantaneous change in yield curves (5 years)
|
||||||||||||
|
|
|
|
|
|
|
||||||
|
Year 1
|
|
Year 2
|
|
Year 3
|
|
Year 4
|
|
Year 5
|
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
+25bps parallel
|
806
|
|
1,153
|
|
1,326
|
|
1,439
|
|
1,507
|
|
6,231
|
|
-25bps parallel
|
(925
|
)
|
(872
|
)
|
(1,154
|
)
|
(1,271
|
)
|
(1,381
|
)
|
(5,603
|
)
|
+100bps parallel
|
3,299
|
|
4,463
|
|
5,105
|
|
5,472
|
|
5,759
|
|
24,098
|
|
-100bps parallel
|
(4,201
|
)
|
(4,538
|
)
|
(5,102
|
)
|
(5,498
|
)
|
(5,813
|
)
|
(25,152
|
)
|
154
|
HSBC Holdings plc
|
HSBC Holdings – foreign exchange VaR
|
||||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
At 31 Dec
|
78.9
|
|
32.1
|
|
Average
|
86.1
|
|
44.4
|
|
Minimum
|
74.9
|
|
32.1
|
|
Maximum
|
101.2
|
|
58.2
|
|
HSBC Holdings plc
|
155
|
Repricing gap analysis of HSBC Holdings
|
||||||||||||
|
Total
|
|
Up to
1 year
|
|
From over
1 to 5 years
|
|
From over
5 to 10 years
|
|
More than
10 years
|
|
Non-interest
bearing
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Cash at bank and in hand:
|
|
|
|
|
|
|
||||||
– balances with HSBC undertakings
|
1,985
|
|
1,985
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Derivatives
|
2,388
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,388
|
|
Loans and advances to HSBC undertakings
|
88,571
|
|
63,237
|
|
6,027
|
|
12,521
|
|
3,351
|
|
3,435
|
|
Financial investments in HSBC undertakings
|
4,264
|
|
2,375
|
|
—
|
|
—
|
|
—
|
|
1,889
|
|
Investments in subsidiaries
|
92,930
|
|
4,866
|
|
2,640
|
|
|
—
|
|
85,424
|
|
|
Other assets
|
1,596
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,596
|
|
Total assets
|
191,734
|
|
72,463
|
|
8,667
|
|
12,521
|
|
3,351
|
|
94,732
|
|
Amounts owed to HSBC undertakings
|
(2,571
|
)
|
—
|
|
|
|
|
(2,571
|
)
|
|||
Financial liabilities designated at fair values
|
(30,890
|
)
|
—
|
|
(12,895
|
)
|
(10,175
|
)
|
(4,453
|
)
|
(3,367
|
)
|
Derivatives
|
(3,082
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(3,082
|
)
|
Debt securities in issue
|
(34,258
|
)
|
(8,433
|
)
|
(9,017
|
)
|
(14,517
|
)
|
(3,351
|
)
|
1,060
|
|
Other liabilities
|
(1,269
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,269
|
)
|
Subordinated liabilities
|
(15,877
|
)
|
(1,918
|
)
|
(1,798
|
)
|
(2,000
|
)
|
(9,713
|
)
|
(448
|
)
|
Total equity
|
(103,787
|
)
|
(7,450
|
)
|
(6,047
|
)
|
(8,899
|
)
|
(1,498
|
)
|
(79,893
|
)
|
Total liabilities and equity
|
(191,734
|
)
|
(17,801
|
)
|
(29,757
|
)
|
(35,591
|
)
|
(19,015
|
)
|
(89,570
|
)
|
Off-balance sheet items attracting interest rate sensitivity
|
|
(41,199
|
)
|
17,812
|
|
14,171
|
|
7,705
|
|
1,511
|
|
|
Net interest rate risk gap at 31 Dec 2017
|
|
13,463
|
|
(3,278
|
)
|
(8,899
|
)
|
(7,959
|
)
|
6,673
|
|
|
Cumulative interest rate gap
|
|
13,463
|
|
10,185
|
|
1,286
|
|
(6,673
|
)
|
—
|
|
|
|
|
|
|
|
|
|
||||||
Cash at bank and in hand:
|
|
|
|
|
|
|
||||||
– balances with HSBC undertakings
|
247
|
|
247
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Derivatives
|
2,148
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,148
|
|
Loans and advances to HSBC undertakings
|
77,421
|
|
72,288
|
|
279
|
|
405
|
|
—
|
|
4,449
|
|
Financial investments in HSBC undertakings
|
3,590
|
|
2,675
|
|
731
|
|
8
|
|
—
|
|
176
|
|
Investments in subsidiaries
|
95,850
|
|
4,751
|
|
2,445
|
|
—
|
|
—
|
|
88,654
|
|
Other assets
|
1,542
|
|
—
|
|
105
|
|
—
|
|
—
|
|
1,437
|
|
Total assets
|
180,798
|
|
79,961
|
|
3,560
|
|
413
|
|
—
|
|
96,864
|
|
Amounts owed to HSBC undertakings
|
(2,157
|
)
|
(105
|
)
|
|
|
|
(2,052
|
)
|
|||
Financial liabilities designated at fair values
|
(30,113
|
)
|
(1,109
|
)
|
(7,344
|
)
|
(12,588
|
)
|
(6,422
|
)
|
(2,650
|
)
|
Derivatives
|
(5,025
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(5,025
|
)
|
Debt securities in issue
|
(21,805
|
)
|
(4,199
|
)
|
(2,997
|
)
|
(11,708
|
)
|
(3,916
|
)
|
1,015
|
|
Other liabilities
|
(1,651
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,651
|
)
|
Subordinated liabilities
|
(15,189
|
)
|
—
|
|
(3,267
|
)
|
(2,000
|
)
|
(9,445
|
)
|
(477
|
)
|
Total equity
|
(104,858
|
)
|
(7,450
|
)
|
(3,500
|
)
|
(7,502
|
)
|
—
|
|
(86,406
|
)
|
Total liabilities and equity
|
(180,798
|
)
|
(12,863
|
)
|
(17,108
|
)
|
(33,798
|
)
|
(19,783
|
)
|
(97,246
|
)
|
Off-balance sheet items attracting interest rate sensitivity
|
|
(57,089
|
)
|
13,608
|
|
26,296
|
|
13,441
|
|
3,744
|
|
|
Net interest rate risk gap at 31 Dec 2016
1
|
|
10,009
|
|
60
|
|
(7,089
|
)
|
(6,342
|
)
|
3,362
|
|
|
Cumulative interest rate gap
|
|
10,009
|
|
10,069
|
|
2,980
|
|
(3,362
|
)
|
—
|
|
1
|
Investments in subsidiaries and equity have been allocated based on call dates for any callable bonds. The prior year figures have been amended to reflect this.
|
•
|
further developed controls to help ensure that we know our customers, ask the right questions, monitor transactions and escalate concerns to detect, prevent and deter financial crime risk;
|
•
|
implemented a number of initiatives to raise our standards in relation to the conduct of our business and other regulatory compliance-related initiatives, as described on page
117
of the ‘Regulatory compliance risk management’ section;
|
•
|
increased monitoring and enhanced detective controls to manage those fraud risks which arise from new technologies and new ways of banking;
|
•
|
strengthened internal security controls to prevent cyber-attacks;
|
•
|
improved controls and security to protect customers when using digital channels; and
|
•
|
enhanced our third-party risk management capability to enable the consistent risk assessment of any third-party service.
|
156
|
HSBC Holdings plc
|
HSBC Holdings plc
|
157
|
Balance sheet of insurance manufacturing subsidiaries by type of contract
55
|
|||||||||||
(Audited)
|
|
|
|
|
|
|
|||||
|
|
With
DPF
|
|
Unit-linked
|
|
Other contracts
64
|
|
Shareholder
assets and liabilities |
|
Total
|
|
|
Footnotes
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Financial assets
|
|
65,112
|
|
9,081
|
|
14,849
|
|
6,662
|
|
95,704
|
|
– trading assets
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
– financial assets designated at fair value
|
|
15,533
|
|
8,814
|
|
2,951
|
|
1,259
|
|
28,557
|
|
– derivatives
|
|
286
|
|
—
|
|
13
|
|
41
|
|
340
|
|
– financial investments – HTM
|
57
|
29,302
|
|
—
|
|
6,396
|
|
3,331
|
|
39,029
|
|
– financial investments – AFS
|
57
|
15,280
|
|
—
|
|
4,836
|
|
1,877
|
|
21,993
|
|
– other financial assets
|
58
|
4,711
|
|
267
|
|
653
|
|
154
|
|
5,785
|
|
Reinsurance assets
|
|
1,108
|
|
274
|
|
1,154
|
|
—
|
|
2,536
|
|
PVIF
|
59
|
—
|
|
—
|
|
—
|
|
6,610
|
|
6,610
|
|
Other assets and investment properties
|
|
1,975
|
|
2
|
|
164
|
|
1,126
|
|
3,267
|
|
Total assets
|
|
68,195
|
|
9,357
|
|
16,167
|
|
14,398
|
|
108,117
|
|
Liabilities under investment contracts designated at fair value
|
|
—
|
|
1,750
|
|
3,885
|
|
—
|
|
5,635
|
|
Liabilities under insurance contracts
|
|
67,137
|
|
7,548
|
|
10,982
|
|
—
|
|
85,667
|
|
Deferred tax
|
60
|
14
|
|
6
|
|
9
|
|
1,230
|
|
1,259
|
|
Other liabilities
|
|
—
|
|
—
|
|
—
|
|
3,325
|
|
3,325
|
|
Total liabilities
|
|
67,151
|
|
9,304
|
|
14,876
|
|
4,555
|
|
95,886
|
|
Total equity
|
|
—
|
|
—
|
|
—
|
|
12,231
|
|
12,231
|
|
Total liabilities and equity at 31 Dec 2017
|
|
67,151
|
|
9,304
|
|
14,876
|
|
16,786
|
|
108,117
|
|
Financial assets
|
|
57,004
|
|
8,877
|
|
13,021
|
|
5,141
|
|
84,043
|
|
– trading assets
|
|
—
|
|
—
|
|
2
|
|
—
|
|
2
|
|
– financial assets designated at fair value
|
|
12,134
|
|
8,592
|
|
2,889
|
|
684
|
|
24,299
|
|
– derivatives
|
|
212
|
|
2
|
|
13
|
|
46
|
|
273
|
|
– financial investments – HTM
|
57
|
25,867
|
|
—
|
|
5,329
|
|
2,919
|
|
34,115
|
|
– financial investments – AFS
|
57
|
14,359
|
|
—
|
|
4,206
|
|
1,355
|
|
19,920
|
|
– other financial assets
|
58
|
4,432
|
|
283
|
|
582
|
|
137
|
|
5,434
|
|
Reinsurance assets
|
|
498
|
|
322
|
|
1,048
|
|
—
|
|
1,868
|
|
PVIF
|
59
|
—
|
|
—
|
|
—
|
|
6,502
|
|
6,502
|
|
Other assets and investment properties
|
|
1,716
|
|
5
|
|
171
|
|
525
|
|
2,417
|
|
Total assets
|
|
59,218
|
|
9,204
|
|
14,240
|
|
12,168
|
|
94,830
|
|
Liabilities under investment contracts designated at fair value
|
|
—
|
|
2,197
|
|
3,805
|
|
—
|
|
6,002
|
|
Liabilities under insurance contracts
|
|
58,800
|
|
6,949
|
|
9,524
|
|
—
|
|
75,273
|
|
Deferred tax
|
60
|
13
|
|
3
|
|
7
|
|
1,166
|
|
1,189
|
|
Other liabilities
|
|
—
|
|
—
|
|
—
|
|
1,805
|
|
1,805
|
|
Total liabilities
|
|
58,813
|
|
9,149
|
|
13,336
|
|
2,971
|
|
84,269
|
|
Total equity
|
|
—
|
|
—
|
|
—
|
|
10,561
|
|
10,561
|
|
Total liabilities and equity at 31 Dec 2016
|
|
58,813
|
|
9,149
|
|
13,336
|
|
13,532
|
|
94,830
|
|
158
|
HSBC Holdings plc
|
HSBC Holdings plc
|
159
|
Financial return guarantees
55
|
|||||||||
(Audited)
|
|||||||||
|
|
2017
|
2016
|
||||||
|
|
Investment returns implied by guarantee
|
Long-term investment returns on relevant portfolios
|
Cost of guarantees
|
|
Investment returns implied by guarantee
|
Long-term investment returns on relevant portfolios
|
Cost of guarantees
|
|
|
Footnote
|
%
|
%
|
$m
|
|
%
|
%
|
$m
|
|
Capital
|
|
0.0
|
0.0–3.2
|
103
|
|
0.0
|
0.0–3.0
|
59
|
|
Nominal annual return
|
|
0.1–2.0
|
3.2–3.7
|
64
|
|
0.1–2.0
|
3.7–3.8
|
64
|
|
Nominal annual return
|
62
|
2.1–4.0
|
3.2–4.4
|
459
|
|
2.1–4.0
|
3.0–4.4
|
426
|
|
Nominal annual return
|
|
4.1–5.0
|
3.2–4.1
|
70
|
|
4.1–5.0
|
3.0–4.1
|
76
|
|
At 31 Dec
|
|
|
|
696
|
|
|
|
625
|
|
•
|
risk associated with credit spread volatility and default by debt security counterparties after investing premiums to generate a return for policyholders and shareholders; and
|
•
|
risk of default by reinsurance counterparties and non-reimbursement for claims made after ceding insurance risk.
|
160
|
HSBC Holdings plc
|
Expected maturity of insurance contract liabilities
55
|
||||||||||
(Audited)
|
||||||||||
|
Expected cash flows (undiscounted)
|
|||||||||
|
Within 1 year
|
|
1-5 years
|
|
5-15 years
|
|
Over 15 years
|
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Unit-linked
|
969
|
|
3,041
|
|
4,695
|
|
6,814
|
|
15,519
|
|
With DPF and Other contracts
|
6,916
|
|
26,453
|
|
43,784
|
|
45,334
|
|
122,487
|
|
At 31 Dec 2017
|
7,885
|
|
29,494
|
|
48,479
|
|
52,148
|
|
138,006
|
|
|
|
|
|
|
|
|||||
Unit-linked
|
630
|
|
2,468
|
|
5,101
|
|
9,513
|
|
17,712
|
|
With DPF and Other contracts
|
5,582
|
|
23,136
|
|
40,621
|
|
40,447
|
|
109,786
|
|
At 31 Dec 2016
|
6,212
|
|
25,604
|
|
45,722
|
|
49,960
|
|
127,498
|
|
Sensitivity analysis
|
||||
(Audited)
|
||||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Effect on profit after tax and total equity
at 31 Dec |
|
|
||
10% increase in mortality and/or morbidity rates
|
(77
|
)
|
(71
|
)
|
10% decrease in mortality and/or morbidity rates
|
82
|
|
75
|
|
10% increase in lapse rates
|
(93
|
)
|
(80
|
)
|
10% decrease in lapse rates
|
106
|
|
93
|
|
10% increase in expense rates
|
(92
|
)
|
(89
|
)
|
10% decrease in expense rates
|
91
|
|
87
|
|
Footnotes to Risk
|
45
|
2016 includes loan impairment charges from the operations in Brazil that we sold on 1 July 2016.
|
46
|
The HSBC UK Liquidity Group shown comprises four legal entities: HSBC Bank plc (including all overseas branches, and SPEs consolidated by HSBC Bank plc for Financial Statement purposes), Marks and Spencer Financial Services plc, HSBC Private Bank (UK) Ltd and HSBC Trust Company (UK) Limited, managed as a single operating entity, in line with the application of UK liquidity regulation as agreed with the UK PRA.
|
47
|
The Hongkong and Shanghai Banking Corporation – Hong Kong branch and The Hongkong and Shanghai Banking Corporation – Singapore branch represent the material activities of The Hongkong and Shanghai Banking Corporation. Each branch is monitored and controlled for liquidity and funding risk purposes as a stand-alone operating entity.
|
48
|
HSBC France and HSBC Canada represent the consolidated banking operations of the Group in France and Canada, respectively. HSBC France and HSBC Canada are each managed as single distinct operating entities for liquidity purposes.
|
49
|
The total shown for other principal HSBC operating entities represents the combined position of all the other operating entities overseen directly by the Risk Management Meeting of the GMB.
|
50
|
Trading portfolios comprise positions arising from the market-making and warehousing of customer-derived positions.
|
51
|
Portfolio diversification is the market risk dispersion effect of holding a portfolio containing different risk types. It represents the reduction in unsystematic market risk that occurs when combining a number of different risk types; for example, interest rate, equity and foreign exchange, together in one portfolio. It is measured as the difference between the sum of the VaR by individual risk type and the combined total VaR. A negative number represents the benefit of portfolio diversification. As the maximum and minimum occurs on different days for different risk types, it is not meaningful to calculate a portfolio diversification benefit for these measures.
|
52
|
The total VaR is non-additive across risk types due to diversification effects.
|
53
|
Investments in private equity are primarily made through managed funds that are subject to limits on the amount of investment. Potential new commitments are subject to risk appraisal to ensure that industry and geographical concentrations remain within acceptable levels for the portfolio as a whole. Regular reviews are performed to substantiate the valuation of the investments within the portfolio.
|
54
|
Investments held to facilitate ongoing business include holdings in government-sponsored enterprises and local stock exchanges.
|
55
|
Does not include associated insurance companies SABB Takaful Company and Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited.
|
56
|
‘Other Contracts’ includes term insurance, credit life insurance, universal life insurance and investment contracts not included in the ‘Unit-linked’ or ‘With DPF’ columns.
|
57
|
Financial investments held to maturity (‘HTM’) and available for sale (‘AFS’).
|
58
|
Comprise mainly loans and advances to banks, cash and inter-company balances with other non-insurance legal entities.
|
59
|
Present value of in-force long-term insurance business.
|
60
|
‘Deferred tax’ includes the deferred tax liabilities arising on recognition of PVIF.
|
61
|
HSBC has no insurance manufacturing subsidiaries in Middle East and North Africa or North America.
|
62
|
A block of contracts in France with guaranteed nominal annual returns in the range 1.25%-3.72% is reported entirely in the 2.1%-4.0% category in line with the average guaranteed return of 2.6% offered to policyholders by these contracts.
|
63
|
For 2016, where a -100 basis point parallel shift in the yield curve would result in a negative interest rate, the effects on profit after tax and total equity have been calculated using a minimum rate of 0%.
|
HSBC Holdings plc
|
161
|
Capital overview
|
Capital ratios
|
||||
|
At
|
|||
|
31 Dec
|
|
31 Dec
|
|
|
2017
|
|
2016
|
|
|
%
|
|
%
|
|
CRD IV transitional
|
|
|
||
Common equity tier 1 ratio
|
14.5
|
|
13.6
|
|
Tier 1 ratio
|
17.3
|
|
16.1
|
|
Total capital ratio
|
20.9
|
|
20.1
|
|
|
|
|
||
CRD IV end point
|
|
|
||
Common equity tier 1 ratio
|
14.5
|
|
13.6
|
|
Tier 1 ratio
|
16.4
|
|
14.9
|
|
Total capital ratio
|
18.3
|
|
16.8
|
|
RWAs by risk types
|
||||
|
RWAs
|
|
Capital required
1
|
|
|
$bn
|
|
$bn
|
|
Credit risk
|
685.2
|
|
54.8
|
|
Counterparty credit risk
|
54.5
|
|
4.4
|
|
Market risk
|
38.9
|
|
3.1
|
|
Operational risk
|
92.7
|
|
7.4
|
|
At 31 Dec 2017
|
871.3
|
|
69.7
|
|
1
|
‘Capital required’ represents the Pillar 1 capital charge at 8% of RWAs.
|
Capital management
|
162
|
HSBC Holdings plc
|
Capital
|
*
|
The references identify the lines prescribed in the EBA template, which are applicable and where there is a value.
|
1
|
In the comparative period, dividend paid has been reallocated from row 2 to row 5a.
|
HSBC Holdings plc
|
163
|
•
|
$
3.7
bn of capital generation through profits, net of dividends and scrip;
|
•
|
$
6.3
bn of favourable foreign currency translation differences;
|
•
|
regulatory netting of $
1.5
bn;
|
•
|
a decrease of $
1.3
bn in the deduction for excess expected loss; and
|
•
|
an increase of $
1.0
bn in the value of minority interests allowed in CET1.
|
•
|
the
$3.0b
n share buy-back; and
|
•
|
a $
1.2
bn decrease as a result of the change in US tax legislation; this change also reduces RWAs by
$3.1b
n.
|
Risk-weighted assets
|
•
|
the treatment of non-performing exposures of $5.0bn;
|
•
|
the netting of current accounts of $2.1bn;
|
•
|
non-recourse purchased receivables of $1.6bn; and
|
•
|
risk-weight floors for HK residential mortgages of $0.6bn
.
|
RWAs by global business
|
||||||||||||
|
RBWM
|
|
CMB
|
|
GB&M
|
|
GPB
|
|
Corporate Centre
|
|
Total
|
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
Credit risk
|
94.2
|
|
277.3
|
|
180.2
|
|
13.0
|
|
120.5
|
|
685.2
|
|
Counterparty credit risk
|
—
|
|
—
|
|
52.4
|
|
0.2
|
|
1.9
|
|
54.5
|
|
Market risk
|
—
|
|
—
|
|
35.9
|
|
—
|
|
3.0
|
|
38.9
|
|
Operational risk
|
27.3
|
|
23.7
|
|
30.8
|
|
2.8
|
|
8.1
|
|
92.7
|
|
At 31 Dec 2017
|
121.5
|
|
301.0
|
|
299.3
|
|
16.0
|
|
133.5
|
|
871.3
|
|
|
|
|
|
|
|
|
||||||
Credit risk
|
84.6
|
|
250.6
|
|
170.8
|
|
12.2
|
|
137.5
|
|
655.7
|
|
Counterparty credit risk
|
—
|
|
—
|
|
59.1
|
|
0.2
|
|
2.7
|
|
62.0
|
|
Market risk
|
—
|
|
—
|
|
38.5
|
|
—
|
|
3.0
|
|
41.5
|
|
Operational risk
|
30.5
|
|
25.3
|
|
32.0
|
|
2.9
|
|
7.3
|
|
98.0
|
|
At 31 Dec 2016
|
115.1
|
|
275.9
|
|
300.4
|
|
15.3
|
|
150.5
|
|
857.2
|
|
1
|
RWAs are non-additive across geographical regions due to market risk diversification effects within the Group.
|
164
|
HSBC Holdings plc
|
RWA movement by global business by key driver
|
||||||||||||||
|
Credit risk, counterparty credit risk and operational risk
|
|
|
|||||||||||
|
RBWM
|
|
CMB
|
|
GB&M
|
|
GPB
|
|
Corporate Centre
|
|
Market
risk
|
|
Total
RWAs
|
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
RWAs at 1 Jan 2017
|
115.1
|
|
275.9
|
|
261.9
|
|
15.3
|
|
147.5
|
|
41.5
|
|
857.2
|
|
RWA initiatives
|
(0.4
|
)
|
(13.8
|
)
|
(27.6
|
)
|
(0.2
|
)
|
(24.8
|
)
|
(4.0
|
)
|
(70.8
|
)
|
Asset size
|
4.4
|
|
16.7
|
|
21.9
|
|
0.8
|
|
(0.6
|
)
|
5.2
|
|
48.4
|
|
Asset quality
|
0.2
|
|
1.5
|
|
(6.1
|
)
|
0.2
|
|
(0.4
|
)
|
—
|
|
(4.6
|
)
|
Model updates
|
1.1
|
|
5.0
|
|
0.3
|
|
(0.1
|
)
|
—
|
|
(0.1
|
)
|
6.2
|
|
– portfolios moving onto IRB approach
|
0.2
|
|
—
|
|
—
|
|
(0.1
|
)
|
—
|
|
(0.1
|
)
|
—
|
|
– new/updated models
|
0.9
|
|
5.0
|
|
0.3
|
|
—
|
|
—
|
|
—
|
|
6.2
|
|
Methodology and policy
|
(1.8
|
)
|
3.6
|
|
4.8
|
|
(0.5
|
)
|
5.8
|
|
(3.7
|
)
|
8.2
|
|
– internal updates
|
(2.5
|
)
|
3.6
|
|
4.8
|
|
(0.5
|
)
|
5.8
|
|
(3.7
|
)
|
7.5
|
|
– external updates – regulatory
|
0.7
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
0.7
|
|
Acquisitions and disposals
|
(0.1
|
)
|
(0.4
|
)
|
—
|
|
—
|
|
(0.5
|
)
|
—
|
|
(1.0
|
)
|
Foreign exchange movements
|
3.0
|
|
12.5
|
|
8.2
|
|
0.5
|
|
3.5
|
|
—
|
|
27.7
|
|
Total RWA movement
|
6.4
|
|
25.1
|
|
1.5
|
|
0.7
|
|
(17.0
|
)
|
(2.6
|
)
|
14.1
|
|
RWAs at 31 Dec 2017
|
121.5
|
|
301.0
|
|
263.4
|
|
16.0
|
|
130.5
|
|
38.9
|
|
871.3
|
|
Leverage ratio
|
|
|
At
|
|||
|
|
31 Dec
|
|
31 Dec
|
|
|
|
2017
|
|
2016
|
|
Ref
*
|
|
$bn
|
|
$bn
|
|
20
|
Tier 1 capital
|
142.7
|
|
127.3
|
|
21
|
Total leverage ratio exposure
|
2,557.1
|
|
2,354.4
|
|
|
|
%
|
|
%
|
|
22
|
Leverage ratio
|
5.6
|
|
5.4
|
|
EU-23
|
Choice of transitional arrangements for the definition of the capital measure
|
Fully phased-in
|
|
Fully phased-in
|
|
|
UK leverage ratio exposure – quarterly average
|
2,351.4
|
|
n/a
|
|
|
|
%
|
|
%
|
|
|
UK leverage ratio – quarterly average
|
6.1
|
|
n/a
|
|
|
UK leverage ratio – quarter end
|
6.1
|
|
5.7
|
|
*
|
The references identify the lines prescribed in the EBA template.
|
HSBC Holdings plc
|
165
|
Corporate Governance Report
|
|
|
Page
|
The Board
|
|
Operation of the Board
|
|
Director and Group Managing Director biographies
|
|
Board of Directors
|
|
Board committees
|
|
Internal control
|
|
Internal audit
|
|
Going concern
|
|
Share capital and other disclosures
|
|
Employees
|
|
Statement of compliance
|
The Board
|
Operation of the Board
|
166
|
HSBC Holdings plc
|
Non-executive Group Chairman
|
Mark E Tucker,
60
Non-executive Group Chairman
Appointed to the Board: September 2017
Group Chairman since October 2017
|
|
|
Executive Directors
|
Stuart Gulliver,
58
Group Chief Executive
Appointed to the Board: May 2008
Group Chief Executive since January 2011
Retiring from Board: 21 February 2018
|
|
|
Iain Mackay,
56
Group Finance Director
Appointed to the Board: December 2010
|
|
|
Marc Moses,
60
Group Chief Risk Officer
Appointed to the Board: January 2014
|
|
|
Independent non-executive Directors
|
Phillip Ameen,
69
Independent non-executive Director
Appointed to the Board: January 2015
|
|
|
Kathleen Casey,
51
Independent non-executive Director
Appointed to the Board: March 2014
|
|
|
HSBC Holdings plc
|
167
|
Laura Cha,
GBM, 68
Independent non-executive Director
Appointed to the Board: March 2011
|
|
|
Henri de Castries,
63
Independent non-executive Director
Appointed to the Board: March 2016
|
|
|
Lord Evans of Weardale,
60
Independent non-executive Director
Appointed to the Board: August 2013
|
|
|
Joachim Faber,
67
Independent non-executive Director
Appointed to the Board: March 2012
|
|
|
Irene Lee,
64
Independent non-executive Director
Appointed to the Board: July 2015
|
|
|
John Lipsky,
71
Independent non-executive Director
Appointed to the Board: March 2012
|
|
|
168
|
HSBC Holdings plc
|
Heidi Miller,
64
Independent non-executive Director
Appointed to the Board: September 2014
|
|
|
David Nish,
57
Independent non-executive Director
Appointed to the Board: May 2016
|
|
|
Jonathan Symonds,
CBE, 58
Independent non-executive Director
Appointed to the Board: April 2014
Senior Independent Director since April 2017
|
|
|
Jackson Tai,
67
Independent non-executive Director
Appointed to the Board: September 2016
|
|
|
Pauline van der Meer Mohr,
57
Independent non-executive Director
Appointed to the Board: September 2015
|
|
Group Company Secretary
|
Ben Mathews,
50
Group Company Secretary
|
|
|
HSBC Holdings plc
|
169
|
Group Chief Executive Designate
|
John Flint,
49
Group Chief Executive Designate
|
|
|
Group Managing Directors
|
Elaine Arden,
49
Group Head of Human Resources
|
Samir Assaf,
57
Chief Executive, Global Banking and Markets
|
Colin Bell,
50
Group Head of Financial Crime Risk
|
Peter Boyles,
62
Chief Executive Officer of Global Private Banking |
Patrick Burke,
56
President and Chief Executive Officer of HSBC USA
|
Pierre Goad,
56
Group Head of Global Communications
|
Pam Kaur,
54
Group Head of Internal Audit
|
Stuart Levey,
54
Chief Legal Officer
|
Andy Maguire,
51
Group Chief Operating Officer
|
Paulo Maia,
59
Chief Executive, Latin America
|
Charlie Nunn,
46
Chief Executive Officer, Retail Banking and Wealth Management
|
170
|
HSBC Holdings plc
|
Noel Quinn,
56
Chief Executive, Global Commercial Banking
|
Antonio Simoes,
42
Chief Executive, HSBC Bank plc
|
Peter Wong,
66
Deputy Chairman and Chief Executive,
The Hongkong and Shanghai Banking Corporation Limited
|
Board of Directors
|
HSBC Holdings plc
|
171
|
Board Committees
|
172
|
HSBC Holdings plc
|
2017 Board and Committee attendance
|
||||||||||||||||||
|
AGM
|
|
Board*
|
|
Group Audit
Committee
|
|
Group Risk
Committee
|
|
Group
Remuneration
Committee
|
|
Nomination
Committee
|
|
Financial
System
Vulnerabilities
Committee
|
|
Conduct &
Values
Committee
|
|
Philanthropic & Community Investment
Oversight Committee
|
|
Number of meetings held*
|
1
|
|
8
|
|
8
|
|
7
|
|
7
|
|
7
|
|
7
|
|
6
|
|
3
|
|
Group Chairman
|
|
|
|
|
|
|
|
|
|
|||||||||
Mark Tucker
1
|
n/a
|
|
3/3
|
|
—
|
|
—
|
|
—
|
|
2/2
|
|
—
|
|
—
|
|
—
|
|
Douglas Flint
2
|
1
|
|
6/6
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Executive Directors
|
|
|
|
|
|
|
|
|
|
|||||||||
Stuart Gulliver
|
1
|
|
8
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Iain Mackay
|
1
|
|
8
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Marc Moses
|
1
|
|
8
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Non-executive Directors
|
|
|
|
|
|
|
|
|
|
|||||||||
Phillip Ameen
|
1
|
|
8
|
|
8
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Kathleen Casey
|
1
|
|
8
|
|
8
|
|
—
|
|
—
|
|
—
|
|
7
|
|
—
|
|
—
|
|
Laura Cha
|
1
|
|
7
|
|
—
|
|
—
|
|
—
|
|
7
|
|
—
|
|
6
|
|
3
|
|
Henri de Castries
3
|
1
|
|
6
|
|
—
|
|
—
|
|
4/4
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Lord Evans of Weardale
|
1
|
|
7
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7
|
|
6
|
|
3
|
|
Joachim Faber
4
|
1
|
|
8
|
|
—
|
|
6
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Sam Laidlaw
5
|
1
|
|
3/3
|
|
—
|
|
—
|
|
2/2
|
|
2/2
|
|
—
|
|
—
|
|
—
|
|
Irene Lee
|
1
|
|
8
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
John Lipsky
|
1
|
|
8
|
|
—
|
|
7
|
|
7
|
|
7
|
|
—
|
|
—
|
|
—
|
|
Rachel Lomax
6
|
1
|
|
3/3
|
|
—
|
|
3/3
|
|
—
|
|
2/2
|
|
—
|
|
2/2
|
|
—
|
|
Heidi Miller
|
1
|
|
8
|
|
—
|
|
7
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
David Nish
7
|
1
|
|
6
|
|
8
|
|
—
|
|
4/4
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Jonathan Symonds
8
|
1
|
|
8
|
|
8
|
|
—
|
|
—
|
|
5/5
|
|
—
|
|
5
|
|
—
|
|
Jackson Tai
|
1
|
|
7
|
|
—
|
|
7
|
|
—
|
|
—
|
|
7
|
|
—
|
|
—
|
|
Pauline van der Meer Mohr
|
1
|
|
8
|
|
—
|
|
—
|
|
7
|
|
6
|
|
—
|
|
6
|
|
—
|
|
Paul Walsh
9
|
—
|
|
2/2
|
|
—
|
|
—
|
|
0/1
|
|
0/1
|
|
—
|
|
—
|
|
—
|
|
1
|
Appointed to the Board and as Chair of the Nomination Committee on 1 September 2017. Appointed as Group Chairman on 1 October 2017.
|
2
|
Resigned from the Board 30 September 2017.
|
3
|
Appointed to the Group Remuneration Committee 26 May 2017
|
4
|
Stepped down from the Group Risk Committee 30 November 2017.
|
5
|
Resigned from the Board 28 April 2017.
|
6
|
Resigned from the Board 28 April 2017.
|
7
|
Appointed to the Group Remuneration Committee 26 May 2017.
|
8
|
Appointed as interim Chair of the Nomination Committee from 28 April 2017 to 1 September 2017. Appointed as Senior Independent Director on 28 April 2017.
|
9
|
Resigned from the Board 21 April 2017.
|
Group Audit Committee
|
HSBC Holdings plc
|
173
|
174
|
HSBC Holdings plc
|
Group Risk Committee
|
HSBC Holdings plc
|
175
|
Financial System Vulnerabilities Committee
|
176
|
HSBC Holdings plc
|
Conduct & Values Committee
|
Group Remuneration Committee
|
Nomination Committee
|
HSBC Holdings plc
|
177
|
Philanthropic & Community Investment
Oversight Committee
|
Chairman’s Committee
|
Internal control
|
•
|
The Group’s Global Standards Manual (‘GSM’) outlines the core principles within which the Group must operate wherever we conduct business. The GSM overlays all other policies and procedures throughout the Group. The requirements of the GSM are mandatory, apply to and must be observed by all businesses within the Group, regardless of the nature or location of their activities.
|
•
|
Delegation of authority within limits set by the Board: subject to certain matters reserved for the Board, the Group Chief Executive has been delegated authority limits and powers within which to manage the day-to-day affairs of the Group, including the right to sub-delegate those limits and powers. Each relevant group managing director or executive Director has delegated authority within which to manage the day-to-day affairs of the business or function for which he or she is accountable. Delegation of authority from the Board requires those individuals to maintain a clear and appropriate apportionment of significant responsibilities and to oversee the establishment and maintenance of systems of control that are appropriate to their business or function. Authorities to enter into credit and market risk exposures are delegated with limits to line management of Group companies. The concurrence of the appropriate global function is required, however, to credit proposals with specified higher risk characteristics. Credit and market risks are measured and reported at subsidiary company level and aggregated for risk concentration analysis on a Group-wide basis.
|
•
|
Risk identification and monitoring: systems and procedures are in place to identify, assess, control and monitor the material risk types facing HSBC. The Group‘s risk measurement and reporting systems are designed to help ensure that risks are comprehensively captured with all the attributes necessary to support well-founded decisions, that those attributes are accurately assessed and that information is delivered in a timely manner for those risks to be successfully managed and mitigated.
|
•
|
Changes in market conditions/practices: processes are in place to identify new risks arising from changes in market conditions/practices or customer behaviours, which could expose the Group to heightened risk of loss or reputational damage. The Group employs a top and emerging risks framework at all levels of the organisation, which enables it to identify current and forward-looking risks and to take action which either prevents them materialising or limits their impact.
|
•
|
Responsibility for risk management: all employees are responsible for identifying and managing risk within the scope of their role as part of the three lines of defence model, which is an activity-based model to delineate management accountabilities and responsibilities for risk management and the control environment. The second line of defence sets the policy and guidelines for managing specific risk areas, provides advice and guidance in relation to the risk, and challenges the first line of defence (the risk owners) on effective risk management.
|
•
|
Strategic plans: strategic plans are prepared for global businesses, global functions and geographical regions within the framework of the Group’s overall strategy. Annual Operating Plans, informed by detailed analysis of risk appetite describing the types and quantum of risk that the Group is prepared to take in executing its strategy, are prepared and
|
178
|
HSBC Holdings plc
|
•
|
IT operations: centralised control is exercised over all IT developments and operations. Common systems are employed for similar business processes wherever practicable.
|
•
|
Subsidiary certifications to the GRC: half-yearly confirmations are provided to the GRC from the risk committees of principal subsidiary companies confirming that the committees have challenged management on the quality of the information provided, reviewed the actions proposed by management to address any emerging issues or trends indicating material divergence from the Group’s risk appetite and that the risk management and internal control systems in place are operating effectively.
|
•
|
Disclosure Committee: chaired by the Group Company Secretary, this Committee supports the discharge of the Group’s obligations under relevant legislation and regulation including the UK and Hong Kong Listing Rules, the Market Abuse Regulation and SEC rules. In so doing the Committee is empowered to determine whether a new event or circumstances should be disclosed, including the form and timing of such disclosure, and review all material disclosures made or to be made by the Group. The membership of the Disclosure Committee includes the Group Finance Director, Group Chief Risk Officer, Chief Legal Officer, Group Chief Accounting Officer, Group Head of Communications, Global Head of Investor Relations, Group Head of Strategy and Planning and Group Financial Controller. The integrity of disclosures is underpinned by structures and processes within the Global Finance and Global Risk functions that support rigorous analytical review of financial reporting and the maintenance of proper accounting records.
|
•
|
Financial reporting: the Group’s financial reporting process is controlled using documented accounting policies and reporting formats, supported by detailed instructions and guidance on reporting requirements, issued to all reporting entities within the Group in advance of each reporting period end. The submission of financial information from each reporting entity is subject to certification by the responsible financial officer, and analytical review procedures at reporting entity and Group levels.
|
•
|
Subsidiary certifications to the GAC: half-yearly confirmations are provided to the GAC from the audit committees of principal subsidiary companies regarding whether their financial statements have been prepared in accordance with Group policies, present fairly the state of affairs of the relevant principal subsidiary and are prepared on a going concern basis.
|
Internal audit
|
Going concern
|
•
|
Details of the Group’s business and operating models, and strategy.
|
•
|
Details of the Group’s approach to managing risk and allocating capital.
|
•
|
A summary of the Group’s financial performance, and its capital position and annual operating plan.
|
•
|
Enterprise-wide risk management reports, including the Group’s risk appetite profile (see page
95
), top and emerging risks (see page
95
) and risk map (see page
109
).
|
•
|
Reports and updates regarding regulatory and internal stress testing exercises (see page
109
). In 2017, the published Bank of England ('BoE') stress test results for HSBC showed that our capital ratios after taking account of CRD IV restrictions and strategic management actions exceeded the BoE’s requirements. The results for HSBC assumed no dividend payments in the first two years of the severe stress projection period.
|
•
|
Reports and updates from management on risk-related issues selected for in-depth consideration.
|
•
|
Reports and updates on the Group’s compliance-related initiatives connected to the resolution of the investigations by US and UK regulatory and law enforcement authorities in December 2012.
|
•
|
Reports and updates on regulatory developments.
|
•
|
Legal reports.
|
Share capital and other disclosures
|
HSBC Holdings plc
|
179
|
Month
|
Number
of shares
|
|
Highest price
paid per share
|
Lowest price
paid per share
|
Average price paid per share
|
Aggregate
price paid
|
|
|
£
|
£
|
£
|
£
|
|
First share buy-back of 2017
|
|
|
|
|
|
|
Feb-17
|
20,682,000
|
|
6.8080
|
6.4500
|
6.5677
|
135,833,224
|
Mar-17
|
77,853,860
|
|
6.7800
|
6.4070
|
6.5977
|
513,656,572
|
Apr-17
|
24,063,464
|
|
6.6360
|
6.4610
|
6.5390
|
157,350,841
|
|
122,599,324
|
|
|
|
|
806,840,637
|
Second share buy-back of 2017
|
|
|
|
|
|
|
Aug-17
|
49,649,445
|
|
7.7090
|
7.3010
|
7.4789
|
371,323,631
|
Sep-17
|
55,482,328
|
|
7.5260
|
7.0530
|
7.2806
|
403,943,040
|
Oct-17
|
53,192,769
|
|
7.6880
|
7.3400
|
7.4595
|
396,791,032
|
Nov-17
|
47,299,535
|
|
7.4650
|
7.2730
|
7.3513
|
347,711,753
|
|
205,624,077
|
|
|
|
|
1,519,769,456
|
180
|
HSBC Holdings plc
|
Scrip dividends
|
|||||||
|
HSBC Holdings
ordinary shares issued
|
Aggregate
nominal value
|
|
Market value per share
|
|||
|
on
|
number
|
|
$
|
|
$
|
£
|
Issued in lieu of
|
|
|
|
|
|
||
Fourth interim dividend for 2016
|
6 Apr 2017
|
241,151,585
|
|
120,575,793
|
|
8.0636
|
6.5160
|
First interim dividend for 2017
|
5 Jul 2017
|
95,501,245
|
|
47,750,623
|
|
8.6500
|
6.6610
|
Second interim dividend for 2017
|
20 Sep 2017
|
19,315,343
|
|
9,657,672
|
|
9.9680
|
7.6606
|
Third interim dividend for 2017
|
22 Nov 2017
|
24,684,023
|
|
12,342,012
|
|
9.8000
|
7.4434
|
All-employee share plans
|
|||||||||
|
Number
|
|
Aggregate
nominal
value
|
|
|
Exercise price
|
|||
from
|
|
to
|
|
||||||
|
|
$
|
|
|
|
|
|||
HSBC Holdings savings-related share option plans
|
|
|
|
|
|
||||
HSBC ordinary shares issued in £
|
8,935,312
|
|
4,467,656
|
|
£
|
4.0472
|
|
5.964
|
|
HSBC ordinary shares issued in HK$
|
377,804
|
|
188,902
|
|
HK$
|
55.4701
|
|
63.9864
|
|
HSBC ordinary shares issued in $
|
125,058
|
|
62,529
|
|
$
|
7.1456
|
|
8.2094
|
|
HSBC ordinary shares issued in €
|
64,712
|
|
32,356
|
|
€
|
5.3532
|
|
5.7974
|
|
Options over HSBC ordinary shares lapsed
|
6,301,579
|
|
3,150,790
|
|
|
|
|
||
Options over HSBC ordinary shares granted in response to approximately 14,932 applications from HSBC employees in the UK on 21
Sep 2017
|
10,447,272
|
|
|
|
|
|
|||
HSBC International Employee Share Purchase Plan
|
693,152
|
|
346,576
|
|
£
|
6.2620
|
|
7.6950
|
|
HSBC share plans
|
||||||||
|
HSBC Holdings
ordinary shares issued
|
|
Aggregate
nominal
value
|
|
Market value per share
|
|||
|
from
|
|
to
|
|
||||
|
|
$
|
|
£
|
|
£
|
|
|
Vesting of awards under the HSBC Share Plan and HSBC Share Plan 2011
|
66,505,211
|
|
33,252,606
|
|
6.4600
|
|
7.6880
|
|
•
|
BlackRock, Inc. gave notice on 18 October 2017 that on 16 October 2017 it had the following: an indirect interest in HSBC Holdings ordinary shares of 1,214,807,412; qualifying financial instruments with 52,830,499 voting rights that may be acquired if the instruments are exercised or converted; and financial instruments with a similar economic effect to qualifying financial instruments which refer to 6,978,758 voting rights, representing 6.06%, 0.26% and 0.03%, respectively, of
|
HSBC Holdings plc
|
181
|
•
|
Ping An Asset Management Co., Ltd. gave notice on 6 December 2017 that on 4 December 2017 it had an indirect interest in HSBC Holdings ordinary shares of 1,007,946,172, representing 5.04% of the total voting rights at that date.
|
•
|
BlackRock, Inc. gave notice on 30 December 2017 that on 28 December 2017 it had the following interests in HSBC Holdings ordinary shares: a long position of 1,424,882,481 shares and a short position of 6,642,872 shares, representing 7.01% and 0.03%, respectively, of the ordinary shares in issue at that date. Since 31 December 2017 and following interim notifications on 6 January and 15 January, BlackRock Inc. gave notice on 2 February 2018 that on 30 January 2018 it had the following interests in HSBC Holdings ordinary shares: a long position of 1,434,324,764 shares and a short position of 5,356,892 shares, representing 7.06% and 0.03%, respectively, of the ordinary shares in issue at that date; and
|
•
|
Ping An Asset Management Co., Ltd. gave notice on 6 December 2017 that on 5 December 2017 it had a long position of 1,017,946,172 in HSBC Holdings ordinary shares, representing 5.01% of the ordinary shares in issue at that date. Since 31 December 2017, Ping An Asset Management Co., Ltd. gave notice on 13 February 2018 that on 9 February 2018 it had a long position of 1,253,254,972 in HSBC Holdings ordinary shares, representing 6.17% of the ordinary shares in issue at that date.
|
182
|
HSBC Holdings plc
|
Directors’ interests – shares and debentures
|
|||||||||||||
|
|
|
At 31 Dec 2017
|
||||||||||
|
Footnotes
|
At 1 Jan
2017
|
|
Beneficial
owner
|
|
Child
under 18
or spouse
|
|
Jointly with another person
|
|
Trustee
|
|
Total
interests
|
|
HSBC Holdings ordinary shares
|
|
|
|
|
|
|
|
||||||
Phillip Ameen
|
1
|
5,000
|
|
5,000
|
|
—
|
|
—
|
|
—
|
|
5,000
|
|
Kathleen Casey
|
1
|
8,620
|
|
9,125
|
|
—
|
|
—
|
|
—
|
|
9,125
|
|
Laura Cha
|
2
|
13,200
|
|
10,200
|
|
8,000
|
|
—
|
|
—
|
|
18,200
|
|
Henri de Castries
|
|
16,165
|
|
17,116
|
|
—
|
|
—
|
|
—
|
|
17,116
|
|
Lord Evans of Weardale
|
|
9,170
|
|
12,892
|
|
—
|
|
—
|
|
—
|
|
12,892
|
|
Joachim Faber
|
|
66,605
|
|
66,605
|
|
—
|
|
—
|
|
—
|
|
66,605
|
|
Stuart Gulliver
|
3
|
3,344,208
|
|
3,534,284
|
|
176,885
|
|
—
|
|
—
|
|
3,711,169
|
|
Irene Lee
|
|
10,000
|
|
10,588
|
|
—
|
|
—
|
|
—
|
|
10,588
|
|
John Lipsky
|
1
|
16,165
|
|
16,165
|
|
—
|
|
—
|
|
—
|
|
16,165
|
|
Iain Mackay
|
3
|
345,469
|
|
442,118
|
|
—
|
|
—
|
|
—
|
|
442,118
|
|
Heidi Miller
|
1
|
3,975
|
|
4,200
|
|
—
|
|
—
|
|
—
|
|
4,200
|
|
Marc Moses
|
3
|
824,241
|
|
1,207,068
|
|
—
|
|
—
|
|
—
|
|
1,207,068
|
|
David Nish
|
|
50,000
|
|
—
|
|
50,000
|
|
—
|
|
—
|
|
50,000
|
|
Jonathan Symonds
|
|
21,771
|
|
37,936
|
|
4,885
|
|
—
|
|
—
|
|
42,821
|
|
Jackson Tai
|
1, 4
|
31,605
|
|
12,900
|
|
10,350
|
|
21,575
|
|
—
|
|
44,825
|
|
Mark Tucker
|
|
—
|
|
276,000
|
|
—
|
|
—
|
|
—
|
|
276,000
|
|
Pauline van der Meer Mohr
|
|
15,000
|
|
15,000
|
|
—
|
|
—
|
|
—
|
|
15,000
|
|
1
|
Phillip Ameen has an interest in 1,000, Kathleen Casey has an interest in 1,825, John Lipsky has an interest in 3,233, Heidi Miller has an interest in 840 and Jackson Tai has an interest in 8,965 listed ADS, which are categorised as equity derivatives under Part XV of the Securities and Futures Ordinance of Hong Kong. Each ADS represents five HSBC Holdings ordinary shares.
|
2
|
HSBC Holdings was advised on 23 January 2018 that Laura Cha's spouse acquired 8,000 shares on 24 August 2015.
|
3
|
Executive Directors’ other interests in HSBC Holdings ordinary shares arising from the HSBC Holdings savings-related share option plans and the HSBC Share Plan 2011 are set out in the Scheme interests in the Directors’ Remuneration Report on page
186
. At 31 December 2017, the aggregate interests under the Securities and Futures Ordinance of Hong Kong in HSBC Holdings ordinary shares, including interests arising through employee share plans and the interests above were: Stuart Gulliver – 6,742,739; Iain Mackay – 2,140,600; and Marc Moses – 2,920,384. Each Director’s total interests represents less than 0.04% of the shares in issue and 0.04% of the shares in issue excluding treasury shares.
|
4
|
Jackson Tai has a non-beneficial interest in 10,350 shares of which he is custodian.
|
Employees
|
Gender diversity statistics
|
|
Male
|
|
Female
|
HSBC Holdings plc
|
183
|
•
|
We completed fire risk assessments in over 2,000 properties worldwide, and addressed areas of concern.
|
•
|
We completed a health and safety inspection and remediation programme in 97% of our premises across the globe.
|
•
|
The application of our health and safety policies and procedures continues to be integrated throughout our supply chain, particularly in developing markets, with audit and inspection programmes demonstrating continued improvements in health and safety performance.
|
•
|
We developed and implemented an improved risk assurance and oversight function to ensure our health and safety management system was performing appropriately, including conducting full reviews of health and safety management in
12 countries. |
Employee health and safety
|
||||||
|
Footnotes
|
2017
|
|
2016
|
|
2015
|
Number of workplace fatalities
|
1
|
2
|
|
1
|
|
0
|
Number of major injuries to employees
|
2
|
31
|
|
44
|
|
n/a
|
All injury rate per 100,000 employees
|
|
205
|
|
246
|
|
n/a
|
1
|
Customer death on branch premises; contractor involved in road traffic accident on bank business.
|
2
|
Fractures, dislocation, concussion.
|
n/a
|
Comparable data not available at global level for 2015 following change in reporting procedure for 2016.
|
184
|
HSBC Holdings plc
|
1
|
The weighted average closing price of the shares immediately before the dates on which options were exercised was £7.32.
|
2
|
The weighted average closing price of the shares immediately before the dates on which options were exercised was £7.48.
|
Statement of compliance
|
Relevant corporate governance codes
|
|
UK Corporate Governance Code
|
www.frc.org.uk
|
Hong Kong Corporate Governance Code (set out in Appendix 14 to the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited)
|
www.hkex.com.hk
|
Descriptions of the roles and responsibilities of the:
– Group Chairman
– Group Chief Executive
– Senior Independent Director
|
www.hsbc.com/about-hsbc/corporate-governance/board-committees
|
Board and senior management
|
www.hsbc.com/about-hsbc/leadership
|
Roles and responsibilities of the Board and its committees
|
www.hsbc.com/about-hsbc/corporate-governance/board-committees
|
Board’s policies on:
– Diversity
– Shareholder communication
|
www.hsbc.com/investor-relations/governance/corporate-governance-codes
|
Global Internal Audit Charter
|
www.hsbc.com/investor-relations/governance/internal-control
|
HSBC Holdings plc
|
185
|
Directors’ Remuneration Report
|
|
|
Page
|
Annual Statement from the Group Remuneration Committee Chair
|
186
|
Directors’ remuneration policy
|
188
|
Annual report on remuneration
|
189
|
Additional remuneration disclosures
|
201
|
Pillar 3 remuneration disclosures
|
203
|
Annual Statement from the Group
Remuneration Committee Chair
|
•
|
$84
m for the fines, penalties and cost of customer redress faced by the Group; and
|
•
|
$383
m for:
|
–
|
financial performance based on certain metrics, in particular, return on equity;
|
–
|
performance against certain metrics in our Group risk appetite profile; and
|
–
|
continued work required to address financial crime compliance issues.
|
•
|
the use of behaviour and performance ratings for all employees, which directly influence pay outcomes;
|
•
|
variable pay adjustments:
|
–
|
positive adjustments to variable pay outcomes for individuals who have exhibited positive behaviour and consistent adherence to the HSBC Values and go the extra mile to courageously do the right thing. During 2017, we made positive adjustments totalling
$14.9
m of variable pay awards; and
|
–
|
we reduced variable pay awards to certain individuals by
$2.9
m in ag
gregate to reflect individual conduct and behaviours; and
|
•
|
the global recognition programme where our employees can recognise peers and reward positive behaviours in a real-time, visible way.
|
186
|
HSBC Holdings plc
|
HSBC Holdings plc
|
187
|
Directors’ remuneration policy
|
1
|
John Flint will succeed Stuart Gulliver as executive Director and Group Chief Executive with effect from 21 February 2018. Stuart Gulliver will step down as executive Director and Group Chief Executive on 20 February 2018.
|
188
|
HSBC Holdings plc
|
•
|
base fee; and
|
•
|
further fees for the role of Senior Independent Director (‘SID’) and additional Board duties such as chairmanship or membership of a committee.
|
|
|
2018 fees
|
|
|
£
|
Category
|
|
|
Non-executive Group Chairman
1
|
|
1,500,000
|
Base fee
|
|
110,000
|
SID
|
|
54,000
|
Audit, Risk, Remuneration, Financial System Vulnerabilities and Conduct & Values Committees
|
Chairman
|
60,000
|
|
Member
|
30,000
|
Nomination Committee
|
Chairman
|
40,000
|
|
Member
|
25,000
|
Philanthropic & Community Investment Oversight Committee
|
Chairman
|
25,000
|
|
Member
|
15,000
|
1
|
Group Chairman does not receive a base fee or any other fees in respect of chairmanship of any other committee. The Committee has exercised its discretion to provide Mark Tucker with life assurance and healthcare insurance with effect from 1 February 2018, taking into consideration that he is performing the role with a time commitment of not less than four days per week, and holds no other offices outside of HSBC Holdings plc.
|
|
Douglas Flint
1
|
John
Flint
|
Stuart Gulliver
|
Iain
Mackay
|
Marc Moses
|
Contract date (rolling)
|
14 Feb 2011
|
21 Feb 2018
|
10 Feb 2011
|
4 Feb
2011
|
27 Nov 2014
|
Notice period
(Director & HSBC)
|
12 months
|
12 months
|
12 months
|
12 months
|
12 months
|
1
|
Douglas Flint stepped down from the Board on 30 September 2017.
|
Annual report on remuneration
|
HSBC Holdings plc
|
189
|
Details of the Committee’s key activities
|
|
Executive Directors
|
All employees
|
•
Approved Directors' Remuneration Report and Strategic Report.
•
Considered executive Director remuneration policy matters for shareholder consultation.
•
Consulted with key shareholders and proxy advisory bodies on executive Director remuneration matters.
•
Reviewed and approved executive Director remuneration matters.
•
Reviewed and approved executive Directors’ scorecards and pay proposals.
|
•
Approved 2016/2017 performance year pay review matters and high-priority programmes progress.
•
Reviewed remuneration policy effectiveness.
•
Considered progress update on Monitor recommendations.
•
Received updates on notable events and regulatory and corporate governance matters.
•
Reviewed and approved 2017 Material Risk Taker ('MRT') identification approach and MRT list.
•
Approved 2017 regulatory submissions.
|
•
|
Iain Mackay, Group Finance Director;
|
•
|
Marc Moses, Group Chief Risk Officer;
|
•
|
Stuart Levey, Chief Legal Officer;
|
•
|
John Flint, Chief Executive, Retail Banking and Wealth Management;
|
•
|
Elaine Arden, Group Head of Human Resources (from June 2017);
|
•
|
Donna Wong, Acting Group Head of Human Resources (until May 2017);
|
•
|
Alexander Lowen, Group Head of Performance and Reward;
|
•
|
Colin Bell, Group Head of Financial Crime Risk;
|
•
|
Ralph Nash, Global Head of Financial Crime Compliance and Group Money Laundering Reporting Officer;
|
•
|
Andy Maguire, Group Chief Operating Officer; and
|
•
|
Ben Mathews, Group Company Secretary.
|
1
|
The first LTI award was made in February 2017, with a performance period ending in 2019. Vesting of the first LTI award will be included in the single figure table for the financial year ending on 31 December 2019.
|
2
|
Douglas Flint stepped down from the Board on 30 September 2017 and his remuneration reflects time served as an executive Director. Details on retirement arrangements are provided on page
196
.
|
3
|
To meet regulatory deferral requirements for 2017,
60%
of the annual incentive award of Stuart Gulliver has been deferred in shares and will vest in five equal instalments between the third and seventh anniversary of the grant date.
|
190
|
HSBC Holdings plc
|
Illustration of release profile
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
2018
|
2019
|
2020
|
2021
|
2022
|
2023
|
2024
|
2025
|
2026
|
|
u
|
||||||||||||||||||||||||||||||
Fixed pay allowance
|
•
Released in five equal annual instalments starting from March 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
u
|
|
|
|
u
|
|
|
|
u
|
|
|
|
u
|
|
|
|
u
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
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|
|
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|
|
|
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|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Annual incentive
|
•
Paid in immediately vested shares subject to a retention period of one year.
•
Subject to clawback provisions for seven years from grant, which may be extended to 10 years in the event of an ongoing internal/regulatory investigation.
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Perform-ance period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
u
|
|
|
u
|
|
u
|
|
|
u
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Malus/Clawback provisions
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
u
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Long-term incentive
|
•
Award subject to a three-year forward-looking performance period.
•
Subject to performance outcome, awards will vest in five equal annual instalments starting from the third anniversary of the grant date.
•
On vesting, shares are subject to a retention period of one year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance period
|
|
|
|
|
|
|
|
Vesting period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
u
|
|
|
|
|
|
|
|
|
|
|
u
|
|
u
|
|
|
|
u
|
|
|
|
u
|
|
|
|
u
|
|
|
|
u
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retention period
|
u
|
|
|
|
u
|
|
|
|
u
|
|
|
|
u
|
|
|
|
u
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Applies to both annual incentive and long-term incentive.
|
•
|
all taxable benefits (gross value before payment of tax) including provision of medical insurance, accommodation and
|
1
|
The car benefit, tax on car benefit and insurance benefits for Iain Mackay and Marc Moses are not included in the above table as they were not significant.
|
2
|
Taxable value determined based on the current market rental value of the bank-owned property in Hong Kong, as estimated by an external lease service provider, plus utility costs, rates, the taxable value of furniture and taking into account the business use of the property.
|
HSBC Holdings plc
|
191
|
Annual assessment
|
|||||||||
|
Stuart Gulliver
|
Iain Mackay
|
Marc Moses
|
||||||
Weighting (%)
|
Assessment (%)
|
Outcome (%)
|
Weighting (%)
|
Assessment (%)
|
Outcome (%)
|
Weighting (%)
|
Assessment (%)
|
Outcome (%)
|
|
Profit before tax
1
|
20.00
|
100.00
|
20.00
|
10.00
|
100.00
|
10.00
|
10.00
|
100.00
|
10.00
|
Capital management
|
—
|
—
|
—
|
25.00
|
100.00
|
25.00
|
—
|
—
|
—
|
Deliver cost savings
|
20.00
|
25.00
|
5.00
|
10.00
|
25.00
|
2.50
|
—
|
—
|
—
|
Reduce Group RWAs
|
10.00
|
100.00
|
10.00
|
10.00
|
100.00
|
10.00
|
15.00
|
100.00
|
15.00
|
Strategic growth
|
10.00
|
90.19
|
9.02
|
—
|
—
|
—
|
—
|
—
|
—
|
Global Standards including
risk and compliance
|
25.00
|
85.00
|
21.25
|
25.00
|
90.00
|
22.50
|
50.00
|
86.25
|
43.13
|
Personal objectives
|
15.00
|
97.92
|
14.69
|
20.00
|
97.70
|
19.54
|
25.00
|
92.18
|
23.04
|
Total
|
100.00
|
|
79.96
|
100.00
|
|
89.54
|
100.00
|
|
91.17
|
Maximum annual incentive opportunity (£000)
|
|
|
£2,660
|
|
|
£1,490
|
|
|
£1,490
|
Annual incentive (£000)
|
|
|
£2,127
|
|
|
£1,334
|
|
|
£1,358
|
Annual assessment
|
|
||||||||||
|
Minimum
(25% payout)
|
|
Maximum
(100% payout)
|
|
Performance
|
|
Assessment
|
|
|||
Measure
|
|
|
|
|
|||||||
Profit before tax
($bn)
1
|
|
$16.0
|
|
|
$19.0
|
|
|
$21.2
|
|
100.00
|
%
|
Deliver cost savings ($bn)
2
|
|
$30.2
|
|
|
$29.6
|
|
|
$30.2
|
|
25.00
|
%
|
Reduce Group RWAs ($bn)
|
|
$63.4
|
|
|
$70.5
|
|
|
$70.7
|
|
100.00
|
%
|
Strategic growth
3
|
Various
|
|
Various
|
|
Fully met targets for six measures and partly met targets for three measures.
|
|
90.19
|
%
|
1
|
Profit before tax, as defined for Group annual bonus pool calculation. This definition excludes business disposal gains and losses, debt valuation adjustments, restructuring and write-off costs included in ‘Costs to Achieve' and variable pay expense. It does, however, take into account fines, penalties and costs of customer redress, which are excluded from the adjusted profit before tax. The adjusted profit before tax as per adjusted results is found on page
2
.
|
2
|
Measured by reference to the 2017 exit run-rate for adjusted costs compared with our 2014 cost base.
|
3
|
Strategic growth measures include optimising global network, rebuilding NAFTA region profitability, delivering growth above GDP from our international network, pivot to Asia and Renminbi internationalisation.
|
192
|
HSBC Holdings plc
|
HSBC Holdings plc
|
193
|
194
|
HSBC Holdings plc
|
HSBC Holdings plc
|
195
|
1
|
Significant items are excluded from the profit attributable to ordinary shareholders of the company for the purpose of computing adjusted return on equity. If the CET1 ratio at the end of performance period is below the CET1 risk tolerance level set in the RAS then, the assessment for this measure will be reduced to nil.
|
2
|
The peer group for the 2017 award is: Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse Group, DBS Group Holdings, Deutsche Bank, JPMorgan Chase & Co., Lloyds Banking Group, Standard Chartered and UBS Group.
|
3
|
To be assessed based on cumulative financing and investment made to develop clean energy, lower-carbon technologies and projects that contribute to the delivery of the Paris Agreement and the UN sustainable development goals.
|
4
|
Assessed based on results of the latest employee snapshot survey question ‘I am seeing the positive impact of our strategy’.
|
•
|
Salary and cash in lieu of pension:
£487,500
; and
|
•
|
Contractual benefits valued at:
£24,068
.
|
196
|
HSBC Holdings plc
|
Scheme awards in 2017
|
||||||||||
(Audited)
|
||||||||||
|
Type of interest awarded
|
Basis on which
award made |
Date of award
|
Face value awarded
1,2
£000
|
Percentage receivable for minimum performance
1,2
|
Number of
shares
awarded
|
Share price
on date
of grant
3
|
|
End of performance period
|
|
Stuart Gulliver
|
Deferred shares
|
Long-term incentive 2016
|
27 Feb 2017
|
3,990
|
25
|
613,562
|
|
£6.5030
|
|
31 Dec 2019
|
Iain Mackay
|
Deferred shares
|
Long-term incentive 2016
|
27 Feb 2017
|
2,232
|
25
|
343,226
|
|
£6.5030
|
|
31 Dec 2019
|
Marc Moses
|
Deferred shares
|
Long-term incentive 2016
|
27 Feb 2017
|
2,232
|
25
|
343,226
|
|
£6.5030
|
|
31 Dec 2019
|
1
|
For annual incentive, awards were determined based on performance achieved during the period to 31 December 2016 and were subject to a
six
-month retention period on vesting. These awards are also subject to clawback for a maximum period of
10
years from the date of the award. The overall award level could have been
0%
of the maximum opportunity if minimum performance was not achieved at the end of the performance period.
|
2
|
For LTI, awards are subject to a
three
-year forward-looking performance period and awards vest in
five
equal instalments subject to performance achieved. On vesting, awards will be subject to a
six
-month retention period. Awards are subject to malus during the vesting period and clawback for a maximum period of
10
years from the date of the award. Details of performance conditions applicable during the forward-looking performance period are set out below.
|
3
|
Share price used is the closing mid-market price on the last working day preceding the date of grant.
|
1
|
Significant items are excluded from the profit attributable to ordinary shareholders of the company for the purpose of computing adjusted return on equity.
|
2
|
The peer group for the 2016 award is: Australia and New Zealand Banking Group, Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse Group, DBS Group Holdings, Deutsche Bank, JPMorgan Chase & Co., Lloyds Banking Group, Standard Chartered and UBS Group.
|
3
|
Assessed based on results of the latest employee snapshot survey question ‘I am seeing the positive impact of our strategy’.
|
HSBC Holdings plc
|
197
|
1
|
The gross number of shares is disclosed. A portion of these shares will be sold at vesting to cover any income tax and social security which falls due at the time of vesting.
|
2
|
Unvested share-based incentives are note counted towards compliance with the shareholding guideline.
|
3
|
The value of the shareholding is calculated using an average of the daily closing share prices in the three months to 31 December 2017, (
£7.4468
).
|
4
|
For variable pay awards (annual incentive and LTI), in line with regulatory requirements, any deferred shares (net of tax) which the Director becomes entitled to are subject to a retention requirement, such that they must be held for a predefined period of time. To provide the executive Directors with appropriate flexibility, the Committee determined that, the requirement to hold these shares could be met either by retaining the shares that vested from the underlying award (net of tax) or by separately retaining a number of shares equivalent to those that vested under the award. The Committee consider that such an arrangement results in the employee holding the same number of shares as per the original intention of the retention period as set out in the remuneration policy approved by shareholders in 2014.
|
5
|
All share options are unvested and unexercised.
|
6
|
Includes Group Performance Share Plan ('GPSP') awards, which were made following an assessment of performance over the relevant period ending on 31 December before the grant date but are subject to a
five
-year vesting period.
|
7
|
Awards granted in March 2013 are subject to service conditions and satisfactory completion of the AML DPA, as determined by the Committee. The AML DPA condition ends on the fifth anniversary of the award date. LTI awards granted in February 2017 are subject to the performance conditions as set out on page
197
.
|
8
|
All Group Managing Directors are expected to meet their shareholding guideline by 2019 or within
five
years of the date of their appointment, whichever is later.
|
1
|
May be advanced to an earlier date in certain circumstances, such as retirement.
|
198
|
HSBC Holdings plc
|
HSBC TSR and FTSE 100 Total Return Index
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
Group Chief
Executive
|
Michael Geoghegan
|
|
Michael Geoghegan
|
|
Stuart Gulliver
|
|
Stuart Gulliver
|
|
Stuart Gulliver
|
|
Stuart Gulliver
|
|
Stuart Gulliver
|
|
Stuart Gulliver
|
|
Stuart Gulliver
|
|
Total single figure
£000
|
7,580
|
7,932
|
8,047
|
7,532
|
8,033
|
7,619
|
7,340
|
5,675
|
6,086
|
|||||||||
Annual incentive
1
(% of maximum)
|
94
|
%
|
82
|
%
|
58
|
%
|
52
|
%
|
49
|
%
|
54
|
%
|
45
|
%
|
64
|
%
|
80
|
%
|
Long-term incentive
2,3
(% of maximum)
|
25
|
%
|
19
|
%
|
50
|
%
|
40
|
%
|
49
|
%
|
44
|
%
|
41
|
%
|
—
|
%
|
—
|
%
|
1
|
The 2012 annual incentive figure for Stuart Gulliver used for this table includes 60% of the annual incentive disclosed in the 2012 Directors’ Remuneration Report, which was deferred for five years and subject to service conditions and satisfactory completion of the AML DPA as determined by the Committee. The AML DPA condition ends on the fifth anniversary of the award date.
|
2
|
Long-term incentive awards are included in the single figure for the year in which the performance period is deemed to be substantially completed. For GPSP awards this is the end of the financial year preceding the date of grant (GPSP awards shown in 2011 to 2015 therefore relate to awards granted in 2012 to 2016). For performance share awards that were awarded before introduction of GPSP, the value of awards that vested subject to satisfaction of performance conditions attached to those awards are included at the end of the third financial year following the date of grant (for example, performance share awards shown in 2010 relates to awards granted in 2008).
|
3
|
The GPSP was replaced by the LTI in 2016 and the value for GPSP is nil for 2016 as no GPSP award was made for 2016. The first LTI award was made in February 2017, with a performance period ending in 2019. For year-on-year comparison purposes, if target performance is achieved over the three-year performance period, LTI payout would be 50% of grant value. In this case, the single figure total remuneration of the Group Chief Executive for year-on-year comparison would be (in £000) £7,670 for 2016. Stuart Gulliver was not eligible for an LTI award in respect of 2017 given his announced retirement.
|
1
|
Employee group consists of local full-time UK employees as representative of employees from different businesses and functions across the Group. Group Chief Executive's total fixed pay has not increased since 1 January 2014.
|
2
|
There has been no change in the benefits provided to the Group Chief Executive. The change in the value of the benefit is due to the change in the taxable value of the benefit as reported in the single figure table.
|
3
|
For benefits, employee group consists of UK employees which was deemed the most appropriate comparison for the Group Chief Executive given varying local requirements.
|
4
|
For annual incentive, employee group consists of all employees globally. The change is based on annual incentive pool as disclosed on page
31
and staff numbers (full-time equivalents at the financial year-end). The percentage change in annual incentive award of the Group Chief Executive is primarily driven by the difference in the 2016 and 2017 scorecard outcome, reflecting performance achieved in those years, and change in policy. Details of the 2017 total single figure of remuneration for the Group Chief Executive are
on page
190
.
|
•
|
total staff pay between 2016 and 2017; and
|
•
|
dividends paid out in respect of 2016 and 2017.
|
Relative importance of spend on pay
|
ì
|
î
|
5%
|
4%
|
Return to shareholder
|
Employee compensation and benefits
|
||||
|
|
Dividends
|
|
|
|
|
|||||
|
|
Share buy-back
|
|
|
|
HSBC Holdings plc
|
199
|
Fees and benefits
|
||||||||||
(Audited)
|
|
Fees
1
|
Benefits
2
|
Total
|
||||||
(£000)
|
Footnotes
|
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
|
Phillip Ameen
|
3
|
474
|
440
|
|
12
|
38
|
|
486
|
478
|
|
Kathleen Casey
|
|
174
|
155
|
|
16
|
21
|
|
190
|
176
|
|
Henri de Castries
|
4
|
132
|
79
|
|
5
|
4
|
|
137
|
83
|
|
Laura Cha
|
5
|
269
|
247
|
|
22
|
20
|
|
291
|
267
|
|
Lord Evans of Weardale
|
|
215
|
190
|
|
8
|
5
|
|
223
|
195
|
|
Joachim Faber
|
6
|
162
|
152
|
|
9
|
10
|
|
171
|
162
|
|
Sam Laidlaw (Retired on 28 April 2017)
|
|
70
|
185
|
|
1
|
11
|
|
71
|
196
|
|
Irene Lee
|
7
|
300
|
268
|
|
8
|
9
|
|
308
|
277
|
|
John Lipsky
|
|
199
|
180
|
|
25
|
21
|
|
224
|
201
|
|
Rachel Lomax (Retired on 28 April 2017)
|
|
93
|
254
|
|
1
|
6
|
|
94
|
260
|
|
Heidi Miller
|
8
|
571
|
536
|
|
18
|
30
|
|
589
|
566
|
|
David Nish
|
9
|
158
|
83
|
|
18
|
19
|
|
176
|
102
|
|
Jonathan Symonds
|
10
|
639
|
520
|
|
2
|
6
|
|
641
|
526
|
|
Jackson Tai
|
11
|
194
|
48
|
|
43
|
4
|
|
237
|
52
|
|
Mark Tucker (Appointed on 1 September 2017)
|
12
|
500
|
—
|
|
318
|
—
|
|
818
|
—
|
|
Pauline van der Meer Mohr
|
13
|
239
|
172
|
|
16
|
9
|
|
255
|
181
|
|
Paul Walsh (Resigned on 21 April 2017)
|
|
55
|
142
|
|
2
|
5
|
|
57
|
147
|
|
Total
|
|
4,444
|
3,651
|
|
524
|
218
|
|
4,968
|
3,869
|
|
Total ($000)
|
|
5,720
|
4,926
|
|
674
|
294
|
|
6,395
|
5,220
|
|
1
|
Fees include a travel allowance of
£4,000
for non-UK based non-executive Directors.
|
2
|
Benefits include accommodation and travel-related expenses relating to attendance at Board and other meetings at HSBC Holdings' registered office. Amounts disclosed have been grossed up using a tax rate of
45%
, where relevant. The 2016 amounts have been restated to exclude National Insurance Contributions.
|
3
|
Includes fees of
£330,000
in 2017 (
£315,000
in 2016) as a Director, Chairman of the Audit Committee and member of the Risk Committee of HSBC North America Holdings Inc.
|
4
|
Appointed as a member of the Group Remuneration Committee on 26 May 2017.
|
5
|
Includes fees of
£75,000
in 2017 (
£72,000
in 2016) as a Director, Deputy Chairman and member of the Nomination Committee of The Hongkong and Shanghai Banking Corporation Limited.
|
6
|
Includes
£8,000
(inclusive of VAT) in respect of his membership of a verwaltungsrat (advisory body) to HSBC Trinkaus & Burkhardt AG. Stepped down as Chairman of the Group Risk Committee on 28 April 2017 and resigned from the Group Risk Committee on 30 November 2017.
|
7
|
Includes fees of
£187,000
in 2017 (
£173,000
in 2016) as a Director, and member of the Audit Committee and the Risk Committee of The Hongkong and Shanghai Banking Corporation Limited and as a Director, member of the Audit Committee and Chairman of the Risk Committee of Hang Seng Bank Limited.
|
8
|
Includes fees of
£427,000
in 2017 (
£411,000
in 2016) as Chairman of HSBC North America Holdings Inc.
|
9
|
Appointed as a member of the Group Remuneration Committee on 26 May 2017.
|
10
|
Appointed as Senior Independent Director on 28 April 2017. Includes fees of
£382,000
in 2017 (
£345,000
in 2016) as non-executive Chairman of HSBC Bank plc.
|
11
|
Appointed as Chairman of the Group Risk Committee on 28 April 2017.
|
12
|
Received a one time relocation benefit of
£300,000
.
|
13
|
Appointed as Chairman of the Conduct & Values Committee and the Group Remuneration Committee on 28 April 2017.
|
Shares
|
||
|
Shareholding guidelines (number of shares)
|
Share interests
(number of shares)
|
Phillip Ameen
|
15,000
|
5,000
|
Kathleen Casey
|
15,000
|
9,125
|
Laura Cha
|
15,000
|
18,200
|
Henri de Castries
|
15,000
|
17,116
|
Lord Evans of Weardale
|
15,000
|
12,892
|
Joachim Faber
|
15,000
|
66,605
|
Sam Laidlaw (Retired on 28 April 2017)
|
15,000
|
41,887
|
Irene Lee
|
15,000
|
10,588
|
John Lipsky
|
15,000
|
16,165
|
Rachel Lomax (Retired on 28 April 2017)
|
15,000
|
18,900
|
Heidi Miller
|
15,000
|
4,200
|
David Nish
|
15,000
|
50,000
|
Jonathan Symonds
|
15,000
|
42,821
|
Jackson Tai
|
15,000
|
44,825
|
Mark Tucker (Appointed on 1 September 2017)
|
15,000
|
276,000
|
Pauline van der Meer Mohr
|
15,000
|
15,000
|
Paul Walsh (Resigned on 21 April 2017)
|
15,000
|
5,211
|
200
|
HSBC Holdings plc
|
Annual General Meeting voting results
|
|||
|
For
1
|
Against
1
|
Withheld
|
Remuneration Report (2017 AGM)
|
96.47%
|
3.53%
|
–
|
8,885,701,458
|
324,969,999
|
30,526,965
|
|
Remuneration Policy (2016 AGM)
|
96.05%
|
3.95%
|
–
|
8,887,168,002
|
365,908,568
|
35,165,873
|
1
|
Votes cast.
|
1
|
Measures will include key objectives set out in the strategy to be agreed with the Board.
|
2
|
Measures will include objectives relating to financial crime risk, operational risk, conduct and other financial risks.
|
Additional remuneration disclosures
|
HSBC Holdings plc
|
201
|
Component of remuneration
|
Approach taken
|
Fixed pay and benefits
|
Executive Directors may be entitled to payments in lieu of:
•
notice, which shall consist of base salary, pension entitlements and other contractual benefits, or an amount in lieu of; and/or
•
accrued but untaken holiday entitlement.
|
Annual incentives and
long-term incentives
|
In exceptional circumstances as determined by the Committee, an executive Director may be eligible for annual incentives and long-term incentives based on the time worked in the performance year and on the individual executive Director’s contribution.
|
Unvested deferred awards
|
All unvested awards will be forfeited when an executive Director ceases employment voluntarily and is not deemed a good leaver. An executive Director may be considered a good leaver at the discretion of the Committee, and the following will apply:
•
unvested awards will continue to vest in line with the applicable vesting dates, subject to the original performance conditions, the share plan rules, malus and clawback provisions; or
•
vested shares, subject to retention, will be released to the executive Director on cessation of employment. In the event of death, unvested awards will vest and will be released to the executive Director’s estate as soon as practicable.
In respect of outstanding unvested awards, for an individual to be considered as a good leaver, the Committee needs to be satisfied that the executive has no current or future intention at the date of leaving HSBC of being employed by any competitor financial services firm. The Committee determines the list of competitor firms and length of time this restriction applies. If the Committee becomes aware of any evidence to the contrary before vesting, the award will lapse.
If the executive Director is not deemed a good leaver for purposes of the GPSP, vested shares, subject to retention, will be released to the executive Director in three equal tranches on each of the first, second and third anniversary of cessation of employment.
|
Repatriation
|
Where an executive Director has been relocated as part of their employment, the Committee retains the discretion to pay the repatriation costs. These may include, but are not restricted to airfare, accommodation, shipment, storage, utilities, and any tax and social security that may be due in respect of such benefits.
|
Post-departure benefits
|
Applicable for the duration of the clawback period, up to a maximum of seven years from date of departure for those who depart under good leaver provisions under the HSBC Share Plan and subject to non-compete provisions, in accordance with the terms of the policy. Benefits may include medical coverage, tax return preparation assistance and legal expenses for the duration of the clawback period.
The Committee also has the discretion to extend the post-departure benefit of medical coverage to former executive Directors up to a maximum of seven years from their date of departure.
|
Legal claims
|
The Committee retains the discretion to make payments (including professional and outplacement fees) to mitigate against legal claims, subject to any such payments being made in accordance with the terms of an appropriate agreement waiving all claims against the Group.
|
Change of control
|
In the event of a change of control, outstanding awards will be treated in line with the provisions set out in the respective plan rules.
|
Emoluments
|
||||||||||||||||
|
Douglas Flint
|
Stuart Gulliver
|
Iain Mackay
|
Marc Moses
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
£000
|
|
£000
|
|
£000
|
|
£000
|
|
£000
|
|
£000
|
|
£000
|
|
£000
|
|
Basic salaries, allowances and benefits in kind
|
1,610
|
|
2,136
|
|
3,896
|
|
3,953
|
|
1,961
|
|
1,949
|
|
1,914
|
|
1,913
|
|
Pension contributions
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Performance-related pay paid or receivable
1
|
—
|
|
—
|
|
2,127
|
|
5,685
|
|
3,566
|
|
3,219
|
|
3,590
|
|
3,237
|
|
Inducements to join paid or receivable
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Compensation for loss of office
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Notional return on deferred cash
|
—
|
|
—
|
|
63
|
|
27
|
|
42
|
|
17
|
|
42
|
|
18
|
|
Total
|
1,610
|
|
2,136
|
|
6,086
|
|
9,665
|
|
5,569
|
|
5,185
|
|
5,546
|
|
5,168
|
|
Total ($000)
|
2,072
|
|
2,882
|
|
7,834
|
|
13,039
|
|
7,168
|
|
6,995
|
|
7,139
|
|
6,972
|
|
1
|
Includes the value of the deferred and LTI awards at grant. The information for 2016 has been restated to include the value of LTI.
|
202
|
HSBC Holdings plc
|
Emoluments
|
|
|||
|
Five highest paid employees
|
|
Senior management
|
|
|
£000
|
|
£000
|
|
Basic salaries, allowances and benefits in kind
|
18,729
|
|
41,143
|
|
Pension contributions
|
12
|
|
198
|
|
Performance-related pay paid or receivable
1
|
15,272
|
|
40,220
|
|
Inducements to join paid or receivable
|
2,465
|
|
2,465
|
|
Compensation for loss of office
|
—
|
|
—
|
|
Total
|
36,478
|
|
84,026
|
|
Total ($000)
|
46,955
|
|
108,159
|
|
1
|
Includes the value of deferred shares awards at grant.
|
Emoluments by bands
|
|||||
Hong Kong dollars
|
US dollars
|
Number of
highest paid employees
|
|
Number of
senior management
|
|
$16,000,001 – $16,500,000
|
$2,053,177 – $2,117,338
|
—
|
|
2
|
|
$24,500,001 – $25,000,000
|
$3,143,927 – $3,208,088
|
—
|
|
1
|
|
$25,500,001 – $26,000,000
|
$3,272,250 – $3,336,412
|
—
|
|
1
|
|
$33,500,001 – $34,000,000
|
$4,298,839 – $4,363,000
|
—
|
|
1
|
|
$34,000,001 – $34,500,000
|
$4,363,000 – $4,427,162
|
—
|
|
2
|
|
$36,000,001 – $36,500,000
|
$4,619,647 – $4,683,809
|
—
|
|
1
|
|
$43,500,001 – $44,000,000
|
$5,582,074 – $5,646,236
|
—
|
|
1
|
|
$47,500,001 – $48,000,000
|
$6,095,368 – $6,159,530
|
—
|
|
1
|
|
$52,500,001 – $53,000,000
|
$6,736,986 – $6,801,147
|
—
|
|
1
|
|
$55,000,001 – $55,500,000
|
$7,057,795 – $7,121,956
|
—
|
|
2
|
|
$60,000,001 – $60,500,000
|
$7,699,412 – $7,763,574
|
1
|
|
1
|
|
$61,500,001 – $62,000,000
|
$7,891,898 – $7,956,059
|
1
|
|
1
|
|
$64,500,001 – $65,000,000
|
$8,276,868 – $8,341,030
|
1
|
|
1
|
|
$65,000,001 – $65,500,000
|
$8,341,030 – $8,405,192
|
1
|
|
1
|
|
$89,000,001 – $89,500,000
|
$11,420,795 – $11,484,956
|
1
|
|
1
|
|
Pillar 3 remuneration disclosures
|
•
|
An alignment to performance at all levels (individual, business and Group) taking into account both ‘what’ has been achieved and ‘how’ it has been achieved. The ‘how’ helps ensure that performance is sustainable in the longer term, consistent with HSBC’s values, conduct and risk and compliance standards.
|
•
|
Being informed, but not driven by, market position and practice. Market benchmarks are sourced through independent specialists and provide an indication of the range of pay levels and employee benefits provided by our competitors.
|
•
|
Targeting pay for employees across the full market range depending upon their individual performance and that of the Group. An individual’s position in this market range will also vary depending upon their performance in any given year.
|
•
|
Compliance with relevant regulation across all of our countries and territories.
|
•
|
Offering our employee a competitive total reward package that includes a mix of fixed pay, variable pay and employee benefits.
|
•
|
Maintaining an appropriate balance between fixed pay, variable pay and employee benefits, taking into consideration an
|
•
|
Variable pay is awarded on a discretionary basis and dependent upon Group, business and individual performance.
|
•
|
Employee benefits offered should be valued by a diverse workforce, appropriate at the local market level and support HSBC’s commitment to employee well-being.
|
•
|
Promoting employee share ownership through variable pay deferral or voluntary enrolment in an all employee share plan.
|
•
|
Reward packages should be linked to performance and behaviour with no bias towards an individual’s ethnicity, gender, age, or any other characteristic.
|
HSBC Holdings plc
|
203
|
204
|
HSBC Holdings plc
|
HSBC Holdings plc
|
205
|
1
|
Shareholders approved the increase in the maximum ratio between the fixed and variable components of total remuneration from 1:1 to 1:2 at the 2014 Annual General Meeting held on 23 May 2014 (98% in favour). The Group has also used the discount rate of 21.85% for individuals with seven-year deferral period and 13.85% for individuals with five-year deferral period. This discount rate was used for six MRTs in UK and one MRT Hong Kong.
|
2
|
HSBC does not dis-apply any remuneration rules on proportionality grounds. However, in accordance with the terms of the PRA and FCA remuneration rules, the deferral requirement for MRTs is not applied to individuals where their total compensation is £500,000 or less and variable pay is not more than 33% of total compensation. For these individuals, the Group standard deferral applies.
|
•
|
MRTs are identified at Group and HSBC Bank plc (consolidated) level.
|
•
|
MRTs are also identified at material solo regulated entity level in EU countries.
|
•
|
HSBC uses the Global Business dimension as the primary basis for identifying MRTs within its matrix management structure.
|
206
|
HSBC Holdings plc
|
Remuneration – fixed and variable amounts
|
||||||||
|
Executive Directors
|
|
Non-executive Directors
|
|
Senior management
|
|
Total
|
|
Number of MRTs
|
4
|
|
17
|
|
15
|
|
36
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Total fixed
|
11.5
|
|
4.4
|
|
33.1
|
|
49.0
|
|
Cash-based
1
|
6.9
|
|
4.4
|
|
33.1
|
|
44.4
|
|
– of which: deferred cash
|
—
|
|
—
|
|
—
|
|
—
|
|
Share-based
|
4.6
|
|
—
|
|
—
|
|
4.6
|
|
– of which: deferred shares
|
—
|
|
—
|
|
—
|
|
—
|
|
Total variable
2
|
14.0
|
|
—
|
|
44.1
|
|
58.1
|
|
Cash-based
|
—
|
|
—
|
|
20.7
|
|
20.7
|
|
– of which: deferred cash
|
—
|
|
—
|
|
12.5
|
|
12.5
|
|
Share-based
3
|
14.0
|
|
—
|
|
23.4
|
|
37.4
|
|
– of which: deferred shares
3
|
9.5
|
|
—
|
|
15.2
|
|
24.7
|
|
Other forms
3
|
—
|
|
—
|
|
—
|
|
—
|
|
– of which: deferred
3
|
—
|
|
—
|
|
—
|
|
—
|
|
Total remuneration
|
25.5
|
|
4.4
|
|
77.2
|
|
107.1
|
|
1
|
Cash-based fixed remuneration is paid immediately.
|
2
|
Variable pay awarded in respect of 2017. In accordance with shareholder approval received on 23 May 2014 (98% in favour), for each MRT the variable component of remuneration for any one year is limited to 200% of fixed component of the total remuneration of the MRT.
|
3
|
Share-based awards are made in HSBC shares. Vested shares are subject to a retention period of up to one year.
|
Deferred remuneration at 31 December
1
|
|
|
|
|
||||
|
Executive
Directors
|
|
Non-executive Directors
|
|
Senior
management
|
|
Total
|
|
$m
|
|
|
|
|
||||
Cash
|
|
|
|
|
||||
Total outstanding deferred remuneration
2
|
3.1
|
|
—
|
|
24.8
|
|
27.9
|
|
– of which:
|
|
|
|
|
||||
Unvested
|
3.1
|
|
—
|
|
24.8
|
|
27.9
|
|
Total amount of outstanding deferred and retained remuneration exposed to ex post explicit and/or implicit adjustment
|
3.1
|
|
—
|
|
24.8
|
|
27.9
|
|
Total amount of amendment during the year due to ex post implicit adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
Total amount of amendment during the year due to ex post explicit adjustment
3
|
—
|
|
—
|
|
—
|
|
—
|
|
Total amount of deferred remuneration paid out in the financial year
|
1.5
|
|
—
|
|
7.2
|
|
8.7
|
|
Shares
|
|
|
|
|
||||
Total outstanding deferred remuneration
2
|
66.7
|
|
—
|
|
68.7
|
|
135.4
|
|
– of which:
|
|
|
|
|
||||
Unvested
|
66.7
|
|
—
|
|
68.7
|
|
135.4
|
|
Total amount of outstanding deferred and retained remuneration exposed to ex post explicit and/or implicit adjustment
|
66.7
|
|
—
|
|
68.7
|
|
135.4
|
|
Total amount of amendment during the year due to ex post implicit adjustment
|
9.7
|
|
—
|
|
10.5
|
|
20.2
|
|
Total amount of amendment during the year due to ex post explicit adjustment
3
|
—
|
|
—
|
|
—
|
|
—
|
|
Total amount of deferred remuneration paid out in the financial year
4
|
20.0
|
|
—
|
|
25.1
|
|
45.1
|
|
Other forms
|
|
|
|
|
||||
Total outstanding deferred remuneration
2
|
—
|
|
—
|
|
—
|
|
—
|
|
– of which:
|
|
|
|
|
||||
Unvested
|
—
|
|
—
|
|
—
|
|
—
|
|
Total amount of outstanding deferred and retained remuneration exposed to ex post explicit and/or implicit adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
Total amount of amendment during the year due to ex post implicit adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
Total amount of amendment during the year due to ex post explicit adjustment
3
|
—
|
|
—
|
|
—
|
|
—
|
|
Total amount of deferred remuneration paid out in the financial year
4
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
This table provides details of balances and movements during performance year 2017. For details of variable pay awards granted for 2017, please refer to the remuneration tables above. Deferred remuneration is made in cash and/or shares. Share-based awards are made in HSBC shares.
|
2
|
Includes unvested deferred awards, and vested deferred awards subject to retention period as at 31 December 2017.
|
3
|
Includes any amendments due to malus or clawback. Page
205
provides details of in-year variable pay adjustments.
|
4
|
Shares are considered as paid when they vest. Vested shares are valued using the sale price or the closing share price on the business day immediately preceding the vesting day.
|
HSBC Holdings plc
|
207
|
Remuneration – fixed and variable amounts
|
||||||||||||||
|
Investment banking
|
|
Retail
banking |
|
Asset management
|
|
Corporate functions
|
|
Independent control functions
|
|
All other
|
|
Total
|
|
Number of MRTs
|
677
|
|
124
|
|
30
|
|
115
|
|
156
|
|
96
|
|
1,198
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Total fixed
|
406.2
|
|
61.3
|
|
18.5
|
|
58
|
|
57.2
|
|
61.6
|
|
662.8
|
|
Cash-based
1
|
406.2
|
|
61.3
|
|
18.5
|
|
58.0
|
|
57.2
|
|
61.6
|
|
662.8
|
|
– of which: deferred cash
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Share-based
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
– of which: deferred shares
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total variable
2
|
417.7
|
|
58.4
|
|
19.0
|
|
57.2
|
|
44.1
|
|
55.1
|
|
651.5
|
|
Cash-based
|
203.5
|
|
28.3
|
|
9.4
|
|
28.0
|
|
22.5
|
|
27.0
|
|
318.7
|
|
– of which: deferred cash
|
105.1
|
|
13.8
|
|
4.6
|
|
13.8
|
|
9.0
|
|
14.3
|
|
160.6
|
|
Share-based
3
|
214.2
|
|
30.1
|
|
5.1
|
|
29.2
|
|
21.5
|
|
28.1
|
|
328.2
|
|
– of which: deferred shares
3
|
117.0
|
|
15.9
|
|
2.8
|
|
15.8
|
|
10.8
|
|
15.7
|
|
178.0
|
|
Other forms
3
|
—
|
|
—
|
|
4.5
|
|
—
|
|
0.1
|
|
—
|
|
4.6
|
|
– of which: deferred shares
3
|
—
|
|
—
|
|
2.7
|
|
—
|
|
—
|
|
—
|
|
2.7
|
|
Total remuneration
|
823.9
|
|
119.7
|
|
37.5
|
|
115.2
|
|
101.3
|
|
116.7
|
|
1,314.3
|
|
1
|
Cash-based fixed remuneration is paid immediately.
|
2
|
Variable pay awarded in respect of 2017. In accordance with shareholder approval received on 23 May 2014 (98% in favour), for each MRT the variable component of remuneration for any one year is limited to 200% of the fixed component of the total remuneration of the MRT.
|
3
|
Share-based awards are made in HSBC shares and/or linked to notional fund units in the HSBC World Selection Balanced Portfolio. Vested shares are subject to a retention period of up to one year.
|
1
|
No sign-on payments were made in 2017. A guaranteed bonus is awarded in exceptional circumstances for new hires, and in the first year only. The circumstances where HSBC would offer a guaranteed bonus would typically involve a critical new hire and would also depend on factors such as the seniority of the individual, whether the new hire candidate has any competing offers and the timing of the hire during the performance year.
|
2
|
Includes payments such as payment in lieu of notice, statutory severance, outplacement service, legal fees, ex-gratia payments and settlements (excludes pre-existing benefit entitlements triggered on terminations).
|
208
|
HSBC Holdings plc
|
Deferred remuneration at 31 December
1
|
|
|
|
|
|
|
||||||||
|
Investment banking
|
|
Retail banking
|
|
Asset management
|
|
Corporate functions
|
|
Independent control functions
|
|
All other
|
|
Total
|
|
$m
|
|
|
|
|
|
|
|
|||||||
Cash
|
|
|
|
|
|
|
|
|||||||
Total outstanding deferred remuneration
2
|
162.9
|
|
19.2
|
|
8.3
|
|
19.9
|
|
12.4
|
|
24.4
|
|
247.1
|
|
– of which:
|
|
|
|
|
|
|
|
|||||||
Unvested
|
162.9
|
|
19.2
|
|
8.3
|
|
19.9
|
|
12.4
|
|
24.4
|
|
247.1
|
|
Total amount of outstanding deferred and retained remuneration exposed to ex post explicit and/or implicit adjustment
|
162.9
|
|
19.2
|
|
8.3
|
|
19.9
|
|
12.4
|
|
24.4
|
|
247.1
|
|
Total amount of amendment during the year due to ex post implicit adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total amount of amendment during the year due to ex post explicit adjustment
3
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total amount of deferred remuneration paid out in the financial year
|
71.1
|
|
7.0
|
|
4.0
|
|
7.2
|
|
4.6
|
|
9.8
|
|
103.7
|
|
Shares
|
|
|
|
|
|
|
|
|||||||
Total outstanding deferred remuneration
2
|
286.2
|
|
31.8
|
|
12.6
|
|
38.5
|
|
23.9
|
|
48.2
|
|
441.2
|
|
– of which:
|
|
|
|
|
|
|
|
|||||||
Unvested
|
286.1
|
|
31.8
|
|
12.6
|
|
38.5
|
|
23.9
|
|
48.1
|
|
441.0
|
|
Total amount of outstanding deferred and retained remuneration exposed to ex post explicit and/or implicit adjustment
|
286.2
|
|
31.8
|
|
12.6
|
|
38.5
|
|
23.9
|
|
48.2
|
|
441.2
|
|
Total amount of amendment during the year due to ex post implicit adjustment
|
43.7
|
|
5.5
|
|
1.8
|
|
6.3
|
|
3.7
|
|
7.7
|
|
68.7
|
|
Total amount of amendment during the year due to ex post explicit adjustment
3
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total amount of deferred remuneration paid out in the financial year
4
|
231.1
|
|
30.5
|
|
11.0
|
|
29.2
|
|
20.2
|
|
32.1
|
|
354.1
|
|
Other forms
|
|
|
|
|
|
|
|
|||||||
Total outstanding deferred remuneration
2
|
—
|
|
—
|
|
0.5
|
|
—
|
|
—
|
|
—
|
|
0.5
|
|
– of which:
|
|
|
|
|
|
|
|
|||||||
Unvested
|
—
|
|
—
|
|
0.5
|
|
—
|
|
—
|
|
—
|
|
0.5
|
|
Total amount of outstanding deferred and retained remuneration exposed to ex post explicit and/or implicit adjustment
|
—
|
|
—
|
|
0.5
|
|
—
|
|
—
|
|
—
|
|
0.5
|
|
Total amount of amendment during the year due to ex post implicit adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total amount of amendment during the year due to ex post explicit adjustment
3
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total amount of deferred remuneration paid out in the financial year
4
|
—
|
|
—
|
|
0.4
|
|
—
|
|
—
|
|
—
|
|
0.4
|
|
1
|
This table provides details of movements during performance year 2017. For details of variable pay awards granted for 2017, please refer to both the remuneration tables above. Deferred remuneration is made in cash and/or shares. Share-based awards are made in HSBC shares and/or linked to notional fund units in the HSBC World Selection Balanced Portfolio.
|
2
|
Includes unvested deferred awards, and vested deferred awards subject to retention period as at 31 December 2017.
|
3
|
Includes any amendments due to malus or clawback. Page
205
provides details of in-year variable pay adjustments.
|
4
|
Shares are considered as paid when they vest. Vested shares are valued using the sale price or the closing share price on the business day immediately preceding the vesting day.
|
1
|
Table prepared in euros in accordance with Article 450 of the European Union Capital Requirements Regulation, using the exchange rates published by the European Commission for financial programming and budget for December of the reported year as published on its website.
|
HSBC Holdings plc
|
209
|
Report of the Independent Registered Public Accounting Firm to the Board of Directors and
Shareholders of HSBC Holdings plc
|
210
|
HSBC Holdings plc
|
12
|
Fair values of financial instruments not carried at fair value
|
|
13
|
Financial assets designated at fair value
|
|
14
|
Derivatives
|
|
15
|
Financial investments
|
|
16
|
Assets pledged, collateral received and assets transferred
|
|
17
|
Interests in associates and joint ventures
|
|
18
|
Investments in subsidiaries
|
|
19
|
Structured entities
|
|
20
|
Goodwill and intangible assets
|
|
21
|
Prepayments, accrued income and other assets
|
|
22
|
Trading liabilities
|
|
23
|
Financial liabilities designated at fair value
|
|
24
|
Debt securities in issue
|
|
25
|
Accruals, deferred income and other liabilities
|
|
26
|
Provisions
|
|
27
|
Subordinated liabilities
|
|
28
|
Maturity analysis of assets, liabilities and off-balance sheet commitments
|
|
29
|
Offsetting of financial assets and financial liabilities
|
|
30
|
Non-controlling interests
|
|
31
|
Called up share capital and other equity instruments
|
|
32
|
Contingent liabilities, contractual commitments
and guarantees
|
|
33
|
Lease commitments
|
|
34
|
Legal proceedings and regulatory matters
|
|
35
|
Related party transactions
|
|
36
|
Events after the balance sheet date
|
|
37
|
HSBC Holdings’ subsidiaries, joint ventures and associates
|
|
38
|
Non-statutory accounts
|
HSBC Holdings plc
|
211
|
Consolidated income statement
|
|||||||
for the year ended 31 December
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|
|
Notes
|
$m
|
|
$m
|
|
$m
|
|
Net interest income
|
|
28,176
|
|
29,813
|
|
32,531
|
|
– interest income
|
|
40,995
|
|
42,414
|
|
47,189
|
|
– interest expense
|
|
(12,819
|
)
|
(12,601
|
)
|
(14,658
|
)
|
Net fee income
|
|
12,811
|
|
12,777
|
|
14,705
|
|
– fee income
|
|
15,853
|
|
15,669
|
|
18,016
|
|
– fee expense
|
|
(3,042
|
)
|
(2,892
|
)
|
(3,311
|
)
|
Net trading income
|
|
7,719
|
|
9,452
|
|
8,723
|
|
– trading income excluding net interest income
|
|
6,098
|
|
8,066
|
|
6,948
|
|
– net interest income on trading activities
|
|
1,621
|
|
1,386
|
|
1,775
|
|
Net income/(expense) from financial instruments designated at fair value
|
2
|
3,698
|
|
(2,666
|
)
|
1,532
|
|
– changes in fair value of long-term debt and related derivatives
|
|
672
|
|
(3,975
|
)
|
863
|
|
– net income from other financial instruments designated at fair value
|
|
3,026
|
|
1,309
|
|
669
|
|
Gains less losses from financial investments
|
|
1,150
|
|
1,385
|
|
2,068
|
|
Dividend income
|
|
106
|
|
95
|
|
123
|
|
Net insurance premium income
|
3
|
9,779
|
|
9,951
|
|
10,355
|
|
Other operating income/(expense)
|
|
337
|
|
(971
|
)
|
1,055
|
|
Total operating income
|
|
63,776
|
|
59,836
|
|
71,092
|
|
Net insurance claims and benefits paid and movement in liabilities to policyholders
|
3
|
(12,331
|
)
|
(11,870
|
)
|
(11,292
|
)
|
Net operating income before loan impairment charges and other credit risk provisions
|
|
51,445
|
|
47,966
|
|
59,800
|
|
Loan impairment charges and other credit risk provisions
|
4
|
(1,769
|
)
|
(3,400
|
)
|
(3,721
|
)
|
Net operating income
|
|
49,676
|
|
44,566
|
|
56,079
|
|
Employee compensation and benefits
|
5
|
(17,315
|
)
|
(18,089
|
)
|
(19,900
|
)
|
General and administrative expenses
|
|
(15,707
|
)
|
(16,473
|
)
|
(17,662
|
)
|
Depreciation and impairment of property, plant and equipment
|
|
(1,166
|
)
|
(1,229
|
)
|
(1,269
|
)
|
Amortisation and impairment of intangible assets
|
|
(696
|
)
|
(777
|
)
|
(937
|
)
|
Goodwill impairment of Global Private Banking – Europe
|
20
|
—
|
|
(3,240
|
)
|
—
|
|
Total operating expenses
|
|
(34,884
|
)
|
(39,808
|
)
|
(39,768
|
)
|
Operating profit
|
4
|
14,792
|
|
4,758
|
|
16,311
|
|
Share of profit in associates and joint ventures
|
17
|
2,375
|
|
2,354
|
|
2,556
|
|
Profit before tax
|
|
17,167
|
|
7,112
|
|
18,867
|
|
Tax expense
|
7
|
(5,288
|
)
|
(3,666
|
)
|
(3,771
|
)
|
Profit for the year
|
|
11,879
|
|
3,446
|
|
15,096
|
|
Attributable to:
|
|
|
|
|
|
||
– ordinary shareholders of the parent company
|
|
9,683
|
|
1,299
|
|
12,572
|
|
– preference shareholders of the parent company
|
|
90
|
|
90
|
|
90
|
|
– other equity holders
|
|
1,025
|
|
1,090
|
|
860
|
|
– non-controlling interests
|
|
1,081
|
|
967
|
|
1,574
|
|
Profit for the year
|
|
11,879
|
|
3,446
|
|
15,096
|
|
|
|
$
|
|
$
|
|
$
|
|
Basic earnings per ordinary share
|
9
|
0.48
|
|
0.07
|
|
0.65
|
|
Diluted earnings per ordinary share
|
9
|
0.48
|
|
0.07
|
|
0.64
|
|
212
|
HSBC Holdings plc
|
Consolidated statement of comprehensive income
|
||||||
for the year ended 31 December
|
||||||
|
2017
|
|
2016
|
|
2015
|
|
|
$m
|
|
$m
|
|
$m
|
|
Profit for the year
|
11,879
|
|
3,446
|
|
15,096
|
|
Other comprehensive income/(expense)
|
|
|
|
|||
Items that will be reclassified subsequently to profit or loss when specific conditions are met:
|
|
|
|
|||
Available-for-sale investments
|
146
|
|
(299
|
)
|
(3,072
|
)
|
– fair value gains/(losses)
|
1,227
|
|
475
|
|
(1,231
|
)
|
– fair value gains reclassified to the income statement
|
(1,033
|
)
|
(895
|
)
|
(2,437
|
)
|
– amounts reclassified to the income statement in respect of impairment losses
|
93
|
|
71
|
|
127
|
|
– income taxes
|
(141
|
)
|
50
|
|
469
|
|
Cash flow hedges
|
(192
|
)
|
(68
|
)
|
(24
|
)
|
– fair value (losses)/gains
|
(1,046
|
)
|
(297
|
)
|
704
|
|
– fair value losses/(gains) reclassified to the income statement
|
833
|
|
195
|
|
(705
|
)
|
– income taxes
|
21
|
|
34
|
|
(23
|
)
|
Share of other comprehensive income/(expense) of associates and joint ventures
|
(43
|
)
|
54
|
|
(9
|
)
|
– share for the year
|
(43
|
)
|
54
|
|
(9
|
)
|
Exchange differences
|
9,077
|
|
(8,092
|
)
|
(10,945
|
)
|
– foreign exchange gains reclassified to income statement on disposal of a foreign operation
|
—
|
|
1,894
|
|
—
|
|
– other exchange differences
|
8,939
|
|
(9,791
|
)
|
(11,112
|
)
|
– income tax attributable to exchange differences
|
138
|
|
(195
|
)
|
167
|
|
Items that will not be reclassified subsequently to profit or loss:
|
|
|
|
|||
Remeasurement of defined benefit asset/liability
|
2,419
|
|
7
|
|
101
|
|
– before income taxes
|
3,440
|
|
(84
|
)
|
130
|
|
– income taxes
|
(1,021
|
)
|
91
|
|
(29
|
)
|
Changes in fair value of financial liabilities designated at fair value due to movement in own credit risk
|
(2,024
|
)
|
—
|
|
—
|
|
– before income taxes
|
(2,409
|
)
|
—
|
|
—
|
|
– income taxes
|
385
|
|
—
|
|
—
|
|
Other comprehensive income/(expense) for the year,
net of tax
|
9,383
|
|
(8,398
|
)
|
(13,949
|
)
|
Total comprehensive income/(expense) fo
r the year
|
21,262
|
|
(4,952
|
)
|
1,147
|
|
Attributable to:
|
|
|
|
|||
– ordinary shareholders of the parent company
|
18,914
|
|
(6,968
|
)
|
(490
|
)
|
– preference shareholders of the parent company
|
90
|
|
90
|
|
90
|
|
– other equity holders
|
1,025
|
|
1,090
|
|
860
|
|
– non-controlling interests
|
1,233
|
|
836
|
|
687
|
|
Total comprehensive income/(expense) fo
r the year
|
21,262
|
|
(4,952
|
)
|
1,147
|
|
HSBC Holdings plc
|
213
|
Consolidated balance sheet
|
|||||
at 31 December
|
|||||
|
|
2017
|
|
2016
|
|
|
Notes
|
$m
|
|
$m
|
|
Assets
|
|
|
|
||
Cash and balances at central banks
|
|
180,624
|
|
128,009
|
|
Items in the course of collection from other banks
|
|
6,628
|
|
5,003
|
|
Hong Kong Government certificates of indebtedness
|
|
34,186
|
|
31,228
|
|
Trading assets
|
10
|
287,995
|
|
235,125
|
|
Financial assets designated at fair value
|
13
|
29,464
|
|
24,756
|
|
Derivatives
|
14
|
219,818
|
|
290,872
|
|
Loans and advances to banks
|
|
90,393
|
|
88,126
|
|
Loans and advances to customers
|
|
962,964
|
|
861,504
|
|
Reverse repurchase agreements – non-trading
|
|
201,553
|
|
160,974
|
|
Financial investments
|
15
|
389,076
|
|
436,797
|
|
Prepayments, accrued income and other assets
|
21
|
67,191
|
|
63,909
|
|
Current tax assets
|
|
1,006
|
|
1,145
|
|
Interests in associates and joint ventures
|
17
|
22,744
|
|
20,029
|
|
Goodwill and intangible assets
|
20
|
23,453
|
|
21,346
|
|
Deferred tax assets
|
7
|
4,676
|
|
6,163
|
|
Total assets at 31 Dec
|
|
2,521,771
|
|
2,374,986
|
|
Liabilities and equity
|
|
|
|
||
Liabilities
|
|
|
|
||
Hong Kong currency notes in circulation
|
|
34,186
|
|
31,228
|
|
Deposits by banks
|
|
69,922
|
|
59,939
|
|
Customer accounts
|
|
1,364,462
|
|
1,272,386
|
|
Repurchase agreements – non-trading
|
|
130,002
|
|
88,958
|
|
Items in the course of transmission to other banks
|
|
6,850
|
|
5,977
|
|
Trading liabilities
|
22
|
184,361
|
|
153,691
|
|
Financial liabilities designated at fair value
|
23
|
94,429
|
|
86,832
|
|
Derivatives
|
14
|
216,821
|
|
279,819
|
|
Debt securities in issue
|
24
|
64,546
|
|
65,915
|
|
Accruals, deferred income and other liabilities
|
25
|
45,907
|
|
44,291
|
|
Current tax liabilities
|
|
928
|
|
719
|
|
Liabilities under insurance contracts
|
3
|
85,667
|
|
75,273
|
|
Provisions
|
26
|
4,011
|
|
4,773
|
|
Deferred tax liabilities
|
7
|
1,982
|
|
1,623
|
|
Subordinated liabilities
|
27
|
19,826
|
|
20,984
|
|
Total liabilities at 31 Dec
|
|
2,323,900
|
|
2,192,408
|
|
Equity
|
|
|
|
||
Called up share capital
|
31
|
10,160
|
|
10,096
|
|
Share premium account
|
31
|
10,177
|
|
12,619
|
|
Other equity instruments
|
|
22,250
|
|
17,110
|
|
Other reserves
|
|
7,664
|
|
(1,234
|
)
|
Retained earnings
|
|
139,999
|
|
136,795
|
|
Total shareholders’ equity
|
|
190,250
|
|
175,386
|
|
Non-controlling interests
|
30
|
7,621
|
|
7,192
|
|
Total equity at 31 Dec
|
|
197,871
|
|
182,578
|
|
Total liabilities and equity at 31 Dec
|
|
2,521,771
|
|
2,374,986
|
|
|
|
|
Mark E Tucker
|
|
Iain Mackay
|
Group Chairman
|
|
Group Finance Director
|
214
|
HSBC Holdings plc
|
Consolidated statement of cash flows
|
|||||||
for the year ended 31 December
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|
|
Footnotes
|
$m
|
|
$m
|
|
$m
|
|
Profit before tax
|
|
17,167
|
|
7,112
|
|
18,867
|
|
Adjustments for non-cash items:
|
|
|
|
|
|
|
|
Depreciation, amortisation and impairment
|
|
1,862
|
|
5,212
|
|
2,181
|
|
Net gain from investing activities
|
|
(1,152
|
)
|
(1,215
|
)
|
(1,935
|
)
|
Share of profits in associates and joint ventures
|
|
(2,375
|
)
|
(2,354
|
)
|
(2,556
|
)
|
(Gain)/Loss on disposal of subsidiaries, businesses, associates and joint ventures
|
|
(79
|
)
|
1,743
|
|
—
|
|
Loan impairment losses gross of recoveries and other credit risk provisions
|
|
2,603
|
|
4,090
|
|
4,546
|
|
Provisions including pensions
|
|
917
|
|
2,482
|
|
3,472
|
|
Share-based payment expense
|
|
500
|
|
534
|
|
757
|
|
Other non-cash items included in profit before tax
|
|
(381
|
)
|
(207
|
)
|
(191
|
)
|
Elimination of exchange differences
|
1
|
(21,289
|
)
|
15,364
|
|
18,308
|
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
Change in net trading securities and derivatives
|
|
(10,901
|
)
|
4,395
|
|
24,384
|
|
Change in loans and advances to banks and customers
|
|
(108,984
|
)
|
52,868
|
|
32,971
|
|
Change in reverse repurchase agreements – non-trading
|
|
(37,281
|
)
|
(13,138
|
)
|
(3,011
|
)
|
Change in financial assets designated at fair value
|
|
(5,303
|
)
|
(1,235
|
)
|
2,394
|
|
Change in other assets
|
|
(6,570
|
)
|
(6,591
|
)
|
9,090
|
|
Change in deposits by banks and customer accounts
|
|
102,211
|
|
(8,918
|
)
|
(65,907
|
)
|
Change in repurchase agreements – non-trading
|
|
41,044
|
|
8,558
|
|
(26,481
|
)
|
Change in debt securities in issue
|
|
(1,369
|
)
|
(23,034
|
)
|
960
|
|
Change in financial liabilities designated at fair value
|
|
8,508
|
|
17,802
|
|
(10,785
|
)
|
Change in other liabilities
|
|
13,514
|
|
8,792
|
|
(4,549
|
)
|
Dividends received from associates
|
|
740
|
|
689
|
|
879
|
|
Contributions paid to defined benefit plans
|
|
(685
|
)
|
(726
|
)
|
(664
|
)
|
Tax paid
|
|
(3,175
|
)
|
(3,264
|
)
|
(3,852
|
)
|
Net cash from operating activities
|
|
(10,478
|
)
|
68,959
|
|
(1,122
|
)
|
Purchase of financial investments
|
|
(357,264
|
)
|
(457,084
|
)
|
(438,376
|
)
|
Proceeds from the sale and maturity of financial investments
|
|
418,352
|
|
430,085
|
|
399,636
|
|
Net cash flows from the purchase and sale of property, plant and equipment
|
|
(1,167
|
)
|
(1,151
|
)
|
(1,249
|
)
|
Net cash flows from disposal of customer and loan portfolios
|
|
6,756
|
|
9,194
|
|
2,023
|
|
Net investment in intangible assets
|
|
(1,285
|
)
|
(906
|
)
|
(954
|
)
|
Net cash flow on disposal of subsidiaries, businesses, associates and joint ventures
|
2
|
165
|
|
4,802
|
|
8
|
|
Net cash from investing activities
|
|
65,557
|
|
(15,060
|
)
|
(38,912
|
)
|
Issue of ordinary share capital and other equity instruments
|
|
5,196
|
|
2,024
|
|
3,727
|
|
Cancellation of shares
|
|
(3,000
|
)
|
—
|
|
—
|
|
Net sales/(purchases) of own shares for market-making and investment purposes
|
|
(67
|
)
|
523
|
|
331
|
|
Purchase of treasury shares
|
|
—
|
|
(2,510
|
)
|
—
|
|
Redemption of preference shares and other equity instruments
|
|
—
|
|
(1,825
|
)
|
(463
|
)
|
Subordinated loan capital issued
|
|
—
|
|
2,622
|
|
3,180
|
|
Subordinated loan capital repaid
|
4
|
(3,574
|
)
|
(595
|
)
|
(2,157
|
)
|
Dividends paid to shareholders of the parent company and non-controlling interests
|
|
(9,005
|
)
|
(9,157
|
)
|
(8,195
|
)
|
Net cash from financing activities
|
|
(10,450
|
)
|
(8,918
|
)
|
(3,577
|
)
|
Net increase/(decrease) in cash and cash equivalents
|
|
44,629
|
|
44,981
|
|
(43,611
|
)
|
Cash and cash equivalents at 1 Jan
|
|
274,550
|
|
243,863
|
|
301,301
|
|
Exchange differences in respect of cash and cash equivalents
|
|
18,233
|
|
(14,294
|
)
|
(13,827
|
)
|
Cash and cash equivalents at 31 Dec
|
|
337,412
|
|
274,550
|
|
243,863
|
|
Cash and cash equivalents comprise:
|
3
|
|
|
|
|
||
– cash and balances at central banks
|
|
180,624
|
|
128,009
|
|
98,934
|
|
– items in the course of collection from other banks
|
|
6,628
|
|
5,003
|
|
5,768
|
|
– loans and advances to banks of one month or less
|
|
82,771
|
|
77,318
|
|
70,985
|
|
– reverse repurchase agreements with banks of one month or less
|
|
58,850
|
|
55,551
|
|
53,971
|
|
– treasury bills, other bills and certificates of deposit less than three months
|
|
15,389
|
|
14,646
|
|
19,843
|
|
– less: items in the course of transmission to other banks
|
|
(6,850
|
)
|
(5,977
|
)
|
(5,638
|
)
|
|
|
337,412
|
|
274,550
|
|
243,863
|
|
1
|
Adjustment to bring changes between opening and closing balance sheet amounts to average rates. This is not done on a line-by-line basis, as details cannot be determined without unreasonable expense.
|
2
|
In July 2016, we completed the disposal of the Brazilian operations resulting in net cash inflow of
$4.8b
n
.
|
3
|
At 31 December 2017 $
39,830m
(2016:
$35,501m
) was not available for use by HSBC, of which $
21,424m
(2016:
$21,108m
) related to mandatory deposits at central banks.
|
4
|
Subordinated liabilities changes during the year are attributable to repayments of
$(3.6)b
n (2016:
$(0.6)b
n) of securities. Non-cash changes during the year included foreign exchange loss/gain (
$0.6b
n) (2016:
$2.1b
n) and fair value losses of (
$1.2b
n) (2016: (
$0.3b
n)).
|
HSBC Holdings plc
|
215
|
Consolidated statement of changes in equity
|
||||||||||||||||||||
for the year ended 31 December
|
||||||||||||||||||||
|
|
|
|
|
|
|
Other reserves
6
|
|
|
|
|
|
|
|||||||
|
Called up share capital and share premium
1
|
|
Other
equity instru-ments 2 |
|
Retained
earnings 3, 4, 5 |
|
Available- for-sale fair value
reserve |
|
Cash flow
hedging reserve |
|
Foreign
exchange reserve |
|
Merger
reserve 7 |
|
Total
share- holders’ equity |
|
Non-
controlling interests |
|
Total
equity |
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
At 1 Jan 2017
|
22,715
|
|
17,110
|
|
136,795
|
|
(477
|
)
|
(27
|
)
|
(28,038
|
)
|
27,308
|
|
175,386
|
|
7,192
|
|
182,578
|
|
Profit for the year
|
—
|
|
—
|
|
10,798
|
|
—
|
|
—
|
|
—
|
|
—
|
|
10,798
|
|
1,081
|
|
11,879
|
|
Other comprehensive income
(net of tax) |
—
|
|
—
|
|
328
|
|
131
|
|
(194
|
)
|
8,966
|
|
—
|
|
9,231
|
|
152
|
|
9,383
|
|
– available-for-sale investments
|
—
|
|
—
|
|
—
|
|
131
|
|
—
|
|
—
|
|
—
|
|
131
|
|
15
|
|
146
|
|
– cash flow hedges
|
—
|
|
—
|
|
—
|
|
—
|
|
(194
|
)
|
—
|
|
—
|
|
(194
|
)
|
2
|
|
(192
|
)
|
– changes in fair value of financial liabilities designated at fair value due to movement in own credit risk
|
—
|
|
—
|
|
(2,024
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,024
|
)
|
—
|
|
(2,024
|
)
|
– remeasurement of defined benefit asset/liability
8
|
—
|
|
—
|
|
2,395
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,395
|
|
24
|
|
2,419
|
|
– share of other comprehensive income of associates and joint ventures
|
—
|
|
—
|
|
(43
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(43
|
)
|
—
|
|
(43
|
)
|
– exchange differences
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,966
|
|
—
|
|
8,966
|
|
111
|
|
9,077
|
|
Total comprehensive income for the year
|
—
|
|
—
|
|
11,126
|
|
131
|
|
(194
|
)
|
8,966
|
|
—
|
|
20,029
|
|
1,233
|
|
21,262
|
|
Shares issued under employee remuneration and share plans
|
622
|
|
—
|
|
(566
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
56
|
|
—
|
|
56
|
|
Shares issued in lieu of dividends and amounts arising thereon
|
—
|
|
—
|
|
3,206
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,206
|
|
—
|
|
3,206
|
|
Capital securities issued
|
—
|
|
5,140
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,140
|
|
—
|
|
5,140
|
|
Dividends to shareholders
|
—
|
|
—
|
|
(11,551
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(11,551
|
)
|
(660
|
)
|
(12,211
|
)
|
Cost of share-based payment arrangements
|
—
|
|
—
|
|
500
|
|
—
|
|
—
|
|
—
|
|
—
|
|
500
|
|
—
|
|
500
|
|
Cancellation of shares
|
(3,000
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(3,000
|
)
|
—
|
|
(3,000
|
)
|
Other movements
|
—
|
|
—
|
|
489
|
|
(4
|
)
|
(1
|
)
|
—
|
|
—
|
|
484
|
|
(144
|
)
|
340
|
|
At 31 Dec 2017
|
20,337
|
|
22,250
|
|
139,999
|
|
(350
|
)
|
(222
|
)
|
(19,072
|
)
|
27,308
|
|
190,250
|
|
7,621
|
|
197,871
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
At 1 Jan 2016
|
22,263
|
|
15,112
|
|
143,976
|
|
(189
|
)
|
34
|
|
(20,044
|
)
|
27,308
|
|
188,460
|
|
9,058
|
|
197,518
|
|
Profit for the year
|
—
|
|
—
|
|
2,479
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,479
|
|
967
|
|
3,446
|
|
Other comprehensive income
(net of tax) |
—
|
|
—
|
|
59
|
|
(271
|
)
|
(61
|
)
|
(7,994
|
)
|
—
|
|
(8,267
|
)
|
(131
|
)
|
(8,398
|
)
|
– available-for-sale investments
|
—
|
|
—
|
|
—
|
|
(271
|
)
|
—
|
|
—
|
|
—
|
|
(271
|
)
|
(28
|
)
|
(299
|
)
|
– cash flow hedges
|
—
|
|
—
|
|
—
|
|
—
|
|
(61
|
)
|
—
|
|
—
|
|
(61
|
)
|
(7
|
)
|
(68
|
)
|
– remeasurement of defined benefit asset/liability
|
—
|
|
—
|
|
5
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5
|
|
2
|
|
7
|
|
– share of other comprehensive income of associates and joint ventures
|
—
|
|
—
|
|
54
|
|
—
|
|
—
|
|
—
|
|
—
|
|
54
|
|
—
|
|
54
|
|
– foreign exchange reclassified to income statement on disposal of a foreign operation
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,894
|
|
—
|
|
1,894
|
|
—
|
|
1,894
|
|
– exchange differences
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(9,888
|
)
|
—
|
|
(9,888
|
)
|
(98
|
)
|
(9,986
|
)
|
Total comprehensive income for the year
|
—
|
|
—
|
|
2,538
|
|
(271
|
)
|
(61
|
)
|
(7,994
|
)
|
—
|
|
(5,788
|
)
|
836
|
|
(4,952
|
)
|
Shares issued under employee remuneration and share plans
|
452
|
|
—
|
|
(425
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
27
|
|
—
|
|
27
|
|
Shares issued in lieu of dividends and amounts arising thereon
|
—
|
|
—
|
|
3,040
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,040
|
|
—
|
|
3,040
|
|
Net increase in treasury shares
|
—
|
|
—
|
|
(2,510
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,510
|
)
|
—
|
|
(2,510
|
)
|
Capital securities issued
|
—
|
|
1,998
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,998
|
|
—
|
|
1,998
|
|
Dividends to shareholders
|
—
|
|
—
|
|
(11,279
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(11,279
|
)
|
(919
|
)
|
(12,198
|
)
|
Cost of share-based payment arrangements
|
—
|
|
—
|
|
534
|
|
—
|
|
—
|
|
—
|
|
—
|
|
534
|
|
—
|
|
534
|
|
Other movements
|
—
|
|
—
|
|
921
|
|
(17
|
)
|
—
|
|
—
|
|
—
|
|
904
|
|
(1,783
|
)
|
(879
|
)
|
At 31 Dec 2016
|
22,715
|
|
17,110
|
|
136,795
|
|
(477
|
)
|
(27
|
)
|
(28,038
|
)
|
27,308
|
|
175,386
|
|
7,192
|
|
182,578
|
|
216
|
HSBC Holdings plc
|
Consolidated statement of changes in equity (continued)
|
||||||||||||||||||||
|
|
|
|
Other reserves
6
|
|
|
|
|||||||||||||
|
Called up share capital and share premium
1
|
|
Other
equity
instru-ments
2
|
|
Retained
earnings
3, 4, 5
|
|
Available- for-sale fair value
reserve
|
|
Cash flow
hedging
reserve
|
|
Foreign
exchange
reserve
|
|
Merger
reserve
7
|
|
Total
share-
holders’
equity
|
|
Non-
controlling
interests
|
|
Total
equity
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
At 1 Jan 2015
|
21,527
|
|
11,532
|
|
137,144
|
|
2,143
|
|
58
|
|
(9,265
|
)
|
27,308
|
|
190,447
|
|
9,531
|
|
199,978
|
|
Profit for the year
|
—
|
|
—
|
|
13,522
|
|
—
|
|
—
|
|
—
|
|
—
|
|
13,522
|
|
1,574
|
|
15,096
|
|
Other comprehensive income
(net of tax) |
—
|
|
—
|
|
73
|
|
(2,332
|
)
|
(24
|
)
|
(10,779
|
)
|
—
|
|
(13,062
|
)
|
(887
|
)
|
(13,949
|
)
|
– available-for-sale investments
|
—
|
|
—
|
|
—
|
|
(2,332
|
)
|
—
|
|
—
|
|
—
|
|
(2,332
|
)
|
(740
|
)
|
(3,072
|
)
|
– cash flow hedges
|
—
|
|
—
|
|
—
|
|
—
|
|
(24
|
)
|
—
|
|
—
|
|
(24
|
)
|
—
|
|
(24
|
)
|
– remeasurement of defined benefit asset/liability
|
—
|
|
—
|
|
82
|
|
—
|
|
—
|
|
—
|
|
—
|
|
82
|
|
19
|
|
101
|
|
– share of other comprehensive income of associates and joint ventures
|
—
|
|
—
|
|
(9
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(9
|
)
|
—
|
|
(9
|
)
|
– exchange differences
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(10,779
|
)
|
—
|
|
(10,779
|
)
|
(166
|
)
|
(10,945
|
)
|
Total comprehensive income for
the year |
—
|
|
—
|
|
13,595
|
|
(2,332
|
)
|
(24
|
)
|
(10,779
|
)
|
—
|
|
460
|
|
687
|
|
1,147
|
|
Shares issued under employee remuneration and share plans
|
736
|
|
—
|
|
(589
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
147
|
|
—
|
|
147
|
|
Shares issued in lieu of dividends and amounts arising thereon
|
—
|
|
—
|
|
3,162
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,162
|
|
—
|
|
3,162
|
|
Capital securities issued
|
—
|
|
3,580
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,580
|
|
—
|
|
3,580
|
|
Dividends to shareholders
|
—
|
|
—
|
|
(10,660
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(10,660
|
)
|
(697
|
)
|
(11,357
|
)
|
Cost of share-based payment arrangements
|
—
|
|
—
|
|
757
|
|
—
|
|
—
|
|
—
|
|
—
|
|
757
|
|
—
|
|
757
|
|
Other movements
|
—
|
|
—
|
|
567
|
|
—
|
|
—
|
|
—
|
|
—
|
|
567
|
|
(463
|
)
|
104
|
|
At 31 Dec 2015
|
22,263
|
|
15,112
|
|
143,976
|
|
(189
|
)
|
34
|
|
(20,044
|
)
|
27,308
|
|
188,460
|
|
9,058
|
|
197,518
|
|
1
|
For further details refer to Note
31
. In February 2017, HSBC announced a share buy-back of up to
$1.0b
n. Subsequently, HSBC completed a
$1.0b
n share buy-back in April 2017. In July 2017, HSBC announced a further share buy-back of up to
$2.0b
n. Subsequently, HSBC completed a
$2.0b
n share buy-back in November 2017.
|
2
|
During 2017, HSBC Holdings issued
$3,000m
, SGD
1,000m
and
€1,250m
of perpetual subordinated contingent convertible capital securities, on which there were
$14m
of external issuance costs,
$37m
of intra-group issuance costs and
$10m
of tax benefits. In 2016, HSBC Holdings issued
$2,000m
of perpetual subordinated contingent convertible capital securities, after issuance costs of
$6m
and tax benefits of
$4m
. In 2015, HSBC Holdings issued
$2,450m
and
€1,000m
of perpetual subordinated contingent convertible capital securities, on which there were
$12m
of external issuance costs,
$25m
of intra-group issuance costs and
$19m
of tax. Under IFRSs these issuance costs and tax benefits are classified as equity.
|
3
|
At 31 December 2017, retained earnings included
360,590,019
treasury shares (2016:
353,356,251
; 2015:
81,580,180
).
In addition, treasury shares are also held within HSBC’s Insurance business retirement funds for the benefit of policyholders or beneficiaries within employee trusts for the settlement of shares expected to be delivered under employee share schemes or bonus plans, and the market-making activities in Markets.
|
4
|
Cumulative goodwill amounting to
$5,138m
has been charged against reserves in respect of acquisitions of subsidiaries prior to 1 January 1998, including
$3,469m
charged against the merger reserve arising on the acquisition of HSBC Bank plc. The balance of
$1,669m
has been charged against retained earnings.
|
5
|
At 1 January 2017, the cumulative changes in fair value attributable to changes in own credit risk of financial liabilities designated at fair value was a loss of
$1,672m
.
|
6
|
At 31 December 2015, our operations in Brazil were classified as held for sale. The cumulative amount of other reserves attributable to these operations were as follows: available-for-sale fair value reserve debit of
$176m
, cash flow hedging reserve credit of
$34m
and foreign exchange reserve debit of
$2.6b
n.
|
7
|
Statutory share premium relief under Section 131 of the Companies Act 1985 (the ‘Act’) was taken in respect of the acquisition of HSBC Bank plc in 1992, HSBC France in 2000 and HSBC Finance Corporation in 2003, and the shares issued were recorded at their nominal value only. In HSBC’s consolidated financial statements the fair value differences of
$8,290m
in respect of HSBC France and
$12,768m
in respect of HSBC Finance Corporation were recognised in the merger reserve. The merger reserve created on the acquisition of HSBC Finance Corporation subsequently became attached to HSBC Overseas Holdings (UK) Limited (‘HOHU’), following a number of intra-group reorganisations. During 2009, pursuant to Section 131 of the Companies Act 1985, statutory share premium relief was taken in respect of the rights issue and
$15,796m
was recognised in the merger reserve. The merger reserve includes a deduction of
$614m
in respect of costs relating to the rights issue, of which
$149m
was subsequently transferred to the income statement. Of this
$149m
,
$121m
was a loss arising from accounting for the agreement with the underwriters as a contingent forward contract. The merger reserve excludes the loss of
$344m
on a forward foreign exchange contract associated with hedging the proceeds of the rights issue.
|
8
|
An actuarial gain of
$1,730m
has arisen as a result of the remeasurement of the defined benefit pension obligation of the HSBC Bank (UK) Pension Scheme. Refer to Note
5
for
further detail. |
HSBC Holdings plc
|
217
|
HSBC Holdings income statement
|
|||||||
for the year ended 31 December
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|
|
Notes
|
$m
|
|
$m
|
|
$m
|
|
Net interest expense
|
|
(383
|
)
|
(424
|
)
|
(438
|
)
|
– interest income
|
|
2,185
|
|
1,380
|
|
866
|
|
– interest expense
|
|
(2,568
|
)
|
(1,804
|
)
|
(1,304
|
)
|
Fee (expense)/income
|
|
2
|
|
(1
|
)
|
39
|
|
Net trading income/(expense)
|
|
(392
|
)
|
119
|
|
(349
|
)
|
Net (expense)/income from financial instruments designated at fair value
|
2
|
314
|
|
(49
|
)
|
276
|
|
– changes in fair value of long term debt and related derivatives
|
|
103
|
|
(49
|
)
|
276
|
|
– net income from other financial instruments designated at fair value
|
|
211
|
|
—
|
|
—
|
|
Gains less losses from financial investments
|
|
154
|
|
—
|
|
—
|
|
Dividend income from subsidiaries
|
|
10,039
|
|
10,436
|
|
8,469
|
|
Other operating income
|
|
769
|
|
696
|
|
654
|
|
Total operating income
|
|
10,503
|
|
10,777
|
|
8,651
|
|
Employee compensation and benefits
|
5
|
(54
|
)
|
(570
|
)
|
(908
|
)
|
General and administrative expenses
|
|
(4,911
|
)
|
(4,014
|
)
|
(3,434
|
)
|
Impairment of subsidiaries
|
|
(63
|
)
|
—
|
|
(26
|
)
|
Total operating expenses
|
|
(5,028
|
)
|
(4,584
|
)
|
(4,368
|
)
|
Profit before tax
|
|
5,475
|
|
6,193
|
|
4,283
|
|
Tax credit
|
|
64
|
|
402
|
|
570
|
|
Profit for the year
|
|
5,539
|
|
6,595
|
|
4,853
|
|
HSBC Holdings statement of comprehensive income
|
||||||
for the year ended 31 December
|
||||||
|
2017
|
|
2016
|
|
2015
|
|
|
$m
|
|
$m
|
|
$m
|
|
Profit for the year
|
5,539
|
|
6,595
|
|
4,853
|
|
Other comprehensive income/(expense)
|
|
|
|
|
|
|
Items that will be reclassified subsequently to profit or loss when specific conditions are met:
|
|
|
|
|
|
|
Financial investments in HSBC undertakings
|
(53
|
)
|
(72
|
)
|
(57
|
)
|
– fair value gains/(losses)
|
(70
|
)
|
(83
|
)
|
(77
|
)
|
– income taxes
|
17
|
|
11
|
|
20
|
|
Items that will not be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|
Changes in fair value of financial liabilities designated at fair value due to movement in own credit risk
|
(828
|
)
|
(896
|
)
|
—
|
|
– before income taxes
|
(1,007
|
)
|
(1,030
|
)
|
—
|
|
– income taxes
|
179
|
|
134
|
|
—
|
|
Other comprehensive income for the year, net of tax
|
(881
|
)
|
(968
|
)
|
(57
|
)
|
Total comprehensive income for the year
|
4,658
|
|
5,627
|
|
4,796
|
|
218
|
HSBC Holdings plc
|
HSBC Holdings balance sheet
|
|||||
at 31 December
|
|||||
|
|
2017
|
|
2016
|
|
|
Notes
|
$m
|
|
$m
|
|
Assets
|
|
|
|
||
Cash and balances with HSBC undertakings
|
|
1,985
|
|
247
|
|
Loans and advances to HSBC undertakings designated at fair value
|
|
11,944
|
|
—
|
|
Derivatives
|
14
|
2,388
|
|
2,148
|
|
Loans and advances to HSBC undertakings
|
|
76,627
|
|
77,421
|
|
Financial investments in HSBC undertakings
|
|
4,264
|
|
3,590
|
|
Prepayments, accrued income and other assets
|
|
369
|
|
503
|
|
Current tax assets
|
|
379
|
|
631
|
|
Investments in subsidiaries
|
18
|
92,930
|
|
95,850
|
|
Intangible assets
|
|
293
|
|
176
|
|
Deferred tax assets
|
|
555
|
|
232
|
|
Total assets at 31 Dec
|
|
191,734
|
|
180,798
|
|
Liabilities and equity
|
|
|
|
||
Liabilities
|
|
|
|
||
Amounts owed to HSBC undertakings
|
|
2,571
|
|
2,157
|
|
Financial liabilities designated at fair value
|
23
|
30,890
|
|
30,113
|
|
Derivatives
|
14
|
3,082
|
|
5,025
|
|
Debt securities in issue
|
24
|
34,258
|
|
21,805
|
|
Accruals, deferred income and other liabilities
|
|
1,269
|
|
1,651
|
|
Subordinated liabilities
|
27
|
15,877
|
|
15,189
|
|
Total liabilities
|
|
87,947
|
|
75,940
|
|
Equity
|
|
|
|
||
Called up share capital
|
31
|
10,160
|
|
10,096
|
|
Share premium account
|
|
10,177
|
|
12,619
|
|
Other equity instruments
|
|
22,107
|
|
17,004
|
|
Other reserves
|
|
37,440
|
|
37,483
|
|
Retained earnings
|
|
23,903
|
|
27,656
|
|
Total equity
|
|
103,787
|
|
104,858
|
|
Total liabilities and equity at 31 Dec
|
|
191,734
|
|
180,798
|
|
|
|
|
Mark E Tucker
|
|
Iain Mackay
|
Group Chairman
|
|
Group Finance Director
|
HSBC Holdings plc
|
219
|
HSBC Holdings statement of cash flows
|
||||||
for the year ended 31 December
|
||||||
|
2017
|
|
2016
|
|
2015
|
|
|
|
(Restated)
1
|
|
(Restated)
1
|
|
|
|
$m
|
|
$m
|
|
$m
|
|
Profit before tax
|
5,475
|
|
6,193
|
|
4,283
|
|
Adjustments for non-cash items:
|
(17
|
)
|
48
|
|
114
|
|
– depreciation, amortisation and impairment
|
33
|
|
10
|
|
30
|
|
– (credit)/charge for share-based payment
|
(2
|
)
|
34
|
|
86
|
|
– other non-cash items included in profit before tax
|
(48
|
)
|
4
|
|
(2
|
)
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
Change in loans to HSBC undertakings
|
(1,122
|
)
|
(36,437
|
)
|
1,247
|
|
Change in loans and advances to HSBC undertakings designated at fair value
|
(11,944
|
)
|
—
|
|
—
|
|
Change in financial investments in HSBC undertakings
|
(1,775
|
)
|
612
|
|
(289
|
)
|
Change in net trading securities and net derivatives
|
(2,183
|
)
|
3,066
|
|
1,413
|
|
Change in other assets
|
134
|
|
(239
|
)
|
(141
|
)
|
Change in debt securities in issue
2
|
1,020
|
|
(1,633
|
)
|
(49
|
)
|
Change in financial liabilities designated at fair value
|
954
|
|
(1,229
|
)
|
(1,228
|
)
|
Change in other liabilities
|
721
|
|
(693
|
)
|
(1,065
|
)
|
Tax received
|
443
|
|
646
|
|
470
|
|
Net cash from operating activities
|
(8,294
|
)
|
(29,666
|
)
|
4,755
|
|
Purchase of financial investments in HSBC undertakings
|
—
|
|
—
|
|
(276
|
)
|
Proceeds from the sale and maturity of financial investments in HSBC undertakings
|
1,165
|
|
610
|
|
—
|
|
Net cash outflow from acquisition of or increase in stake of subsidiaries
|
(89
|
)
|
(2,073
|
)
|
(2,118
|
)
|
Repayment of capital from subsidiaries
|
4,070
|
|
3,920
|
|
790
|
|
Net investment in intangible assets
|
(150
|
)
|
(109
|
)
|
(79
|
)
|
Net cash from investing activities
|
4,996
|
|
2,348
|
|
(1,683
|
)
|
Issue of ordinary share capital and other equity instruments
|
5,647
|
|
2,381
|
|
4,216
|
|
Purchase of treasury shares
|
—
|
|
(2,510
|
)
|
—
|
|
Cancellation of shares
|
(3,000
|
)
|
—
|
|
—
|
|
Subordinated loan capital issued
|
—
|
|
2,636
|
|
3,180
|
|
Subordinated loan capital repaid
|
(1,184
|
)
|
(1,781
|
)
|
(1,565
|
)
|
Debt securities issued
|
11,433
|
|
32,080
|
|
—
|
|
Debt securities repaid
|
—
|
|
—
|
|
—
|
|
Dividends paid on ordinary shares
|
(6,987
|
)
|
(7,059
|
)
|
(6,548
|
)
|
Dividends paid to holders of other equity instruments
|
(1,359
|
)
|
(1,180
|
)
|
(950
|
)
|
Net cash from financing activities
|
4,550
|
|
24,567
|
|
(1,667
|
)
|
Net increase/(decrease) in cash and cash equivalents
|
1,252
|
|
(2,751
|
)
|
1,405
|
|
Cash and cash equivalents at 1 January
|
3,697
|
|
6,448
|
|
5,043
|
|
Cash and cash equivalents at 31 Dec
1
|
4,949
|
|
3,697
|
|
6,448
|
|
Cash and cash equivalents comprise:
|
|
|
|
|
|
|
– Cash at bank with HSBC undertakings
|
1,985
|
|
247
|
|
242
|
|
– Loans and advances to banks of one month or less
|
2,964
|
|
3,450
|
|
6,206
|
|
1.
|
In 2017 cash and cash equivalents include loans and advances to HSBC undertakings of one month or less duration. The comparative figures have also been amended.
|
2.
|
Subordinated liabilities changes during the year
$0.7b
n (2016:
$0.7b
n) are wholly attributable to non-cash changes. During the year fair value losses amounted to
$0.7b
n (2016: gain
$0.7b
n).
|
220
|
HSBC Holdings plc
|
HSBC Holdings statement of changes in equity
|
||||||||||||||||
for the year ended 31 December
|
||||||||||||||||
|
|
|
|
|
Other reserves
|
|
||||||||||
|
Called up
share
capital
|
|
Share
premium
|
|
Other
equity
instruments
|
|
Retained earnings
1
|
|
Available-for-sale fair value reserve
|
|
Other
paid-in
capital
2
|
|
Merger
and other
reserves
|
|
Total
share-
holders’
equity
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
At 1 Jan 2017
|
10,096
|
|
12,619
|
|
17,004
|
|
27,656
|
|
112
|
|
2,244
|
|
35,127
|
|
104,858
|
|
Profit for the year
|
—
|
|
—
|
|
—
|
|
5,539
|
|
—
|
|
—
|
|
—
|
|
5,539
|
|
Other comprehensive income (net of tax)
|
—
|
|
—
|
|
—
|
|
(828
|
)
|
(53
|
)
|
—
|
|
—
|
|
(881
|
)
|
– available-for-sale investments
|
—
|
|
—
|
|
—
|
|
—
|
|
(53
|
)
|
—
|
|
—
|
|
(53
|
)
|
– changes in fair value of financial liabilities designated at fair value due to movement in own credit risk
|
—
|
|
—
|
|
—
|
|
(828
|
)
|
—
|
|
—
|
|
—
|
|
(828
|
)
|
Total comprehensive income for the year
|
—
|
|
—
|
|
—
|
|
4,711
|
|
(53
|
)
|
—
|
|
—
|
|
4,658
|
|
Shares issued under employee share plans
|
38
|
|
584
|
|
—
|
|
(52
|
)
|
—
|
|
—
|
|
—
|
|
570
|
|
Shares issued in lieu of dividends and amounts arising thereon
|
190
|
|
(190
|
)
|
—
|
|
3,205
|
|
—
|
|
—
|
|
—
|
|
3,205
|
|
Cancellation of shares
|
(164
|
)
|
(2,836
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(3,000
|
)
|
Capital securities issued
|
—
|
|
|
|
5,103
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,103
|
|
Dividends to shareholders
|
—
|
|
—
|
|
—
|
|
(11,551
|
)
|
—
|
|
—
|
|
—
|
|
(11,551
|
)
|
Cost of share-based payment arrangements
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
Other movements
|
—
|
|
—
|
|
—
|
|
(64
|
)
|
—
|
|
10
|
|
—
|
|
(54
|
)
|
At 31 Dec 2017
|
10,160
|
|
10,177
|
|
22,107
|
|
23,903
|
|
59
|
|
2,254
|
|
35,127
|
|
103,787
|
|
|
|
|
|
|
|
|
|
|
||||||||
At 1 Jan 2016
|
9,842
|
|
12,421
|
|
15,020
|
|
32,224
|
|
183
|
|
2,597
|
|
35,127
|
|
107,414
|
|
Profit for the year
|
—
|
|
—
|
|
—
|
|
6,595
|
|
—
|
|
—
|
|
—
|
|
6,595
|
|
Other comprehensive income (net of tax)
|
—
|
|
—
|
|
—
|
|
(896
|
)
|
(72
|
)
|
—
|
|
—
|
|
(968
|
)
|
– available-for-sale investments
|
—
|
|
—
|
|
—
|
|
—
|
|
(72
|
)
|
—
|
|
—
|
|
(72
|
)
|
– changes in fair value of financial liabilities designated at fair value due to movement in own credit risk
|
—
|
|
—
|
|
—
|
|
(896
|
)
|
—
|
|
—
|
|
—
|
|
(896
|
)
|
Total comprehensive income for the year
|
—
|
|
—
|
|
—
|
|
5,699
|
|
(72
|
)
|
—
|
|
—
|
|
5,627
|
|
Shares issued under employee share plans
|
35
|
|
417
|
|
—
|
|
(51
|
)
|
—
|
|
—
|
|
—
|
|
401
|
|
Shares issued in lieu of dividends and amounts arising thereon
|
219
|
|
(219
|
)
|
—
|
|
3,040
|
|
—
|
|
—
|
|
—
|
|
3,040
|
|
Net increase in treasury shares
|
—
|
|
—
|
|
—
|
|
(2,510
|
)
|
—
|
|
—
|
|
—
|
|
(2,510
|
)
|
Capital securities issued
|
—
|
|
|
|
1,984
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,984
|
|
Dividends to shareholders
|
—
|
|
—
|
|
—
|
|
(11,279
|
)
|
—
|
|
—
|
|
—
|
|
(11,279
|
)
|
Cost of share-based payment arrangements
|
—
|
|
—
|
|
—
|
|
34
|
|
—
|
|
—
|
|
—
|
|
34
|
|
Other movements
|
—
|
|
—
|
|
—
|
|
499
|
|
1
|
|
(353
|
)
|
—
|
|
147
|
|
At 31 Dec 2016
|
10,096
|
|
12,619
|
|
17,004
|
|
27,656
|
|
112
|
|
2,244
|
|
35,127
|
|
104,858
|
|
|
|
|
|
|
|
|
|
|
||||||||
At 1 Jan 2015
|
9,609
|
|
11,918
|
|
11,476
|
|
34,986
|
|
240
|
|
2,089
|
|
35,127
|
|
105,445
|
|
Profit for the year
|
—
|
|
—
|
|
—
|
|
4,853
|
|
—
|
|
—
|
|
—
|
|
4,853
|
|
Other comprehensive income (net of tax)
|
—
|
|
—
|
|
—
|
|
—
|
|
(57
|
)
|
—
|
|
—
|
|
(57
|
)
|
– available-for-sale investments
|
—
|
|
—
|
|
—
|
|
—
|
|
(57
|
)
|
—
|
|
—
|
|
(57
|
)
|
Total comprehensive income for the year
|
—
|
|
—
|
|
—
|
|
4,853
|
|
(57
|
)
|
—
|
|
—
|
|
4,796
|
|
Shares issued under employee share plans
|
45
|
|
691
|
|
—
|
|
(59
|
)
|
—
|
|
—
|
|
—
|
|
677
|
|
Shares issued in lieu of dividends and amounts arising thereon
|
188
|
|
(188
|
)
|
—
|
|
3,162
|
|
—
|
|
—
|
|
—
|
|
3,162
|
|
Capital securities issued
|
—
|
|
—
|
|
3,544
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,544
|
|
Dividends to shareholders
|
—
|
|
—
|
|
—
|
|
(10,660
|
)
|
—
|
|
—
|
|
—
|
|
(10,660
|
)
|
Cost of share-based payment arrangements
|
—
|
|
—
|
|
—
|
|
86
|
|
—
|
|
—
|
|
—
|
|
86
|
|
Other movements
|
—
|
|
—
|
|
—
|
|
(144
|
)
|
—
|
|
508
|
|
—
|
|
364
|
|
At 31 Dec 2015
|
9,842
|
|
12,421
|
|
15,020
|
|
32,224
|
|
183
|
|
2,597
|
|
35,127
|
|
107,414
|
|
1
|
At 31 December 2017, retained earnings included
326,843,840
(
$2,542m
) of treasury shares (2016:
325,499,152
(
$2,499m
); 2015:
67,881
(
$1m
)). The increase principally reflects the share buy-back initiative, with the purchase of
328.2
m ordinary shares (
$3,000m
) all of which were cancelled during the year and used to reduce outstanding ordinary shares. In addition, treasury shares are held to fund employee share plans.
|
2
|
Other paid-in capital arises from the exercise and lapse of share options granted to employees of HSBC Holdings subsidiaries.
|
HSBC Holdings plc
|
221
|
1
|
Basis of preparation and significant accounting policies
|
1.1
|
Basis of preparation
|
(a)
|
Compliance with International Financial Reporting Standards
|
(b)
|
Differences between IFRSs and Hong Kong Financial Reporting Standards
|
(c)
|
Future accounting developments
|
222
|
HSBC Holdings plc
|
(d)
|
Foreign currencies
|
(e)
|
Presentation of information
|
•
|
segmental disclosures are included in the ‘Report of the Directors: Financial Review’ on pages
32
to
85
;
|
•
|
disclosures concerning the nature and extent of risks relating to insurance contracts and financial instruments are included in the ‘Report of the Directors: Risk’ on pages
95
to
161
;
|
•
|
capital disclosures are included in the ‘Report of the Directors: Capital’ on pages
162
to
165
; and
|
•
|
disclosures relating to HSBC’s securitisation activities and structured products are included in the ‘Report of the Directors: Risk’ on pages
95
to
161
.
|
HSBC Holdings plc
|
223
|
(f)
|
Critical accounting estimates and judgements
|
(g)
|
Segmental analysis
|
(h)
|
Going concern
|
1.2
|
Summary of significant accounting policies
|
(a)
|
Consolidation and related policies
|
The review of goodwill for impairment reflects management’s best estimate of the future cash flows of the CGUs and the rates used to discount these cash flows, both of which are subject to uncertain factors as follows:
•
The future cash flows of the CGUs are sensitive to the cash flows projected for the periods for which detailed forecasts are available and to assumptions regarding the long-term pattern of sustainable cash flows thereafter. Forecasts are compared with actual performance and verifiable economic data, but they reflect management’s view of future business prospects at the time of the assessment.
•
The rates used to discount future expected cash flows can have a significant effect on their valuation, and are based on the costs of capital assigned to individual CGUs. The cost of capital percentage is generally derived from a capital asset pricing model, which incorporates inputs reflecting a number of financial and economic variables, including the risk-free interest rate in the country concerned and a premium for the risk of the business being evaluated. These variables are subject to fluctuations in external market rates and economic conditions beyond management’s control. They are therefore subject to uncertainty and require the exercise of significant judgement.
The accuracy of forecast cash flows is subject to a high degree of uncertainty in volatile market conditions. In such circumstances, management retests goodwill for impairment more frequently than once a year when indicators of impairment exist. This ensures that the assumptions on which the cash flow forecasts are based continue to reflect current market conditions and management’s best estimate of future business prospects.
|
224
|
HSBC Holdings plc
|
Impairment testing of investments in associates involves significant judgement in determining the value in use, and in particular estimating the present values of cash flows expected to arise from continuing to hold the investment. The most significant judgements relate to the impairment testing of our investment in Bank of Communications Co., Limited (‘BoCom’). Key assumptions used in estimating BoCom’s value in use, the sensitivity of the value in use calculation to different assumptions and a sensitivity analysis that shows the changes in key assumptions that would reduce the excess of value in use over the carrying amount (the ‘headroom’) to nil are described in Note 17.
|
(b)
|
Income and expense
|
•
|
Income earned on the execution of a significant act is recognised as revenue when the act is completed (for example, fees arising from negotiating a transaction, such as the acquisition of shares, for a third party); and
|
•
|
Income earned from the provision of services is recognised as revenue as the services are provided (for example, asset management services).
|
(c)
|
Valuation of financial instruments
|
The majority of valuation techniques employ only observable market data. However, certain financial instruments are valued on the basis of valuation techniques that feature one or more significant market inputs that are unobservable, and for them the measurement of fair value is more judgemental. An instrument in its entirety is classified as valued using significant unobservable inputs if, in the opinion of management, a significant proportion of the instrument’s inception profit or greater than 5% of the instrument’s valuation is driven by unobservable inputs. ‘Unobservable’ in this context means that there is little or no current market data available from which to determine the price at which an arm’s length transaction would be likely to occur. It generally does not mean that there is no data available at all upon which to base a determination of fair value (consensus pricing data may, for example,
be used). |
(d)
|
Financial instruments measured at amortised cost
|
HSBC Holdings plc
|
225
|
•
|
When appropriate empirical information is available, HSBC utilises roll-rate methodology, which employs statistical analyses of historical data and experience of delinquency and default to reliably estimate the amount of the loans that will eventually be written off as a result of events occurring before the balance sheet date. Individual loans are grouped using ranges of past due days, and statistical estimates are made of the likelihood that loans in each range will progress through the various stages of delinquency and become irrecoverable. Additionally, individual loans are segmented based on their credit characteristics, such as industry sector, loan grade or product. In applying this methodology, adjustments are made to estimate the periods of time between a loss event occurring, for example because of a missed payment, and its confirmation through write-off (known as the loss identification period). Current economic conditions are also evaluated when calculating the appropriate level of allowance required to cover inherent loss. In certain highly developed markets, models also take into account behavioural and account management trends as revealed in, for example, bankruptcy and rescheduling statistics.
|
•
|
When the portfolio size is small or when information is insufficient or not reliable enough to adopt a roll-rate methodology, HSBC adopts a basic formulaic approach based on historical loss rate experience, or a discounted cash flow model. Where a basic formulaic approach is undertaken, the period between a loss event occurring and its identification is estimated by local management, and is typically between six and 12 months.
|
226
|
HSBC Holdings plc
|
Loan impairment allowances represent management’s best estimate of losses incurred in the loan portfolios at the balance sheet date. Management is required to exercise judgement in making assumptions and estimates when calculating loan impairment allowances on both individually and collectively assessed loans and advances.
Collective impairment allowances are subject to estimation uncertainty, in part because it is not practicable to identify losses on an individual loan basis due to the large number of individually insignificant loans in the portfolio. The estimation methods include the use of statistical analyses of historical information, supplemented with significant management judgement, to assess whether current economic and credit conditions are such that the actual level of incurred losses is likely to be greater or less than historical experience. Where changes in economic, regulatory or behavioural conditions result in the most recent trends in portfolio risk factors being not fully reflected in the statistical models, risk factors are taken into account by adjusting the impairment allowances derived solely from historical loss experience.
Risk factors include loan portfolio growth, product mix, unemployment rates, bankruptcy trends, geographical concentrations, loan product features, economic conditions such as national and local trends in housing markets, the level of interest rates, portfolio seasoning, account management policies and practices, changes in laws and regulations, and other influences on customer payment patterns. Different factors are applied in different regions and countries to reflect local economic conditions, laws and regulations. The methodology and the assumptions used in calculating impairment losses are reviewed regularly in the light of differences between loss estimates and actual loss experience. For example, roll rates, loss rates and the expected timing of future recoveries are regularly benchmarked against actual outcomes to ensure they remain appropriate.
For individually assessed loans, judgement is required in determining whether there is objective evidence that a loss event has occurred and, if so, the measurement of the impairment allowance. In determining whether there is objective evidence that a loss event has occurred, judgement is exercised in evaluating all relevant information on indicators of impairment, including the consideration of whether payments are contractually past due and the consideration of other factors indicating deterioration in the financial condition and outlook of borrowers, affecting their ability to pay.
A higher level of judgement is required for loans to borrowers showing signs of financial difficulty in market sectors experiencing economic stress, particularly where the likelihood of repayment is affected by the prospects for refinancing or the sale of a specified asset. For those loans where objective evidence of impairment exists, management determines the size of the allowance required based on a range of factors such as the realisable value of security, the likely dividend available on liquidation or bankruptcy, the viability of the customer’s business model and the capacity to trade successfully out of financial difficulties and generate sufficient cash flow to service debt obligations.
HSBC might provide loan forbearance to borrowers experiencing financial difficulties by agreeing to modify the contractual payment terms of loans in order to improve the management of customer relationships, maximise collection opportunities or avoid default or repossession. Where forbearance activities are significant, higher levels of judgement and estimation uncertainty are involved in determining their effects on loan impairment allowances. Judgements are involved in differentiating the credit risk characteristics of forbearance cases, including those which return to performing status following renegotiation. Where collectively assessed loan portfolios include significant levels of loan forbearance, portfolios are segmented to reflect the different credit risk characteristics of forbearance cases, and estimates are made of the incurred losses inherent within each forbearance portfolio segment.
The exercise of judgement requires the use of assumptions which are highly subjective and very sensitive to the risk factors, in particular to changes in economic and credit conditions across a large number of geographical areas. Many of the factors have a high degree of interdependency and there is no single factor to which our loan impairment allowances as a whole are sensitive.
|
(e)
|
Financial instruments measured at fair value
|
HSBC Holdings plc
|
227
|
•
|
the use of the designation removes or significantly reduces an accounting mismatch;
|
•
|
when a group of financial assets, liabilities or both is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy; and
|
•
|
where financial instruments contain one or more non-closely related embedded derivatives.
|
228
|
HSBC Holdings plc
|
(f)
|
Insurance contracts
|
(g)
|
Employee compensation and benefits
|
HSBC Holdings plc
|
229
|
(h)
|
Tax
|
The recognition of a deferred tax asset relies on an assessment of the probability and sufficiency of future taxable profits, future reversals of existing taxable temporary differences and ongoing tax planning strategies. In the absence of a history of taxable profits, the most significant judgements relate to expected future profitability and to the applicability of tax planning strategies, including corporate reorganisations.
|
(i)
|
Provisions, contingent liabilities and guarantees
|
Judgement is involved in determining whether a present obligation exists and in estimating the probability, timing and amount of any outflows. Professional expert advice is taken on the assessment of litigation, property (including onerous contracts) and similar obligations. Provisions for legal proceedings and regulatory matters typically require a higher degree of judgement than other types of provisions. When matters are at an early stage, accounting judgements can be difficult because of the high degree of uncertainty associated with determining whether a present obligation exists, and estimating the probability and amount of any outflows that may arise. As matters progress, management and legal advisers evaluate on an ongoing basis whether provisions should be recognised, revising previous judgements and estimates as appropriate. At more advanced stages, it is typically easier to make judgements and estimates around a better defined set of possible outcomes. However, the amount provisioned can remain very sensitive to the assumptions used. There could be a wide range of possible outcomes for any pending legal proceedings, investigations or inquiries. As a result, it is often not practicable to quantify a range of possible outcomes for individual matters. It is also not practicable to meaningfully quantify ranges of potential outcomes in aggregate for these types of provisions because of the diverse nature and circumstances of such matters and the wide range of uncertainties involved. Provisions for customer remediation also require significant levels of estimation and judgement. The amounts of provisions recognised depend on a number of different assumptions, such as the volume of inbound complaints, the projected period of inbound complaint volumes, the decay rate of complaint volumes, the population identified as systemically mis-sold and the number of policies per customer complaint.
|
230
|
HSBC Holdings plc
|
2
|
Net income/(expense) from financial instruments designated at fair value
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
Footnote
|
$m
|
|
$m
|
|
$m
|
|
Net income/(expense) arising on:
|
|
|
|
|
|||
Financial assets
|
|
|
|
|
|||
Financial assets held to meet liabilities under insurance and investment contracts
|
|
3,211
|
|
1,480
|
|
531
|
|
Other financial assets designated at fair value
|
|
198
|
|
90
|
|
89
|
|
Derivatives managed with other financial assets designated at fair value
|
|
(9
|
)
|
(43
|
)
|
13
|
|
|
|
3,400
|
|
1,527
|
|
633
|
|
Financial liabilities
|
|
|
|
|
|
||
Liabilities to customers under investment contracts
|
|
(375
|
)
|
(218
|
)
|
34
|
|
HSBC’s long-term debt issued and related derivatives
|
|
672
|
|
(3,975
|
)
|
863
|
|
– changes in own credit spread on long-term debt
|
1
|
—
|
|
(1,792
|
)
|
1,002
|
|
– derivatives managed in conjunction with HSBC’s issued debt securities
|
|
(273
|
)
|
(1,367
|
)
|
(1,997
|
)
|
– other changes in fair value
|
|
945
|
|
(816
|
)
|
1,858
|
|
Other financial liabilities designated at fair value
|
|
1
|
|
(6
|
)
|
3
|
|
Derivatives managed with other financial liabilities designated at fair value
|
|
—
|
|
6
|
|
(1
|
)
|
|
|
298
|
|
(4,193
|
)
|
899
|
|
Year ended 31 Dec
|
|
3,698
|
|
(2,666
|
)
|
1,532
|
|
1
|
From 1 January 2017, HSBC Holdings plc adopted, in its consolidated financial statements, the requirements of IFRS 9 ‘Financial Instruments’ relating to the presentation of gains and losses on financial liabilities designated at fair value. As a result, changes in fair value attributable to changes in own credit risk are presented in other comprehensive income with the remaining effect presented in profit or loss.
|
Net income/(expense) arising on HSBC Holdings’ long-term debt issued and related derivatives
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|
|
Footnote
|
$m
|
|
$m
|
|
$m
|
|
Net income/(expense) arising on:
|
|
|
|
|
|||
Financial assets:
|
|
211
|
|
—
|
|
—
|
|
– other financial assets designated at fair value
|
|
161
|
|
—
|
|
—
|
|
– derivatives managed with other financial assets designated at fair value
|
|
50
|
|
—
|
|
—
|
|
Financial liabilities
|
|
103
|
|
(49
|
)
|
276
|
|
– changes in own credit spread on long-term debt
|
1
|
—
|
|
—
|
|
348
|
|
– derivatives managed in conjunction with HSBC Holdings issued debt securities
|
|
292
|
|
(642
|
)
|
(927
|
)
|
– other changes in fair value
|
|
(189
|
)
|
593
|
|
855
|
|
Year ended 31 Dec
|
|
314
|
|
(49
|
)
|
276
|
|
1
|
From 1 January 2016, HSBC Holdings plc adopted, in its separate financial statements, the requirements of IFRS 9 ‘Financial Instruments’ relating to the presentation of gains and losses on financial liabilities designated at fair value. As a result, changes in fair value attributable to changes in own credit risk are presented in other comprehensive income with the remaining effect presented in profit or loss.
|
3
|
Insurance business
|
Net insurance premium income
|
||||||||
|
Non-linked
insurance
|
|
Linked life
insurance
|
|
Investment contracts
with DPF
1
|
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Gross insurance premium income
|
8,424
|
|
351
|
|
2,027
|
|
10,802
|
|
Reinsurers’ share of gross insurance premium income
|
(1,016
|
)
|
(7
|
)
|
—
|
|
(1,023
|
)
|
Year ended 31 Dec 2017
|
7,408
|
|
344
|
|
2,027
|
|
9,779
|
|
|
|
|
|
|
||||
Gross insurance premium income
|
8,036
|
|
675
|
|
1,877
|
|
10,588
|
|
Reinsurers’ share of gross insurance premium income
|
(629
|
)
|
(8
|
)
|
—
|
|
(637
|
)
|
Year ended 31 Dec 2016
|
7,407
|
|
667
|
|
1,877
|
|
9,951
|
|
|
|
|
|
|
||||
Gross insurance premium income
|
7,506
|
|
1,409
|
|
2,097
|
|
11,012
|
|
Reinsurers’ share of gross insurance premium income
|
(648
|
)
|
(9
|
)
|
—
|
|
(657
|
)
|
Year ended 31 Dec 2015
|
6,858
|
|
1,400
|
|
2,097
|
|
10,355
|
|
1
|
Discretionary participation features.
|
HSBC Holdings plc
|
231
|
Net insurance claims and benefits paid and movement in liabilities to policyholders
|
||||||||
|
Non-linked
insurance
|
|
Linked life
insurance
|
|
Investment
contracts
with DPF
1
|
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Gross claims and benefits paid and movement in liabilities
|
8,894
|
|
1,413
|
|
2,901
|
|
13,208
|
|
– claims, benefits and surrenders paid
|
2,883
|
|
1,044
|
|
2,002
|
|
5,929
|
|
– movement in liabilities
|
6,011
|
|
369
|
|
899
|
|
7,279
|
|
Reinsurers’ share of claims and benefits paid and movement in liabilities
|
(942
|
)
|
65
|
|
—
|
|
(877
|
)
|
– claims, benefits and surrenders paid
|
(297
|
)
|
(223
|
)
|
—
|
|
(520
|
)
|
– movement in liabilities
|
(645
|
)
|
288
|
|
—
|
|
(357
|
)
|
Year ended 31 Dec 2017
|
7,952
|
|
1,478
|
|
2,901
|
|
12,331
|
|
|
|
|
|
|
||||
Gross claims and benefits paid and movement in liabilities
|
8,778
|
|
1,321
|
|
2,409
|
|
12,508
|
|
– claims, benefits and surrenders paid
|
2,828
|
|
749
|
|
2,017
|
|
5,594
|
|
– movement in liabilities
|
5,950
|
|
572
|
|
392
|
|
6,914
|
|
Reinsurers’ share of claims and benefits paid and movement in liabilities
|
(560
|
)
|
(78
|
)
|
—
|
|
(638
|
)
|
– claims, benefits and surrenders paid
|
(112
|
)
|
(14
|
)
|
—
|
|
(126
|
)
|
– movement in liabilities
|
(448
|
)
|
(64
|
)
|
—
|
|
(512
|
)
|
Year ended 31 Dec 2016
|
8,218
|
|
1,243
|
|
2,409
|
|
11,870
|
|
|
|
|
|
|
||||
Gross claims and benefits paid and movement in liabilities
|
7,746
|
|
1,398
|
|
2,728
|
|
11,872
|
|
– claims, benefits and surrenders paid
|
3,200
|
|
1,869
|
|
2,101
|
|
7,170
|
|
– movement in liabilities
|
4,546
|
|
(471
|
)
|
627
|
|
4,702
|
|
Reinsurers’ share of claims and benefits paid and movement in liabilities
|
(575
|
)
|
(5
|
)
|
—
|
|
(580
|
)
|
– claims, benefits and surrenders paid
|
(153
|
)
|
(64
|
)
|
—
|
|
(217
|
)
|
– movement in liabilities
|
(422
|
)
|
59
|
|
—
|
|
(363
|
)
|
Year ended 31 Dec 2015
|
7,171
|
|
1,393
|
|
2,728
|
|
11,292
|
|
1
|
Discretionary participation features.
|
1
|
Discretionary participation features.
|
2
|
‘Exchange differences and other movements’ includes movements in liabilities arising from net unrealised investment gains recognised in other comprehensive income.
|
232
|
HSBC Holdings plc
|
4
|
Operating profit
|
|
2017
|
|
2016
|
|
2015
|
|
|
$m
|
|
$m
|
|
$m
|
|
Income
|
|
|
|
|
||
Interest recognised on impaired financial assets
|
261
|
|
574
|
|
934
|
|
Fees earned on financial assets that are not at fair value through profit or loss (other than amounts included in determining the effective interest rate)
|
7,577
|
|
7,732
|
|
8,736
|
|
Fees earned on trust and other fiduciary activities
|
2,691
|
|
2,543
|
|
3,052
|
|
Expense
|
|
|
|
|
|
|
Interest on financial instruments, excluding interest on financial liabilities held for trading or designated at
fair value |
(10,912
|
)
|
(11,858
|
)
|
(13,680
|
)
|
Fees payable on financial liabilities that are not at fair value through profit or loss (other than amounts included in determining the effective interest rate)
|
(1,475
|
)
|
(1,214
|
)
|
(1,251
|
)
|
Fees payable relating to trust and other fiduciary activities
|
(134
|
)
|
(129
|
)
|
(166
|
)
|
Payments under lease and sublease agreements
|
(936
|
)
|
(969
|
)
|
(1,190
|
)
|
– minimum lease payments
|
(911
|
)
|
(945
|
)
|
(1,058
|
)
|
– contingent rents and sublease payments
|
(25
|
)
|
(24
|
)
|
(132
|
)
|
UK bank levy
|
(916
|
)
|
(922
|
)
|
(1,421
|
)
|
Restructuring provisions
|
(204
|
)
|
(415
|
)
|
(430
|
)
|
Gains/(losses)
|
|
|
|
|
|
|
Impairment of available-for-sale equity securities
|
(98
|
)
|
(36
|
)
|
(111
|
)
|
Gains/(losses) recognised on assets held for sale
|
195
|
|
(206
|
)
|
(244
|
)
|
Gains on the partial sale of shareholding in Industrial Bank
|
—
|
|
—
|
|
1,372
|
|
Gain/(loss) on disposal of Brazilian operations
|
19
|
|
(1,743
|
)
|
—
|
|
Loan impairment charges and other credit risk provisions
|
(1,769
|
)
|
(3,400
|
)
|
(3,721
|
)
|
– net impairment charge on loans and advances
|
(1,992
|
)
|
(3,350
|
)
|
(3,592
|
)
|
– release of impairment on available-for-sale debt securities
|
190
|
|
63
|
|
17
|
|
– other credit risk provisions
|
33
|
|
(113
|
)
|
(146
|
)
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
Footnote
|
$m
|
|
$m
|
|
$m
|
|
External net operating income by country
|
1
|
51,445
|
|
47,966
|
|
59,800
|
|
– UK
|
|
11,057
|
|
9,495
|
|
14,132
|
|
– Hong Kong
|
|
14,992
|
|
12,864
|
|
14,447
|
|
– US
|
|
4,573
|
|
5,094
|
|
5,541
|
|
– France
|
|
2,203
|
|
2,571
|
|
2,706
|
|
– other countries
|
|
18,620
|
|
17,942
|
|
22,974
|
|
– of which: Brazil
|
|
60
|
|
(204
|
)
|
3,546
|
|
1
|
Net operating income before loan impairment charges and other credit risk provisions, also referred to as revenue.
|
5
|
Employee compensation and benefits
|
|
2017
|
|
2016
|
|
2015
|
|
|
$m
|
|
$m
|
|
$m
|
|
Wages and salaries
|
15,227
|
|
15,735
|
|
17,245
|
|
Social security costs
|
1,419
|
|
1,312
|
|
1,600
|
|
Post-employment benefits
|
669
|
|
1,042
|
|
1,055
|
|
Year ended 31 Dec
|
17,315
|
|
18,089
|
|
19,900
|
|
HSBC Holdings plc
|
233
|
Average number of persons employed by HSBC during the year by geographical region
|
||||||
|
2017
|
|
2016
|
|
2015
|
|
Europe
|
70,301
|
|
71,196
|
|
68,408
|
|
Asia
|
125,004
|
|
122,282
|
|
121,438
|
|
Middle East and North Africa
|
10,408
|
|
12,021
|
|
14,467
|
|
North America
|
18,610
|
|
20,353
|
|
21,506
|
|
Latin America
|
20,465
|
|
21,081
|
|
42,614
|
|
Year ended 31 Dec
|
244,788
|
|
246,933
|
|
268,433
|
|
|
2017
|
2016
|
2015
|
|
$m
|
$m
|
$m
|
Restricted share awards
|
520
|
591
|
748
|
Savings-related and other share award option plans
|
26
|
33
|
43
|
Year ended 31 Dec
|
546
|
624
|
791
|
Movement on HSBC share awards
|
||||
|
2017
|
|
2016
|
|
|
Number
|
|
Number
|
|
|
(000s)
|
|
(000s)
|
|
Restricted share awards outstanding at 1 Jan
|
123,166
|
|
118,665
|
|
Additions during the year
|
62,044
|
|
94,981
|
|
Released in the year
|
(76,051
|
)
|
(76,552
|
)
|
Forfeited in the year
|
(4,634
|
)
|
(13,928
|
)
|
Restricted share awards outstanding at 31 Dec
|
104,525
|
|
123,166
|
|
Weighted average fair value of awards granted ($)
|
7.09
|
|
7.25
|
|
234
|
HSBC Holdings plc
|
HSBC share option plans
|
|
Main plans
|
Policy
|
Savings-related share option plans (‘Sharesave’)
|
• Two plans: the UK Plan and the International Plan. The last grant of options under the International Plan was in 2012.
• From 2014, eligible employees can save up to £500 per month with the option to use the savings to acquire shares. • Exercisable within six months following either the third or fifth anniversary of the commencement of a three-year or five-year contract, respectively. • The exercise price is set at a 20% (2016: 20%) discount to the market value immediately preceding the date of invitation. |
Movement on HSBC share option plans
|
|||||
|
|
Savings-related
share option plans |
|||
|
|
Number
|
|
WAEP
1
|
|
|
Footnotes
|
(000s)
|
|
£
|
|
Outstanding at 1 Jan 2017
|
|
70,027
|
|
4.30
|
|
Granted during the year
|
2
|
10,447
|
|
5.96
|
|
Exercised during the year
|
3
|
(9,503
|
)
|
4.83
|
|
Expired during the year
|
|
(3,902
|
)
|
4.45
|
|
Forfeited during the year
|
|
(2,399
|
)
|
4.27
|
|
Outstanding at 31 Dec 2017
|
|
64,670
|
|
4.49
|
|
Of which exercisable
|
|
1,129
|
|
5.00
|
|
Weighted average remaining contractual life (years)
|
|
2.42
|
|
|
|
|
|
|
|
||
Outstanding at 1 Jan 2016
|
|
74,775
|
|
4.36
|
|
Granted during the year
|
2
|
15,044
|
|
4.40
|
|
Exercised during the year
|
3
|
(4,354
|
)
|
5.02
|
|
Expired during the year
|
|
(13,243
|
)
|
4.49
|
|
Forfeited during the year
|
|
(2,195
|
)
|
4.34
|
|
Outstanding at 31 Dec 2016
|
|
70,027
|
|
4.30
|
|
Of which exercisable
|
|
1,086
|
|
5.25
|
|
Weighted average remaining contractual life (years)
|
|
2.91
|
|
|
1
|
Weighted average exercise price.
|
2
|
The weighted average fair value of options granted during the year was
$1.29
(2016:
$1.28
).
|
3
|
The weighted average share price at the date the options were exercised was
$9.93
(2016:
$6.98
).
|
HSBC Holdings plc
|
235
|
Future benefit payments ($bn)
|
Income statement charge
|
||||||
|
2017
|
|
2016
|
|
2015
|
|
|
$m
|
|
$m
|
|
$m
|
|
Defined benefit pension plans
|
100
|
|
218
|
|
256
|
|
Defined contribution pension plans
|
603
|
|
783
|
|
793
|
|
Pension plans
|
703
|
|
1,001
|
|
1,049
|
|
Defined benefit and contribution healthcare plans
|
(34
|
)
|
41
|
|
6
|
|
Year ended 31 Dec
|
669
|
|
1,042
|
|
1,055
|
|
236
|
HSBC Holdings plc
|
Net asset/(liability) under defined benefit pension plans
|
||||||||||||||||
|
Fair value of plan assets
|
Present value of defined benefit obligations
|
Effect of the asset ceiling
|
Net defined benefit asset/(liability)
|
||||||||||||
|
Principal
plan
|
|
Other
plans
|
|
Principal
plan
|
|
Other
plans
|
|
Principal
plan
|
|
Other
plans
|
|
Principal
plan
|
|
Other
plans
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
At 1 Jan 2017
|
33,442
|
|
8,955
|
|
(29,279
|
)
|
(10,468
|
)
|
—
|
|
(24
|
)
|
4,163
|
|
(1,537
|
)
|
Current service cost
|
—
|
|
—
|
|
(65
|
)
|
(160
|
)
|
—
|
|
—
|
|
(65
|
)
|
(160
|
)
|
Past service cost and gains/(losses) from settlements
|
—
|
|
(833
|
)
|
(231
|
)
|
1,051
|
|
—
|
|
—
|
|
(231
|
)
|
218
|
|
Service cost
|
—
|
|
(833
|
)
|
(296
|
)
|
891
|
|
—
|
|
—
|
|
(296
|
)
|
58
|
|
Net interest income/(cost) on the net defined benefit asset/(liability)
|
864
|
|
272
|
|
(750
|
)
|
(300
|
)
|
—
|
|
(1
|
)
|
114
|
|
(29
|
)
|
Re-measurement effects recognised in other comprehensive income
|
1,410
|
|
784
|
|
1,730
|
|
(486
|
)
|
—
|
|
(9
|
)
|
3,140
|
|
289
|
|
– return on plan assets (excluding interest income)
|
1,410
|
|
784
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,410
|
|
784
|
|
– actuarial gains/(losses)
|
—
|
|
—
|
|
954
|
|
(491
|
)
|
—
|
|
(9
|
)
|
954
|
|
(500
|
)
|
– other changes
|
—
|
|
—
|
|
776
|
|
5
|
|
—
|
|
—
|
|
776
|
|
5
|
|
Exchange differences
|
3,292
|
|
239
|
|
(2,723
|
)
|
(306
|
)
|
—
|
|
(3
|
)
|
569
|
|
(70
|
)
|
Contributions by HSBC
|
449
|
|
236
|
|
—
|
|
—
|
|
—
|
|
—
|
|
449
|
|
236
|
|
– normal
|
58
|
|
215
|
|
—
|
|
—
|
|
—
|
|
—
|
|
58
|
|
215
|
|
– special
|
391
|
|
21
|
|
—
|
|
—
|
|
—
|
|
—
|
|
391
|
|
21
|
|
Contributions by employees
|
—
|
|
27
|
|
—
|
|
(27
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
Benefits paid
|
(1,143
|
)
|
(663
|
)
|
1,143
|
|
716
|
|
—
|
|
—
|
|
—
|
|
53
|
|
Administrative costs and taxes paid by plan
|
(49
|
)
|
(17
|
)
|
49
|
|
17
|
|
—
|
|
—
|
|
—
|
|
—
|
|
At 31 Dec 2017
|
38,265
|
|
9,000
|
|
(30,126
|
)
|
(9,963
|
)
|
—
|
|
(37
|
)
|
8,139
|
|
(1,000
|
)
|
Present value of defined benefit obligation relating to:
|
|
|
|
|
|
|
|
|
||||||||
– actives
|
|
|
|
|
(5,837
|
)
|
(5,084
|
)
|
|
|
|
|
|
|
|
|
– deferreds
|
|
|
|
|
(8,745
|
)
|
(1,663
|
)
|
|
|
|
|
|
|
|
|
– pensioners
|
|
|
|
|
(15,544
|
)
|
(3,216
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
At 1 Jan 2016
|
32,670
|
|
8,754
|
|
(27,675
|
)
|
(10,651
|
)
|
—
|
|
(14
|
)
|
4,995
|
|
(1,911
|
)
|
Current service cost
|
—
|
|
—
|
|
(70
|
)
|
(235
|
)
|
—
|
|
—
|
|
(70
|
)
|
(235
|
)
|
Past service cost and gains/(losses) from settlements
|
—
|
|
(1
|
)
|
—
|
|
(39
|
)
|
—
|
|
—
|
|
—
|
|
(40
|
)
|
Service cost
|
—
|
|
(1
|
)
|
(70
|
)
|
(274
|
)
|
—
|
|
—
|
|
(70
|
)
|
(275
|
)
|
Net interest income/(cost) on the net defined benefit asset/(liability)
|
1,085
|
|
294
|
|
(914
|
)
|
(337
|
)
|
—
|
|
(1
|
)
|
171
|
|
(44
|
)
|
Re-measurement effects recognised in other comprehensive income
|
6,449
|
|
671
|
|
(6,886
|
)
|
(299
|
)
|
—
|
|
(8
|
)
|
(437
|
)
|
364
|
|
– return on plan assets (excluding interest income)
|
6,449
|
|
671
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,449
|
|
671
|
|
– actuarial gains/(losses)
|
—
|
|
—
|
|
(7,029
|
)
|
(152
|
)
|
—
|
|
(8
|
)
|
(7,029
|
)
|
(160
|
)
|
– other changes
|
—
|
|
—
|
|
143
|
|
(147
|
)
|
—
|
|
—
|
|
143
|
|
(147
|
)
|
Exchange differences
|
(6,097
|
)
|
(534
|
)
|
5,254
|
|
410
|
|
—
|
|
(1
|
)
|
(843
|
)
|
(125
|
)
|
Contributions by HSBC
|
347
|
|
379
|
|
—
|
|
—
|
|
—
|
|
—
|
|
347
|
|
379
|
|
– normal
|
64
|
|
207
|
|
—
|
|
—
|
|
—
|
|
—
|
|
64
|
|
207
|
|
– special
|
283
|
|
172
|
|
—
|
|
—
|
|
—
|
|
—
|
|
283
|
|
172
|
|
Contributions by employees
|
—
|
|
30
|
|
—
|
|
(30
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
Benefits paid
|
(970
|
)
|
(623
|
)
|
970
|
|
698
|
|
—
|
|
—
|
|
—
|
|
75
|
|
Administrative costs and taxes paid by plan
|
(42
|
)
|
(15
|
)
|
42
|
|
15
|
|
—
|
|
—
|
|
—
|
|
—
|
|
At 31 Dec 2016
|
33,442
|
|
8,955
|
|
(29,279
|
)
|
(10,468
|
)
|
—
|
|
(24
|
)
|
4,163
|
|
(1,537
|
)
|
Present value of defined benefit obligation relating to:
|
|
|
|
|
|
|
|
|
||||||||
– actives
|
|
|
(7,066
|
)
|
(5,066
|
)
|
|
|
|
|
||||||
– deferreds
|
|
|
(9,219
|
)
|
(2,306
|
)
|
|
|
|
|
||||||
– pensioners
|
|
|
(12,994
|
)
|
(3,096
|
)
|
|
|
|
|
Benefits expected to be paid from plans
|
|
||||||||||||
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023-2027
|
|
|
Footnote
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
The principal plan
|
1
|
1,241
|
|
1,279
|
|
1,320
|
|
1,360
|
|
1,402
|
|
7,692
|
|
Other plans
|
1
|
443
|
|
508
|
|
511
|
|
527
|
|
520
|
|
2,307
|
|
1
|
The duration of the defined benefit obligation is
17.4
years for the principal plan under the disclosure assumptions adopted (2016:
19.0
years) and
12.9
years for all other plans combined (2016:
13.9
years).
|
HSBC Holdings plc
|
237
|
Fair value of plan assets by asset classes
|
||||||||||||||||
|
31 Dec 2017
|
31 Dec 2016
|
||||||||||||||
|
Value
|
|
Quoted
market price in active market |
|
No quoted
market price in active market |
|
Thereof
HSBC 1 |
|
Value
|
|
Quoted
market price in active market |
|
No quoted
market price in active market |
|
Thereof
HSBC 1 |
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
The principal plan
|
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets
|
38,265
|
|
33,624
|
|
4,641
|
|
1,006
|
|
33,442
|
|
29,379
|
|
4,063
|
|
878
|
|
– equities
|
6,131
|
|
5,503
|
|
628
|
|
—
|
|
5,386
|
|
4,722
|
|
664
|
|
—
|
|
– bonds
|
26,591
|
|
26,591
|
|
—
|
|
—
|
|
23,426
|
|
23,426
|
|
—
|
|
—
|
|
– derivatives
|
2,398
|
|
—
|
|
2,398
|
|
1,006
|
|
2,107
|
|
—
|
|
2,107
|
|
878
|
|
– other
|
3,145
|
|
1,530
|
|
1,615
|
|
—
|
|
2,523
|
|
1,231
|
|
1,292
|
|
—
|
|
Other plans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fair value of plan assets
|
9,000
|
|
7,737
|
|
1,263
|
|
114
|
|
8,955
|
|
7,631
|
|
1,324
|
|
239
|
|
– equities
|
2,005
|
|
1,340
|
|
665
|
|
—
|
|
2,255
|
|
1,502
|
|
753
|
|
—
|
|
– bonds
|
5,871
|
|
5,714
|
|
157
|
|
7
|
|
5,811
|
|
5,592
|
|
219
|
|
5
|
|
– derivatives
|
—
|
|
39
|
|
(39
|
)
|
—
|
|
(89
|
)
|
44
|
|
(133
|
)
|
(85
|
)
|
– other
|
1,124
|
|
644
|
|
480
|
|
107
|
|
978
|
|
493
|
|
485
|
|
319
|
|
1
|
The fair value of plan assets includes derivatives entered into with HSBC Bank plc as detailed in Note
35
.
|
1
|
Self-administered pension scheme (‘SAPS’) S2 table (males: 'All Pensioners' version; females: 'Normal Pensions' version) with a multiplier of
0.98
for both male and female pensioners. Improvements are projected in accordance with the Continuous Mortality Investigation (‘CMI’) core projection model 2016 with a long-term rate of improvement of
1.25%
per annum. Separate tables assuming lighter mortality have been applied to higher paid pensioners.
|
2
|
Self-administered pension scheme (‘SAPS’) S2 table (males: 'All Pensioners' version; females: 'Normal Pensions' version) with a multiplier of
0.98
for both male and female pensioners. Improvements are projected in accordance with the Continuous Mortality Investigation (‘CMI’) core projection model 2015 with a long-term rate of improvement of
1.25%
per annum. Separate tables assuming lighter mortality have been applied to higher paid pensioners.
|
238
|
HSBC Holdings plc
|
6
|
Auditors’ remuneration
|
|
|
2017
|
2016
|
2015
|
|
Footnote
|
$m
|
$m
|
$m
|
Audit fees payable to PwC
|
1
|
84.8
|
65.7
|
62.0
|
Other audit fees payable
|
|
1.2
|
1.6
|
1.2
|
Year ended 31 Dec
|
|
86.0
|
67.3
|
63.2
|
Fees payable by HSBC to PwC
|
|
|
|
|
|||
|
|
2017
|
|
2016
|
|
2015
|
|
|
Footnotes
|
$m
|
|
$m
|
|
$m
|
|
Fees for HSBC Holdings’ statutory audit
|
2
|
15.1
|
|
14.0
|
|
13.1
|
|
Fees for other services provided to HSBC
|
|
114.6
|
|
97.1
|
|
85.1
|
|
– audit of HSBC’s subsidiaries
|
3
|
69.7
|
|
51.7
|
|
48.9
|
|
– audit-related assurance services
|
4
|
22.5
|
|
20.6
|
|
16.6
|
|
– taxation compliance services
|
|
1.2
|
|
1.9
|
|
1.0
|
|
– taxation advisory services
|
|
—
|
|
0.4
|
|
0.9
|
|
– other assurance services
|
5
|
3.9
|
|
4.5
|
|
2.8
|
|
– other non-audit services
|
5
|
17.3
|
|
18.0
|
|
14.9
|
|
Year ended 31 Dec
|
|
129.7
|
|
111.1
|
|
98.2
|
|
1
|
The 2016 audit fees payable amount includes
$4.2m
related to the prior year audit in respect of overruns.
|
2
|
Fees payable to PwC for the statutory audit of the consolidated financial statements of HSBC and the separate financial statements of HSBC Holdings. They include amounts payable for services relating to the consolidation returns of HSBC Holdings’ subsidiaries which are clearly identifiable as being in support of the Group audit opinion.
|
3
|
Fees payable for the statutory audit of the financial statements of HSBC’s subsidiaries, including the 2017 and 2016 changes in scope and additional procedures performed due to the technology systems and data access controls matter as described on page
210
.
|
4
|
Including services for assurance and other services that relate to statutory and regulatory filings, including comfort letters and interim reviews and work performed related to the implementation of IFRS 9.
|
5
|
Including other permitted services relating to advisory, corporate finance transactions, etc.
|
7
|
Tax
|
Tax expense
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|
|
Footnote
|
$m
|
|
$m
|
|
$m
|
|
Current tax
|
1
|
4,264
|
|
3,669
|
|
3,797
|
|
– for this year
|
|
4,115
|
|
3,525
|
|
3,882
|
|
– adjustments in respect of prior years
|
|
149
|
|
144
|
|
(85
|
)
|
Deferred tax
|
|
1,024
|
|
(3
|
)
|
(26
|
)
|
– origination and reversal of temporary differences
|
|
(228
|
)
|
(111
|
)
|
(153
|
)
|
– effect of changes in tax rates
|
|
1,337
|
|
(4
|
)
|
110
|
|
– adjustments in respect of prior years
|
|
(85
|
)
|
112
|
|
17
|
|
Year ended 31 Dec
|
|
5,288
|
|
3,666
|
|
3,771
|
|
1
|
Current tax included Hong Kong profits tax of
$1,350m
(2016:
$1,118m
; 2015:
$1,294m
). The Hong Kong tax rate applying to the profits of subsidiaries assessable in Hong Kong was
16.5%
(2016:
16.5%
; 2015:
16.5%
).
|
HSBC Holdings plc
|
239
|
|
2017
|
2016
|
2015
|
|||||||||
|
$m
|
|
%
|
|
$m
|
|
%
|
|
$m
|
|
%
|
|
Profit before tax
|
17,167
|
|
|
|
7,112
|
|
|
|
18,867
|
|
|
|
Tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxation at UK corporation tax rate of 19.25% (2016: 20.0%;
2015: 20.25%) |
3,305
|
|
19.25
|
|
1,422
|
|
20.00
|
|
3,821
|
|
20.25
|
|
Impact of differently taxed overseas profits in overseas locations
|
407
|
|
2.3
|
|
43
|
|
0.6
|
|
71
|
|
0.4
|
|
Items increasing tax charge in 2017 not in 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
– deferred tax remeasurement due to US federal tax rate reduction
|
1,288
|
|
7.5
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Other items increasing tax charge in 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
– local taxes and overseas withholding taxes
|
618
|
|
3.6
|
|
434
|
|
6.1
|
|
416
|
|
2.2
|
|
– other permanent disallowables
|
400
|
|
2.3
|
|
438
|
|
6.2
|
|
421
|
|
2.2
|
|
– bank levy
|
180
|
|
1.0
|
|
170
|
|
2.4
|
|
286
|
|
1.5
|
|
– non-deductible UK customer compensation
|
166
|
|
1.0
|
|
162
|
|
2.3
|
|
87
|
|
0.5
|
|
– UK banking surcharge
|
136
|
|
0.8
|
|
199
|
|
2.8
|
|
—
|
|
—
|
|
– UK tax losses not recognised
|
70
|
|
0.4
|
|
305
|
|
4.3
|
|
—
|
|
—
|
|
– adjustments in respect of prior period liabilities
|
64
|
|
0.4
|
|
256
|
|
3.6
|
|
(68
|
)
|
(0.4
|
)
|
– change in tax rates
|
49
|
|
0.3
|
|
(4
|
)
|
(0.1
|
)
|
110
|
|
0.6
|
|
– non-UK tax losses not recognised
|
33
|
|
0.2
|
|
147
|
|
2.1
|
|
—
|
|
—
|
|
– non-deductible goodwill write-down
|
—
|
|
—
|
|
648
|
|
9.1
|
|
—
|
|
—
|
|
– non-deductible loss and taxes suffered on Brazil disposal
|
—
|
|
—
|
|
464
|
|
6.5
|
|
—
|
|
—
|
|
Items reducing tax charge in 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
– non-taxable income and gains
|
(766
|
)
|
(4.4
|
)
|
(577
|
)
|
(8.1
|
)
|
(501
|
)
|
(2.7
|
)
|
– effect of profits in associates and joint ventures
|
(481
|
)
|
(2.8
|
)
|
(461
|
)
|
(6.5
|
)
|
(508
|
)
|
(2.7
|
)
|
– non-deductible regulatory settlements
|
(132
|
)
|
(0.8
|
)
|
20
|
|
0.3
|
|
184
|
|
1.0
|
|
– other deferred tax temporary differences previously not recognised
|
(49
|
)
|
(0.3
|
)
|
—
|
|
—
|
|
(21
|
)
|
(0.1
|
)
|
– non-taxable income and gains - Industrial Bank
|
—
|
|
—
|
|
—
|
|
—
|
|
(227
|
)
|
(1.2
|
)
|
– US deferred tax temporary differences previously not recognised
|
—
|
|
—
|
|
—
|
|
—
|
|
(184
|
)
|
(1.0
|
)
|
– other items
|
—
|
|
—
|
|
—
|
|
—
|
|
(116
|
)
|
(0.6
|
)
|
Year ended 31 Dec
|
5,288
|
|
30.8
|
|
3,666
|
|
51.6
|
|
3,771
|
|
20.0
|
|
240
|
HSBC Holdings plc
|
Movement of deferred tax assets and liabilities
|
|||||||||||||||
|
|
Loan
impairment provisions |
|
Unused tax
losses and tax credits |
|
Derivatives,
FVOD 1 and other investments |
|
Insurance
business |
|
Expense
provisions |
|
Other
|
|
Total
|
|
|
Footnote
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Assets
|
|
950
|
|
2,212
|
|
1,441
|
|
—
|
|
893
|
|
1,857
|
|
7,353
|
|
Liabilities
|
|
—
|
|
—
|
|
(274
|
)
|
(1,170
|
)
|
—
|
|
(1,369
|
)
|
(2,813
|
)
|
At 1 Jan 2017
|
|
950
|
|
2,212
|
|
1,167
|
|
(1,170
|
)
|
893
|
|
488
|
|
4,540
|
|
Income statement
|
|
(235
|
)
|
(873
|
)
|
(397
|
)
|
12
|
|
(269
|
)
|
738
|
|
(1,024
|
)
|
Other comprehensive income
|
|
3
|
|
(6
|
)
|
368
|
|
—
|
|
—
|
|
(1,255
|
)
|
(890
|
)
|
Equity
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
29
|
|
29
|
|
Foreign exchange and other adjustments
|
|
(5
|
)
|
40
|
|
51
|
|
(24
|
)
|
19
|
|
(42
|
)
|
39
|
|
At 31 Dec 2017
|
|
713
|
|
1,373
|
|
1,189
|
|
(1,182
|
)
|
643
|
|
(42
|
)
|
2,694
|
|
Assets
|
2
|
713
|
|
1,373
|
|
1,282
|
|
—
|
|
643
|
|
2,313
|
|
6,324
|
|
Liabilities
|
2
|
—
|
|
—
|
|
(93
|
)
|
(1,182
|
)
|
—
|
|
(2,355
|
)
|
(3,630
|
)
|
|
|
|
|
|
|
|
|
|
|||||||
Assets
|
|
1,351
|
|
1,388
|
|
1,400
|
|
—
|
|
1,271
|
|
1,050
|
|
6,460
|
|
Liabilities
|
|
—
|
|
—
|
|
(230
|
)
|
(1,056
|
)
|
—
|
|
(883
|
)
|
(2,169
|
)
|
At 1 Jan 2016
|
|
1,351
|
|
1,388
|
|
1,170
|
|
(1,056
|
)
|
1,271
|
|
167
|
|
4,291
|
|
Income statement
|
|
(279
|
)
|
876
|
|
18
|
|
(123
|
)
|
(370
|
)
|
(314
|
)
|
(192
|
)
|
Other comprehensive income
|
|
—
|
|
—
|
|
28
|
|
—
|
|
—
|
|
259
|
|
287
|
|
Equity
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
20
|
|
20
|
|
Foreign exchange and other adjustments
|
|
(122
|
)
|
(52
|
)
|
(49
|
)
|
9
|
|
(8
|
)
|
356
|
|
134
|
|
At 31 Dec 2016
|
|
950
|
|
2,212
|
|
1,167
|
|
(1,170
|
)
|
893
|
|
488
|
|
4,540
|
|
Assets
|
2
|
950
|
|
2,212
|
|
1,441
|
|
—
|
|
893
|
|
1,857
|
|
7,353
|
|
Liabilities
|
2
|
—
|
|
—
|
|
(274
|
)
|
(1,170
|
)
|
—
|
|
(1,369
|
)
|
(2,813
|
)
|
1
|
Fair value of own debt.
|
2
|
After netting off balances within countries, the balances as disclosed in the accounts are as follows: deferred tax assets
$4,676m
(2016:
$6,163m
); and deferred tax liabilities
$1,982m
(2016:
$1,623m
).
|
HSBC Holdings plc
|
241
|
8
|
Dividends
|
Dividends to shareholders of the parent company
|
||||||||||||||||||
|
2017
|
2016
|
2015
|
|||||||||||||||
|
Per
share |
|
Total
|
|
Settled
in scrip |
|
Per
share |
|
Total
|
|
Settled
in scrip |
|
Per
share |
|
Total
|
|
Settled
in scrip |
|
|
$
|
|
$m
|
|
$m
|
|
$
|
|
$m
|
|
$m
|
|
$
|
|
$m
|
|
$m
|
|
Dividends paid on ordinary shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In respect of previous year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
– fourth interim dividend
|
0.21
|
|
4,169
|
|
1,945
|
|
0.21
|
|
4,137
|
|
408
|
|
0.20
|
|
3,845
|
|
2,011
|
|
In respect of current year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
– first interim dividend
|
0.10
|
|
2,005
|
|
826
|
|
0.10
|
|
1,981
|
|
703
|
|
0.10
|
|
1,951
|
|
231
|
|
– second interim dividend
|
0.10
|
|
2,014
|
|
193
|
|
0.10
|
|
1,991
|
|
994
|
|
0.10
|
|
1,956
|
|
160
|
|
– third interim dividend
|
0.10
|
|
2,005
|
|
242
|
|
0.10
|
|
1,990
|
|
935
|
|
0.10
|
|
1,958
|
|
760
|
|
Total
|
0.51
|
|
10,193
|
|
3,206
|
|
0.51
|
|
10,099
|
|
3,040
|
|
0.50
|
|
9,710
|
|
3,162
|
|
Total dividends on preference shares classified as equity (paid quarterly)
|
62.00
|
|
90
|
|
|
|
62.00
|
|
90
|
|
|
|
62.00
|
|
90
|
|
|
|
1
|
Discretionary coupons are paid quarterly on the perpetual subordinated capital securities, in denominations of
$25
per security.
|
2
|
Discretionary coupons are paid semi-annually on the perpetual subordinated contingent convertible securities, in denominations of each security’s issuance currency
1,000
per security.
|
3
|
Further details of these securities can be found in Note
31
.
|
9
|
Earnings per share
|
242
|
HSBC Holdings plc
|
Basic and diluted earnings per share
|
|||||||||||||||||||
|
|
2017
|
2016
|
2015
|
|||||||||||||||
|
|
Profit
|
|
Number
of shares |
|
Per
share |
|
Profit
|
|
Number
of shares
|
|
Per
share
|
|
Profit
|
|
Number
of shares
|
|
Per
share
|
|
|
Footnote
|
$m
|
|
(millions)
|
|
$
|
|
$m
|
|
(millions)
|
|
$
|
|
$m
|
|
(millions)
|
|
$
|
|
Basic
|
1
|
9,683
|
|
19,972
|
|
0.48
|
|
1,299
|
|
19,753
|
|
0.07
|
|
12,572
|
|
19,380
|
|
0.65
|
|
Effect of dilutive potential ordinary shares
|
|
|
|
100
|
|
|
|
|
92
|
|
|
|
137
|
|
|
||||
Diluted
|
1
|
9,683
|
|
20,072
|
|
0.48
|
|
1,299
|
|
19,845
|
|
0.07
|
|
12,572
|
|
19,517
|
|
0.64
|
|
1
|
Weighted average number of ordinary shares outstanding (basic) or assuming dilution (diluted).
|
10
|
Trading assets
|
|
|
2017
|
|
2016
|
|
|
Footnote
|
$m
|
|
$m
|
|
Treasury and other eligible bills
|
|
17,532
|
|
14,451
|
|
Debt securities
|
|
107,486
|
|
94,054
|
|
Equity securities
|
|
99,260
|
|
63,604
|
|
Trading securities
|
|
224,278
|
|
172,109
|
|
Loans and advances to banks
|
1
|
26,057
|
|
24,769
|
|
Loans and advances to customers
|
1
|
37,660
|
|
38,247
|
|
At 31 Dec
|
|
287,995
|
|
235,125
|
|
1
|
Loans and advances to banks and customers include settlement accounts, stock borrowing, reverse repos, cash collateral and margin accounts relating to trading activities.
|
Trading Securities
1
|
|
|
|
||
|
|
2017
|
|
2016
|
|
|
Footnotes
|
$m
|
|
$m
|
|
US Treasury and US Government agencies
|
2
|
15,995
|
|
17,010
|
|
UK Government
|
|
9,540
|
|
9,493
|
|
Hong Kong Government
|
|
10,070
|
|
7,970
|
|
Other governments
|
|
58,858
|
|
49,229
|
|
Asset-backed securities
|
3
|
2,986
|
|
2,668
|
|
Corporate debt and other securities
|
|
27,569
|
|
22,135
|
|
Equity securities
|
|
99,260
|
|
63,604
|
|
At 31 Dec
|
|
224,278
|
|
172,109
|
|
1
|
Included within these figures are debt securities issued by banks and other financial institutions of
$18,585m
(2016:
$14,630m
), of which
$906m
(2016:
$789m
) are guaranteed by various governments.
|
2
|
Includes securities that are supported by an explicit guarantee issued by the US Government.
|
3
|
Excludes asset-backed securities included under US Treasury and US Government agencies.
|
11
|
Fair values of financial instruments carried at fair value
|
HSBC Holdings plc
|
243
|
•
|
Level 1 – valuation technique using quoted market price: financial instruments with quoted prices for identical instruments in active markets that HSBC can access at the measurement date.
|
•
|
Level 2 – valuation technique using observable inputs: financial instruments with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial instruments valued using models where all significant inputs are observable.
|
•
|
Level 3 – valuation technique with significant unobservable inputs: financial instruments valued using valuation techniques where one or more significant inputs are unobservable.
|
244
|
HSBC Holdings plc
|
Global Banking & Markets (‘GB&M’) and Corporate Centre fair value adjustments
|
||||||||
|
2017
|
2016
|
||||||
|
GB&M
|
|
Corporate Centre
|
|
GB&M
|
|
Corporate Centre
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Type of adjustment
|
|
|
|
|
||||
Risk-related
|
1,078
|
|
79
|
|
1,131
|
|
5
|
|
– bid-offer
|
413
|
|
5
|
|
416
|
|
5
|
|
– uncertainty
|
91
|
|
8
|
|
87
|
|
—
|
|
– credit valuation adjustment (‘CVA’)
|
420
|
|
59
|
|
633
|
|
—
|
|
– debit valuation adjustment (‘DVA’)
|
(82
|
)
|
—
|
|
(437
|
)
|
—
|
|
– funding fair value adjustment (‘FFVA’)
|
233
|
|
7
|
|
429
|
|
—
|
|
– other
|
3
|
|
—
|
|
3
|
|
—
|
|
Model-related
|
92
|
|
13
|
|
14
|
|
1
|
|
– model limitation
|
92
|
|
6
|
|
14
|
|
1
|
|
– other
|
—
|
|
7
|
|
—
|
|
—
|
|
Inception profit (Day 1 P&L reserves) (Note 14)
|
106
|
|
—
|
|
99
|
|
—
|
|
At 31 Dec
|
1,276
|
|
92
|
|
1,244
|
|
6
|
|
HSBC Holdings plc
|
245
|
Financial instruments measured at fair value using a valuation technique with significant unobservable inputs – Level 3
|
||||||||||||||||||
|
Assets
|
Liabilities
|
||||||||||||||||
|
Available
for sale
|
|
Held for trading
|
|
Designated at fair value
|
|
Derivatives
|
|
Total
|
|
Held for trading
|
|
Designated at fair value
|
|
Derivatives
|
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Private equity including strategic investments
|
2,012
|
|
38
|
|
1,458
|
|
—
|
|
3,508
|
|
20
|
|
—
|
|
—
|
|
20
|
|
Asset-backed securities
|
1,300
|
|
1,277
|
|
—
|
|
—
|
|
2,577
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Loans held for securitisation
|
—
|
|
24
|
|
—
|
|
—
|
|
24
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Structured notes
|
—
|
|
3
|
|
—
|
|
—
|
|
3
|
|
4,180
|
|
—
|
|
—
|
|
4,180
|
|
Derivatives with monolines
|
—
|
|
—
|
|
—
|
|
113
|
|
113
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Other derivatives
|
—
|
|
—
|
|
—
|
|
2,331
|
|
2,331
|
|
—
|
|
—
|
|
1,944
|
|
1,944
|
|
Other portfolios
|
120
|
|
3,710
|
|
2
|
|
—
|
|
3,832
|
|
—
|
|
—
|
|
—
|
|
—
|
|
At 31 Dec 2017
|
3,432
|
|
5,052
|
|
1,460
|
|
2,444
|
|
12,388
|
|
4,200
|
|
—
|
|
1,944
|
|
6,144
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Private equity including strategic investments
|
2,435
|
|
49
|
|
712
|
|
—
|
|
3,196
|
|
25
|
|
—
|
|
—
|
|
25
|
|
Asset-backed securities
|
761
|
|
789
|
|
—
|
|
—
|
|
1,550
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Loans held for securitisation
|
—
|
|
28
|
|
—
|
|
—
|
|
28
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Structured notes
|
—
|
|
2
|
|
—
|
|
—
|
|
2
|
|
3,557
|
|
—
|
|
—
|
|
3,557
|
|
Derivatives with monolines
|
—
|
|
—
|
|
—
|
|
175
|
|
175
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Other derivatives
|
—
|
|
—
|
|
—
|
|
2,577
|
|
2,577
|
|
—
|
|
—
|
|
2,300
|
|
2,300
|
|
Other portfolios
|
280
|
|
5,621
|
|
18
|
|
—
|
|
5,919
|
|
—
|
|
37
|
|
—
|
|
37
|
|
At 31 Dec 2016
|
3,476
|
|
6,489
|
|
730
|
|
2,752
|
|
13,447
|
|
3,582
|
|
37
|
|
2,300
|
|
5,919
|
|
246
|
HSBC Holdings plc
|
Movement in Level 3 financial instruments
|
|||||||||||||||
|
|
Assets
|
Liabilities
|
||||||||||||
|
|
Available
for sale |
|
Held for trading
|
|
Designated
at fair value |
|
Derivatives
|
|
Held for trading
|
|
Designated
at fair value |
|
Derivatives
|
|
|
Footnote
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
At 1 Jan 2017
|
|
3,476
|
|
6,489
|
|
730
|
|
2,752
|
|
3,582
|
|
37
|
|
2,300
|
|
Total gains/(losses) recognised in profit or loss
|
|
351
|
|
(188
|
)
|
(107
|
)
|
152
|
|
154
|
|
(5
|
)
|
400
|
|
– trading income/(expense) excluding net interest income
|
|
—
|
|
(188
|
)
|
—
|
|
152
|
|
154
|
|
—
|
|
400
|
|
– net income/(expense) from other financial instruments designated at fair value
|
|
—
|
|
—
|
|
(107
|
)
|
—
|
|
—
|
|
(5
|
)
|
—
|
|
– gains less losses from financial investments
|
|
313
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
– loan impairment charges and other credit risk provisions (‘LICs’)
|
|
38
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total gains/(losses) recognised in other comprehensive income (‘OCI’)
|
1
|
71
|
|
106
|
|
7
|
|
188
|
|
169
|
|
1
|
|
120
|
|
– available-for-sale investments: fair value gains/(losses)
|
|
(30
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
– cash flow hedges: fair value gains/(losses)
|
|
—
|
|
(1
|
)
|
3
|
|
(23
|
)
|
—
|
|
—
|
|
(35
|
)
|
– exchange differences
|
|
101
|
|
107
|
|
4
|
|
211
|
|
169
|
|
1
|
|
155
|
|
Purchases
|
|
200
|
|
1,503
|
|
1,127
|
|
2
|
|
5
|
|
—
|
|
23
|
|
New issuances
|
|
—
|
|
—
|
|
—
|
|
1
|
|
1,915
|
|
—
|
|
—
|
|
Sales
|
|
(939
|
)
|
(3,221
|
)
|
(130
|
)
|
(8
|
)
|
(12
|
)
|
—
|
|
(12
|
)
|
Settlements
|
|
(69
|
)
|
(331
|
)
|
(166
|
)
|
(60
|
)
|
(998
|
)
|
—
|
|
(123
|
)
|
Transfers out
|
|
(565
|
)
|
(149
|
)
|
(3
|
)
|
(885
|
)
|
(678
|
)
|
(33
|
)
|
(1,030
|
)
|
Transfers in
|
|
907
|
|
843
|
|
2
|
|
302
|
|
63
|
|
—
|
|
266
|
|
At 31 Dec 2017
|
|
3,432
|
|
5,052
|
|
1,460
|
|
2,444
|
|
4,200
|
|
—
|
|
1,944
|
|
Unrealised gains/(losses) recognised in profit or loss relating to assets and liabilities held at 31 Dec 2016
|
|
16
|
|
(110
|
)
|
(146
|
)
|
218
|
|
(117
|
)
|
—
|
|
(397
|
)
|
– trading income/(expense) excluding net interest income
|
|
—
|
|
(110
|
)
|
—
|
|
218
|
|
(117
|
)
|
—
|
|
(397
|
)
|
– net income/(expense) from other financial instruments designated at fair value
|
|
—
|
|
—
|
|
(146
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
– loan impairment charges and other credit risk provisions
|
|
16
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|||||||
At 1 Jan 2016
|
|
4,727
|
|
6,856
|
|
474
|
|
2,262
|
|
4,285
|
|
3
|
|
1,210
|
|
Total gains/(losses) recognised in profit or loss
|
|
178
|
|
31
|
|
25
|
|
1,107
|
|
337
|
|
(1
|
)
|
1,428
|
|
– trading income/(expense) excluding net interest income
|
|
—
|
|
31
|
|
—
|
|
1,107
|
|
337
|
|
—
|
|
1,428
|
|
– net income from other financial instruments designated at fair value
|
|
—
|
|
—
|
|
25
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
– gains less losses from financial investments
|
|
91
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
– loan impairment charges and other credit risk provisions (‘LICs’)
|
|
87
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Total gains/(losses) recognised in other comprehensive income (‘OCI’)
|
1
|
(162
|
)
|
(610
|
)
|
(8
|
)
|
(335
|
)
|
(130
|
)
|
(1
|
)
|
(240
|
)
|
– available-for-sale investments: fair value gains/(losses)
|
|
123
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
– cash flow hedges: fair value gains/(losses)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
12
|
|
– exchange differences
|
|
(285
|
)
|
(610
|
)
|
(8
|
)
|
(335
|
)
|
(130
|
)
|
(1
|
)
|
(252
|
)
|
Purchases
|
|
350
|
|
823
|
|
359
|
|
—
|
|
20
|
|
6
|
|
—
|
|
New issuances
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,882
|
|
—
|
|
—
|
|
Sales
|
|
(1,212
|
)
|
(1,760
|
)
|
(7
|
)
|
—
|
|
(40
|
)
|
(2
|
)
|
—
|
|
Settlements
|
|
(177
|
)
|
(311
|
)
|
(113
|
)
|
(107
|
)
|
(1,907
|
)
|
—
|
|
(239
|
)
|
Transfers out
|
|
(947
|
)
|
(199
|
)
|
(2
|
)
|
(187
|
)
|
(920
|
)
|
—
|
|
(229
|
)
|
Transfers in
|
|
719
|
|
1,659
|
|
2
|
|
12
|
|
55
|
|
32
|
|
370
|
|
At 31 Dec 2016
|
|
3,476
|
|
6,489
|
|
730
|
|
2,752
|
|
3,582
|
|
37
|
|
2,300
|
|
Unrealised gains/(losses) recognised in profit or loss relating to assets and liabilities held at 31 Dec 2015
|
|
87
|
|
(170
|
)
|
21
|
|
364
|
|
(143
|
)
|
1
|
|
(335
|
)
|
– trading income/(expense) excluding net interest income
|
|
—
|
|
(170
|
)
|
—
|
|
364
|
|
(143
|
)
|
—
|
|
(335
|
)
|
– net income from other financial instruments designated at fair value
|
|
—
|
|
—
|
|
21
|
|
—
|
|
—
|
|
1
|
|
—
|
|
– loan impairment charges and other credit risk provisions
|
|
87
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
Included in ‘Available-for-sale investments: fair value gains/(losses)’ and ‘Exchange differences’ in the consolidated statement of comprehensive income.
|
HSBC Holdings plc
|
247
|
Sensitivity of Level 3 fair values to reasonably possible alternative assumptions
|
|||||||||||||||||
|
|
2017
|
2016
|
||||||||||||||
|
|
Reflected in profit or loss
|
Reflected in OCI
|
Reflected in profit or loss
|
Reflected in OCI
|
||||||||||||
|
|
Favourable
changes |
|
Un-
favourable changes |
|
Favourable
changes |
|
Un-
favourable changes |
|
Favourable
changes |
|
Un-
favourable changes |
|
Favourable
changes |
|
Un-
favourable changes |
|
|
Footnote
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Derivatives, trading assets and trading liabilities
|
1
|
372
|
|
(253
|
)
|
—
|
|
—
|
|
238
|
|
(177
|
)
|
—
|
|
—
|
|
Financial assets and liabilities designated at fair value
|
|
89
|
|
(74
|
)
|
—
|
|
—
|
|
48
|
|
(38
|
)
|
—
|
|
—
|
|
Financial investments: available for sale
|
|
53
|
|
(30
|
)
|
128
|
|
(149
|
)
|
72
|
|
(36
|
)
|
170
|
|
(149
|
)
|
At 31 Dec
|
|
514
|
|
(357
|
)
|
128
|
|
(149
|
)
|
358
|
|
(251
|
)
|
170
|
|
(149
|
)
|
1
|
Derivatives, trading assets and trading liabilities are presented as one category to reflect the manner in which these instruments are risk managed.
|
248
|
HSBC Holdings plc
|
Quantitative information about significant unobservable inputs in Level 3 valuations
|
|||||||||||||||||||
|
|
Fair value
|
|
|
2017
|
2016
|
|||||||||||||
|
|
Assets
|
|
Liabilities
|
|
Valuation
techniques |
Key unobservable
inputs |
Full range
of inputs |
Core range
of inputs 1 |
Full range
of inputs |
Core range
of inputs 1 |
||||||||
|
Footnotes
|
$m
|
|
$m
|
|
|
|
Lower
|
|
Higher
|
|
Lower
|
|
Higher
|
|
Lower
|
Higher
|
Lower
|
Higher
|
Private equity including
strategic investments |
|
3,508
|
|
20
|
|
See page 255
|
See page 255
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
n/a
|
n/a
|
n/a
|
Asset-backed securities
|
2
|
2,577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
– CLO/CDO
|
|
520
|
|
|
|
Market proxy
|
Prepayment rate
|
2
|
%
|
7
|
%
|
2
|
%
|
7
|
%
|
2%
|
7%
|
2%
|
7%
|
|
|
|
|
Market proxy
|
Bid quotes
|
0
|
|
101
|
|
6
|
|
53
|
|
0
|
101
|
42
|
94
|
||
– other ABSs
|
|
2,057
|
|
|
|
Market proxy
|
Bid quotes
|
0
|
|
103
|
|
34
|
|
98
|
|
0
|
96
|
57
|
90
|
Loans held for securitisation
|
|
24
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||
Structured notes
|
|
3
|
|
4,180
|
|
|
|
|
|
|
|
|
|
|
|
||||
– equity-linked notes
|
|
—
|
|
4,077
|
|
Model –
Option model |
Equity volatility
|
7%
|
|
47%
|
|
14%
|
|
30%
|
|
11%
|
96%
|
16%
|
36%
|
|
|
|
|
|
Model – Option model
|
Equity correlation
|
33%
|
|
95%
|
|
45%
|
|
72%
|
|
33%
|
94%
|
46%
|
81%
|
|
– fund-linked notes
|
|
—
|
|
7
|
|
Model – Option model
|
Fund volatility
|
6%
|
|
15%
|
|
6%
|
|
15%
|
|
6%
|
11%
|
6%
|
11%
|
– FX-linked notes
|
|
—
|
|
76
|
|
Model – Option model
|
FX volatility
|
3%
|
|
20%
|
|
4%
|
|
13%
|
|
3%
|
29%
|
5%
|
18%
|
– other
|
|
3
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives with monolines
|
|
113
|
|
—
|
|
Model – Discounted
cash flow |
Credit spread
|
0.4%
|
|
3%
|
|
1%
|
|
3%
|
|
2%
|
2%
|
2%
|
2%
|
Other derivatives
|
|
2,331
|
|
1,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
– Interest rate derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
securitisation swaps
|
|
285
|
|
806
|
|
Model – Discounted
cash flow |
Prepayment
rate |
20%
|
|
90%
|
|
20%
|
|
90%
|
|
0%
|
90%
|
8%
|
27%
|
long-dated swaptions
|
|
1,244
|
|
66
|
|
Model – Option model
|
IR volatility
|
8%
|
|
41%
|
|
15%
|
|
31%
|
|
8%
|
101%
|
21%
|
39%
|
other
|
|
302
|
|
145
|
|
|
|
|
|
|
|
|
|
|
|
||||
– FX derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
FX options
|
|
86
|
|
83
|
|
Model – Option model
|
FX volatility
|
0.7%
|
|
50%
|
|
5%
|
|
11%
|
|
0.6%
|
25%
|
7%
|
12%
|
other
|
|
135
|
|
129
|
|
|
|
|
|
|
|
|
|
|
|
||||
– Equity derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
long-dated single stock options
|
|
158
|
|
359
|
|
Model – Option model
|
Equity volatility
|
7%
|
|
84%
|
|
15%
|
|
44%
|
|
11%
|
83%
|
16%
|
36%
|
other
|
|
96
|
|
329
|
|
|
|
|
|
|
|
|
|
|
|
||||
– Credit derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
other
|
|
25
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other portfolios
|
|
3,832
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||
– structured certificates
|
|
3,014
|
|
—
|
|
Model – Discounted cash flow
|
Credit volatility
|
2%
|
|
4%
|
|
2%
|
|
4%
|
|
3%
|
4%
|
3%
|
4%
|
– EM corporate debt
|
|
85
|
|
—
|
|
Market proxy
|
Bid quotes
|
100
|
|
100
|
|
100
|
|
100
|
|
96
|
144
|
113
|
113
|
– other
|
3
|
733
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||
At 31 Dec 2017
|
|
12,388
|
|
6,144
|
|
|
|
|
|
|
|
|
|
|
|
1
|
The core range of inputs is the estimated range within which
90%
of the inputs fall.
|
2
|
Collateralised loan obligation/collateralised debt obligation.
|
3
|
‘Other’ includes a range of smaller asset holdings.
|
HSBC Holdings plc
|
249
|
250
|
HSBC Holdings plc
|
12
|
Fair values of financial instruments not carried at fair value
|
Fair values of financial instruments not carried at fair value and bases of valuation
|
||||||||||
|
|
Fair value
|
||||||||
|
Carrying
amount |
|
Quoted market
price Level 1 |
|
Observable
inputs Level 2 |
|
Significant
unobservable inputs Level 3 |
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
At 31 Dec 2017
|
|
|
|
|
|
|||||
Assets
|
|
|
|
|
|
|||||
Loans and advances to banks
|
90,393
|
|
—
|
|
87,384
|
|
3,007
|
|
90,391
|
|
Loans and advances to customers
|
962,964
|
|
—
|
|
20,029
|
|
944,176
|
|
964,205
|
|
Reverse repurchase agreements – non-trading
|
201,553
|
|
—
|
|
200,012
|
|
1,526
|
|
201,538
|
|
Financial investments – debt securities
|
52,919
|
|
1,363
|
|
52,707
|
|
17
|
|
54,087
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
Deposits by banks
|
69,922
|
|
—
|
|
69,862
|
|
30
|
|
69,892
|
|
Customer accounts
|
1,364,462
|
|
—
|
|
1,353,017
|
|
11,608
|
|
1,364,625
|
|
Repurchase agreements – non-trading
|
130,002
|
|
1
|
|
129,995
|
|
—
|
|
129,996
|
|
Debt securities in issue
|
64,546
|
|
—
|
|
65,138
|
|
—
|
|
65,138
|
|
Subordinated liabilities
|
19,826
|
|
—
|
|
23,740
|
|
355
|
|
24,095
|
|
|
|
|
|
|
|
|||||
At 31 Dec 2016
|
|
|
|
|
|
|||||
Assets
|
|
|
|
|
|
|
|
|
|
|
Loans and advances to banks
|
88,126
|
|
—
|
|
85,568
|
|
2,572
|
|
88,140
|
|
Loans and advances to customers
|
861,504
|
|
—
|
|
15,670
|
|
845,894
|
|
861,564
|
|
Reverse repurchase agreements – non-trading
|
160,974
|
|
—
|
|
159,504
|
|
1,527
|
|
161,031
|
|
Financial investments – debt securities
|
46,923
|
|
1,190
|
|
46,014
|
|
19
|
|
47,223
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
Deposits by banks
|
59,939
|
|
—
|
|
59,883
|
|
42
|
|
59,925
|
|
Customer accounts
|
1,272,386
|
|
—
|
|
1,262,540
|
|
10,136
|
|
1,272,676
|
|
Repurchase agreements – non-trading
|
88,958
|
|
—
|
|
88,939
|
|
—
|
|
88,939
|
|
Debt securities in issue
|
65,915
|
|
—
|
|
66,386
|
|
—
|
|
66,386
|
|
Subordinated liabilities
|
20,984
|
|
—
|
|
23,264
|
|
292
|
|
23,556
|
|
HSBC Holdings plc
|
251
|
Fair values of HSBC Holdings’ financial instruments not carried at fair value on the balance sheet
|
|||||||||
|
|
2017
|
2016
|
||||||
|
|
Carrying
amount |
|
Fair
value 1 |
|
Carrying
amount |
|
Fair
value 1 |
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Assets at 31 Dec
|
|
|
|
|
|
||||
Loans and advances to HSBC undertakings
|
|
76,627
|
|
78,534
|
|
77,421
|
|
79,985
|
|
Liabilities at 31 Dec
|
|
|
|
|
|
||||
Amounts owed to HSBC undertakings
|
|
2,571
|
|
2,571
|
|
2,157
|
|
2,156
|
|
Debt securities in issue
|
|
34,258
|
|
36,611
|
|
21,805
|
|
23,147
|
|
Subordinated liabilities
|
|
15,877
|
|
19,596
|
|
15,189
|
|
17,715
|
|
1
|
Fair values were determined using valuation techniques with observable inputs (Level 2).
|
13
|
Financial assets designated at fair value
|
|
|
2017
|
|
2016
|
|
|
|
$m
|
|
$m
|
|
Securities
|
|
29,456
|
|
24,677
|
|
– treasury and other eligible bills
|
|
606
|
|
204
|
|
– debt securities
|
|
4,090
|
|
4,189
|
|
– equity securities
|
|
24,760
|
|
20,284
|
|
Loans and advances to banks and customers
|
|
8
|
|
79
|
|
At 31 Dec
|
|
29,464
|
|
24,756
|
|
Securities
1
|
|||||
|
|
2017
|
|
2016
|
|
|
Footnotes
|
$m
|
|
$m
|
|
US Treasury and US Government agencies
|
2
|
—
|
|
104
|
|
UK Government
|
|
17
|
|
41
|
|
Hong Kong Government
|
|
64
|
|
16
|
|
Other governments
|
|
1,247
|
|
747
|
|
Asset-backed securities
|
3
|
2
|
|
20
|
|
Corporate debt and other securities
|
|
3,366
|
|
3,465
|
|
Equities
|
|
24,760
|
|
20,284
|
|
At 31 Dec
|
|
29,456
|
|
24,677
|
|
1
|
Included within these figures are debt securities issued by banks and other financial institutions of $
1,621
m (
2016
: $
1,766
m), of which $
0.4
m (
2016
: $
19
m) are guaranteed by various governments.
|
2
|
Includes securities that are supported by an explicit guarantee issued by the US Government.
|
3
|
Excludes asset-backed securities included under US Treasury and US Government agencies.
|
252
|
HSBC Holdings plc
|
14
|
Derivatives
|
Notional contract amounts and fair values of derivatives by product contract type held by HSBC
|
||||||||||||||||
|
Notional contract amount
|
Fair value – Assets
|
Fair value – Liabilities
|
|||||||||||||
|
Trading
|
|
Hedging
|
|
Trading
|
|
Hedging
|
|
Total
|
|
Trading
|
|
Hedging
|
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Foreign exchange
|
6,215,518
|
|
28,768
|
|
78,089
|
|
428
|
|
78,517
|
|
74,915
|
|
853
|
|
75,768
|
|
Interest rate
|
19,751,577
|
|
178,289
|
|
235,430
|
|
1,365
|
|
236,795
|
|
229,989
|
|
3,042
|
|
233,031
|
|
Equities
|
590,156
|
|
—
|
|
9,353
|
|
—
|
|
9,353
|
|
11,845
|
|
—
|
|
11,845
|
|
Credit
|
391,798
|
|
—
|
|
4,692
|
|
—
|
|
4,692
|
|
5,369
|
|
—
|
|
5,369
|
|
Commodity and other
|
59,716
|
|
—
|
|
886
|
|
—
|
|
886
|
|
1,233
|
|
—
|
|
1,233
|
|
Gross total fair values
|
27,008,765
|
|
207,057
|
|
328,450
|
|
1,793
|
|
330,243
|
|
323,351
|
|
3,895
|
|
327,246
|
|
Offset (Note 29)
|
|
|
|
|
|
|
|
|
(110,425
|
)
|
|
|
|
|
(110,425
|
)
|
At 31 Dec 2017
|
27,008,765
|
|
207,057
|
|
328,450
|
|
1,793
|
|
219,818
|
|
323,351
|
|
3,895
|
|
216,821
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange
|
5,819,814
|
|
26,281
|
|
126,185
|
|
1,228
|
|
127,413
|
|
118,813
|
|
968
|
|
119,781
|
|
Interest rate
|
13,729,757
|
|
215,006
|
|
253,398
|
|
1,987
|
|
255,385
|
|
245,941
|
|
4,081
|
|
250,022
|
|
Equities
|
472,169
|
|
—
|
|
7,410
|
|
—
|
|
7,410
|
|
9,240
|
|
—
|
|
9,240
|
|
Credit
|
448,220
|
|
—
|
|
5,199
|
|
—
|
|
5,199
|
|
5,767
|
|
—
|
|
5,767
|
|
Commodity and other
|
62,009
|
|
—
|
|
2,020
|
|
—
|
|
2,020
|
|
1,564
|
|
—
|
|
1,564
|
|
Gross total fair values
|
20,531,969
|
|
241,287
|
|
394,212
|
|
3,215
|
|
397,427
|
|
381,325
|
|
5,049
|
|
386,374
|
|
Offset (Note 29)
|
|
|
|
|
(106,555
|
)
|
|
|
(106,555
|
)
|
||||||
At 31 Dec 2016
|
20,531,969
|
|
241,287
|
|
394,212
|
|
3,215
|
|
290,872
|
|
381,325
|
|
5,049
|
|
279,819
|
|
HSBC Holdings plc
|
253
|
Unamortised balance of derivatives valued using models with significant unobservable inputs
|
|||||
|
|
2017
|
|
2016
|
|
|
Footnote
|
$m
|
|
$m
|
|
Unamortised balance at 1 Jan
|
|
99
|
|
97
|
|
Deferral on new transactions
|
|
191
|
|
156
|
|
Recognised in the income statement during the year:
|
|
(187
|
)
|
(140
|
)
|
– amortisation
|
|
(85
|
)
|
(70
|
)
|
– subsequent to unobservable inputs becoming observable
|
|
(2
|
)
|
(5
|
)
|
– maturity, termination or offsetting derivative
|
|
(100
|
)
|
(65
|
)
|
Exchange differences
|
|
10
|
|
(13
|
)
|
Other
|
|
(7
|
)
|
(1
|
)
|
Unamortised balance at 31 Dec
|
1
|
106
|
|
99
|
|
1
|
This amount is yet to be recognised in the consolidated income statement.
|
254
|
HSBC Holdings plc
|
Forecast principal balances on which interest cash flows are expected to arise
|
||||||||
|
3 months
or less
|
|
More than 3 months
but less than 1 year
|
|
5 years or less
but more than 1 year
|
|
More than 5 years
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Net cash inflows/(outflows) exposure
|
|
|
|
|
||||
Assets
|
70,769
|
|
65,771
|
|
44,347
|
|
956
|
|
Liabilities
|
(7,729
|
)
|
(7,017
|
)
|
(4,992
|
)
|
(536
|
)
|
At 31 Dec 2017
|
63,040
|
|
58,754
|
|
39,355
|
|
420
|
|
|
|
|
|
|
||||
Net cash inflows/(outflows) exposure
|
|
|
|
|
||||
Assets
|
83,472
|
|
79,749
|
|
57,553
|
|
2,750
|
|
Liabilities
|
(13,169
|
)
|
(12,977
|
)
|
(11,761
|
)
|
(1,502
|
)
|
At 31 Dec 2016
|
70,303
|
|
66,772
|
|
45,792
|
|
1,248
|
|
15
|
Financial investments
|
Carrying amount of financial investments
|
|||||
|
|
2017
|
|
2016
|
|
|
Footnote
|
$m
|
|
$m
|
|
Available for sale securities at fair value
|
|
336,157
|
|
389,874
|
|
– treasury and other eligible bills
|
|
78,851
|
|
99,226
|
|
– debt securities
|
|
253,389
|
|
285,981
|
|
– equity securities
|
|
3,917
|
|
4,667
|
|
Held to maturity securities at amortised cost
|
|
52,919
|
|
46,923
|
|
– debt securities
|
1
|
52,919
|
|
46,923
|
|
At 31 Dec
|
|
389,076
|
|
436,797
|
|
1
|
Fair value
$54.1
bn (
2016
:
$47.2
bn).
|
1
|
Included within ‘fair value’ figures are debt securities issued by banks and other financial institutions of $
67
bn (
2016
:
$69
bn), of which $
15
bn (
2016
:
$20
bn) are guaranteed by various governments.
|
2
|
Includes securities that are supported by an explicit guarantee issued by the US Government.
|
3
|
Excludes asset-backed securities included under US Government agencies and sponsored entities.
|
HSBC Holdings plc
|
255
|
Contractual maturities and weighted average yields of investment debt securities
|
||||||||||||
|
1 year or less
|
5 years or less
but over
1 year
|
10 years or less
but over
5 years
|
Over 10 years
|
||||||||
|
Amount
|
|
Yield
|
Amount
|
|
Yield
|
Amount
|
|
Yield
|
Amount
|
|
Yield
|
|
$m
|
|
%
|
$m
|
|
%
|
$m
|
|
%
|
$m
|
|
%
|
Available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
US Treasury
|
3,981
|
|
1.1
|
16,213
|
|
1.9
|
15,806
|
|
2.0
|
3,318
|
|
3.1
|
US Government agencies
|
50
|
|
1.9
|
129
|
|
2.2
|
19
|
|
3.8
|
7,924
|
|
2.6
|
US Government-sponsored agencies
|
148
|
|
3.5
|
2,759
|
|
3.0
|
1,965
|
|
2.6
|
2,733
|
|
2.7
|
UK Government
|
636
|
|
0.2
|
6,970
|
|
0.9
|
6,552
|
|
0.8
|
—
|
|
—
|
Hong Kong Government
|
216
|
|
0.8
|
1,014
|
|
1.3
|
—
|
|
—
|
—
|
|
—
|
Other governments
|
45,337
|
|
1.8
|
57,441
|
|
2.7
|
7,429
|
|
3.0
|
1,678
|
|
3.4
|
Asset-backed securities
|
26
|
|
7.8
|
28
|
|
5.5
|
271
|
|
1.7
|
5,858
|
|
2.9
|
Corporate debt and other securities
|
13,613
|
|
1.7
|
35,598
|
|
1.9
|
4,043
|
|
2.6
|
7,779
|
|
3.9
|
Total amortised cost at 31 Dec 2017
|
64,007
|
|
|
120,152
|
|
|
36,085
|
|
|
29,290
|
|
|
Total carrying value
|
63,896
|
|
|
122,113
|
|
|
37,292
|
|
|
30,088
|
|
|
Held to maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
US Treasury
|
41
|
|
5.0
|
22
|
|
4.7
|
49
|
|
4.9
|
130
|
|
4.2
|
US Government agencies
|
—
|
|
—
|
21
|
|
4.0
|
27
|
|
2.5
|
10,519
|
|
2.4
|
US Government-sponsored agencies
|
—
|
|
—
|
322
|
|
2.4
|
325
|
|
2.8
|
2,747
|
|
2.9
|
Hong Kong Government
|
227
|
|
0.5
|
28
|
|
2.6
|
13
|
|
1.2
|
7
|
|
1.4
|
Other governments
|
108
|
|
4.7
|
240
|
|
4.0
|
198
|
|
3.7
|
847
|
|
4.3
|
Asset-backed securities
|
—
|
|
—
|
—
|
|
—
|
—
|
|
—
|
4
|
|
6.7
|
Corporate debt and other securities
|
3,355
|
|
3.7
|
8,773
|
|
3.4
|
12,870
|
|
3.3
|
12,046
|
|
3.9
|
Total amortised cost at 31 Dec 2017
|
3,731
|
|
|
9,406
|
|
|
13,482
|
|
|
26,300
|
|
|
Total carrying value
|
3,731
|
|
|
9,406
|
|
|
13,482
|
|
|
26,300
|
|
|
16
|
Assets pledged, collateral received and assets transferred
|
Financial assets pledged as collateral
|
||||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Treasury bills and other eligible securities
|
10,183
|
|
7,151
|
|
Loans and advances to banks
|
14,518
|
|
17,444
|
|
Loans and advances to customers
|
68,336
|
|
74,109
|
|
Debt securities
|
96,245
|
|
80,063
|
|
Equity securities
|
33,209
|
|
2,655
|
|
Other
|
2,743
|
|
1,838
|
|
Assets pledged at 31 Dec
|
225,234
|
|
183,260
|
|
256
|
HSBC Holdings plc
|
17
|
Interests in associates and joint ventures
|
Principal associates of HSBC
|
|||||||||
|
|
2017
|
2016
|
||||||
|
|
Carrying
amount |
|
Fair
value 1 |
|
Carrying
amount |
|
Fair
value 1 |
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Bank of Communications Co., Limited
|
|
18,057
|
|
10,491
|
|
15,765
|
|
10,207
|
|
The Saudi British Bank
|
|
3,618
|
|
4,320
|
|
3,280
|
|
3,999
|
|
1
|
Principal associates are listed on recognised stock exchanges. The fair values are based on the quoted market prices of the shares held (Level 1 in the fair value hierarchy).
|
1
|
People’s Republic of China.
|
|
At 31 Dec 2017
|
At 31 Dec 2016
|
||||||||||
|
VIU
|
|
Carrying value
|
|
Fair
value |
|
VIU
|
|
Carrying value
|
|
Fair
value |
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
$bn
|
|
Bank of Communications Co., Limited
|
18.3
|
|
18.1
|
|
10.5
|
|
16.1
|
|
15.8
|
|
10.2
|
|
HSBC Holdings plc
|
257
|
•
|
Long-term profit growth rate of
3%
(2016:
5%
) for periods after 2020, which does not exceed forecast GDP growth in mainland China and is within the range forecast by external analysts.
|
•
|
Long-term asset growth rate of
3%
(2016:
4%
) for periods after 2020, which is the rate that assets are expected to grow to achieve long-term profit growth of
3%
.
|
•
|
Discount rate of
11.85%
(2016:
13.0%
), which is based on a capital asset pricing model (‘CAPM’) calculation for BoCom, using market data. Management also compares rates derived from the CAPM with discount rates from external sources. The discount rate used was within the range of
10.2%
to
13.4%
(2016:
10.2%
to
15.0%
) indicated by external sources.
|
•
|
Loan impairment charge as a percentage of customer advances: a range from
0.66%
to
0.82%
(2016:
0.72%
to
0.87%
) in the short to medium term, largely based on forecasts disclosed by external analysts. For periods after 2020, the ratio is
0.70%
(2016:
0.70%
), slightly higher than the historical average.
|
•
|
Risk-weighted assets as a percentage of total assets:
62%
(2016:
62%
) for all forecast periods. This is consistent with the forecasts disclosed by external analysts.
|
•
|
Cost-income ratio: ranges from
37.1%
to
38.0%
(2016:
40.0%
) in the short to medium term. This is slightly higher than the forecasts
disclosed by external analysts.
|
Key assumption
|
Changes to key assumption to reduce headroom to nil
|
•
Long-term profit growth rate
|
•
Decrease by 11 basis points
|
•
Long-term asset growth rate
|
•
Increase by 10 basis points
|
•
Discount rate
|
•
Increase by 13 basis points
|
•
Loan impairment charge as a percentage of customer advances
|
•
Increase by 2 basis points
|
•
Risk-weighted assets as a percentage of total assets
|
•
Increase by 63 basis points
|
•
Cost-income ratio
|
•
Increase by 46 basis points
|
258
|
HSBC Holdings plc
|
Selected balance sheet information of BoCom
|
||||
|
At 30 Sep
|
|||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Cash and balances at central banks
|
146,029
|
|
137,844
|
|
Loans and advances to banks and other financial institutions
|
120,403
|
|
101,436
|
|
Loans and advances to customers
|
662,706
|
|
566,126
|
|
Other financial assets
|
386,067
|
|
311,207
|
|
Other assets
|
58,202
|
|
48,922
|
|
Total assets
|
1,373,407
|
|
1,165,535
|
|
Deposits by banks and other financial institutions
|
366,993
|
|
297,442
|
|
Customer accounts
|
747,882
|
|
680,915
|
|
Other financial liabilities
|
123,751
|
|
69,954
|
|
Other liabilities
|
32,568
|
|
27,860
|
|
Total liabilities
|
1,271,194
|
|
1,076,171
|
|
Total equity
|
102,213
|
|
89,364
|
|
Selected income statement information of BoCom
|
||||
|
For the 12 months ended 30 Sep
|
|||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Net interest income
|
19,080
|
|
20,614
|
|
Net fee and commission income
|
5,698
|
|
5,493
|
|
Loan impairment charges
|
(4,286
|
)
|
(4,284
|
)
|
Depreciation and amortisation
|
(1,342
|
)
|
(1,216
|
)
|
Tax expense
|
(2,234
|
)
|
(2,800
|
)
|
Profit for the year
|
10,288
|
|
10,151
|
|
Other comprehensive income
|
(624
|
)
|
875
|
|
Total comprehensive income
|
9,664
|
|
11,026
|
|
Dividends received from BoCom
|
565
|
|
580
|
|
HSBC Holdings plc
|
259
|
Movements in interests in associates and joint ventures
|
|||||
|
|
2017
|
|
2016
|
|
|
Footnote
|
$m
|
|
$m
|
|
At 1 Jan
|
|
20,029
|
|
19,139
|
|
Additions
|
|
60
|
|
76
|
|
Disposals
|
|
(67
|
)
|
(25
|
)
|
Share of results
|
|
2,375
|
|
2,354
|
|
Dividends
|
|
(740
|
)
|
(751
|
)
|
Exchange differences
|
|
1,144
|
|
(1,115
|
)
|
Share of other comprehensive income of associates and joint ventures
|
|
(43
|
)
|
54
|
|
Other movements
|
|
(14
|
)
|
297
|
|
At 31 Dec
|
1
|
22,744
|
|
20,029
|
|
1
|
Includes goodwill of
$521m
(2016:
$488m
).
|
18
|
Investments in subsidiaries
|
1
|
Cumulative Irredeemable Preference shares.
|
2
|
Non-cumulative Irredeemable Preference shares.
|
3
|
Cumulative Redeemable Preference shares.
|
4
|
People’s Republic of China.
|
260
|
HSBC Holdings plc
|
Subsidiaries with significant non-controlling interests
|
||||
|
2017
|
|
2016
|
|
Hang Seng Bank Limited
|
|
|
|
|
Proportion of ownership interests and voting rights held by non-controlling interests
|
37.86%
|
|
37.86%
|
|
Place of business
|
Hong Kong
|
|
Hong Kong
|
|
|
$m
|
|
$m
|
|
Profit attributable to non-controlling interests
|
997
|
|
814
|
|
Accumulated non-controlling interests of the subsidiary
|
6,233
|
|
5,792
|
|
Dividends paid to non-controlling interests
|
594
|
|
811
|
|
Summarised financial information:
|
|
|
|
|
– total assets
|
186,638
|
|
175,242
|
|
– total liabilities
|
169,275
|
|
159,035
|
|
– net operating income before loan impairment
|
4,556
|
|
3,937
|
|
– profit for the year
|
2,632
|
|
2,148
|
|
– total comprehensive income for the year
|
2,895
|
|
2,044
|
|
19
|
Structured entities
|
•
|
Solitaire – At 31 December
2017
, Solitaire, HSBC’s principal SIC held
$3.2b
n of ABSs (
2016
:
$4.7b
n). These are included within the disclosures of ABSs on page
140
. It is currently funded entirely by commercial paper (‘CP’) issued to HSBC. Although HSBC continues to provide a liquidity facility, Solitaire has no need to draw on it as long as HSBC purchases its issued CP, which HSBC intends to do for the foreseeable future. At 31 December
2017
, HSBC held
$4.6b
n of CP (
2016
:
$6.1b
n).
|
•
|
Mazarin, Barion and Malachite – All three SICs are now funded by medium-term notes, and are no longer funded by repurchase agreements. HSBC’s primary exposure to Mazarin, Barion and Malachite is represented by the amortised cost of the debt required to support the non-cash assets of the vehicles. At 31 December
2017
, this amounted to
$0.9b
n (
2016
:
$1.3b
n). For all three SICs first loss protection is provided through the capital notes issued by these vehicles, which are held substantially by third parties.
|
HSBC Holdings plc
|
261
|
•
|
For commitments, guarantees and written credit default swaps, the maximum exposure to loss is the notional amount of potential future losses.
|
•
|
For retained and purchased investments in and loans to unconsolidated structured entities, the maximum exposure to loss is the carrying value of these interests at the balance sheet reporting date.
|
262
|
HSBC Holdings plc
|
20
|
Goodwill and intangible assets
|
|
|
2017
|
|
2016
|
|
|
Footnote
|
$m
|
|
$m
|
|
Goodwill
|
|
13,588
|
|
12,330
|
|
Present value of in-force long-term insurance business
|
|
6,610
|
|
6,502
|
|
Other intangible assets
|
1
|
3,255
|
|
2,514
|
|
At 31 Dec
|
|
23,453
|
|
21,346
|
|
1
|
Included within other intangible assets is internally generated software with a net carrying value of $
2,641m
(2016: $
1,982m
).
|
HSBC Holdings plc
|
263
|
1
|
Subsequent to the 1 July 2016 annual test the CGU for Global Banking and Markets was amended from a regional to a global basis. The first formal impairment test for this CGU was performed as at 1 July 2017.
|
Movements in PVIF
|
|||||
|
|
2017
|
|
2016
|
|
|
Footnotes
|
$m
|
|
$m
|
|
PVIF at 1 Jan
|
|
6,502
|
|
5,685
|
|
Change in PVIF of long-term insurance business
|
|
24
|
|
902
|
|
– value of new business written during the year
|
|
919
|
|
900
|
|
– expected return
|
1
|
(599
|
)
|
(532
|
)
|
– assumption changes and experience variances (see below)
|
|
(280
|
)
|
513
|
|
– other adjustments
|
|
(16
|
)
|
21
|
|
Transfer of assets classified as held for sale
|
2
|
—
|
|
(45
|
)
|
Exchange differences and other
|
|
84
|
|
(40
|
)
|
PVIF at 31 Dec
|
|
6,610
|
|
6,502
|
|
1
|
‘Expected return’ represents the unwinding of the discount rate and reversal of expected cash flows for the period.
|
2
|
Relates to the Brazilian insurance operations which were classified as held for sale in 2015.
|
264
|
HSBC Holdings plc
|
•
|
$(98)m
(2016:
$279m
), directly offsetting regulatory-driven changes to the valuation of liabilities under insurance contracts.
|
•
|
$(141)m
(2016:
$301m
), reflecting the future expected sharing of returns with policyholders on contracts with discretionary participation features (‘DPF’), to the extent this sharing is not already included in liabilities under insurance contracts.
|
•
|
$(41)m
(2016:
$(67)m
), driven by other assumptions changes and experience variances.
|
|
2017
|
2016
|
||
|
Hong Kong
|
France
1
|
Hong Kong
|
France
1
|
|
%
|
%
|
%
|
%
|
Weighted average risk-free rate
|
2.02
|
1.50
|
2.09
|
0.99
|
Weighted average risk discount rate
|
6.20
|
2.20
|
6.34
|
1.84
|
Expense inflation
|
3.00
|
1.48
|
3.00
|
1.66
|
1
|
For 2017, the calculation of France’s PVIF assumes a risk discount rate of
2.20%
(2016:
1.84%
) plus a risk margin of
$80m
(2016:
$101m
).
|
21
|
Prepayments, accrued income and other assets
|
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Prepayments and accrued income
|
7,929
|
|
7,335
|
|
Assets held for sale
|
781
|
|
4,389
|
|
Bullion
|
13,128
|
|
15,406
|
|
Endorsements and acceptances
|
9,750
|
|
8,574
|
|
Reinsurers’ share of liabilities under insurance contracts (Note 3)
|
2,471
|
|
1,820
|
|
Employee benefit assets (Note 5)
|
8,752
|
|
4,714
|
|
Other accounts
|
14,353
|
|
12,298
|
|
Property, plant and equipment
|
10,027
|
|
9,373
|
|
At 31 Dec
|
67,191
|
|
63,909
|
|
22
|
Trading liabilities
|
|
|
2017
|
|
2016
|
|
|
Footnotes
|
$m
|
|
$m
|
|
Deposits by banks
|
1
|
23,297
|
|
24,827
|
|
Customer accounts
|
1, 2
|
52,595
|
|
45,085
|
|
Other debt securities in issue (Note 24)
|
3
|
40,734
|
|
32,656
|
|
Other liabilities – net short positions in securities
|
|
67,735
|
|
51,123
|
|
At 31 Dec
|
|
184,361
|
|
153,691
|
|
1
|
‘Deposits by banks’ and ‘Customer accounts’ include repos, settlement accounts, stock lending, cash collateral and margin accounts relating to trading activities.
|
2
|
Structured deposits placed at HSBC Bank USA and HSBC Trust Company (Delaware) National Association are insured by the Federal Deposit Insurance Corporation, a US government agency, up to $250,000 per depositor.
|
3
|
‘Other debt securities in issue’ comprises structured notes issued by HSBC for which market risks are actively managed as part of trading portfolios.
|
HSBC Holdings plc
|
265
|
23
|
Financial liabilities designated at fair value
|
HSBC
|
||||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Deposits by banks and customer accounts
|
145
|
|
135
|
|
Liabilities to customers under investment contracts
|
5,635
|
|
6,002
|
|
Debt securities in issue (Note 24)
|
64,359
|
|
57,112
|
|
Subordinated liabilities (Note 27)
|
23,831
|
|
23,172
|
|
Preferred securities (Note 27)
|
459
|
|
411
|
|
At 31 Dec
|
94,429
|
|
86,832
|
|
24
|
Debt securities in issue
|
HSBC
|
||||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Bonds and medium-term notes
|
146,539
|
|
133,721
|
|
Other debt securities in issue
|
23,100
|
|
21,962
|
|
Total debt securities in issue
|
169,639
|
|
155,683
|
|
Included within:
|
|
|
|
|
– trading liabilities (Note 22)
|
(40,734
|
)
|
(32,656
|
)
|
– financial liabilities designated at fair value (Note 23)
|
(64,359
|
)
|
(57,112
|
)
|
At 31 Dec
|
64,546
|
|
65,915
|
|
HSBC Holdings
|
||||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Debt securities
|
51,754
|
|
38,571
|
|
Included within:
|
|
|
|
|
– financial liabilities designated at fair value (Note 23)
|
(17,496
|
)
|
(16,766
|
)
|
At 31 Dec
|
34,258
|
|
21,805
|
|
25
|
Accruals, deferred income and other liabilities
|
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Accruals and deferred income
|
11,521
|
|
10,770
|
|
Endorsements and acceptances
|
9,746
|
|
8,567
|
|
Employee benefit liabilities (Note 5)
|
2,152
|
|
2,681
|
|
Liabilities of disposal groups held for sale
|
1,286
|
|
2,790
|
|
Other liabilities
|
21,202
|
|
19,483
|
|
At 31 Dec
|
45,907
|
|
44,291
|
|
266
|
HSBC Holdings plc
|
26
|
Provisions
|
|
Restructuring
costs |
|
Contractual
commitments |
|
Legal proceedings
and regulatory matters |
|
Customer
remediation |
|
Other
provisions |
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
At 1 Jan 2017
|
551
|
|
298
|
|
2,436
|
|
1,124
|
|
364
|
|
4,773
|
|
Additions
|
204
|
|
87
|
|
829
|
|
820
|
|
280
|
|
2,220
|
|
Amounts utilised
|
(353
|
)
|
(3
|
)
|
(850
|
)
|
(543
|
)
|
(133
|
)
|
(1,882
|
)
|
Unused amounts reversed
|
(103
|
)
|
(135
|
)
|
(980
|
)
|
(52
|
)
|
(107
|
)
|
(1,377
|
)
|
Unwinding of discounts
|
—
|
|
(1
|
)
|
—
|
|
—
|
|
9
|
|
8
|
|
Exchange and other movements
|
35
|
|
7
|
|
66
|
|
105
|
|
56
|
|
269
|
|
At 31 Dec 2017
|
334
|
|
253
|
|
1,501
|
|
1,454
|
|
469
|
|
4,011
|
|
|
|
|
|
|
|
|
||||||
At 1 Jan 2016
|
463
|
|
240
|
|
3,174
|
|
1,340
|
|
335
|
|
5,552
|
|
Additions
|
415
|
|
141
|
|
1,258
|
|
762
|
|
208
|
|
2,784
|
|
Amounts utilised
|
(168
|
)
|
(1
|
)
|
(1,831
|
)
|
(680
|
)
|
(118
|
)
|
(2,798
|
)
|
Unused amounts reversed
|
(115
|
)
|
(97
|
)
|
(165
|
)
|
(94
|
)
|
(96
|
)
|
(567
|
)
|
Unwinding of discounts
|
—
|
|
—
|
|
—
|
|
—
|
|
6
|
|
6
|
|
Exchange and other movements
|
(44
|
)
|
15
|
|
—
|
|
(204
|
)
|
29
|
|
(204
|
)
|
At 31 Dec 2016
|
551
|
|
298
|
|
2,436
|
|
1,124
|
|
364
|
|
4,773
|
|
1
|
Excludes invalid claims for which no PPI policy exists.
|
2
|
Claims include inbound and responses to outbound contact.
|
HSBC Holdings plc
|
267
|
27
|
Subordinated liabilities
|
HSBC’s subordinated liabilities
|
|
|
||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
At amortised cost
|
19,826
|
|
20,984
|
|
– subordinated liabilities
|
17,988
|
|
19,230
|
|
– preferred securities
|
1,838
|
|
1,754
|
|
Designated at fair value
(Note 23)
|
24,290
|
|
23,583
|
|
– subordinated liabilities
|
23,831
|
|
23,172
|
|
– preferred securities
|
459
|
|
411
|
|
At 31 Dec
|
44,116
|
|
44,567
|
|
Issued by HSBC subsidiaries
|
15,470
|
|
16,860
|
|
Issued by HSBC Holdings
|
28,646
|
|
27,707
|
|
268
|
HSBC Holdings plc
|
HSBC’s subordinated liabilities in issue
|
|||||||||
|
|
|
|
2017
|
|
2016
|
|
||
|
Footnotes
|
First call date
|
|
Maturity date
|
$m
|
|
$m
|
|
|
Additional tier 1 capital securities guaranteed by HSBC Holdings plc
|
1
|
|
|
|
|
||||
$900m
|
10.176% non-cumulative step-up perpetual preferred securities, series 2
|
|
Jun 2030
|
|
|
892
|
|
891
|
|
|
|
|
|
|
892
|
|
891
|
|
|
Additional tier 1 capital securities guaranteed by HSBC Bank plc
|
1
|
|
|
|
|
||||
£300m
|
5.862% non-cumulative step-up perpetual preferred securities
|
|
Apr 2020
|
|
|
459
|
|
411
|
|
£700m
|
5.844% non-cumulative step-up perpetual preferred securities
|
|
Nov 2031
|
|
|
946
|
|
863
|
|
|
|
|
|
|
1,405
|
|
1,274
|
|
|
Tier 2 securities issued by HSBC Bank plc
|
|
|
|
|
|
||||
$750m
|
Undated floating rate primary capital notes
|
|
Jun 1990
|
|
|
750
|
|
750
|
|
$500m
|
Undated floating rate primary capital notes
|
|
Sep 1990
|
|
|
500
|
|
500
|
|
$300m
|
Undated floating rate primary capital notes, series 3
|
|
Jun 1992
|
|
|
300
|
|
300
|
|
$300m
|
7.65% subordinated notes
|
|
—
|
|
May 2025
|
375
|
|
372
|
|
|
|
|
|
|
|
|
|||
£350m
|
5.00% callable subordinated notes
|
2
|
Mar 2018
|
|
Mar 2023
|
496
|
|
466
|
|
£300m
|
6.50% subordinated notes
|
|
—
|
|
Jul 2023
|
405
|
|
369
|
|
£350m
|
5.375% callable subordinated step-up notes
|
3
|
Nov 2025
|
|
Nov 2030
|
584
|
|
489
|
|
£500m
|
5.375% subordinated notes
|
|
—
|
|
Aug 2033
|
912
|
|
750
|
|
£225m
|
6.25% subordinated notes
|
|
—
|
|
Jan 2041
|
303
|
|
276
|
|
£600m
|
4.75% subordinated notes
|
|
—
|
|
Mar 2046
|
802
|
|
731
|
|
|
|
|
|
|
5,427
|
|
5,003
|
|
|
Tier 2 securities issued by The Hongkong and Shanghai Banking Corporation Ltd
|
|
|
|
|
|
||||
$400m
|
Primary capital undated floating rate notes (third series)
|
|
Jul 1991
|
|
|
400
|
|
400
|
|
|
|
|
|
|
400
|
|
400
|
|
|
Tier 2 securities issued by HSBC Bank Malaysia Berhad
|
|
|
|
|
|
||||
MYR500m
|
4.35% subordinated bonds
|
4
|
Jun 2017
|
|
Jun 2022
|
—
|
|
112
|
|
MYR500m
|
5.05% subordinated bonds
|
|
Nov 2022
|
|
Nov 2027
|
123
|
|
112
|
|
|
|
|
|
|
123
|
|
224
|
|
|
Tier 2 securities issued by HSBC USA Inc.
|
|
|
|
|
|
||||
$750m
|
5.00% subordinated notes
|
|
—
|
|
Sep 2020
|
748
|
|
748
|
|
$250m
|
7.20% subordinated debentures
|
|
—
|
|
Jul 2097
|
221
|
|
220
|
|
|
Other subordinated liabilities each less than $150m
|
5
|
|
|
277
|
|
284
|
|
|
|
|
|
|
|
1,246
|
|
1,252
|
|
|
Tier 2 securities issued by HSBC Bank USA, N.A.
|
|
|
|
|
|
||||
$500m
|
6.00% subordinated notes
|
|
—
|
|
Aug 2017
|
—
|
|
498
|
|
$1,250m
|
4.875% subordinated notes
|
|
—
|
|
Aug 2020
|
1,236
|
|
1,257
|
|
$1,000m
|
5.875% subordinated notes
|
|
—
|
|
Nov 2034
|
1,272
|
|
1,137
|
|
$750m
|
5.625% subordinated notes
|
|
—
|
|
Aug 2035
|
955
|
|
862
|
|
$700m
|
7.00% subordinated notes
|
|
—
|
|
Jan 2039
|
700
|
|
701
|
|
|
|
|
|
|
4,163
|
|
4,455
|
|
|
Tier 2 securities issued by HSBC Finance Corporation
|
|
|
|
|
|
||||
$2,939m
|
6.676% senior subordinated notes
|
6
|
—
|
|
Jan 2021
|
1,092
|
|
2,192
|
|
|
|
|
|
|
|
|
|||
Tier 2 securities issued by HSBC Bank Canada
|
|
|
|
|
|
||||
CAD400m
|
4.80% subordinated debentures
|
4
|
Apr 2017
|
|
Apr 2022
|
—
|
|
299
|
|
|
Other subordinated liabilities each less than $150m
|
|
Oct 1996
|
|
Nov 2083
|
31
|
|
29
|
|
|
|
|
|
|
31
|
|
328
|
|
|
Securities issued by HSBC Mexico, S.A.
|
|
|
|
|
|
||||
$300m
|
Non-convertible subordinated obligations
|
7, 8
|
Jun 2014
|
|
Jun 2019
|
240
|
|
240
|
|
|
Other subordinated liability less than $150m
|
7, 9
|
|
|
115
|
|
198
|
|
|
|
|
|
|
|
355
|
|
438
|
|
|
Securities issued by other HSBC subsidiaries
|
|
|
|
|
|
||||
Other subordinated liabilities each less than $200m
|
5
|
|
|
336
|
|
403
|
|
||
Subordinated liabilities issued by HSBC subsidiaries at 31 Dec
|
|
|
|
15,470
|
|
16,860
|
|
1
|
See paragraph below, ‘Guaranteed by HSBC Holdings or HSBC Bank plc’.
|
2
|
In January 2018, HSBC gave notice it will redeem these securities.
|
3
|
The interest rate payable after November 2025 is the sum of the three-month sterling Libor plus
1.50%
percentage points.
|
4
|
In 2017 HSBC redeemed these securities.
|
5
|
Some securities included here are ineligible for inclusion in the capital base of HSBC.
|
6
|
HSBC tendered for these securities in 2017. In January 2018 a further tender was conducted. The principal balance is now
$509m
.
|
7
|
These securities are ineligible for inclusion in the capital base of HSBC.
|
8
|
Approximately
$60m
of these securities are held by HSBC Holdings.
|
9
|
In February 2018, HSBC gave notice it will redeem these securities.
|
HSBC Holdings plc
|
269
|
HSBC Holdings
|
||||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
At amortised cost
|
15,877
|
|
15,189
|
|
Designated at fair value (Note 23)
|
13,394
|
|
13,347
|
|
At 31 Dec
|
29,271
|
|
28,536
|
|
1
|
Amounts owed to third parties represent securities included in the capital base of HSBC as tier 2 securities in accordance with the grandfathering provisions under CRD IV rules.
|
2
|
These securities are included in the capital base of HSBC as fully CRD IV compliant tier 2 securities on an end point basis.
|
3
|
In 2017, HSBC redeemed these securities.
|
4
|
These subordinated notes are measured at amortised cost in HSBC Holdings, where the interest rate risk is hedged using a fair value hedge, while they are measured at fair value in the Group.
|
270
|
HSBC Holdings plc
|
28
|
Maturity analysis of assets, liabilities and off-balance sheet commitments
|
•
|
Trading assets and liabilities (including trading derivatives but excluding reverse repos, repos and debt securities in issue) are included in the ‘Due not more than 1 month’ time bucket, because trading balances are typically held for short periods of time.
|
•
|
Financial assets and liabilities with no contractual maturity (such as equity securities) are included in the ‘Due over 5 years’ time bucket. Undated or perpetual instruments are classified based on the contractual notice period which the counterparty of the instrument is entitled to give. Where there is no contractual notice period, undated or perpetual contracts are included in the ‘Due over 5 years’ time bucket.
|
•
|
Non-financial assets and liabilities with no contractual maturity are included in the ‘Due over 5 years’ time bucket.
|
•
|
Financial instruments included within assets and liabilities of disposal groups held for sale are classified on the basis of the contractual maturity of the underlying instruments and not on the basis of the disposal transaction.
|
•
|
Liabilities under insurance contracts are included in the ‘Due over 5 years’ time bucket. Liabilities under investment contracts are classified in accordance with their contractual maturity. Undated investment contracts are included in the ‘Due over 5 years’ time bucket, however, such contracts are subject to surrender and transfer options by the policyholders.
|
•
|
Loan and other credit-related commitments are classified on the basis of the earliest date they can be drawn down. Application of this policy throughout the Group was improved in 2017, and therefore comparative information has been represented.
|
HSBC Holdings plc
|
271
|
Maturity analysis of assets, liabilities and off-balance sheet commitments
|
||||||||||||||||||
|
Due not
more than
1 month
|
|
Due over
1 month
but not
more than
3 months
|
|
Due over
3 months
but not
more than
6 months
|
|
Due over
6 months
but not
more than
9 months
|
|
Due over
9 months
but not
more than
1 year
|
|
Due over
1 year
but not
more than
2 years
|
|
Due over
2 years
but not
more than
5 years
|
|
Due over
5 years
|
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash and balances at central banks
|
180,624
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
180,624
|
|
Items in the course of collection from other banks
|
6,628
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,628
|
|
Hong Kong Government certificates of indebtedness
|
34,186
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
34,186
|
|
Trading assets
|
284,781
|
|
1,432
|
|
642
|
|
—
|
|
1,140
|
|
—
|
|
—
|
|
—
|
|
287,995
|
|
Financial assets designated at fair value
|
612
|
|
93
|
|
230
|
|
162
|
|
197
|
|
556
|
|
2,068
|
|
25,546
|
|
29,464
|
|
Derivatives
|
218,103
|
|
162
|
|
97
|
|
124
|
|
42
|
|
234
|
|
592
|
|
464
|
|
219,818
|
|
Loans and advances to banks
|
61,968
|
|
10,665
|
|
4,212
|
|
2,344
|
|
1,502
|
|
5,799
|
|
2,491
|
|
1,412
|
|
90,393
|
|
Loans and advances to customers
|
195,577
|
|
65,469
|
|
49,860
|
|
34,107
|
|
37,176
|
|
93,065
|
|
218,784
|
|
268,926
|
|
962,964
|
|
– personal
|
42,593
|
|
9,126
|
|
8,483
|
|
7,441
|
|
7,492
|
|
23,552
|
|
61,238
|
|
214,837
|
|
374,762
|
|
– corporate and commercial
|
124,669
|
|
50,532
|
|
36,046
|
|
22,932
|
|
26,577
|
|
61,785
|
|
144,451
|
|
49,762
|
|
516,754
|
|
– financial
|
28,315
|
|
5,811
|
|
5,331
|
|
3,734
|
|
3,107
|
|
7,728
|
|
13,095
|
|
4,327
|
|
71,448
|
|
Reverse repurchase agreements
– non-trading |
144,244
|
|
30,289
|
|
7,951
|
|
2,194
|
|
3,960
|
|
1,072
|
|
4,598
|
|
7,245
|
|
201,553
|
|
Financial investments
|
31,981
|
|
51,487
|
|
31,634
|
|
13,446
|
|
17,647
|
|
40,582
|
|
90,366
|
|
111,933
|
|
389,076
|
|
Accrued income and other financial assets
|
19,259
|
|
5,795
|
|
2,050
|
|
358
|
|
411
|
|
652
|
|
513
|
|
2,046
|
|
31,084
|
|
Financial assets at 31 Dec 2017
|
1,177,963
|
|
165,392
|
|
96,676
|
|
52,735
|
|
62,075
|
|
141,960
|
|
319,412
|
|
417,572
|
|
2,433,785
|
|
Non-financial assets
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
87,986
|
|
87,986
|
|
Total assets at 31 Dec 2017
|
1,177,963
|
|
165,392
|
|
96,676
|
|
52,735
|
|
62,075
|
|
141,960
|
|
319,412
|
|
505,558
|
|
2,521,771
|
|
Off-balance sheet commitments received
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loan and other credit-related commitments
|
2,431
|
|
—
|
|
3,335
|
|
—
|
|
—
|
|
133
|
|
—
|
|
—
|
|
5,899
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|||||||||
Hong Kong currency notes in circulation
|
34,186
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
34,186
|
|
Deposits by banks
|
56,829
|
|
1,961
|
|
1,097
|
|
616
|
|
157
|
|
361
|
|
7,393
|
|
1,508
|
|
69,922
|
|
Customer accounts
1
|
1,269,003
|
|
44,129
|
|
21,596
|
|
11,570
|
|
10,757
|
|
4,527
|
|
2,257
|
|
623
|
|
1,364,462
|
|
– personal
|
648,040
|
|
22,938
|
|
13,489
|
|
6,810
|
|
5,727
|
|
2,753
|
|
1,557
|
|
119
|
|
701,433
|
|
– corporate and commercial
|
458,937
|
|
16,496
|
|
6,983
|
|
3,712
|
|
3,970
|
|
1,705
|
|
641
|
|
451
|
|
492,895
|
|
– financial
|
162,026
|
|
4,695
|
|
1,124
|
|
1,048
|
|
1,060
|
|
69
|
|
59
|
|
53
|
|
170,134
|
|
Repurchase agreements
– non-trading |
113,208
|
|
14,042
|
|
1,592
|
|
160
|
|
—
|
|
—
|
|
1,000
|
|
—
|
|
130,002
|
|
Items in the course of transmission to other banks
|
6,850
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,850
|
|
Trading liabilities
|
145,028
|
|
2,026
|
|
2,177
|
|
2,130
|
|
3,077
|
|
5,038
|
|
12,814
|
|
12,071
|
|
184,361
|
|
Financial liabilities designated at
fair value |
80
|
|
281
|
|
2,094
|
|
271
|
|
2,798
|
|
4,215
|
|
22,468
|
|
62,222
|
|
94,429
|
|
– debt securities in issue: covered bonds
|
—
|
|
—
|
|
—
|
|
209
|
|
—
|
|
212
|
|
2,494
|
|
1,654
|
|
4,569
|
|
– debt securities in issue: unsecured
|
55
|
|
95
|
|
2,087
|
|
62
|
|
2,797
|
|
1,654
|
|
19,505
|
|
33,535
|
|
59,790
|
|
– subordinated liabilities and preferred securities
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,349
|
|
459
|
|
21,482
|
|
24,290
|
|
– other
|
25
|
|
186
|
|
7
|
|
—
|
|
1
|
|
—
|
|
10
|
|
5,551
|
|
5,780
|
|
Derivatives
|
213,011
|
|
79
|
|
141
|
|
140
|
|
202
|
|
504
|
|
1,107
|
|
1,637
|
|
216,821
|
|
Debt securities in issue
|
6,081
|
|
6,295
|
|
5,228
|
|
5,795
|
|
9,240
|
|
6,725
|
|
22,767
|
|
2,415
|
|
64,546
|
|
– covered bonds
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
3
|
|
10
|
|
34
|
|
48
|
|
– otherwise secured
|
3,479
|
|
4
|
|
—
|
|
—
|
|
1,000
|
|
1,100
|
|
914
|
|
1,193
|
|
7,690
|
|
– unsecured
|
2,602
|
|
6,291
|
|
5,228
|
|
5,795
|
|
8,239
|
|
5,622
|
|
21,843
|
|
1,188
|
|
56,808
|
|
Accruals and other financial liabilities
|
18,009
|
|
9,547
|
|
2,798
|
|
749
|
|
717
|
|
1,007
|
|
1,569
|
|
938
|
|
35,334
|
|
Subordinated liabilities
|
—
|
|
1,918
|
|
73
|
|
36
|
|
132
|
|
273
|
|
3,595
|
|
13,799
|
|
19,826
|
|
Total financial liabilities at
31 Dec 2017
|
1,862,285
|
|
80,278
|
|
36,796
|
|
21,467
|
|
27,080
|
|
22,650
|
|
74,970
|
|
95,213
|
|
2,220,739
|
|
Non-financial liabilities
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
103,161
|
|
103,161
|
|
Total liabilities at 31 Dec 2017
|
1,862,285
|
|
80,278
|
|
36,796
|
|
21,467
|
|
27,080
|
|
22,650
|
|
74,970
|
|
198,374
|
|
2,323,900
|
|
Off-balance sheet commitments given
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loan and other credit-related commitments
|
628,070
|
|
38,736
|
|
3,310
|
|
1,777
|
|
4,087
|
|
3,436
|
|
3,824
|
|
2,349
|
|
685,589
|
|
– personal
|
187,545
|
|
2,001
|
|
340
|
|
343
|
|
1,583
|
|
1,033
|
|
952
|
|
513
|
|
194,310
|
|
– corporate and commercial
|
388,778
|
|
32,011
|
|
2,782
|
|
1,322
|
|
2,309
|
|
2,403
|
|
2,804
|
|
1,716
|
|
434,125
|
|
– financial
|
51,747
|
|
4,724
|
|
188
|
|
112
|
|
195
|
|
—
|
|
68
|
|
120
|
|
57,154
|
|
272
|
HSBC Holdings plc
|
Maturity analysis of assets, liabilities and off-balance sheet commitments (continued)
|
||||||||||||||||||
|
Due not
more than
1 month
|
|
Due over
1 month
but not
more than
3 months
|
|
Due over
3 months
but not
more than
6 months
|
|
Due over
6 months
but not
more than
9 months
|
|
Due over
9 months
but not
more than
1 year
|
|
Due over
1 year
but not
more than
2 years
|
|
Due over
2 years
but not
more than
5 years
|
|
Due over
5 years
|
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash and balances at central banks
|
128,009
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
128,009
|
|
Items in the course of collection from other banks
|
5,003
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,003
|
|
Hong Kong Government certificates of indebtedness
|
31,228
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
31,228
|
|
Trading assets
|
232,550
|
|
758
|
|
230
|
|
415
|
|
1,172
|
|
—
|
|
—
|
|
—
|
|
235,125
|
|
Financial assets designated at fair value
|
176
|
|
182
|
|
75
|
|
178
|
|
363
|
|
749
|
|
2,486
|
|
20,547
|
|
24,756
|
|
Derivatives
|
287,749
|
|
149
|
|
207
|
|
96
|
|
110
|
|
704
|
|
1,056
|
|
801
|
|
290,872
|
|
Loans and advances to banks
|
59,636
|
|
13,404
|
|
4,494
|
|
2,375
|
|
1,765
|
|
2,879
|
|
2,298
|
|
1,275
|
|
88,126
|
|
Loans and advances to customers
|
167,531
|
|
61,693
|
|
47,664
|
|
30,115
|
|
30,362
|
|
85,144
|
|
192,787
|
|
246,208
|
|
861,504
|
|
– personal
|
39,295
|
|
7,812
|
|
6,723
|
|
5,928
|
|
6,799
|
|
22,664
|
|
53,620
|
|
194,985
|
|
337,826
|
|
– corporate and commercial
|
108,906
|
|
48,333
|
|
35,180
|
|
21,317
|
|
19,573
|
|
54,739
|
|
126,890
|
|
45,271
|
|
460,209
|
|
– financial
|
19,330
|
|
5,548
|
|
5,761
|
|
2,870
|
|
3,990
|
|
7,741
|
|
12,277
|
|
5,952
|
|
63,469
|
|
Reverse repurchase agreements
– non-trading
|
115,942
|
|
25,525
|
|
10,378
|
|
5,220
|
|
2,350
|
|
479
|
|
1,080
|
|
—
|
|
160,974
|
|
Financial investments
|
36,932
|
|
59,826
|
|
30,403
|
|
16,800
|
|
19,564
|
|
50,255
|
|
104,933
|
|
118,084
|
|
436,797
|
|
Accrued income and other financial assets
|
16,885
|
|
8,050
|
|
1,737
|
|
407
|
|
462
|
|
421
|
|
1,033
|
|
1,907
|
|
30,902
|
|
Financial assets at 31 Dec 2016
|
1,081,641
|
|
169,587
|
|
95,188
|
|
55,606
|
|
56,148
|
|
140,631
|
|
305,673
|
|
388,822
|
|
2,293,296
|
|
Non-financial assets
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
81,690
|
|
81,690
|
|
Total assets at 31 Dec 2016
|
1,081,641
|
|
169,587
|
|
95,188
|
|
55,606
|
|
56,148
|
|
140,631
|
|
305,673
|
|
470,512
|
|
2,374,986
|
|
Off-balance sheet commitments received
|
|
|
|
|
|
|
|
|
|
|||||||||
Loan and other credit-related commitments
|
2,813
|
|
—
|
|
2,050
|
|
—
|
|
—
|
|
110
|
|
—
|
|
—
|
|
4,973
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|||||||||
Hong Kong currency notes in circulation
|
31,228
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
31,228
|
|
Deposits by banks
|
46,306
|
|
4,075
|
|
2,085
|
|
665
|
|
489
|
|
422
|
|
4,842
|
|
1,055
|
|
59,939
|
|
Customer accounts
1
|
1,180,641
|
|
45,245
|
|
19,187
|
|
10,277
|
|
8,325
|
|
4,709
|
|
3,500
|
|
502
|
|
1,272,386
|
|
– personal
|
590,654
|
|
22,222
|
|
12,024
|
|
5,823
|
|
4,786
|
|
3,484
|
|
2,483
|
|
121
|
|
641,597
|
|
– corporate and commercial
|
436,666
|
|
17,460
|
|
6,178
|
|
3,951
|
|
3,082
|
|
1,200
|
|
967
|
|
360
|
|
469,864
|
|
– financial
|
153,321
|
|
5,563
|
|
985
|
|
503
|
|
457
|
|
25
|
|
50
|
|
21
|
|
160,925
|
|
Repurchase agreements – non-trading
|
82,330
|
|
2,707
|
|
2,871
|
|
50
|
|
—
|
|
—
|
|
1,000
|
|
—
|
|
88,958
|
|
Items in the course of transmission to other banks
|
5,977
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,977
|
|
Trading liabilities
|
121,707
|
|
2,053
|
|
1,423
|
|
1,845
|
|
3,013
|
|
6,219
|
|
9,010
|
|
8,421
|
|
153,691
|
|
Financial liabilities designated at
fair value
|
1,659
|
|
958
|
|
1,396
|
|
3
|
|
1,701
|
|
5,046
|
|
17,989
|
|
58,080
|
|
86,832
|
|
– debt securities in issue: covered bonds
|
1,587
|
|
—
|
|
303
|
|
—
|
|
—
|
|
207
|
|
1,348
|
|
2,558
|
|
6,003
|
|
– debt securities in issue: unsecured
|
25
|
|
15
|
|
1,091
|
|
3
|
|
1,700
|
|
4,839
|
|
14,056
|
|
29,380
|
|
51,109
|
|
– subordinated liabilities and preferred securities
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,578
|
|
21,005
|
|
23,583
|
|
– other
|
47
|
|
943
|
|
2
|
|
—
|
|
1
|
|
—
|
|
7
|
|
5,137
|
|
6,137
|
|
Derivatives
|
274,965
|
|
39
|
|
39
|
|
112
|
|
273
|
|
506
|
|
1,471
|
|
2,414
|
|
279,819
|
|
Debt securities in issue
|
4,708
|
|
8,598
|
|
8,280
|
|
5,996
|
|
4,610
|
|
10,953
|
|
19,432
|
|
3,338
|
|
65,915
|
|
– covered bonds
|
—
|
|
—
|
|
1
|
|
71
|
|
1
|
|
3
|
|
24
|
|
26
|
|
126
|
|
– otherwise secured
|
3,207
|
|
823
|
|
893
|
|
114
|
|
329
|
|
1,882
|
|
2,680
|
|
1,181
|
|
11,109
|
|
– unsecured
|
1,501
|
|
7,775
|
|
7,386
|
|
5,811
|
|
4,280
|
|
9,068
|
|
16,728
|
|
2,131
|
|
54,680
|
|
Accruals and other financial liabilities
|
19,052
|
|
8,172
|
|
2,392
|
|
833
|
|
519
|
|
885
|
|
1,299
|
|
568
|
|
33,720
|
|
Subordinated liabilities
|
12
|
|
—
|
|
143
|
|
61
|
|
497
|
|
1,788
|
|
5,056
|
|
13,427
|
|
20,984
|
|
Total financial liabilities at 31 Dec 2016
|
1,768,585
|
|
71,847
|
|
37,816
|
|
19,842
|
|
19,427
|
|
30,528
|
|
63,599
|
|
87,805
|
|
2,099,449
|
|
Non-financial liabilities
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
92,959
|
|
92,959
|
|
Total liabilities at 31 Dec 2016
|
1,768,585
|
|
71,847
|
|
37,816
|
|
19,842
|
|
19,427
|
|
30,528
|
|
63,599
|
|
180,764
|
|
2,192,408
|
|
Off-balance sheet commitments given
|
|
|
|
|
|
|
|
|
|
|||||||||
Loan and other credit-related commitments
|
609,923
|
|
29,752
|
|
3,010
|
|
1,897
|
|
3,253
|
|
2,514
|
|
4,280
|
|
1,214
|
|
655,843
|
|
– personal
|
177,462
|
|
1,835
|
|
89
|
|
262
|
|
1,896
|
|
1,114
|
|
747
|
|
405
|
|
183,810
|
|
– corporate and commercial
|
366,573
|
|
26,650
|
|
2,839
|
|
1,350
|
|
904
|
|
996
|
|
3,410
|
|
754
|
|
403,476
|
|
– financial
|
65,888
|
|
1,267
|
|
82
|
|
285
|
|
453
|
|
404
|
|
123
|
|
55
|
|
68,557
|
|
1
|
‘Customer accounts’ includes $
386,417m
(2016:
$343,782m
) insured by guarantee schemes.
|
HSBC Holdings plc
|
273
|
Maturity analysis of assets, liabilities and off-balance sheet commitments
|
||||||||||||||||||
|
Due not
more than
1 month
|
|
Due over
1 month
but not
more than
3 months
|
|
Due over
3 months
but not
more than
6 months
|
|
Due over
6 months
but not
more than
9 months
|
|
Due over
9 months
but not
more than
1 year
|
|
Due over
1 year
but not
more than
2 years
|
|
Due over
2 years
but not
more than
5 years
|
|
Due over
5 years
|
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash at bank and in hand:
|
|
|
|
|
|
|
|
|
|
|||||||||
– balances with HSBC undertakings
|
1,985
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,985
|
|
Derivatives
|
1,952
|
|
—
|
|
—
|
|
—
|
|
—
|
|
80
|
|
—
|
|
356
|
|
2,388
|
|
Loans and advances to HSBC undertakings
|
4,861
|
|
13,039
|
|
3,145
|
|
5
|
|
2
|
|
1,134
|
|
29,560
|
|
24,881
|
|
76,627
|
|
Loans and advances to HSBC undertakings designated at fair value
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,411
|
|
9,533
|
|
11,944
|
|
Financial investments in HSBC undertakings
|
17
|
|
3
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,798
|
|
2,446
|
|
4,264
|
|
Accrued income and other financial assets
|
—
|
|
4
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
123
|
|
127
|
|
Total financial assets at
31 Dec 2017
|
8,815
|
|
13,046
|
|
3,145
|
|
5
|
|
2
|
|
1,214
|
|
33,769
|
|
37,339
|
|
97,335
|
|
Non-financial assets
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
94,399
|
|
94,399
|
|
Total assets at 31 Dec 2017
|
8,815
|
|
13,046
|
|
3,145
|
|
5
|
|
2
|
|
1,214
|
|
33,769
|
|
131,738
|
|
191,734
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts owed to HSBC undertakings
|
120
|
|
2,405
|
|
46
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,571
|
|
Financial liabilities designated at fair value
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,349
|
|
11,491
|
|
17,050
|
|
30,890
|
|
– debt securities in issue
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11,491
|
|
6,005
|
|
17,496
|
|
– subordinated liabilities and preferred securities
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,349
|
|
—
|
|
11,045
|
|
13,394
|
|
Derivatives
|
2,008
|
|
—
|
|
—
|
|
—
|
|
—
|
|
110
|
|
183
|
|
781
|
|
3,082
|
|
Debt securities in issue
|
—
|
|
—
|
|
—
|
|
—
|
|
1,081
|
|
—
|
|
10,354
|
|
22,823
|
|
34,258
|
|
Accruals and other financial liabilities
|
439
|
|
395
|
|
157
|
|
39
|
|
7
|
|
3
|
|
1
|
|
11
|
|
1,052
|
|
Subordinated liabilities
|
—
|
|
1,918
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
13,959
|
|
15,877
|
|
Total financial liabilities at
31 Dec 2017
|
2,567
|
|
4,718
|
|
203
|
|
39
|
|
1,088
|
|
2,462
|
|
22,029
|
|
54,624
|
|
87,730
|
|
Non-financial liabilities
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
217
|
|
217
|
|
Total liabilities at 31 Dec 2017
|
2,567
|
|
4,718
|
|
203
|
|
39
|
|
1,088
|
|
2,462
|
|
22,029
|
|
54,841
|
|
87,947
|
|
Off-balance sheet commitments given
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Undrawn formal standby facilities, credit lines and other commitments to lend
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
274
|
HSBC Holdings plc
|
Maturity analysis of assets, liabilities and off-balance sheet commitments (continued)
|
||||||||||||||||||
|
Due not
more than
1 month
|
|
Due over
1 month
but not
more than
3 months
|
|
Due over
3 months
but not
more than
6 months
|
|
Due over
6 months
but not
more than
9 months
|
|
Due over
9 months
but not
more than
1 year
|
|
Due over
1 year
but not
more than
2 years
|
|
Due over
2 years
but not
more than
5 years
|
|
Due over
5 years
|
|
Total
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash at bank and in hand:
|
|
|
|
|
|
|
|
|
|
|||||||||
– balances with HSBC undertakings
|
247
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
247
|
|
Derivatives
|
1,702
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
93
|
|
353
|
|
2,148
|
|
Loans and advances to HSBC undertakings
|
16,372
|
|
—
|
|
—
|
|
—
|
|
—
|
|
167
|
|
14,204
|
|
46,678
|
|
77,421
|
|
Financial investments in HSBC undertakings
|
40
|
|
2
|
|
—
|
|
—
|
|
—
|
|
—
|
|
838
|
|
2,710
|
|
3,590
|
|
Accrued income and other financial assets
|
12
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
107
|
|
119
|
|
Total financial assets at 31 Dec 2016
|
18,373
|
|
2
|
|
—
|
|
—
|
|
—
|
|
167
|
|
15,135
|
|
49,848
|
|
83,525
|
|
Non-financial assets
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
97,273
|
|
97,273
|
|
Total assets at 31 Dec 2016
|
18,373
|
|
2
|
|
—
|
|
—
|
|
—
|
|
167
|
|
15,135
|
|
147,121
|
|
180,798
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|||||||||
Amounts owed to HSBC undertakings
|
2,052
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
105
|
|
—
|
|
2,157
|
|
Financial liabilities designated at fair value
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,167
|
|
5,845
|
|
22,101
|
|
30,113
|
|
– debt securities in issue
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,845
|
|
10,921
|
|
16,766
|
|
– subordinated liabilities and preferred securities
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,167
|
|
—
|
|
11,180
|
|
13,347
|
|
Derivatives
|
3,841
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
592
|
|
592
|
|
5,025
|
|
Debt securities in issue
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
953
|
|
4,822
|
|
16,030
|
|
21,805
|
|
Accruals and other financial liabilities
|
75
|
|
1,268
|
|
142
|
|
22
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,507
|
|
Subordinated liabilities
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,693
|
|
—
|
|
13,496
|
|
15,189
|
|
Total financial liabilities at 31 Dec 2016
|
5,968
|
|
1,268
|
|
142
|
|
22
|
|
—
|
|
4,813
|
|
11,364
|
|
52,219
|
|
75,796
|
|
Non-financial liabilities
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
144
|
|
144
|
|
Total liabilities at 31 Dec 2016
|
5,968
|
|
1,268
|
|
142
|
|
22
|
|
—
|
|
4,813
|
|
11,364
|
|
52,363
|
|
75,940
|
|
Off-balance sheet commitments given
|
|
|
|
|
|
|
|
|
|
|||||||||
Undrawn formal standby facilities, credit lines and other commitments
to lend
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
29
|
Offsetting of financial assets and financial liabilities
|
•
|
the counterparty has an offsetting exposure with HSBC and a master netting or similar arrangement is in place with a right to set off only in the event of default, insolvency or bankruptcy, or the offset criteria are otherwise not satisfied; and
|
•
|
in the case of derivatives and reverse repurchase/repurchase, stock borrowing/lending and similar agreements, cash and non-cash collateral has been received/pledged.
|
HSBC Holdings plc
|
275
|
Offsetting of financial assets and financial liabilities
|
|
|
|
|
|
|
|||||||||||||
|
|
Amounts subject to enforceable netting arrangements
|
Amounts not
subject to
enforceable
netting
arrangements
5
|
|
Total
|
|
|||||||||||||
|
|
|
|
|
|
|
|
Amounts not set off in the
balance sheet
|
|
|
|||||||||
|
|
Gross
amounts
|
|
Amounts
offset
|
|
Net amounts
in the balance sheet
|
|
Financial
instruments
|
|
Non-cash
collateral
|
|
Cash
collateral
|
|
Net
amount
|
|
||||
|
Footnotes
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives (Note 14)
|
1
|
322,422
|
|
(110,425
|
)
|
211,997
|
|
(156,088
|
)
|
(11,092
|
)
|
(37,302
|
)
|
7,515
|
|
7,821
|
|
219,818
|
|
Reverse repos, stock borrowing and similar agreements classified as:
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
– trading assets
|
|
15,893
|
|
—
|
|
15,893
|
|
(430
|
)
|
(15,462
|
)
|
—
|
|
1
|
|
1,227
|
|
17,120
|
|
– non-trading assets
|
|
265,666
|
|
(105,776
|
)
|
159,890
|
|
(3,714
|
)
|
(155,973
|
)
|
(49
|
)
|
154
|
|
41,663
|
|
201,553
|
|
Loans and advances to customers
|
3
|
42,091
|
|
(10,424
|
)
|
31,667
|
|
(26,390
|
)
|
—
|
|
(181
|
)
|
5,096
|
|
619
|
|
32,286
|
|
At 31 Dec 2017
|
|
646,072
|
|
(226,625
|
)
|
419,447
|
|
(186,622
|
)
|
(182,527
|
)
|
(37,532
|
)
|
12,766
|
|
51,330
|
|
470,777
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives (Note 14)
|
1
|
387,999
|
|
(106,555
|
)
|
281,444
|
|
(210,067
|
)
|
(11,647
|
)
|
(40,188
|
)
|
19,542
|
|
9,428
|
|
290,872
|
|
Reverse repos, stock borrowing and similar agreements classified as:
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
– trading assets
|
|
9,859
|
|
—
|
|
9,859
|
|
(475
|
)
|
(9,383
|
)
|
—
|
|
1
|
|
348
|
|
10,207
|
|
– non-trading assets
|
|
222,485
|
|
(87,929
|
)
|
134,556
|
|
(4,779
|
)
|
(129,373
|
)
|
(215
|
)
|
189
|
|
26,418
|
|
160,974
|
|
Loans and advances to customers
|
3
|
46,296
|
|
(14,602
|
)
|
31,694
|
|
(24,459
|
)
|
—
|
|
(248
|
)
|
6,987
|
|
743
|
|
32,437
|
|
At 31 Dec 2016
|
|
666,639
|
|
(209,086
|
)
|
457,553
|
|
(239,780
|
)
|
(150,403
|
)
|
(40,651
|
)
|
26,719
|
|
36,937
|
|
494,490
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives (Note 14)
|
1
|
321,932
|
|
(110,425
|
)
|
211,507
|
|
(156,072
|
)
|
(14,342
|
)
|
(28,666
|
)
|
12,427
|
|
5,314
|
|
216,821
|
|
Repos, stock lending and similar agreements
classified as:
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
– trading liabilities
|
|
10,555
|
|
—
|
|
10,555
|
|
(430
|
)
|
(9,615
|
)
|
—
|
|
510
|
|
63
|
|
10,618
|
|
– non-trading liabilities
|
|
187,268
|
|
(105,776
|
)
|
81,492
|
|
(7,165
|
)
|
(74,048
|
)
|
(240
|
)
|
39
|
|
48,510
|
|
130,002
|
|
Customer accounts
|
4
|
42,533
|
|
(10,424
|
)
|
32,109
|
|
(26,390
|
)
|
—
|
|
(188
|
)
|
5,531
|
|
158
|
|
32,267
|
|
At 31 Dec 2017
|
|
562,288
|
|
(226,625
|
)
|
335,663
|
|
(190,057
|
)
|
(98,005
|
)
|
(29,094
|
)
|
18,507
|
|
54,045
|
|
389,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Derivatives (Note 14)
|
1
|
378,571
|
|
(106,555
|
)
|
272,016
|
|
(210,035
|
)
|
(15,512
|
)
|
(33,754
|
)
|
12,715
|
|
7,803
|
|
279,819
|
|
Repos, stock lending and similar agreements
classified as:
|
2
|
|
|
|
|
|
|
|
|
|
|||||||||
– trading liabilities
|
|
5,034
|
|
—
|
|
5,034
|
|
(475
|
)
|
(4,515
|
)
|
—
|
|
44
|
|
37
|
|
5,071
|
|
– non-trading liabilities
|
|
148,443
|
|
(87,929
|
)
|
60,514
|
|
(6,202
|
)
|
(54,126
|
)
|
(146
|
)
|
40
|
|
28,444
|
|
88,958
|
|
Customer accounts
|
4
|
45,422
|
|
(14,602
|
)
|
30,820
|
|
(24,459
|
)
|
—
|
|
(248
|
)
|
6,113
|
|
228
|
|
31,048
|
|
At 31 Dec 2016
|
|
577,470
|
|
(209,086
|
)
|
368,384
|
|
(241,171
|
)
|
(74,153
|
)
|
(34,148
|
)
|
18,912
|
|
36,512
|
|
404,896
|
|
1
|
At 31 December 2017, the amount of cash margin received that had been offset against the gross derivatives assets was
$6,324m
(2016:
$3,720m
). The amount of cash margin paid that had been offset against the gross derivatives liabilities was
$5,196m
(2016:
$5,862m
).
|
2
|
For the amount of repos, reverse repos, stock lending, stock borrowing and similar agreements recognised on the balance sheet within ‘Trading assets’ $
17,120m
(2016: $
10,207m
) and ‘Trading liabilities’ $
10,618m
(2016: $
5,071m
), see the ‘Funding sources and uses’ table on page
147
.
|
3
|
At 31 December 2017, the total amount of ‘Loans and advances to customers’ was $
962,964m
(2016: $
861,504m
) of which $
31,667m
(2016: $
31,694m
) was subject to offsetting.
|
4
|
At 31 December 2017, the total amount of ‘Customer accounts’ was $
1,364,462m
(2016: $
1,272,386m
) of which $
32,109m
(2016: $
30,820m
) was subject to offsetting.
|
5
|
These exposures continue to be secured by financial collateral, but we may not have sought or been able to obtain a legal opinion evidencing enforceability of the right of offset.
|
30
|
Non-controlling interests
|
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
Non-controlling interests attributable to holders of ordinary shares in subsidiaries
|
7,621
|
|
6,932
|
|
Preferred securities issued by subsidiaries
|
—
|
|
260
|
|
At 31 Dec
|
7,621
|
|
7,192
|
|
276
|
HSBC Holdings plc
|
1
|
In 2017 HSBC redeemed these securities.
|
31
|
Called up share capital and other equity instruments
|
HSBC Holdings share premium
|
||||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
At 31 Dec
|
10,177
|
|
12,619
|
|
Total called up share capital and share premium
|
||||
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
At 31 Dec
|
20,337
|
|
22,715
|
|
1
|
All HSBC Holdings ordinary shares in issue, excluding
325,273,407
shares held in treasury, confer identical rights, including in respect of capital, dividends and voting.
|
2
|
Included in the capital base of HSBC as additional tier 1 capital in accordance with the CRD IV rules, by virtue of the application of grandfathering provisions.
|
HSBC Holdings plc
|
277
|
278
|
HSBC Holdings plc
|
32
|
Contingent liabilities, contractual commitments and guarantees
|
|
HSBC
|
HSBC Holdings
1
|
||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Guarantees and other contingent liabilities:
|
|
|
|
|
||||
– financial guarantees and similar contracts
|
38,328
|
|
37,072
|
|
7,778
|
|
7,619
|
|
– other guarantees
|
51,434
|
|
44,394
|
|
—
|
|
—
|
|
– other contingent liabilities
|
616
|
|
553
|
|
—
|
|
—
|
|
At 31 Dec
|
90,378
|
|
82,019
|
|
7,778
|
|
7,619
|
|
Commitments:
|
|
|
|
|
|
|
|
|
– documentary credits and short-term trade-related transactions
|
8,776
|
|
9,190
|
|
—
|
|
—
|
|
– forward asset purchases and forward deposits placed
|
4,295
|
|
5,386
|
|
—
|
|
—
|
|
– standby facilities, credit lines and other commitments to lend
|
672,518
|
|
641,267
|
|
—
|
|
—
|
|
At 31 Dec
|
685,589
|
|
655,843
|
|
—
|
|
—
|
|
1
|
Guarantees by HSBC Holdings are all in favour of other Group entities.
|
33
|
Lease commitments
|
|
2017
|
2016
|
||||||||||
|
Total future
minimum payments |
|
Unearned
finance income |
|
Present
value |
|
Total future
minimum payments |
|
Unearned
finance income |
|
Present
value |
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Lease receivables:
|
|
|
|
|
|
|
||||||
No later than one year
|
3,523
|
|
(326
|
)
|
3,197
|
|
3,248
|
|
(330
|
)
|
2,918
|
|
Later than one year and no later than five years
|
7,033
|
|
(696
|
)
|
6,337
|
|
6,563
|
|
(702
|
)
|
5,861
|
|
Later than five years
|
4,784
|
|
(669
|
)
|
4,115
|
|
4,548
|
|
(633
|
)
|
3,915
|
|
At 31 Dec
|
15,340
|
|
(1,691
|
)
|
13,649
|
|
14,359
|
|
(1,665
|
)
|
12,694
|
|
HSBC Holdings plc
|
279
|
34
|
Legal proceedings and regulatory matters
|
280
|
HSBC Holdings plc
|
HSBC Holdings plc
|
281
|
282
|
HSBC Holdings plc
|
HSBC Holdings plc
|
283
|
284
|
HSBC Holdings plc
|
HSBC Holdings plc
|
285
|
35
|
Related party transactions
|
286
|
HSBC Holdings plc
|
Compensation of Key Management Personnel
|
||||||
|
2017
|
|
2016
|
|
2015
|
|
|
$m
|
|
$m
|
|
$m
|
|
Short-term employee benefits
|
43
|
|
41
|
|
40
|
|
Post-employment benefits
|
—
|
|
—
|
|
1
|
|
Other long-term employee benefits
|
5
|
|
5
|
|
9
|
|
Share-based payments
|
35
|
|
37
|
|
51
|
|
Year ended 31 Dec
|
83
|
|
83
|
|
101
|
|
Shareholdings, options and other securities of Key Management Personnel
|
||||
|
2017
|
|
2016
|
|
|
(000s)
|
|
(000s)
|
|
Number of options held over HSBC Holdings ordinary shares under employee share plans
|
15
|
|
18
|
|
Number of HSBC Holdings ordinary shares held beneficially and non-beneficially
|
22,609
|
|
22,283
|
|
At 31 Dec
|
22.624
|
|
22,301
|
|
1
|
Includes Key Management Personnel, close family members of Key Management Personnel and entities which are controlled or jointly controlled by Key Management Personnel or their close family members.
|
2
|
Advances and credits entered into by subsidiaries of HSBC Holdings during
2017
with Directors, disclosed pursuant to Section 413 of the Companies Act 2006, totalled
$2m
(
2016
:
$2m
).
|
HSBC Holdings plc
|
287
|
Transactions and balances during the year with subsidiaries
|
||||||||
|
2017
|
2016
|
||||||
|
Highest balance
during the year |
|
Balance at
31 Dec |
|
Highest balance
during the year |
|
Balance at
31 Dec |
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Assets
|
|
|
|
|
||||
Cash and balances with HSBC undertakings
|
1,985
|
|
1,985
|
|
997
|
|
247
|
|
Loans and advances to HSBC undertakings designated at fair value
|
11,944
|
|
11,944
|
|
—
|
|
—
|
|
Derivatives
|
2,796
|
|
2,388
|
|
4,494
|
|
2,148
|
|
Loans and advances to HSBC undertakings
|
89,810
|
|
76,627
|
|
77,732
|
|
77,421
|
|
Financial investments in HSBC undertakings
|
4,264
|
|
4,264
|
|
4,314
|
|
3,590
|
|
Investments in subsidiaries
|
95,850
|
|
92,930
|
|
97,827
|
|
95,850
|
|
Total related party assets at 31 Dec
|
206,649
|
|
190,138
|
|
185,364
|
|
179,256
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Amounts owed to HSBC undertakings
|
2,906
|
|
2,571
|
|
3,823
|
|
2,157
|
|
Derivatives
|
4,904
|
|
3,082
|
|
5,025
|
|
5,025
|
|
Subordinated liabilities
|
892
|
|
892
|
|
1,749
|
|
891
|
|
Total related party liabilities at 31 Dec
|
8,702
|
|
6,545
|
|
10,597
|
|
8,073
|
|
Guarantees and commitments
|
9,692
|
|
7,778
|
|
63,719
|
|
7,619
|
|
36
|
Events after the balance sheet date
|
37
|
HSBC Holdings’ subsidiaries, joint ventures and associates
|
288
|
HSBC Holdings plc
|
Subsidiaries
|
% of share class held by immediate parent company (or by the Group where this varies)
|
Footnotes
|
|
|
ACN 087 652 113 Pty Limited
|
100.00
|
|
15
|
|
Almacenadora Banpacifico S.A. (in liquidation)
|
99.99
|
|
9, 16
|
|
Assetfinance December (F) Limited
|
100.00
|
|
17
|
|
Assetfinance December (H) Limited
|
100.00
|
|
17
|
|
Assetfinance December (M) Limited
|
100.00
|
|
17
|
|
Assetfinance December (P) Limited
|
100.00
|
|
17
|
|
Assetfinance December (R) Limited
|
100.00
|
|
17
|
|
Assetfinance June (A) Limited
|
100.00
|
|
17
|
|
Assetfinance June (D) Limited
|
100.00
|
|
17
|
|
Assetfinance Limited
|
100.00
|
|
17
|
|
Assetfinance March (B) Limited
|
100.00
|
|
18
|
|
Assetfinance March (D) Limited
|
100.00
|
|
17
|
|
Assetfinance March (F) Limited
|
100.00
|
|
17
|
|
Assetfinance September (F) Limited
|
100.00
|
|
17
|
|
Assetfinance September (G) Limited
|
100.00
|
|
17
|
|
B&Q Financial Services Limited
|
100.00
|
|
19
|
|
Banco Nominees (Guernsey) Limited
|
100.00
|
|
9, 20
|
|
Banco Nominees 2 (Guernsey) Limited
|
100.00
|
|
20
|
|
Banco Nominees Limited
|
100.00
|
|
21
|
|
Bank of Bermuda (Cayman) Limited
|
100.00
|
|
22
|
|
Beau Soleil Limited Partnership
|
n/a
|
|
7, 9, 23
|
|
Beijing Miyun HSBC Rural Bank Company Limited
|
100.00
|
|
12, 24
|
|
Beneficial Company LLC
|
100.00
|
|
25
|
|
Beneficial Consumer Discount Company
|
100.00
|
|
26
|
|
Beneficial Financial I Inc.
|
100.00
|
|
27
|
|
Beneficial Florida Inc.
|
100.00
|
|
25
|
|
Beneficial Homeowner Service Corporation
|
100.00
|
|
25
|
|
Beneficial Kentucky Inc.
|
100.00
|
|
25
|
|
Beneficial Loan & Thrift Co.
|
100.00
|
|
25
|
|
Beneficial Louisiana Inc.
|
100.00
|
|
25
|
|
Beneficial Maine Inc.
|
100.00
|
|
25
|
|
Beneficial Massachusetts Inc.
|
100.00
|
|
25
|
|
Beneficial Michigan Inc.
|
100.00
|
|
25
|
|
Beneficial New Hampshire Inc.
|
100.00
|
|
25
|
|
Beneficial Oregon Inc.
|
100.00
|
|
25
|
|
Beneficial Rhode Island Inc.
|
100.00
|
|
25
|
|
Beneficial South Dakota Inc.
|
100.00
|
|
25
|
|
Beneficial Tennessee Inc.
|
100.00
|
|
28
|
|
Beneficial West Virginia, Inc.
|
100.00
|
|
29
|
|
Beneficial Wyoming Inc.
|
100.00
|
|
30
|
|
BFC Insurance Agency of Nevada
|
100.00
|
|
223
|
|
Billingsgate Nominees Limited
|
100.00
|
|
17
|
|
Cal-Pacific Services, Inc.
|
100.00
|
|
27
|
|
Canada Crescent Nominees (UK) Limited
|
100.00
|
|
17
|
|
Canada Square Nominees (UK) Limited
|
100.00
|
|
17
|
|
Canada Square Property Participations Limited
|
100.00
|
|
17
|
|
Canada Water Nominees (UK) Limited
|
100.00
|
|
17
|
|
Capco/Cove, Inc.
|
100.00
|
|
31
|
|
Card-Flo #1, Inc.
|
100.00
|
|
32
|
|
Card-Flo #3, Inc.
|
100.00
|
|
25
|
|
Cayman International Finance Limited
|
100.00
|
|
33
|
|
CC&H Holdings LLC
|
100.00
|
|
34
|
|
CCF Charterhouse GmbH & Co Asset Leasing KG (In Liquidation)
|
100.00
|
(99.99)
|
35
|
|
CCF Charterhouse GmbH (in Liquidation)
|
100.00
|
(99.99)
|
4, 35
|
|
CCF Holding (LIBAN) S.A.L. (in liquidation)
|
74.99
|
|
1, 36
|
|
CCF & Partners Asset Management Limited
|
99.99
|
|
17
|
|
Charterhouse Administrators ( D.T.) Limited
|
100.00
|
(99.99)
|
9, 17
|
|
Charterhouse Development Limited
|
100.00
|
|
17
|
|
Charterhouse Management Services Limited
|
100.00
|
(99.99)
|
9, 17
|
|
Charterhouse Pensions Limited
|
100.00
|
|
17
|
|
Subsidiaries
|
% of share class held by immediate parent company (or by the Group where this varies)
|
Footnotes
|
|
Chongqing Dazu HSBC Rural Bank Company Limited
|
(100.00)
|
|
12, 37
|
Chongqing Fengdu HSBC Rural Bank Company Limited
|
100.00
|
|
12, 38
|
Chongqing Rongchang HSBC Rural Bank Company Limited
|
100.00
|
|
12, 39
|
CL Residential Limited (in liquidation)
|
100.00
|
|
40
|
COIF Nominees Limited
|
100.00
|
|
17
|
Cordico Management AG
|
100.00
|
|
41
|
Corhold Limited (in liquidation)
|
100.00
|
|
42
|
Dalian Pulandian HSBC Rural Bank Company Limited
|
100.00
|
|
12, 43
|
Decision One Mortgage Company, LLC
|
100.00
|
|
44
|
Dem 5
|
100.00
|
(99.99)
|
4, 9, 45
|
Dem 9
|
100.00
|
(99.99)
|
4, 9, 45
|
Dempar 1
|
100.00
|
(99.99)
|
4, 9, 46
|
Dempar 4
|
100.00
|
(99.99)
|
9, 46
|
Desarrollo Turistico, S.A. de C.V.
|
99.99
|
|
9, 16
|
Ellenville Holdings, Inc.
|
100.00
|
|
31
|
Elysees GmbH (in Liquidation)
|
100.00
|
(99.99)
|
35
|
Elysées Immo Invest
|
100.00
|
(99.99)
|
4, 47
|
EMTT Limited (in liquidation)
|
100.00
|
|
17
|
Equator Holdings Limited (in liquidation)
|
100.00
|
|
17
|
Eton Corporate Services Limited
|
100.00
|
|
20
|
Far East Leasing SA
|
100.00
|
|
48
|
Fdm 5 SAS
|
100.00
|
(99.99)
|
4, 9, 45
|
FEPC Leasing Ltd.
|
100.00
|
|
49
|
Finanpar 2
|
100.00
|
(99.99)
|
4, 9, 47
|
Finanpar 7
|
100.00
|
(99.99)
|
4, 9, 47
|
Flandres Contentieux S.A.
|
100.00
|
(99.99)
|
1, 4, 9, 50
|
Foncière Elysées
|
100.00
|
(99.99)
|
4, 9, 46
|
Forward Trust Rail Services Limited
|
100.00
|
|
17
|
Fujian Yongan HSBC Rural Bank Company Limited
|
100.00
|
|
12, 51
|
Fulcher Enterprises Company Limited
|
100.00
|
(62.14)
|
52
|
Fundacion HSBC, A.C.
|
99.99
|
|
1, 9, 11, 16
|
Gesellschaft fur Industrielle Beteiligungen und Finanzierung mbH
|
100.00
|
(80.67)
|
9, 53
|
Gesico International SA (in liquidation)
|
100.00
|
|
54
|
Giller Ltd.
|
100.00
|
|
31
|
GPIF Co-Investment, LLC
|
80.00
|
|
25
|
GPIF-I Equity Co., Ltd.
|
100.00
|
|
8, 22
|
GPIF-I Finance Co., Ltd
|
100.00
|
|
8, 22
|
Griffin International Limited
|
100.00
|
|
17
|
Grupo Financiero HSBC, S. A. de C. V.
|
99.99
|
|
9, 16
|
Guangdong Enping HSBC Rural Bank Company Limited
|
100.00
|
|
12, 55
|
GZ Guyerzeller Corporation (in liquidation)
|
100.00
|
|
129
|
Hang Seng (Nominee) Limited
|
100.00
|
(62.14)
|
52
|
Hang Seng Bank (China) Limited
|
100.00
|
(62.14)
|
12, 57
|
Hang Seng Bank (Trustee) Limited
|
100.00
|
(62.14)
|
52
|
Hang Seng Bank Limited
|
62.14
|
|
52
|
Hang Seng Bullion Company Limited
|
100.00
|
(62.14)
|
52
|
Hang Seng Credit Limited
|
100.00
|
(62.14)
|
52
|
Hang Seng Data Services Limited
|
100.00
|
(62.14)
|
52
|
Hang Seng Finance Limited
|
100.00
|
(62.14)
|
52
|
Hang Seng Financial Information Limited
|
100.00
|
(62.14)
|
52
|
Hang Seng Futures Limited
|
100.00
|
(62.14)
|
52
|
Hang Seng Indexes Company Limited
|
100.00
|
(62.14)
|
52
|
Hang Seng Insurance Company Limited
|
100.00
|
(62.14)
|
52
|
Hang Seng Investment Management Limited
|
100.00
|
(62.14)
|
52
|
Hang Seng Investment Services Limited
|
100.00
|
|
52
|
Hang Seng Life Limited
|
100.00
|
|
52
|
Hang Seng Real Estate Management Limited
|
100.00
|
|
52
|
Hang Seng Securities Limited
|
100.00
|
|
52
|
HSBC Holdings plc
|
289
|
Subsidiaries
|
% of share class held by immediate parent company (or by the Group where this varies)
|
Footnotes
|
|
Hang Seng Security Management Limited
|
100.00
|
|
52
|
Haseba Investment Company Limited
|
100.00
|
|
52
|
HFC Bank Limited (in liquidation)
|
100.00
|
|
40
|
HFC Company LLC
|
100.00
|
|
25
|
High Time Investments Limited
|
100.00
|
(62.14)
|
52
|
HITG Administration GmbH
|
100.00
|
|
58
|
Honey Green Enterprises Ltd.
|
100.00
|
|
59
|
Hongkong International Trade Finance (Holdings) Limited (in liquidation)
|
100.00
|
|
17
|
Household Capital Markets LLC
|
100.00
|
|
25
|
Household Commercial Financial Services, Inc.
|
100.00
|
|
26
|
Household Finance Consumer Discount Company
|
100.00
|
|
25
|
Household Finance Corporation II
|
100.00
|
|
25
|
Household Finance Corporation III
|
100.00
|
|
25
|
Household Finance Corporation of Alabama
|
100.00
|
|
224
|
Household Finance Corporation of California
|
100.00
|
|
25
|
Household Finance Industrial Loan Company of Iowa
|
100.00
|
|
225
|
Household Finance Realty Corporation of Nevada
|
100.00
|
|
25
|
Household Finance Realty Corporation of New York
|
100.00
|
|
25
|
Household Financial Center Inc.
|
100.00
|
|
25
|
Household Industrial Finance Company
|
100.00
|
|
226
|
Household Insurance Group Holding Company
|
100.00
|
|
227
|
Household International Europe Limited (in liquidation)
|
100.00
|
|
3, 40
|
Household Pooling Corporation
|
100.00
|
|
60
|
Household Realty Corporation
|
100.00
|
|
25
|
HRMG Nominees Limited
|
100.00
|
|
20
|
HSBC (BGF) Investments Limited
|
100.00
|
|
17
|
HSBC (BVI) Limited (in liquidation)
|
100.00
|
|
56
|
HSBC (General Partner) Limited
|
100.00
|
|
2, 61
|
HSBC (Guernsey) GP PCC Limited
|
100.00
|
|
1, 20
|
HSBC (Kuala Lumpur) Nominees Sdn Bhd
|
100.00
|
|
62
|
HSBC (Malaysia) Trustee Berhad
|
100.00
|
|
63
|
HSBC (Singapore) Nominees Pte Ltd
|
100.00
|
|
64
|
HSBC Administradora de Inversiones S.A.
|
100.00
|
(99.65)
|
65
|
HSBC Agency (India) Private Limited
|
100.00
|
|
66
|
HSBC Alpha Funding (UK) Holdings LP (in liquidation)
|
n/a
|
|
7, 67
|
HSBC Alternative Investments Limited
|
100.00
|
|
17
|
HSBC Amanah Malaysia Berhad
|
100.00
|
|
62
|
HSBC Amanah Takaful (Malaysia) Berhad
|
49.00
|
|
56, 62
|
HSBC Americas Corporation (Delaware)
|
100.00
|
|
25
|
HSBC Argentina Holdings S.A.
|
100.00
|
|
68
|
HSBC Asia Holdings (UK) Limited
|
100.00
|
|
17
|
HSBC Asia Holdings B.V.
|
100.00
|
|
3, 17
|
HSBC Asia Holdings Limited
|
100.00
|
|
2, 69
|
HSBC Asia Pacific Holdings (UK) Limited
|
100.00
|
|
17
|
HSBC Asset Finance (UK) Limited
|
100.00
|
|
17
|
HSBC Asset Finance Holdings Limited
|
100.00
|
|
17
|
HSBC Asset Finance M.O.G. Holdings (UK) Limited
|
100.00
|
|
17
|
HSBC Asset Management (India) Private Limited
|
100.00
|
(99.99)
|
3, 9, 70
|
HSBC Assurances Vie (France)
|
100.00
|
(99.99)
|
4, 9, 50
|
HSBC Australia Holdings Pty Limited
|
100.00
|
|
15
|
HSBC Bank (Chile)
|
100.00
|
(99.99)
|
9, 71
|
HSBC Bank (China) Company Limited
|
100.00
|
|
12, 72
|
HSBC Bank (General Partner) Limited
|
100.00
|
|
61
|
HSBC Bank (Mauritius) Limited
|
72.95
|
|
73
|
HSBC Bank (RR) (Limited Liability Company)
|
100.00
|
|
13, 74
|
HSBC Bank (Singapore) Limited
|
100.00
|
|
64
|
HSBC Bank (Taiwan) Limited
|
100.00
|
|
75
|
Subsidiaries
|
% of share class held by immediate parent company (or by the Group where this varies)
|
Footnotes
|
|
HSBC Bank (Uruguay) S.A.
|
100.00
|
|
76
|
HSBC Bank (Vietnam) Ltd.
|
100.00
|
|
77
|
HSBC Bank A.S.
|
100.00
|
|
78
|
HSBC Bank Argentina S.A.
|
100.00
|
(99.99)
|
79
|
HSBC Bank Armenia cjsc
|
70.00
|
|
80
|
HSBC Bank Australia Limited
|
100.00
|
|
15
|
HSBC Bank Bermuda Limited
|
100.00
|
|
21
|
HSBC Bank Canada
|
100.00
|
|
81
|
HSBC Bank Capital Funding (Sterling 1) LP
|
100.00
|
|
7, 61
|
HSBC Bank Capital Funding (Sterling 2) LP
|
100.00
|
|
7, 61
|
HSBC Bank Egypt S.A.E
|
94.54
|
|
82
|
HSBC Bank International Limited
|
100.00
|
|
83
|
HSBC Bank Malaysia Berhad
|
100.00
|
|
62
|
HSBC Bank Malta p.l.c.
|
70.03
|
|
84
|
HSBC Bank Middle East Limited
|
100.00
|
|
5, 85
|
HSBC Bank Middle East Limited, Representative Office Morocco SARL
|
100.00
|
|
86
|
HSBC Bank Nominee (Jersey) Limited
|
100.00
|
|
83
|
HSBC Bank Oman S.A.O.G.
|
51.00
|
|
87
|
HSBC Bank Pension Trust (UK) Limited
|
100.00
|
|
17
|
HSBC Bank plc
|
100.00
|
|
2, 17
|
HSBC Bank Polska S.A.
|
100.00
|
|
3, 88
|
HSBC Bank USA, National Association
|
100.00
|
|
3, 89
|
HSBC Branch Nominee (UK) Limited
|
100.00
|
|
17
|
HSBC Brasil Holding S.A.
|
100.00
|
|
90
|
HSBC Brasil S.A. Banco De Investimento
|
100.00
|
|
90
|
HSBC Broking Forex (Asia) Limited
|
100.00
|
|
69
|
HSBC Broking Futures (Asia) Limited
|
100.00
|
|
69
|
HSBC Broking Futures (Hong Kong) Limited
|
100.00
|
|
69
|
HSBC Broking Nominees (Asia) Limited
|
100.00
|
|
69
|
HSBC Broking Securities (Asia) Limited
|
100.00
|
|
69
|
HSBC Broking Securities (Hong Kong) Limited
|
100.00
|
|
69
|
HSBC Broking Services (Asia) Limited
|
100.00
|
|
69
|
HSBC Canada Holdings (UK) Limited
|
100.00
|
|
17
|
HSBC Canadian Covered Bond (Legislative) GP Inc
|
100.00
|
|
199
|
HSBC Capital (Canada) Inc.
|
100.00
|
|
91
|
HSBC Capital (USA), Inc.
|
100.00
|
|
25
|
HSBC Capital Funding (Dollar 1) L.P.
|
100.00
|
|
61
|
HSBC Capital Limited
|
100.00
|
|
69
|
HSBC Card Services Inc.
|
100.00
|
|
25
|
HSBC Casa de Bolsa, S.A. de C.V., Grupo Financiero HSBC
|
99.99
|
|
9, 16
|
HSBC Cayman Services Limited
|
100.00
|
|
33
|
HSBC City Funding Holdings
|
100.00
|
|
17
|
HSBC Client Holdings Nominee (UK) Limited
|
100.00
|
|
17
|
HSBC Client Share Offer Nominee (UK) Limited
|
100.00
|
|
17
|
HSBC Columbia Funding, LLC
|
100.00
|
|
25
|
HSBC Corporate Advisory (Malaysia) Sdn Bhd
|
100.00
|
|
62
|
HSBC Corporate Finance (Hong Kong) Limited
|
100.00
|
|
69
|
HSBC Corporate Trustee Company (UK) Limited
|
100.00
|
|
17
|
HSBC Credit Center, Inc.
|
100.00
|
|
25
|
HSBC Custody Nominees (Australia) Limited
|
100.00
|
|
15
|
HSBC Custody Services (Guernsey) Limited
|
100.00
|
|
20
|
HSBC Daisy Investments (Mauritius) Limited
|
100.00
|
|
92
|
HSBC Diversified Loan Fund General Partner Sarl
|
100.00
|
|
93
|
HSBC Electronic Data Processing (Guangdong) Limited
|
100.00
|
|
12, 94
|
HSBC Electronic Data Processing (Malaysia) Sdn Bhd
|
100.00
|
|
95
|
HSBC Electronic Data Processing (Philippines), Inc.
|
100.00
|
|
96
|
HSBC Electronic Data Processing India Private Limited
|
100.00
|
|
97
|
290
|
HSBC Holdings plc
|
Subsidiaries
|
% of share class held by immediate parent company (or by the Group where this varies)
|
Footnotes
|
|
HSBC Electronic Data Processing Lanka (Private) Limited
|
100.00
|
|
98
|
HSBC Electronic Data Service Delivery (Egypt) S.A.E.
|
100.00
|
|
99
|
HSBC Enterprise Investment Company (UK) Limited
|
100.00
|
|
17
|
HSBC Epargne Entreprise (France)
|
100.00
|
(99.99)
|
4, 9, 50
|
HSBC Equator (UK) Limited (in liquidation)
|
100.00
|
|
17
|
HSBC Equipment Finance (UK) Limited
|
100.00
|
|
17
|
HSBC Equities (Luxembourg) S.a r.l. (in liquidation)
|
100.00
|
|
1, 100
|
HSBC Equity (UK) Limited
|
100.00
|
|
17
|
HSBC Europe B.V.
|
100.00
|
|
17
|
HSBC European Clients Depositary Receipts Nominee (UK) Limited (in liquidation)
|
100.00
|
|
17
|
HSBC Executor & Trustee Company (UK) Limited
|
100.00
|
|
17
|
HSBC Factoring (France)
|
100.00
|
(99.99)
|
4, 9, 46
|
HSBC Finance (Brunei) Berhad
|
100.00
|
|
101
|
HSBC Finance (Netherlands)
|
100.00
|
|
2, 17
|
HSBC Finance Corporation
|
100.00
|
|
25
|
HSBC Finance Limited
|
100.00
|
|
17
|
HSBC Finance Mortgages Inc.
|
100.00
|
|
102
|
HSBC Finance Transformation (UK) Limited
|
100.00
|
|
2, 17
|
HSBC Financial Services (Lebanon) s.a.l.
|
99.70
|
|
103
|
HSBC Financial Services (Middle East) Limited (In Liquidation)
|
100.00
|
|
104
|
HSBC Financial Services (Uruguay) S.A. (in liquidation)
|
100.00
|
|
105
|
HSBC France
|
99.99
|
|
4, 46
|
HSBC Fund Services (Korea) Limited
|
92.95
|
|
1, 106
|
HSBC Funding (UK) Holdings
|
100.00
|
|
17
|
HSBC Germany Holdings GmbH
|
100.00
|
|
53
|
HSBC Gestion (Monaco) SA
|
99.80
|
|
107
|
HSBC Global Asset Management (Bermuda) Limited
|
100.00
|
|
21
|
HSBC Global Asset Management (Canada) Limited
|
100.00
|
|
108
|
HSBC Global Asset Management (Deutschland) GmbH
|
100.00
|
(80.67)
|
9, 53
|
HSBC Global Asset Management (France)
|
100.00
|
(99.99)
|
4, 9, 109
|
HSBC Global Asset Management
|
|
|
|
(Hong Kong) Limited
|
100.00
|
|
23
|
HSBC Global Asset Management (International) Limited
|
100.00
|
|
110
|
HSBC Global Asset Management
|
|
|
|
(Japan) K. K.
|
100.00
|
|
111
|
HSBC Global Asset Management (Malta) Limited
|
100.00
|
(70.02)
|
112
|
HSBC Global Asset Management (México), S.A. de C.V., Sociedad Operadora de Fondos de Inversión, Grupo Financiero HSBC
|
99.99
|
|
9, 16
|
HSBC Global Asset Management (Oesterreich) GmbH
|
100.00
|
(80.67)
|
6, 9, 222
|
HSBC Global Asset Management (Singapore) Limited
|
100.00
|
|
64
|
HSBC Global Asset Management (Switzerland) AG
|
100.00
|
(90.33)
|
4, 9, 113
|
HSBC Global Asset Management (Taiwan) Limited
|
100.00
|
|
114
|
HSBC Global Asset Management (UK) Limited
|
100.00
|
|
17
|
HSBC Global Asset Management (USA) Inc.
|
100.00
|
|
115
|
HSBC Global Asset Management Holdings (Bahamas) Limited
|
100.00
|
|
116
|
HSBC Global Asset Management Limited
|
100.00
|
|
17
|
HSBC Global Custody Nominee (UK) Limited
|
100.00
|
|
17
|
HSBC Global Custody Proprietary Nominee (UK) Limited
|
100.00
|
|
17
|
HSBC Global Services (Hong Kong) Limited
|
100.00
|
|
69
|
Subsidiaries
|
% of share class held by immediate parent company (or by the Group where this varies)
|
Footnotes
|
|
HSBC Global Services (UK) Limited
|
100.00
|
|
17
|
HSBC Global Services Limited
|
100.00
|
|
2, 17
|
HSBC Global Shared Services (India) Private Limited (in liquidation)
|
100.00
|
(99.99)
|
9, 66
|
HSBC Group Management Services Limited
|
100.00
|
|
17
|
HSBC Group Nominees UK Limited
|
100.00
|
|
1, 2, 17
|
HSBC Holdings B.V.
|
100.00
|
|
17
|
HSBC Home Equity Loan Corporation II
|
100.00
|
|
25
|
HSBC IM Pension Trust Limited
|
100.00
|
|
1, 17
|
HSBC Infrastructure Limited
|
100.00
|
|
17
|
HSBC INKA Investment-AG TGV
|
100.00
|
(80.67)
|
9, 14, 117
|
HSBC Inmobiliaria (Mexico), S.A. de C.V.
|
99.99
|
|
9, 16
|
HSBC Institutional Trust Services (Asia) Limited
|
100.00
|
|
69
|
HSBC Institutional Trust Services (Bermuda) Limited
|
100.00
|
|
118
|
HSBC Institutional Trust Services (Ireland) DAC
|
100.00
|
|
119
|
HSBC Institutional Trust Services (Mauritius) Limited
|
100.00
|
|
120
|
HSBC Institutional Trust Services (Singapore) Limited
|
100.00
|
|
64
|
HSBC Insurance (Asia) Limited
|
100.00
|
|
121
|
HSBC Insurance (Asia-Pacific) Holdings Limited
|
100.00
|
|
122
|
HSBC Insurance (Bermuda) Limited
|
100.00
|
|
21
|
HSBC Insurance (Singapore) Pte. Limited
|
100.00
|
|
64
|
HSBC Insurance Agency (USA) Inc.
|
100.00
|
|
123
|
HSBC Insurance Brokers (Philippines) Inc
|
100.00
|
(99.99)
|
9, 124
|
HSBC Insurance Brokers (Taiwan) Limited
|
100.00
|
|
125
|
HSBC Insurance Holdings Limited
|
100.00
|
|
2, 17
|
HSBC Insurance Management Services Limited (in liquidation)
|
100.00
|
|
126
|
HSBC Insurance Services (Lebanon) S.A.L. (in liquidation)
|
97.70
|
|
9, 127
|
HSBC Insurance Services Holdings Limited
|
100.00
|
|
17
|
HSBC International Finance Corporation (Delaware)
|
100.00
|
|
128
|
HSBC International Financial Services (UK) Limited (in liquidation)
|
100.00
|
|
17
|
HSBC International Holdings (Jersey) Limited
|
100.00
|
|
83
|
HSBC International Nominees Limited
|
100.00
|
|
1, 129
|
HSBC International Trade Finance Limited (in liquidation)
|
100.00
|
|
40
|
HSBC International Trustee (BVI) Limited
|
100.00
|
|
10, 130
|
HSBC International Trustee (Holdings) Pte. Limited
|
100.00
|
|
64
|
HSBC International Trustee Limited
|
100.00
|
|
129
|
HSBC Inversiones S.A.
|
99.99
|
|
9, 71
|
HSBC Inversiones y Servicios Financieros Limitada
|
100.00
|
(99.99)
|
9, 71
|
HSBC InvestDirect (India) Limited
|
99.99
|
(99.54)
|
131
|
HSBC InvestDirect Financial Services (India) Limited
|
100.00
|
(99.54)
|
9, 131
|
HSBC InvestDirect Sales & Marketing (India) Limited
|
99.99
|
(98.54)
|
9, 66
|
HSBC InvestDirect Securities (India) Private Limited
|
99.99
|
(99.61)
|
9, 131
|
HSBC Investment Bank Holdings B.V.
|
100.00
|
|
17
|
HSBC Investment Bank Holdings Limited
|
100.00
|
|
17
|
HSBC Investment Funds (Canada) Inc.
|
100.00
|
|
108
|
HSBC Investment Funds (Hong Kong) Limited
|
100.00
|
|
23
|
HSBC Investment Funds (Luxembourg) SA
|
100.00
|
|
100
|
HSBC Investments (Bahamas) Limited (in liquidation)
|
100.00
|
|
133
|
HSBC Invoice Finance (UK) Limited
|
100.00
|
|
134
|
HSBC Iris Investments (Mauritius) Ltd
|
100.00
|
|
92
|
HSBC Issuer Services Common Depositary Nominee (UK) Limited
|
100.00
|
|
17
|
HSBC Holdings plc
|
291
|
Subsidiaries
|
% of share class held by immediate parent company (or by the Group where this varies)
|
Footnotes
|
|
HSBC Issuer Services Depositary Nominee (UK) Limited
|
100.00
|
|
17
|
HSBC Land Title Agency (USA) LLC
|
100.00
|
(55.00)
|
135
|
HSBC Latin America B.V.
|
100.00
|
|
17
|
HSBC Latin America Holdings (UK) Limited
|
100.00
|
|
2, 17
|
HSBC Leasing (Asia) Limited
|
100.00
|
|
69
|
HSBC Leasing (France)
|
100.00
|
(99.99)
|
4, 9, 45
|
HSBC Life (International) Limited
|
100.00
|
|
118
|
HSBC Life (UK) Limited
|
100.00
|
|
17
|
HSBC Life Assurance (Malta) Limited
|
100.00
|
(70.02)
|
112
|
HSBC Lodge Funding (UK) Holdings
|
100.00
|
|
17
|
HSBC LU Nominees Limited
|
100.00
|
|
17
|
HSBC Management (Guernsey) Limited
|
100.00
|
|
20
|
HSBC Markets (USA) Inc.
|
100.00
|
|
25
|
HSBC Marking Name Nominee (UK) Limited
|
100.00
|
|
17
|
HSBC Mexico, S.A., Institucion de Banca Multiple, Grupo Financiero HSBC
|
99.99
|
|
16
|
HSBC Middle East Finance Company Limited
|
100.00
|
(80.00)
|
136
|
HSBC Middle East Holdings B.V.
|
100.00
|
|
2, 17
|
HSBC Middle East Leasing Partnership
|
n/a
|
|
7, 9, 137
|
HSBC Middle East Securities L.L.C
|
49.00
|
|
56, 138
|
HSBC Mortgage Corporation (Canada)
|
100.00
|
|
81
|
HSBC Mortgage Corporation (USA)
|
100.00
|
|
25
|
HSBC Mortgage Services Inc.
|
100.00
|
|
25
|
HSBC Nominees (Asing) Sdn Bhd
|
100.00
|
|
62
|
HSBC Nominees (Hong Kong) Limited
|
100.00
|
|
69
|
HSBC Nominees (New Zealand) Limited
|
100.00
|
|
139
|
HSBC Nominees (Tempatan) Sdn Bhd
|
100.00
|
|
62
|
HSBC North America Holdings Inc.
|
100.00
|
|
25
|
HSBC Odeme Sistemleri Bilgisayar Teknolojileri Basin Yayin Ve Musteri Hizmetleri
|
100.00
|
(99.99)
|
140
|
HSBC Overseas Holdings (UK) Limited
|
100.00
|
|
2, 17
|
HSBC Overseas Investments Corporation (New York)
|
100.00
|
|
141
|
HSBC Overseas Nominee (UK) Limited
|
100.00
|
|
17
|
HSBC Participaciones (Argentina) S.A.
|
100.00
|
(99.99)
|
9, 68
|
HSBC PB Corporate Services 1 Limited
|
100.00
|
|
142
|
HSBC PB Services (Suisse) SA
|
100.00
|
|
143
|
HSBC Pension Trust (Ireland) DAC
|
100.00
|
|
119
|
HSBC Pensiones, S.A.
|
99.99
|
|
9, 144
|
HSBC PI Holdings (Mauritius) Limited
|
100.00
|
|
120
|
HSBC Portfoy Yonetimi A.S.
|
100.00
|
(99.98)
|
9, 145
|
HSBC Preferential LP (UK)
|
100.00
|
|
17
|
HSBC Private Bank (C.I.) Limited
|
100.00
|
|
20
|
HSBC Private Bank (Luxembourg) S.A.
|
100.00
|
|
100
|
HSBC Private Bank (Monaco) SA
|
100.00
|
|
4, 107
|
HSBC Private Bank (Suisse) SA
|
100.00
|
|
143
|
HSBC Private Bank (UK) Limited
|
100.00
|
|
17
|
HSBC Private Bank International
|
100.00
|
|
132
|
HSBC Private Banking Holdings (Suisse) SA
|
100.00
|
|
143
|
HSBC Private Banking Nominee 3 (Jersey) Limited
|
100.00
|
|
142
|
HSBC Private Equity Advisors LLC
|
100.00
|
|
25
|
HSBC Private Equity Investments (UK) Limited
|
100.00
|
|
17
|
HSBC Private Trustee (Hong Kong) Limited
|
100.00
|
|
69
|
HSBC Private Wealth Services (Canada) Inc.
|
100.00
|
|
108
|
HSBC Professional Services (India) Private Limited
|
100.00
|
|
66
|
HSBC Property (UK) Limited
|
100.00
|
|
17
|
HSBC Property Funds (Holding) Limited
|
100.00
|
|
17
|
HSBC Property Funds Investment Limited (in liquidation)
|
100.00
|
|
40
|
HSBC Provident Fund Trustee (Hong Kong) Limited
|
100.00
|
|
69
|
HSBC Qianhai Securities Limited
|
100.00
|
(51.00)
|
1, 12, 146
|
HSBC Rail (UK) Limited
|
100.00
|
|
17
|
HSBC Real Estate Leasing (France)
|
99.00
|
|
4, 9, 50
|
HSBC Realty Credit Corporation (USA)
|
100.00
|
|
25
|
Subsidiaries
|
% of share class held by immediate parent company (or by the Group where this varies)
|
Footnotes
|
|
HSBC REIM (France)
|
100.00
|
(99.99)
|
4, 9, 50
|
HSBC Representative Office (Nigeria) Limited
|
100.00
|
|
147
|
HSBC Retail Services Inc.
|
100.00
|
|
25
|
HSBC Retirement Benefits Trustee (UK) Limited
|
100.00
|
|
1, 2, 17
|
HSBC Savings Bank (Philippines) Inc.
|
99.99
|
|
148
|
HSBC Securities (Asia) Limited
|
100.00
|
|
69
|
HSBC Securities (B) Berhad
|
100.00
|
|
1, 101
|
HSBC Securities (Canada) Inc.
|
100.00
|
|
149
|
HSBC Securities (Egypt) S.A.E.
|
100.00
|
(94.65)
|
82
|
HSBC Securities (Japan) Limited
|
100.00
|
|
17
|
HSBC Securities (Philippines) Inc.
|
99.99
|
|
1, 9, 150
|
HSBC Securities (Singapore) Pte Limited
|
100.00
|
|
64
|
HSBC Securities (South Africa) (Pty) Limited
|
100.00
|
|
151
|
HSBC Securities (Taiwan) Corporation Limited
|
100.00
|
|
75
|
HSBC Securities (USA) Inc.
|
100.00
|
|
25
|
HSBC Securities and Capital Markets (India) Private Limited
|
99.99
|
|
9, 66
|
HSBC Securities Asia International Nominees Limited
|
100.00
|
|
152
|
HSBC Securities Asia Nominees Limited
|
100.00
|
|
69
|
HSBC Securities Brokers (Asia) Limited
|
100.00
|
|
69
|
HSBC Securities Investments (Asia) Limited
|
100.00
|
|
69
|
HSBC Securities Services (Bermuda) Limited
|
100.00
|
|
118
|
HSBC Securities Services (Guernsey) Limited
|
100.00
|
|
20
|
HSBC Securities Services (Ireland) DAC
|
100.00
|
|
119
|
HSBC Securities Services (Luxembourg) S.A.
|
100.00
|
|
100
|
HSBC Securities Services (USA) Inc.
|
100.00
|
|
153
|
HSBC Securities Services Holding Limited
|
100.00
|
|
129
|
HSBC Securities Services Holdings (Ireland) DAC
|
100.00
|
|
119
|
HSBC Seguros de Retiro (Argentina) S.A.
|
100.00
|
(99.99)
|
9, 68
|
HSBC Seguros de Vida (Argentina) S.A.
|
100.00
|
(99.99)
|
9, 68
|
HSBC Seguros, S.A de C.V., Grupo Financiero HSBC
|
99.99
|
|
3, 9, 144
|
HSBC Service Delivery (Polska) Sp. z o.o.
|
100.00
|
|
154
|
HSBC Services (France)
|
100.00
|
(99.99)
|
4, 9, 46
|
HSBC Services Japan Limited
|
100.00
|
|
133
|
HSBC Servicios Financieros, S.A. de C.V.
|
99.99
|
|
9, 16
|
HSBC Servicios, S.A. DE C.V., Grupo Financiero HSBC
|
99.99
|
|
9, 16
|
HSBC SFH (France)
|
100.00
|
(99.99)
|
4, 9, 50
|
HSBC Software Development (Canada) Inc
|
100.00
|
|
155
|
HSBC Software Development (Guangdong) Limited
|
100.00
|
|
12, 156
|
HSBC Software Development (India) Private Limited
|
100.00
|
|
157
|
HSBC Software Development (Malaysia) Sdn Bhd
|
100.00
|
|
95
|
HSBC Specialist Investments Limited
|
100.00
|
|
17
|
HSBC Stockbroker Services (Client Assets) Nominees Limited
|
100.00
|
|
17
|
HSBC Stockbrokers Nominee (UK) Limited
|
100.00
|
|
17
|
HSBC Taxpayer Financial Services Inc.
|
100.00
|
|
25
|
HSBC Technology & Services (China) Limited
|
100.00
|
|
12, 158
|
HSBC Technology & Services (USA) Inc.
|
100.00
|
|
25
|
HSBC TFS I 2005 LLC
|
100.00
|
|
32
|
HSBC Transaction Services GmbH
|
100.00
|
|
6, 159
|
HSBC Trinkaus & Burkhardt (International) S.A.
|
100.00
|
(80.67)
|
100
|
HSBC Trinkaus & Burkhardt AG
|
100.00
|
(80.67)
|
14, 53
|
HSBC Trinkaus & Burkhardt Gesellschaft fur Bankbeteiligungen mbH
|
100.00
|
(80.67)
|
53
|
HSBC Trinkaus Europa Immobilien-Fonds Nr. 5 GmbH
|
100.00
|
(80.67)
|
53
|
HSBC Trinkaus Family Office GmbH
|
100.00
|
(80.67)
|
6, 53
|
HSBC Trinkaus Immobilien Beteiligungs KG
|
100.00
|
(80.67)
|
53
|
HSBC Trinkaus Real Estate GmbH
|
100.00
|
(80.67)
|
6, 53
|
HSBC Trust Company (Canada)
|
100.00
|
|
81
|
292
|
HSBC Holdings plc
|
Subsidiaries
|
% of share class held by immediate parent company (or by the Group where this varies)
|
Footnotes
|
|
HSBC Trust Company (Delaware), National Association
|
100.00
|
|
1, 160
|
HSBC Trust Company (UK) Limited
|
100.00
|
|
17
|
HSBC Trust Company AG
|
100.00
|
|
41
|
HSBC Trustee (C.I.) Limited
|
100.00
|
|
142
|
HSBC Trustee (Cayman) Limited
|
100.00
|
|
161
|
HSBC Trustee (Guernsey) Limited
|
100.00
|
|
20
|
HSBC Trustee (Hong Kong) Limited
|
100.00
|
|
69
|
HSBC Trustee (Mauritius) Limited (in liquidation)
|
100.00
|
|
162
|
HSBC Trustee (Singapore) Limited
|
100.00
|
|
64
|
HSBC UK Bank plc
|
100.00
|
|
17
|
HSBC UK Holdings Limited
|
100.00
|
|
2, 17
|
HSBC USA Inc.
|
100.00
|
|
141
|
HSBC Valores S.A.
|
100.00
|
(99.99)
|
9, 163
|
HSBC Violet Investments (Mauritius) Limited
|
100.00
|
|
92
|
HSBC Wealth Client Nominee Limited
|
100.00
|
|
17
|
HSBC Yatirim Menkul Degerler A.S.
|
99.99
|
(99.98)
|
9, 145
|
HSI Asset Securitization Corporation
|
100.00
|
|
25
|
HSI International Limited
|
100.00
|
(62.14)
|
52
|
HSIL Investments Limited
|
100.00
|
|
17
|
Hubei Macheng HSBC Rural Bank Company Limited
|
100.00
|
|
12, 164
|
Hubei Suizhou Cengdu HSBC Rural Bank Company Limited
|
100.00
|
|
12, 165
|
Hubei Tianmen HSBC Rural Bank Company Limited
|
100.00
|
|
12, 166
|
Hunan Pingjiang HSBC Rural Bank Company Limited
|
100.00
|
|
12, 167
|
Imenson Limited
|
100.00
|
(62.14)
|
52
|
INKA Internationale Kapitalanlagegesellschaft mbH
|
100.00
|
(80.67)
|
159
|
Inmobiliaria Banci, S.A. de C.V.
|
100.00
|
(98.91)
|
3, 16
|
Inmobiliaria Bisa, S.A. de C.V.
|
100.00
|
(99.99)
|
9, 16
|
Inmobiliaria Grufin, S.A. de C.V.
|
100.00
|
(99.99)
|
9, 16
|
Inmobiliaria Guatusi, S.A. de C.V.
|
100.00
|
(99.99)
|
3, 9, 16
|
IRERE Property Investments (French Offices) Sarl
|
100.00
|
|
168
|
James Capel & Co. Limited
|
100.00
|
|
17
|
James Capel (Channel Islands) Nominees Limited
|
100.00
|
|
110
|
James Capel (Nominees) Limited
|
100.00
|
|
17
|
James Capel (Second Nominees) Limited (in liquidation)
|
100.00
|
|
17
|
James Capel (Taiwan) Nominees Limited
|
100.00
|
|
17
|
John Lewis Financial Services Limited
|
100.00
|
|
17
|
Keyser Ullmann Limited
|
100.00
|
(99.99)
|
9, 17
|
Kings Meadow Nominees Limited
|
100.00
|
|
169
|
Legend Estates Limited
|
100.00
|
|
17
|
Lion Corporate Services Limited
|
100.00
|
|
69
|
Lion International Corporate Services Limited
|
100.00
|
|
129
|
Lion International Management Limited
|
100.00
|
|
129
|
Lion Management (Hong Kong) Limited
|
100.00
|
|
69
|
Lyndholme Limited
|
100.00
|
|
69
|
Marks and Spencer Financial Services plc
|
100.00
|
|
169
|
Marks and Spencer Retail Financial Services Holdings Limited
|
100.00
|
|
169
|
Marks and Spencer Savings and Investments Limited
|
100.00
|
|
169
|
Marks and Spencer Unit Trust Management Limited
|
100.00
|
|
169
|
Maxima S.A. AFJP (in liquidation)
|
100.00
|
(99.98)
|
68
|
Mercantile Company Limited
|
100.00
|
|
17
|
Mexicana de Fomento, S.A. de C.V.
|
99.80
|
|
16
|
Midcorp Limited
|
100.00
|
|
17
|
Midland Bank (Branch Nominees) Limited
|
100.00
|
|
17
|
Midland Nominees Limited
|
100.00
|
|
17
|
MIL (Cayman) Limited
|
100.00
|
|
33
|
MW Gestion SA
|
100.00
|
|
68
|
Subsidiaries
|
% of share class held by immediate parent company (or by the Group where this varies)
|
Footnotes
|
|
Promocion en Bienes Raices, S.A. de C.V.
|
100.00
|
(99.19)
|
3, 9, 16
|
Prudential Client HSBC GIS Nominee (UK) Limited
|
100.00
|
|
17
|
PT Bank HSBC Indonesia
|
100.00
|
(98.93)
|
170
|
PT HSBC Sekuritas Indonesia
|
100.00
|
(85.00)
|
171
|
R/CLIP Corp.
|
100.00
|
|
25
|
Republic Nominees Limited
|
100.00
|
|
20
|
Republic Overseas Capital Corporation
|
100.00
|
|
123
|
RLUKREF Nominees (UK) One Limited
|
100.00
|
|
17
|
RLUKREF Nominees (UK) Two Limited
|
100.00
|
|
17
|
S.A.P.C. - Ufipro Recouvrement
|
100.00
|
(99.97)
|
11, 45
|
Saf Baiyun
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Chang Jiang
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Chang Jiang Shi Liu
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Chang Jiang Shi Wu
|
100.00
|
(99.99)
|
1, 4, 9, 47
|
Saf Guangzhou
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Zhu Jiang
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Zhu Jiang Yi
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Zhu Jiang Ba
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Zhu Jiang Er
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Zhu Jiang Jiu
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Zhu Jiang Liu
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Zhu Jiang Qi
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Zhu Jiang San
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Zhu Jiang Shi
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Zhu Jiang Shi Ba
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Zhu Jiang Shi Er
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Zhu Jiang Shi Jiu
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Zhu Jiang Shi Liu
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Zhu Jiang Shi Qi
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Zhu Jiang Shi Wu
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Zhu Jiang Shiyi
|
100.00
|
(99.99)
|
4, 9, 47
|
Saf Zhu Jiang Wu
|
100.00
|
(99.99)
|
4, 9, 47
|
Samada Limited
|
100.00
|
|
142
|
SAS Bosquet-Audrain
|
100.00
|
(94.90)
|
1, 4, 221
|
SAS Cyatheas Pasteur
|
100.00
|
(94.93)
|
1, 4, 45
|
SAS Orona
|
100.00
|
(94.92)
|
1, 4, 220
|
SCI HSBC Assurances Immo
|
100.00
|
(99.99)
|
1, 9, 11, 50
|
Secondary Club Deal I GP Limited
|
100.00
|
|
20
|
Secondary Club Deal II GP Limited
|
100.00
|
|
20
|
SFSS Nominees (Pty) Limited
|
100.00
|
|
151
|
Shandong Rongcheng HSBC Rural Bank Company Limited
|
100.00
|
|
12, 172
|
Sico Limited
|
100.00
|
|
173
|
SNC Dorique
|
100.00
|
(99.99)
|
1,9,11,174
|
SNC Kerouan
|
100.00
|
(99.99)
|
1, 9, 11, 47
|
SNC Les Mercuriales
|
100.00
|
(99.99)
|
1, 9, 11, 47
|
SNC Les Oliviers D'Antibes
|
59.99
|
|
11, 50
|
SNC Makala
|
100.00
|
(99.99)
|
1,9,11,47
|
SNC Nuku-Hiva Bail
|
100.00
|
(99.99)
|
1,9,11,47
|
SNCB/M6 - 2008 A
|
100.00
|
(99.99)
|
1, 4, 9, 47
|
SNCB/M6-2007 A
|
100.00
|
(99.99)
|
1, 4, 9, 47
|
SNCB/M6-2007 B
|
100.00
|
(99.99)
|
1, 4, 9, 47
|
Societe CCF Finance Moyen-Orient S.A.L.
|
96.64
|
(99.99)
|
4, 9, 36
|
Société Financière et Mobilière
|
100.00
|
(99.99)
|
4, 9, 46
|
Société Française et Suisse
|
100.00
|
(99.99)
|
4, 9, 47
|
Societe Immobiliere Atlas S.A.
|
100.00
|
|
143
|
Somers Dublin DAC
|
100.00
|
|
119
|
Somers Nominees (Far East) Limited
|
100.00
|
|
118
|
Sopingest
|
100.00
|
(99.99)
|
4, 9, 47
|
South Yorkshire Light Rail Limited
|
100.00
|
|
17
|
SPE 1 2005 Manager Inc.
|
100.00
|
|
32
|
St Cross Trustees Limited
|
100.00
|
|
17
|
Sun Hung Kai Development (Lujiazui III) Limited
|
100.00
|
|
12, 175
|
Swan National Leasing (Commercials) Limited
|
100.00
|
|
17
|
Swan National Limited
|
100.00
|
|
17
|
HSBC Holdings plc
|
293
|
Subsidiaries
|
% of share class held by immediate parent company (or by the Group where this varies)
|
Footnotes
|
|
Tasfiye Halinde HSBC Internet ve Telekomunikasyon Hizmetleri Anonim Sirketi (in liquidation)
|
100.00
|
(99.99)
|
176
|
Tempus Management AG (in liquidation)
|
100.00
|
|
41
|
Thasosfin
|
100.00
|
(99.99)
|
4, 9, 50
|
The Hongkong and Shanghai Banking Corporation Limited
|
100.00
|
|
69
|
The Venture Catalysts Limited
|
100.00
|
|
17
|
Timberlink Settlement Services (USA) Inc.
|
100.00
|
|
25
|
TKM International Limited (in liquidation)
|
100.00
|
|
17
|
Tooley Street View Limited
|
100.00
|
|
1, 2, 17
|
Tower Investment Management
|
100.00
|
|
177
|
Trinkaus Australien Immobilien Fonds Nr. 1 Brisbane GmbH & Co. KG
|
100.00
|
(80.67)
|
53
|
Trinkaus Australien Immobilien-Fonds Nr. 1 Treuhand-GmbH
|
100.00
|
(80.67)
|
6, 53
|
Trinkaus Canada Immobilien-Fonds Nr. 1 Verwaltungs-GmbH
|
100.00
|
(80.67)
|
53
|
Trinkaus Europa Immobilien-Fonds Nr.3 Objekt Utrecht Verwaltungs-GmbH
|
100.00
|
(80.67)
|
53
|
Trinkaus Immobilien-Fonds Geschaeftsfuehrungs-GmbH
|
100.00
|
(80.67)
|
6, 53
|
Trinkaus Immobilien-Fonds Verwaltungs-GmbH
|
100.00
|
(80.67)
|
6, 53
|
Trinkaus Private Equity Management GmbH
|
100.00
|
(80.67)
|
53
|
Trinkaus Private Equity Verwaltungs GmbH
|
100.00
|
(80.67)
|
6, 53
|
Tropical Nominees Limited
|
100.00
|
|
33
|
Turnsonic (Nominees) Limited
|
100.00
|
|
17
|
Vadep Holding AG (in liquidation)
|
100.00
|
|
178
|
Valeurs Mobilières Elysées
|
100.00
|
(99.99)
|
4, 9, 179
|
Vintage 2016 HV GP Limited (in liquidation)
|
100.00
|
|
20
|
Vintage 2016 KKR GP Limited (in liquidation)
|
100.00
|
|
20
|
Vintage 2017 Athyrium GP Limited (in liquidation)
|
100.00
|
|
20
|
Vintage I Secondary GP Limited (in liquidation)
|
100.00
|
|
20
|
Vintage III Special Situations GP Limited (in liquidation)
|
100.00
|
|
20
|
Wardley Limited
|
100.00
|
|
69
|
Wayfoong Credit Limited
|
100.00
|
|
69
|
Wayfoong Finance Limited
|
100.00
|
|
69
|
Wayfoong Nominees Limited
|
100.00
|
|
69
|
Wayhong (Bahamas) Limited (in liquidation)
|
100.00
|
|
116
|
Westminster House, LLC
|
100.00
|
|
25
|
Woodex Limited
|
100.00
|
|
21
|
Yan Nin Development Company Limited
|
62.14
|
|
52
|
Joint Ventures
|
% of share class held by immediate
parent company
(or by the Group
where this varies)
|
Footnotes
|
|
HCM Holdings Limited
|
50.99
|
|
40
|
House Network Sdn Bhd
|
25.00
|
|
180
|
HSBC Jintrust Fund Management Company Limited
|
49.00
|
|
12, 181
|
HSBC Kingdom Africa Investments (Cayman) Limited
|
50.00
|
|
182
|
HSBC Life Insurance Company Limited
|
50.00
|
|
183
|
ProServe Bermuda Limited
|
50.00
|
|
184
|
Vaultex UK Limited
|
50.00
|
|
186
|
HSBC Saudi Arabia
|
49.40
|
(69.40)
|
201
|
Associates
|
% of share class held by immediate
parent company
(or by the Group
where this varies)
|
Footnotes
|
|
Bank of Communications Co., Ltd.
|
19.03
|
|
56, 188
|
Barrowgate Limited
|
24.64
|
|
189
|
BGF Group Limited
|
24.38
|
|
190
|
Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited
|
26.00
|
|
191
|
CFAC Payment Scheme Limited
|
33.33
|
|
192
|
Chemi and Cotex Industries Limited
|
33.99
|
|
195
|
Corsair IV Financial Services Capital Partners
|
n/a
|
|
7, 219
|
Electronic Payment Services Company (Hong Kong) Limited
|
19.33
|
|
56, 69
|
EPS Company (Hong Kong) Limited
|
40.58
|
|
69
|
Guangzhou GuangZheng Hang Seng Securities Advisory Co. Ltd.
|
33.00
|
|
217
|
GZHS Research Co Ltd
|
20.50
|
|
197
|
Hang Seng Qianhai Fund Management Company Limited
|
43.50
|
|
9, 12, 198
|
HSBC Mortgage LLP
|
n/a
|
|
7, 200
|
HSBC TFS II 2005 LLC
|
20.00
|
|
32
|
InfraRed NF China Real Estate Investments LP
|
n/a
|
|
7, 214
|
Jeppe Star Limited
|
33.99
|
|
187
|
MENA Infrastructure Fund (GP) Ltd
|
33.33
|
|
203
|
Northstar Trade Finance Inc.
|
20.88
|
|
205
|
Novo Star Limited
|
33.99
|
|
206
|
PEF 2005 (A) & (D) Limited Partnership
|
n/a
|
|
7, 216
|
PEF 2010 (A) Limited Partnership
|
n/a
|
|
7, 216
|
Peregrine Capital Services Ltd
|
33.46
|
|
218
|
Quantexa Limited
|
10.00
|
|
56, 212
|
Services Epargne Entreprise SAS
|
14.35
|
|
56, 215
|
The London Gold Market Fixing Limited
|
25.00
|
|
210
|
The Saudi British Bank
|
40.00
|
|
211
|
Vizolution Limited
|
17.95
|
|
56, 213
|
294
|
HSBC Holdings plc
|
Footnotes for Note 37
|
|
1
|
Management has determined that these undertakings are excluded from consolidation in the Group accounts as these entities do not meet the definition of subsidiaries in accordance with IFRS. HSBC’s consolidation policy is described in Note 1.2(a).
|
2
|
Directly held by HSBC Holdings plc
|
3
|
Preference Shares
|
Description of Shares
|
|
4
|
Actions
|
5
|
Redeemable Preference Shares
|
6
|
GmbH Anteil
|
7
|
This undertaking is a partnership and does not have share capital
|
8
|
Liquidating Share Class
|
9
|
In the prior period the Group disclosed the immediate parent company’s interest in this undertaking
|
10
|
Non-Participating Voting Shares
|
11
|
Parts
|
12
|
Registered Capital Shares
|
13
|
Russian Limited Liability Company Shares
|
14
|
Stückaktien
|
Registered Offices
|
|
15
|
Level 36 Tower 1 International Towers Sydney, 100 Barangaroo Avenue, Sydney, New South Wales, Australia, 2000
|
16
|
Paseo de la Reforma 347, Col. Cuauhtemoc, Mexico, 06500
|
17
|
8 Canada Square, London, United Kingdom, E14 5HQ
|
18
|
5 Donegal Square South, Belfast, Northern Ireland, BT1 5JP
|
19
|
Camden House West The Parade, Birmingham, United Kingdom, B1 3PY
|
20
|
Arnold House St Julians Avenue, St Peter Port, Guernsey, GY1 3NF
|
21
|
37 Front Street, Hamilton, Bermuda, HM 11
|
22
|
PO Box 513 HSBC House, 68 West Bay Road, George Town, Grand Cayman, Cayman Islands, KY1-1106
|
23
|
HSBC Main Building 1 Queen's Road Central, Hong Kong
|
24
|
First Floor, Xinhua Bookstore Xindong Road (SE of roundabout), Miyun District, Beijing, China
|
25
|
c/o The Corporation Trust Company 1209 Orange Street, Wilmington, Delaware, United States, 19801
|
26
|
CT Corporation System 1515 Market Street, Registered Office, Philadelphia, Pennsylvania, United States, 19102
|
27
|
CT Corporation System 800 S. Figueroa, Los Angeles, California, United States, 90017
|
28
|
CT Corporation System 530 Gay Street, Knoxville, Tennessee, United States, 37902
|
29
|
CT Corporation System Secretary of State, 707 Virginia Street East, Charleston, West Virginia, United States, 25301
|
30
|
CT Corporation System 1720 Carey Avenue, Cheyenne, Wyoming, United States, 82001
|
31
|
95 Washington Street, Buffalo, New York, United States, 14203
|
32
|
1209 Orange Street, Wilmington, Delaware, United States, 19801
|
33
|
PO Box 1109 HSBC House, 68 West Bay Road, George Town, Grand Cayman, Cayman Islands, KY1-1102
|
34
|
Corporation Service Company 251 Little Falls Drive, Wilmington, Delaware, United States, 19808
|
35
|
Unsoeldstrasse 2, Munich, Germany, 80538
|
36
|
Solidere - Rue Saad Zaghloul Immeuble - 170 Marfaa, PO Box 17 5476 Mar Michael 11042040, Beyrouth, Lebanon
|
37
|
No 1, Bei Huan East Road Dazu County, Chongqing, China
|
38
|
No 107, Ping Du Avenue (E), Sanhe Town, Fengdu County, Chongqing, China
|
39
|
No. 3, 5, 7, Haitang Erzhi Road Changyuan, Rongchang, Chongqing, China, 402460
|
40
|
Hill House 1 Little New Street, London, United Kingdom, EC4A 3TR
|
41
|
Bederstrasse 49, Zurich, Switzerland, CH-8002
|
42
|
Rawlinson and Hunter Limited Woodbourne Hall, PO Box 3162, Road Town, Tortola, British Virgin Islands, VG1110
|
43
|
15 Rue GFirst & Second Floor, No.3 Nanshan Road, Pulandian, Dalian, Liaoning, China uynemer BP 412 Noumea 98845 Nouvelle Calédonie
|
44
|
CT Corporation System 225 Hillsborough Street, Raleigh, North Carolina, United States, 27603
|
45
|
39 rue de Bassano, Paris, France, 75008
|
46
|
103 avenue des Champs-Elysées, Paris, France, 75008
|
47
|
64 rue Galilée, Paris, France, 75008
|
Registered Offices
|
|
48
|
MMG Tower, 23 floor Ave. Paseo del Mar Urbanizacion Costa del Este, Panama
|
49
|
Walkers Corporate Services Limited, Walker House, 87 Mary Street, George Town, Grand Cayman KY1-9005, Cayman Islands
|
50
|
15 rue Vernet, Paris, France, 75008
|
51
|
No. 1 1211 Yanjiang Zhong Road, Yongan, Fujian, China
|
52
|
83 Des Voeux Road Central, Hong Kong
|
53
|
Königsallee 21/23, Düsseldorf, Germany, 40212
|
54
|
Bufete Tapia, PO Box 7412, Panama, Panama, 5
|
55
|
No. 44, Xin Ping Road Central, Encheng, Enping, Guangdong, China, 529400
|
56
|
HSBC Holdings plc exercises control or significant influence over this undertaking notwithstanding its equity interest
|
57
|
34/F and 36/F, Hang Seng Bank Tower, 1000 Lujiazui Ring Road 27/F, Shanghai Stock Exchange Bldg, 528 Pudong South Road, Shanghai, Shanghai, China, 200120
|
58
|
11-17 Ludwig-Erhard-Str., Hamburg, Germany, 20459
|
59
|
Akara Bldg. 24 De Castro Street, Wickhams Cay I, Road Town, Tortola, British Virgin Islands
|
60
|
The Corporation Trust Company of Nevada 311 S. Division Street, Carson City, Nevada, United States, 89703
|
61
|
HSBC House Esplanade, St. Helier, Jersey, JE4 8UB
|
62
|
10th Floor, North Tower 2 Leboh Ampang, Kuala Lumpur, Malaysia, 50100
|
63
|
13th Floor, South Tower 2 Leboh Ampang, Kuala Lumpur, Malaysia, 50100
|
64
|
21 Collyer Quay #13-02 HSBC Building, Singapore, 049320
|
65
|
Bouchard 557, Piso 18°, Cdad. Autónoma de Buenos Aires, Argentina, 1106
|
66
|
52/60 M G Road, Fort, Mumbai, India, 400 001
|
67
|
PO Box 513 HSBC House, 68 West Bay Road, George Town, Grand Cayman, Cayman Islands, KY1-1102
|
68
|
Florida 229, 10°, Ciudad de Buenos Aires, Argentina, C1005AAE
|
69
|
1 Queen's Road Central, Hong Kong
|
70
|
3rd Floor, Merchantile Bank Chamber 16, Veer Nariman Road, Fort, Mumbai, India, 400001
|
71
|
Isidora Goyenechea 2800, 23rd floor, Las Condes, Santiago, Chile, 7550647
|
72
|
HSBC Building Shanghai ifc, 8 Century Avenue, Pudong, Shanghai, China, 200120
|
73
|
6th floor, HSBC Centre, 18, Cybercity, Ebene, Mauritius
|
74
|
2 Paveletskaya square, building 2, Moscow, Russian Federation, 115054
|
75
|
13F-14F, 333 Keelung Road, Sec.1, Taipei, 110
|
76
|
Rincon 391, Montevideo, Uruguay, 11000
|
77
|
The Metropolitan 235 Dong Khoi Street, District 1, Ho Chi Minh City, Vietnam
|
78
|
Esentepe mah. Büyükdere Caddesi No.128 Istanbul 34394, Turkey
|
79
|
Florida 201, 10°, Ciudad de Buenos Aires, Argentina, C1005AAE
|
80
|
66 Teryan street, Yerevan, Armenia, 0009
|
81
|
885 West Georgia Street Suite 300, Vancouver, British Columbia, Canada, V6C 3E9
|
82
|
306 Corniche El Nil, Maadi, Egypt, 11728
|
83
|
HSBC House Esplanade, St. Helier, Jersey, JE1 1HS
|
84
|
116 Archbishop Street, Valletta, Malta
|
85
|
Level 1, Building No. 8, Gate Village Dubai International Financial Centre, PO Box 502601, United Arab Emirates
|
86
|
Tour Crystal 1 10EME Etage BD Al Mohades, Casablanca, Morocco
|
87
|
Al Khuwair Office PO Box 1727 PC111 CPO Seeb, Muscat, Oman
|
88
|
Rondo ONZ 1, Warsaw, Poland, 00-124
|
89
|
1800 Tysons Boulevard Suite 50, McLean, Virginia, United States, 22102
|
90
|
Rua Funchal, nº 160, SP Corporate Towers, Torre Norte, 19° andar, cj 191A - Parte, São Paulo, Brazil, 04551-060
|
91
|
300, 885 West Georgia Street, Vancouver, British Columbia, Canada, V6C 3E9
|
92
|
c/o Kross Border Trust Services Limited St. Louis Business Centre, Cnr Desroches & St Louis Streets, Port Louis, Mauritius
|
93
|
49 avenue J.F. Kennedy, Luxembourg, Luxembourg, 1855
|
94
|
4-17/F, Office Tower 2 TaiKoo Hui, No. 381 Tian He Road, Tian He District, Guangzhou, Guangdong, China
|
95
|
Suite 1005, 10th Floor, Wisma Hamzah Kwong Hing No. 1, Leboh Ampang, Kuala Lumpur, Malaysia, 50100
|
96
|
HSBC, Filinvest One Bldg, Northgate Cyberzone, Filinvest Corporate City, Alabang, Muntinlupa City, Philippines
|
97
|
HSBC House Plot No.8, Survey No.64 (Part), Hightec City Layout Madhapur, Hyderabad, India, 500081
|
98
|
439, Sri Jayawardenapura Mawatha Welikada, Rajagiriya, Colombo, Sri Lanka
|
HSBC Holdings plc
|
295
|
Registered Offices
|
|
99
|
Smart Village 28th Km Cairo- Alexandria Desert Road Building, Cairo, Egypt
|
100
|
16 Boulevard d'Avranches, Luxembourg, L-1160
|
101
|
HSBC Chambers, Corner of Jalan Sultan / Jalan Pemancha , Bandar Seri Begawan, Brunei Darussalam, BS8811
|
102
|
Suite 300, 3381 Steeles Avenue East, Toronto, Ontario, Canada, M2H 3S7
|
103
|
Centre Ville 1341 Building - 4th Floor Patriarche Howayek Street (facing Beirut Souks), PO Box Riad El Solh, Lebanon, 9597
|
104
|
3rd Floor, HSBC Bank Middle East Limited Building Al Souq Road, Bur Dubai, PO Box 4604, Dubai, United Arab Emirates
|
105
|
World Trade Center Montevideo Avenida Luis Alberto de Herrera 1248, Torre 1, Piso 15, Oficina 1502, Montevideo, Uruguay, CP 11300
|
106
|
Level 12, HSBC Building 37, Chilpae-ro, Jung-gu, Seoul, Korea, Republic of
|
107
|
17 avenue d'Ostende, Monaco, 98000
|
108
|
2910 Virtual Way, Vancouver, British Columbia, Canada, V5M 0B2
|
109
|
Immeuble Coeur Défense 110, Esplanade du Général de Gaulle- La défense 4, Courbevoie, France, 92400
|
110
|
HSBC House Esplanade, St. Helier, Jersey, JE4 8WP
|
111
|
HSBC Building 11-1, Nihonbashi 3-chome, Chuo-ku, Tokyo, Japan, 103-0027
|
112
|
80 Mill Street, Qormi, Malta, QRM 3101
|
113
|
Gartenstrasse 26, Zurich, Switzerland
|
114
|
24th Fl., 99, Sec.2, Tunhwa S. Rd., Taipei, Taiwan, Province of China
|
115
|
452 Fifth Avenue 7th floor, New York NY10018, United States
|
116
|
Mareva House 4 George Street, Nassau, Bahamas
|
117
|
Breite Str. 29/31, Düsseldorf, Germany, 40213
|
118
|
37 Front Street, Hamilton, Bermuda, HM 11
|
119
|
1 Grand Canal Square Grand Canal Harbour, Dublin 2, D02 P820, Ireland
|
120
|
HSBC Centre Eighteen, Cybercity, Ebene, Mauritius
|
121
|
18th Floor, Tower 1 HSBC Centre, 1 Sham Mong Road, Kowloon, Hong Kong
|
122
|
Level 32, HSBC Main Building 1 Queen's Road Central, Hong Kong
|
123
|
452 Fifth Avenue, New York NY10018, United States
|
124
|
9th Floor, HSBC Centre 3058 Fifth Avenue West, Bonifacio Global City, Taguig City, Philippines
|
125
|
16F 369 Zhongxiao East Road, Section 7 , Nangang District , Taipei, Taiwan, Province of China, 115
|
126
|
1 More London Place, London, United Kingdom, SE1 2AF
|
127
|
HSBC Building Minet El Hosn, Riad el Solh, Beirut 1107-2080, PO Box 11-1380, Lebanon
|
128
|
300 Delaware Avenue Suite 1400, Wilmington, Delaware, United States, 19801
|
129
|
Craigmuir Chambers, PO Box 71, Road Town, Tortola, British Virgin Islands
|
130
|
Woodbourne Hall, Road Town PO Box 916, Tortola, British Virgin Islands
|
131
|
9-11 Floors, NESCO IT Park Building No. 3 Western Express Highway, Goregaon (East), Mumbai, India, 400063
|
132
|
1441 Brickell Avenue, Miami, Florida, United States 33131
|
133
|
MB&H Corporate Services Ltd Mareva House, 4 George Street, Nassau, Bahamas
|
134
|
21 Farncombe Road, Worthing, United Kingdom, BN11 2BW
|
135
|
3303 Express Drive North, Islandia, New York, United States, 11749
|
136
|
Shop 4 & 5 Ground Floor & Mezzanine, Bldg. of Hilal Salim Bin Tarraf, Al Wasel Area, Sheikh Zayed Road, PO Box 1956 Dubai, United Arab Emirates
|
137
|
Precinct Building 4, Level 3 Dubai International Financial Centre, Dubai, United Arab Emirates, PO BOX 506553
|
138
|
HSBC Bank Middle East Building - level 5, building 5, Emaar, Dubai, United Arab Emirates, 502601
|
139
|
HSBC House Level 9, One Queen Street, Auckland, New Zealand, 1010
|
140
|
Büyükdere Cad. No.122 D Blok Esentepe Sisli Istanbul, Turkey
|
141
|
c/o The Corporation Trust Incorporated 351 West Camden Street, Baltimore, Maryland, United States, 21201
|
142
|
HSBC House Esplanade, St. Helier, Jersey, JE1 1GT
|
143
|
Quai des Bergues 9-17, Geneva, Switzerland, 1201
|
144
|
Paseo de la Reforma 359, 6th Floor, Mexico, 06500
|
145
|
Büyükdere Cad. No.128 D Blok Esentepe Sisli Istanbul, Turkey
|
146
|
Block 27 A&B, Qianhai Enterprise Dream Park No. 63 Qianwan Yi Road, Shenzhen-Hong Kong Cooperation Zone, Shenzhen, China, 518052
|
147
|
St Nicholas House, 10th Floor Catholic Mission St Lagos, Nigeria
|
148
|
Unit 1 GF The Commercial Complex Madrigal Avenue Ayala Alabang Village, Muntinlupa City, Philippines, 1770
|
149
|
70 York Street 7th Floor, Toronto, Ontario, Canada, M5J 1S9
|
150
|
7/F The Enterprise Centre - Tower I, 6766 Ayala Avenue corner Paseo De Roxas, Makati City, Philippines
|
151
|
2 Exchange Square 85 Maude Street, Sandown, Sandton, South Africa, 2196
|
Registered Offices
|
|
152
|
Palm Grove House PO Box 438, Road Town, Tortola, British Virgin Islands
|
153
|
The Corporation Trust Company 820 Bear Tavern Road, West Trenton, New Jersey, United States, 08628
|
154
|
Kapelanka 42A, Krakow, Poland, 30-347
|
155
|
Suite 2400, 745 Thurlow Street, Vancouver, Canada, BC V6E 0C5
|
156
|
L22, Office Tower 2, Taikoo Hui, 381 Tianhe Road, Tianhe District, Guangzhou, Guangdong, China
|
157
|
HSBC Centre River Side, West Avenue, 25B Raheja woods, Kalyaninagar, Pune, India, 411006
|
158
|
Level 19, HSBC Building, Shanghai ifc 8 Century Avenue Pudong, Shanghai, China
|
159
|
Yorckstraße 21 - 23 40476, Duesseldorf, Germany
|
160
|
300 Delaware Avenue Suite 1401, Wilmington, Delaware, United States, 19801
|
161
|
PO Box 484, Ground Floor, HSBC House 68 West Bay Road, Grand Cayman, KY1-1106, Cayman Islands
|
162
|
c/o HSBC Bank (Mauritius) Limited 6th Floor, HSBC Centre, 18 Cyber City, Ebene, Mauritius
|
163
|
Bouchard 680, 11°, Ciudad de Buenos Aires, Argentina, 1106
|
164
|
No. 56, Yu Rong Street, Macheng, China, 438300
|
165
|
No. 205, Lie Shan Road Suizhou, Hubei, China
|
166
|
Building 3, Yin Zuo Di Jing Wan Tianmen New City,Tianmen, Hubei Province, China
|
167
|
RM101, 102 & 106 Sunshine Fairview, Sunshine Garden, Pedestrian Walkway, Pingjiang, China
|
168
|
6 rue Adolphe, Luxembourg, L-1116
|
169
|
Kings Meadow Chester Business Park, Chester, United Kingdom, CH99 9FB
|
170
|
World Trade Center 1, Floor 8-9 Jalan Jenderal Sudirman Kavling 29-31, Jakarta, Indonesia, 12920
|
171
|
4th Floor, World Trade Center, J1, Jend. Sudirman Kav. 29-31, Jakarta, Indonesia, 12920
|
172
|
No.198-2, Chengshan Avenue (E), Rongcheng, China, 264300
|
173
|
Woodbourne Hall, Road Town PO Box 3162, Tortola, British Virgin Islands
|
174
|
43 rue de Paris, Saint Denis, 97400
|
175
|
RM 2112, HSBC Building, Shanghai ifc No. 8 Century Road, Pudong, Shanghai, China, 200120
|
176
|
Büyükdere Cad. No 124 kat 9 Oda 2 Esentepe ªiºli Istanbul, Turkey
|
177
|
11 Dr. Roy’s Drive PO Box 694GT, Grand Cayman, Cayman Islands, KY1-1107
|
178
|
Philippe Kaiser Baarerstrasse 8, Zug, Switzerland, 6300
|
179
|
109 avenue des Champs-Elysees, Paris, France, 75008
|
180
|
Suite 8-3A, Menara RA, No. 18, Jalan Dataran SD2,, Dataran SD, PJU 9, Bandar Sri Damansara, 52200, Malaysia
|
181
|
17F, HSBC Building, Shanghai ifc 8 Century Avenue, Pudong, Shanghai, China
|
182
|
Maples Corporate Services Limited PO Box 309, Ugland House, South Church Street, George Town, Cayman Islands, KY1-1104
|
183
|
18/F, HSBC Building, 8 Century Avenue China (Shanghai) Pilot Free Trade Zone, China, 200120
|
184
|
c/o MUFG Fund Services (Bermuda) Limited The Belvedere Building, 69 Pitts Bay Road, Pembroke, Bermuda, HM08
|
186
|
21 Garlick Hill, London, United Kingdom, EC4V 2AU
|
187
|
c/o Trident Trust Company Trident Chambers, PO Box 146, Tortola, British Virgin Islands
|
188
|
No.188, Yin Cheng Zhong Road China (Shanghai) Pilot Free Trade Zone, Shanghai, China
|
189
|
49/F, The Lee Gardens, 33 Hysan Avenue, Hong Kong
|
190
|
13-15 York Buildings, London, United Kingdom, WC2N 6JU
|
191
|
Unit No. 208, 2nd Floor, Kanchenjunga Building 18 Barakhamba Road, New Delhi - 110001, India
|
192
|
6th Floor 65 Gresham Street, London EC2V 7NQ
|
195
|
Plot No. 89-90 Mbezi Industrial Area Box 347, Dar es Salaam City
|
196
|
37 avenue Henri Lafleur, Nouméa, New Caledonia, BP K3 98849
|
197
|
1101-J46, 11/F, Nansha Financial Building 171 Haibin Road, Nansha District, Guangzhou, China
|
198
|
2-3/F, Unit 21A, Qianhai Enterprise Dream Park, No. 63 Qian Wan Yi Road,, Qianhai Shenzhen-Hongkong Cooperation Zone, Shenzhen, China
|
199
|
66 Wellington Street West, Suite 5300, Toronto, Ontario, Canada, M5K 1E6
|
200
|
35 Great St Helens, London, United Kingdom, EC3A 6AP
|
201
|
HSBC Building 7267 Olaya - Al Murrooj, Riyadh, Kingdom of Saudi Arabia, 12283 - 2255
|
203
|
Level 3 Building 4, Gate District, Dubai International Financial Centre, Dubai, United Arab Emirates
|
296
|
HSBC Holdings plc
|
Registered Offices
|
|
204
|
13th Floor, Lulu Center Building Salam Street, PO Box 44505, United Arab Emirates
|
205
|
833 Three Bentall Centre 595 Burrard Street, Vancouver, British Columbia, Canada, V7X 1C4
|
206
|
Jayla Place Wickhams Cay I, PO Box 3190, Road Town, British Virgin Islands
|
210
|
c/o Hackwood Secretaries Limited One Silk Street, London, United Kingdom, EC2Y 8HQ
|
211
|
Prince Abdulaziz Ibn Mossaad Ibn Jalawi Street, Riyadh, Kingdom of Saudi Arabia
|
212
|
75 Park Lane, Croydon, Surrey, United Kingdom, CR9 1XS
|
213
|
Ground Floor, Office Block A Bay Studio Business Park, Fabian Way, Swansea, Wales, United Kingdom, SA1 8QB
|
214
|
Ground Floor, Dorey Court, Admiral Park, St Peter Port Guernsey GY1 2HT
|
215
|
32 Rue du Champ de Tir, 44300 NANTES
|
216
|
1020-885 West Georgia Street, Vancouver BC, V6C3E8
|
217
|
11/F, J46 of Room1101,Nansha Financial Mansion, No.171 Haibin Road, Nansha Area, Guangzhou, China
|
218
|
Rahejas, 4th Floor, Corner of Main Avenue & V.P Road, Santacruz (West) Mumbai - 400 054
|
219
|
717 Fifth Avenue, New York, NY 10022
|
220
|
10 rue Jean Jaurès BP Q5 Noumea 98845 Nouvelle Calédonie
|
221
|
15 rue Guynemer BP 412 Noumea 98845 Nouvelle Calédonie
|
222
|
Herrengasse 1-3, 1010 Wien, Austria
|
223
|
2156 Horse Prairie Drive, Henderson NV 89052 United States
|
224
|
2 North Jackson Street, Suite 605, Montgomery AL, 36104 United States
|
225
|
2222 Grand Avenue, Des Moines IA 50312 United States
|
226
|
c/o The Corporation Trust Company, 100 S. 5th Street-Suite 1075 Minneapolis MN 55401, United States
|
227
|
545 Washington Blvd., 11th Floor Jersey City NJ 07310 United States
|
38
|
Non-statutory accounts
|
HSBC Holdings plc
|
297
|
Shareholder information
|
|
|
Page
|
Fourth interim dividend for 2017
|
|
Interim dividends for 2017
|
|
2017 Annual General Meeting
|
|
Earnings Releases and Interim Results
|
|
Shareholder enquiries and communications
|
|
Stock symbols
|
|
Investor relations
|
|
Where more information about HSBC is available
|
|
Taxation of shares and dividends
|
|
Information about the enforceability of judgements made in the US
|
|
Exchange controls and other limitations affecting equity security
holders
|
302
|
Dividends on the ordinary shares of HSBC Holdings
|
302
|
American Depositary Shares
|
303
|
Nature of trading market
|
303
|
Memorandum and Articles of Association
|
304
|
History and development of HSBC
|
304
|
Differences in HSBC Holdings/New York Stock Exchange corporate
governance practices
|
304
|
Glossary of accounting terms and US equivalents
|
|
2017 HSBC 20-F reconciliation table
|
|
Abbreviations
|
309
|
Fourth interim dividend for 2017
|
|
Footnote
|
|
Announcement
|
|
20 February 2018
|
Shares quoted ex-dividend in London, Hong Kong, Paris and Bermuda and American Depositary Shares (‘ADS’) quoted ex-dividend
in New York |
|
22 February 2018
|
Record date – London, Hong Kong, New York, Paris, Bermuda
|
1
|
23 February 2018
|
Mailing of
Annual Report and Accounts 2017
and/or
Strategic Report 2017
and dividend documentation
|
|
7 March 2018
|
Final date for receipt by registrars of forms of election, Investor Centre electronic instructions and revocations of standing instructions for scrip dividends
|
|
22 March 2018
|
Exchange rate determined for payment of dividends in sterling and Hong Kong dollars
|
|
26 March 2018
|
Payment date: dividend warrants, new share certificates or transaction advices and notional tax vouchers mailed and shares credited to stock accounts in CREST
|
|
6 April 2018
|
1
|
Removals to and from the Overseas Branch register of shareholders in Hong Kong will not be permitted on this date.
|
Interim dividends for 2018
|
2017 Annual General Meeting
|
Earnings Releases and Interim Results
|
298
|
HSBC Holdings plc
|
Principal Register:
|
|
Hong Kong Overseas Branch Register:
|
|
Bermuda Overseas Branch Register:
|
|
|
|
|
|
Computershare Investor Services PLC
|
|
Computershare Hong Kong Investor
|
|
Investors Relations Team
|
The Pavilions
|
|
Services Limited
|
|
HSBC Bank Bermuda Limited
|
Bridgwater Road
|
|
Rooms 1712-1716, 17th
Floor
|
|
6 Front Street
|
Bristol BS99 6ZZ
|
|
Hopewell Centre
|
|
Hamilton HM 11
|
United Kingdom
|
|
183 Queen’s Road East
|
|
Bermuda
|
Telephone: +44 (0) 370 702 0137
|
|
Hong Kong
|
|
Telephone: +1 441 299 6737
|
Email via website:
|
|
Telephone: +852 2862 8555
|
|
Email: hbbm.shareholder.services@hsbc.bm
|
www.investorcentre.co.uk/contactus
|
|
Email: hsbc.ecom@computershare.com.hk
|
|
|
|
|
|
|
|
Investor Centre:
|
|
Investor Centre:
|
|
Investor Centre:
|
www.investorcentre.co.uk
|
|
www.investorcentre.com/hk
|
|
www.investorcentre.com/bm
|
The Bank of New York Mellon
|
Shareowner Services
|
PO Box 505000
|
Louisville, KY 40233-5000
|
USA
|
Telephone (US): +1 877 283 5786
|
Telephone (International): +1 201 680 6825
|
Email: shrrelations@cpushareownerservices.com
|
Website: www.mybnymdr.com
|
CACEIS Corporate Trust
|
14, rue Rouget de Lisle
|
92130 Issy-Les-Moulineaux
|
France
|
Telephone: +33 1 57 78 34 28
|
Email: ct-service-ost@caceis.com
|
Website: www.caceis.com
|
For those in Europe, the Middle East and Africa:
|
For those in Asia:
|
For those in the Americas:
|
Global Communications
|
Communications (Asia)
|
US Communications
|
HSBC Holdings plc
|
The Hongkong and Shanghai Banking
|
HSBC Bank USA, N.A.
|
8 Canada Square
|
Corporation Limited
|
1 West 39th Street, 9th Floor
|
London E14 5HQ
|
1 Queen’s Road Central
|
New York, NY 10018
|
United Kingdom
|
Hong Kong
|
USA
|
HSBC Holdings plc
|
299
|
Computershare Hong Kong Investor Services Limited
|
|
Computershare Investor Services PLC
|
Rooms 1712-1716, 17th Floor
|
|
The Pavilions
|
Hopewell Centre
|
|
Bridgwater Road
|
183 Queen’s Road East
|
|
Bristol BS99 6ZZ
|
Hong Kong
|
|
United Kingdom
|
Stock symbols
|
London Stock Exchange
|
HSBA
|
Euronext Paris
|
HSB
|
Hong Kong Stock Exchange
|
5
|
Bermuda Stock Exchange
|
HSBC.BH
|
New York Stock Exchange (ADS)
|
HSBC
|
|
|
Investor relations
|
Richard O’Connor, Global Head of Investor Relations
|
Hugh Pye, Head of Investor Relations, Asia-Pacific
|
HSBC Holdings plc
|
The Hongkong and Shanghai Banking
|
8 Canada Square
|
Corporation Limited
|
London E14 5HQ
|
1 Queen’s Road Central
|
United Kingdom
|
Hong Kong
|
Telephone: +44 (0) 20 7991 6590
|
Telephone: 852 2822 4908
|
Email: investorrelations@hsbc.com
|
|
Where more information about HSBC is available
|
300
|
HSBC Holdings plc
|
Taxation of shares and dividends
|
HSBC Holdings plc
|
301
|
Information about the enforceability of
judgments made in the US
|
•
|
civil liabilities under US securities laws in original actions; or
|
•
|
judgments of US courts based upon these civil liability provisions.
|
Exchange controls and other limitations
affecting equity security holders
|
Dividends on the ordinary shares of
HSBC Holdings
|
302
|
HSBC Holdings plc
|
|
|
First
interim
|
|
Second
interim
|
|
Third
interim
|
|
Fourth
interim
1
|
|
Total
2
|
|
2017
|
$
|
0.10
|
|
0.10
|
|
0.10
|
|
|
|
||
|
£
|
0.079
|
|
0.076
|
|
0.076
|
|
|
|
||
|
HK$
|
0.780
|
|
0.781
|
|
0.780
|
|
|
|
||
2016
|
$
|
0.100
|
|
0.100
|
|
0.100
|
|
0.210
|
|
0.510
|
|
|
£
|
0.075
|
|
0.077
|
|
0.080
|
|
0.171
|
|
0.403
|
|
|
HK$
|
0.776
|
|
0.776
|
|
0.776
|
|
1.628
|
|
3.956
|
|
2015
|
$
|
0.100
|
|
0.100
|
|
0.100
|
|
0.210
|
|
0.510
|
|
|
£
|
0.064
|
|
0.064
|
|
0.066
|
|
0.142
|
|
0.336
|
|
|
HK$
|
0.775
|
|
0.775
|
|
0.775
|
|
1.628
|
|
3.953
|
|
2014
|
$
|
0.100
|
|
0.100
|
|
0.100
|
|
0.200
|
|
0.500
|
|
|
£
|
0.059
|
|
0.062
|
|
0.064
|
|
0.128
|
|
0.313
|
|
|
HK$
|
0.775
|
|
0.777
|
|
0.776
|
|
1.551
|
|
3.879
|
|
2013
|
$
|
0.100
|
|
0.100
|
|
0.100
|
|
0.190
|
|
0.490
|
|
|
£
|
0.066
|
|
0.064
|
|
0.062
|
|
0.114
|
|
0.306
|
|
|
HK$
|
0.776
|
|
0.775
|
|
0.775
|
|
1.473
|
|
3.799
|
|
1
|
The fourth interim dividends have been translated into pounds sterling and Hong Kong dollars at the closing rate on 31 December. The fourth interim dividend for 2017 of $0.21 per ordinary share will be paid on 6 April 2018.
|
2
|
The above dividends declared are accounted for as disclosed in Note
8
on the Financial Statements.
|
American Depositary Shares
|
Nature of trading market
|
HSBC Holdings plc
|
303
|
High and low mid-market closing prices
|
||||||||||||||||||||
|
London
|
Hong Kong
|
New York
|
Paris
|
Bermuda
|
|||||||||||||||
|
$0.50 shares
|
|
$0.50 shares
|
|
ADSs
1
|
|
$0.50 shares
|
|
$0.50 shares
|
|
||||||||||
|
High
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
Low
|
|
|
pence
|
|
pence
|
|
HK$
|
|
HK$
|
|
$
|
|
$
|
|
euro
|
|
euro
|
|
$
|
|
$
|
|
2017
|
770
|
|
621
|
|
80.0
|
|
62.1
|
|
51.7
|
|
39.7
|
|
8.7
|
|
7.4
|
|
10.3
|
|
7.9
|
|
2016
|
680
|
|
416
|
|
65.8
|
|
45.8
|
|
43.0
|
|
29.3
|
|
8.0
|
|
5.1
|
|
8.1
|
|
5.8
|
|
2015
|
649
|
|
486
|
|
77.5
|
|
57.1
|
|
50.2
|
|
37.0
|
|
9.1
|
|
6.6
|
|
9.6
|
|
7.6
|
|
2014
|
681
|
|
589
|
|
86.1
|
|
72.2
|
|
56.0
|
|
46.5
|
|
8.4
|
|
7.1
|
|
11.0
|
|
9.4
|
|
2013
|
770
|
|
647
|
|
90.4
|
|
79.3
|
|
58.6
|
|
50.7
|
|
9.1
|
|
7.7
|
|
11.4
|
|
10.5
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
4th Quarter
|
769
|
|
725
|
|
80.0
|
|
75.1
|
|
51.7
|
|
48.1
|
|
8.7
|
|
8.2
|
|
10.3
|
|
9.6
|
|
3rd Quarter
|
770
|
|
708
|
|
79.4
|
|
72.7
|
|
50.8
|
|
46.4
|
|
8.6
|
|
7.9
|
|
9.9
|
|
8.7
|
|
2nd Quarter
|
716
|
|
621
|
|
72.8
|
|
62.1
|
|
46.5
|
|
39.7
|
|
8.1
|
|
7.4
|
|
8.8
|
|
7.9
|
|
1st Quarter
|
712
|
|
646
|
|
69.0
|
|
62.3
|
|
44.1
|
|
40.2
|
|
8.4
|
|
7.5
|
|
8.6
|
|
7.9
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
4th Quarter
|
680
|
|
588
|
|
65.8
|
|
57.5
|
|
43.0
|
|
37.0
|
|
8.0
|
|
6.7
|
|
8.1
|
|
7.5
|
|
3rd Quarter
|
589
|
|
462
|
|
60.0
|
|
46.8
|
|
38.7
|
|
30.0
|
|
6.9
|
|
5.4
|
|
7.6
|
|
6.0
|
|
2nd Quarter
|
472
|
|
416
|
|
52.9
|
|
45.8
|
|
34.4
|
|
29.3
|
|
6.0
|
|
5.1
|
|
6.7
|
|
5.8
|
|
1st Quarter
|
523
|
|
420
|
|
60.4
|
|
47.8
|
|
38.6
|
|
30.7
|
|
7.2
|
|
5.4
|
|
7.6
|
|
5.9
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
January
|
796
|
|
751
|
|
85.8
|
|
79.9
|
|
55.6
|
|
51.6
|
|
8.9
|
|
8.5
|
|
10.8
|
|
10.3
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December
|
769
|
|
725
|
|
80.0
|
|
76.1
|
|
51.7
|
|
48.5
|
|
8.7
|
|
8.2
|
|
10.3
|
|
9.6
|
|
November
|
745
|
|
730
|
|
78.0
|
|
75.1
|
|
49.8
|
|
48.1
|
|
8.5
|
|
8.2
|
|
9.9
|
|
9.6
|
|
October
|
763
|
|
734
|
|
78.6
|
|
76.0
|
|
50.6
|
|
48.7
|
|
8.5
|
|
8.3
|
|
9.9
|
|
9.8
|
|
September
|
750
|
|
708
|
|
76.7
|
|
74.2
|
|
49.4
|
|
47.5
|
|
8.4
|
|
7.9
|
|
9.9
|
|
9.5
|
|
August
|
770
|
|
734
|
|
79.4
|
|
73.8
|
|
50.8
|
|
47.2
|
|
8.6
|
|
8.0
|
|
9.9
|
|
9.5
|
|
July
|
757
|
|
712
|
|
78.5
|
|
72.7
|
|
50.1
|
|
46.4
|
|
8.5
|
|
8.1
|
|
9.8
|
|
8.7
|
|
Memorandum and Articles of Association
|
History and development of HSBC
|
2017
|
We became the first foreign bank to win permission for a majority-owned securities joint venture in mainland China.
|
2017
|
We returned a total of $3bn to shareholders through share buy-backs.
|
2017
|
We completed the wind-down of our US consumer and mortgage lending (‘CML’) run-off portfolio with asset sales of $7.0bn in 2017.
|
2017
|
Our five-year Deferred Prosecution Agreement with the US Department of Justice expired in December.
|
Differences in HSBC Holdings/New York Stock
Exchange corporate governance practices
|
304
|
HSBC Holdings plc
|
HSBC Holdings plc
|
305
|
Glossary of accounting terms and US equivalents
|
Accounting term
|
US equivalent or brief description
|
Accounts
|
Financial Statements
|
Articles of Association
|
Articles of incorporation
|
Called up share capital
|
Shares issued and fully paid
|
Creditors
|
Payables
|
Debtors
|
Receivables
|
Deferred tax
|
Deferred income tax
|
Finance lease
|
Capital lease
|
Freehold
|
Ownership with absolute rights in perpetuity
|
Interests in associates and joint ventures
|
Interests in entities over which we have significant influence or joint control, which are accounted for using the equity method
|
Loans and advances
|
Loans
|
Loan capital
|
Long-term debt
|
Nominal value
|
Par value
|
One-off
|
Non-recurring
|
Ordinary shares
|
Common stock
|
Overdraft
|
A line of credit, contractually repayable on demand unless a fixed-term has been agreed, established through a customer’s current account
|
Preference shares
|
Preferred stock
|
Premises
|
Property
|
Provisions
|
Liabilities of uncertain timing or amount
|
Share premium account
|
Additional paid-in capital
|
Shares in issue
|
Shares outstanding
|
Write-offs
|
Charge-offs
|
306
|
HSBC Holdings plc
|
HSBC Holdings plc
|
307
|
|
|||
Form 20-F Item Number and Caption
|
Location
|
Page
|
|
|
|
|
|
B. Significant Changes
|
Note 36 on the Financial Statements – Events after the balance sheet date
|
298
|
|
9. The Offer and Listing
|
|
|
|
A. Offer and Listing Details
|
Shareholder Information
|
300
|
|
B. Plan of Distribution
|
Not required for Annual Report
|
—
|
|
C. Markets
|
Shareholder Information
|
300
|
|
D. Selling Shareholders
|
Not required for Annual Report
|
—
|
|
E. Dilution
|
Not required for Annual Report
|
—
|
|
F. Expenses of the Issue
|
Not required for Annual Report
|
—
|
|
A. Share Capital
|
Not required for Annual Report
|
—
|
|
B. Memorandum and Articles of Association
|
Shareholder Information
|
304
|
|
C. Material Contracts
|
Report of the Directors: Directors’ Remuneration Report
|
189
|
|
D. Exchange Controls
|
Shareholder Information
|
302
|
|
E. Taxation
|
Shareholder Information
|
301
|
|
F. Dividends and Paying Agents
|
Not required for Annual Report
|
—
|
|
G. Statements by Experts
|
Not required for Annual Report
|
—
|
|
H. Documents on Display
|
Shareholder Information
|
300
|
|
I. Subsidiary Information
|
Not Applicable
|
—
|
|
11. Quantitative and Qualitative Disclosures About Market Risk
|
Report of the Directors: Financial Review–Risk–Market risk profile
|
150-156
|
|
|
Note 14 on the Financial Statements - Derivatives
|
253-255
|
|
|
Note 15 on the Financial Statements – Financial investment
|
255-256
|
|
12. Description of Securities Other than Equity Securities
|
|
|
|
A. Debt Securities
|
Not required for Annual Report
|
—
|
|
B. Warrants and Rights
|
Not required for Annual Report
|
—
|
|
C. Other Securities
|
Not required for Annual Report
|
—
|
|
D. American Depositary Shares
|
Shareholder Information
|
303
|
|
PART II
|
|
|
|
13. Defaults, Dividends Arrearages and Delinquencies
|
Not Applicable
|
—
|
|
14. Material Modifications to the Rights of Securities Holders and Use of Proceeds
|
Not Applicable
|
—
|
|
15. Controls and Procedures
|
Report of Independent Registered Public Accounting Firm to the Board of Directors and Shareholders of HSBC Holdings plc
|
210
|
|
|
Report of the Directors: Other information
|
79
|
|
|
|
|
|
16A. Audit Committee Financial Expert
|
Report of the Directors: Corporate Governance
|
174
|
|
16B. Code of Ethics
|
Shareholder Information
|
—
|
|
16C. Principal Accountant Fees and Services
|
Note 6 on the Financial Statements - Auditors’ remuneration
|
239
|
|
16D. Exemptions from the Listing Standards for Audit Committees
|
Not Applicable
|
—
|
|
16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
|
Report of the Directors: Corporate Governance
|
181
|
|
16F. Change in Registrant’s Certifying Accountant
|
Not Applicable
|
—
|
|
16G. Corporate Governance
|
Shareholder Information
|
304
|
|
PART III
|
|
|
|
17. Financial Statements
|
Not Applicable
|
—
|
|
18. Financial Statements
|
Financial Statements
|
211-297
|
|
19. Exhibits (including Certifications)
|
|
*
|
|
308
|
HSBC Holdings plc
|
Abbreviations
|
Currencies
|
|
CA$
|
Canadian dollar
|
EGP
|
Egyptian pound
|
€
|
Euro
|
HK$
|
Hong Kong dollar
|
MXN
|
Mexican peso
|
RMB
|
Chinese renminbi
|
SGD
|
Singapore dollar
|
$
|
United States dollar
|
A
|
|
ABS¹
|
Asset-backed security
|
ADR
|
American Depositary Receipt
|
ADS
|
American Depositary Share
|
AFS
|
Available for sale
|
AGM
|
Annual General Meeting
|
AIEA
|
Average interest-earning assets
|
ALCM
|
Asset, Liability and Capital Management
|
ALCO
|
Asset and Liability Management Committee
|
AML
|
Anti-money laundering
|
AML DPA
|
Five-year deferred prosecution agreement with the US Department of Justice, entered into in December 2012
|
APE
|
Annual Premium Equivalent
|
ASEAN
|
Association of Southeast Asian Nations
|
AT1
|
Additional tier 1
|
B
|
|
Barion
|
Barion Funding Limited, a term-funding vehicle
|
Basel Committee
|
Basel Committee on Banking Supervision
|
Basel II¹
|
2006 Basel Capital Accord
|
Basel III¹
|
Basel Committee’s reforms to strengthen global capital and liquidity rules
|
BBA
|
British Bankers’ Association
|
BEPS
|
The OECD Base Erosion and Profit Shifting initiative
|
BoCom
|
Bank of Communications Co., Limited, one of China’s largest banks
|
BoE
|
Bank of England
|
Bps¹
|
Basis points. One basis point is equal to one-hundredth of a percentage point
|
BRRD
|
Bank Recovery and Resolution Directive (EU)
|
BSA
|
Bank Secrecy Act (US)
|
BSM
|
Balance Sheet Management
|
BVI
|
British Virgin Islands
|
C
|
|
C&L
|
Credit and Lending
|
CCA
|
Consumer Credit Act (UK)
|
CAPM
|
Capital asset pricing model
|
CCAR
|
Federal Reserve Comprehensive Capital Analysis and Review
|
CCP
|
Central Counterparty
|
CDOs
|
Collateralised debt obligations
|
CDS¹
|
Credit default swap
|
CEA
|
Commodity Exchange Act (US)
|
CET1¹
|
Common equity tier 1
|
CFPB
|
Consumer Financial Protection Bureau
|
CGUs
|
Cash-generating units
|
CIUs
|
Collective investment undertakings
|
CMA
|
UK Competition and Markets Authority
|
CMB
|
Commercial Banking, a global business
|
CMC
|
Capital maintenance charge
|
CML¹
|
Consumer and Mortgage Lending (US)
|
CODM
|
Chief Operating Decision Maker
|
COSO
|
2013 Committee of the Sponsors of the Treadway Commission (US)
|
CP¹
|
Commercial paper
|
CRD¹
|
Capital Requirements Directive
|
CRR¹
|
Customer risk rating
|
CRR/CRD IV
|
Capital Requirements Regulation and Directive
|
|
|
CSA
|
Credit Support Annex
|
CSA
|
Credit Support Annex
|
CVA¹
|
Credit valuation adjustment
|
CVC
|
Conduct & Values Committee
|
D
|
|
Deferred Shares
|
Awards of deferred shares define the number of HSBC Holdings ordinary shares to which the employee will become entitled, generally between one and three years from the date of the award, and normally subject to the individual remaining in employment
|
DFAST
|
Dodd-Frank Act Stress Testing
|
Dodd-Frank
|
Dodd-Frank Wall Street Reform and Consumer Protection Act (US)
|
DoJ
|
US Department of Justice
|
DPF
|
Discretionary participation feature of insurance and investment contracts
|
DVA¹
|
Debit valuation adjustment
|
E
|
|
EAD¹
|
Exposure at default
|
EBA
|
European Banking Authority
|
EC
|
European Commission
|
ECB
|
European Central Bank
|
ECL
|
Expected credit losses
|
EL¹
|
Expected loss
|
ERISA
|
Employee Retirement Income Security Act of 1974 (US)
|
ESG
|
Environmental, Social and Governance
|
EU
|
European Union
|
Euribor
|
Euro interbank offered rate
|
EVE
|
Economic value of equity
|
F
|
|
FCA
|
Financial Conduct Authority (UK)
|
FCA Direction
|
Undertaking originally with the Financial Services Authority (subsequently with the Financial Conduct Authority) to comply with certain forward-looking obligations with respect to AML and sanctions requirements
|
FCR
|
Financial Crime Risk function
|
FDIA
|
Federal Deposit Insurance Act
|
FDIC
|
Federal Deposit Insurance Corporation
|
FFVA
|
Funding fair value adjustment estimation methodology on derivative contracts
|
Fintech
|
Financial technology
|
FPC
|
Financial Policy Committee (UK)
|
FRB
|
Federal Reserve Board (US)
|
FSB
|
Financial Stability Board
|
FSCS
|
Financial Services Compensation Scheme
|
FSMA
|
Financial Services and Markets Act 2000
|
FSVC
|
Financial System Vulnerabilities Committee
|
FTE
|
Full-time equivalent staff
|
FTSE
|
Financial Times – Stock Exchange index
|
FuM
|
Funds under management
|
FVOCI¹
|
Fair value through other comprehensive income
|
FVPL¹
|
Fair value through profit or loss
|
FX DPA
|
Three-year deferred prosecution agreement with the US Department of Justice, entered into in January 2018
|
G
|
|
GAAP
|
Generally accepted accounting principles
|
GAC
|
Group Audit Committee
|
GB&M
|
Global Banking and Markets, a global business
|
GCC
|
The Group Change Committee
|
GDP
|
Gross domestic product
|
GLB Act
|
Gramm-Leach-Bliley Act
|
GLCM
|
Global Liquidity and Cash Management
|
Global Markets
|
HSBC’s capital markets services in Global Banking and Markets
|
GMB
|
Group Management Board
|
GPB
|
Global Private Banking, a global business
|
309
|
HSBC Holdings plc
|
GPSP
|
Group Performance Share Plan
|
GRC
|
Group Risk Committee
|
Group
|
HSBC Holdings together with its subsidiary undertakings
|
GRRC
|
Group Reputational Risk Committee
|
G-SIB¹
|
Global systemically important bank
|
GSM
|
The Group’s Global Standards Manual
|
GTRF
|
Global Trade and Receivables Finance
|
H
|
|
Hang Seng Bank
|
Hang Seng Bank Limited, one of Hong Kong’s largest banks
|
HKEx
|
The Stock Exchange of Hong Kong Limited
|
HKMA
|
Hong Kong Monetary Authority
|
HMRC
|
HM Revenue and Customs
|
HNAH
|
HSBC North America Holdings Inc.
|
Holdings ALCO
|
HSBC Holdings Asset and Liability Management Committee
|
Hong Kong
|
Hong Kong Special Administrative Region of the People’s Republic of China
|
HQLA
|
High-quality liquid assets
|
HSBC
|
HSBC Holdings together with its subsidiary undertakings
|
HSBC Bank
|
HSBC Bank plc
|
HSBC Bank
Middle East |
HSBC Bank Middle East Limited
|
HSBC Bank USA
|
HSBC Bank USA, N.A., HSBC’s retail bank
in the US
|
HSBC Canada
|
The sub-group, HSBC Bank Canada, HSBC Trust Company Canada, HSBC Mortgage Corporation Canada and HSBC Securities Canada, consolidated for liquidity purposes
|
HSBC Colombia
|
HSBC Bank (Colombia) S.A.
|
HSBC Finance
|
HSBC Finance Corporation, the US consumer finance company (formerly Household International, Inc.)
|
HSBC France
|
HSBC’s French banking subsidiary, formerly CCF S.A.
|
HSBC Holdings
|
HSBC Holdings plc, the parent company of HSBC
|
HSBC Private Bank (Suisse)
|
HSBC Private Bank (Suisse) SA, HSBC’s private bank in Switzerland
|
HSBC USA
|
The sub-group, HSBC USA Inc (the holding company of HSBC Bank USA) and HSBC Bank USA, consolidated for liquidity purposes
|
HSI
|
HSBC Securities (USA) Inc.
|
HSSL
|
HSBC Securities Services (Luxembourg)
|
HTIE
|
HSBC International Trust Services (Ireland) Limited
|
HTM
|
Held to maturity
|
I
|
|
IA
|
Insurance Authority
|
IAS
|
International Accounting Standards
|
IASB
|
International Accounting Standards Board
|
ICAAP
|
Internal capital adequacy assessment process
|
IFRSs
|
International Financial Reporting Standards
|
IHC
|
Intermediate holding company
|
ILAAP
|
Individual liquidity adequacy assessment process
|
ILR
|
Inherent liquidity risk
|
Industrial Bank
|
Industrial Bank Co. Limited, a national joint-stock bank in mainland China in which Hang Seng Bank Limited has a shareholding
|
Investor Update
|
The Investor Update in June 2015
|
IRB¹
|
Internal ratings-based
|
IRRBB
|
Interest rate risk in the banking book
|
ISDA
|
International Swaps and Derivatives Association
|
K
|
|
KPMG
|
KPMG Audit Plc and its affiliates
|
L
|
|
LCR
|
Liquidity coverage ratio
|
LFRF
|
Liquidity and funding risk management framework
|
LGBT+
|
Lesbian, gay, bisexual and transgender. The plus sign denotes other non-mainstream groups on the spectrums of sexual orientation and gender identity
|
LGD¹
|
Loss given default
|
Libor
|
London interbank offered rate
|
LICs
|
Loan impairment charges and other credit risk provisions
|
LTI
|
Long-term incentive
|
LTV¹
|
Loan-to-value ratio
|
M
|
|
Madoff Securities
|
Bernard L. Madoff Investment Securities LLC
|
Mainland China
|
People’s Republic of China excluding Hong Kong
|
Malachite
|
Malachite Funding Limited, a term-funding vehicle
|
Mazarin
|
Mazarin Funding Limited, an asset-backed CP conduit
|
MBS
|
US mortgage-backed security
|
MENA
|
Middle East and North Africa
|
MOCs
|
Model Oversight Committees
|
Monoline
|
Monoline insurance company
|
MRT¹
|
Material risk taker
|
N
|
|
NGO
|
Non-governmental organisation
|
NII
|
Net interest income
|
NSFR
|
Net stable funding ratio
|
NYSE
|
New York Stock Exchange
|
O
|
|
OCC
|
Office of the Comptroller of the Currency (US)
|
OCI
|
Other comprehensive income
|
ORMF
|
Operational risk management framework
|
OTC¹
|
Over-the-counter
|
P
|
|
PD¹
|
Probability of default
|
Performance shares¹
|
Awards of HSBC Holdings ordinary shares under employee share plans that are subject to corporate performance conditions
|
Ping An
|
Ping An Insurance (Group) Company of China, Ltd, the second-largest life insurer in the PRC
|
POCI
|
Purchased or originated credit impaired financial assets
|
PPI
|
Payment protection insurance
|
PRA
|
Prudential Regulation Authority (UK)
|
PRC
|
People’s Republic of China
|
Principal plan
|
HSBC Bank (UK) Pension Scheme
|
PVIF
|
Present value of in-force long-term insurance business and long-term investment contracts with DPF
|
PwC
|
The member firms of the PwC network, including PricewaterhouseCoopers LLP
|
R
|
|
RAS
|
Risk appetite statement
|
RBWM
|
Retail Banking and Wealth Management, a global business
|
RC
|
The Regulatory Compliance sub-function
|
Repo¹
|
Sale and repurchase transaction
|
RRCS
|
Reputational Risk and Client Selection team
|
Reverse repo
|
Security purchased under commitments to sell
|
RMM
|
Risk Management Meeting of the Group Management Board
|
RNIV
|
Risk not in VaR
|
RoE
|
Return on equity
|
RoRWA
|
Return on risk-weighted assets
|
RoTE
|
Return on Tangible Equity
|
RQFII
|
Renminbi qualified foreign institutional investor
|
RRCS
|
Reputational Risk and Client Selection team
|
RWA¹
|
Risk-weighted asset
|
S
|
|
SBS
|
Security-based swap
|
SE¹
|
Structured entity
|
SEC
|
Securities and Exchange Commission (US)
|
ServCo group
|
Separately incorporated group of service companies planned in response to UK ring-fencing proposals
|
Sibor
|
Singapore Interbank Offered Rate
|
SIC
|
Securities investment conduit
|
SID
|
Senior Independent Director
|
SME
|
Small- and medium-sized enterprise
|
Solitaire
|
Solitaire Funding Limited, a special purpose entity managed by HSBC
|
SPE¹
|
Special purpose entity
|
SRR
|
A special resolution regime created by the Banking Act 2009, as amended
|
SSM
|
The EU’s Single Supervisory Mechanism
|
HSBC Holdings plc
|
310
|
T
|
|
T1
|
Tier 1
|
T2
|
Tier 2
|
TCFD¹
|
Task Force on Climate-related Financial Disclosures
|
TLAC¹
|
Total loss-absorbing capacity
|
TSR¹
|
Total shareholder return
|
U
|
|
UAE
|
United Arab Emirates
|
UK
|
United Kingdom
|
US
|
United States of America
|
US run-off portfolio
|
Includes our CML, vehicle finance and Taxpayer Financial Services businesses and insurance, commercial, corporate and treasury activities in HSBC Finance on an IFRSs management basis
|
V
|
|
VaR¹
|
Value at risk
|
VIU
|
Value in use
|
1
|
A full definition is included in the glossary to
the Annual Report and Accounts 2017
which is available at www.hsbc.com/investor-relations.
|
HSBC Holdings plc
|
|
Incorporated in England on 1 January 1959 with
|
limited liability under the UK Companies Act
|
Registered in England: number 617987
|
Registered Office and Group Head Office
|
|
8 Canada Square
|
London E14 5HQ
|
United Kingdom
|
Telephone: 44 020 7991 8888
|
Facsimile: 44 020 7992 4880
|
Web: www.hsbc.com
|
Registrars
|
|
Principal Register
|
Computershare Investor Services PLC
|
The Pavilions
|
Bridgwater Road
|
Bristol BS99 6ZZ
|
United Kingdom
|
Telephone: 44 0370 702 0137
|
Email: via website
|
Web: www.investorcentre.co.uk/contactus
|
|
Hong Kong Overseas Branch Register
|
Computershare Hong Kong Investor Services
|
Limited
|
Rooms 1712-1716, 17th floor
|
Hopewell Centre
|
183 Queen’s Road East
|
Hong Kong
|
Telephone: 852 2862 8555
|
Email: hsbc.ecom@computershare.com.hk
|
Web: www.investorcentre.com/hk
|
|
Bermuda Overseas Branch Register
|
Investor Relations Team
|
HSBC Bank Bermuda Limited
|
6 Front Street
|
Hamilton HM11
|
Bermuda
|
Telephone: 1 441 299 6737
|
Email: hbbm.shareholder.services@hsbc.bm
|
Web: www.investorcentre.com/bm
|
ADR Depositary
|
The Bank of New York Mellon
|
Shareowner Services
|
PO Box 505000
|
Louisville, KY 40233-5000
|
USA
|
Telephone (US): 1 877 283 5786
|
Telephone (International): 1 201 680 6825
|
Email: shrrelations@cpushareownerservices.com
|
Web: www.mybnymdr.com
|
Paying Agent (France)
|
CACEIS Corporate Trust
|
14, rue Rouget de Lisle
|
92130 Issy-Les-Moulineaux
|
France
|
Telephone: 33 1 57 78 34 28
|
Email: ct-service-ost@caceis.com
|
Web: www.caceis.com
|
311
|
HSBC Holdings plc
|
Stockbrokers
|
|
Goldman Sachs International
|
Peterborough Court
|
133 Fleet Street
|
London EC4A 2BB
|
United Kingdom
|
|
Credit Suisse Securities (Europe) Limited
|
1 Cabot Square
|
London E14 4QT
|
United Kingdom
|
|
HSBC Bank plc
|
8 Canada Square
|
London E14 5HQ
|
United Kingdom
|
312
|
HSBC Holdings plc
|
HSBC Holdings plc
|
313
|
|
|
|
|
|
|
HSBC Holdings plc
|
|
||
|
By:
|
/s/ Iain J Mackay
|
|
|
|
|
Name:
|
Iain J Mackay
|
|
|
|
Title:
|
Group Finance Director
|
|
|
314
|
HSBC Holdings plc
|
Exhibit 7.1
|
Computation of ratios of earnings to combined fixed charges (and preference share dividends)
|
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|
Footnotes
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
Profit before tax
|
|
17,167
|
|
7,112
|
|
18,867
|
|
18,680
|
|
22,565
|
|
– dividends received from associates
|
|
740
|
|
751
|
|
879
|
|
757
|
|
694
|
|
– share of profit in associates and joint ventures
|
|
(2,375
|
)
|
(2,354
|
)
|
(2,556
|
)
|
(2,532
|
)
|
(2,325
|
)
|
Fixed charges
|
|
15,594
|
|
15,063
|
|
17,250
|
|
19,667
|
|
19,238
|
|
– interest on deposits
|
|
6,790
|
|
8,127
|
|
10,846
|
|
12,581
|
|
11,874
|
|
– rental expense and other charges
|
1
|
8,804
|
|
6,936
|
|
6,404
|
|
7,086
|
|
7,364
|
|
Earnings
|
2
|
|
|
|
|
|
|||||
– excluding interest on deposits
|
|
24,336
|
|
12,445
|
|
23,594
|
|
23,991
|
|
28,298
|
|
– including interest on deposits
|
|
31,126
|
|
20,572
|
|
34,440
|
|
36,572
|
|
40,172
|
|
Preference share dividends
|
3
|
2,054
|
|
2,563
|
|
1,334
|
|
728
|
|
726
|
|
Combined fixed charges and preference share dividends
|
|
|
|
|
|
|
|
||||
– excluding interest on deposits
|
|
10,858
|
|
9,499
|
|
7,738
|
|
7,814
|
|
8,090
|
|
– including interest on deposits
|
|
17,648
|
|
17,626
|
|
18,584
|
|
20,395
|
|
19,964
|
|
1
|
Includes an estimate of the interest in rental expense, charges incurred in respect of subordinated liabilities and interest on preference shares.
|
2
|
Includes profit before tax, dividends received from associates and fixed charges, less share of profit in associates and joint ventures.
|
3
|
Dividends on preference shares and other equity instruments.
|
1.
|
I have reviewed this annual report on Form 20-F of HSBC Holdings plc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5.
|
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
Dated:
|
20 February 2018
|
|
/s/ Stuart T Gulliver
|
|
|
|
Stuart T Gulliver, Group Chief Executive
|
1.
|
I have reviewed this annual report on Form 20-F of HSBC Holdings plc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5.
|
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
Dated:
|
20 February 2018
|
|
/s/ Iain J Mackay
|
|
|
|
Iain J Mackay, Group Finance Director
|
Dated:
|
20 February 2018
|
|
/s/ Stuart T Gulliver
|
|
|
|
Stuart T Gulliver, Group Chief Executive
|
|
|
|
|
Dated:
|
20 February 2018
|
|
/s/ Iain J Mackay
|
|
|
|
Iain J Mackay, Group Finance Director
|
Consent of independent registered public accounting firm
|