Annual Financial Report - 11 of 54 | RNS | Ticker

Annual Financial Report - 11 of 54

RNS Announcement

RNS Number : 0692I

HSBC Holdings PLC

20 March 2015

· Operating expenses increased by US$946m due to higher costs associated with Regulatory Programmes and Compliance, an increase in Global Resourcing costs in India and mainland China and the 2013 release of a litigation provision in Asia. In addition, the UK bank levy charge of US$1.1bn in 2014 was higher than the charge of US$916m in 2013, primarily due to an increase in the rate of the levy. This was partly offset by a reduction in North America by the expiry of the TSAs relating to the sale of the CRS business.

Analysis by global business

HSBC profit/(loss) before tax and balance sheet data

	2014
	Retail Banking and Wealth Management US$m	Commercial Banking US$m	Global Banking and Markets US$m	Global Private Banking US$m	Other³⁹ US$m	Inter- segment elimination⁵⁵ US$m	Total US$m
Profit/(loss) before tax

Net interest income/(expense)	16,782	10,506	7,022	994	(501)	(98)	34,705

Net fee income/(expense)	6,668	4,738	3,560	1,056	(65)	−	15,957

Trading income/(expense) excluding net interest income	(28)	620	4,063	298	(100)	−	4,853
Net interest income/(expense) on trading activities	9	(2)	1,798	(4)	8	98	1,907

Net trading income/(expense)⁵⁰	(19)	618	5,861	294	(92)	98	6,760

Changes in fair value of long- term debt issued and related derivatives	−	−	−	−	508	−	508
Net income/(expense) from other financial instruments designated at fair value	1,675	288	12	(1)	(9)	−	1,965

Net income/(expense) from financial instruments designated at fair value	1,675	288	12	(1)	499	−	2,473
Gains less losses from financial investments	14	31	1,117	9	164	−	1,335
Dividend income	24	18	80	5	184	−	311
Net insurance premium income	10,570	1,296	5	50	−	−	11,921
Other operating income	719	248	124	33	6,176	(6,169)	1,131

Total operating income	36,433	17,743	17,781	2,440	6,365	(6,169)	74,593

Net insurance claims⁵⁶	(11,839)	(1,440)	(3)	(63)	−	−	(13,345)

Net operating income⁴	24,594	16,303	17,778	2,377	6,365	(6,169)	61,248

Loan impairment (charges)/ recoveries and other credit risk provisions	(1,819)	(1,675)	(365)	8	−	−	(3,851)

Net operating income	22,775	14,628	17,413	2,385	6,365	(6,169)	57,397

Employee expenses⁵⁷	(5,038)	(2,439)	(3,655)	(732)	(8,502)	−	(20,366)
Other operating expenses	(12,484)	(5,050)	(8,373)	(1,046)	(99)	6,169	(20,883)

Total operating expenses	(17,522)	(7,489)	(12,028)	(1,778)	(8,601)	6,169	(41,249)

Operating profit/(loss)	5,253	7,139	5,385	607	(2,236)	−	16,148

Share of profit in associates and joint ventures	398	1,605	504	19	6	−	2,532

Profit/(loss) before tax	5,651	8,744	5,889	626	(2,230)	−	18,680

	%	%	%	%	%		%

Share of HSBC's profit before tax	30.3	46.8	31.5	3.4	(12.0)		100.0
Cost efficiency ratio	71.2	45.9	67.7	74.8	135.1		67.3

Balance sheet data⁴⁰
	US$m	US$m	US$m	US$m	US$m		US$m
Loans and advances to customers (net)²⁷	359,744	313,999	254,463	44,102	2,352		974,660
Total assets	499,083	372,739	1,839,644	88,342	164,537	(330,206)	2,634,139
Customer accounts²⁷	581,421	363,654	319,121	85,465	981		1,350,642

	2013
	Retail Banking and Wealth Management US$m	Commercial Banking US$m	Global Banking and Markets US$m	Global Private Banking US$m	Other³⁹ US$m	Inter- segment elimination⁵⁵ US$m	Total US$m
Profit/(loss) before tax

Net interest income/(expense)	18,339	10,200	6,766	1,146	(737)	(175)	35,539

Net fee income	7,021	4,717	3,482	1,150	64	−	16,434

Trading income/(expense) excluding net interest income	689	649	4,953	390	(38)	−	6,643
Net interest income/(expense) on trading activities	(3)	−	1,827	4	44	175	2,047

Net trading income⁵⁰	686	649	6,780	394	6	175	8,690

Changes in fair value of long-term debt issued and related derivatives	−	-	-	-	(1,228)	-	(1,228)
Net income/(expense) from other financial instruments designated at fair value	1,638	332	599	4	(576)	(1)	1,996

Net income/(expense) from financial instruments designated at fair value	1,638	332	599	4	(1,804)	(1)	768
Gains less losses from financial investments	55	1	747	(3)	1,212	−	2,012
Dividend income	21	15	129	8	149	−	322
Net insurance premium income	10,543	1,375	6	16	−	−	11,940
Other operating income/(expense)	544	621	670	(239)	6,761	(5,725)	2,632

Total operating income	38,847	17,910	19,179	2,476	5,651	(5,726)	78,337

Net insurance claims⁵⁶	(12,107)	(1,545)	(3)	(37)	−	−	(13,692)

Net operating income⁴	26,740	16,365	19,176	2,439	5,651	(5,726)	64,645

Loan impairment charges and other credit risk provisions	(3,227)	(2,384)	(207)	(31)	−	−	(5,849)

Net operating income	23,513	13,981	18,969	2,408	5,651	(5,726)	58,796

Employee expenses⁵⁷	(5,219)	(2,327)	(3,549)	(776)	(7,325)	−	(19,196)
Other operating expenses	(12,029)	(4,722)	(6,411)	(1,453)	(471)	5,726	(19,360)

Total operating expenses	(17,248)	(7,049)	(9,960)	(2,229)	(7,796)	5,726	(38,556)

Operating profit/(loss)	6,265	6,932	9,009	179	(2,145)	−	20,240

Share of profit/(loss) in associates and joint ventures	384	1,509	432	14	(14)	−	2,325

Profit/(loss) before tax	6,649	8,441	9,441	193	(2,159)	−	22,565

	%	%	%	%	%		%

Share of HSBC's profit before tax	29.5	37.4	41.8	0.9	(9.6)		100.0
Cost efficiency ratio	64.5	43.1	51.9	91.4	138.0		59.6

Balance sheet data⁴⁰
	US$m	US$m	US$m	US$m	US$m		US$m
Loans and advances to customers (net)²⁷	375,086	297,852	272,473	44,224	2,454		992,089
Total assets	517,085	360,623	1,975,509	97,655	171,812	(451,366)	2,671,318
Customer accounts²⁷	579,994	354,298	328,800	96,770	1,435		1,361,297

For footnotes, see page 109.

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RNS metadata

Title: Annual Financial Report - 11 of 54
Time: 16:25:01
Date: 20 Mar 2015
Category: Results
ID: 0692I