1/3: HSBC Holdings 1H04 PT1

HSBC Holdings PLC 02 August 2004 HSBC Holdings PLC 2004 INTERIM RESULTS - HIGHLIGHTS •Operating income up 35 per cent to US$25,028 million (US$18,507 million in the first half of 2003). For the half year (excluding goodwill amortisation): •Operating profit before provisions up 41 per cent to US$12,685 million (US$9,017 million in the first half of 2003). •Group pre-tax profit up 49 per cent to US$10,251 million (US$6,879 million in the first half of 2003). •Attributable profit up 48 per cent to US$7,229 million (US$4,873 million in the first half of 2003). •Return on average invested capital of 16.5 per cent (14.2 per cent in the first half of 2003). •Earnings per share up 40 per cent to US$0.67 (US$0.48 in the first half of 2003). For the half year (as reported): •Operating profit before provisions up 41 per cent to US$11,802 million (US$8,385 million in the first half of 2003). •Group pre-tax profit up 53 per cent to US$9,368 million (US$6,112 million in the first half of 2003). •Attributable profit up 55 per cent to US$6,346 million (US$4,106 million in the first half of 2003). •Return on average shareholders' funds of 16.0 per cent (13.5 per cent in the first half of 2003). •Basic earnings per share up 41 per cent to US$0.58 (US$0.41 in the first half of 2003). Dividend and capital position: •Second interim dividend of US$0.13 per share, which, together with the first interim dividend of US$0.13 per share already paid, represents an increase of 8 per cent over the first interim dividend for 2003. •Tier 1 capital ratio of 9.3 per cent; total capital ratio of 12.4 per cent. Within this document, the Hong Kong Special Administrative Region of the People's Republic of China has been referred to as 'Hong Kong'. HSBC HOLDINGS REPORTS PRE-TAX PROFIT OF US$9,368 MILLION HSBC made a profit on ordinary activities before tax of US$9,368 million, a rise of US$3,256 million, or 53 per cent, over the same period in 2003. Household contributed US$1,900 million in the first half of the year compared with a contribution, from the date of acquisition, of US$536 million in 2003. Net interest income of US$15,106 million was US$3,885 million, or 35 per cent, higher than for the same period in 2003 mainly due to the additional three months' contribution from Household compared to the first half of 2003. On an underlying basis and at constant currency, net interest income increased by 4 per cent. Other operating income rose by US$2,636 million, or 36 per cent, to US$9,922 million over the same period in 2003. On an underlying basis and at constant currency, the increase was 15 per cent and reflected strong growth in fees and commissions across all customer groups as well as a strong performance within Global Markets. Operating expenses, excluding goodwill amortisation, of US$12,343 million were US$2,853 million, or 30 per cent, higher than in the first half of 2003. On an underlying basis and expressed in terms of constant currency, operating expenses increased by 8 per cent. HSBC's cost:income ratio, excluding goodwill amortisation, decreased to 49.3 per cent in the first half of 2004 from 51.3 per cent in the same period in 2003. The charge for bad and doubtful debts rose by US$429 million to US$2,803 million in the first half of 2004 when compared with the same period in 2003. There were two key drivers to this change. The increase included an additional quarter's charge from Household amounting to US$1,294 million. Offsetting this, there were substantially fewer large specific provisions required in the corporate sector, and the improving economic environment and outlook in both the US and Hong Kong generated lower requirements for both specific and general provisions, resulting in higher levels of recoveries and releases in both categories. Gains on disposal of investments of US$317 million were US$53 million higher than in the first half of 2003. The tier 1 capital and total capital ratios for the Group remained strong at 9.3 per cent and 12.4 per cent, respectively, at 30 June 2004. The Group's total assets at 30 June 2004 were US$1,154 billion, an increase of US$120 billion, or 12 per cent, since 31 December 2003. Geographical distribution of results Half-year to Half-year to Half-year to Figures in US$m 30Jun04 30Jun03 31Dec03 ------- ------- ------- Profit before tax (excluding goodwill amortisation) % % % Europe 3,067 29.8 2,380 34.7 2,482 33.1 Hong Kong 2,580 25.2 1,843 26.8 1,887 25.1 Rest of Asia-Pacific 973 9.5 753 10.9 673 8.9 North America 3,471 33.9 1,833 26.6 2,424 32.2 South America 160 1.6 70 1.0 56 0.7 10,251 100.0 6,879 100.0 7,522 100.0 Goodwill amortisation (883) (767) (818) Group profit before tax 9,368 6,112 6,704 Tax on profit on ordinary activities (2,368) (1,554) (1,566) Profit on ordinary activities after tax 7,000 4,558 5,138 Minority interests (654) (452) (470) Profit attributable 6,346 4,106 4,668 Profit attributable (excluding goodwill amortisation) 7,229 4,873 5,486 Distribution of results by customer group Half-year to Half-year to Half-year to Figures in US$m 30Jun04 30Jun03 31Dec03 ------- ------- ------- Profit/(loss) before tax (excluding goodwill amortisation) % % % Personal Financial Services 2,615 25.5 2,082 30.3 1,926 25.6 Consumer Finance^ 2,117 20.7 649 9.4 1,576 21.0 Total Personal Financial Services 4,732 46.2 2,731 39.7 3,502 46.6 Commercial Banking 2,191 21.4 1,647 23.9 1,511 20.1 Corporate, Investment Banking and Markets 2,764 27.0 2,237 32.5 2,206 29.3 Private Banking 345 3.4 268 3.9 295 3.9 Other 219 2.0 (4) - 8 0.1 Group profit before tax (excluding goodwill amortisation) 10,251 100.0 6,879 100.0 7,522 100.0 Goodwill amortisation (883) (767) (818) Group profit before tax 9,368 6,112 6,704 ^Comprises Household International's consumer finance business and the US residential mortgages acquired by HSBC Bank USA from Household International and its correspondents since December 2003. Comment by Sir John Bond, Group Chairman We delivered a solid performance in the first half of 2004. Indeed, the absolute level of profits was the highest we have achieved in a six-month period. Our results reflect sound underlying revenue growth, a disciplined management of costs while investing for the future, and improved productivity. They are also a measure of the progress we are making in harnessing the strengths of our business across all geographical regions and all our customer groups. We grew profit attributable to shareholders by 55 per cent to US$6.3 billion. Excluding the amortisation of goodwill, profit attributable, which is the basis used to benchmark dividend proposals, was US$7.2 billion, an increase of 48 per cent. This represents US$0.67 per share, an increase of 40 per cent over the first half of 2003. In line with the programme of dividends announced with our 2003 results, the Directors have approved a second interim dividend of US$0.13 per share which will be payable on 6 October 2004. This brings the total dividend declared to date to US$0.26 per share, an increase of 8 per cent against the dividend declared at the same stage last year. The background to our results was one of improving economic conditions in many of our most important markets compared with the first half of 2003, particularly in the US and Hong Kong. There was, thankfully, no repetition of the outbreak of SARS which had so severely affected a number of countries in Asia in the first half of 2003. Hong Kong's economy achieved a significantly higher rate of growth, buoyed by rising business and consumer confidence and by measures taken by the Chinese authorities to allow increased tourism from mainland China. Both the property market and employment levels improved. These factors in turn contributed to renewed activity in the stock market which encouraged greater investment flows, particularly from private investors. The US economy is expected to have achieved real GDP growth of around 5 per cent in the first six months of 2004. Employment levels began to rise after three years of decline. Over one million new jobs were created in the period as the full effects of earlier monetary and fiscal stimuli began to feed through. Rising property prices and tax cuts helped consumer spending to continue growing at a healthy rate. The UK economy was resilient, with employment levels remaining strong. Interest rate rises during the first half appear not to have dampened consumer confidence. Against this background, we continued to invest in the future of HSBC and implementation of our new five-year strategic plan is well under way. In the first six months of 2004, we have taken a number of significant initiatives in line with the plan. We have started to reorganise our business in the UK to improve productivity and customer contact. Some of the measures we are taking in the UK are painful but they are essential, and there are already signs that they are yielding results in terms of business growth. Meanwhile, our creation of 1,000 new customer-facing roles will strengthen the service levels that we want HSBC to be known for. Elsewhere, we have expanded our network of branches in Asia and, on 24 June, we confirmed that The Hongkong and Shanghai Banking Corporation Limited is in discussions to acquire 19.9 per cent of Bank of Communications in China. Those discussions have gone well and we have now reached agreement in principle on the terms of our investment. We expect to make a further announcement shortly. We have deployed a growing amount of work internationally through the further development of our Group Service Centres. We have upgraded and expanded through selective recruitment our markets and investment banking capabilities. Above all, we are reconfiguring our business in response to the transforming effects which technology has on our relationship with our customers. We made good progress in all customer groups during this half-year. It is particularly pleasing to note that we have achieved strong organic growth in many of our established markets which have not benefited from our acquisition activity over the past few years. For example, we increased pre-tax profits in the Middle East by 27 per cent to US$159 million and in India by 36 per cent to US$98 million. In Hong Kong, fees and commissions rose by 40 per cent to reach US$904 million. This represents compound annual growth of 16 per cent since the first half of 1999. Personal Financial Services ('PFS') Our priority in PFS is to meet the financial needs of our customers in an efficient and informed way so that we build and retain strong, valued relationships with them. During the first half of the year, we continued to grow our customer base profitably, with increasing numbers of customers choosing to access us online. The progressive expansion of our customer relationship management systems, the deployment of technologies and techniques from Household and the roll-out of segmentation models all contributed to increased sales. In May, we gained our one-millionth HSBC Premier customer, with cross-sales to this, our most valuable customer segment, remaining very strong. The improved economic environment, combined with collaborative initiatives between PFS and Household, has allowed us to expand profitably our personal credit business. At the same time, improved stock market sentiment and rising equity prices reinvigorated retail interest in investment products. •In the UK, we achieved record mortgage sales through our 'One great rate' campaign, which allowed customers to choose between a fixed or variable rate mortgage offered at the same price. This led to an 18 per cent growth in mortgage balances. Last month, Moneyfacts named HSBC the best value mortgage lender in the UK. Also in the UK, we achieved strong growth in current accounts and, through more effective marketing, in savings, personal lending and credit card balances. Our fee income benefited from increased sales of repayment protection products. •First Direct in the UK acquired more current account customers than any other direct bank in the first half of the year and it remains the country's top bank for service and customer recommendation. •In Hong Kong, sales of unit trusts and capital-protected investment products reached record levels. Retail brokerage flows were also strong in Hong Kong and in Canada. In insurance, HSBC led the market in new regular premium life sales in the first quarter of 2004, with a market share of 24.9 per cent. Insurance income in total grew by 50 per cent, or US$71 million, over the same period in 2003. We also benefited from an improved personal credit environment leading to lower provisioning requirements. •In Hong Kong, a mature credit card market, we concentrated on card usage and, as a result, spending on HSBC-issued cards grew by 43 per cent. •With the launch of HSBC Premier in April 2004, Mexico became the 32nd country to offer this service. Deposit growth has accelerated with current account balances up 15 per cent to US$5.5 billion since June 2003. Acquisitions in the insurance and pensions businesses in the second half of 2003 also contributed to the overall strong revenue growth within our PFS franchise. HSBC Mexico's market share of international remittances from the US has increased substantially and collaborative efforts with Household effectively position us to further capitalise on this high growth market. •Our Middle East business has refocused its sales activities and this has resulted in good all-round growth, particularly in the cards business where the base has increased by 35 per cent. The June launch of HSBC Amanah as the dedicated brand for our Shariah-compliant products and services is being well received in the Middle East as well as in Indonesia, Malaysia, Singapore, the UK and the US. •In South America, the integration of the Losango consumer finance business acquired at the end of 2003 has progressed well. The combined customer base and enhanced capabilities have resulted in significantly increased personal business in the region. •We continue to innovate for the benefit of our customers and to introduce new products and services to our key markets. Amongst our most recent initiatives are a new retirement service in France, and new insurance-linked, capital-protected investment products in Hong Kong. In the US, we have introduced free current account services and also launched our first marketing initiatives aimed specifically at the fast-growing Hispanic and Latino communities. Consumer Finance The integration of Household into HSBC is virtually complete. The potential we saw in providing wider access to Household's technology and marketing skills and from using its experience in consumer credit management and retail services in the rest of our Group is now being realised. The roll-out of Household's WHIRL credit card system will enable us to accelerate the geographical build up of cards in a number of countries. Household's experience in retail services was crucial in helping HSBC win the competitive tender for Marks and Spencer's financial services business in July. Household is also supporting the development of our consumer credit business in Mexico and Brazil by providing staff and access to its technology and collection processes. Driven by improved economic conditions and the benefits of integration with HSBC, Household's performance in the first half of 2004 was strong. •Compared with a year ago, Household achieved underlying growth in customer loans of 13 per cent despite increased competition in the sector. •Delinquency trends were positive across all products and maturities. •The combination of HSBC and Household has opened a 'near prime' real estate secured lending opportunity which offers continuing lending growth at attractive margins. •Funding synergies continue to afford Household access to wider sources of funds at competitive rates. Commercial Banking ('CMB') Our commercial banking customer base remains a core area of focus and development. During the first half of 2004, we expanded sales support covering this segment and made further progress in building cross-border business and referrals. We also enhanced our business internet banking service and invested further in customer relationship management systems and related marketing support. The results were encouraging. •Underlying revenue grew by 9 per cent, more than double the rate of cost growth, driven by higher fee and commission income as we expanded sales of trade finance, credit and insurance services. •Cross-border business referrals into China and between the US and Canada grew strongly. Two further regional cross-border initiatives - between the UK, France and Germany, and between Brazil and Argentina - were launched. •Supporting this growth, we added specialist Business Banking Centres in Hong Kong and relationship-managed more top tier customers through our Corporate Banking Centres in the UK, France and Canada. •Trade finance activity was particularly strong in the Middle East and Asia with significant growth recorded in our businesses in Japan, Malaysia and China. •We have grown business internet banking customer numbers by over 50 per cent since June 2003 and seen a significant increase in revenues. Internet banking transaction volumes increased in Mexico, and in the UK we achieved particular success in enrolling new customers. •Joint initiatives between Household's retail services business and HSBC's corporate customers generated a growing number of leads. New business was booked in Canada, the US, and in Brazil, where new business from the Losango acquisition is well ahead of expectations. Corporate, Investment Banking and Markets ('CIBM') The planned investment to upgrade the product and service capabilities of our CIBM businesses is on track. During the first half of 2004, over 700 people were recruited and our restructuring saw a similar number of staff departures. Some 90 per cent of planned senior hires have now been made. Growing revenues have helped to fund this investment. •In our Global Markets business, revenues were higher than in the first half of 2003. We added to our trading and sales capabilities in areas such as derivatives and structured products, contributing to the growth in revenues. New hires significantly enhanced our capabilities in convertibles, asset-backed securities, mortgage-backed securities and emerging market debt. Equities sales and trading, now integrated with our Global Markets business, was profitable in the first half on higher revenue, compared with a loss in the first half of 2003. •Corporate and Institutional Banking continued to invest in people and infrastructure, appointing new business heads in a number of key countries, upgrading client relationship managers to improve client servicing and enhancing management information systems. Improved economic conditions led to restructuring and refinancing activity internationally that allowed HSBC to recover provisions against impaired loans. •Within Global Transaction Banking our custody business has benefited significantly from strong market sentiment and investment flows across markets within Asia-Pacific. The custody and funds administration businesses of HSBC and Bank of Bermuda were integrated quickly and successfully. Major mandates won during the first half of 2004 included the outsourcing by Gartmore of its back office operation. •Our Debt Finance and Advisory business performed well. Worldwide, our share of international bond issuance rose to 4.5 per cent from 3.8 per cent in the same period in 2003. In Asia, we maintained our position as the leading arranger and underwriter. We made significant progress in Europe and the Americas, arranging major financing transactions for clients, including a US$11.8 billion multi-tranche financing for Network Rail and a US$1.5 billion issue for Petroleos Mexicanos (PEMEX). •Even at this early stage of the development of our Global Investment Banking advisory business there was an encouraging improvement in the scope of mandates awarded. Significant appointments included acting as financial adviser to Saudi Arabian Oil Co. on its acquisition of a stake in Showa Shell Sekiyu K.K. (Japan) from the Royal Dutch/Shell Group, and acting as joint global co-ordinator of Ping An Insurance Co.'s US$1.84 billion initial public offering, the largest IPO in Hong Kong in the period. Private Banking Private Banking achieved broadly based growth across the business. Revenue growth comfortably exceeded cost growth and contributed to a pre-tax profit of US$345 million which, adjusting for acquisitions and business transfers, represented an underlying increase of 29 per cent. The rebranded business, HSBC Private Bank, expanded its range of services in Singapore following the receipt of a wholesale banking licence in 2003. It also grew in Malaysia, where we established an onshore presence, and in Sweden and Greece where we opened representative offices. Good progress has been made in integrating Bank of Bermuda's Private Client Services business with HSBC's. As a result, HSBC Private Bank's Global Wealth Solutions business is now one of the world's largest international private trust and fiduciary administrators, operating from 23 locations. •Positive flows into the HSBC Private Bank Funds and our alternative investment capability have attracted US$3.8 billion of new assets since 30 June 2003. Total client assets invested in hedge funds increased to US$18 billion. •Strategic Investment Solutions has attracted US$610 million in client assets since its launch in July 2003, reflecting client demand for open architecture products. •Lending to clients, their families and related structures has grown by 30 per cent since 30 June 2003. Credit Quality One important aspect of the improving economic climate has been the favourable effect on credit quality, particularly in the US and Hong Kong. Improving levels of employment, steadily rising property prices and resilient consumer confidence are all key factors in our evaluation of portfolio provisioning requirements. As a result of our assessment of the current benign credit environment, and historic loss rates, some US$245 million of general provisions were released in North America and Hong Kong. In the UK, we paid considerable attention to our consumer portfolios given the level of sensitivity within these businesses to rises in either interest rates or unemployment. Although there is some evidence of deterioration, our experience of arrears, repossessions and losses has continued to compare favourably with industry averages. This reflects HSBC's long-standing traditions of lending conservatively and providing early support for customers who find themselves in difficulties. Corporate credit experience remained highly favourable compared with historical trends. Improved sentiment in the corporate sectors afforded further restructuring opportunities which allowed us to recover provisions as companies refinanced. There were no concentrations of industry or geographical exposures emerging in the first half of 2004 that were of significance in terms of credit risk exposure. Bank of Bermuda The acquisition of Bank of Bermuda was completed in February this year, and integration is proceeding well. We are delighted with the reaction of customers who see our investment as strengthening our capabilities in funds administration and trust services, as well as bringing additional products to an important commercial banking presence in Bermuda. The current trend in the fund management industry to offer an increasing number of alternative investment strategies is accelerating the move towards outsourcing fund administration. Our combined strengths have already been successful in attracting sizeable new mandates. Similarly, in supporting Bermuda's reinsurance industry, HSBC's capital strength is allowing Bank of Bermuda to expand its coverage of this important sector. The synergies we identified at the time of the acquisition are on track and we expect the integration process to be substantially completed by the end of 2004. Outlook When I described the outlook for our businesses on reporting our full year results for 2003, there were many questions and uncertainties. How sustainable were the early signs of recovery in the United States and Hong Kong? Could China manage to slow its economy softly? When global interest rates began to rise, would the rate of change be gradual and predictable? Had consumer indebtedness in Western markets reached unmanageable levels? What would be the impact of the continued threat of international terrorism? Would the growing burden of regulation stifle innovation or investment? As our results for the first half of this year demonstrate, my colleagues have found opportunities within this challenging environment to deliver our strongest ever performance in a six-month period. Although trading conditions in our Global Markets business in the second quarter were less buoyant than in the first, there are no obvious signs of significant deterioration. The current operating environment remains favourable. However, the global imbalances which brought about such uncertainties remain. It would be unwise to relax, particularly when the last 18 months have seen a significant build-up of capital reserves within the financial services industry and while capital investment in the West has remained muted. The risk of market disruption rises as financial institutions use increasingly similar technology to manage risk. The possibility of volatility also increases as the investment sector becomes more highly geared in search of better returns. We remain focused on these issues. Our strength lies in the broad diversification of our revenues by geography and by customer group. It also rests on delivering the revenue growth and cost control objectives of our current strategic plan. That is the challenge before us now. I know that my colleagues around the world, talented and industrious as they are, are committed to meeting it. Financial Overview 30Jun03 31Dec03 Half-year to 30Jun04 US$m US$m US$m £m HK$m For the half-year (excluding goodwill amortisation) 6,879 7,522 Profit before tax 10,251 5,628 79,825 4,873 5,486 Profit attributable to shareholders 7,229 3,969 56,292 For the half-year (as reported) 6,112 6,704 Profit before tax 9,368 5,143 72,949 4,106 4,668 Profit attributable to shareholders 6,346 3,484 49,416 2,589 3,943 Dividends 2,853 1,566 22,216 At period-end 69,467 74,473 Shareholders' funds^ 79,259 43,672 618,220 66,881 74,042 Capital resources 81,075 44,672 632,385 623,318 643,556 Customer accounts and deposits by banks 732,338 403,518 5,712,237 981,866 1,034,216 Total assets^ 1,153,932 635,817 9,000,670 569,613 618,662 Risk-weighted assets 655,695 361,288 5,114,421 US$ US$ Per share US$ £ HK$ 0.48 0.51 Earnings (excluding goodwill amortisation) 0.67 0.37 5.22 0.41 0.43 Basic earnings 0.58 0.32 4.52 0.40 0.43 Diluted earnings 0.58 0.32 4.52 0.24 0.36 Dividends^^ 0.26 0.14 2.03 6.41 6.79 Net asset value^ 7.19 3.96 56.08 Share information 10,841 10,960 US$0.50 ordinary shares in issue (million) 11,026 US$128 US$172 Market capitalisation (billion) US$165 £7.16 £8.78 Closing market price per share £8.20 Total shareholder return to 30Jun04^^^ HSBC Benchmark - over 1 year 121 112 - since 1 January 2004 96 101 ^The figures for June 2003 have been restated to reflect the adoption of Urgent Issues Task Force Abstracts 37 'Purchases and sales of own shares' and 38 'Accounting for ESOP Trusts', details of which are set out in Note 1 on page 17. ^^The second interim dividend of US$0.13 per share is translated at the closing rate on 30 June 2004 (see Note 8 on page 22). Where required, this dividend will be converted into sterling or Hong Kong dollars at the exchange rates on 27 September 2004 (see Note 2 on page 17). ^^^Total shareholder return (TSR) is as defined in the Annual Report and Accounts 2003 on page 217. 30Jun03 31Dec03 Half-year to 30Jun04 Performance ratios (%) Excluding goodwill amortisation 14.2 13.3 Return on average invested capital^ 16.5 25.0 24.4 Return on average net tangible equity^^,^^^ 28.1 1.23 1.19 Post-tax return on average tangible assets^^^ 1.46 2.17 1.99 Post-tax return on average risk-weighted assets 2.49 On a reported basis 13.5 12.6 Return on average shareholders' funds^^^ 16.0 1.03 1.00 Post-tax return on average total assets^^^ 1.26 1.86 1.71 Post-tax return on average risk-weighted assets 2.21 Efficiency and revenue mix ratios 51.3 51.4 Cost:income ratio (excluding goodwill amortisation) 49.3 As a percentage of total operating income: 60.6 63.7 - net interest income 60.4 39.4 36.3 - other operating income 39.6 25.3 25.3 - net fees and commissions 25.4 6.8 4.1 - dealing profits 5.5 Capital ratios 8.5 8.9 - tier 1 capital 9.3 11.7 12.0 - total capital 12.4 ^Return on invested capital is based on attributable profit excluding goodwill amortisation adjusted for depreciation attributable to revaluation surpluses. Average invested capital is measured as shareholders' funds after adding back goodwill amortised and goodwill previously written-off directly to reserves and after deducting property revaluation reserves. This measure reflects capital initially invested and subsequent profit (excluding goodwill amortisation). ^^Attributable profit excluding goodwill amortisation divided by average shareholders' funds after deduction of average purchased goodwill. ^^^The figures for June 2003 have been restated to reflect the adoption of Urgent Issues Task Force Abstracts 37 'Purchases and sales of own shares' and 38 'Accounting for ESOP Trusts', details of which are set out in Note 1 on page 17. Consolidated Profit and Loss Account 30Jun03 31Dec03 Half-year to 30Jun04 US$m US$m US$m £m HK$m 18,206 21,762 Interest receivable 23,478 12,889 182,823 (6,985) (7,385) Interest payable (8,372) (4,596) (65,193) 11,221 14,377 Net interest income 15,106 8,293 117,630 7,286 8,188 Other operating income 9,922 5,447 77,263 18,507 22,565 Operating income 25,028 13,740 194,893 Operating expenses excluding goodwill (9,490) (11,592) amortisation (12,343) (6,776) (96,115) (632) (818) Goodwill amortisation (883) (485) (6,876) 8,385 10,155 Operating profit before provisions 11,802 6,479 91,902 (2,374) (3,719) Provisions for bad and doubtful debts (2,803) (1,539) (21,827) Provisions for contingent liabilities and (56) 12 commitments (109) (60) (849) (60) (46) Amounts written off fixed asset investments 16 9 125 5,895 6,402 Operating profit 8,906 4,889 69,351 (124) 8 Share of operating profit/(loss) in joint ventures 4 2 31 92 129 Share of operating profit in associates 119 65 927 Gains/(losses) on disposal of: 264 187 - investments 317 175 2,469 (15) (22) - tangible fixed assets 22 12 171 6,112 6,704 Profit on ordinary activities before tax 9,368 5,143 72,949 (1,554) (1,566) Tax on profit on ordinary activities (2,368) (1,300) (18,440) 4,558 5,138 Profit on ordinary activities after tax 7,000 3,843 54,509 Minority interests: (261) (226) - equity (330) (181) (2,570) (191) (244) - non-equity (324) (178) (2,523) 4,106 4,668 Profit attributable to shareholders 6,346 3,484 49,416 (2,589) (3,943) Dividends (2,853) (1,566) (22,216) 1,517 725 Retained profit for the period 3,493 1,918 27,200 Consolidated Balance Sheet At 30Jun03^ At 31Dec03 At 30Jun04 US$m US$m US$m £m HK$m ASSETS 9,509 7,661 Cash and balances at central banks 10,103 5,567 78,803 Items in the course of collection 8,706 6,628 from other banks 8,641 4,761 67,400 21,348 20,391 Treasury bills and other eligible bills 30,525 16,819 238,095 Hong Kong Government certificates 9,977 10,987 of indebtedness 10,984 6,052 85,674 116,012 117,173 Loans and advances to banks 140,188 77,244 1,093,466 503,625 528,977 Loans and advances to customers 594,875 327,776 4,640,025 189,991 205,722 Debt securities 225,349 124,167 1,757,722 11,764 12,879 Equity shares 14,048 7,740 109,574 85 10 Interests in joint ventures 10 6 78 1,177 1,263 Interests in associates 1,411 777 11,006 683 690 Other participating interests 867 478 6,763 26,786 28,640 Goodwill and intangible assets 28,029 15,444 218,626 14,548 15,748 Tangible fixed assets 16,922 9,324 131,992 56,522 63,128 Other assets 57,109 31,468 445,452 11,133 14,319 Prepayments and accrued income 14,871 8,194 115,994 981,866 1,034,216 Total assets 1,153,932 635,817 9,000,670 LIABILITIES Hong Kong currency notes in 9,977 10,987 circulation 10,984 6,052 85,674 75,771 70,426 Deposits by banks 97,307 53,616 758,995 547,547 573,130 Customer accounts 635,031 349,902 4,953,242 Items in the course of transmission to 5,965 4,383 other banks 6,923 3,815 53,999 144,502 153,562 Debt securities in issue 164,760 90,783 1,285,128 83,874 94,669 Other liabilities 106,120 58,472 827,738 9,363 13,760 Accruals and deferred income 12,073 6,652 94,169 Provisions for liabilities and charges 1,373 1,670 - deferred taxation 1,908 1,051 14,882 5,531 5,078 - other provisions 5,237 2,886 40,849 Subordinated liabilities 3,559 3,617 - undated loan capital 3,617 1,993 28,213 17,189 17,580 - dated loan capital 18,258 10,060 142,412 Minority interests 2,193 2,162 - equity 2,325 1,281 18,135 5,555 8,719 - non-equity 10,130 5,582 79,014 5,421 5,481 Called up share capital 5,513 3,038 43,001 64,046 68,992 Reserves 73,746 40,634 575,219 69,467 74,473 Shareholders' funds 79,259 43,672 618,220 981,866 1,034,216 Total liabilities 1,153,932 635,817 9,000,670 ^The figures for June 2003 have been restated to reflect the adoption of Urgent Issues Task Force Abstracts 37 'Purchases and sales of own shares' and 38 'Accounting for ESOP Trusts', details of which are set out in Note 1 on page 17. Consolidated Cash Flow Statement Half-year to Half-year to Half-year to Figures in US$m 30Jun04 30Jun03^ 31Dec03 Net cash inflow from operating activities 32,292 14,481 8,194 Dividends received from associated undertakings 47 45 63 Returns on investments and servicing of finance: Interest paid on finance leases and similar hire purchase contracts (20) (18) (19) Interest paid on subordinated loan capital (385) (374) (508) Dividends paid to minority interests - equity (280) (317) (197) - non-equity (321) (243) (149) Net cash outflow from returns on investments and servicing of finance (1,006) (952) (873) Taxation paid (2,148) (1,100) (1,531) Capital expenditure and financial investments: Purchase of investment securities (182,179) (90,958) (127,238) Proceeds from sale and maturities of investment securities 170,358 87,630 118,469 Purchase of tangible fixed assets (1,125) (657) (1,324) Proceeds from sale of tangible fixed assets 202 259 87 Purchase of intangible assets - (87) - Net cash outflow from capital expenditure and financial investments (12,744) (3,813) (10,006) Acquisitions and disposals: Net cash outflow from acquisition of and increase in stake in subsidiary undertakings (1,176) (1,151) (986) Net cash inflow from disposal of subsidiary undertakings - - 556 Purchase of interest in associated undertakings and other participating interests (447) (40) (7) Proceeds from disposal of associated undertakings and other participating interests 152 2 1 Net cash outflow from acquisitions and disposals (1,471) (1,189) (436) Equity dividends paid (3,057) (2,625) (1,617) Net cash inflow/(outflow) before financing 11,913 4,847 (6,206) Financing: Issue of ordinary share capital 86 432 413 Net purchases and sales of own shares for market making purposes 16 (11) (127) Purchases of own shares to meet share awards and share option awards (429) (271) (30) Own shares released on vesting of share awards and exercise of share options 53 100 81 Net increase in non-equity minority interests 1,481 1,029 2,869 Subordinated loan capital issued 1,082 1,274 1,084 Subordinated loan capital repaid (356) (492) (972) Net cash inflow from financing 1,933 2,061 3,318 Increase/(decrease) in cash 13,846 6,908 (2,888) ^The figures for June 2003 have been restated to reflect the adoption of Urgent Issues Task Force Abstracts 37 'Purchases and sales of own shares' and 38 'Accounting for ESOP Trusts', details of which are set out in Note 1 on page 17. Other Primary Financial Statements Statement of total consolidated recognised gains and losses for the half-year to 30Jun03 31Dec03 30Jun04 US$m US$m US$m 4,106 4,668 Profit for the period attributable to shareholders 6,346 Unrealised surplus/(deficit) on revaluation of investment properties: (24) (4) - Subsidiaries 38 - (10) - Associates - Unrealised surplus/(deficit) on revaluation of land and buildings (excluding investment properties): (214) (78) - Subsidiaries 723 2,208 3,110 Exchange and other movements (789) 1,970 3,018 Total other recognised gains and losses (28) 6,076 7,686 Total recognised gains and losses for the period 6,318 Reconciliation of movements in consolidated shareholders' funds for the half-year to 30Jun03^ 31Dec03 30Jun04 US$m US$m US$m 4,106 4,668 Profit for the period attributable to shareholders 6,346 (2,589) (3,943) Dividends (2,853) 1,517 725 3,493 1,970 3,018 Other recognised gains and losses relating to the period (28) 447 415 New share capital subscribed, net of costs 86 Purchases of own shares to meet share awards and share (271) (30) option awards (429) 90 72 Own shares released on exercise of options 58 10 9 Amortisation of shares in restricted share plan 15 (11) (127) Net purchases and sales of own shares for market making purposes 16 Total net change in shareholders' funds arising from own (182) (76) shares adjustments (340) (17) (24) Reserve in respect of obligations under CCF share option (44) New share capital issued in connection with the acquisition 13,405 - of Household - Net reserve in respect of obligations under Household 112 (28) share options (5) Net reserve in respect of the equity component of Household 8.875 per cent Adjustable Conversion-Rate Equity Security 6 (3) Units (1) 444 979 Amounts arising on shares issued in lieu of dividends 1,625 17,702 5,006 Net addition to shareholders' funds 4,786 51,765 70,290 Shareholders' funds at beginning of period as reported 74,473 - (823) Prior period adjustment (as explained in Note 1) - 51,765 69,467 Shareholders' funds at beginning of period restated 74,473 69,467 74,473 Shareholders' funds at end of period 79,259 ^The figures for June 2003 have been restated to reflect the adoption of Urgent Issues Task Force Abstracts 37 'Purchases and sales of own shares' and 38 'Accounting for ESOP Trusts', details of which are set out in Note 1 on page 17. This information is provided by RNS The company news service from the London Stock Exchange

Companies

HSBC Holdings (HSBA)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today