Annual Financial Report - 11 of 54

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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