Annual Financial Report - 34 of 41

RNS Number : 8706D

HSBC Holdings PLC

30 March 2011

 



Profit/(loss) for the year

	2010
	Europe		Hong        Kong		Rest of        Asia-     Pacific		Middle          East		North America		Latin America		Intra-      HSBC       items		Total
	US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
Interest income ......................	17,550		5,102		6,432		2,003		16,781		11,590		(1,113)		58,345
Interest expense .....................	(6,300)		(856)		(2,604)		(636)		(4,342)		(5,279)		1,113		(18,904)
Net interest income ...............	11,250		4,246		3,828		1,367		12,439		6,311		-		39,441
Fee income ............................	8,334		3,460		2,399		737		4,524		2,366		(703)		21,117
Fee expense ...........................	(1,963)		(498)		(467)		(60)		(860)		(617)		703		(3,762)
Net fee income ......................	6,371		2,962		1,932		677		3,664		1,749		-		17,355
Trading income excluding  net interest income ...........	1,461		1,107		1,207		343		109		453		-		4,680
Net interest income on trading activities ............	1,402		205		411		27		205		280		-		2,530
Net trading income ................	2,863		1,312		1,618		370		314		733		-		7,210
Changes in fair value of long- term debt issued and related derivatives ..........................	(365)		(2)		(2)		-		111		-		-		(258)
Net income from other financial instruments designated at fair value .......	647		380		26		-		-		425		-		1,478
Net income from financial instruments designated at fair value ............................	282		378		24		-		111		425		-		1,220
Gains less losses from financial investments ........................	486		98		146		(3)		143		98		-		968
Dividend income ....................	20		30		1		7		42		12		-		112
Net earned insurance premiums ...........................................	4,067		4,332		448		-		245		2,054		-		11,146
Other operating income/ (expense) ...........................	2,117		1,606		1,598		(8)		233		141		(3,125)		2,562
Total operating income ......	27,456		14,964		9,595		2,410		17,191		11,523		(3,125)		80,014
Net insurance claims incurred and movement in liabilities to policyholders .................	(4,706)		(4,762)		(363)		-		(144)		(1,792)		-		(11,767)
Net operating income before loan impairment charges and other credit risk provisions .........................	22,750		10,202		9,232		2,410		17,047		9,731		(3,125)		68,247
Loan impairment charges and other credit risk provisions .	(3,020)		(114)		(439)		(627)		(8,295)		(1,544)		-		(14,039)
Net operating income .........	19,730		10,088		8,793		1,783		8,752		8,187		(3,125)		54,208
Employee compensation and benefits  .............................	(7,875)		(2,341)		(2,719)		(579)		(3,672)		(2,650)		-		(19,836)
General and administrative expenses .............................	(6,499)		(1,686)		(2,181)		(450)		(4,179)		(3,286)		3,125		(15,156)
Depreciation and impairment of property, plant and equipment	(719)		(237)		(189)		(42)		(288)		(238)		-		(1,713)
Amortisation and impairment of intangible assets .............	(352)		(167)		(54)		(7)		(183)		(220)		-		(983)
Total operating expenses ...	(15,445)		(4,431)		(5,143)		(1,078)		(8,322)		(6,394)		3,125		(37,688)
Operating profit .................	4,285		5,657		3,650		705		430		1,793		-		16,520
Share of profit in associates and joint ventures ...............	17		35		2,252		187		24		2		-		2,517
Profit before tax ..................	4,302		5,692		5,902		892		454		1,795		-		19,037
Tax expense ..........................	(1,006)		(987)		(962)		(138)		(1,180)		(573)		-		(4,846)
Profit/(loss) for the year ....	3,296		4,705		4,940		754		(726)		1,222		-		14,191

	2009
	Europe		Hong        Kong		Rest of         Asia-      Pacific		Middle          East		North    America		Latin    America		Intra-        HSBC        items		Total
	US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
Interest income ......................	20,283		5,327		5,877		2,260		19,526		10,091		(1,268)		62,096
Interest expense .....................	(8,015)		(1,132)		(2,338)		(775)		(5,856)		(4,518)		1,268		(21,366)
Net interest income ...............	12,268		4,195		3,539		1,485		13,670		5,573		-		40,730
Fee income ............................	8,576		3,099		1,972		682		5,496		2,230		(652)		21,403
Fee expense ...........................	(2,309)		(430)		(415)		(57)		(679)		(501)		652		(3,739)
Net fee income ......................	6,267		2,669		1,557		625		4,817		1,729		-		17,664
Trading income excluding  net interest income ...........	2,861		1,068		1,264		369		35		639		-		6,236
Net interest income on trading activities ............	2,598		157		342		25		296		209		-		3,627
Net trading income ................	5,459		1,225		1,606		394		331		848		-		9,863
Changes in fair value of long- term debt issued and related derivatives ..........................	(2,746)		(3)		(1)		-		(3,497)		-		-		(6,247)
Net income from other financial instruments designated at fair value .......	1,321		788		111		-		1		495		-		2,716
Net income/(expense) from financial instruments designated at fair value .......	(1,425)		785		110		-		(3,496)		495		-		(3,531)
Gains less losses from financial investments ........................	50		9		(19)		16		296		168		-		520
Dividend income ....................	29		28		2		3		53		11		-		126
Net earned insurance premiums ...........................................	4,223		3,674		365		-		309		1,900		-		10,471
Other operating income .........	2,262		1,274		1,238		71		566		133		(2,756)		2,788
Total operating income .........	29,133		13,859		8,398		2,594		16,546		10,857		(2,756)		78,631
Net insurance claims incurred and movement in liabilities to policyholders .................	(5,589)		(4,392)		(395)		-		(241)		(1,833)		-		(12,450)
Net operating income before loan impairment charges and other credit risk provisions ..........................	23,544		9,467		8,003		2,594		16,305		9,024		(2,756)		66,181
Loan impairment charges and other credit risk provisions .	(5,568)		(500)		(896)		(1,334)		(15,664)		(2,526)		-		(26,488)
Net operating income ............	17,976		8,967		7,107		1,260		641		6,498		(2,756)		39,693
Employee compensation and benefits  .............................	(7,174)		(2,102)		(2,363)		(545)		(4,085)		(2,199)		-		(18,468)
General and administrative expenses .............................	(5,775)		(1,502)		(1,872)		(419)		(3,794)		(2,786)		2,756		(13,392)
Depreciation and impairment of property, plant and equipment	(762)		(224)		(172)		(31)		(329)		(207)		-		(1,725)
Amortisation and impairment of intangible assets .............	(277)		(118)		(43)		(6)		(183)		(183)		-		(810)
Total operating expenses .......	(13,988)		(3,946)		(4,450)		(1,001)		(8,391)		(5,375)		2,756		(34,395)
Operating profit/(loss) ...........	3,988		5,021		2,657		259		(7,750)		1,123		-		5,298
Share of profit in associates and joint ventures ...............	21		8		1,543		196		12		1		-		1,781
Profit/(loss) before tax ...........	4,009		5,029		4,200		455		(7,738)		1,124		-		7,079
Tax income/(expense) ...........	(776)		(869)		(753)		(94)		2,285		(178)		-		(385)
Profit/(loss) for the year ........	3,233		4,160		3,447		361		(5,453)		946		-		6,694

Profit/(loss) for the year (continued)

	2008
	Europe		Hong        Kong		Rest of         Asia-      Pacific		Middle          East		North    America		Latin    America		Intra-        HSBC        items		Total
	US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
Interest income ......................	35,117		9,530		9,066		2,451		25,897		11,632		(2,392)		91,301
Interest expense .....................	(25,421)		(3,832)		(5,129)		(895)		(10,679)		(5,174)		2,392		(48,738)
Net interest income ...............	9,696		5,698		3,937		1,556		15,218		6,458		-		42,563
Fee income ............................	10,225		3,062		2,414		740		6,292		2,716		(685)		24,764
Fee expense ...........................	(2,733)		(482)		(547)		(49)		(1,065)		(549)		685		(4,740)
Net fee income ......................	7,492		2,580		1,867		691		5,227		2,167		-		20,024
Trading income/(expense) excluding net interest income ...........................................	1,691		856		1,443		380		(3,879)		356		-		847
Net interest income on trading activities ............	3,666		337		599		22		744		345		-		5,713
Net trading income/(expense)	5,357		1,193		2,042		402		(3,135)		701		-		6,560
Changes in fair value of long- term debt issued and related derivatives ..........................	2,939		3		1		-		3,736		-		-		6,679
Net income/(expense) from other financial instruments designated at fair value .......	(1,826)		(1,194)		(172)		-		1		364		-		(2,827)
Net income/(expense) from financial instruments designated at fair value .......	1,113		(1,191)		(171)		-		3,737		364		-		3,852
Gains less losses from financial investments ........................	418		(309)		24		8		(120)		176		-		197
Dividend income ....................	130		41		2		2		77		20		-		272
Net earned insurance premiums ...........................................	5,299		3,247		197		-		390		1,717		-		10,850
Gains on disposal of French regional banks ....................	2,445		-		-		-		-		-		-		2,445
Other operating income .........	2,096		817		1,055		9		23		300		(2,492)		1,808
Total operating income .........	34,046		12,076		8,953		2,668		21,417		11,903		(2,492)		88,571
Net insurance claims incurred and movement in liabilities to policyholders .................	(3,367)		(1,922)		28		-		(238)		(1,390)		-		(6,889)
Net operating income before loan impairment charges and other credit risk provisions	30,679		10,154		8,981		2,668		21,179		10,513		(2,492)		81,682
Loan impairment charges and other credit risk provisions .	(3,754)		(765)		(852)		(279)		(16,795)		(2,492)		-		(24,937)
Net operating income ............	26,925		9,389		8,129		2,389		4,384		8,021		(2,492)		56,745
Employee compensation and benefits ..............................	(8,551)		(2,069)		(2,475)		(544)		(4,609)		(2,544)		-		(20,792)
General and administrative expenses .............................	(6,428)		(1,562)		(2,037)		(384)		(4,282)		(3,059)		2,492		(15,260)
Depreciation and impairment of property, plant and equipment	(865)		(209)		(163)		(25)		(265)		(223)		-		(1,750)
Amortisation and impairment of intangible assets .............	(228)		(103)		(29)		(6)		(203)		(164)		-		(733)
Goodwill impairment ..............	-		-		-		-		(10,564)		-		-		(10,564)
Total operating expenses .......	(16,072)		(3,943)		(4,704)		(959)		(19,923)		(5,990)		2,492		(49,099)
Operating profit/(loss) ...........	10,853		5,446		3,425		1,430		(15,539)		2,031		-		7,646
Share of profit in associates and joint ventures ...............	16		15		1,297		316		11		6		-		1,661
Profit/(loss) before tax ...........	10,869		5,461		4,722		1,746		(15,528)		2,037		-		9,307
Tax income/(expense) ...........	(2,199)		(899)		(928)		(245)		1,715		(253)		-		(2,809)
Profit/(loss) for the year ........	8,670		4,562		3,794		1,501		(13,813)		1,784		-		6,498

Other information about the profit/(loss) for the year

	Europe		Hong        Kong		Rest of        Asia-     Pacific		Middle          East		North America		Latin America		Intra-      HSBC       items		Total
	US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
2010
Net operating income ............	19,730		10,088		8,793		1,783		8,752		8,187		(3,125)		54,208
External .............................	18,881		9,170		7,728		1,774		8,504		8,151		-		54,208
Inter-segment .....................	849		918		1,065		9		248		36		(3,125)		-
Profit/(loss) for the year includes the following significant non-cash items:
Depreciation, amortisation and impairment ..............	1,071		404		243		49		471		458		-		2,696
Loan impairment losses gross of recoveries and other credit risk provisions ......	3,303		169		615		684		8,476		1,812		-		15,059
Impairment of financial investments ....................	35		41		4		5		21		1		-		107
2009
Net operating income ............	17,976		8,967		7,107		1,260		641		6,498		(2,756)		39,693
External .............................	16,734		8,352		6,056		1,283		767		6,501		-		39,693
Inter-segment .....................	1,242		615		1,051		(23)		(126)		(3)		(2,756)		-
Profit/(loss) for the year includes the following significant non-cash items:
Depreciation, amortisation and impairment ..............	1,039		342		215		37		515		390		-		2,538
Loan impairment losses gross of recoveries and other credit risk provisions ......	5,833		534		1,028		1,361		15,757		2,865		-		27,378
Impairment of financial investments ....................	137		129		50		4		38		-		-		358
2008
Net operating income ............	26,925		9,389		8,129		2,389		4,384		8,021		(2,492)		56,745
External .............................	25,887		8,205		7,010		2,386		5,236		8,021		-		56,745
Inter-segment .....................	1,038		1,184		1,119		3		(852)		-		(2,492)		-
Profit/(loss) for the year includes the following significant non-cash items:
Depreciation, amortisation and impairment ..............	1,093		312		192		31		11,352		387		-		13,367
Loan impairment losses gross of recoveries and other credit risk provisions ......	4,050		803		960		309		16,892		2,757		-		25,771
Impairment of financial investments ....................	278		535		-		-		229		-		-		1,042

Performance ratios

	Europe		Hong        Kong		Rest of        Asia-     Pacific		Middle          East		North America		Latin America				Total
	%		%		%		%		%		%				%
2010
Share of HSBC's profit before tax .....................................	22.6		29.9		31.0		4.7		2.4		9.4				100.0
Cost efficiency ratio ..............	67.9		43.4		55.7		44.7		48.8		65.7				55.2
2009
Share of HSBC's profit/(loss) before tax ...........................	56.7		71.0		59.3		6.4		(109.3)		15.9				100.0
Cost efficiency ratio ..............	59.4		41.7		55.6		38.6		51.5		59.6				52.0
2008
Share of HSBC's profit/(loss) before tax ...........................	116.7		58.7		50.7		18.8		(166.8)		21.9				100.0
Cost efficiency ratio ..............	52.4		38.8		52.4		35.9		94.1		57.0				60.1

Balance sheet information

	Europe		Hong        Kong		Rest of        Asia-     Pacific		Middle          East		North America		Latin America		Intra-      HSBC       items		Total
	US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
At 31 December 2010
Loans and advances to customers (net) ..................	435,799		140,691		108,731		24,626		190,532		57,987		-		958,366
Interests in associates and joint ventures .....................	186		207		15,035		1,661		104		5		-		17,198
Total assets ............................	1,249,527		429,565		278,062		52,757		492,487		139,938		(187,647)		2,454,689
Customer accounts .................	491,563		297,484		158,155		33,511		158,486		88,526		-		1,227,725
Total liabilities .......................	1,189,996		422,101		246,989		45,379		459,301		123,655		(187,647)		2,299,774
Capital expenditure incurred1 .	865		836		168		46		774		788		-		3,477
At 31 December 2009
Loans and advances to customers (net) ..................	439,481		99,381		80,043		22,844		206,853		47,629		-		896,231
Interests in associates and joint ventures .....................	147		157		11,083		1,573		42		9		-		13,011
Total assets ............................	1,268,600		399,243		222,139		48,107		475,014		115,967		(164,618)		2,364,452
Customer accounts .................	495,019		275,441		133,999		32,529		149,157		72,889		-		1,159,034
Total liabilities .......................	1,213,907		384,912		203,243		42,325		447,530		101,492		(164,618)		2,228,791
Capital expenditure incurred1 .	983		290		159		102		658		540		-		2,732
At 31 December 2008
Loans and advances to customers (net) ..................	426,191		100,220		80,661		27,295		256,214		42,287		-		932,868
Interests in associates and joint ventures .....................	137		153		9,728		1,383		128		8		-		11,537
Total assets ............................	1,392,049		414,484		225,573		50,952		596,302		102,946		(254,841)		2,527,465
Customer accounts .................	502,476		250,517		124,194		35,165		143,532		59,443		-		1,115,327
Total liabilities .......................	1,361,960		400,637		210,478		45,416		571,657		91,929		(254,841)		2,427,236
Capital expenditure incurred1 .	2,078		440		426		85		726		617		-		4,372

1  Expenditure incurred on property, plant and equipment and other intangible assets. Excludes assets acquired as part of business combinations and goodwill.

Other financial information

Net operating income by customer group and global business

	Personal   Financial     Services	Commercial      Banking			Global    Banking & Markets		Global       Private    Banking		Other1		Intra-       HSBC          items		Total
	US$m		US$m		US$m		US$m		US$m		US$m		US$m
2010
Net operating income ............	21,317		12,029		18,957		3,105		4,663		(5,863)		54,208
External .............................	19,529		11,419		22,090		2,194		(1,024)		-		54,208
Internal ..............................	1,788		610		(3,133)		911		5,687		(5,863)		-
2009
Net operating income ............	15,513		9,571		18,652		2,984		(2,031)		(4,996)		39,693
External .............................	13,804		9,285		21,383		2,275		(7,054)		-		39,693
Internal ..............................	1,709		286		(2,731)		709		5,023		(4,996)		-
2008
Net operating income ............	20,269		13,144		12,047		3,563		12,290		(4,568)		56,745
External .............................	15,023		13,080		17,739		2,231		8,672		-		56,745
Internal ..............................	5,246		64		(5,692)		1,332		3,618		(4,568)		-

1  The main items reported in the 'Other' category are certain property activities, unallocated investment activities, centrally held investment companies, movements in fair value of own debt and HSBC's holding company and financing operations. The 'Other' category also includes gains and losses on the disposal of certain significant subsidiaries or business units.

Information by country

	2010				2009				2008
	External net   operating       income1		Non-      current         assets2		External net     operating        income1		Non-        current           assets2		External net     operating        income1		Non-        current           assets2
	US$m		US$m		US$m		US$m		US$m		US$m
UK ..............................................................	11,467		19,661		9,958		19,704		15,789		12,491
Hong Kong ..................................................	9,170		4,630		8,352		3,374		8,205		3,527
USA ............................................................	6,098		6,669		(1,042)		5,499		2,862		4,660
France .........................................................	3,185		10,914		3,322		11,782		6,457		11,862
Brazil ..........................................................	4,506		2,025		3,368		1,868		3,886		1,421
Other countries ...........................................	19,782		29,747		15,735		25,557		19,546		23,020
	54,208		73,646		39,693		67,784		56,745		56,981

1  External net operating income is attributed to countries on the basis of the location of the branch responsible for reporting the results or advancing the funds.

2  Non-current assets consist of property, plant and equipment, goodwill, other intangible assets, interests in associates and joint ventures and certain other assets expected to be recovered more than twelve months after the reporting period.

14   Analysis of financial assets and liabilities by measurement basis

Financial assets and financial liabilities are measured on an ongoing basis either at fair value or at amortised cost. The summary of significant accounting policies in Note 2 describes how the classes of financial instruments are measured, and how income and expenses, including fair value gains and losses, are recognised. The following table analyses the carrying amounts of the financial assets and liabilities by category as defined in IAS 39 and by balance sheet heading.

 

END

 

 

ACSUKAWRABAOUAR