Annual Financial Report - 8 of 56

RNS Number : 6123S

HSBC Holdings PLC

18 March 2016

 

Retail Banking and Wealth Management

RBWM provides banking and wealth management services for our personal customers to help them secure their future prosperity and realise their ambitions.
								Principal RBWM consists of
		Total  RBWM28		US run-off portfolio		Principal  RBWM		Banking  operations		Insurance   manufacturing		Asset  management
		$m		$m		$m		$m		$m		$m
2015
Net interest income		15,926		1,033		14,893		13,127		1,757		9
Net fee income/(expense)		6,218		(4)		6,222		5,726		(560)		1,056
Other income/(expense)33		1,372		(203)		1,575		876		680		19
Net operating income1		23,516		826		22,690		19,729		1,877		1,084
LICs34		(1,939)		(62)		(1,877)		(1,877)		-		-
Net operating income		21,577		764		20,813		17,852		1,877		1,084
Total operating expenses		(17,020)		(1,384)		(15,636)		(14,459)		(432)		(745)
Operating profit/(loss)		4,557		(620)		5,177		3,393		1,445		339
Income from associates35		410		-		410		357		24		29
Profit/(loss) before tax		4,967		(620)		5,587		3,750		1,469		368
RoRWA24		2.5%		(1.3%)		3.7%
2014
Net interest income		17,130		1,390		15,740		13,983		1,746		11
Net fee income/(expense)		6,836		(4)		6,840		6,264		(534)		1,110
Other income/(expense)33		1,183		(49)		1,232		602		608		22
Net operating income1		25,149		1,337		23,812		20,849		1,820		1,143
LICs34		(1,936)		(30)		(1,906)		(1,906)		-		-
Net operating income		23,213		1,307		21,906		18,943		1,820		1,143
Total operating expenses		(18,030)		(738)		(17,292)		(16,060)		(453)		(779)
Operating profit		5,183		569		4,614		2,883		1,367		364
Income from associates35		398		-		398		323		40		35
Profit before tax		5,581		569		5,012		3,206		1,407		399
				US
RoRWA24		2.5%		0.8%		3.2%
2013
Net interest income		18,808		2,061		16,747		15,003		1,725		19
Net fee income/(expense)		7,211		11		7,200		6,786		(625)		1,039
Other income/(expense)33		1,434		(400)		1,834		1,014		779		41
Net operating income1		27,453		1,672		25,781		22,803		1,879		1,099
LICs34		(3,510)		(705)		(2,805)		(2,806)		-		1
Net operating income		23,943		967		22,976		19,997		1,879		1,100
Total operating expenses		(17,774)		(1,166)		(16,608)		(15,307)		(554)		(747)
Operating profit/(loss)		6,169		(199)		6,368		4,690		1,325		353
Income/(expense) from associates35		384		(1)		385		299		62		24
Profit/(loss) before tax		6,553		(200)		6,753		4,989		1,387		377
RoRWA24		2.6%		(0.2%)		4.2%

For footnotes, see page 99.

RBWM comprises the Principal RBWM business and the US run-off portfolio. We believe that highlighting Principal RBWM (and its constituent business streams, Banking Operations, Insurance Manufacturing and Asset Management) allows management to identify more readily the causes of material changes from year-to-year in the ongoing business and assess the factors and trends that are expected to have a material effect on the business in future years.

Insurance manufacturing for RBWM excluded other global businesses which contributed net operating income of $286m (2014: $358m, 2013: $397m) and profit before tax of $201m (2014: $263m, 2013: $266m) to overall insurance manufacturing. In 2015 insurance manufacturing net operating income for RBWM included $1,686m within Wealth Management (2014: $1,529m) and $191m within other products (2014: $350m).

Principal RBWM performance

Principal RBWM: management view of adjusted revenue

		2015		2014
		$m		$m
Net operating income1
Current accounts, savings and deposits		5,602		5,530
Wealth management products		6,282		5,825
- investment distribution36		3,512		3,271
- life insurance manufacturing		1,686		1,529
- asset management		1,084		1,025
Personal lending		9,962		10,218
- mortgages		2,873		2,956
- credit cards		3,868		3,961
- other personal lending37		3,221		3,301
Other38		841		759
Year ended 31 December		22,687		22,332

For footnotes, see page 99.

Profit before tax ($m)

Revenue ($m)

Operating expenses ($m)

For details of significant items, see page 66.

Commercial Banking

CMB serves more than two million customers in 55 countries and territories. Our customers range from small enterprises focused primarily on their domestic markets through to corporates operating globally.
		2015		2014		2013
		$m		$m		$m
Net interest income		9,859		10,158		9,731
Net fee income		4,190		4,570		4,527
Other income33		821		1,020		1,394
Net operating income1		14,870		15,748		15,652
LICs34		(1,770)		(1,558)		(2,101)
Net operating income		13,100		14,190		13,551
Total operating expenses		(6,744)		(6,981)		(6,523)
Operating profit		6,356		7,209		7,028
Income from associates35		1,617		1,605		1,509
Profit before tax		7,973		8,814		8,537
RoRWA24		1.9%		2.1%		2.2%

For footnotes, see page 99.

Management view of adjusted revenue

		2015		2014
		$m		$m
Net operating income1
Global Trade and Receivables Finance		2,403		2,447
Credit and Lending		6,002		5,609
Payments and Cash Management, current accounts and savings deposits		4,568		4,423
Markets products, Insurance and Investments and Other39		1,914		2,036
Year ended 31 December		14,887		14,515

For footnotes, see page 99.

Profit before tax ($m)

Revenue ($m)

Operating expenses ($m)

For details of significant items, see page 66.

Global Banking and Markets

GB&M supports major government, corporate and institutional clients worldwide in achieving their long-term strategic goals through tailored and innovative solutions.
				GB&M client-
		Total GB&M		Legacy	facing and BSM
		$m		$m		$m
2015
Net interest income		6,931		127		6,804
Net fee income/(expense)		3,375		(11)		3,386
Net trading income40		7,169		9		7,160
Other income/(expense)33		758		(64)		822
Net operating income1		18,233		61		18,172
LICs34		−		37		(37)
Net operating income		18,233		98		18,135
Total operating expenses		(10,834)		(103)		(10,731)
Operating profit/(loss)		7,399		(5)		7,404
Income from associates35		511
Profit/(loss) before tax		7,910
RoRWA24		1.6%		-		1.8%
2014
Net interest income/(expense)		7,022		(172)		7,194
Net fee income/(expense)		3,560		(7)		3,567
Net trading income/(expense)40		5,861		(55)		5,916
Other income33		1,335		232		1,103
Net operating income/ (expense)1		17,778		(2)		17,780
LICs34		(365)		349		(714)
Net operating income		17,413		347		17,066
Total operating expenses		(12,028)		(708)		(11,320)
Operating profit/(loss)		5,385		(361)		5,746
Income from associates35		504
Profit/(loss) before tax		5,889
RoRWA24		1.2%		(0.8%)		1.3%
2013
Net interest income		6,766		38		6,728
Net fee income/(expense)		3,482		(7)		3,489
Net trading income40		6,780		198		6,582
Other income/(expense)33		2,148		(80)		2,228
Net operating income1		19,176		149		19,027
LICs34		(207)		206		(413)
Net operating income		18,969		355		18,614
Total operating expenses		(9,960)		(170)		(9,790)
Operating profit		9,009		185		8,824
Income from associates35		432
Profit before tax		9,441
RoRWA24		2.3%		0.6%		2.5%

For footnotes, see page 99.

The GB&M client-facing and Balance Sheet Management ('BSM') businesses measure excludes the effects of the legacy credit portfolio and income from associates. This allows GB&M management to identify more readily the cause of material changes from year to year in the ongoing businesses and assess the factors and trends that are expected to have a material effect on the businesses in future years.

Management view of adjusted revenue

		2015 $m		2014 $m
Total operating income1
Markets41		6,882		5,775
- Legacy credit		61		(16)
- Credit		659		532
- Rates		1,638		1,419
- Foreign Exchange		2,918		2,722
- Equities		1,606		1,118
		1,606		1,118
Capital Financing		3,789		3,777
Payments and Cash Management		1,801		1,680
Securities Services		1,698		1,589
Global Trade and Receivables Finance		718		701
Balance Sheet Management		2,943		2,845
Principal Investments		243		498
Other42		(40)		(55)
Year ended 31 December		18,034		16,810

For footnotes, see page 99.

Profit before tax ($m)

Revenue ($m)

Operating expenses ($m)

For details of significant items, see page 66.

Global Private Banking

GPB serves high net worth individuals and families with complex and international needs within the Group's priority markets.
		2015		2014		2013
		$m		$m		$m
Net interest income		870		994		1,146
Net fee income		959		1,056		1,150
Other income33		343		327		143
Net operating income1		2,172		2,377		2,439
LICs34		(12)		8		(31)
Net operating income		2,160		2,385		2,408
Total operating expenses		(1,832)		(1,778)		(2,229)
Operating profit		328		607		179
Income from associates35		16		19		14
Profit before tax		344		626		193
RoRWA24		1.7%		2.9%		0.9%

Reported client assets⁴³

		2015		2014
		$bn		$bn
At 1 January		365		382
Net new money		1		(3)
Of which: areas targeted for growth		14		14
Value change		1		8
Disposals		-		(11)
Exchange and other		(18)		(11)
At 31 December		349		365

Reported client assets by geography

		2015		2014
		$bn		$bn
Europe		168		179
Asia		112		112
North America		61		63
Latin America		8		11
At 31 December		349		365

For footnotes, see page 99.

Profit before tax ($m)

Revenue ($m)

Operating expenses ($m)

For details of significant items, see page 66.

Other²⁹

'Other' contains the results of HSBC's holding company and financing operations, central support and functional costs with associated recoveries, unallocated investment activities, centrally held investment companies, certain property transactions and movements in fair value of own debt.
		2015		2014		2013
		$m		$m		$m
Net interest expense		(710)		(501)		(737)
Net fee income/(expense)		(37)		(65)		64
Net trading income/(expense)		(192)		(92)		6
Changes in fair value of long-term debt issued and related derivatives		863		508		(1,228)
Changes in other financial instruments designated at fair value		61		(9)		(576)
Net income/(expense) from financial instruments designated at fair value		924		499		(1,804)
Other income		7,619		6,524		8,122
Net operating income1		7,604		6,365		5,651
LICs34		−		−		−
Net operating income		7,604		6,365		5,651
Total operating expenses		(9,933)		(8,601)		(7,796)
Operating loss		(2,329)		(2,236)		(2,145)
Income/(expense) from associates35		2		6		(14)
Loss before tax		(2,327)		(2,230)		(2,159)
For footnotes, see page 99.

Loss before tax ($m)

Revenue ($m)

Operating expenses ($m)

For details of significant items, see page 66.

 

END

 

 

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