Half-year Report - 2022 Interim Report - Part 2

RNS Number : 5078U

HSBC Holdings PLC

01 August 2022

 

Financial summary
	Page
Use of alternative performance measures	29
Adjusted performance	29
Significant items	29
Foreign currency translation differences	29
Changes to presentation from 1 January 2022	29
Future accounting developments	29
Summary consolidated income statement	30
Income statement commentary	31
Net interest income	31
Tax expense	33
Summary consolidated balance sheet	34
Balance sheet commentary compared with 31 December 2021	35

Use of alternative performance measures

Our reported results are prepared in accordance with IFRSs as detailed in the interim condensed financial statements starting on page 104.

To measure our performance, we supplement our IFRSs figures with non-IFRSs measures, which constitute alternative performance measures under European Securities and Markets Authority guidance and non-GAAP financial measures defined in and presented in accordance with US Securities and Exchange Commission rules and regulations. These measures include those derived from our reported results that eliminate factors that distort period-on-period comparisons. The 'adjusted performance' measure used throughout this report is described below. Definitions and calculations of other alternative performance measures are included in our 'Reconciliation of alternative performance measures' on page 56. All alternative performance measures are reconciled to the closest reported performance measure.

The global business segmental results are presented on an adjusted basis in accordance with IFRS 8 'Operating Segments' as detailed in Note 5: 'Segmental analysis' on page 112.

Adjusted performance

Adjusted performance is computed by adjusting reported results for the effects of foreign currency translation differences and significant items, which distort period-on-period comparisons.

We consider adjusted performance provides useful information for investors by aligning internal and external reporting, identifying and quantifying items management believes to be significant, and providing insight into how management assesses period-on-period performance.

Significant items

'Significant items' refers collectively to the items that management and investors would ordinarily identify and consider separately to improve the understanding of the underlying trends in the business.

The tables on pages 37 to 39 and pages 48 to 53 detail the effects of significant items on each of our global business segments, geographical regions and selected countries/territories in 1H22, 1H21 and 2H21.

Foreign currency translation differences

Foreign currency translation differences reflect the movements of the US dollar against most major currencies during 2022.

We exclude them to derive constant currency data, allowing us to assess balance sheet and income statement performance on a like-for-like basis and to better understand the underlying trends in the business.

Foreign currency translation differences Foreign currency translation differences for the half-year to 30 June 2022 are computed by retranslating into US dollars for non-US dollar branches, subsidiaries, joint ventures and associates: • the income statements for the half-years to 30 June 2021 and 31 December 2021 at the average rates of exchange for the half-year to 30 June 2022; and • the balance sheets at 30 June 2021 and 31 December 2021 at the prevailing rates of exchange on 30 June 2022. No adjustment has been made to the exchange rates used to translate foreign currency-denominated assets and liabilities into the functional currencies of any HSBC branches, subsidiaries, joint ventures or associates. The constant currency data of HSBC's Argentina subsidiaries have not been adjusted further for the impacts of hyperinflation. Since 1 June 2022, Turkey has been deemed a hyperinflationary economy for accounting purposes. HSBC has an operating entity in Turkey and the constant currency data has not been adjusted further for the impacts of hyperinflation. When reference is made to foreign currency translation differences in tables or commentaries, comparative data reported in the functional currencies of HSBC's operations have been translated at the appropriate exchange rates applied in the current period on the basis described above.

Changes to presentation from 1 January 2022

Application of IAS 29 'Financial Reporting in Hyperinflationary Economies'

Since 1 June 2022, Turkey has been deemed a hyperinflationary economy for accounting purposes. The results of HSBC's operations with a functional currency of the Turkish lira have been prepared in accordance with IAS 29 'Financial Reporting in Hyperinflationary Economies' as if the economy had always been hyperinflationary. The results of those operations for the six-month period ended 30 June 2022 are stated in terms of current purchasing power using the Turkey consumer price index at 30 June 2022 with the corresponding adjustment presented in the consolidated statement of comprehensive income in 2Q22. In accordance with IAS 21 'The Effects of Changes in Foreign Exchange Rates', the results have been translated and presented in US dollars at the prevailing rate of exchange on 30 June 2022. The Group's comparative information presented in US dollars with respect to the six-month periods ended 30 June 2021 and 31 December 2021 has not been restated. The impact of applying IAS 29 and the hyperinflation provisions of IAS 21 in the current period was a decrease in the Group's profit before tax of $114m, comprising a decrease in revenue of $113m and an increase in ECL and operating expenses of $1m.

Future accounting developments

IFRS 17 'Insurance Contracts'

IFRS 17 will be effective from 1 January 2023, with comparatives restated from 1 January 2022. The standard sets out the requirements that an entity should apply in accounting for insurance contracts it issues and reinsurance contracts it holds, and applies retrospectively. The main changes arising from IFRS 17 are the removal of the present value of in-force long-term insurance business ('PVIF') asset in respect of unearned profits, the recognition of a contractual service margin ('CSM') liability, the measurement of insurance liabilities, and the redesignation of financial assets held to support insurance liabilities currently measured at amortised cost, to fair value under IFRS 9. All of these impacts will be subject to deferred tax.

The Group continues to make progress on the implementation of IFRS 17 with accounting policies, data and models in place, with focus now on finalising the opening balance sheet and rehearsing our operational readiness. However, industry practice and interpretation of aspects of the standard are still evolving, and there remains uncertainty around the likely financial impact of its implementation. As previously guided, our preliminary management estimate of the impact of applying IFRS 17, compared with our current accounting policies for insurance contracts, is an approximate two-third reduction in total equity of our insurance operations at 1 January 2022. Work is ongoing to estimate the impact on the 2022 income statement, which will form the basis for comparative period results following the adoption of the standard in 2023. This estimate is expected to be communicated through an update, to be provided towards the end of 2022, to our previously communicated planning assumption of a reduction in profitability of approximately two-thirds, albeit within a range of expected outcomes.

Summary consolidated income statement

	Half-year to
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$m	$m	$m
Net interest income	14,451	13,098	13,391
Net fee income	6,064	6,674	6,423
Net income from financial instruments held for trading or managed on a fair value basis	4,921	4,184	3,560
Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss	(3,051)	2,795	1,258
Change in fair value of designated debt and related derivatives1	(158)	(67)	(115)
Changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss	68	548	250
Gains less losses from financial investments	21	433	136
Net insurance premium income	7,646	5,663	5,207
Other operating income	723	155	347
Total operating income	30,685	33,483	30,457
Net insurance claims and benefits paid and movement in liabilities to policyholders	(5,449)	(7,932)	(6,456)
Net operating income before change in expected credit losses and other credit impairment charges2	25,236	25,551	24,001
Change in expected credit losses and other credit impairment charges	(1,090)	719	209
Net operating income	24,146	26,270	24,210
Total operating expenses excluding impairment of goodwill and other intangible assets	(16,343)	(17,045)	(16,842)
Impairment of goodwill and other intangible assets	(76)	(42)	(691)
Operating profit	7,727	9,183	6,677
Share of profit in associates and joint ventures	1,449	1,656	1,390
Profit before tax	9,176	10,839	8,067
Tax credit/(charge)	39	(2,417)	(1,796)
Profit for the period	9,215	8,422	6,271
Attributable to:
-  ordinary shareholders of the parent company	8,289	7,276	5,331
-  preference shareholders of the parent company	-	7	-
-  other equity holders	626	666	637
-  non-controlling interests	300	473	303
Profit for the period	9,215	8,422	6,271
	$	$	$
Basic earnings per share	0.42	0.36	0.26
Diluted earnings per share	0.41	0.36	0.26
Dividend per ordinary share (paid in the period)3	0.18	0.15	0.07
	%	%	%
Post-tax return on average total assets (annualised)	0.6	0.6	0.4
Return on average ordinary shareholders' equity (annualised)4	9.7	8.4	7.1
Return on average tangible equity (annualised)4	9.9	9.4	8.3

1  The debt instruments, issued for funding purposes, are designated under the fair value option to reduce an accounting mismatch.

2  Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

3  Second interim dividend of $0.18 per ordinary share in respect of the financial year ending 31 December 2021, paid in April 2022.

4  Half-year to 31 December 2021 is calculated on a full-year basis and not a 2H21 basis.

Income statement commentary

For further financial performance data of our global business segments, see pages 37 to 45. For further financial performance data by geographical regions and selected countries/territories, see pages 46 to 55.

Net interest income

	Half-year to		Quarter to
	30 Jun	30 Jun	30 Jun	31 Mar	30 Jun
	2022	2021	2022	2022	2021
	$m	$m	$m	$m	$m
Interest income	20,855	17,960	11,188	9,667	8,975
Interest expense	(6,404)	(4,862)	(3,734)	(2,670)	(2,391)
Net interest income	14,451	13,098	7,454	6,997	6,584
Average interest-earning assets	2,233,321	2,188,991	2,207,731	2,259,198	2,198,953
	%	%	%	%	%
Gross interest yield1	1.88	1.65	2.03	1.74	1.64
Less: gross interest payable1	(0.71)	(0.54)	(0.83)	(0.59)	(0.53)
Net interest spread2	1.17	1.11	1.20	1.15	1.11
Net interest margin3	1.30	1.21	1.35	1.26	1.20

1  Gross interest yield is the average annualised interest rate earned on average interest-earning assets ('AIEA'). Gross interest payable is the average annualised interest cost as a percentage of average interest-bearing liabilities.

2  Net interest spread is the difference between the average annualised interest rate earned on AIEA, net of amortised premiums and loan fees, and the average annualised interest rate payable on average interest-bearing funds.

3  Net interest margin is net interest income expressed as an annualised percentage of AIEA.

Summary of interest income by type of asset
	Half-year to						Full-year to
	30 Jun 2022			30 Jun 2021			31 Dec 2021
	Average balance	Interest income	Yield	Average balance	Interest income	Yield	Average balance	Interest income	Yield
	$m	$m	%	$m	$m	%	$m	$m	%
Short-term funds and loans and advances to banks	458,230	1,355	0.60	421,521	507	0.24	450,678	1,105	0.25
Loans and advances to customers	1,055,938	13,878	2.65	1,063,974	13,005	2.46	1,060,658	26,071	2.46
Reverse repurchase agreements - non-trading	228,226	1,093	0.97	201,428	486	0.49	206,246	1,019	0.49
Financial investments	440,495	3,855	1.76	448,587	3,391	1.52	438,840	6,729	1.53
Other interest-earning assets	50,432	674	2.70	53,481	571	2.15	53,091	1,264	2.38
Total interest-earning assets	2,233,321	20,855	1.88	2,188,991	17,960	1.65	2,209,513	36,188	1.64

Summary of interest expense by type of liability
	Half-year to						Full-year to
	30 Jun 2022			30 Jun 2021			31 Dec 2021
	Average balance	Interest expense	Cost	Average balance	Interest expense	Cost	Average balance	Interest expense	Cost
	$m	$m	%	$m	$m	%	$m	$m	%
Deposits by banks1	82,232	195	0.48	73,402	107	0.29	75,671	198	0.26
Customer accounts2	1,369,088	2,834	0.42	1,355,092	2,020	0.30	1,362,580	4,099	0.30
Repurchase agreements - non-trading	122,886	584	0.96	108,165	166	0.31	114,201	363	0.32
Debt securities in issue - non-trading	182,080	2,053	2.27	199,058	1,864	1.89	193,137	3,603	1.87
Other interest-bearing liabilities	70,443	738	2.11	68,376	705	2.08	70,929	1,436	2.02
Total interest-bearing liabilities	1,826,729	6,404	0.71	1,804,093	4,862	0.54	1,816,518	9,699	0.53

1  Including interest-bearing bank deposits only.

2  Including interest-bearing customer accounts only.

Net interest income ('NII') for 1H22 was $14.5bn, an increase of $1.4bn or 10.3% compared with 1H21. This reflected higher average market interest rates across the major currencies compared with 1H21.

Excluding the unfavourable impacts of significant items and foreign currency translation differences, NII increased by $1.9bn or 15.3%.

NII for 2Q22 was $7.5bn, up 13.2% year-on-year, and 6.5% compared with the previous quarter. This was driven by the impact of higher market interest rates across major currencies, particularly in Europe and North America. The increase was driven by higher asset yields, particularly on customer term lending, short-term funds and loans and advances to banks, as well as on reverse repurchase agreements. This was partly offset by higher funding costs, in particular for customer deposits, debt securities and repurchase agreements.

Net interest margin ('NIM') of 1.30% was 9 basis points ('bps') higher compared with 1H21, as the rise in the yield on AIEA of 23bps was partly offset by the rise in the funding cost of average interest-bearing liabilities of 17bps. The increase in NIM in 1H22 included the unfavourable impacts of significant items and foreign currency translation differences. Excluding this, NIM increased by 11bps.

NIM for 2Q22 was 1.35%, up 15bps year-on-year, and up 9bps compared with the previous quarter, predominantly driven by the impact of higher market interest rates.

Interest income of $20.9bn increased by $2.9bn or 16%, primarily due to higher average interest rates compared with 1H21, as the yield on AIEA increased by 23bps. This was caused by the increase in market interest rates, partly offset by unfavourable changes in balance sheet mix, as balances of low-yielding assets, particularly short-term funds and loans and advances to banks, increased by $37bn and reverse repurchase agreements increased by $27bn, while the balances of high-yielding assets, particularly customer term lending in the loans and advances to customer category, declined by $24bn. The change in interest income included $32.1m in relation to the unfavourable impact of significant items and $743m from the adverse effects of foreign currency translation. Excluding these, interest income increased by $3.7bn.

Interest income of $11.2bn in 2Q22 was up $2.2bn year-on-year, and up $1.5bn from the previous quarter. This was predominantly driven by the impact of higher market interest rates, partly offset by an unfavourable change in the balance sheet mix as balances in low-yielding assets increased, while balances in high-yielding assets declined. Compared with the previous year, balances in low-yielding reverse repurchase agreements increased by $34bn, whereas higher-yielding customer term lending balances declined by $23bn.

Interest expense of $6.4bn increased by $1.5bn or 32% compared with 1H21. This reflected the increase in funding costs by 17bps, mainly arising from higher interest rates paid on interest-bearing customer accounts, repurchase agreements and debt securities in issue. This was partly offset by a reduction in interest expense attributable to reduced balances of high-costing subordinated debt, which declined by $12bn. The change in interest expense included the favourable effects of foreign currency translation differences of $0.2bn. Excluding this, interest expense increased by $1.7bn.

Interest expense of $3.7bn in 2Q22 was up $1.3bn year-on-year, and up $1.1bn compared with the previous quarter. This was predominantly driven by the impact of higher market interest rates.

Net fee income of $6.1bn was $0.6bn lower than in 1H21, and included a $0.2bn adverse impact from currency translation. The fall in net fee income was in WPB and GBM, although it rose in CMB.

In WPB, the reduction in fee income was mainly in Wealth, particularly in broking and unit trusts in Hong Kong, reflecting weaker equity markets due to muted customer sentiment. Covid-19-related restrictions in Hong Kong in 1Q22 also resulted in temporary branch network closures. These reductions were partly offset by higher cards income, notably in the UK, as customer spending increased. The growth in cards activity resulted in a rise in fee expense.

In GBM, a reduction in fee income was driven by lower underwriting fees, as market activity fell due to the effects of the Russia-Ukraine war and wider macroeconomic uncertainty. This compared with a strong 1H21 when corporates raised finance as initial Covid-19 restrictions were eased.

In CMB, fee income increased from account services and credit cards as customer activity increased, as well as from trade products, as global trade volumes recovered compared with 1H21.

Net income from financial instruments held for trading or managed on a fair value basis of $4.9bn was $0.7bn higher. The increase was driven by GBM, as higher market volatility supported a strong performance within Global Foreign Exchange.

This was partly offset by adverse fair value movements on non-qualifying hedges of $0.2bn.

Net expense from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss of $3.1bn compared with a net income of $2.8bn in 1H21. This decrease primarily reflected adverse equity market performances in Hong Kong and France.

This adverse movement resulted in a corresponding movement in liabilities to policyholders and the present value of in-force long-term insurance business ('PVIF') (see 'Other operating income' below). This reflected the extent to which the policyholders and shareholders respectively participate in the investment performance of the associated asset portfolios.

Changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss of $0.1bn were $0.5bn lower compared with 1H21. This included lower revaluation gains in Principal Investments. It also included revaluation losses on other financial assets due to the increased macroeconomic uncertainty, in part due to the Russia-Ukraine war, as well as adverse movements on interest rate-linked instruments as yield curves steepened.

Gains less losses from financial investments of $21m were $0.4bn lower compared with 1H21, reflecting smaller gains on the disposal of debt securities.

Net insurance premium income of $7.6bn was $2.0bn higher than in 1H21, reflecting strong sales in Hong Kong.

Other operating income of $0.7bn increased by $0.6bn compared with 1H21, primarily due to $0.9bn higher net favourable changes in PVIF.

The changes in PVIF were mainly in Hong Kong and included a $0.2bn increase in the value of new business and a $0.3bn gain following a pricing update for our policyholders' funds held on deposit with us in Hong Kong to reflect the cost to provide this service. There was also an increase of $0.3bn primarily reflecting the effect of sharing lower investment returns with policyholders.

PVIF is presented in accordance with IFRS 4 'Insurance Contracts'. As set out in 'Future accounting developments' on page 29, IFRS 17 'Insurance Contracts' is effective from 1 January 2023. Under IFRS 17, there will be no PVIF asset recognised. Instead, the estimated future profit will be included in the measurement of the insurance contract liability as the contractual service margin and gradually recognised in revenue as services are provided over the duration of the insurance contract.

The increase in 'Other operating income' also included a $0.1bn provisional gain on completion of our acquisition of AXA Singapore in 1H22. The increases were partly offset by 1H22 losses associated with the planned sales of our branch operations in Greece and our operations in Russia.

Net insurance claims and benefits paid and movement in liabilities to policyholders of $5.4bn were $2.5bn lower, primarily due to lower returns on financial assets supporting contracts where the policyholder is subject to part or all of the investment risk, mainly in France and Hong Kong, together with the impact of higher sales volumes in Hong Kong.

Change in expected credit losses and other credit impairment charges ('ECL') were a charge of $1.1bn, compared with a net release of $0.7bn in 1H21.

The 1H22 charge primarily reflected stage 3 charges of $0.8bn, including charges related to the commercial real estate sector in mainland China, as well as against Russia exposures. We also recognised additional stage 1 and stage 2 allowances to reflect heightened levels of economic uncertainty and inflationary pressures, in part offset by the release of most of our remaining Covid-19-related allowances. This compared with a net release in 1H21 primarily relating to Covid-19-related allowances previously built up in 2020.

We continue to expect our ECL charges to normalise towards 30bps of average loans in 2022, recognising the possible risk of further deterioration in the consensus economic outlook. We also continue to monitor external developments in certain key vulnerable sectors, particularly offshore commercial financing of the real estate sector in mainland China.

For further details on the calculation of ECL, including the measurement uncertainties and significant judgements applied to such calculations, the impact of economic scenarios and management judgemental adjustments, see pages 67 to 75.

Operating expenses - significant items and currency translation
	Half-year to
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$m	$m	$m
Significant items	1,043	818	1,576
-  customer redress programmes	(6)	17	32
-  impairment of goodwill and other intangibles	9	-	587
-  restructuring and other related costs	1,040	848	988
-  currency translation on significant items		(47)	(31)
Currency translation		749	510
Total	1,043	1,567	2,086

Operating expenses
	Half-year to
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$m	$m	$m
Gross employee compensation and benefits	9,501	10,225	9,387
Capitalised wages and salaries	(430)	(615)	(255)
Goodwill impairment	-	-	587
Property and equipment	2,431	2,540	2,605
Amortisation and impairment of intangibles	828	642	796
UK bank levy	-	-	116
Legal proceedings and regulatory matters	94	47	59
Other operating expenses1	3,995	4,248	4,238
Total operating expenses (reported)	16,419	17,087	17,533
Total significant items (including currency translation on significant items)	(1,043)	(818)	(1,576)
Currency translation		(749)	(510)
Total operating expenses (adjusted)	15,376	15,520	15,447

1  Other operating expenses includes professional fees, contractor costs, transaction taxes, marketing and travel. The decrease was driven by favourable currency translation, as well as higher capitalisation resulting from changes in the capitalisation offset to contractors, services contracted out and other administration expenses compared with the prior year. This was partly offset by higher professional fees resulting from investment in technology including cost to achieve spend.

Staff numbers (full-time equivalents)
	At
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
Global businesses
Wealth and Personal Banking	127,638	132,616	130,185
Commercial Banking	44,183	43,241	42,969
Global Banking and Markets	46,624	46,326	46,166
Corporate Centre	421	367	377
Total staff numbers	218,866	222,550	219,697

Operating expenses of $16.4bn were $0.7bn or 4% lower than in 1H21. This included a favourable impact of $0.7bn from foreign currency translation differences, in part offset by an increase in restructuring and other related costs of $0.2bn.

The reduction also reflected the impact of our cost-saving initiatives of $1.1bn and a lower performance-related pay accrual of $0.4bn, for which the Group-wide phasing of the accrual is driven by the expected profile of full-year profits. Given profits in 1H21 benefited from significant ECL releases, we recognised a larger share of the accrual in the first half of the year relative to 1H22. These factors more than offset increases from our continued investments in technology of $0.4bn, which is gross of cost savings of $0.2bn, and in wealth in Asia of $0.2bn, as well as from other increases, including higher inflation, regulatory investments, growth in business volumes and marketing.

The number of employees expressed in full-time equivalent staff ('FTEs') at 30 June 2022 was 218,866, a decrease of 831 from 31 December 2021. Additionally, the number of contractors at 30 June 2022 was 6,642, an increase of 450 from 31 December 2021.

Share of profit in associates and joint ventures of $1.4bn was $0.2bn or 13% lower, primarily as 1H21 included a higher share of profit from BGF due to the recovery in asset valuations.

In relation to Bank of Communications Co., Limited ('BoCom'), we continue to be subject to a risk of impairment in the carrying value of our investment. We have performed an impairment test on the carrying amount of our investment and confirmed there was no impairment at 30 June 2022. For further details of our impairment review process, see Note 10 on the interim condensed financial statements.

Tax expense

Tax in 1H22 was a credit of $39m. This was mainly due to a $1.8bn credit arising from the recognition of a deferred tax asset on historical tax losses of HSBC Holdings as a result of improved profit forecasts for the UK tax group, which accelerated the expected utilisation of these losses and reduced the uncertainty regarding their recoverability. Excluding this, the effective tax rate for 1H22 was 19.4% and was reduced by the remeasurement of deferred tax balances following substantive enactment of legislation to reduce the rate of the UK banking surcharge from 8% to 3% with effect from 1 April 2023. The effective tax rate for 1H21 was 22.3%.

Summary consolidated balance sheet
	At
	30 Jun	31 Dec
	2022	2021
	$m	$m
Assets
Cash and balances at central banks	363,608	403,018
Trading assets	217,350	248,842
Financial assets designated and otherwise mandatorily measured at fair value through profit or loss	45,873	49,804
Derivatives	262,923	196,882
Loans and advances to banks	96,429	83,136
Loans and advances to customers1	1,028,356	1,045,814
Reverse repurchase agreements - non-trading	244,451	241,648
Financial investments	430,796	446,274
Other assets	295,634	242,521
Total assets	2,985,420	2,957,939
Liabilities and equity
Liabilities
Deposits by banks	105,275	101,152
Customer accounts	1,651,301	1,710,574
Repurchase agreements - non-trading	129,707	126,670
Trading liabilities	80,569	84,904
Financial liabilities designated at fair value	126,006	145,502
Derivatives	251,469	191,064
Debt securities in issue	87,944	78,557
Liabilities under insurance contracts	113,130	112,745
Other liabilities	243,329	199,994
Total liabilities	2,788,730	2,751,162
Equity
Total shareholders' equity	188,382	198,250
Non-controlling interests	8,308	8,527
Total equity	196,690	206,777
Total liabilities and equity	2,985,420	2,957,939

1  Net of impairment allowances.

Selected financial information
	At
	30 Jun	31 Dec
	2022	2021
	$m	$m
Called up share capital	10,188	10,316
Capital resources1	158,519	177,786
Undated subordinated loan capital	1,967	1,968
Preferred securities and dated subordinated loan capital2	27,981	28,568
Risk-weighted assets	851,743	838,263
Total shareholders' equity	188,382	198,250
Less: preference shares and other equity instruments	(21,691)	(22,414)
Total ordinary shareholders' equity	166,691	175,836
Less: goodwill and intangible assets (net of tax)	(18,383)	(17,643)
Tangible ordinary shareholders' equity	148,308	158,193
Financial statistics
Loans and advances to customers as a percentage of customer accounts (%)	62.3	61.1
Average total shareholders' equity to average total assets (%)	6.37	6.62
Net asset value per ordinary share at period end ($)3	8.41	8.76
Tangible net asset value per ordinary share at period end ($)4	7.48	7.88
Tangible net asset value per fully diluted ordinary share at period end ($)	7.43	7.84
Number of $0.50 ordinary shares in issue (millions)	20,376	20,632
Basic number of $0.50 ordinary shares outstanding (millions)	19,819	20,073
Basic number of $0.50 ordinary shares outstanding and dilutive potential ordinary shares (millions)	19,949	20,189
Closing foreign exchange translation rates to $:
$1: £	0.822	0.739
$1: €	0.959	0.880

1  Capital resources are regulatory capital, the calculation of which is set out on page 91.

2  Including perpetual preferred securities.

3  The definition of net asset value per ordinary share is total shareholders' equity, less non-cumulative preference shares and capital securities, divided by the number of ordinary shares in issue, excluding own shares held by the company, including those purchased and held in treasury.

4  The definition of tangible net asset value per ordinary share is total ordinary shareholder's equity excluding goodwill, PVIF and other intangible assets (net of deferred tax), divided by the number of basic ordinary shares in issue, excluding own shares held by the company, including those purchased and held in treasury.

A more detailed consolidated balance sheet is contained in the interim condensed financial statements on page 106.

Balance sheet commentary compared with 31 December 2021

At 30 June 2022, our total assets were $3.0tn, an increase of $27bn or 1% on a reported basis, and $173bn or 6% on a constant currency basis.

Our asset base included growth in derivative asset balances due to favourable revaluation movements on interest rate contracts, and higher other assets reflecting seasonal reductions in settlement accounts at 31 December 2021, as clients settled trades prior to the year end. These increases were partly offset by reductions in cash and balances at central banks and lower trading assets.

Our ratio of loans and advances to customers as a percentage of customer accounts of 62% was in line with 31 December 2021.

Assets

Cash and balances at central banks decreased by $39bn or 10%, which included a $32bn impact of foreign exchange movements since 31 December 2021.

Trading assets decreased by $31bn or 13%, notably from a reduction in equity securities held, particularly in the UK and Hong Kong, notably reflecting lower client demand.

Derivative assets increased by $66bn or 34%, mainly in Europe, reflecting favourable revaluation movements on interest rate contracts due to movements in long-term yield curve rates in most major markets. Foreign exchange contracts also increased as a result of foreign exchange rate movements, mainly in the UK, France and Hong Kong. The increase in derivative assets was consistent with the increase in derivative liabilities, as the underlying risk is broadly matched.

Loans and advances to customers of $1.0tn were $17bn lower, which included an adverse impact from foreign currency translation differences of $51bn. On a constant currency basis, customer lending balances were $34bn higher.

The commentary below is on a constant currency basis.

Customer lending increased in WPB by $13bn to $475bn, mainly from higher mortgage balances, notably in the UK (up $5bn), Australia (up $2bn) and Hong Kong (up $1bn). There was also an increase in term lending of $2bn, mainly in Hong Kong and the UK, although overdraft and credit card balances fell, mainly in Asia.

In CMB, customer lending of $348bn was $16bn higher with increases in all regions. Trade volumes remained robust, with growth in term lending of $9bn, reflecting a strong performance in North America and Asia. 

In GBM, customer lending of $204bn grew by $5bn, reflecting higher term lending of $5bn, mainly in the US, the UK and UAE due to increased customer drawdowns. There was also growth in overdraft balances of $3bn, mainly in the UK and Hong Kong.

Financial investments decreased by $15bn or 3%, mainly in Europe from the adverse impact of foreign currency translation differences since 31 December 2021. The reduction included adverse fair value movements recorded in 'other comprehensive income' in equity on debt securities, treasury and other eligible bills as a result of higher yield curves and wider macroeconomic pressures. It also included reductions due to disposals and maturity of these securities. The reductions were partly offset by increases in debt instruments measured at amortised cost, as we repositioned our portfolio to reduce capital volatility.

Other assets grew by $53bn or 22%, primarily due to an increase of $29bn in settlement accounts in the UK, the US and Hong Kong from higher trading activity, compared with the seasonal reduction in December 2021. Cash collateral grew by $14bn, reflecting the increase in fair value of derivative assets.

Liabilities

Customer accounts of $1.7tn decreased by $59bn on a reported basis, including the adverse impact of foreign currency translation differences of $83bn. On a constant currency basis, customer accounts were $24bn higher.

The commentary below is on a constant currency basis.

The increase in customer accounts was primarily in WPB (up $15bn), driven by higher interest-bearing and term deposit balances, as interest rates rose. There was a smaller corresponding reduction in non-interest-bearing current accounts.

Customer accounts also increased in GBM, mainly due to growth in interest-bearing and term deposit balances as customers demonstrated a preference for higher yielding accounts as interest rates rose, notably in Europe.

In CMB, customer accounts remained broadly stable, with reductions in North America, partly offset with growth in all other regions. In the UK, customer accounts grew as clients deployed their commercial surplus to interest-bearing accounts as interest rates rose.

Financial liabilities designated at fair value decreased by $19bn or 13%, notably from maturities, mark-to-market reductions and foreign exchange revaluations on non-US dollar instruments.

Derivative liabilities increased by $60bn or 32%, which is consistent with the increase in derivative assets, since the underlying risk is broadly matched.

Other liabilities increased by $43bn or 22%, notably from a rise of $31bn in settlement accounts in the UK, Hong Kong and the US from an increase in trading activity, compared with the seasonal reduction in December 2021. Cash collateral increased by $15bn, mainly due to the increase in fair value of derivative liabilities.

Equity

Total shareholders' equity , including non-controlling interests, decreased by $10bn or 5% compared with 31 December 2021.

Profits generated of $9bn were more than offset by coupon distributions on securities classified as equity and dividends paid of $4bn, as well as net losses through other comprehensive income ('OCI') of $13bn. The net losses in OCI included adverse movements of $5bn on financial instruments designated as hold-to-collect-and-sell, which are held as hedges to our exposure to interest rate movements, as a result of the increase in term market yield curves in 1H22. The net loss also included an adverse impact from foreign exchange differences of $9bn. These losses were partly offset by fair value gains on liabilities related to changes in own credit risk of $2bn.

Overall the Group is positively exposed to rising interest rates through net interest income, although there is an impact on our capital base due to the fair value of hold-to-collect-and-sell instruments. These instruments are reported within 'financial investments'. There is an initial negative effect materialising through reserves, after which the net interest income of the Group is expected to result in a net benefit over time, provided policy rates follow market implied rates.

Over time, these adverse movements will unwind as the instruments reach maturity, although not all will necessarily be held to maturity.

It is currently estimated that it will take around four quarters for the benefit to Group net interest income to offset the adverse impact of these revaluations, provided the composition of the portfolio were to remain static.

Customer accounts by country/territory
	At
	30 Jun	31 Dec
	2022	2021
	$m	$m
Europe	628,977	667,769
-  UK	505,195	535,797
-  France	52,643	56,841
-  Germany	25,942	22,509
-  Switzerland	8,021	10,680
-  other	37,176	41,942
Asia	779,153	792,098
-  Hong Kong	543,400	549,429
-  Singapore	57,057	57,572
-  mainland China	55,580	59,266
-  Australia	28,366	28,240
-  India	24,470	24,507
-  Malaysia	16,353	16,500
-  Taiwan	14,588	15,483
-  Indonesia	5,804	6,019
-  other	33,535	35,082
Middle East and North Africa (excluding Saudi Arabia)	44,008	42,629
-  United Arab Emirates	22,661	20,943
-  Egypt	6,281	6,699
-  Turkey	3,812	4,258
-  other	11,254	10,729
North America	168,699	178,565
-  US	101,137	111,921
-  Canada	58,241	58,071
-  other	9,321	8,573
Latin America	30,464	29,513
-  Mexico	23,659	23,583
-  other	6,805	5,930
At end of period	1,651,301	1,710,574

Risk-weighted assets

Risk-weighted assets ('RWAs') rose by $13.4bn during the first half of the year. Excluding foreign currency translation differences, RWAs increased by $47.4bn, largely as a result of the following:

• a $19.9bn increase due to asset size movements, mostly due to corporate loan growth across our major regions; and

• a $28.3bn increase due to changes in methodology and policy. This was mostly due to regulatory change and refinements to our treatment of small and medium-sized enterprises, partly offset by reductions from risk parameter refinements in GBM and CMB.

Global businesses
	Page
Summary	36
Basis of preparation	36
Reconciliation of reported and adjusted items - global businesses	37
Reconciliation of reported and adjusted items - risk-weighted assets	40
Supplementary tables for WPB	40

Summary

The Group Chief Executive, supported by the rest of the Group Executive Committee ('GEC'), reviews operating activity on a number of bases, including by global business and geographical region. Our global businesses - Wealth and Personal Banking, Commercial Banking, and Global Banking and Markets - along with Corporate Centre are our reportable segments under IFRS 8 'Operating Segments', and are presented below and in Note 5: 'Segmental analysis' on page 112.

Basis of preparation The Group Chief Executive, supported by the rest of the GEC, is considered the Chief Operating Decision Maker ('CODM') for the purposes of identifying the Group's reportable segments. Global business results are assessed by the CODM on the basis of adjusted performance, which removes the effects of significant items and currency translation from reported results. Therefore, we present these results on an adjusted basis. Adjusted performance information for 1H21 and 2H21 is presented on a constant currency basis as described on page 29. As required by IFRS 8, reconciliations of the total adjusted global business results to the Group's reported results are presented on page 113. Supplementary reconciliations from reported to adjusted results by global business are presented on pages 37 to 39 for information purposes. Global business performance is also assessed using return on tangible equity ('RoTE'), excluding significant items. A reconciliation of global business RoTE, excluding significant items to the Group's RoTE, is provided on page 56. Our operations are closely integrated and, accordingly, the presentation of data includes internal allocations of certain items of income and expense. These allocations include the costs of certain support services and global functions to the extent that they can be meaningfully attributed to global businesses and geographical regions. While such allocations have been made on a systematic and consistent basis, they necessarily involve a degree of subjectivity. Costs that are not allocated to global businesses are included in Corporate Centre. Where relevant, income and expense amounts presented include the results of inter-segment funding along with inter-company and inter-business line transactions. All such transactions are undertaken on arm's length terms. The intra-Group elimination items for the global businesses are presented in Corporate Centre. The expense of the UK bank levy is included in the Europe geographical region as HSBC regards the levy as a cost of being headquartered in the UK. The current year expense is reflected in the fourth quarter as it is assessed on our balance sheet position as at 31 December. The results of geographical regions are presented on a reported and adjusted basis. Geographical information is classified by the location of the principal operations of the subsidiary or, for The Hongkong and Shanghai Banking Corporation Limited, HSBC Bank plc, HSBC UK Bank plc, HSBC Bank Middle East Limited and HSBC Bank USA, by the location of the branch responsible for reporting the results or providing funding.

Descriptions of the global businesses are provided in the Overview section on pages 18 to 24.

Reconciliation of reported and adjusted items - global businesses

Supplementary unaudited analysis of significant items by global business is presented below.

	Half-year to 30 Jun 2022
	Wealth and Personal Banking	Commercial Banking	Global Banking and Markets	Corporate Centre	Total
	$m	$m	$m	$m	$m
Revenue1
Reported	11,006	7,216	7,943	(929)	25,236
Significant items	(84)	1	(102)	639	454
-  customer redress programmes	11	3	-	-	14
-  disposals, acquisitions and investment in new businesses2	-	-	-	288	288
-  fair value movements on financial instruments3	(2)	(2)	(127)	351	220
-  restructuring and other related costs4	(93)	-	25	-	(68)
Adjusted	10,922	7,217	7,841	(290)	25,690
ECL
Reported	(573)	(288)	(227)	(2)	(1,090)
Adjusted	(573)	(288)	(227)	(2)	(1,090)
Operating expenses
Reported	(7,514)	(3,417)	(4,822)	(666)	(16,419)
Significant items	103	66	87	787	1,043
-  customer redress programmes	(10)	-	-	4	(6)
-  impairment of goodwill and other intangibles	-	-	-	9	9
-  restructuring and other related costs	113	66	87	774	1,040
Adjusted	(7,411)	(3,351)	(4,735)	121	(15,376)
Share of profit in associates and joint ventures
Reported	8	-	-	1,441	1,449
Adjusted	8	-	-	1,441	1,449
Profit/(loss) before tax
Reported	2,927	3,511	2,894	(156)	9,176
Significant items	19	67	(15)	1,426	1,497
-  revenue	(84)	1	(102)	639	454
-  operating expenses	103	66	87	787	1,043
Adjusted profit before tax	2,946	3,578	2,879	1,270	10,673
Reported tax (charge)/credit	(676)	(822)	(497)	2,034	39
Tax significant items	(1)	(12)	5	(1,993)	(2,001)
-  tax charge/(credit) on significant items	(1)	(12)	5	(228)	(236)
-  recognition of losses on HSBC Holdings	-	-	-	(1,765)	(1,765)
Adjusted profit after tax	2,269	2,744	2,387	1,311	8,711
Loans and advances to customers (net)
Reported	475,464	348,253	204,097	542	1,028,356
Adjusted	475,464	348,253	204,097	542	1,028,356
Customer accounts
Reported	836,026	479,680	335,033	562	1,651,301
Adjusted	836,026	479,680	335,033	562	1,651,301

1  Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

2  Includes losses from classifying businesses as held-for-sale as part of a broader restructuring of our European business.

3  Includes fair value movements on non-qualifying hedges and debt valuation adjustments on derivatives.

4  Comprises gains and losses relating to the business update in February 2020, including losses associated with RWA reduction commitments.

Reconciliation of reported results to adjusted results - global businesses (continued)
	Half-year to 30 Jun 2021
	Wealth and Personal Banking	Commercial Banking	Global Banking and Markets	Corporate Centre	Total
	$m	$m	$m	$m	$m
Revenue1
Reported	11,400	6,670	7,703	(222)	25,551
Currency translation	(423)	(301)	(349)	4	(1,069)
Significant items	3	(16)	164	101	252
-  customer redress programmes	2	(20)	-	-	(18)
-  fair value movements on financial instruments2	(1)	(1)	13	183	194
-  restructuring and other related costs3	-	2	162	(94)	70
-  currency translation on significant items	2	3	(11)	12	6
Adjusted	10,980	6,353	7,518	(117)	24,734
ECL
Reported	52	249	414	4	719
Currency translation	(14)	(21)	(9)	-	(44)
Adjusted	38	228	405	4	675
Operating expenses
Reported	(7,817)	(3,544)	(5,058)	(668)	(17,087)
Currency translation	332	156	267	(6)	749
Significant items	208	17	67	526	818
-  customer redress programmes	13	-	-	4	17
-  restructuring and other related costs	204	19	73	552	848
-  currency translation on significant items	(9)	(2)	(6)	(30)	(47)
Adjusted	(7,277)	(3,371)	(4,724)	(148)	(15,520)
Share of profit in associates and joint ventures
Reported	11	1	-	1,644	1,656
Currency translation	(1)	-	-	(6)	(7)
Adjusted	10	1	-	1,638	1,649
Profit before tax
Reported	3,646	3,376	3,059	758	10,839
Currency translation	(106)	(166)	(91)	(8)	(371)
Significant items	211	1	231	627	1,070
-  revenue	3	(16)	164	101	252
-  operating expenses	208	17	67	526	818
Adjusted profit before tax	3,751	3,211	3,199	1,377	11,538
Reported tax (charge)/ credit	(768)	(807)	(655)	(187)	(2,417)
Currency translation	25	35	19	30	109
Tax significant items	(46)	(6)	(48)	(47)	(147)
-  tax charge/(credit) on significant items	(50)	(6)	(50)	(47)	(153)
-  currency translation on significant items	4	-	2	-	6
Adjusted profit after tax	2,962	2,433	2,515	1,173	9,083
Loans and advances to customers (net)
Reported	491,320	350,945	216,098	1,148	1,059,511
Currency translation	(32,747)	(21,072)	(11,054)	(83)	(64,956)
Adjusted	458,573	329,873	205,044	1,065	994,555
Customer accounts
Reported	841,257	485,689	341,242	903	1,669,091
Currency translation	(47,980)	(30,683)	(24,377)	(109)	(103,149)
Adjusted	793,277	455,006	316,865	794	1,565,942

1  Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

2  Includes fair value movements on non-qualifying hedges and debt valuation adjustments on derivatives.

3  Comprises losses associated with RWA reduction commitments and gains relating to the business update in February 2020.

Reconciliation of reported results to adjusted results - global businesses (continued)
	Half-year to 31 Dec  2021
	Wealth and Personal Banking	Commercial Banking	Global Banking and Markets	Corporate Centre	Total
	$m	$m	$m	$m	$m
Revenue1
Reported	10,717	6,761	6,885	(362)	24,001
Currency translation	(271)	(210)	(235)	5	(711)
Significant items	(7)	5	228	61	287
-  customer redress programmes	5	2	-	-	7
-  fair value movements on financial instruments2	1	-	6	41	48
-  restructuring and other related costs3	(14)	1	233	17	237
-  currency translation on significant items	1	2	(11)	3	(5)
Adjusted	10,439	6,556	6,878	(296)	23,577
ECL
Reported	236	51	(77)	(1)	209
Currency translation	(21)	(11)	(3)	-	(35)
Adjusted	215	40	(80)	(1)	174
Operating expenses
Reported	(8,489)	(3,511)	(5,145)	(388)	(17,533)
Currency translation	212	96	197	5	510
Significant items	703	60	117	696	1,576
-  customer redress programmes	26	1	-	5	32
-  impairment of goodwill and other intangibles	587	-	-	-	587
-  restructuring and other related costs	92	62	124	710	988
-  currency translation on significant items	(2)	(3)	(7)	(19)	(31)
Adjusted	(7,574)	(3,355)	(4,831)	313	(15,447)
Share of profit in associates and joint ventures
Reported	23	-	-	1,367	1,390
Currency translation	1	-	-	(14)	(13)
Adjusted	24	-	-	1,353	1,377
Profit before tax
Reported	2,487	3,301	1,663	616	8,067
Currency translation	(79)	(125)	(41)	(4)	(249)
Significant items	696	65	345	757	1,863
-  revenue	(7)	5	228	61	287
-  operating expenses	703	60	117	696	1,576
Adjusted profit before tax	3,104	3,241	1,967	1,369	9,681
Reported tax (charge)/credit	(662)	(611)	(838)	315	(1,796)
Currency translation	3	23	51	(24)	53
Tax significant items	(15)	(8)	(41)	(103)	(167)
-  tax charge/(credit) on significant items	(16)	(9)	(45)	(103)	(173)
-  currency translation on significant items	1	1	4	-	6
Adjusted profit after tax	2,430	2,645	1,139	1,557	7,771
Loans and advances to customers (net)
Reported	488,786	349,126	207,162	740	1,045,814
Currency translation	(26,334)	(16,416)	(8,308)	(54)	(51,112)
Adjusted	462,452	332,710	198,854	686	994,702
Customer accounts
Reported	859,029	506,688	344,205	652	1,710,574
Currency translation	(38,465)	(24,907)	(19,966)	(62)	(83,400)
Adjusted	820,564	481,781	324,239	590	1,627,174

1  Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

2  Includes fair value movements on non-qualifying hedges and debt valuation adjustments on derivatives.

3  Comprises losses associated with RWA reduction commitments and gains relating to the business update in February 2020.

Reconciliation of reported and adjusted risk-weighted assets

	At 30 Jun 2022
	Wealth and Personal Banking	Commercial Banking	Global Banking and Markets	Corporate Centre	Total
	$bn	$bn	$bn	$bn	$bn
Risk-weighted assets
Reported	186.1	341.9	241.1	82.6	851.7
Adjusted1	186.1	341.9	241.1	82.6	851.7
	At 30 Jun 2021
Risk-weighted assets
Reported	185.0	332.1	255.2	90.0	862.3
Currency translation	(9.4)	(21.0)	(11.2)	(1.8)	(43.4)
Adjusted1	175.6	311.1	244.0	88.2	818.9

	At 31 Dec 2021
Risk-weighted assets
Reported	178.3	332.9	236.2	90.9	838.3
Currency translation	(7.3)	(16.4)	(7.9)	(1.4)	(33.0)
Adjusted1	171.0	316.5	228.3	89.5	805.3

1  Adjusted risk-weighted assets are calculated using reported risk-weighted assets adjusted for the effects of currency translation differences and material significant items.

Supplementary tables for WPB

WPB adjusted performance by business unit

A breakdown of WPB by business unit is presented below to reflect the basis of how the revenue performance of the business units is assessed and managed.

WPB - summary (adjusted basis)
	Total WPB	Consists of1
		Banking operations	Insurance manufacturing	Global Private Banking	Asset management
	$m	$m	$m	$m	$m
Half-year to 30 Jun 2022
Net operating income before change in expected credit losses and other credit impairment charges2	10,922	8,426	1,013	945	538
-  net interest income	7,658	6,132	1,139	388	(1)
-  net fee income/(expense)	2,619	2,013	(379)	424	561
-  other income	645	281	253	133	(22)
ECL	(573)	(562)	(7)	(4)	-
Net operating income	10,349	7,864	1,006	941	538
Total operating expenses	(7,411)	(5,931)	(404)	(667)	(409)
Operating profit	2,938	1,933	602	274	129
Share of profit/(loss) in associates and joint ventures	8	4	4	-	-
Profit before tax	2,946	1,937	606	274	129
Half-year to 30 Jun 2021
Net operating income before change in expected credit losses and other credit impairment charges2	10,980	8,065	1,437	905	573
-  net interest income	6,808	5,382	1,118	310	(2)
-  net fee income/(expense)	2,955	2,238	(306)	464	559
-  other income/(expense)	1,217	445	625	131	16
ECL	38	57	(20)	1	-
Net operating income	11,018	8,122	1,417	906	573
Total operating expenses	(7,277)	(5,942)	(260)	(685)	(390)
Operating profit	3,741	2,180	1,157	221	183
Share of profit/(loss) in associates and joint ventures	10	3	7	-	-
Profit before tax	3,751	2,183	1,164	221	183

WPB - summary (adjusted basis) (continued)
	Total WPB	Consists of1
		Banking operations	Insurance manufacturing	Global Private Banking	Asset management
	$m	$m	$m	$m	$m
Half-year to 31 Dec 2021
Net operating income before change in expected credit losses and other credit impairment charges2	10,439	7,833	1,132	870	604
-  net interest income	6,953	5,476	1,157	320	-
-  net fee income/(expense)	2,789	2,065	(299)	447	576
-  other income/(expense)	697	292	274	103	28
ECL	215	201	3	12	(1)
Net operating income	10,654	8,034	1,135	882	603
Total operating expenses2	(7,574)	(6,019)	(316)	(835)	(404)
Operating profit	3,080	2,015	819	47	199
Share of profit in associates and joint ventures	24	14	10	-	-
Profit before tax	3,104	2,029	829	47	199

1  The results presented for insurance manufacturing operations are shown before elimination of inter-company transactions with HSBC non-insurance operations. These eliminations are presented within Banking operations.

2  Operating expenses in Global Private Banking in 2H21 included a charge of $0.1bn, which did not meet the criteria to be classified as a significant item.

WPB insurance manufacturing adjusted results

The following table shows the results of our insurance manufacturing operations by income statement line item. It shows the results of insurance manufacturing operations for WPB and for all global business segments in aggregate, and separately the insurance distribution income earned by HSBC bank channels.

Adjusted results of insurance manufacturing operations and insurance distribution income earned by HSBC bank channels1,2
	Half-year to
	30 Jun		30 Jun		31 Dec
	2022		2021		2021
	WPB	All global businesses	WPB	All global businesses	WPB	All global businesses
	$m	$m	$m	$m	$m	$m
Net interest income	1,139	1,254	1,118	1,205	1,157	1,244
Net fee expense	(379)	(398)	(306)	(330)	(299)	(306)
-  fee income	78	88	45	56	57	69
-  fee expense	(457)	(486)	(351)	(386)	(356)	(375)
Net income/(expense) from financial instruments held for trading or managed on a fair value basis	55	45	(2)	(6)	1	(1)
Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss	(3,060)	(3,077)	2,656	2,682	1,245	1,254
Gains less losses from financial investments	(1)	(1)	58	53	28	36
Net insurance premium income	7,335	7,702	5,241	5,563	5,028	5,180
Other operating income/(expense)	1,010	1,011	38	22	131	130
-  of which: PVIF	915	922	10	(2)	71	75
Total operating income	6,099	6,536	8,803	9,189	7,291	7,537
Net insurance claims and benefits paid and movement in liabilities to policyholders	(5,086)	(5,476)	(7,366)	(7,680)	(6,159)	(6,347)
Net operating income before change in expected credit losses and other credit impairment charges3	1,013	1,060	1,437	1,509	1,132	1,190
Change in expected credit losses and other credit impairment charges	(7)	(8)	(20)	(19)	3	(1)
Net operating income	1,006	1,052	1,417	1,490	1,135	1,189
Total operating expenses	(404)	(416)	(260)	(271)	(316)	(332)
Operating profit	602	636	1,157	1,219	819	857
Share of profit/(loss) in associates and joint ventures	4	4	7	7	10	10
Profit before tax of insurance manufacturing operations4	606	640	1,164	1,226	829	867
Annualised new business premiums of insurance manufacturing operations	1,280	1,320	1,525	1,561	1,272	1,289
Insurance distribution income earned by HSBC bank channels	431	470	386	430	353	378

1  Adjusted results are derived by adjusting for period-on-period effects of foreign currency translation differences, and the effect of significant items that distort period-on-period comparisons. There were no significant items included within insurance manufacturing, and the impact of foreign currency translation on 'All global businesses' profit before tax was 1H21: $36m unfavourable (reported: $1,262m); 2H21: $12m unfavourable (reported: $879m).

2  The results presented for insurance manufacturing operations are shown before elimination of inter-company transactions with HSBC
non-insurance operations.

3  Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

4  The effect on the insurance manufacturing operations of applying hyperinflation accounting in Argentina resulted in a decrease in adjusted revenue in 1H22 of $2m (1H21: increase of $6m; 2H21: increase of $5m) and a decrease in profit before tax in 1H22 of $2m (1H21: increase of $6m; 2H21: increase of $4m). These effects are recorded within 'All global businesses'.

Insurance manufacturing

The following commentary, unless otherwise specified, relates to the 'All global businesses' results.

HSBC recognises the present value of long-term in-force insurance contracts and investment contracts with discretionary participation features ('PVIF') as an asset on the balance sheet.

The overall balance sheet equity, including PVIF, is therefore a measure of the embedded value in the insurance manufacturing entities, and the movement in this embedded value in the period drives the overall income statement result.

Adjusted profit before tax of $0.6bn decreased by $0.6bn compared with 1H21.

Net operating income before change in expected credit losses and other credit impairment charges was $1.1bn, which was $0.5bn lower than in 1H21. This reflected the following:

• 'Net expense from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss' of $3.1bn in 1H22, compared with a net income of $2.7bn in 1H21. This was primarily due to unfavourable equity market performances in France and Hong Kong in 1H22, compared with favourable market performances in 1H21.

This unfavourable movement resulted in a corresponding movement in liabilities to policyholders and PVIF (see 'Other operating income' below), reflecting the extent to which policyholders and shareholders respectively participate in the investment performance of the associated asset portfolios.

• Net insurance premium income of $7.7bn was $2.1bn higher than in 1H21. This increase reflected strong sales in Hong Kong driven by our whole-of-life propositions.

•
Other operating income of $1.0bn increased by $1.0bn compared with 1H21, reflecting an increase in the value of new business of $0.2bn in Hong Kong, a $0.3bn gain from a pricing update for policyholder funds held on deposit with us in Hong Kong to reflect the cost of provision of these services, and an increase of $0.3bn primarily reflecting the effect of sharing lower investment returns with policyholders in Hong Kong. It also reflected a $0.1bn day one provisional gain on completion of our acquisition of AXA Singapore in 1H22.

• Net insurance claims and benefits paid and movement in liabilities to policyholders of $5.5bn were $2.2bn lower, primarily due to a decline in returns on financial assets supporting contracts where the policyholder is subject to part or all of the investment risk, mainly in France and Hong Kong. It also reflected higher sales volumes in Hong Kong.

• Total operating expenses of $0.4bn increased by $0.1bn compared with 1H21, reflecting the incorporation of the results of AXA Singapore in 1H22 and investment in our Pinnacle proposition in mainland China.

Annualised new business premiums ('ANP') is a measure of new insurance premium generation by the business. It is calculated as 100% of annualised first-year regular premiums and 10% of single premiums, before reinsurance ceded. ANP of $1.3bn in 1H22 was $0.2bn lower due to a higher proportion of sales in Hong Kong having been generated from single premium products.

Insurance distribution income from HSBC channels included $294m (1H21: $258m; 2H21: $216m) on HSBC manufactured products, for which a corresponding fee expense is recognised within insurance manufacturing, and $175m (1H21: $172m; 2H21: $162m) on products manufactured by third-party providers. The WPB component of this distribution income was $265m (1H21: $223m; 2H21: $199m) from HSBC manufactured products and $166m (1H21: $163m; 2H21: $154m) from third-party products.

WPB: Wealth adjusted revenue by geography

The following table shows the adjusted revenue of our Wealth business by region. Our Wealth business comprises investment distribution, life insurance manufacturing, Global Private Banking and Asset Management.

Wealth adjusted revenue by geography
	Half-year to
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$m	$m	$m
Europe	1,173	1,186	1,044
Asia	2,426	3,114	2,614
MENA	94	84	84
North America	281	259	268
Latin America	136	119	127
Total	4,110	4,762	4,137

WPB: Wealth balances

The following table shows the wealth balances, which include invested assets and wealth deposits. Invested assets comprise

customer assets either managed by our Asset Management business or by external third-party investment managers, as well as self-directed investments by our customers.

WPB - reported wealth balances1
	Half-year to
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$bn	$bn	$bn
Global Private Banking client assets	311	360	351
-  managed by Global Asset Management	57	69	67
-  external managers, direct securities and other	254	291	284
Retail wealth balances	398	457	434
-  managed by Global Asset Management	219	231	229
-  external managers, direct securities and other	179	226	205
Asset Management third-party distribution	310	317	334
Reported invested assets1	1,019	1,134	1,119
Wealth deposits (Premier, Jade and Global Private Banking)2	542	537	551
Total reported wealth balances	1,561	1,671	1,670

1  Invested assets are not reported on the Group's balance sheet, except where it is deemed that we are acting as principal rather than agent in our role as investment manager.

2  Premier, Jade and Global Private Banking deposits, which include Prestige deposits in Hang Seng Bank, form part of the total WPB customer accounts balance of $836bn (30 June 2021: $841bn, 31 December 2021: $859bn) on page 37.

Asset Management: Funds under management

The following table shows the funds under management of our Asset Management business. Funds under management

represents assets managed, either actively or passively, on behalf of our customers.

Asset Management - reported funds under management1
	Half-year to
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$bn	$bn	$bn
Opening balance	630	602	616
Net new invested assets	20	4	23
Net market movements	(33)	16	2
Foreign exchange and others	(32)	(6)	(11)
Closing balance	585	616	630
Asset Management - reported funds under management by geography
	At
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$bn	$bn	$bn
Europe	317	347	367
Asia	170	186	180
MENA	5	6	5
North America	84	68	69
Latin America	9	9	9
Closing balance	585	616	630

1  Funds under management are not reported on the Group's balance sheet, except where it is deemed that we are acting as principal rather than agent in our role as investment manager.

At 30 June 2022, Asset Management funds under management amounted to $585bn, a decrease of $45bn or 7% compared with 31 December 2021. The decrease was driven by an adverse market performance, reflecting the effects of macroeconomic uncertainty on financial markets, and the unfavourable impact of

foreign currency translation differences. Despite this, we delivered robust net new invested assets of $20bn, primarily from money market solutions, passive investment products and private equity investment products.

Global Private Banking client assets¹

The following table shows the client assets of our Global Private Banking business.

Global Private Banking - reported client assets2
	Half-year to
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$bn	$bn	$bn
Opening balance	423	394	427
Net new invested assets	14	20	(1)
Increase/(decrease) in deposits	(2)	-	4
Net market movements	(43)	16	1
Foreign exchange and others	(10)	(3)	(8)
Closing balance	382	427	423

Global Private Banking - reported client assets by geography
	At
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$bn	$bn	$bn
Europe	154	176	174
Asia	167	193	178
North America	61	58	71
Closing balance	382	427	423

1  Client assets are translated at the rates of exchange applicable for their respective period-ends, with the effects of currency translation reported separately.

2  Client assets are not reported on the Group's balance sheet, except where it is deemed that we are acting as principal rather than agent in our role as investment manager. Customer deposits included in these client assets are recorded on our balance sheet.

Retail invested assets

The following table shows the invested assets of our retail customers. These comprise customer assets either managed by our Asset Management business or by external third-party

investment managers as well as self-directed investments by our customers. Retail invested assets are not reported on the Group's balance sheet, except where it is deemed that we are acting as principal rather than agent in our role as investment manager.

Retail invested assets
	Half-year to
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$bn	$bn	$bn
Opening balance	434	407	457
Net new invested assets1	12	16	10
Net market movements	(27)	22	(17)
Foreign exchange and others	(21)	12	(16)
Closing balance	398	457	434
Retail invested assets by geography
	At
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$bn	$bn	$bn
Europe	65	81	81
Asia	284	316	293
MENA	4	5	4
North America	37	46	47
Latin America	8	9	9
Closing balance	398	457	434

1  'Retail net new invested assets' covers nine markets, comprising Hong Kong including Hang Seng Bank (Hong Kong), mainland China, Malaysia, Singapore, HSBC UK, UAE, US, Canada and Mexico. The 'net new invested assets' related to all other geographies is reported in 'Foreign exchange and other'.

WPB invested assets

'Net new invested assets' represents the net customer inflows from retail invested assets, Asset Management third-party distribution and Global Private Banking invested assets. It excludes all customer deposits. The 'net new invested assets' in the table below is non-additive from the tables above, as net new invested assets managed by Asset Management that are generated by retail clients or Global Private Banking will be recorded in both businesses.

WPB: Invested assets
	Half-year to
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$bn	$bn	$bn
Opening balance	1,119	1,050	1,134
Net new invested assets	39	36	28
Net market movements	(85)	44	(10)
Foreign exchange and others	(54)	4	(33)
Closing balance	1,019	1,134	1,119
WPB: Net new invested assets by geography
	At
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$bn	$bn	$bn
Europe	-	(1)	18
Asia	22	27	10
MENA	-	-	-
North America	17	10	-
Latin America	-	-	-
Total	39	36	28

Geographical regions
		Page
Analysis of reported results by geographical regions		46
Reconciliation of reported and adjusted items - geographical regions		48
Analysis by country/territory		54
Analysis of reported results by geographical regions
HSBC reported profit/(loss) before tax and balance sheet data
	Half-year to 30 Jun 2022
	Europe			Asia	MENA	North America	Latin America	Intra-HSBC items	Total
	$m			$m	$m	$m	$m	$m	$m
Net interest income	3,578			6,785	702	1,527	1,260	599	14,451
Net fee income	1,847			2,527	431	997	263	(1)	6,064
Net income from financial instruments held for trading or managed on a fair value basis	1,692			2,286	310	294	299	40	4,921
Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit and loss	(1,709)			(1,354)	-	-	11	1	(3,051)
Changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss	691			4	3	(7)	19	(642)	68
Other income/(expense)1	3,253			2,701	(108)	378	(71)	(3,370)	2,783
Net operating income before change in expected credit losses and other credit impairment charges2	9,352			12,949	1,338	3,189	1,781	(3,373)	25,236
Change in expected credit losses and other credit impairment charges	(302)			(529)	49	(47)	(261)	-	(1,090)
Net operating income	9,050			12,420	1,387	3,142	1,520	(3,373)	24,146
Total operating expenses excluding impairment of goodwill and other intangible assets	(8,102)			(7,443)	(755)	(2,281)	(1,135)	3,373	(16,343)
Impairment of goodwill and other intangible assets	(42)			(28)	(1)	(3)	(2)	-	(76)
Operating profit	906			4,949	631	858	383	-	7,727
Share of profit/(loss) in associates and joint ventures	(23)			1,351	117	-	4	-	1,449
Profit before tax	883			6,300	748	858	387	-	9,176
	%			%	%	%	%		%
Share of HSBC's profit before tax	9.5			68.7	8.2	9.4	4.2		100.0
Cost efficiency ratio	87.1			57.7	56.5	71.6	63.8		65.1
Balance sheet data	$m			$m	$m	$m	$m	$m	$m
Loans and advances to customers (net)	368,923			492,548	28,348	116,075	22,462	-	1,028,356
Total assets	1,356,981			1,311,551	72,791	366,751	50,024	(172,678)	2,985,420
Customer accounts	628,977			779,153	44,008	168,699	30,464	-	1,651,301
Risk-weighted assets3	257,609			410,736	60,856	111,990	37,870	-	851,743
	Half-year to 30 Jun 2021
Net interest income	3,144			6,266	650	1,432	1,009	597	13,098
Net fee income	1,925			3,115	370	1,009	255	-	6,674
Net income from financial instruments held for trading or managed on a fair value basis	1,439			2,010	205	258	235	37	4,184
Net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit and loss	1,074			1,700	-	-	21	-	2,795
Changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss	1,124			(3)	(3)	31	36	(637)	548
Other income/(expense)1	1,523			168	30	321	(71)	(3,719)	(1,748)
Net operating income before change in expected credit losses and other credit impairment charges2	10,229			13,256	1,252	3,051	1,485	(3,722)	25,551
Change in expected credit losses and other credit impairment charges	670			(207)	116	212	(72)	-	719
Net operating income	10,899			13,049	1,368	3,263	1,413	(3,722)	26,270
Total operating expenses excluding impairment of goodwill and other intangible assets	(9,071)			(7,457)	(782)	(2,448)	(1,009)	3,722	(17,045)
Impairment of goodwill and other intangible assets	(13)			(15)	(3)	(10)	(1)	-	(42)
Operating profit	1,815			5,577	583	805	403	-	9,183
Share of profit in associates and joint ventures	153			1,359	140	-	4	-	1,656
Profit before tax	1,968			6,936	723	805	407	-	10,839
	%			%	%	%	%		%
Share of HSBC's profit before tax	18.2			64.0	6.7	7.4	3.7		100.0
Cost efficiency ratio	88.8			56.4	62.7	80.6	68.0		66.9
Balance sheet data	$m			$m	$m	$m	$m	$m	$m
Loans and advances to customers (net)	402,778			502,360	27,608	106,414	20,351	-	1,059,511
Total assets	1,376,064			1,249,145	68,351	383,082	49,102	(149,739)	2,976,005
Customer accounts	663,996			759,948	41,086	176,152	27,909	-	1,669,091
Risk-weighted assets3	269,873			407,117	59,476	115,208	34,845	-	862,292

HSBC reported profit/(loss) before tax and balance sheet data (continued)
	Half-year to 31 Dec 2021
	Europe	Asia	MENA	North America	Latin America	Intra-HSBC items	Total
	$m	$m	$m	$m	$m	$m	$m
Net interest income	3,310	6,330	649	1,413	1,186	503	13,391
Net fee income	1,957	2,756	404	1,047	259	-	6,423
Net income from financial instruments held for trading or managed on a fair value basis	1,163	1,633	226	168	241	129	3,560
Net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit and loss	596	640	-	-	24	(2)	1,258
Changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss	849	-	-	23	4	(626)	250
Other income/(expense)1	2,000	1,148	29	352	(141)	(4,269)	(881)
Net operating income before change in expected credit losses and other credit impairment charges2	9,875	12,507	1,308	3,003	1,573	(4,265)	24,001
Change in expected credit losses and other credit impairment charges	931	(633)	16	26	(131)	-	209
Net operating income	10,806	11,874	1,324	3,029	1,442	(4,265)	24,210
Total operating expenses excluding impairment of goodwill and other intangible assets	(9,028)	(7,679)	(754)	(2,457)	(1,189)	4,265	(16,842)
Impairment of goodwill and other intangible assets	(82)	(9)	(5)	(3)	(592)	-	(691)
Operating profit/(loss)	1,696	4,186	565	569	(339)	-	6,677
Share of profit/(loss) in associates and joint ventures	115	1,127	135	-	13	-	1,390
Profit/(loss) before tax	1,811	5,313	700	569	(326)	-	8,067
	%	%	%	%	%		%
Share of HSBC's profit before tax	22.3	65.9	8.7	7.1	(4.0)		100.0
Cost efficiency ratio	92.3	61.5	58.0	81.9	113.2		73.1
Balance sheet data	$m	$m	$m	$m	$m	$m	$m
Loans and advances to customers (net)	397,090	492,525	26,375	108,717	21,107	-	1,045,814
Total assets	1,354,483	1,261,707	70,974	362,150	46,602	(137,977)	2,957,939
Customer accounts	667,769	792,098	42,629	178,565	29,513	-	1,710,574
Risk-weighted assets3	261,115	396,206	60,223	110,412	35,915	-	838,263

1  Other income/(expense) in this context comprises, where applicable, net income/(expense) from other financial instruments designated at fair value, gains less losses from financial investments, dividend income, net insurance premium income and other operating income less net insurance claims and benefits paid and movement in liabilities to policyholders.

2  Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

3  Risk-weighted assets are non-additive across geographical regions due to market risk diversification effects within the Group.

Reconciliation of reported and adjusted items - geographical regions

Reconciliation of reported and adjusted items - geographical regions and selected countries/territories
	Half-year to 30 Jun 2022
	Europe	Asia	MENA	North America	Latin America	Total
	$m	$m	$m	$m	$m	$m
Revenue1
Reported2	9,352	12,949	1,338	3,189	1,781	25,236
Significant items	437	(166)	(5)	(105)	-	454
-  customer redress programmes	14	-	-	-	-	14
-  disposals, acquisitions and investment in new businesses3	288	-	-	-	-	288
-  fair value movements on financial instruments4	308	(76)	(5)	(6)	(1)	220
-  restructuring and other related costs2,5	(173)	(90)	-	(99)	1	(68)
Adjusted2	9,789	12,783	1,333	3,084	1,781	25,690
ECL
Reported	(302)	(529)	49	(47)	(261)	(1,090)
Adjusted	(302)	(529)	49	(47)	(261)	(1,090)
Operating expenses
Reported2	(8,144)	(7,471)	(756)	(2,284)	(1,137)	(16,419)
Significant items	835	281	22	155	43	1,043
-  customer redress programmes	(6)	-	-	-	-	(6)
-  impairment of goodwill and other intangibles	9	-	-	-	-	9
-  restructuring and other related costs2	832	281	22	155	43	1,040
Adjusted2	(7,309)	(7,190)	(734)	(2,129)	(1,094)	(15,376)
Share of profit in associates and joint ventures
Reported	(23)	1,351	117	-	4	1,449
Adjusted	(23)	1,351	117	-	4	1,449
Profit before tax
Reported	883	6,300	748	858	387	9,176
Significant items	1,272	115	17	50	43	1,497
-  revenue2	437	(166)	(5)	(105)	-	454
-  operating expenses2	835	281	22	155	43	1,043
Adjusted profit before tax	2,155	6,415	765	908	430	10,673
Reported tax (charge)/credit	1,536	(1,045)	(167)	(205)	(80)	39
Tax significant items	(1,962)	(14)	(3)	(10)	(12)	(2,001)
-  tax charge/(credit) on significant items	(197)	(14)	(3)	(10)	(12)	(236)
-  recognition of losses on HSBC Holdings	(1,765)	-	-	-	-	(1,765)
Adjusted profit after tax	1,729	5,356	595	693	338	8,711
Loans and advances to customers (net)
Reported	368,923	492,548	28,348	116,075	22,462	1,028,356
Adjusted	368,923	492,548	28,348	116,075	22,462	1,028,356
Customer accounts
Reported	628,977	779,153	44,008	168,699	30,464	1,651,301
Adjusted	628,977	779,153	44,008	168,699	30,464	1,651,301

1  Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

2  Amounts are non-additive across geographical regions due to inter-company transactions within the Group.

3  Includes losses from classifying businesses as held-for-sale as part of a broader restructuring of our European business.

4  Includes fair value movements on non-qualifying hedges and debt valuation adjustments on derivatives.

5  Comprises gains and losses relating to the business update in February 2020, including losses associated with RWA reduction commitments.

Reconciliation of reported and adjusted items - geographical regions and selected countries/territories (continued)
	Half-year to 30 Jun 2022
	UK1	Hong Kong	Mainland China	US	Mexico
	$m	$m	$m	$m	$m
Revenue2
Reported	8,811	6,974	2,157	2,122	1,296
Significant items	127	(16)	(38)	(101)	1
-  customer redress programmes	14	-	-	-	-
-  fair value movement on financial instruments3	318	(56)	(2)	(4)	(1)
-  restructuring and other related costs4	(205)	40	(36)	(97)	2
Adjusted	8,938	6,958	2,119	2,021	1,297
ECL
Reported	(196)	(419)	(139)	(21)	(243)
Adjusted	(196)	(419)	(139)	(21)	(243)
Operating expenses
Reported	(6,465)	(4,065)	(1,422)	(1,696)	(790)
Significant items	694	132	15	127	36
-  customer redress programmes	(6)	-	-	-	-
-  restructuring and other related costs	700	132	15	127	36
Adjusted	(5,771)	(3,933)	(1,407)	(1,569)	(754)
Share of profit in associates and joint ventures
Reported	(23)	(1)	1,344	-	4
Adjusted	(23)	(1)	1,344	-	4
Profit before tax
Reported	2,127	2,489	1,940	405	267
Significant items	821	116	(23)	26	37
-  revenue	127	(16)	(38)	(101)	1
-  operating expenses	694	132	15	127	36
Adjusted profit before tax	2,948	2,605	1,917	431	304
Reported tax (charge)/credit	1,653	(367)	(103)	(101)	(69)
Tax significant items	(1,869)	(18)	6	(7)	(11)
-  tax charge/(credit) on significant items	(104)	(18)	6	(7)	(11)
-  recognition of losses on HSBC Holdings	(1,765)	-	-	-	-
Adjusted profit after tax	2,732	2,220	1,820	323	224
Loans and advances to customers (net)
Reported	285,097	310,779	52,922	56,819	18,996
Adjusted	285,097	310,779	52,922	56,819	18,996
Customer accounts
Reported	505,195	543,400	55,580	101,137	23,659
Adjusted	505,195	543,400	55,580	101,137	23,659

1  UK includes HSBC UK Bank plc (ring-fenced bank) and HSBC Bank plc (non-ring-fenced bank).

2  Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

3  Includes fair value movements on non-qualifying hedges and debt valuation adjustments on derivatives.

4  Comprises gains and losses relating to the business update in February 2020, including losses associated with RWA reduction commitments.

Reconciliation of reported and adjusted items - geographical regions and selected countries/territories (continued)
	Half-year to 30 Jun 2021
	Europe	Asia	MENA	North America	Latin America	Total
	$m	$m	$m	$m	$m	$m
Revenue1
Reported2	10,229	13,256	1,252	3,051	1,485	25,551
Currency translation2	(743)	(244)	(89)	(18)	(53)	(1,069)
Significant items	90	(53)	(1)	3	7	252
-  customer redress programmes	(18)	-	-	-	-	(18)
-  fair value movements on financial instruments3	188	5	-	-	1	194
-  restructuring and other related costs2,4	(91)	(59)	-	3	6	70
-  currency translation on significant items	11	1	(1)	-	-	6
Adjusted2	9,576	12,959	1,162	3,036	1,439	24,734
ECL
Reported	670	(207)	116	212	(72)	719
Currency translation	(42)	5	(7)	(2)	2	(44)
Adjusted	628	(202)	109	210	(70)	675
Operating expenses
Reported2	(9,084)	(7,472)	(785)	(2,458)	(1,010)	(17,087)
Currency translation2	576	143	52	11	45	749
Significant items	590	197	21	190	26	818
-  customer redress programmes	17	-	-	-	-	17
-  restructuring and other related costs2	617	202	22	191	27	848
-  currency translation on significant items	(44)	(5)	(1)	(1)	(1)	(47)
Adjusted2	(7,918)	(7,132)	(712)	(2,257)	(939)	(15,520)
Share of profit in associates and joint ventures
Reported	153	1,359	140	-	4	1,656
Currency translation	(6)	(1)	-	-	-	(7)
Adjusted	147	1,358	140	-	4	1,649
Profit before tax
Reported	1,968	6,936	723	805	407	10,839
Currency translation	(215)	(97)	(44)	(9)	(6)	(371)
Significant items	680	144	20	193	33	1,070
-  revenue2	90	(53)	(1)	3	7	252
-  operating expenses2	590	197	21	190	26	818
Adjusted profit before tax	2,433	6,983	699	989	434	11,538
Reported tax (charge)/credit	(738)	(1,123)	(123)	(316)	(117)	(2,417)
Currency translation	63	29	12	2	3	109
Tax significant items	(67)	(28)	(4)	(39)	(9)	(147)
-  tax charge/(credit) on significant items	(70)	(29)	(4)	(39)	(11)	(153)
-  currency translation on significant items	3	1	-	-	2	6
Adjusted profit after tax	1,691	5,861	584	636	311	9,083
Loans and advances to customers (net)
Reported	402,778	502,360	27,608	106,414	20,351	1,059,511
Currency translation	(47,474)	(12,973)	(1,773)	(2,182)	(554)	(64,956)
Adjusted	355,304	489,387	25,835	104,232	19,797	994,555
Customer accounts
Reported	663,996	759,948	41,086	176,152	27,909	1,669,091
Currency translation	(78,133)	(18,216)	(3,225)	(2,352)	(1,223)	(103,149)
Adjusted	585,863	741,732	37,861	173,800	26,686	1,565,942

1  Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

2  Amounts are non-additive across geographical regions due to inter-company transactions within the Group.

3  Includes fair value movements on non-qualifying hedges and debt valuation adjustments on derivatives.

4  Comprises gains and losses relating to the business update in February 2020, including losses associated with RWA reduction commitments.

Reconciliation of reported and adjusted items - geographical regions and selected countries/territories (continued)
	Half-year to 30 Jun 2021
	UK1	Hong Kong	Mainland China	US	Mexico
	$m	$m	$m	$m	$m
Revenue2
Reported	8,179	7,661	1,791	2,048	1,149
Currency translation	(535)	(59)	(3)	-	(5)
Significant items	122	25	(21)	4	16
-  customer redress programmes	(18)	-	-	-	-
-  fair value movements on financial instruments3	186	2	-	-	1
-  restructuring and other related costs	(49)	23	(21)	4	15
-  currency translation on significant items	3	-	-	-	-
Adjusted	7,766	7,627	1,767	2,052	1,160
ECL
Reported	655	(91)	(2)	174	(68)
Currency translation	(41)	1	-	-	-
Adjusted	614	(90)	(2)	174	(68)
Operating expenses
Reported	(7,307)	(3,945)	(1,306)	(1,849)	(725)
Currency translation	419	29	3	-	4
Significant items	537	85	11	153	10
-  customer redress programmes	17	-	-	-	-
-  restructuring and other related costs	558	86	11	153	10
-  currency translation on significant items	(38)	(1)	-	-	-
Adjusted	(6,351)	(3,831)	(1,292)	(1,696)	(711)
Share of profit in associates and joint ventures
Reported	153	8	1,348	-	4
Currency translation	(6)	-	(1)	-	-
Adjusted	147	8	1,347	-	4
Profit before tax
Reported	1,680	3,633	1,831	373	360
Currency translation	(163)	(29)	(1)	-	(1)
Significant items	659	110	(10)	157	26
-  revenue	122	25	(21)	4	16
-  operating expenses	537	85	11	153	10
Adjusted profit before tax	2,176	3,714	1,820	530	385
Reported tax (charge)/credit	(581)	(556)	(111)	(209)	(96)
Currency translation	42	5	1	-	-
Tax significant items	(82)	(18)	3	(38)	(8)
-  tax charge/(credit) on significant items	(87)	(18)	3	(38)	(8)
-  currency translation on significant items	5	-	-	-	-
Adjusted profit after tax	1,555	3,145	1,713	283	281
Loans and advances to customers (net)
Reported	313,966	328,913	51,123	51,985	17,793
Currency translation	(37,606)	(3,392)	(1,800)	-	(252)
Adjusted	276,360	325,521	49,323	51,985	17,541
Customer accounts
Reported	534,034	529,172	57,227	110,579	22,516
Currency translation	(63,965)	(5,456)	(2,015)	-	(318)
Adjusted	470,069	523,716	55,212	110,579	22,198

1  UK includes HSBC UK Bank plc (ring-fenced bank) and HSBC Bank plc (non-ring-fenced bank).

2  Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

3  Includes fair value movements on non-qualifying hedges and debt valuation adjustments on derivatives.

Reconciliation of reported and adjusted items - geographical regions and selected countries/territories (continued)
	Half-year to 31 Dec 2021
	Europe	Asia	MENA	North America	Latin America	Total
	$m	$m	$m	$m	$m	$m
Revenue1
Reported2	9,875	12,507	1,308	3,003	1,573	24,001
Currency translation2	(503)	(147)	(74)	(9)	(35)	(711)
Significant items2	44	(108)	-	7	(2)	287
-  customer redress programmes	7	-	-	-	-	7
-  fair value movements on financial instruments3	38	6	-	5	(1)	48
-  restructuring and other related costs2,4	1	(116)	-	2	(1)	237
-  currency translation on significant items	(2)	2	-	-	-	(5)
Adjusted2	9,416	12,252	1,234	3,001	1,536	23,577
ECL
Reported	931	(633)	16	26	(131)	209
Currency translation	(37)	7	3	-	(8)	(35)
Adjusted	894	(626)	19	26	(139)	174
Operating expenses
Reported2	(9,110)	(7,688)	(759)	(2,460)	(1,781)	(17,533)
Currency translation2	406	94	32	6	29	510
Significant items2	699	303	32	241	647	1,576
-  customer redress programmes	32	-	-	-	-	32
-  impairment of goodwill and other intangibles	-	-	-	-	587	587
-  restructuring and other related costs2	701	307	34	241	56	988
-  currency translation on significant items	(34)	(4)	(2)	-	4	(31)
Adjusted2	(8,005)	(7,291)	(695)	(2,213)	(1,105)	(15,447)
Share of profit/(loss) in associates and joint ventures
Reported	115	1,127	135	-	13	1,390
Currency translation	(5)	(9)	1	-	-	(13)
Adjusted	110	1,118	136	-	13	1,377
Profit/(loss) before tax
Reported	1,811	5,313	700	569	(326)	8,067
Currency translation	(139)	(55)	(38)	(3)	(14)	(249)
Significant items	743	195	32	248	645	1,863
-  revenue2	44	(108)	-	7	(2)	287
-  operating expenses2	699	303	32	241	647	1,576
Adjusted profit before tax	2,415	5,453	694	814	305	9,681
Reported tax (charge)/credit	(514)	(958)	(129)	(27)	(168)	(1,796)
Currency translation	22	13	12	1	5	53
Tax significant items	(77)	(16)	(6)	(54)	(14)	(167)
-  tax charge/(credit) on significant items	(82)	(16)	(7)	(54)	(14)	(173)
-  currency translation on significant items	5	-	1	-	-	6
Adjusted profit  after tax	1,846	4,492	571	734	128	7,771
Loans and advances to customers (net)
Reported	397,090	492,525	26,375	108,717	21,107	1,045,814
Currency translation	(38,009)	(11,318)	(802)	(1,024)	41	(51,112)
Adjusted	359,081	481,207	25,573	107,693	21,148	994,702
Customer accounts
Reported	667,769	792,098	42,629	178,565	29,513	1,710,574
Currency translation	(64,037)	(15,936)	(1,995)	(1,097)	(335)	(83,400)
Adjusted	603,732	776,162	40,634	177,468	29,178	1,627,174

1  Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

2  Amounts are non-additive across geographical regions due to inter-company transactions within the Group.

3  Includes fair value movements on non-qualifying hedges and debt valuation adjustments on derivatives.

4  Comprises gains and losses relating to the business update in February 2020, including losses associated with RWA reduction commitments.

Reconciliation of reported and adjusted items - geographical regions and selected countries/territories (continued)
	Half-year to 31 Dec 2021
	UK1	Hong Kong	Mainland China	US	Mexico
	$m	$m	$m	$m	$m
Revenue2
Reported	8,236	6,802	1,943	1,958	1,192
Currency translation	(399)	(33)	(15)	-	5
Significant items	(130)	36	(19)	10	-
-  customer redress programmes	7	-	-	-	-
-  fair value movements on financial instruments3	34	5	-	5	(1)
-  restructuring and other related costs4	(178)	31	(20)	5	-
-  currency translation on significant items	7	-	1	-	1
Adjusted	7,707	6,805	1,909	1,968	1,197
ECL
Reported	990	(517)	(87)	31	(156)
Currency translation	(40)	4	2	-	(5)
Adjusted	950	(513)	(85)	31	(161)
Operating expenses
Reported	(7,501)	(4,010)	(1,467)	(1,834)	(840)
Currency translation	313	20	11	-	(9)
Significant items	592	140	20	202	52
-  customer redress programmes	32	-	-	-	-
-  restructuring and other related costs	586	141	21	202	49
-  currency translation on significant items	(26)	(1)	(1)	-	3
Adjusted	(6,596)	(3,850)	(1,436)	(1,632)	(797)
Share of profit in associates and joint ventures
Reported	114	8	1,113	-	13
Currency translation	(4)	-	(9)	-	-
Adjusted	110	8	1,104	-	13
Profit/(loss) before tax
Reported	1,839	2,283	1,502	155	209
Currency translation	(130)	(9)	(11)	-	(9)
Significant items	462	176	1	212	52
-  revenue	(130)	36	(19)	10	-
-  operating expenses	592	140	20	202	52
Adjusted profit before tax	2,171	2,450	1,492	367	252
Reported tax (charge)/credit	(498)	(377)	(148)	57	(112)
Currency translation	23	2	1	-	(1)
Tax significant items	(56)	(29)	-	(50)	(14)
-  tax charge/(credit) on significant items	(59)	(29)	-	(50)	(14)
-  currency translation on significant items	3	-	-	-	-
Adjusted profit after tax	1,640	2,046	1,345	374	125
Loans and advances to customers (net)
Reported	306,464	311,947	54,239	52,678	18,043
Currency translation	(30,977)	(1,910)	(2,733)	2	227
Adjusted	275,487	310,037	51,506	52,680	18,270
Customer accounts
Reported	535,797	549,429	59,266	111,921	23,583
Currency translation	(54,158)	(3,365)	(2,986)	-	297
Adjusted	481,639	546,064	56,280	111,921	23,880

1  UK includes HSBC UK Bank plc (ring-fenced bank) and HSBC Bank plc (non-ring-fenced bank).

2  Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

3  Includes fair value movements on non-qualifying hedges and debt valuation adjustments on derivatives.

4  Comprises losses associated with RWA reduction commitments we made at our business update in February 2020.

Analysis by country/territory
Profit/(loss) before tax by country/territory within global businesses
	Wealth and Personal Banking	Commercial Banking	Global Banking and Markets	Corporate Centre	Total
	$m	$m	$m	$m	$m
Europe	740	1,468	148	(1,473)	883
-  UK1	614	1,203	(54)	364	2,127
of which: HSBC UK Bank plc (ring-fenced bank)	843	1,515	71	(159)	2,270
of which: HSBC Bank plc (non-ring-fenced bank)	112	113	264	(209)	280
of which: Holdings and other2	(341)	(425)	(389)	732	(423)
-  France	117	143	53	(82)	231
-  Germany	4	36	93	(65)	68
-  Switzerland	11	(42)	(1)	(12)	(44)
-  other2	(6)	128	57	(1,678)	(1,499)
Asia	1,741	1,276	1,832	1,451	6,300
-  Hong Kong	1,570	567	518	(166)	2,489
-  Australia	60	84	91	(22)	213
-  India	33	156	324	131	644
-  Indonesia	8	44	52	(2)	102
-  mainland China	(56)	137	310	1,549	1,940
-  Malaysia	45	34	115	(15)	179
-  Singapore	65	73	144	(21)	261
-  Taiwan	19	15	68	(7)	95
-  other	(3)	166	210	4	377
Middle East and North Africa	114	120	442	72	748
-  Egypt	48	15	94	(2)	155
-  UAE	38	76	187	(39)	262
-  Saudi Arabia	12	-	54	118	184
-  other	16	29	107	(5)	147
North America	224	499	327	(192)	858
-  US	92	220	255	(162)	405
-  Canada	98	263	54	(26)	389
-  other	34	16	18	(4)	64
Latin America	108	148	145	(14)	387
-  Mexico	123	112	86	(54)	267
-  other	(15)	36	59	40	120
Half-year to 30 Jun 2022	2,927	3,511	2,894	(156)	9,176
Europe	853	1,348	111	(344)	1,968
-  UK1	654	1,156	(42)	(88)	1,680
of which: HSBC UK Bank plc (ring-fenced bank)	802	1,403	58	(125)	2,138
of which: HSBC Bank plc (non-ring-fenced bank)	115	113	327	22	577
of which: Holdings and other	(263)	(360)	(427)	15	(1,035)
-  France	164	52	(41)	(72)	103
-  Germany	11	41	116	105	273
-  Switzerland	20	12	(1)	(12)	19
-  other	4	87	79	(277)	(107)
Asia	2,544	1,259	1,953	1,180	6,936
-  Hong Kong	2,310	774	767	(218)	3,633
-  Australia	83	62	74	(6)	213
-  India	(11)	146	317	77	529
-  Indonesia	18	(8)	59	(5)	64
-  mainland China	(3)	171	304	1,359	1,831
-  Malaysia	36	(68)	59	(10)	17
-  Singapore	96	54	134	(7)	277
-  Taiwan	11	7	58	(1)	75
-  other	4	121	181	(9)	297
Middle East and North Africa	80	145	402	96	723
-  Egypt	36	18	77	(4)	127
-  UAE	37	22	188	(35)	212
-  Saudi Arabia	11	-	23	139	173
-  other	(4)	105	114	(4)	211
North America	4	522	419	(140)	805
-  US	(86)	243	318	(102)	373
-  Canada	72	274	85	(36)	395
-  other	18	5	16	(2)	37
Latin America	165	102	174	(34)	407
-  Mexico	178	73	134	(25)	360
-  other	(13)	29	40	(9)	47
Half-year to 30 Jun 2021	3,646	3,376	3,059	758	10,839

Profit/(loss) before tax by country/territory within global businesses (continued)
	Wealth and Personal Banking	Commercial Banking	Global Banking and Markets	Corporate Centre	Total
	$m	$m	$m	$m	$m
Europe	964	1,545	(410)	(288)	1,811
-  UK1	857	1,319	(445)	108	1,839
of which: HSBC UK Bank plc (ring-fenced bank)	1,245	1,526	69	(193)	2,647
of which: HSBC Bank plc (non-ring-fenced bank)	61	146	(107)	(39)	61
of which: Holdings and other	(449)	(353)	(407)	340	(869)
-  France	72	111	(56)	(61)	66
-  Germany	6	41	39	(38)	48
-  Switzerland	26	(2)	1	-	25
-  other	3	76	51	(297)	(167)
Asia	1,822	1,105	1,240	1,146	5,313
-  Hong Kong	1,766	529	153	(165)	2,283
-  Australia	63	70	57	(20)	170
-  India	31	119	276	155	581
-  Indonesia	(4)	20	52	(3)	65
-  mainland China	(92)	117	282	1,195	1,502
-  Malaysia	1	45	86	(10)	122
-  Singapore	49	53	97	(6)	193
-  Taiwan	3	9	48	(4)	56
-  other	5	143	189	4	341
Middle East and North Africa	114	90	403	93	700
-  Egypt	43	24	86	2	155
-  UAE	54	(19)	154	(26)	163
-  Saudi Arabia	6	-	42	135	183
-  other	11	85	121	(18)	199
North America	56	501	278	(266)	569
-  US	(45)	229	206	(235)	155
-  Canada	69	270	60	(26)	373
-  other	32	2	12	(5)	41
Latin America	(469)	60	152	(69)	(326)
-  Mexico	127	15	88	(21)	209
-  other3	(596)	45	64	(48)	(535)
Half-year to 31 Dec 2021	2,487	3,301	1,663	616	8,067

1  UK includes results from the ultimate holding company, HSBC Holdings plc, and the separately incorporated group of service companies ('ServCo Group').

2  Corporate Centre includes intercompany debt eliminations of $1,334m.

3  Loss reported in Latin America for the half-year to 31 December 2021 includes the impact of goodwill impairment of $587m. As per the Group's accounting policy, HSBC's cash-generating units are based on geographical regions, which are sub-divided by global businesses.

Reconciliation of alternative performance measures
	Page
Use of alternative performance measures	56
Return on average ordinary shareholders' equity and return on average tangible equity	56
Net asset value and tangible net asset value per ordinary share	58
Post-tax return and average total shareholders' equity on average total assets	58
Expected credit losses and other credit impairment charges as % of average gross loans and advances to customers	58

Use of alternative performance measures

Our reported results are prepared in accordance with IFRSs as detailed in our interim condensed financial statements starting on page 104.

As described on page 29, we use a combination of reported and alternative performance measures, including those derived from our reported results that eliminate factors that distort period-on-period comparisons. These are considered alternative performance measures (non-GAAP financial measures).

The following information details the adjustments made to the reported results and the calculation of other alternative performance measures. All alternative performance measures are reconciled to the closest reported performance measure.

Return on average ordinary shareholders' equity and return on average tangible equity

Return on average ordinary shareholders' equity ('RoE') is computed by taking profit attributable to the ordinary shareholders of the parent company ('reported results'), divided by average ordinary shareholders' equity ('reported equity') for the period. The adjustment to reported results and reported equity excludes amounts attributable to non-controlling interests and holders of preference shares and other equity instruments.

Return on average tangible equity ('RoTE') is computed by adjusting reported results for the movements in the present value of in-force long-term insurance business ('PVIF') and for impairment of goodwill and other intangible assets (net of tax), divided by average reported equity adjusted for goodwill, intangibles and PVIF for the period.

Return on average tangible equity excluding significant items is annualised profit attributable to ordinary shareholders, excluding changes in PVIF and significant items (net of tax), divided by average tangible shareholders' equity excluding fair value of own debt, debt valuation adjustment ('DVA') and other adjustments for the period.

We provide RoTE ratios in addition to RoE as a way of assessing our performance, which is closely aligned to our capital position.

Return on average ordinary shareholders' equity and return on average tangible equity
	Half-year ended		Year ended
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$m	$m	$m
Profit
Profit attributable to the ordinary shareholders of the parent company	8,289	7,276	12,607
Impairment of goodwill and other intangible assets (net of tax)	46	-	608
Decrease/(increase) in PVIF (net of tax)	(699)	16	(58)
Profit attributable to ordinary shareholders, excluding goodwill impairment and PVIF	7,636	7,292	13,157
Significant items (net of tax) and other adjustments1	(582)	994	2,086
Profit attributable to ordinary shareholders, excluding goodwill impairment, PVIF and significant items	7,054	8,286	15,243
Equity
Average total shareholders' equity	195,250	197,402	199,295
Effect of average preference shares and other equity instruments	(22,173)	(23,414)	(22,814)
Average ordinary shareholders' equity	173,077	173,988	176,481
Effect of goodwill, PVIF and other intangibles (net of deferred tax)	(18,024)	(17,576)	(17,705)
Average tangible equity	155,053	156,412	158,776
Fair value of own debt, DVA and other adjustments	878	3,286	1,278
Average tangible equity excluding fair value of own debt, DVA and other adjustments	155,931	159,698	160,054
Ratio	%	%	%
Return on average ordinary shareholders' equity (annualised)	9.7	8.4	7.1
Return on average tangible equity (annualised)	9.9	9.4	8.3
Return on average tangible equity excluding significant items (annualised)1	9.1	10.5	9.5

1  Other adjustments includes entries relating to the timing of payments on additional tier 1 coupons.

Return on average tangible equity by global business
	Half-year ended 30 Jun 2022
	Wealth and Personal Banking	Commercial Banking	Global Banking and Markets	Corporate Centre	Total
	$m	$m	$m	$m	$m
Profit before tax	2,927	3,511	2,894	(156)	9,176
Tax expense	(639)	(827)	(494)	1,999	39
Profit after tax	2,288	2,684	2,400	1,843	9,215
Less attributable to: preference shareholders, other equity holders, non-controlling interests	(289)	(304)	(337)	4	(926)
Profit attributable to ordinary shareholders of the parent company	1,999	2,380	2,063	1,847	8,289
Decrease/(increase) in PVIF (net of tax)	(700)	1	1	(1)	(699)
Significant items (net of tax)	19	56	(10)	(568)	(503)
Other adjustments	2	(2)	(3)	(30)	(33)
Profit attributable to ordinary shareholders, excluding PVIF and significant items	1,320	2,435	2,051	1,248	7,054
Average tangible shareholders' equity excluding fair value of own debt, DVA and other adjustments	31,696	38,912	37,970	47,353	155,931
RoTE excluding significant items (annualised) (%)	8.4	12.6	10.9	5.3	9.1
	Half-year ended 30 Jun 2021
Profit before tax	3,646	3,376	3,059	758	10,839
Tax expense	(769)	(874)	(624)	(150)	(2,417)
Profit after tax	2,877	2,502	2,435	608	8,422
Less attributable to: preference shareholders, other equity holders, non-controlling interests	(389)	(343)	(382)	(32)	(1,146)
Profit attributable to ordinary shareholders of the parent company	2,488	2,159	2,053	576	7,276
Decrease/(increase) in PVIF (net of tax)	9	10	-	(3)	16
Significant items (net of tax)	169	(6)	197	600	960
Other adjustments	-	(1)	(1)	36	34
Profit attributable to ordinary shareholders, excluding PVIF and significant items	2,666	2,162	2,249	1,209	8,286
Average tangible shareholders' equity excluding fair value of own debt, DVA and other adjustments	29,971	39,310	42,428	47,989	159,698
RoTE excluding significant items  (annualised) (%)	17.9	11.1	10.7	5.1	10.5
	Year ended 31 Dec 2021
Profit before tax	6,133	6,677	4,722	1,374	18,906
Tax expense	(1,540)	(1,783)	(1,020)	130	(4,213)
Profit after tax	4,593	4,894	3,702	1,504	14,693
Less attributable to: preference shareholders, other equity holders, non-controlling interests	(735)	(665)	(618)	(68)	(2,086)
Profit attributable to ordinary shareholders of the parent company	3,858	4,229	3,084	1,436	12,607
Increase in PVIF (net of tax)	(65)	4	-	3	(58)
Significant items (net of tax) and UK bank levy	850	51	517	1,269	2,687
Other adjustments	3	(4)	(3)	11	7
Profit attributable to ordinary shareholders, excluding PVIF and significant items	4,646	4,280	3,598	2,719	15,243
Average tangible shareholders' equity excluding fair value of own debt, DVA and other adjustments	30,587	39,487	41,816	48,164	160,054
RoTE excluding significant items (annualised) (%)	15.2	10.8	8.6	5.6	9.5

Net asset value and tangible net asset value per ordinary share

Net asset value per ordinary share is total shareholders' equity less non-cumulative preference shares and capital securities ('total ordinary shareholders' equity'), divided by the number of ordinary shares in issue excluding shares that the company has purchased and are held in treasury.

Tangible net asset value per ordinary share is total ordinary shareholders' equity excluding goodwill, PVIF and other intangible assets (net of deferred tax) ('tangible ordinary shareholders' equity'), divided by the number of basic ordinary shares in issue excluding shares that the company has purchased and are held in treasury.

Net asset value and tangible net asset value per ordinary share
	At
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$m	$m	$m
Total shareholders' equity	188,382	198,218	198,250
Preference shares and other equity instruments	(21,691)	(22,414)	(22,414)
Total ordinary shareholders' equity	166,691	175,804	175,836
Goodwill, PVIF and intangible assets (net of deferred tax)	(18,383)	(17,819)	(17,643)
Tangible ordinary shareholders' equity	148,308	157,985	158,193
Basic number of $0.50 ordinary shares outstanding	19,819	20,223	20,073
Value per share	$	$	$
Net asset value per ordinary share	8.41	8.69	8.76
Tangible net asset value per ordinary share	7.48	7.81	7.88

Post-tax return and average total shareholders' equity on average total assets

Post-tax return on average total assets is profit after tax divided by average total assets for the period.

Average total shareholders' equity to average total assets is average total shareholders' equity divided by average total assets for the period.

Post-tax return and average total shareholders' equity on average total assets
	Half-year ended		Year-ended
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$m	$m	$m
Profit after tax	9,215	8,422	14,693
Average total shareholders' equity	195,250	197,402	199,295
Average total assets	3,063,125	3,011,306	3,012,437
Ratio	%	%	%
Post-tax return on average total assets (annualised)	0.6	0.6	0.5
Average total shareholders' equity to average total assets	6.37	6.56	6.62

Expected credit losses and other credit impairment charges as % of average gross loans and advances to customers

Expected credit losses and other credit impairment charges ('ECL') as % of average gross loans and advances to customers is the

annualised adjusted ECL divided by adjusted average gross loans and advances to customers for the period.

The adjusted numbers are derived by adjusting reported ECL and loans and advances to customers for the effects of foreign currency translation differences.

Expected credit losses and other credit impairment charges as % of average gross loans and advances to customers
	Half-year ended
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$m	$m	$m
Expected credit losses and other credit impairment charges ('ECL')	(1,090)	719	209
Currency translation		(44)	(35)
Adjusted ECL	(1,090)	675	174
Average gross loans and advances to customers	1,054,321	1,059,548	1,060,264
Currency translation	(30,887)	(65,308)	(56,427)
Average gross loans and advances to customers - at most recent balance sheet foreign exchange rates	1,023,434	994,240	1,003,837
Ratio	%	%	%
Expected credit losses and other credit impairment charges as % of average gross loans and advances to customers (annualised)	0.21	(0.14)	(0.03)

 

END

 

 

IR FLFLETRILIIF