Interim Report - 20 of 24

RNS Number : 2060X

HSBC Holdings PLC

26 August 2015

 



Consolidated income statement

for the half-year to 30 June 2015

			Half-year to
			30 June                          2015		30 June                          2014		31 December                          2014
		Notes	$m		$m		$m
Interest income			24,019		25,435		25,520
Interest expense			(7,575)		(8,030)		(8,220)
Net interest income			16,444		17,405		17,300
Fee income			9,372		10,031		9,514
Fee expense			(1,647)		(1,854)		(1,734)
Net fee income			7,725		8,177		7,780
Trading income excluding net interest income			3,520		2,362		2,491
Net interest income on trading activities			1,053		913		994
Net trading income			4,573		3,275		3,485
Changes in fair value of long-term debt issued and related derivatives			1,324		438		70
Net income from other financial instruments designated at fair value			1,342		1,222		743
Net income from financial instruments designated at fair value			2,666		1,660		813
Gains less losses from financial investments			1,874		946		389
Dividend income			68		88		223
Net insurance premium income			5,607		6,137		5,784
Other operating income			836		538		593
Total operating income			39,793		38,226		36,367
Net insurance claims and benefits paid and movement in liabilities to policyholders			(6,850)		(7,059)		(6,286)
Net operating income before loan impairment charges and other credit risk provisions			32,943		31,167		30,081
Loan impairment charges and other credit risk provisions			(1,439)		(1,841)		(2,010)
Net operating income			31,504		29,326		28,071
Employee compensation and benefits			(10,041)		(9,978)		(10,388)
General and administrative expenses			(8,129)		(7,127)		(11,438)
Depreciation and impairment of property, plant and equipment			(604)		(712)		(670)
Amortisation and impairment of intangible assets			(413)		(449)		(487)
Total operating expenses			(19,187)		(18,266)		(22,983)
Operating profit			12,317		11,060		5,088
Share of profit in associates and joint ventures			1,311		1,280		1,252
Profit before tax			13,628		12,340		6,340
Tax expense		2	(2,907)		(2,022)		(1,953)
Profit for the period			10,721		10,318		4,387
Profit attributable to shareholders of the parent company			9,618		9,746		3,942
Profit attributable to non-controlling interests			1,103		572		445
			$		$		$
Basic earnings per ordinary share		4	0.48		0.50		0.19
Diluted earnings per ordinary share		4	0.48		0.50		0.19

The accompanying notes on pages 107 to 139 form an integral part of these financial statements¹.

For footnote, see page 106.

Consolidated statement of comprehensive income

for the half-year to 30 June 2015

		Half-year to
		30 June		30 June		31 December
		2015		2014		2014
		$m		$m		$m
				,
Profit for the period		10,721		10,318		4,387
Other comprehensive income/(expense)
Items that will be reclassified subsequently to profit or loss when specific conditions are met:
Available-for-sale investments		(2,445)		958		2,014
- fair value gains/(losses)		(355)		2,183		2,611
- fair value gains reclassified to the income statement		(2,317)		(643)		(1,029)
- amounts reclassified to the income statement in respect of impairment losses		2		15		359
- income taxes		225		(597)		73
Cash flow hedges		(150)		(17)		205
- fair value gains/(losses)		341		(44)		1,556
- fair value (gains)/losses reclassified to the income statement		(538)		50		(1,294)
- income taxes		47		(23)		(57)
Share of other comprehensive income/(expense) of associates and joint ventures		2		(16)		96
- share for the period		2		(18)		96
- reclassified to income statement on disposal		-		2		-
Exchange differences		(3,267)		670		(9,573)
- foreign exchange gains reclassified to the income statement on disposal of a foreign operation		-		(21)		-
- other exchange differences		(3,395)		691		(9,608)
- income tax attributable to exchange differences		128		-		35
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit asset/liability		(1,680)		316		1,669
- before income taxes		(2,085)		421		1,998
- income taxes		405		(105)		(329)
Other comprehensive income/(expense) for the period, net of tax		(7,540)		1,911		(5,589)
Total comprehensive income/(expense) for the period		3,181		12,229		(1,202)
Attributable to:
- shareholders of the parent company		2,856		11,706		(2,461)
- non-controlling interests		325		523		1,259
Total comprehensive income/(expense) for the period		3,181		12,229		(1,202)

The accompanying notes on pages 107 to 139 form an integral part of these financial statements¹.

For footnote, see page 106.

Consolidated balance sheet

at 30 June 2015

			At                     30 June		At                     30 June		At          31 December
			2015		2014		2014
		Notes	$m		$m		$m
Assets
Cash and balances at central banks			144,324		132,137		129,957
Items in the course of collection from other banks			10,190		8,144		4,927
Hong Kong Government certificates of indebtedness			28,104		26,640		27,674
Trading assets		6	283,138		347,106		304,193
Financial assets designated at fair value		9	25,168		31,823		29,037
Derivatives		10	296,942		269,839		345,008
Loans and advances to banks			109,405		127,387		112,149
Loans and advances to customers			953,985		1,047,241		974,660
Reverse repurchase agreements - non-trading			149,384		198,301		161,713
Financial investments		11	404,682		423,710		415,467
Assets held for sale		12	60,929		10,248		7,647
Prepayments, accrued income and other assets			55,489		75,520		67,529
Current tax assets			566		1,068		1,309
Interests in associates and joint ventures		14	18,705		17,497		18,181
Goodwill and intangible assets			24,913		29,740		27,577
Deferred tax assets			5,789		7,192		7,111
Total assets			2,571,713		2,753,593		2,634,139
Liabilities and equity
Liabilities
Hong Kong currency notes in circulation			28,104		26,640		27,674
Deposits by banks			71,140		92,764		77,426
Customer accounts			1,335,800		1,415,705		1,350,642
Repurchase agreements - non-trading			81,506		165,506		107,432
Items in the course of transmission to other banks			12,711		9,936		5,990
Trading liabilities		15	181,435		228,135		190,572
Financial liabilities designated at fair value			69,485		82,968		76,153
Derivatives		10	289,984		263,494		340,669
Debt securities in issue			102,656		96,397		95,947
Liabilities of disposal groups held for sale		12	53,226		12,361		6,934
Accruals, deferred income and other liabilities			42,224		50,882		46,462
Current tax liabilities			1,322		1,434		1,213
Liabilities under insurance contracts			69,494		75,223		73,861
Provisions		17	5,125		4,283		4,998
Deferred tax liabilities			1,338		1,091		1,524
Subordinated liabilities			24,781		28,052		26,664
Total liabilities			2,370,331		2,554,871		2,434,161
Equity
Called up share capital			9,758		9,535		9,609
Share premium account			12,290		11,582		11,918
Other equity instruments			13,991		5,851		11,532
Other reserves			15,180		28,355		20,244
Retained earnings			141,208		134,958		137,144
Total shareholders' equity			192,427		190,281		190,447
Non-controlling interests			8,955		8,441		9,531
Total equity			201,382		198,722		199,978
Total liabilities and equity			2,571,713		2,753,593		2,634,139

The accompanying notes on pages 107 to 139 form an integral part of these financial statements¹.

For footnote, see page 107.

Consolidated statement of cash flows

for the half-year to 30 June 2015

		Half-year to
		30 June                         2015		30 June                         2014		31 December                         2014
		$m		$m		$m
Cash flows from operating activities
Profit before tax		13,628		12,340		6,340
-....
Adjustments for:
- net gain from investing activities		(1,926)		(979)		(949)
- share of profit in associates and joint ventures		(1,311)		(1,280)		(1,252)
- (gain)/loss on disposal of associates, joint ventures, subsidiaries and businesses		-		(18)		27
- other non-cash items included in profit before tax		4,522		4,284		6,978
- change in operating assets		12,077		(86,266)		112,143
- change in operating liabilities		(15,544)		59,108		(152,922)
- elimination of exchange differences		3,951		(5,486)		30,057
- dividends received from associates		770		127		630
- contributions paid to defined benefit plans		(226)		(315)		(366)
- tax paid		(1,351)		(1,358)		(2,215)
Net cash generated from/(used in) operating activities		14,590		(19,843)		(1,529)
Cash flows from investing activities
Purchase of financial investments		(211,669)		(187,934)		(196,265)
Proceeds from the sale and maturity of financial investments		208,637		194,335		188,502
Purchase of property, plant and equipment		(620)		(523)		(954)
Proceeds from the sale of property, plant and equipment		56		55		33
Net cash inflow/(outflow) from disposal of customer and loan portfolios		321		950		(1,985)
Net purchase of intangible assets		(400)		(385)		(518)
Net cash inflow/(outflow) from disposal of subsidiaries, businesses, associates and joint ventures		7		(140)		(102)
Net cash outflow from acquisition of or increase in stake of associates		(1)		(30)		-
				-
Net cash generated from/(used in) investing activities		(3,669)		6,328		(11,289)
Cash flows from financing activities
Issue of ordinary share capital		9		14		253
Net sales/(purchases) of own shares for market-making and investment purposes		139		(25)		(71)
Issue of other equity instruments		2,459		-		5,681
Redemption of preference shares and other equity instruments		(462)		234		(468)
Subordinated loan capital issued		1,680		3,500		-
Subordinated loan capital repaid		(778)		(3,042)		(121)
Dividends paid to ordinary shareholders of the parent company		(1,834)		(1,755)		(4,856)
Dividends paid to non-controlling interests		(386)		(350)		(289)
Dividends paid to holders of other equity instruments		(428)		(287)		(286)
				-
Net cash generated from/(used in) financing activities		399		(1,711)		(157)
Net increase/(decrease) in cash and cash equivalents		11,320		(15,226)		(12,975)
Cash and cash equivalents at the beginning of the period		301,301		346,281		334,498
Exchange differences in respect of cash and cash equivalents		(3,829)		3,443		(20,222)
Cash and cash equivalents at the end of the period		308,792		334,498		301,301

Consolidated statement of changes in equity

for the half-year to 30 June 2015

										Other reserves
		Called up             share            capital		Share      premium		Other            equity            instru-            ments2		Retained     earnings		Available-         for-sale      fair value         reserve3		Cash flow         hedging         reserve3		Foreign     exchange         reserve3		Merger       reserve		Total            share-       holders'            equity		Non-    controlling       interests		Total            equity
		$m		$m		$m		$m		$m		$m		$m		$m		$m		$m		$m
At 1 January 2015		9,609		11,918		11,532		137,144		2,143		58		(9,265)		27,308		190,447		9,531		199,978
Profit for the period		-		-		-		9,618		-		-		-		-		9,618		1,103		10,721
Other comprehensive income (net of tax)		-		-		-		(1,693)		(1,735)		(151)		(3,183)		-		(6,762)		(778)		(7,540)
- available-for-sale investments		-		-		-		-		(1,735)		-		-		-		(1,735)		(710)		(2,445)
- cash flow hedges		-		-		-		-		-		(151)		-		-		(151)		1		(150)
- remeasurement of defined benefit asset/liability		-		-		-		(1,695)		-		-		-		-		(1,695)		15		(1,680)
- share of other comprehensive income of associates and joint ventures		-		-		-		2		-		-		-		-		2		-		2
- exchange differences		-		-		-		-		-		-		(3,183)		-		(3,183)		(84)		(3,267)
Total comprehensive income for the period		-		-		-		7,925		(1,735)		(151)		(3,183)		-		2,856		325		3,181
Shares issued under employee remuneration and share plans		31		490		-		(512)		-		-		-		-		9		-		9
Shares issued in lieu of dividends and amounts arising thereon		118		(118)		-		2,242		-		-		-		-		2,242		-		2,242
Dividends to shareholders		-		-		-		(6,224)		-		-		-		-		(6,224)		(432)		(6,656)
Capital securities issued		-		-		2,459		-		-		-		-		-		2,459		-		2,459
Cost of share-based payment arrangements		-		-		-		444		-		-		-		-		444		-		444
Other movements		-		-		-		189		5		-		-		-		194		(469)		(275)
At 30 June 2015		9,758		12,290		13,991		141,208		413		(93)		(12,448)		27,308		192,427		8,955		201,382
At 1 January 2014		9,415		11,135		5,851		128,728		97		(121)		(542)		27,308		181,871		8,588		190,459
Profit for the period		-		-		-		9,746		-		-		-		-		9,746		572		10,318
Other comprehensive income (net of tax)		-		-		-		300		956		(16)		720		-		1,960		(49)		1,911
- available-for-sale investments		-		-		-		-		956		-		-		-		956		2		958
- cash flow hedges		-		-		-		-		-		(16)		-		-		(16)		(1)		(17)
- remeasurement of defined benefit asset/liability		-		-		-		316		-		-		-		-		316		-		316
- share of other comprehensive income of associates and joint ventures		-		-		-		(16)		-		-		-		-		(16)		-		(16)
- exchange differences		-		-		-		-		-		-		720		-		720		(50)		670
Total comprehensive income for the period		-		-		-		10,046		956		(16)		720		-		11,706		523		12,229
										-		-		-		-
Shares issued under employee remuneration and share plans		28		539		-		(553)		-		-		-		-		14		-		14
Shares issued in lieu of dividends and amounts arising thereon		92		(92)		-		2,111		-		-		-		-		2,111		-		2,111
Dividends to shareholders		-		-		-		(5,774)		-		-		-		-		(5,774)		(432)		(6,206)
Cost of share-based payment arrangements		-		-		-		333		-		-		-		-		333		-		333
Other movements		-		-		-		67		(39)		(8)		-		-		20		(238)		(218)
At 30 June 2014		9,535		11,582		5,851		134,958		1,014		(145)		178		27,308		190,281		8,441		198,722

Consolidated statement of changes in equity for the half-year to 30 June 2015 (continued)

										Other reserves
		Called up              share            capital		Share       premium		Other            equity            instru-           ments		Retained     earnings		Available-          for-sale      fair value          reserve		Cash flow         hedging          reserve		Foreign      exchange          reserve		Merger reserve		Total            share-        holders'            equity		Non-    controlling        interests		Total            equity
		$m		$m		$m		$m		$m		$m		$m		$m		$m		$m		$m
At 1 July 2014		9,535		11,582		5,851		134,958		1,014		(145)		178		27,308		190,281		8,441		198,722
Profit for the period		-		-		-		3,942		-		-		-		-		3,942		445		4,387
Other comprehensive income (net of tax)		-		-		-		1,766		1,069		205		(9,443)		-		(6,403)		814		(5,589)
- available-for-sale investments		-		-		-		-		1,069		-		-		-		1,069		945		2,014
- cash flow hedges		-		-		-		-		-		205		-		-		205		-		205
- remeasurement of defined benefit asset/liability		-		-		-		1,670		-		-		-		-		1,670		(1)		1,669
- share of other comprehensive income of associates and joint ventures		-		-		-		96		-		-		-		-		96		-		96
- exchange differences		-		-		-		-		-		-		(9,443)		-		(9,443)		(130)		(9,573)
Total comprehensive income for the period		-		-		-		5,708		1,069		205		(9,443)		-		(2,461)		1,259		(1,202)
Shares issued under employee remuneration and share plans		32		378		-		(157)		-		-		-		-		253		-		253
Shares issued in lieu of dividends and amounts arising thereon		42		(42)		-		598		-		-		-		-		598		-		598
Dividends to shareholders		-		-		-		(4,119)		-		-		-		-		(4,119)		(280)		(4,399)
Capital securities issued		-		-		5,681		-		-		-		-		-		5,681		-		5,681
Cost of share-based payment arrangements		-		-		-		399		-		-		-		-		399		-		399
Other movements		-		-		-		(243)		60		(2)		-		-		(185)		111		(74)
At 31 December 2014		9,609		11,918		11,532		137,144		2,143		58		(9,265)		27,308		190,447		9,531		199,978

The accompanying notes on pages 107 to 139 form an integral part of these financial statements¹.

Footnotes to financial statements

1   The tables: 'Gross loans and advances to customers by industry sector and by geographical region' (see page 61), 'Movement in impairment allowances on loans and advances to customers and banks' (see page 66), and the Composition of regulatory capital within 'Capital' (see page 94) also form an integral part of these financial statements.

2   During March 2015, HSBC Holdings issued $2,450m of Perpetual Subordinated Contingent Convertible Capital Securities, after issuance costs of $8m and tax benefits of $17m, which are classified as equity under IFRSs.

3   At 30 June 2015, our operations in Brazil were classified as held for sale (see Note 12).The cumulative amount of other reserves attributable to these operations were as follows: available-for-sale fair value reserve debit of $65m, cash flow hedging reserve debit of $29m and foreign exchange reserve debit of $1,724m.

 

END

 

 

IR PKADDPBKDAFB