Consolidated income statement for the half-year to 30 June 2008
|
|
Half-year to |
||||
|
|
30 June 2008 |
|
30 June 2007 |
|
31 December 2007 |
|
Notes |
US$m |
|
US$m |
|
US$m |
|
|
|
|
|
|
|
Interest income |
|
47,164 |
|
43,567 |
|
48,792 |
Interest expense |
|
(25,986) |
|
(25,337) |
|
(29,227) |
|
|
|
|
|
|
|
Net interest income |
|
21,178 |
|
18,230 |
|
19,565 |
|
|
|
|
|
|
|
Fee income |
|
13,381 |
|
12,488 |
|
13,849 |
Fee expense |
|
(2,390) |
|
(1,993) |
|
(2,342) |
|
|
|
|
|
|
|
Net fee income |
|
10,991 |
|
10,495 |
|
11,507 |
|
|
|
|
|
|
|
Trading income excluding net interest income |
|
639 |
|
3,351 |
|
1,107 |
Net interest income on trading activities |
|
3,195 |
|
2,160 |
|
3,216 |
|
|
|
|
|
|
|
Net trading income |
|
3,834 |
|
5,511 |
|
4,323 |
|
|
|
|
|
|
|
Net income/(expense) from financial instruments designated at fair value |
|
(584) |
|
874 |
|
3,209 |
Gains less losses from financial investments |
|
817 |
|
999 |
|
957 |
Gains arising from dilution of interests in associates |
19 |
- |
|
1,076 |
|
16 |
Dividend income |
|
88 |
|
252 |
|
72 |
Net earned insurance premiums |
|
5,153 |
|
3,977 |
|
5,099 |
Other operating income |
|
1,435 |
|
678 |
|
761 |
|
|
|
|
|
|
|
Total operating income |
|
42,912 |
|
42,092 |
|
45,509 |
|
|
|
|
|
|
|
Net insurance claims incurred and movement in liabilities to policyholders |
|
(3,437) |
|
(3,599) |
|
(5,009) |
|
|
|
|
|
|
|
Net operating income before loan impairment charges and |
|
39,475 |
|
38,493 |
|
40,500 |
|
|
|
|
|
|
|
Loan impairment charges and other credit risk provisions |
|
(10,058) |
|
(6,346) |
|
(10,896) |
|
|
|
|
|
|
|
Net operating income |
|
29,417 |
|
32,147 |
|
29,604 |
|
|
|
|
|
|
|
Employee compensation and benefits |
|
(10,925) |
|
(10,430) |
|
(10,904) |
General and administrative expenses |
|
(7,479) |
|
(7,022) |
|
(8,272) |
Depreciation and impairment of property, plant and equipment |
|
(863) |
|
(817) |
|
(897) |
Amortisation and impairment of intangible assets |
|
(346) |
|
(342) |
|
(358) |
Goodwill impairment |
20 |
(527) |
|
- |
|
- |
|
|
|
|
|
|
|
Total operating expenses |
|
(20,140) |
|
(18,611) |
|
(20,431) |
|
|
|
|
|
|
|
Operating profit |
|
9,277 |
|
13,536 |
|
9,173 |
|
|
|
|
|
|
|
Share of profit in associates and joint ventures |
|
970 |
|
623 |
|
880 |
|
|
|
|
|
|
|
Profit before tax |
|
10,247 |
|
14,159 |
|
10,053 |
|
|
|
|
|
|
|
Tax expense |
6 |
(1,941) |
|
(2,645) |
|
(1,112) |
|
|
|
|
|
|
|
Profit for the period |
|
8,306 |
|
11,514 |
|
8,941 |
|
|
|
|
|
|
|
Profit attributable to shareholders of the parent company |
15 |
7,722 |
|
10,895 |
|
8,238 |
Profit attributable to minority interests |
15 |
584 |
|
619 |
|
703 |
|
|
|
|
|
|
|
|
|
US$ |
|
US$ |
|
US$ |
|
|
|
|
|
|
|
Basic earnings per ordinary share |
4 |
0.65 |
|
0.95 |
|
0.70 |
Diluted earnings per ordinary share |
4 |
0.65 |
|
0.94 |
|
0.69 |
Dividends per ordinary share |
3 |
0.57 |
|
0.53 |
|
0.34 |
Consolidated balance sheet at 30 June 2008
|
|
At |
|
At |
|
At |
|
|
2008 |
|
2007 |
|
2007 |
|
Notes |
US$m |
|
US$m |
|
US$m |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and balances at central banks |
|
13,473 |
|
16,651 |
|
21,765 |
Items in the course of collection from other banks |
|
16,719 |
|
23,152 |
|
9,777 |
Hong Kong Government certificates of indebtedness |
|
14,378 |
|
12,947 |
|
13,893 |
Trading assets |
7 |
473,537 |
|
424,645 |
|
445,968 |
Financial assets designated at fair value |
8 |
40,786 |
|
34,849 |
|
41,564 |
Derivatives |
9 |
260,664 |
|
149,181 |
|
187,854 |
Loans and advances to banks |
|
256,981 |
|
214,645 |
|
237,366 |
Loans and advances to customers |
|
1,049,200 |
|
928,101 |
|
981,548 |
Financial investments |
10 |
274,750 |
|
233,001 |
|
283,000 |
Interests in associates and joint ventures |
|
11,259 |
|
8,583 |
|
10,384 |
Goodwill and intangible assets |
|
40,814 |
|
38,445 |
|
39,689 |
Property, plant and equipment |
|
15,713 |
|
14,982 |
|
15,694 |
Other assets |
11 |
52,670 |
|
30,164 |
|
39,493 |
Current tax asset |
|
1,443 |
|
675 |
|
896 |
Deferred tax asset |
|
6,490 |
|
3,327 |
|
5,284 |
Prepayments and accrued income |
|
17,801 |
|
17,093 |
|
20,091 |
|
|
|
|
|
|
|
Total assets |
|
2,546,678 |
|
2,150,441 |
|
2,354,266 |
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Hong Kong currency notes in circulation |
|
14,378 |
|
12,947 |
|
13,893 |
Deposits by banks |
|
154,152 |
|
128,773 |
|
132,181 |
Customer accounts |
|
1,161,923 |
|
980,832 |
|
1,096,140 |
Items in the course of transmission to other banks |
|
15,329 |
|
20,339 |
|
8,672 |
Trading liabilities |
12 |
340,611 |
|
313,193 |
|
314,580 |
Financial liabilities designated at fair value |
13 |
89,758 |
|
75,966 |
|
89,939 |
Derivatives |
9 |
251,357 |
|
144,284 |
|
183,393 |
Debt securities in issue |
|
230,267 |
|
229,239 |
|
246,579 |
Retirement benefit liabilities |
|
3,619 |
|
2,984 |
|
2,893 |
Other liabilities |
|
48,435 |
|
31,937 |
|
35,013 |
Current tax liability |
|
3,082 |
|
2,563 |
|
2,559 |
Liabilities under insurance contracts |
|
46,851 |
|
36,929 |
|
42,606 |
Accruals and deferred income |
|
17,592 |
|
16,857 |
|
21,766 |
Provisions |
|
1,872 |
|
1,603 |
|
1,958 |
Deferred tax liability |
|
1,924 |
|
2,000 |
|
1,859 |
Subordinated liabilities |
|
31,517 |
|
23,504 |
|
24,819 |
|
|
|
|
|
|
|
Total liabilities |
|
2,412,667 |
|
2,023,950 |
|
2,218,850 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Called up share capital |
|
6,003 |
|
5,857 |
|
5,915 |
Share premium account |
|
8,097 |
|
7,834 |
|
8,134 |
Other equity instruments |
|
2,134 |
|
- |
|
- |
Other reserves |
|
27,561 |
|
31,838 |
|
33,014 |
Retained earnings |
|
82,990 |
|
74,251 |
|
81,097 |
|
|
|
|
|
|
|
Total shareholders' equity |
|
126,785 |
|
119,780 |
|
128,160 |
Minority interests |
|
7,226 |
|
6,711 |
|
7,256 |
|
|
|
|
|
|
|
Total equity |
15 |
134,011 |
|
126,491 |
|
135,416 |
|
|
|
|
|
|
|
Total equity and liabilities |
|
2,546,678 |
|
2,150,441 |
|
2,354,266 |
Consolidated statement of recognised income and expense for the half-year to 30 June 2008
|
Half-year to |
||||
|
30 June |
|
30 June |
|
31 December |
|
2008 |
|
2007 |
|
2007 |
|
US$m |
|
US$m |
|
US$m |
|
|
|
|
|
|
Available-for-sale investments: |
|
|
|
|
|
- fair value gains/(losses) taken to equity |
(8,475) |
|
1,162 |
|
(406) |
- fair value gains transferred to income statement on disposal |
(920) |
|
(763) |
|
(1,011) |
- amounts transferred to/(from) the income statement in respect of impairment |
384 |
|
(20) |
|
54 |
Cash flow hedges: |
|
|
|
|
|
- fair value gains taken to equity |
914 |
|
395 |
|
230 |
- fair value gains transferred to income statement |
(1,134) |
|
(568) |
|
(1,318) |
Share of changes in equity of associates and joint ventures |
(342) |
|
186 |
|
186 |
Exchange differences |
3,170 |
|
2,293 |
|
3,653 |
Actuarial gains/(losses) on defined benefit plans |
(910) |
|
2,028 |
|
139 |
|
|
|
|
|
|
|
(7,313) |
|
4,713 |
|
1,527 |
|
|
|
|
|
|
Tax on items taken directly to equity |
936 |
|
(455) |
|
229 |
|
|
|
|
|
|
Total income and expense taken to equity during the period |
(6,377) |
|
4,258 |
|
1,756 |
|
|
|
|
|
|
Profit for the period |
8,306 |
|
11,514 |
|
8,941 |
|
|
|
|
|
|
Total recognised income and expense for the period |
1,929 |
|
15,772 |
|
10,697 |
|
|
|
|
|
|
Total recognised income and expense for the period attributable to: |
|
|
|
|
|
- shareholders of the parent company |
1,523 |
|
14,950 |
|
9,851 |
- minority interests |
406 |
|
822 |
|
846 |
|
|
|
|
|
|
|
1,929 |
|
15,772 |
|
10,697 |
Consolidated cash flow statement for the half-year to 30 June 2008
|
|
Half-year to |
||||
|
Notes |
30 June 2008 |
|
30 June 2007 |
|
31 December 2007 |
|
|
US$m |
|
US$m |
|
US$m |
|
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
|
|
Profit before tax |
|
10,247 |
|
14,159 |
|
10,053 |
|
|
|
|
|
|
|
Adjustments for: |
|
|
|
|
|
|
- non-cash items included in profit before tax |
16 |
12,900 |
|
7,358 |
|
14,343 |
- change in operating assets |
16 |
(101,131) |
|
(65,685) |
|
(110,853) |
- change in operating liabilities |
16 |
69,395 |
|
123,248 |
|
126,847 |
- elimination of exchange differences1
|
|
(11,632) |
|
(5,871) |
|
(12,731) |
- net gain from investing activities |
|
(1,555) |
|
(1,149) |
|
(1,060) |
- share of profit in associates and joint ventures |
|
(970) |
|
(623) |
|
(880) |
- dividends received from associates |
|
405 |
|
146 |
|
217 |
- contribution paid to defined benefit plans |
|
(416) |
|
(970) |
|
(423) |
- tax paid |
|
(2,152) |
|
(2,217) |
|
(2,871) |
|
|
|
|
|
|
|
Net cash generated from/(used in) operating activities |
|
(24,909) |
|
68,396 |
|
22,642 |
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
Purchase of financial investments |
|
(123,464) |
|
(126,316) |
|
(134,664) |
Proceeds from the sale and maturity of financial investments |
|
126,384 |
|
115,063 |
|
123,584 |
Purchase of property, plant and equipment |
|
(1,112) |
|
(965) |
|
(1,755) |
Proceeds from the sale of property, plant and equipment |
|
2,156 |
|
1,368 |
|
1,810 |
Proceeds from the sale of loan portfolios |
|
- |
|
- |
|
1,665 |
Net purchase of intangible assets |
|
(553) |
|
(451) |
|
(499) |
Net cash inflow/(outflow) from acquisition of and increase in |
|
1,608 |
|
(323) |
|
(300) |
Net cash inflow from disposal of subsidiaries |
|
440 |
|
- |
|
187 |
Net cash outflow from acquisition of and increase in stake of |
|
(122) |
|
(9) |
|
(342) |
Net cash inflow from the consolidation of funds |
|
- |
|
- |
|
1,600 |
Proceeds from disposal of associates |
|
(8) |
|
- |
|
69 |
|
|
|
|
|
|
|
Net cash generated from/(used in) investing activities |
|
5,329 |
|
(11,633) |
|
(8,645) |
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
Issue of ordinary share capital |
|
52 |
|
116 |
|
358 |
Issue of other equity instruments |
|
2,134 |
|
- |
|
- |
Net purchases and sales of own shares for market-making and |
|
(202) |
|
220 |
|
(94) |
Purchases of own shares to meet share awards and share |
|
(783) |
|
(807) |
|
171 |
On exercise of share options |
|
14 |
|
58 |
|
46 |
Subordinated loan capital issued |
|
5,582 |
|
563 |
|
5,142 |
Subordinated loan capital repaid |
|
6 |
|
(87) |
|
(602) |
Dividends paid to shareholders of the parent company |
|
(3,825) |
|
(3,591) |
|
(2,412) |
Dividends paid to minority interests |
|
(394) |
|
(460) |
|
(258) |
|
|
|
|
|
|
|
Net cash generated from/(used in) financing activities |
|
2,584 |
|
(3,988) |
|
2,351 |
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents |
|
(16,996) |
|
52,775 |
|
16,348 |
|
|
|
|
|
|
|
Cash and cash equivalents at the beginning of the period |
|
297,009 |
|
215,486 |
|
272,284 |
|
|
|
|
|
|
|
Exchange differences in respect of cash and cash equivalents |
|
7,525 |
|
4,023 |
|
8,377 |
|
|
|
|
|
|
|
Cash and cash equivalents at the end of the period |
16 |
287,538 |
|
272,284 |
|
297,009 |
1 Adjustment to bring changes between opening and closing balance sheet amounts to average rates. This is not done on a line-by-line basis, as details cannot be determined without unreasonable expense.