Annual Financial Report - 13 of 54

RNS Number : 0708I

HSBC Holdings PLC

20 March 2015

 



Operating expenses rose by US$1.3bn, mainly in the UK, reflecting growth in Regulatory Programmes and Compliance costs in all businesses and increased staff costs. In addition, the UK bank levy charge of US$1.1bn in respect of 2014 was US$0.2bn higher than in 2013, primarily due to an increase in the rate of the levy. Expenses also increased due to the timing of the recognition of the Financial Services Compensation Scheme levy in the UK. These increases were partly offset by sustainable cost savings of over US$330m.

Profit/(loss) before tax and balance sheet data - Europe

		2014
		Retail Banking and Wealth Management US$m		Commercial Banking US$m		Global Banking and Markets US$m		Global Private Banking US$m		Other US$m		Inter-segment elimination55 US$m		Total US$m
Profit/(loss) before tax
Net interest income/(expense)		5,196		3,616		1,956		594		(654)		(97)		10,611
Net fee income/(expense)		2,456		1,900		1,087		626		(27)		−		6,042
Trading income/(expense) excluding net interest income		(260)		33		1,943		140		(92)		−		1,764
Net interest income/(expense) on trading activities		14		2		660		(4)		1		97		770
Net trading income/(expense)50		(246)		35		2,603		136		(91)		97		2,534
Changes in fair value of long-term debt issued and related derivatives		−		−		−		−		614		−		614
Net income/(expense) from other financial instruments designated at fair value		616		119		14		(1)		(11)		−		737
Net income/(expense) from financial instruments designated at fair value		616		119		14		(1)		603		−		1,351
Gains less losses from financial investments		12		10		730		9		11		−		772
Dividend income		3		7		50		2		3		−		65
Net insurance premium income/(expense)		2,741		217		−		50		−		−		3,008
Other operating income/(expense)		(127)		45		(3)		29		1,249		(186)		1,007
Total operating income		10,651		5,949		6,437		1,445		1,094		(186)		25,390
Net insurance claims56		(3,450)		(306)		−		(63)		−		−		(3,819)
Net operating income4		7,201		5,643		6,437		1,382		1,094		(186)		21,571
Loan impairment (charges)/ recoveries and other credit risk provisions		(268)		(502)		−		4		2		−		(764)
Net operating income		6,933		5,141		6,437		1,386		1,096		(186)		20,807
Total operating expenses		(6,621)		(2,594)		(6,391)		(1,071)		(3,726)		186		(20,217)
Operating profit/(loss)		312		2,547		46		315		(2,630)		−		590
Share of profit in associates and joint ventures		2		1		3		−		−		−		6
Profit/(loss) before tax		314		2,548		49		315		(2,630)		−		596
		%		%		%		%		%				%
Share of HSBC's profit before tax		1.7		13.6		0.3		1.7		(14.1)				3.2
Cost efficiency ratio		91.9		46.0		99.3		77.5		340.6				93.7
Balance sheet data40
		US$m		US$m		US$m		US$m		US$m				US$m
Loans and advances to customers (net)27		165,112		106,342		113,136		24,766		377				409,733
Total assets		221,679		120,819		948,951		64,676		64,182		(129,381)		1,290,926
Customer accounts27		202,413		135,837		166,075		41,380		254				545,959

		2013
		Retail Banking and Wealth Management US$m		Commercial Banking US$m		Global Banking and Markets US$m		Global Private Banking US$m		Other US$m		Inter- segment elimination55 US$m		Total US$m
Profit/(loss) before tax
Net interest income/(expense)		5,600		3,353		1,774		722		(694)		(62)		10,693
Net fee income/(expense)		2,545		1,789		957		744		(3)		-		6,032
Trading income excluding net interest income		206		30		2,181		192		698		-		3,307
Net interest income on trading activities		2		5		1,013		4		30		62		1,116
Net trading income50		208		35		3,194		196		728		62		4,423
Changes in fair value of long-term debt issued and related derivatives		−		−		−		−		(936)		−		(936)
Net income/(expense) from other financial instruments designated at fair value		1,059		271		591		4		(570)		(1)		1,354
Net income/(expense) from financial instruments designated at fair value		1,059		271		591		4		(1,506)		(1)		418
Gains less losses from financial investments		52		−		344		(17)		−		−		379
Dividend income		4		2		65		4		−		−		75
Net insurance premium income/(expense)		2,782		361		(1)		16		−		−		3,158
Other operating income/(expense)		(103)		9		110		(253)		766		−		529
Total operating income/(expense)		12,147		5,820		7,034		1,416		(709)		(1)		25,707
Net insurance claims56		(4,136)		(567)		−		(37)		−		−		(4,740)
Net operating income/(expense)4		8,011		5,253		7,034		1,379		(709)		(1)		20,967
Loan impairment charges and other credit risk provisions		(329)		(935)		(242)		(24)		−		−		(1,530)
Net operating income/(expense)		7,682		4,318		6,792		1,355		(709)		(1)		19,437
Total operating expenses		(5,934)		(2,231)		(4,987)		(1,519)		(2,943)		1		(17,613)
Operating profit/(loss)		1,748		2,087		1,805		(164)		(3,652)		−		1,824
Share of profit/(loss) in associates and joint ventures		5		1		(4)		(1)		−		−		1
Profit/(loss) before tax		1,753		2,088		1,801		(165)		(3,652)		−		1,825
		%		%		%		%		%				%
Share of HSBC's profit before tax		7.8		9.2		8.0		(0.7)		(16.2)				8.1
Cost efficiency ratio		74.1		42.5		70.9		110.2		(415.1)				84.0
Balance sheet data40
		US$m		US$m		US$m		US$m		US$m				US$m
Loans and advances to customers (net)27		177,357		105,498		145,136		27,289		830				456,110
Total assets		238,499		124,242		1,054,506		75,718		72,174		(172,180)		1,392,959
Customer accounts27		205,288		134,120		191,715		49,789		1,021				581,933

For footnotes, see page 109.

 

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