Interim Report - 1 of 21

RNS Number : 9124Q

HSBC Holdings PLC

13 August 2010

Headquartered in London, HSBC is one of the largest banking and financial services organisations in the world. Its international network comprises some 8,000 offices in 87 countries and territories in Europe; Hong Kong; Rest of Asia-Pacific; the Middle East; North America and Latin America.

With listings on the London, Hong Kong, New York, Paris and Bermuda stock exchanges, shares in HSBC Holdings plc are held by over 220,000 shareholders in 124 countries and territories. The shares are traded on the New York Stock Exchange in the form of American Depositary Shares.

HSBC provides a comprehensive range of financial services to around 100 million customers through four customer groups and global businesses: Personal Financial Services (including consumer finance); Commercial Banking; Global Banking and Markets; and Private Banking.

Certain defined terms

Unless the context requires otherwise, 'HSBC Holdings' means HSBC Holdings plc and 'HSBC' or the 'Group' means HSBC Holdings together with its subsidiaries. Within this document, the Hong Kong Special Administrative Region of the People's Republic of China is referred to as 'Hong Kong'. When used in the terms 'shareholders' equity' and 'total shareholders' equity', 'shareholders' means holders of HSBC Holdings ordinary shares and those preference shares classified as equity.

The Interim Report 2010 of HSBC Holdings has been prepared in accordance with the requirements of English law, and liability in respect thereof is also governed by English law. In particular, the liability of the Directors for these reports is solely to HSBC Holdings. HSBC's Interim Financial Statements and Notes thereon, as set out on pages 204 to 232, have been prepared in accordance with the Disclosure Rules and Transparency Rules of the Financial Services Authority and International Accounting Standard ('IAS') 34 'Interim Financial Reporting' as issued by the International Accounting Standards Board ('IASB') and endorsed by the European Union ('EU'). The consolidated financial statements of HSBC at 31 December 2009 were prepared in accordance with International Financial Reporting Standards ('IFRSs') as issued by the IASB, and as endorsed by the EU. EU-endorsed IFRSs may differ from IFRSs as issued by the IASB if, at any point in time, new or amended IFRSs have not been endorsed by the EU. At 31 December 2009, there were no unendorsed standards effective for the year ended 31 December 2009 affecting the consolidated financial statements at that date, and there was no difference between IFRSs endorsed by the EU and IFRSs issued by the IASB in terms of their application to HSBC. Accordingly, HSBC's financial statements for the year ended 31 December 2009 were prepared in accordance with IFRSs as issued by the IASB. At 30 June 2010, there were no unendorsed standards effective for the period ended 30 June 2010 affecting these interim consolidated financial statements, and there was no difference between IFRSs endorsed by the EU and IFRSs issued by the IASB in terms of their application to HSBC.

HSBC uses the US dollar as its presentation currency because the US dollar and currencies linked to it form the major currency bloc in which HSBC transacts and funds its business. Unless otherwise stated, the information presented in this document has been prepared in accordance with IFRSs.

When reference is made to 'underlying' or 'underlying basis' in tables or commentaries, comparative information has been expressed at constant currency (see page 12) and adjusted for the effects of acquisitions and disposals.

Financial Highlights ....................................................................................................................................................			2

Cautionary Statement Regarding Forward-Looking Statements ........................................................................			4

Group Chief Executive's Review ................................................................................................................................			5

Interim Management Report ......................................................................................................................................			11
Operating and Financial Review
Principal activities .....................................................	11	Group performance by income and expense item ...	15
Strategic direction ......................................................	11	Economic profit/(loss) ............................................	25
Challenges and uncertainties .......................................	11	Balance sheet .........................................................	26
Reconciliation of reported and underlying profit ........	11	Other information ...................................................	28
Financial summary .....................................................	14	Customer groups and global businesses ........................	30
Income statement ...................................................	14	Geographical regions ..................................................	46
Impact of Market Turmoil
Background and disclosure policy ................................	97	Nature and extent of HSBC's exposures ......................	103
Overview of exposure .................................................	98	Fair values of financial instruments ............................	114
Business model ...........................................................	102	Special purpose entities ..............................................	125
Risk management .......................................................	103	Other off-balance sheet arrangements
Accounting policies ....................................................	103	and commitments ...................................................	136
Risk
Current challenges in regulation and supervision .........	138	Market risk ................................................................	175
Risk management .......................................................	140	Operational risk .........................................................	183
Credit risk ..................................................................	141	Reputational risk ........................................................	184
Liquidity and funding ..................................................	172	Risk management of insurance operations ..................	185
		Capital management and allocation ............................	189

Board of Directors and Senior Management ...........................................................................................................			198

Financial Statements ...................................................................................................................................................			204

Notes on the Financial Statements¹ ...........................................................................................................................			212

Responsibility Statement ............................................................................................................................................			233

Independent Review Report by KPMG Audit Plc to HSBC Holdings plc ............................................................			234

Additional Information .................................................................................................................................................			235
Directors' interests .....................................................	235	Interim Management Statement .................................	245
Employee share option plans .....................................	238	Final results ................................................................	245
Notifiable interests in share capital .............................	243	Corporate governance ................................................	245
Dealings in HSBC Holdings shares ...............................	243	Telephone and online share dealing service ................	245
First interim dividend for 2010 ...................................	244	Stock codes ................................................................	246
Second interim dividend for 2010 ...............................	244	Copies of the Interim Report 2010 and shareholder enquiries and communications .................................	246
Proposed interim dividends for 2010 ..........................	245		246

Glossary .........................................................................................................................................................................			248

Index ................................................................................................................................................................................			257