John Flint, Group Chief Executive, said:
“We are taking firm steps to deliver the strategy we outlined in June. Today's results, which are in line with our expectations, show strong revenue growth in our global businesses. This is creating room to invest while maintaining our commitment to full-year positive adjusted jaws. We are investing to win new customers, increase our market share, and lay the foundations for consistent growth in profits and returns.”
|
Financial highlights and key ratios |
|
|
|
|
|||
|
|
|
Half-year to 30 Jun |
|||||
|
|
|
2018 |
2017 |
Change |
|||
|
|
Footnotes |
$m |
$m |
% |
|||
|
Reported profit before tax |
|
10,712 |
|
10,243 |
|
4.58 |
|
|
Adjusted profit before tax |
1 |
12,139 |
|
12,364 |
|
(1.82 |
) |
|
|
|
% |
% |
|
|||
|
Return on average ordinary shareholders' equity (annualised) |
|
8.7 |
|
8.8 |
|
|
|
|
Adjusted jaws |
2 |
(5.6 |
) |
|
|
||
For footnotes, see page 7.
We use adjusted performance to understand the underlying trends in the business. The main differences between reported and
adjusted are foreign currency translation and significant items.
|
Capital and balance sheet3 |
|
|
|
|
|||
|
|
|
At |
|||||
|
|
|
30 Jun |
31 Dec |
Change |
|||
|
|
|
2018 |
2017 |
|
|||
|
|
Footnote |
% |
% |
|
|||
|
Common equity tier 1 ratio |
4 |
14.2 |
|
14.5 |
|
|
|
|
Leverage ratio |
4 |
5.4 |
|
5.6 |
|
|
|
|
|
|
$m |
$m |
$m |
|||
|
Loans and advances to customers |
|
973,443 |
|
962,964 |
|
10,479 |
|
|
Customer accounts |
|
1,356,307 |
|
1,364,462 |
|
(8,155 |
) |
|
Risk-weighted assets |
4 |
865,467 |
|
871,337 |
|
(5,870 |
) |
For footnotes, see page 7.
|
Highlights |
|
|
|
Half-year to 30 Jun |
|||
|
|
|
2018 |
2017 |
||
|
|
Footnote |
$m |
$m |
||
|
Reported |
|
|
|
||
|
Revenue |
5 |
27,287 |
|
26,166 |
|
|
Change in expected credit losses and other credit impairment charges |
|
(407 |
) |
N/A |
|
|
Loan impairment charges and other credit risk provisions |
|
N/A |
(663 |
) |
|
|
Operating expenses |
|
(17,549 |
) |
(16,443 |
) |
|
Profit before tax |
|
10,712 |
|
10,243 |
|
|
Adjusted |
|
|
|
||
|
Revenue |
5 |
27,535 |
|
26,957 |
|
|
Change in expected credit losses and other credit impairment charges
|
|
(407 |
) |
N/A |
|
|
Loan impairment charges and other credit risk provisions |
|
N/A |
(657 |
) |
|
|
Operating expenses |
|
(16,370 |
) |
(15,195 |
) |
|
Profit before tax |
|
12,139 |
|
12,364 |
|
|
|
|
|
|
||
|
Significant items affecting adjusted performance |
|
|
|
||
|
Revenue |
|
|
|
||
|
Customer redress programmes |
|
(54 |
) |
(299 |
) |
|
Disposals, acquisitions and investment in new businesses |
|
(145 |
) |
348 |
|
|
Fair value movements on financial instruments |
|
(152 |
) |
(245 |
) |
|
Operating expenses |
|
|
|
||
|
Costs to achieve |
|
– |
|
(1,670 |
) |
|
Costs of structural reform |
|
(211 |
) |
(180 |
) |
|
Restructuring and other related costs |
|
(24 |
) |
– |
|
|
Settlements and provisions in connection with legal and regulatory matters |
|
(841 |
) |
322 |
|
For footnotes, see page 7.
|
Statement by Mark E Tucker, Group Chairman |
At the start of the year, I spoke of the Board's focus on enhancing HSBC's performance and reputation. The Group has made a good start in both regards.
The strength of our global businesses underlines the potential of the Group to make further revenue and market share gains, and provides room to invest in revenue growth, resilience, and technology to support our customers. These are all necessary to further strengthen HSBC's reputation among our many stakeholders.
The strategy that John Flint, the Group Chief Executive, unveiled in June is designed to unlock this potential. We have created a strategy that builds on past achievements to improve the Group's competitiveness and increase value for shareholders. It focuses on areas where HSBC is already strong, but which also hold the greatest capacity for revenue growth and value creation. This demonstrates the many competitive advantages the Group already enjoys.
Investing in the future of the business is a key pillar of the bank's strategy. No business can hope to thrive unless it anticipates and adapts to the changes around it. Technological change, in particular, will only accelerate in the coming years. Being able to invest thoughtfully and at scale at this point in the cycle will differentiate future winners from the rest of the industry.
This edge was evident in the first half of 2018. Our award-winning PayMe app acquired its millionth user and is now an established part of the daily lives of people and business in Hong Kong. In May, HSBC executed the first ever live trade finance transaction using scalable blockchain technology, making an important breakthrough in an area previously rich in potential but low on delivery. In July, we announced an expansion of our use of Google Cloud technology, increasing access to some of the leading machine learning and data analytics technology in the world. These are just a few examples of how we are marrying emerging technology with the needs and expectations of our customers.
We are also investing to keep our customers safe. Both the Board and management remain unequivocally committed to safeguarding our clients and delivering industry-leading financial crime standards. This is a permanent priority for everyone at HSBC.
Our global businesses continue to benefit from the economic growth trends we identified at our 2017 Annual Results presentation. The diversity of the Group underpins our ability to manage the external environment effectively. We remain cautiously optimistic for global growth in the remainder of the year. In particular, the fundamentals of Asia remain strong despite rising concerns around the future of international trade and protectionism.
The Board has appointed Jonathan Symonds as the Deputy Group Chairman of HSBC Holdings plc. Jon already serves as the senior independent director. He takes up this new role today and steps down as Chairman of HSBC Bank plc. I am delighted that Jon has agreed to support me in this new capacity.
I am very grateful to all our people for the excellent work that they do in service of the bank, our customers and each other. Our results for the first half demonstrate that the Group has strong foundations. I have every confidence that we will build on them further.