REG - HSBC Holdings PLC - Half-year Report - Part 4
31/07/2024 16:30
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RNS Number : 5771Y HSBC Holdings PLC 31 July 2024
Independent review report to HSBC Holdings plc
Report on the interim condensed consolidated financial statements
Our conclusion
We have reviewed HSBC Holdings plc's interim condensed consolidated financial
statements (the 'interim financial statements') in the Interim Report 2024 of
HSBC Holdings plc for the six month period ended 30 June 2024 (the 'period').
Based on our review, nothing has come to our attention that causes us to
believe that the interim condensed consolidated financial statements are not
prepared, in all material respects, in accordance with the basis of the
policies set out in the 2023 annual financial statements, International
Accounting Standards 34 ('IAS 34') 'Interim Financial Reporting' as adopted by
the United Kingdom ('UK'), IAS 34 'Interim Financial Reporting' as issued by
the International Accounting Standards Board ('IASB'), IAS 34 'Interim
Financial Reporting' as adopted by the European Union ('EU'), and the
Disclosure Guidance and Transparency Rules sourcebook of the UK's Financial
Conduct Authority.
The interim financial statements comprise:
- the consolidated balance sheet as at 30 June 2024;
- the consolidated income statement and the consolidated statement of
comprehensive income for the period then ended;
- the consolidated statement of changes in equity for the period then
ended;
- the consolidated statement of cash flows for the period then ended; and
- the explanatory notes to the interim financial statements(1).
The interim financial statements included in the Interim Report 2024 of HSBC
Holdings plc have been prepared in accordance with the basis of the policies
set out in the 2023 annual financial statements, IAS 34 'Interim Financial
Reporting' as adopted by the UK, IAS 34 'Interim Financial Reporting' as
issued by the International Accounting Standards Board ('IASB'), IAS 34
'Interim Financial Reporting' as adopted by the EU, and the Disclosure
Guidance and Transparency Rules sourcebook of the UK's Financial Conduct
Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom ('ISRE (UK) 2410'). A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the Interim Report 2024 of
HSBC Holdings plc and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the interim
financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause HSBC Holdings plc to cease to continue as a going
concern.
1 Certain notes to the interim
financial statements have been presented elsewhere in the Interim report,
rather than in the notes to the interim financial statements. These are
cross-referenced from the financial statements and are identified as
'(Reviewed)'. The relevant disclosures are included in the 'Risk' section on
pages 81 to 85 and the 'Shareholder information' section on page 144.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The Interim Report 2024 of HSBC Holdings plc, including the interim financial
statements, is the responsibility of, and has been approved by the directors.
The directors are responsible for preparing the Interim Report 2024 of HSBC
Holdings plc in accordance with the Disclosure Guidance and Transparency Rules
sourcebook of the UK's Financial Conduct Authority. In preparing the Interim
Report 2024 of HSBC Holdings plc, including the interim financial statements,
the directors are responsible for assessing HSBC Holdings plc's ability to
continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the
directors either intend to liquidate HSBC Holdings plc or to cease operations,
or have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the Interim Report 2024 of HSBC Holdings plc based on our
review. Our conclusion, including our Conclusions relating to going concern,
is based on procedures that are less extensive than audit procedures, as
described in the Basis for conclusion paragraph of this report. This report,
including the conclusion, has been prepared for and only for the company for
the purpose of complying with the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority and for no
other purpose. We do not, in giving this conclusion, accept or assume
responsibility for any other purpose or to any other person to whom this
report is shown or into whose hands it may come save where expressly agreed by
our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
31 July 2024
Interim condensed consolidated financial statements
Contents
113 Consolidated income statement
114 Consolidated statement of comprehensive income
115 Consolidated balance sheet
116 Consolidated statement of changes in equity
119 Consolidated statement of cash flows
Consolidated income statement
Half-year to
30 Jun 2024 30 Jun 2023
Notes* $m $m
Net interest income 16,911 18,264
- interest income 55,372 46,955
- interest expense (38,461) (28,691)
Net fee income 2 6,200 6,085
- fee income 8,158 7,947
- fee expense (1,958) (1,862)
Net income from financial instruments held for trading or managed on a fair 10,516 8,112
value basis(1)
Net income from assets and liabilities of insurance businesses, including 2,376 4,304
related derivatives, measured at fair value through profit or loss
Insurance finance expense (2,486) (4,234)
Insurance service result 662 524
- insurance service revenue 1,310 1,104
- insurance service expense (648) (580)
Gain on acquisition(2) - 1,507
Gain less impairment relating to sale of business operations(3) 3,256 2,130
Other operating (expense)/income (143) 184
Net operating income before change in expected credit losses and other credit 37,292 36,876
impairment charges(4)
Change in expected credit losses and other credit impairment charges (1,066) (1,345)
Net operating income 36,226 35,531
Employee compensation and benefits (9,192) (8,954)
General and administrative expenses (5,135) (4,912)
Depreciation and impairment of property, plant and equipment and right-of-use (867) (782)
assets
Amortisation and impairment of intangible assets (1,102) (809)
Total operating expenses (16,296) (15,457)
Operating profit 19,930 20,074
Share of profit in associates and joint ventures 1,626 1,583
Profit before tax 21,556 21,657
Tax expense (3,891) (3,586)
Profit after tax 17,665 18,071
Attributable to:
- ordinary shareholders of the parent company 16,586 16,966
- other equity holders 526 542
- non-controlling interests 553 563
Profit after tax 17,665 18,071
$ $
Basic earnings per ordinary share 4 0.89 0.86
Diluted earnings per ordinary share 4 0.88 0.86
1 Includes a $255m gain (1H23: $284m loss) on the foreign exchange
hedging of the proceeds from the sale of our banking business in Canada.
2 Gain recognised in respect of the acquisition of SVB
UK. .
3 In the first half of 2024, a gain of $4.6bn inclusive of the
recycling of $0.6bn in foreign currency translation reserve losses and $0.4bn
of other reserves recycling losses on the sale of our banking business in
Canada, and an impairment loss of $1.2bn relating to the planned sale of our
business in Argentina was recognised. In the first quarter of 2023, the $2.1bn
reversal of the held for sale classification was recognised relating to the
sale of our retail banking operations in France.
4 Net operating income before change in expected credit losses and
other credit impairment charges, also referred to as revenue.
* For Notes on the interim condensed consolidated financial
statements, see page 120.
Consolidated statement of comprehensive income
Half-year to
30 Jun 2024 30 Jun 2023
$m $m
Profit for the period 17,665 18,071
Other comprehensive income/(expense)
Items that will be reclassified subsequently to profit or loss when specific
conditions are met:
Debt instruments at fair value through other comprehensive income (213) 549
- fair value (losses)/gains (378) 804
- fair value gains transferred to the income statement on disposal (24) (63)
- expected credit losses/(recoveries) recognised in the income statement 13 (3)
- disposal of subsidiary 90 -
- income taxes 86 (189)
Cash flow hedges (710) (1,062)
- fair value losses (612) (1,700)
- fair value (gains)/losses reclassified to the income statement (673) 227
- disposal of subsidiary 262 -
- income taxes 313 411
Share of other comprehensive income/(expense) of associates and joint ventures 211 101
- share for the period 211 101
Net finance income/(expense) from insurance contracts 17 (101)
- before income taxes 23 (136)
- income taxes (6) 35
Exchange differences (2,588) (347)
- foreign exchange losses reclassified to the income statement on disposal 648 -
of a foreign operation
- other exchange differences (3,236) (347)
Items that will not be reclassified subsequently to profit or loss:
Fair value gains on property revaluation 5 1
Remeasurement of defined benefit asset/(liability) 146 (112)
- before income taxes 178 (105)
- income taxes (32) (7)
Changes in fair value of financial liabilities designated at fair value upon (283) (653)
initial recognition arising from changes in own credit risk
- before income taxes (372) (867)
- income taxes 89 214
Equity instruments designated at fair value through other comprehensive income 41 7
- fair value gains 62 7
- income taxes (21) -
Effects of hyperinflation 892 578
Other comprehensive expense for the period, net of tax (2,482) (1,039)
Total comprehensive income for the period 15,183 17,032
Attributable to:
- ordinary shareholders of the parent company 14,131 15,986
- other equity holders 526 542
- non-controlling interests 526 504
Total comprehensive income for the period 15,183 17,032
Consolidated balance sheet
At
30 Jun 2024 31 Dec 2023
Notes* $m $m
Assets
Cash and balances at central banks 277,112 285,868
Items in the course of collection from other banks 9,977 6,342
Hong Kong Government certificates of indebtedness 43,026 42,024
Trading assets 331,307 289,159
Financial assets designated and otherwise mandatorily measured at fair value 117,014 110,643
through profit or loss
Derivatives 8 219,269 229,714
Loans and advances to banks 102,057 112,902
Loans and advances to customers 938,257 938,535
Reverse repurchase agreements - non-trading 230,189 252,217
Financial investments 9 467,356 442,763
Assets held for sale 5,821 114,134
Prepayments, accrued income and other assets 184,303 165,255
Current tax assets 1,308 1,536
Interests in associates and joint ventures 10 28,465 27,344
Goodwill and intangible assets 12,161 12,487
Deferred tax assets 7,381 7,754
Total assets 2,975,003 3,038,677
Liabilities
Hong Kong currency notes in circulation 43,026 42,024
Deposits by banks 82,435 73,163
Customer accounts 1,593,834 1,611,647
Repurchase agreements - non-trading 202,770 172,100
Items in the course of transmission to other banks 10,482 7,295
Trading liabilities 77,455 73,150
Financial liabilities designated at fair value 140,800 141,426
Derivatives 8 217,096 234,772
Debt securities in issue 98,158 93,917
Liabilities of disposal groups held for sale 5,041 108,406
Accruals, deferred income and other liabilities 157,171 136,606
Current tax liabilities 2,837 2,777
Insurance contract liabilities 125,252 120,851
Provisions 11 1,536 1,741
Deferred tax liabilities 1,186 1,238
Subordinated liabilities 25,510 24,954
Total liabilities 2,784,589 2,846,067
Equity
Called up share capital 9,310 9,631
Share premium account 14,808 14,738
Other equity instruments 18,825 17,719
Other reserves (14,930) (8,907)
Retained earnings 155,280 152,148
Total shareholders' equity 183,293 185,329
Non-controlling interests 7,121 7,281
Total equity 190,414 192,610
Total liabilities and equity 2,975,003 3,038,677
* For Notes on the interim condensed consolidated financial
statements, see page 120.
Consolidated statement of changes in equity
Other reserves
Called up share Other Cash Foreign Merger and other Insurance Retained Total share-holders' equity Non- Total equity
flow
exchange
controlling
capital equity Financial assets at FVOCI reserve
hedging
reserve reserves finance earnings
interests
reserve
and share premium instru-ments reserve(1)
$m $m $m $m $m $m $m $m $m $m $m
At 1 Jan 2024 24,369 17,719 (3,507) (1,033) (33,753) 28,601 785 152,148 185,329 7,281 192,610
Profit for the period - - - - - - - 17,112 17,112 553 17,665
Other comprehensive income (net of tax) - - (164) (691) (2,551) 5 (10) 956 (2,455) (27) (2,482)
- debt instruments at fair value through other comprehensive income - - (313) - - - - - (313) 10 (303)
- equity instruments designated at fair value through other comprehensive - - 35 - - - - - 35 6 41
income
- cash flow hedges - - - (970) - - - - (970) (2) (972)
- changes in fair value of financial liabilities designated at fair value - - - - - - - (283) (283) - (283)
upon initial recognition arising from changes in own credit risk
- property revaluation - - - - - 5 - - 5 - 5
- remeasurement of defined benefit asset/liability - - - - - - - 136 136 10 146
- share of other comprehensive income of associates and joint ventures - - - - - - - 211 211 - 211
- effects of hyperinflation - - - - - - - 892 892 - 892
- foreign exchange losses reclassified to income statement on disposal of a - - - - 648 - - - 648 - 648
foreign operation
- other reserves reclassified to income statement on disposal of a foreign - - 90 262 - - - - 352 - 352
operation
- insurance finance income/ (expense) recognised in other comprehensive - - - - - - 17 - 17 - 17
income
- other exchange differences - - 24 17 (3,199) - (27) - (3,185) (51) (3,236)
Total comprehensive income for the period - - (164) (691) (2,551) 5 (10) 18,068 14,657 526 15,183
Shares issued under employee remuneration and share plans 75 - - - - - - (75) - - -
Capital securities issued(2) - 1,106 - - - - - - 1,106 - 1,106
Dividends to shareholders - - - - - - - (12,217) (12,217) (468) (12,685)
Cost of share-based payment arrangements - - - - - - - 274 274 - 274
Transfers(3) - - - - - (2,945) - 2,945 - - -
Share buy-backs(4) - - - - - - - (5,019) (5,019) - (5,019)
Cancellation of shares (326) - - - - 326 - - - - -
Other movements - - 4 - - 3 - (844) (837) (218) (1,055)
At 30 Jun 2024 24,118 18,825 (3,667) (1,724) (36,304) 25,990 775 155,280 183,293 7,121 190,414
Consolidated statement of changes in equity (continued)
Other reserves
Called up Other Financial assets at FVOCI reserve Cash Foreign exchange reserve Merger and other reserves Insurance Retained Total Non- Total
share capital
equity
flow
earnings
share-
controlling
equity
and share premium
instru-
hedging finance
holders'
interests
ments
reserve
equity
reserve(1)
$m $m $m $m $m $m $m $m $m $m $m
At 1 Jan 2023 24,811 19,746 (7,038) (3,808) (32,575) 33,209 1,079 142,409 177,833 7,364 185,197
Profit for the period - - - - - - - 17,508 17,508 563 18,071
Other comprehensive income (net of tax) - - 560 (1,077) (271) 1 (101) (92) (980) (59) (1,039)
- debt instruments at fair value through other - - 546 - - - - - 546 3 549
comprehensive income
- equity instruments designated at fair value through - - 14 - - - - - 14 7
other comprehensive (7)
income
- cash flow hedges - - - (1,077) - - - - (1,077) 15 (1,062)
- changes in fair value of financial liabilities - - - - - - - (654) (654) 1 (653)
designated at fair value
upon initial recognition arising from changes in own credit
risk
- property revaluation - - - - - 1 - - 1 - 1
- remeasurement of defined benefit asset/liability - - - - - - - (117) (117) 5 (112)
- share of other comprehensive income of associates and - - - - - - - 101 101 - 101
joint ventures
- effects of hyperinflation - - - - - - - 578 578 - 578
- insurance finance income/ (expense) recognised in other - - - - - - (101) - (101) - (101)
comprehensive
income
- other exchange differences - - - - (271) - - - (271) (76) (347)
Total comprehensive income for the period - - 560 (1,077) (271) 1 (101) 17,416 16,528 504 17,032
Shares issued under employee remuneration and share plans 78 - - - - - - (78) - - -
Capital securities issued - 1,996 - - - - - - 1,996 - 1,996
Dividends to shareholders - - - - - - - (7,133) (7,133) (375) (7,508)
Redemption of securities - (2,350) - - - - - - (2,350) - (2,350)
Cost of share-based payment arrangements - - - - - - - 228 228 - 228
Share buy-backs - - - - - - - (2,007) (2,007) - (2,007)
Cancellation of shares (79) - - - - 79 - - - - -
Other movements - - 6 - - 1 - (932) (925) (12) (937)
At 30 Jun 2023 24,810 19,392 (6,472) (4,885) (32,846) 33,290 978 149,903 184,170 7,481 191,651
Consolidated statement of changes in equity (continued)
Other reserves
Called up Other Financial assets at FVOCI reserve Cash Foreign exchange reserve Merger and other reserves Insurance Retained Total Non- Total
share capital
equity
flow
share-
controlling
and share premium
instru-
hedging finance earnings
holders'
interests equity
ments
reserve
equity
reserve(1)
$m $m $m $m $m $m $m $m $m $m $m
At 1 Jul 2023 24,810 19,392 (6,472) (4,885) (32,846) 33,290 978 149,903 184,170 7,481 191,651
Profit for the period - - - - - - - 6,025 6,025 463 6,488
Other comprehensive income (net of tax) - - 1,842 4,107 60 - (270) 206 5,945 77 6,022
- debt instruments at fair value through other comprehensive income - - 2,028 - - - - - 2,028 22 2,050
- equity instruments designated at fair value through other comprehensive - - (107) - - - - - (107) (20) (127)
income
- cash flow hedges - - - 3,996 - - - - 3,996 19 4,015
- changes in fair value of financial liabilities designated at fair value - - - - - - - (566) (566) - (566)
upon initial recognition arising from changes in own credit risk
- property revaluation - - - - - - - - - - -
- remeasurement of defined benefit asset/liability - - - - - - - (200) (200) (2) (202)
- share of other comprehensive income of associates and joint ventures - - - - - - - (54) (54) - (54)
- effects of hyperinflation - - - - - - - 1,026 1,026 - 1,026
- insurance finance income/ (expense) recognised in other comprehensive - - - - - - (263) - (263) - (263)
income
- other exchange differences - - (79) 111 60 - (7) - 85 58 143
Total comprehensive income for the period - - 1,842 4,107 60 - (270) 6,231 11,970 540 12,510
Shares issued under employee remuneration and share plans 1 - - - - - - (1) - - -
Dividends to shareholders - - - - - - - (4,460) (4,460) (228) (4,688)
Redemption of securities - (1,673) - - - - - 20 (1,653) - (1,653)
Cost of share-based payment arrangements - - - - - - - 254 254 - 254
Transfers - - - - - (5,130) - 5,130 - - -
Share buy-backs - - - - - - - (5,018) (5,018) - (5,018)
Cancellation of shares (442) - - - - 442 - - - - -
Other movements - - 1,123 (255) (967) (1) 77 89 66 (512) (446)
At 31 Dec 2023 24,369 17,719 (3,507) (1,033) (33,753) 28,601 785 152,148 185,329 7,281 192,610
1 The insurance finance reserve reflects the impact of adoption of the
other comprehensive income option for our insurance business in France.
Underlying assets supporting these contracts are measured at fair value
through other comprehensive income. Under this option, only the amount that
matches income or expenses recognised in profit or loss on underlying items is
included in finance income or expenses, resulting in the elimination of income
statement accounting mismatches. The remaining amount of finance income or
expenses for these insurance contracts is recognised in other comprehensive
income ('OCI').
2 In June 2024, HSBC Holdings issued SGD1,500m of contingent convertible
securities on which there were SGD15m of external issue costs.
3 At 30 June 2024, an impairment of $2,945m of HSBC Overseas Holdings
(UK) Limited was recognised post sale of our banking business in Canada,
resulting in a permitted transfer from the merger reserve to retained
earnings.
4 In February 2024, HSBC Holdings announced a share buy-back of up to
$2.0bn, which concluded in March 2024. Additionally, in April 2024, HSBC
Holdings announced another share buy-back of up to $3.0bn, which was completed
in July 2024.
Consolidated statement of cash flows
Half-year to
30 Jun 2024 30 Jun 2023
$m $m
Profit before tax 21,556 21,657
Adjustments for non-cash items:
Depreciation, amortisation and impairment 1,969 1,591
Net gain from investing activities (34) (41)
Share of profit in associates and joint ventures (1,626) (1,583)
Net gain on acquisition/disposal of subsidiaries, businesses, associates and (3,199) (3,604)
joint ventures
Change in expected credit losses gross of recoveries and other credit 1,192 1,482
impairment charges
Provisions including pensions 15 148
Share-based payment expense 274 228
Other non-cash items included in profit before tax (4,237) (1,661)
Elimination of exchange differences(1) 18,406 (6,558)
Change in operating assets(2) (41,493) (52,745)
Change in operating liabilities 36,486 72,836
Dividends received from associates 130 124
Contributions paid to defined benefit plans (76) (87)
Tax paid (2,664) (1,664)
Net cash from operating activities 26,699 30,123
Purchase of financial investments (259,999) (298,182)
Proceeds from the sale and maturity of financial investments 223,443 263,838
Net cash flows from the purchase and sale of property, plant and equipment (464) (329)
Net investment in intangible assets (1,058) (1,123)
Net cash inflow on acquisition/disposal of subsidiaries, businesses, 9,891 1,243
associates and joint ventures(3)
Net cash outflow on acquisition/disposal of subsidiaries, businesses, (10,612) (15)
associates and joint ventures(3)
Net cash from investing activities (38,799) (34,568)
Issue of ordinary share capital and other equity instruments 1,106 1,996
Cancellation of shares (5,330) (1,273)
Net sales/(purchases) of own shares for market-making and investment purposes (494) (823)
Redemption of preference shares and other equity instruments - (2,350)
Subordinated loan capital issued 2,611 2,744
Subordinated loan capital repaid (2,000) (1,044)
Dividends paid to shareholders of the parent company and non-controlling (12,685) (7,508)
interests
Net cash from financing activities (16,792) (8,258)
Net increase in cash and cash equivalents (28,892) (12,703)
Cash and cash equivalents at the beginning of the period 490,933 521,671
Exchange differences in respect of cash and cash equivalents (13,057) 8,565
Cash and cash equivalents at the end of the period(4) 448,984 517,533
Interest received was $54,197m (1H23: $46,817m), interest paid was $41,254m
(1H23: $29,222m) and dividends received (excluding dividends received from
associates, which are presented separately above) were $1,231m (1H23: $751m).
1 Adjustments 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.
2 Includes net settlement of the foreign exchange hedge of the
proceeds from the sale of our banking business in Canada, with a $255m gain in
1H24 (1H23: $284m loss).
3 The 'Net cash inflow on acquisition/disposal of subsidiaries,
businesses, associates and joint ventures' includes $9.3bn of net cash inflow
on the sale of our banking business in Canada in March 2024. In 1H23, it
included $1.2bn of net cash inflow on acquisition of Silicon Valley Bank UK
Limited in March 2023. The 'Net cash outflow on acquisition/disposal of
subsidiaries, businesses, associates and joint ventures includes $10.6bn of
net cash outflow on the sale of our retail banking operations in France in
January 2024.
4 Includes $1.7bn (1H23: $7.5bn) of cash and cash equivalents
classified as held for sale.
Notes on the interim condensed consolidated financial statements
Contents
120 1 Basis of preparation and material accounting policies 132 10 Interests in associates and joint ventures
121 2 Net fee income 134 11 Provisions
122 3 Dividends 135 12 Contingent liabilities, contractual commitments and guarantees
122 4 Earnings per share 135 13 Legal proceedings and regulatory matters
122 5 Segmental analysis 138 14 Transactions with related parties
125 6 Fair values of financial instruments carried at fair value 138 15 Assets held for sale, liabilities of disposal groups held for sale and
business acquisitions
130 7 Fair values of financial instruments not carried at fair value
131 8 Derivatives 141 16 Events after the balance sheet date
131 9 Financial investments 141 17 Interim Report 2024 and statutory accounts
1 Basis of preparation and material accounting policies
(a) Compliance with International Financial Reporting Standards
Our interim condensed consolidated financial statements have been prepared on
the basis of the policies set out in the 2023 annual financial statements.
They have also been prepared in accordance with IAS 34 'Interim Financial
Reporting' as adopted by the UK, IAS 34 'Interim Financial Reporting' as
issued by the International Accounting Standards Board ('IASB'), IAS 34
'Interim Financial Reporting' as adopted by the EU, and the Disclosure
Guidance and Transparency Rules sourcebook of the UK's Financial Conduct
Authority. Therefore, they include an explanation of events and transactions
that are significant to an understanding of the changes in HSBC's financial
position and performance since the end of 2023.
These interim condensed consolidated financial statements should be read in
conjunction with the Annual Report and Accounts 2023, which was prepared in
accordance with UK-adopted international accounting standards in conformity
with the requirements of the Companies Act 2006 and international financial
reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union. These interim condensed consolidated financial
statements were also prepared in accordance with International Financial
Reporting Standards ('IFRS Accounting Standards') as issued by the IASB,
including interpretations issued by the IFRS Interpretations Committee.
At 30 June 2024, there were no IFRS Accounting Standards effective for the
half-year to 30 June 2024 affecting these financial statements that were not
approved for adoption in the UK by the UK Endorsement Board. There was no
difference between IFRS Accounting Standards adopted by the UK, IFRS
Accounting Standards as adopted by the EU, and IFRS Accounting Standards
issued by the IASB in terms of their application to HSBC.
Standards applied during the half-year to 30 June 2024
There were no new standards or amendments to standards that had an effect on
these interim condensed consolidated financial statements.
(b) Use of estimates and judgements
Management believes that the critical estimates and judgements applicable to
the Group are those that relate to impairment of amortised cost and FVOCI debt
financial assets, the valuation of financial instruments, deferred tax assets,
provisions, interests in associates, impairment of goodwill and non-financial
assets, and post-employment benefit plans.
Other than in respect of non-current assets and disposal groups held for sale,
there were no material changes in the current period to any of the critical
estimates and judgements disclosed in 2023, which are stated on pages 101 and
343 to 354 of the Annual Report and Accounts 2023.
(c) Composition of the Group
In the first half of 2024 the sales of the retail banking operations in
France, the banking business in Canada, and the business in Russia completed.
There were no other material changes in the composition of the Group in the
half-year to 30 June 2024.
For further details of future business acquisitions and disposals, see Note 15
'Assets held for sale, liabilities of disposal groups held for sale and
business acquisitions'.
(d) Future accounting developments
Amendments to IAS 21 'Lack of Exchangeability'
In August 2023, the IASB published amendments to IAS 21 'Lack of
Exchangeability' effective from 1 January 2025. The Group is undertaking an
assessment of the potential impact, which is not expected to be significant.
Amendments to IFRS 9 'Financial Instruments' and IFRS 7 'Financial
Instruments: Disclosures'
In May 2024, the IASB issued amendments to IFRS 9 'Financial Instruments' and
IFRS 7 'Financial Instruments: Disclosures', effective for annual reporting
periods beginning on, or after, 1 January 2026. In addition to guidance as to
when certain financial liabilities can be deemed settled when using an
electronic payment system, the amendments also provide further clarification
regarding the classification of financial assets that contain contractual
terms that change the timing or amount of contractual cash flows, including
those arising from ESG-related contingencies, and financial assets with
certain non-recourse features. The Group is undertaking an assessment of the
potential impact.
IFRS 18 'Presentation and Disclosure in Financial Statements'
In April 2024, the IASB issued IFRS 18 'Presentation and Disclosure in
Financial Statements', effective for annual reporting periods beginning on or
after 1 January 2027. The new accounting standard aims to give users of
financial statements more transparent and comparable information about an
entity's financial performance. It will replace IAS 1 'Presentation of
Financial Statements' but carries over many requirements from that IFRS
Accounting Standard unchanged. In addition, there are three sets of new
requirements relating to the structure of the income statement,
management-defined performance measures and the aggregation and disaggregation
of financial information.
While IFRS 18 will not change recognition criteria or measurement bases, it
might have a significant impact on presenting information in the financial
statements, in particular the income statement. HSBC are currently assessing
any impacts as well as data readiness before developing a more detailed
implementation plan.
(e) Going concern
The financial statements are prepared on a going concern basis, as the
Directors are satisfied that the Group and parent company have the resources
to continue in business for the foreseeable future. In making this assessment,
the Directors have considered a wide range of information relating to present
and future conditions, including future projections of profitability, cash
flows, capital requirements and capital resources. These considerations
include stressed scenarios, as well as considering potential impacts from
other top and emerging risks, and the related impact on profitability, capital
and liquidity.
(f) Accounting policies
The accounting policies that we applied for these interim condensed
consolidated financial statements are consistent with those described on pages
341 to 354 of the Annual Report and Accounts 2023, as are the methods of
computation.
(g) Presentation of information
Certain disclosures have been presented elsewhere in the Interim Report 2024,
rather than in the notes to the financial statements. These are marked as
'(Reviewed)' as follows:
- Reconciliation of changes in gross carrying/nominal amount and
allowances for loans and advances to banks and customers including loan
commitments and financial guarantees included in the 'Risk' section on pages
81 to 83.
- Distribution of financial instruments to which the impairment
requirements in IFRS 9 are applied, by credit quality and stage allocation
included in the 'Risk' section on pages 84 to 85.
- Share buy-back included in the 'Shareholder information' section on
page 144.
2 Net fee income
Half-year to
30 Jun 2024 30 Jun 2023
$m $m
Net fee income by product
Funds under management 1,206 1,176
Cards 1,395 1,351
Credit facilities 754 798
Account services 760 765
Broking income 626 555
Unit trusts 515 386
Underwriting 369 345
Global custody 401 432
Remittances 399 405
Imports/exports 313 328
Insurance agency commission 183 159
Other 1,237 1,247
Fee income 8,158 7,947
Less: fee expense (1,958) (1,862)
Net fee income 6,200 6,085
Net fee income by global business
Wealth and Personal Banking 2,941 2,694
Commercial Banking 1,962 2,009
Global Banking and Markets 1,287 1,382
Corporate Centre 10 -
3 Dividends
On 31 July 2024, the Directors approved a second interim dividend for 2024 of
$0.10 per ordinary share in respect of the financial year ending 31 December
2024. This distribution amounts to approximately $1.849bn and will be payable
on 27 September 2024. No liability is recognised in the financial statements
in respect of these dividends.
Dividends paid to shareholders of HSBC Holdings plc
Half-year to
30 Jun 2024 30 Jun 2023
Per share Total Per share Total
$ $m $ $m
Dividends paid on ordinary shares
In respect of previous year:
- second interim dividend - - 0.23 4,590
- fourth interim dividend 0.31 5,872 - -
In respect of current year:
- first interim dividend 0.10 1,877 0.10 2,001
- special dividend 0.21 3,942 - -
Total 0.62 11,691 0.33 6,591
Total coupons on capital securities classified as equity 526 542
Dividends to shareholders 12,217 7,133
4 Earnings per share
Basic earnings per ordinary share is calculated by dividing the profit
attributable to ordinary shareholders of the parent company by the weighted
average number of ordinary shares outstanding, excluding own shares held.
Diluted earnings per ordinary share is calculated by dividing the basic
earnings, which require no adjustment for the effects of dilutive potential
ordinary shares, by the weighted average number of ordinary shares
outstanding, excluding own shares held, plus the weighted average number of
ordinary shares that would be issued on conversion of dilutive potential
ordinary shares.
Basic and diluted earnings per share
Half-year to
30 Jun 2024 30 Jun 2023
Profit Number Amount per share Profit Number Amount per share
of shares of shares
$m (millions) $ $m (millions) $
Basic(1) 16,586 18,666 0.89 16,966 19,693 0.86
Effect of dilutive potential ordinary shares 120 136
Diluted(1) 16,586 18,786 0.88 16,966 19,829 0.86
1 Weighted average number of ordinary shares outstanding (basic) or
assuming dilution (diluted).
2
1
5 Segmental analysis
The Group Chief Executive, supported by the rest of the Group Executive
Committee ('GEC'), is considered the Chief Operating Decision Maker ('CODM')
for the purposes of identifying the Group's reportable segments. Global
business results are assessed by the CODM on the basis of constant currency
performance that removes the effects of currency translation from reported
results. Therefore, we disclose these results on a constant currency basis as
required by IFRS Accounting Standards. The income statement for the half-year
to 30 June 2023 is converted at the average rate of exchange for 2024, and the
balance sheets at 30 June 2023 and 31 December 2023 at the prevailing rates
of exchange on 30 June 2024.
Our operations are closely integrated and, accordingly, the presentation of
data includes internal allocations of certain items of income and expense.
These allocations include the costs of certain support services and global
functions to the extent that they can be meaningfully attributed to global
businesses. While such allocations have been made on a systematic and
consistent basis, they necessarily involve a degree of subjectivity. Costs
that are not allocated to global businesses are included in Corporate Centre.
Where relevant, income and expense amounts presented include the results of
inter-segment funding along with inter-company and inter-business line
transactions. All such transactions are undertaken on arm's length terms.
Measurement of segmental assets, liabilities, income and expenses is in
accordance with the Group's accounting policies. Shared costs are included in
segments on the basis of actual recharges. The intra-Group elimination items
for the global businesses are presented in Corporate Centre.
Our global businesses
We provide a comprehensive range of banking and related financial services to
our customers in our three global businesses. The products and services
offered to customers are organised by these global businesses:
- Wealth and Personal Banking ('WPB') provides a full range of retail
banking and wealth products to our customers from personal banking to ultra
high net worth individuals. Typically, customer offerings include retail
banking products, such as current and savings accounts, mortgages and personal
loans, credit cards, debit cards and local and international payment services.
We also provide wealth management services, including insurance and investment
products, global asset management services, investment management and private
wealth solutions for customers with more sophisticated and international
requirements.
- Commercial Banking ('CMB') offers a broad range of products and
services to serve the needs of our commercial customers, including small and
medium-sized enterprises, mid-market enterprises and corporates. These include
credit and lending, international trade and receivables finance, treasury
management and liquidity solutions (payments and cash management and
commercial cards), commercial insurance and investments. CMB also offers
customers access to products and services offered by other global businesses,
such as Global Banking and Markets, which include foreign exchange products,
raising capital on debt and equity markets and advisory services.
- Global Banking and Markets ('GBM') provides tailored financial
solutions to major government, corporate and institutional clients and private
investors worldwide. The client-focused business lines deliver a full range of
banking capabilities, including financing, advisory and transaction services,
a markets business that provides services in credit, rates, foreign exchange,
equities, money markets and securities services, and principal investment
activities.
-
HSBC constant currency profit before tax and balance sheet data
Half-year to 30 Jun 2024
Wealth and Personal Banking Commercial Global Banking Corporate Total
Banking and Markets Centre
$m $m $m $m $m
Net operating income/(expense) before change in expected credit losses and 14,312 10,896 8,742 3,342 37,292
other credit impairment charges(1)
- external 10,166 11,217 15,377 532 37,292
- inter-segment 4,146 (321) (6,635) 2,810 -
- of which: net interest income/(expense)(2) 10,231 8,799 3,710 (5,829) 16,911
Change in expected credit losses and other credit impairment charges (476) (573) (11) (6) (1,066)
Net operating income 13,836 10,323 8,731 3,336 36,226
Total operating expenses (7,406) (3,861) (4,918) (111) (16,296)
Operating profit 6,430 6,462 3,813 3,225 19,930
Share of profit/(loss) in associates and joint ventures 1 - 1,597 1,626
28
Constant currency profit before tax 6,458 6,463 3,813 4,822 21,556
% % % % %
Share of HSBC's constant currency profit before tax 30.0 30.0 17.7 22.3 100.0
Constant currency cost efficiency ratio 51.7 35.4 56.3 3.3 43.7
Constant currency balance sheet data $m $m $m $m $m
Loans and advances to customers (net) 445,882 310,356 174,376 7,643 938,257
Interests in associates and joint ventures 567 25 111 27,762 28,465
Total external assets 864,948 597,808 1,365,439 146,808 2,975,003
Customer accounts 794,807 467,362 331,269 396 1,593,834
Half-year to 30 Jun 2023
Net operating income/(expense) before change in expected credit losses and 16,095 12,086 8,321 - 36,502
other credit impairment charges(1)
- external 12,317 12,730 13,714 (2,259) 36,502
- inter-segment 3,778 (644) (5,393) 2,259 -
- of which: net interest income/(expense)(2) 10,130 8,073 3,401 (3,877) 17,727
Change in expected credit losses and other credit impairment charges (484) (694) (136) (3) (1,317)
Net operating income/(expense) 15,611 11,392 8,185 (3) 35,185
Total operating expenses (7,020) (3,458) (4,776) 10 (15,244)
Operating profit 8,591 7,934 3,409 7 19,941
Share of profit in associates and joint ventures (1) - 1,497 1,531
35
Constant currency profit before tax 8,626 7,933 3,409 1,504 21,472
% % % % %
Share of HSBC's constant currency profit before tax 40.2 36.9 15.9 7.0 100.0
Constant currency cost efficiency ratio 43.6 28.6 57.4 - 41.8
Constant currency balance sheet data $m $m $m $m $m
Loans and advances to customers (net) 460,395 315,271 175,055 293 951,014
Interests in associates and joint ventures 551 22 105 28,856 29,534
Total external assets 891,675 644,672 1,325,327 150,047 3,011,721
Customer accounts 803,962 466,302 309,526 628 1,580,418
1 Net operating income before change in expected credit losses and
other credit impairment charges, also referred to as revenue.
2 Net interest expense recognised in the Corporate Centre includes
$5.5bn (1H23: $3.8bn) of interest expense in relation to the internal cost to
fund trading and fair value net assets; and the funding cost of foreign
exchange swaps in our Markets Treasury function.
Reported external net operating income is attributed to countries and
territories on the basis of the location of the branch responsible for
reporting the results or advancing the funds:
Half-year to
30 Jun 2024 30 Jun 2023
$m $m
Reported external net operating income by country/territory(1) 37,292 36,876
- UK 6,247 6,762
- Hong Kong 10,393 10,325
- US 2,146 2,112
- France 1,819 4,107
- other countries/territories 16,687 13,570
1 Net operating income before change in expected credit losses and
other credit impairment charges, also referred to as revenue.
Constant currency results reconciliation
30 Jun 2024 30 Jun 2023
Reported and constant currency Constant currency Currency translation Reported
$m $m $m $m
Revenue(1) 37,292 36,502 (374) 36,876
ECL (1,066) (1,317) 28 (1,345)
Operating expenses (16,296) (15,244) 213 (15,457)
Share of profit in associates and joint ventures 1,626 1,531 (52) 1,583
Profit before tax 21,556 21,472 (185) 21,657
1 Net operating income before change in expected credit losses and
other credit impairment charges, also referred to as revenue.
Constant currency balance sheet reconciliation
At 30 Jun 2024 At 30 Jun 2023 At 31 Dec 2023
Reported and constant currency Constant currency Currency translation Reported Constant currency Currency translation Reported
$m $m $m $m $m $m $m
Loans and advances to customers (net) 938,257 951,014 (8,544) 959,558 925,791 (12,744) 938,535
Interests in associates and joint ventures 28,465 29,534 (12) 29,546 26,967 (377) 27,344
Total external assets 2,975,003 3,011,721 (29,755) 3,041,476 2,997,845 (40,832) 3,038,677
Customer accounts 1,593,834 1,580,418 (15,351) 1,595,769 1,590,533 (21,114) 1,611,647
Notable items
Half-year to
30 Jun 2024 30 Jun 2023
$m $m
Notable items
Revenue
Disposals, acquisitions and related costs(1,2) 3,571 3,321
Fair value movements on financial instruments(3) - 15
Operating expenses
Disposals, acquisitions and related costs (101) (118)
Restructuring and other related costs(4) 19 47
1 Includes the impact of the sale of our retail banking operations in
France.
2 Includes the gain of $1.5bn recognised in respect of the acquisition
of SVB UK.
3 Fair value movements on non-qualifying hedges in HSBC Holdings.
4 Relates to reversals of restructuring provisions recognised in 2022.
6 Fair values of financial instruments carried at fair value
The accounting policies, control framework and hierarchy used to determine
fair values at 30 June 2024 are consistent with those applied for the Annual
Report and Accounts 2023.
Financial instruments carried at fair value and bases of valuation
Valuation techniques
Quoted Using With significant Total
market price observable inputs unobservable inputs
Level 1 Level 2 Level 3
Recurring fair value measurements $m $m $m $m
At 30 Jun 2024
Assets
Trading assets 254,095 73,132 4,080 331,307
Financial assets designated and otherwise mandatorily measured at fair value 30,762 64,631 21,621 117,014
through profit or loss
Derivatives 1,278 215,480 2,511 219,269
Financial investments 252,692 62,912 2,414 318,018
Liabilities
Trading liabilities 54,933 22,392 130 77,455
Financial liabilities designated at fair value 1,322 127,319 12,159 140,800
Derivatives 1,331 212,284 3,481 217,096
At 31 Dec 2023
Assets
Trading assets 202,020 82,833 4,306 289,159
Financial assets designated and otherwise mandatorily measured at fair value 27,030 63,825 19,788 110,643
through profit or loss
Derivatives 931 226,714 2,069 229,714
Financial investments 215,228 76,591 2,618 294,437
Liabilities
Trading liabilities 53,354 19,318 478 73,150
Financial liabilities designated at fair value 1,266 129,232 10,928 141,426
Derivatives 1,918 230,285 2,569 234,772
The table below provides the fair value levelling of assets held for sale and
liabilities of disposal groups that have been classified as held for sale in
accordance with IFRS 5. For further details, see Note 15.
Financial instruments carried at fair value and bases of valuation - assets
and liabilities held for sale
Valuation techniques
Quoted Using With significant Total
market price observable inputs unobservable inputs
Level 1 Level 2 Level 3
Recurring fair value measurements $m $m $m $m
At 30 Jun 2024
Assets
Trading assets 63 114 - 177
Financial assets designated and otherwise mandatorily measured at fair value 382 11 19 412
through profit or loss
Derivatives - 3 - 3
Financial investments 123 1,641 3 1,767
Liabilities
Trading liabilities - - - -
Financial liabilities designated at fair value - - - -
Derivatives - 1 - 1
At 31 Dec 2023
Assets
Trading assets 2,403 61 - 2,465
Financial assets designated and otherwise mandatorily measured at fair value - 15 49 64
through profit or loss
Derivatives - 528 - 528
Financial investments 9,357 - 28 9,385
Liabilities
Trading liabilities 1,352 64 - 1,417
Financial liabilities designated at fair value - 2,370 - 2,370
Derivatives - 615 - 615
Transfers between Level 1 and Level 2 fair values
Assets Liabilities
Financial investments Trading assets Designated and otherwise mandatorily measured at fair value Derivatives Trading liabilities Designated at fair value Derivatives
$m $m $m $m $m $m $m
At 30 Jun 2024
Transfers from Level 1 to Level 2 4,084 1,975 - 33 - -
611
Transfers from Level 2 to Level 1 5,662 3,098 1,113 - 63 - -
At 31 Dec 2023
Transfers from Level 1 to Level 2 13,200 8,066 1,709 - 54 - -
Transfers from Level 2 to Level 1 9,975 5,758 2,477 - 309 - -
Transfers between levels of the fair value hierarchy are deemed to occur at
the end of each quarterly reporting period. Transfers into and out of levels
of the fair value hierarchy are primarily attributable to observability of
valuation inputs and price transparency.
Fair value adjustments
We adopt the use of fair value adjustments when we take into consideration
additional factors not incorporated within the valuation model that would
otherwise be considered by a market participant. We classify fair value
adjustments as either 'risk-related' or 'model-related'. The majority of these
adjustments relate to GBM. Movements in the amount of fair value adjustments
do not necessarily translate into equivalent movements of profits or losses
within the income statement, as these movements can be compensated for by
other related profit or loss effects. For example, as models are enhanced,
fair value adjustments may no longer be required. Similarly, fair value
adjustments will decrease when the related positions are unwound, but this may
not result in profit or loss.
Global Banking and Markets fair value adjustments
At 30 Jun 2024 At 31 Dec 2023
GBM Corporate Centre GBM Corporate Centre
$m $m $m $m
Type of adjustment
Risk-related 602 45 692 41
- bid-offer 351 - 414 -
- uncertainty 70 4 75 3
- credit valuation adjustment 124 37 164 35
- debit valuation adjustment (26) - (54) -
- funding fair value adjustment 83 4 93 3
Model-related 50 - 63 -
- model limitation 50 - 63 -
Inception profit (Day 1 P&L reserves) 91 - 86 -
Total 743 45 841 41
The reduction in fair value adjustments was predominantly driven by changes to
exposure, and tightening of credit and liquidity market spreads.
Fair value valuation bases
Financial instruments measured at fair value using a valuation technique with
significant unobservable inputs - Level 3
Assets Liabilities
Financial investments Trading assets Designated and otherwise mandatorily measured at fair value through profit or Derivatives Total Trading liabilities Designated at fair value Derivatives Total
loss
$m $m $m $m $m $m $m $m $m
Private equity including strategic investments 514 1 - 19,665 - 1 - 1
19,150
Asset-backed securities 309 227 - 543 - - - -
7
Structured notes - - - 3 - 12,050 - 12,050
3
Other derivatives - - 2,511 2,511 - - 3,481 3,481
-
Other portfolios 1,591 3,852 - 7,904 130 108 - 238
2,461
At 30 Jun 2024 2,414 4,080 2,511 30,626 130 12,159 3,481 15,770
21,621
Private equity including strategic investments 507 7 - 18,154 - 1 - 1
17,640
Asset-backed securities 309 128 - 445 - - - -
8
Structured notes - - - 3 - 10,331 - 10,331
3
Other derivatives - - 2,069 2,069 - - 2,569 2,569
-
Other portfolios 1,802 4,171 - 8,110 478 596 - 1,074
2,137
At 31 Dec 2023 2,618 4,306 2,069 28,781 478 10,928 2,569 13,975
19,788
The basis for determining the fair value of the financial instruments in the
table above is explained on page 378 of the Annual Report and Accounts 2023.
Reconciliation of fair value measurements in Level 3 of the fair value
hierarchy
Movement in Level 3 financial instruments
Assets Liabilities
Financial investments Trading assets Designated and otherwise mandatorily measured at fair value through profit or Derivatives Trading liabilities Designated at fair value Derivatives
loss
$m $m $m $m $m $m $m
At 1 Jan 2024 2,618 4,306 19,788 2,069 478 10,928 2,569
Total gains or losses recognised in profit or loss (11) (7) 270 323 (4) 345 865
- net income or losses from financial instruments held for trading or - (7) - 323 (4) 345 865
managed on a fair value basis
- net income from assets and liabilities of insurance businesses, including - - 223 - - - -
related derivatives, measured at fair value through profit or loss
- changes in fair value of other financial instruments mandatorily measured - - 47 - - - -
at fair value through profit or loss
- gains less losses from financial investments held at fair value through (11) - - - - - -
other comprehensive income
Total gains/(losses) recognised in other comprehensive income ('OCI') (73) (48) (102) (22) (4) (77) (30)
- financial investments: fair value gains/(losses) (18) - - - - 31 -
- exchange differences (55) (48) (102) (22) (4) (108) (30)
Purchases 351 1,030 3,694 - 135 - -
New issuances - - - - - 3,378 -
Sales (30) (633) (183) - (293) - -
Settlements (406) (615) (1,738) (147) (164) (1,898) (136)
Transfers out (80) (281) (213) (265) (29) (1,039) (353)
Transfers in 45 328 105 553 11 522 566
At 30 Jun 2024 2,414 4,080 21,621 2,511 130 12,159 3,481
Unrealised gains or losses recognised in profit or loss relating to assets and - (12) (302) (2,157) 5 (167) (541)
liabilities held at 30 Jun 2024
- net income or losses from financial instruments held for trading or - (12) - (2,157) 5 - (541)
managed on a fair value basis
- changes in fair value of other financial instruments mandatorily measured - - (302) - - (167) -
at fair value through profit or loss
Movement in Level 3 financial instruments (continued)
Assets Liabilities
Financial investments Trading assets Designated and otherwise mandatorily measured at fair value through profit or Derivatives Trading liabilities Designated at fair value Derivatives
loss
$m $m $m $m $m $m $m
At 1 Jan 2023 2,961 4,817 17,407 1,964 474 10,432 2,920
Total gains or losses recognised in profit or loss (15) 65 706 237 25 60 478
- net income or losses from financial instruments held for trading or - 65 - 237 25 - 478
managed on a fair value basis
- changes in fair value of other financial instruments mandatorily measured - - 706 - - 60 -
at fair value through profit or loss
- gains less losses from financial investments held at fair value through (15) - - - - - -
other comprehensive income
Total gains/(losses) recognised in other comprehensive income ('OCI') 138 92 11 75 21 323 98
- financial investments: fair value gains/(losses) 83 - - - - 234 -
- exchange differences 55 92 11 75 21 89 98
Purchases 215 761 1,660 - 115 - -
New issuances - - - - 2 2,313 -
Sales (122) (1,353) (303) - (181) (2) -
Settlements (202) (487) (963) (517) (9) (1,479) (1,164)
Transfers out (108) (377) (140) (85) (32) (1,821) (138)
Transfers in 139 554 2 98 36 323 121
At 30 Jun 2023 3,006 4,072 18,380 1,772 451 10,149 2,315
Unrealised gains or losses recognised in profit or loss relating to assets and - (58) 232 734 (4) (189) (560)
liabilities held at 30 Jun 2023
- net income or losses from financial instruments held for trading or - (58) - 734 (4) - (560)
managed on a fair value basis
- changes in fair value of other financial instruments mandatorily measured - - 232 - - (189) -
at fair value through profit or loss
Transfers between levels of the fair value hierarchy are deemed to occur at
the end of each quarterly reporting period. Transfers into and out of levels
of the fair value hierarchy are primarily attributable to observability of
valuation inputs and price transparency.
Effect of changes in significant unobservable assumptions to reasonably
possible alternatives
The following table shows the sensitivity of Level 3 fair values to reasonably
possible alternative assumptions:
Sensitivity of fair values to reasonably possible alternative assumptions
Reflected in profit or loss Reflected in OCI
Favourable Unfavourable Favourable Unfavourable
changes changes changes changes
$m $m $m $m
Derivatives, trading assets and trading liabilities(1) 546 (309) - -
Financial assets and liabilities designated and otherwise mandatorily measured 1,664 (1,255) - -
at fair value through profit or loss
Financial investments 18 (18) 42 (45)
At 30 Jun 2024 2,228 (1,582) 42 (45)
Derivatives, trading assets and trading liabilities(1) 332 - -
(434)
Financial assets and liabilities designated and otherwise mandatorily measured 1,009 (1,009) - -
at fair value through profit or loss
Financial investments 10 61
(10) (63)
At 30 Jun 2023 1,351 (1,453) 61
(63)
Derivatives, trading assets and trading liabilities(1) 492 - -
(531)
Financial assets and liabilities designated and otherwise mandatorily measured 1,092 (1,100) - -
at fair value through profit or loss
Financial investments 13 61
(12) (66)
At 31 Dec 2023 1,597 (1,643) 61
(66)
1 'Derivatives, trading assets and trading liabilities' are presented
as one category to reflect the manner in which these financial instruments are
risk-managed.
The sensitivity analysis for certain private equity positions has been
enhanced in order to reduce dependency on historical observations and focus on
current valuation uncertainty, resulting in some increases in favourable
sensitivities.
The sensitivity analysis aims to measure a range of fair values consistent
with the application of a 95% confidence interval. Methodologies take account
of the nature of the valuation technique employed, as well as the availability
and reliability of observable proxy and historical data.
When the fair value of a financial instrument is affected by more than one
unobservable assumption, the table above reflects the most favourable or the
most unfavourable change from varying the assumptions individually.
Key unobservable inputs to Level 3 financial instruments
The following table lists key unobservable inputs to Level 3 financial
instruments and provides the range of those inputs at 30 June 2024. There has
been no change to the key unobservable inputs to Level 3 financial instruments
and inter-relationships therein, which are detailed on pages 380 and 381 of
the Annual Report and Accounts 2023.
Quantitative information about significant unobservable inputs in Level 3
valuations
Fair value Key valuation techniques Key unobservable inputs 30 Jun 2024 31 Dec 2023
Assets Liabilities Full range of Full range of
inputs inputs
$m $m Lower Higher Lower Higher
Private equity including strategic investments(1) 19,665 1 Price - Net asset value Current Value/Cost - 277 See footnote 1
Asset-backed securities ('ABS') 543 -
- collateralised loan/debt obligation 81 -
Market proxy Bid quotes - 96 - 94
- other ABSs 462 - Market proxy Bid quotes - 246 - 220
Structured notes 3 12,050
- equity-linked notes 3 7,929 Model - Option model Equity volatility 6% 177% 6% 154%
Model - Option model Equity correlation 27% 100% 34% 100%
- Foreign exchange ('FX')-linked notes - 2,521 Model - Option model FX volatility 1% 38% 1% 34%
- other(2) - 1,600
Other derivatives 2,511 3,481
- interest rate derivatives 1,094 994
securitisation swaps 152 119 Model - Discounted cash flow Prepayment rate 5% 10% 5% 10%
long-dated swaptions 66 71 Model - Option model Interest rate volatility 7% 26% 11% 37%
other(2) 876 804
- FX derivatives 373 411
FX options 312 369 Model - Option model FX volatility 1% 32% 1% 31%
other(2) 61 42
- equity derivatives 681 1,396
long-dated single stock options 469 905 Model - Option model Equity volatility 6% 133% 6% 110%
other(2) 212 491
- credit derivatives 363 680
other(2) 363 680
Other portfolios 7,904 238
- repurchase agreements 949 116 Model - Discounted cash flow Interest rate curve 5% 8% 3% 8%
- bonds 3,383 1 Market proxy Mid quotes - 103 - 101
- other(2) 3,572 121
At 30 Jun 2024 30,626 15,770
1 'Private equity including
strategic investments' includes private equity, private credit, private equity
funds, and infrastructure debt, primarily held as part of our Insurance
business and for strategic investments. The analysis for private equity
positions has been enhanced with the range of key unobservable inputs now
quoted.
2 'Other' includes a range of smaller holdings with multiple inputs.
7 Fair values of financial instruments not carried at fair value
The bases for measuring the fair values of loans and advances to banks and
customers, financial investments, deposits by banks, customer accounts, debt
securities in issue, subordinated liabilities and non-trading repurchase and
reverse repurchase agreements are explained on pages 382 and 383 of the Annual
Report and Accounts 2023.
Fair values of financial instruments not carried at fair value on the balance
sheet
At 30 Jun 2024 At 31 Dec 2023
Carrying Fair Carrying Fair
amount value amount value
$m $m $m $m
Assets
Loans and advances to banks 102,057 102,058 112,902 112,744
Loans and advances to customers 938,257 923,152 938,535 924,382
Reverse repurchase agreements - non-trading 230,189 230,153 252,217 252,243
Financial investments - at amortised cost 149,338 146,390 148,326 146,588
Liabilities
Deposits by banks 82,435 82,472 73,163 73,176
Customer accounts 1,593,834 1,593,834 1,611,647 1,611,795
Repurchase agreements - non-trading 202,770 202,735 172,100 172,081
Debt securities in issue 98,158 99,009 93,917 93,902
Subordinated liabilities 25,510 27,916 24,954 27,151
Fair values of financial instruments not carried at fair value on the balance
sheet - assets and disposal groups held for sale
At 30 Jun 2024 At 31 Dec 2023
Carrying Fair Carrying Fair
amount value amount value
$m $m $m $m
Assets
Loans and advances to banks 631 631 10,487 10,487
Loans and advances to customers 2,414 2,339 73,376 72,290
Reverse repurchase agreements - non-trading 209 209 2,723 2,723
Financial investments - at amortised cost 92 113 7,624 7,535
Liabilities
Deposits by banks 9 9 78 78
Customer accounts 4,037 4,037 85,950 86,475
Repurchase agreements - non-trading 1 1 2,768 2,768
Debt securities in issue - - 9,084 8,820
Subordinated liabilities - - 8 7
Other financial instruments not carried at fair value are typically short term
in nature and reprice to current market rates frequently. Accordingly, their
carrying amount is a reasonable approximation of fair value.
8 Derivatives
Notional contract amounts and fair values of derivatives by product contract
type held by HSBC
Notional contract amount Fair value amount
Assets and liabilities Assets Liabilities
Trading Hedging Trading Hedging Total Trading Hedging Total
$m $m $m $m $m $m $m $m
Foreign exchange 11,084,647 65,960 87,694 1,921 89,615 82,071 170 82,241
Interest rate 17,753,900 363,059 216,753 4,522 221,275 217,725 4,603 222,328
Equities 835,458 - 17,797 - 17,797 21,556 - 21,556
Credit 157,766 - 1,350 - 1,350 1,586 - 1,586
Commodity and other 104,840 - 2,250 - 2,250 2,403 - 2,403
Gross total fair values 29,936,611 429,019 325,844 6,443 332,287 325,341 4,773 330,114
Offset (113,018) (113,018)
At 30 Jun 2024 29,936,611 429,019 325,844 6,443 219,269 325,341 4,773 217,096
Foreign exchange 9,463,768 63,547 99,014 935 99,949 99,949 780 100,729
Interest rate 14,853,397 361,312 223,534 5,119 228,653 225,443 4,080 229,523
Equities 677,149 - 14,427 - 14,427 17,603 - 17,603
Credit 153,606 - 1,351 - 1,351 1,861 - 1,861
Commodity and other 90,007 - 1,820 - 1,820 1,542 - 1,542
Gross total fair values 25,237,927 424,859 340,146 6,054 346,200 346,398 4,860 351,258
Offset (116,486) (116,486)
At 31 Dec 2023 25,237,927 424,859 340,146 6,054 229,714 346,398 4,860 234,772
The notional contract amounts of derivatives held for trading purposes and
derivatives designated in qualifying hedge accounting relationships indicate
the nominal value of transactions outstanding at the balance sheet date, not
amounts at risk. Derivative assets and liabilities decreased during 1H24,
reflecting changes in yield curves and the market environment.
Hedge accounting derivatives
The notional contract amounts of derivatives held for hedge accounting
purposes indicate the nominal value of transactions outstanding at the balance
sheet date, not amounts at risk.
Notional contract amounts of derivatives held for hedging purposes by product
type
At 30 Jun 2024 At 31 Dec 2023
Cash flow Fair value Cash flow Fair value
hedges hedges hedges hedges
$m $m $m $m
Foreign exchange 33,272 - 29,772 -
Interest rate 184,049 179,010 188,327 172,985
Total 217,321 179,010 218,099 172,985
The Group applies hedge accounting in respect of certain consolidated net
investments. Hedging is undertaken using forward foreign exchange contracts or
by financing with foreign currency borrowings. At 30 June 2024, the notional
contract value of outstanding financial instruments designated as hedges of
net investments in foreign operations was $32,688m (31 December 2023:
$33,775m).
9 Financial investments
Carrying amounts of financial investments
30 Jun 2024 31 Dec 2023
$m $m
Financial investments measured at fair value through other comprehensive 318,018 294,437
income
- treasury and other eligible bills 110,960 102,438
- debt securities 205,327 190,119
- equity securities 1,492 1,447
- other instruments 239 433
Debt instruments measured at amortised cost 149,338 148,326
- treasury and other eligible bills 26,177 30,733
- debt securities 123,161 117,593
At the end of the period 467,356 442,763
10 Interests in associates and joint ventures
At 30 June 2024, the carrying amount of HSBC's interests in associates and
joint ventures was $28,465m (31 December 2023: $27,344m).
Principal associates of HSBC
At 30 Jun 2024 At 31 Dec 2023
Carrying amount Fair value(1) Carrying amount Fair value(1)
$m $m $m $m
Bank of Communications Co., Limited 22,126 11,096 21,210 8,812
Saudi Awwal Bank 4,823 6,469 4,659 6,438
1 Principal associates are listed on recognised stock exchanges. The
fair values are based on the quoted market prices of the shares held (Level 1
in the fair value hierarchy).
Share of profit in associates and joint ventures
Half year to
30 Jun 2024 30 Jun 2023
$m $m
Bank of Communications Co., Limited 1,257 1,317
Saudi Awwal Bank 317 272
Other associates and joint ventures 52 (6)
Share of profit in associates and joint ventures 1,626 1,583
Bank of Communications Co., Limited
The Group maintains a 19.03% interest in Bank of Communications Co., Limited
('BoCom'). The Group's investment in BoCom is classified as an associate.
Significant influence in BoCom was established with consideration of all
relevant factors, including representation on BoCom's Board of Directors and
participation in a resource and experience sharing agreement ('RES'). Under
the RES, HSBC staff have been seconded to assist in the maintenance of BoCom's
financial and operating policies. Investments in associates are recognised
using the equity method of accounting in accordance with IAS 28 'Investments
in Associates and Joint Ventures', whereby the investment is initially
recognised at cost and adjusted thereafter for the post-acquisition change in
the Group's share of associate's net assets. An impairment test is required if
there is any indication of impairment.
The fair value of the Group's investment in BoCom is below its carrying
amount. At 31 December 2023, the Group performed an impairment test on the
carrying amount, which resulted in an impairment of $3.0bn, as the recoverable
amount as determined by a value in use ('VIU') calculation was lower than the
carrying value.
The VIU may increase or decrease depending on the effect of changes to model
inputs. The main model inputs are described below and are based on factors
observed at period-end. The factors that could result in increases or
reductions in the VIU include changes in BoCom's short-term performance, a
change in regulatory capital requirements or revisions to the forecast of
BoCom's future profitability.
If the Group did not have significant influence in BoCom, the investment would
be carried at fair value rather than the current carrying value.
Impairment testing
At 30 June 2024, the carrying amount of the investment was $22.1bn (31
December 2023: $21.2bn) with fair value of $11.1bn (31 December 2023: $8.8bn).
The Group has concluded there is no indication of further significant
impairment (or indication that an impairment may no longer exist or may have
decreased significantly) since 31 December 2023. As part of this assessment
the Group updated the VIU calculation, which supported the case that there was
no significant change to the 31 December 2023 impairment position. As a
result, no additional impairment to the carrying amount (or reversal of
impairment) was made at 30 June 2024.
Basis of recoverable amount
The updated assessment was performed by comparing the recoverable amount of
BoCom, determined by a VIU calculation, with its carrying value. The VIU
calculation uses discounted cash flow projections based on management's best
estimates of future earnings available to ordinary shareholders prepared in
accordance with IAS 36 'Impairment of Assets'. Significant management
judgement is required in arriving at the best estimate.
There are two main components to the VIU calculation. The first component is
management's best estimate of BoCom's earnings. Forecast earnings growth over
the short to medium term continues to be lower than recent (within the last
five years) actual growth, and reflects the impact of recent macroeconomic,
policy and industry factors in mainland China. As a result of management's
intent to continue to retain its investment for the long term, earnings beyond
the short to medium term are extrapolated into perpetuity using a long-term
growth rate to derive a terminal value, which comprises the majority of the
VIU. The second component is the capital maintenance charge ('CMC'), which is
management's forecast of the earnings that need to be withheld in order for
BoCom to meet capital requirements over the forecast period, meaning that CMC
is deducted when arriving at management's estimate of future earnings
available to ordinary shareholders. The CMC reflects the revised capital
requirements arising from revisions of the ratio of risk-weighted assets to
total assets assumption. The principal inputs to the CMC calculation include
estimates of asset growth, the ratio of risk-weighted assets to total assets
and the expected capital requirements. An increase in the CMC as a result of a
change to these principal inputs would reduce VIU. Additionally, management
considers other qualitative factors, to ensure that the inputs to the VIU
calculation remain appropriate.
Key assumptions in value-in-use calculation
We used a number of assumptions in our VIU calculation, in accordance with the
requirements of IAS 36:
- Long-term profit growth rate: 3.00% (31 December 2023: 3.00%) for
periods after 2027, which does not exceed forecast GDP growth in mainland
China and is similar to forecasts by external analysts.
- Long-term asset growth rate: 3.25% (31 December 2023: 3.00%) for periods
after 2027, which is the rate that assets are expected to grow to achieve
long-term profit growth of 3.00%. The increase of long-term asset growth rate
was supported by historical data, which is expected to continue.
- Discount rate: 8.53% (31 December 2023: 9.00%), which is based on a
capital asset pricing model ('CAPM'), using market data. The discount rate
used is within the range of 7.7% to 9.4% (31 December 2023: 7.9% to 9.7%)
indicated by the CAPM, and decreased as a consequence of a market-driven
reduction in the risk-free rate and beta.
- Expected credit losses ('ECL') as a percentage of loans and advances to
customers: ranges from 0.78% to 0.97% (31 December 2023: 0.80% to 0.97%) in
the short to medium term, reflecting reported credit experience in mainland
China. For periods after 2027, the ratio is 0.97% (31 December 2023: 0.97%),
which is higher than BoCom's average ECL as a percentage of loans and advances
to customers in recent years prior to the pandemic.
- Risk-weighted assets as a percentage of total assets: ranges from 62.0%
to 62.5% (31 December 2023: 62.0% to 63.7%) in the short to medium term,
reflecting higher risk-weights in the short term followed by an expected
reversion to recent historical levels. For periods after 2027, the ratio is
62.0% (31 December 2023: 62.0%), which is similar to BoCom's actual results in
recent years.
- Loans and advances to customers growth rate: ranges from 9.0% to 10.0%
(31 December 2023: 9.0% to 10.0%) in the short to medium term, which is
similar to BoCom's actual results in recent years. Increases in the forecast
growth rate of loans and advances to customers results in higher forecast ECL.
- Operating income growth rate: ranges from -0.4% to 9.3% (31 December
2023: -0.4% to 9.7%) in the short to medium term, which is similar to BoCom's
actual results in recent years, and is impacted by projections of net interest
income in the short term as a consequence of recent macroeconomic, policy and
industry factors in mainland China.
- Cost-income ratio: ranges from 35.5% to 39.8% (31 December 2023: 35.5%
to 39.8%) in the short to medium term. These ratios are similar to BoCom's
actual results in recent years and forecasts disclosed by external analysts.
- Effective tax rate ('ETR'): ranges from 6.3% to 15.0% (31 December 2023:
5.3% to 15.0%) in the short to medium term, reflecting BoCom's actual results
and an expected increase towards the long-term assumption through the forecast
period. For periods after 2027, the rate is 15.0% (31 December 2023: 15.0%),
which is higher than the recent historical average, and aligned to the minimum
tax rate as proposed by the OECD/Group of 20 ('G20') Inclusive Framework on
Base Erosion and Profit Shifting.
- Capital requirements: capital adequacy ratio of 12.5% (31 December 2023:
12.5%) and tier 1 capital adequacy ratio of 9.5% (31 December 2023: 9.5%),
based on BoCom's capital risk appetite and capital requirements respectively.
The VIU is highly sensitive to the assumptions above. To indicate the scale of
that sensitivity, we also disclose the reasonably possible range of VIU-based
changes to these assumptions. This is based on impacts arising from the
favourable/unfavourable change in the earnings in the short to medium term,
the long-term expected credit losses as a percentage of loans and advances to
customers, and a 50bps increase/decrease in the discount rate. At 30 June
2024, we estimate that the reasonably possible range of VIU is $14.1bn to
$31.1bn (31 December 2023: $13.1bn to $28.8bn), acknowledging that the fair
value of the Group's investment has ranged from $6.8bn to $11.1bn over the
last five years as at the date of the impairment test. All other long-term
assumptions, and the basis of the CMC, have been kept unchanged when
determining the reasonable possible range of the VIU.
Saudi Awwal Bank
The Group's investment in Saudi Awwal Bank ('SAB') is classified as an
associate. HSBC is the largest shareholder in SAB with a shareholding of 31%.
Significant influence in SAB is established via representation on the Board of
Directors. Investments in associates are recognised using the equity method of
accounting in accordance with IAS 28, as described previously for BoCom.
Impairment testing
There were no indicators of impairment at 30 June 2024. The fair value of the
Group's investment in SAB of $6.5bn was above the carrying amount of $4.8bn.
11 Provisions
Restructuring Legal proceedings Customer Other Total
costs and regulatory remediation provisions
matters
$m $m $m $m $m
Provisions (excluding contractual commitments)
At 31 Dec 2023 284 380 130 420 1,214
Additions 37 97 12 49 195
Amounts utilised (113) (145) (24) (64) (346)
Unused amounts reversed (33) (45) (24) (39) (141)
Exchange and other movements (8) (4) 6 17 11
At 30 Jun 2024 167 283 100 383 933
Contractual commitments(1)
At 31 Dec 2023 527
Net change in expected credit loss provision and other movements 76
At 30 Jun 2024 603
Total provisions
At 31 Dec 2023 1,741
At 30 Jun 2024 1,536
1 Contractual commitments include the expected credit loss provision
in relation to off-balance sheet financial guarantee contracts and commitments
where HSBC has become party to an irrevocable commitment, as defined under
IFRS 9 'Financial Instruments'; and provisions for performance and other
guarantee contracts.
Further details of 'Legal proceedings and regulatory matters' are set out in
Note 13. Legal proceedings include civil court, arbitration or tribunal
proceedings brought against HSBC companies (whether by way of claim or
counterclaim); or civil disputes that may, if not settled, result in court,
arbitration or tribunal proceedings. 'Regulatory matters' refers to
investigations, reviews and other actions carried out by, or in response to,
the actions of regulators or law enforcement agencies in connection with
alleged wrongdoing by HSBC.
Customer remediation refers to HSBC's activities to compensate customers for
losses or damages associated with a failure to comply with regulations or to
treat customers fairly. Customer remediation is often initiated by HSBC in
response to customer complaints and/or industry developments in sales
practices, and is not necessarily initiated by regulatory action.
For further details of the impact of IFRS 9 on undrawn loan commitments and
financial guarantees, presented in 'Contractual commitments', see Note 12.
Further analysis of the movement in the ECL provision is disclosed within the
'Reconciliation of changes in gross carrying/nominal amount and allowances for
loans and advances to banks and customers including loan commitments and
financial guarantees' table on page 82.
Brazil PIS and COFINS tax matters
Beginning in the late 1990s, HSBC Bank Brasil S.A. - Banco Múltiplo ('HSBC
Brazil') and other financial services firms brought legal proceedings in
Brazil challenging the assessment of PIS and COFINS taxes, which are federal
taxes imposed on gross revenues earned by legal entities in Brazil. The
Supreme Court of Brazil selected three cases - one involving an insurer, in
2007, and two involving other banks, in 2011 - to set standards that would
apply to all of these proceedings. In June 2023, the court ruled against the
financial services firms in all three cases. The standards set by the court in
this ruling have not yet been applied to HSBC Brazil's legacy cases, liability
for which remained with HSBC after the sale of HSBC's operations in Brazil to
Bradesco in 2016. There are many factors that may affect the range of outcomes
and any resulting financial impact for HSBC. Based upon the information
currently available, a provision was recognised in respect of one legacy case.
The remaining additional tax liability subject to challenge on all legacy PIS
and COFINS cases is up to $0.4bn.
12 Contingent liabilities, contractual commitments and guarantees
At
30 Jun 2024 31 Dec 2023
$m $m
Guarantees and other contingent liabilities:
- financial guarantees 16,343 17,009
- performance and other guarantees 91,275 94,277
- other contingent liabilities 543 636
At the end of the period 108,161 111,922
Commitments:(1)
- documentary credits and short-term trade-related transactions 7,169 7,818
- forward asset purchases and forward deposits placed 87,219 78,535
- standby facilities, credit lines and other commitments to lend 780,929 810,797
At the end of the period 875,317 897,150
1 Includes $638,635m of commitments at 30 June 2024 (31 December 2023:
$661,015m), to which the impairment requirements in IFRS 9 are applied where
HSBC has become party to an irrevocable commitment.
The preceding table discloses the nominal principal amounts of off-balance
sheet liabilities and commitments for the Group, which represent the maximum
amounts at risk should the contracts be fully drawn upon and the clients
default. As a significant portion of guarantees and commitments is expected to
expire without being drawn upon, the total of the nominal principal amounts is
not indicative of future liquidity requirements. The expected credit loss
provision relating to guarantees and commitments under IFRS 9 is disclosed in
Note 11.
The majority of the guarantees have a term of less than one year, while
guarantees with terms of more than one year are subject to HSBC's annual
credit review process.
Contingent liabilities arising from legal proceedings and regulatory and other
matters against Group companies are excluded from this note but are disclosed
in Notes 11 and 13.
13 Legal proceedings and regulatory matters
HSBC is party to legal proceedings and regulatory matters in a number of
jurisdictions arising out of its normal business operations. Apart from the
matters described below, HSBC considers that none of these matters are
material. The recognition of provisions is determined in accordance with the
accounting policies set out in Note 1 of the Annual Report and Accounts 2023.
While the outcomes of legal proceedings and regulatory matters are inherently
uncertain, management believes that, based on the information available to it,
appropriate provisions have been made in respect of these matters as at 30
June 2024 (see Note 11). Where an individual provision is material, the fact
that a provision has been made is stated and quantified, except to the extent
that doing so would be seriously prejudicial. Any provision recognised does
not constitute an admission of wrongdoing or legal liability. It is not
practicable to provide an aggregate estimate of potential liability for our
legal proceedings and regulatory matters as a class of contingent liabilities.
Bernard L. Madoff Investment Securities LLC
Various non-US HSBC companies provided custodial, administration and similar
services to a number of funds incorporated outside the US whose assets were
invested with Bernard L. Madoff Investment Securities LLC ('Madoff
Securities'). Based on information provided by Madoff Securities as at 30
November 2008, the purported aggregate value of these funds was $8.4bn,
including fictitious profits reported by Madoff. Based on information
available to HSBC, the funds' actual transfers to Madoff Securities minus
their actual withdrawals from Madoff Securities during the time HSBC serviced
the funds are estimated to have totalled approximately $4bn. Various HSBC
companies have been named as defendants in lawsuits arising out of Madoff
Securities' fraud.
US litigation: The Madoff Securities Trustee has brought lawsuits against
various HSBC companies and others, seeking recovery of alleged transfers from
Madoff Securities to HSBC in the amount of $543m (plus interest), and these
lawsuits remain pending in the US Bankruptcy Court for the Southern District
of New York (the 'US Bankruptcy Court').
Certain Fairfield entities (together, 'Fairfield') (in liquidation) have
brought a lawsuit in the US against fund shareholders, including HSBC
companies that acted as nominees for clients, seeking restitution of
redemption payments in the amount of $382m (plus interest). Fairfield's claims
against most of the HSBC companies have been dismissed by the US Bankruptcy
Court and the US District Court for the Southern District of New York, but
remain pending on appeal before the US Court of Appeals for the Second
Circuit. Fairfield's claims against HSBC Private Bank (Suisse) SA and HSBC
Securities Services Luxembourg ('HSSL') have not been dismissed and their
appeals are also pending before the US Court of Appeals for the Second
Circuit. Meanwhile, proceedings before the US Bankruptcy Court with respect to
the claims against HSBC Private Bank (Suisse) SA and HSSL are ongoing.
UK litigation: The Madoff Securities Trustee has filed a claim against various
HSBC companies in the High Court of England and Wales, seeking recovery of
transfers from Madoff Securities to HSBC. The claim has not yet been served
and the amount claimed has not been specified.
Luxembourg litigation: In 2009, Herald Fund SPC ('Herald') (in liquidation)
brought an action against HSSL before the Luxembourg District Court, seeking
restitution of cash and securities in the amount of $2.5bn (plus interest), or
damages in the amount of $2bn (plus interest). In 2018, HSBC Bank plc was
added to the claim and Herald increased the amount of the alleged damages
claim to $5.6bn (plus interest). The Luxembourg District Court has dismissed
Herald's securities restitution claim, but reserved Herald's cash restitution
and damages claims. Herald has appealed this dismissal to the Luxembourg Court
of Appeal, where the matter is pending.
Beginning in 2009, various HSBC companies have been named as defendants in a
number of actions brought by Alpha Prime Fund Limited in the Luxembourg
District Court seeking damages for alleged breach of contract and negligence
in the amount of $1.16bn (plus interest). These matters are currently pending
before the Luxembourg District Court.
Beginning in 2014, HSSL and the Luxembourg branch of HSBC Bank plc have been
named as defendants in a number of actions brought by Senator Fund SPC before
the Luxembourg District Court seeking restitution of securities in the amount
of $625m (plus interest), or damages in the amount of $188m (plus interest).
These matters are currently pending before the Luxembourg District Court.
Based on the facts currently known, it is not practicable at this time for
HSBC to predict the resolution of the pending matters, including the timing or
any possible impact on HSBC, which could be significant.
US Anti-Terrorism Act litigation
Since November 2014, a number of lawsuits have been filed in federal courts in
the US against various HSBC companies and others on behalf of plaintiffs who
are, or are related to, alleged victims of terrorist attacks in the Middle
East. In each case, it is alleged that the defendants aided and abetted the
unlawful conduct of various sanctioned parties in violation of the US
Anti-Terrorism Act, or provided banking services to customers alleged to have
connections to terrorism financing. Seven actions, which seek damages for
unspecified amounts, remain pending and HSBC's motions to dismiss have been
granted in three of these cases. These dismissals are subject to appeals
and/or the plaintiffs re-pleading their claims. The four other actions are at
an early stage.
Based on the facts currently known, it is not practicable at this time for
HSBC to predict the resolution of these matters, including the timing or any
possible impact on HSBC, which could be significant.
Interbank offered rates investigation and litigation
Euro interest rate derivatives: In December 2016, the European Commission
('EC') issued a decision finding that HSBC, among other banks, engaged in
anti-competitive practices in connection with the pricing of euro interest
rate derivatives, and the EC imposed a fine on HSBC based on a one-month
infringement in 2007. The fine was annulled in 2019 and a lower fine was
imposed in 2021. In January 2023, the European Court of Justice dismissed an
appeal by HSBC and upheld the EC's findings on HSBC's liability. A separate
appeal by HSBC concerning the amount of the fine remains pending before the
General Court of the European Union.
US dollar Libor: Beginning in 2011, HSBC and other panel banks have been named
as defendants in a number of individual and putative class action lawsuits
filed in federal and state courts in the US with respect to the setting of US
dollar Libor. The complaints assert claims under various US federal and state
laws, including antitrust and racketeering laws and the Commodity Exchange Act
('US CEA'). HSBC has concluded class settlements with five groups of
plaintiffs, and several class action lawsuits brought by other groups of
plaintiffs have been voluntarily dismissed. A number of individual US dollar
Libor-related actions seeking damages for unspecified amounts remain pending.
Based on the facts currently known, it is not practicable at this time for
HSBC to predict the resolution of the pending matters, including the timing or
any possible impact on HSBC, which could be significant.
Foreign exchange-related investigations and litigation
In December 2016, Brazil's Administrative Council of Economic Defense
initiated an investigation into the onshore foreign exchange market and
identified a number of banks, including HSBC, as subjects of its
investigation, which remains ongoing.
Since 2017, HSBC Bank plc, among other financial institutions, has been
defending a complaint filed by the Competition Commission of South Africa
before the South African Competition Tribunal for alleged anti-competitive
behaviour in the South African foreign exchange market. In 2020, a revised
complaint was filed which also named HSBC Bank USA N.A. ('HSBC Bank USA') as a
defendant. In January 2024, the South African Competition Appeal Court
dismissed HSBC Bank USA from the revised complaint but denied HSBC Bank plc's
application to dismiss. The Competition Commission and HSBC Bank plc have
appealed to the Constitutional Court of South Africa.
Since 2015, various HSBC companies and other banks have been named as
defendants in a putative class action in the US District Court for the
Southern District of New York filed by a group of retail customers who dealt
in foreign exchange products. The plaintiffs allege that the defendants
conspired to manipulate foreign exchange rates and seek damages for
unspecified amounts. In May 2024, the US Court of Appeals for the Second
Circuit affirmed the dismissal of this action.
HSBC Bank plc and HSBC Holdings have reached a settlement with plaintiffs in
Israel to resolve a class action filed in the local courts alleging foreign
exchange-related misconduct. The settlement remains subject to court approval.
Lawsuits alleging foreign exchange-related misconduct remain pending against
HSBC and other banks in courts in Brazil.
In February 2024, HSBC Bank plc and HSBC Holdings were joined to an existing
claim brought in the UK Competition Appeals Tribunal against various other
banks alleging historical anti-competitive behaviour in the foreign exchange
market and seeking approximately £3bn in damages from all the defendants.
This matter is at an early stage. It is possible that additional civil actions
will be initiated against HSBC in relation to its historical foreign exchange
activities.
There are many factors that may affect the range of outcomes, and the
resulting financial impact, of the pending matters, which could be
significant.
Precious metals fix-related litigation
US litigation: HSBC and other members of The London Silver Market Fixing
Limited are defending a class action pending in the US District Court for the
Southern District of New York alleging that, from January 2007 to December
2013, the defendants conspired to manipulate the price of silver and silver
derivatives for their collective benefit in violation of US antitrust laws,
the US CEA and New York state law. In May 2023, this action, which seeks
damages for unspecified amounts, was dismissed but remains pending on appeal.
HSBC and other members of The London Platinum and Palladium Fixing Company
Limited are defending a class action pending in the US District Court for the
Southern District of New York alleging that, from January 2008 to November
2014, the defendants conspired to manipulate the price of platinum group
metals and related financial products for their collective benefit in
violation of US antitrust laws and the US CEA. The defendants have reached a
settlement-in-principle with the plaintiffs to resolve this action. The
settlement-in-principle remains subject to documentation and court approval.
Canada litigation: HSBC and other financial institutions are defending
putative class actions filed in the Ontario and Quebec Superior Courts of
Justice alleging that the defendants conspired to manipulate the price of
silver, gold and related derivatives in violation of the Canadian Competition
Act and common law. These actions each seek CA$1bn in damages plus CA$250m in
punitive damages. Two of the actions are proceeding and the others have been
stayed.
There are many factors that may affect the range of outcomes, and the
resulting financial impact, of the pending matters, which could be
significant.
Tax-related investigations
In March 2023, the French National Financial Prosecutor announced an
investigation into a number of banks, including HSBC Continental Europe and
the Paris branch of HSBC Bank plc, in connection with alleged tax fraud
related to the dividend withholding tax treatment of certain trading
activities. HSBC Bank plc and the German branch of HSBC Continental Europe
also continue to cooperate with investigations by the German public prosecutor
into numerous financial institutions and their employees, in connection with
the dividend withholding tax treatment of certain trading activities.
Based on the facts currently known, it is not practicable at this time for
HSBC to predict the resolution of these matters, including the timing or any
possible impact on HSBC, which could be significant.
Gilts trading investigation and litigation
Since 2018, the UK Competition and Markets Authority ('CMA') has been
investigating HSBC and four other banks for suspected anti-competitive conduct
in relation to the historical trading of gilts and related derivatives. In May
2023, the CMA announced its case against HSBC Bank plc and HSBC Holdings; both
HSBC companies are contesting the CMA's allegations.
In June 2023, HSBC Bank plc and HSBC Securities (USA) Inc., among other banks,
were named as defendants in a putative class action filed in the US District
Court for the Southern District of New York by plaintiffs alleging
anti-competitive conduct in the gilts market and seeking damages for
unspecified amounts. In September 2023, the defendants filed a motion to
dismiss which remains pending. It is possible that additional civil actions
will be initiated against HSBC in relation to its historical gilts trading
activities.
Based on the facts currently known, it is not practicable at this time for
HSBC to predict the resolution of these matters, including the timing or any
possible impact on HSBC, which could be significant.
UK collections and recoveries investigation
In 2019, the FCA began investigating HSBC Bank plc's, HSBC UK Bank plc's and
Marks and Spencer Financial Services plc's compliance with regulatory
standards relating to collections and recoveries operations in the UK between
2017 and 2018. In May 2024, the FCA concluded its investigation and imposed a
£6m fine on HSBC Bank plc, HSBC UK Bank plc and Marks and Spencer Financial
Services plc, which has been paid, and this matter is now closed.
Korean short selling indictment
In March 2024, the Korean Prosecutors' Office issued a criminal indictment
against The Hongkong and Shanghai Banking Corporation Limited and three
current and former employees for breaching short selling rules under the
Financial Investment Services and Capital Markets Act in connection with
trades carried out between August 2021 and December 2021. The Hongkong and
Shanghai Banking Corporation Limited is defending the action.
Silicon Valley Bank ('SVB') litigation
In May 2023, First-Citizens Bank & Trust Company ('First Citizens')
brought a lawsuit in the US District Court for the Northern District of
California against various HSBC companies and seven US-based HSBC employees
who had previously worked for SVB. The lawsuit seeks $1bn in damages and
alleges, among other things, that the various HSBC companies conspired with
the individual defendants to solicit employees from First Citizens and that
the individual defendants took confidential information belonging to SVB
and/or First Citizens. In July 2024, the court dismissed several of First
Citizens' claims and also dismissed certain defendants for lack of
jurisdiction, but allowed limited discovery into whether some of these
defendants may be subject to jurisdiction. The remaining claims are proceeding
against certain defendants.
Based on the facts currently known, it is not practicable at this time for
HSBC to predict the resolution of this matter, including the timing or any
possible impact on HSBC, which could be significant.
Film Finance litigation
In June 2020, two separate investor groups issued claims against HSBC UK Bank
plc (as successor to HSBC Private Bank (UK) Limited ('PBGB')) in the High
Court of England and Wales seeking damages for unspecified amounts in
connection with PBGB's role in the development of Eclipse film finance
schemes. In March 2024, HSBC UK Bank plc reached a settlement with the first
investor group. In April 2024, the High Court dismissed the second investor
group's claims, and this matter is now closed.
US mortgage securitisation litigation
Beginning in 2014, a number of lawsuits were filed in various state and
federal courts in the US against HSBC Bank USA, as a trustee of more than 280
mortgage securitisation trusts, seeking unspecified damages for losses in
collateral value allegedly sustained by the trusts. HSBC Bank USA has reached
settlements with a number of plaintiffs to resolve nearly all of these
lawsuits. The remaining two actions are pending in a New York state court.
HSBC Bank USA and certain of its affiliates continue to defend a mortgage loan
repurchase action seeking unspecified damages and specific performance brought
by the trustee of a mortgage securitisation trust in New York state court.
There are many factors that may affect the range of outcomes, and the
resulting financial impact, of the pending matters, which could be
significant.
Mexican government bond litigation
HSBC Mexico S.A. and other banks are named as defendants in a consolidated
putative class action pending in the US District Court for the Southern
District of New York alleging anti-competitive conduct in the Mexican
government bond market between 2010 and 2014 and seeking damages for
unspecified amounts. In February 2024, the US Court of Appeals for the Second
Circuit reversed an earlier dismissal of this lawsuit. In May 2024, the
plaintiffs amended their complaint and this action is ongoing.
Based on the facts currently known, it is not practicable at this time for
HSBC to predict the resolution of this matter, including the timing or any
possible impact on HSBC, which could be significant.
Stanford litigation
Since 2009, HSBC Bank plc has been named as a defendant in numerous claims
filed in courts in the UK and the US arising from the collapse of Stanford
International Bank Ltd, for which it was a correspondent bank from 2003 to
2009. In February 2023, HSBC Bank plc reached settlements with the plaintiffs
to resolve the claims and these settlements have concluded.
Other regulatory investigations, reviews and litigation
HSBC Holdings and/or certain of its affiliates are also subject to a number of
other enquiries and examinations, requests for information, investigations and
reviews by various tax authorities, regulators, competition and law
enforcement authorities, as well as legal proceedings including litigation,
arbitration and other contentious proceedings, in connection with various
matters arising out of their businesses and operations.
At the present time, HSBC does not expect the ultimate resolution of any of
these matters to be material to the Group's financial position; however, given
the uncertainties involved in legal proceedings and regulatory matters, there
can be no assurance regarding the eventual outcome of a particular matter or
matters.
14 Transactions with related parties
There were no changes in the related party transactions described in the
Annual Report and Accounts 2023 that have had a material effect on the
financial position or performance of HSBC in the half-year to 30 June 2024.
All related party transactions that took place in the half-year to 30 June
2024 were similar in nature to those disclosed in the Annual Report and
Accounts 2023.
15 Assets held for sale, liabilities of disposal groups held for sale and
business acquisitions
At
30 Jun 2024 31 Dec 2023
$m $m
Disposal groups 6,226 115,836
Unallocated impairment losses(1) (695) (1,975)
Non-current assets held for sale 290 273
Assets held for sale 5,821 114,134
Liabilities of disposal groups held for sale 5,041 108,406
1 This represents impairment losses in excess of the carrying value of the
non-current assets, excluded from the measurement scope of IFRS 5.
Disposal groups
France retail banking operations
On 1 January 2024, HSBC Continental Europe completed the sale of its retail
banking operations in France to CCF, a subsidiary of Promontoria MMB SAS ('My
Money Group'). The sale also included HSBC Continental Europe's 100% ownership
interest in HSBC SFH (France) and its 3% ownership interest in Crédit
Logement.
Upon completion and in accordance with the terms of the sale, HSBC Continental
Europe received a €0.1bn ($0.1bn) profit participation interest in the
ultimate holding company of My Money Group. The associated impacts on initial
recognition of this stake at fair value were recognised as part of the pre-tax
loss on disposal in 2023, upon the reclassification of the disposal group as
held for sale. In accordance with the terms of the sale, HSBC Continental
Europe retained a portfolio of €7.1bn ($7.6bn) at the time of sale,
consisting of home and certain other loans, in respect of which it may
consider on-sale opportunities at a suitable time, and the CCF brand, which it
licensed to the buyer under a long-term licence agreement. Additionally, HSBC
Continental Europe's subsidiaries, HSBC Assurances Vie (France) and HSBC
Global Asset Management (France), have entered into distribution agreements
with the buyer.
The customer lending balances and associated income statement impacts of the
portfolio of retained loans, together with the profit participation interest
and the licence agreement of the CCF brand, were reclassified from WPB to
Corporate Centre, with effect from 1 January 2024.
Canada banking business
On 28 March 2024, HSBC Overseas Holdings (UK) Limited, a direct subsidiary of
HSBC Holdings plc, completed the sale of HSBC Bank Canada to the Royal Bank of
Canada.
The completion of the transaction resulted in a gain on sale of $4.8bn,
inclusive of the recycling of $0.6bn in foreign currency translation reserve
losses and $0.4bn in other reserves losses. The gain on sale also included
$0.3bn in fair value gains recognised on the related foreign exchange hedges
in the first quarter of 2024. There was no tax on the gain recognised at
completion due to the substantial shareholding exemption rule in the UK.
Following the completion of this transaction, the Board approved a special
dividend of $0.21 per share, which was paid in June 2024 alongside the first
interim dividend.
Argentina business
On 9 April 2024, HSBC Latin America B.V. entered into a binding agreement to
sell its business in Argentina to Grupo Financiero Galicia ('Galicia').
Galicia will acquire all of HSBC Argentina's business covering banking, asset
management and insurance, together with $100m of subordinated debt issued by
HSBC Argentina and held by HSBC Latin America Holdings (UK) Limited for a base
consideration of $550m. The consideration will be adjusted for the results of
the business and fair value gains or losses on HSBC Argentina's securities
portfolios during the period between 31 December 2023 and closing.
HSBC expects to receive the purchase consideration in a combination of cash
and Galicia's American Depositary Receipts ('ADRs'), with ADRs accounting for
around half of the consideration received and representing less than a 10%
economic interest in Galicia. The transaction is subject to conditions,
including regulatory approval, and is expected to be completed in the second
half of 2024.
At 31 March 2024, given the advanced stage of agreement on deal terms and that
completion was expected within 12 months, our investment in HSBC Argentina met
the criteria to be classified as held for sale in accordance with IFRS 5. At
30 June 2024, total assets of $5.9bn and total liabilities of $4.1bn were
classified as held for sale, and we recognised a $1.2bn pre-tax loss in the
first half of 2024. There was no tax deduction on the loss recognised. At
closing, cumulative foreign currency translation reserves and other reserves
will recycle to the income statement. At 30 June 2024, foreign currency
translation reserve and other reserve losses stood at $5.0bn.
Between signing and closing, the loss on sale will vary by changes in the net
asset value of the disposed business and associated hyperinflation and foreign
currency translation, and the fair value of consideration including price
adjustments and migration costs.
Other disposals
On 30 May 2024, HSBC Europe BV, a wholly-owned subsidiary of HSBC Bank plc,
completed the sale of HSBC Bank (RR) (Limited Liability Company) to Expobank.
Foreign currency translation reserve losses of $0.1bn were recognised in the
income statement upon completion.
On 6 February 2024, following a strategic review of our operations in Armenia,
HSBC Europe BV reached an agreement for the sale of HSBC Bank Armenia to
Ardshinbank. This resulted in a loss on classification to held for sale of
$0.1bn. The transaction is subject to regulatory approvals. As part of this
transaction, all staff members of HSBC Armenia will transfer to Ardshinbank at
completion, and the transfer will include all customer relationships held by
HSBC Armenia at that time. The transaction is expected to complete in the
second half of 2024.
On 13 November 2023, the Hongkong and Shanghai Banking Corporation Limited
(acting through its Mauritius branch) entered into an agreement with ABSA Bank
(Mauritius) Limited, a wholly-owned subsidiary of ABSA Bank Group Limited, to
sell its Wealth and Personal Banking business in Mauritius. The sale completed
on 6 July 2024 and the financial impact was not significant for the Group.
At 30 June 2024, the major classes of assets and associated liabilities of
disposal groups held for sale, including allocated impairment losses, were as
follows:
Argentina Armenia Other Total
$m $m $m $m
Assets of disposal groups held for sale
Cash and balances at central banks 244 - 308
64
Trading assets 176 - 177
1
Financial assets designated and otherwise mandatorily measured at fair value 412 - - 412
through profit or loss
Derivatives - -
3 3
Loans and advances to banks 616 - 631
15
Loans and advances to customers 1,559 478 216 2,253
Reverse repurchase agreements - non-trading 175 209
33 1
Financial investments(1) 1,788 - 1,859
71
Prepayments, accrued income and other assets 338 374
25 11
Total assets at 30 Jun 2024 5,311 687 228 6,226
Liabilities of disposal groups held for sale
Deposits by banks -
8 1 9
Customer accounts 3,077 457 503 4,037
Repurchase agreements - non-trading - -
1 1
Derivatives - -
1 1
Accruals, deferred income and other liabilities 974 993
16 3
Total liabilities at 30 Jun 2024 4,061 474 506 5,041
Expected date of completion Second half of Second half of 2024
2024
Operating segment All global businesses All global businesses
1 Includes financial investments measured at fair value through other
comprehensive income of $1,767m and debt instruments measured at amortised
cost of $92m.
Canada Retail banking operations in France Other Total
$m $m $m $m
Assets of disposal groups held for sale
Cash and balances at central banks 5,370 226 - 5,596
Trading assets 2,465 - 2,465
-
Financial assets designated and otherwise mandatorily measured at fair value -
through profit or loss 15 49 64
Derivatives 528 - 528
-
Loans and advances to banks 154 10,333 - 10,487
Loans and advances to customers 56,129 16,902 254 73,285
Reverse repurchase agreements - non-trading 2,723 - 2,723
-
Financial investments(1) 16,978 17,011
33
Goodwill 225 225
-
Prepayments, accrued income and other assets 3,318 132 3,452
2
Total assets at 31 Dec 2023 87,905 27,675 256 115,836
Liabilities of disposal groups held for sale
Trading liabilities 1,417 - 1,417
-
Deposits by banks -
78 - 78
Customer accounts 63,001 22,307 642 85,950
Repurchase agreements - non-trading 2,768 - 2,768
-
Financial liabilities designated at fair value - 2,370 - 2,370
Derivatives 608 - 615
7
Debt securities in issue 7,707 1,377 - 9,084
Subordinated liabilities -
8 - 8
Accruals, deferred income and other liabilities 5,916 196 6,116
4
Total liabilities at 31 Dec 2023 81,503 26,257 646 108,406
1 Includes financial investments measured at fair value through other
comprehensive income of $9,385m and debt instruments measured at amortised
cost of $7,624m.
Business acquisitions
In October 2023, HSBC Global Asset Management Singapore Limited, a
wholly-owned subsidiary of The Hongkong and Shanghai Banking Corporation
Limited, entered into an agreement to acquire 100% of the shares of SilkRoad
Property Partners Pte Ltd ('SilkRoad') and for HSBC Global Asset Management
Limited to acquire SilkRoad's affiliated General Partner entities. SilkRoad is
a Singapore headquartered Asia-Pacific-focused, real estate investment
manager. The acquisition was completed on 31 January 2024.
In October 2023, HSBC Bank (China) Company Limited, a wholly-owned subsidiary
of The Hongkong and Shanghai Banking Corporation Limited, entered into an
agreement to acquire Citibank China's retail wealth management portfolio in
mainland China. The portfolio comprises assets under management and deposits,
and the associated wealth customers. The acquisition was completed on 7 June
2024.
In accordance with IFRS 3, the amounts recognised for both acquisitions at 30
June 2024 remain provisional until expiry of the measurement period.
16 Events after the balance sheet date
On 6 July 2024, the Hongkong and Shanghai Banking Corporation Limited (acting
through its Mauritius Branch) completed the sale of its Wealth and Personal
Banking business to ABSA Bank (Mauritius) Limited, a wholly-owned subsidiary
of ABSA Bank Group Limited. The financial impact was not significant for the
Group.
A second interim dividend for 2024 of $0.10 per ordinary share in respect of
the financial year ending 31 December 2024 was approved by the Directors on
31 July 2024, as described in Note 3. On 31 July 2024, HSBC Holdings
announced a share buy-back to purchase its ordinary shares up to a maximum
consideration of $3.0bn, which is expected to commence shortly and complete
within three months.
17 Interim Report 2024 and statutory accounts
The information in this Interim Report 2024 is unaudited and does not
constitute statutory accounts within the meaning of section 434 of the
Companies Act 2006. This Interim Report 2024 was approved by the Board of
Directors on 31 July 2024. The unaudited interim condensed consolidated
financial statements included in the Interim Report 2024 have been reviewed by
the Group's auditor, PwC, in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom. The statutory accounts of HSBC Holdings
plc for the year ended 31 December 2023 have been delivered to the Registrar
of Companies in England and Wales in accordance with section 447 of the
Companies Act 2006. The Group's auditor, PwC, has reported on those accounts.
Its report was unqualified, did not include a reference to any matters to
which PwC drew attention by way of emphasis without qualifying its report and
did not contain a statement under section 498(2) or (3) of the Companies Act
2006.
Shareholder information
Contents
142 1 Directors' interests 146 10 Earnings release
144 2 Employee share plans 147 11 Final results
144 3 Share buy-back 147 12 Corporate governance
145 4 Other equity instruments 147 13 Changes in Directors' details
145 5 Notifiable interests in share capital 147 14 Going concern basis
146 6 Dealings in HSBC Holdings listed securities 147 15 Telephone and online share dealing service
146 7 Second interim dividend for 2024 148 16 Stock symbols
146 8 Dividend on preference share 148 17 Copies of the Interim Report 2024 and shareholder enquiries and communications
146 9 Proposed interim dividends for 2024
1 Directors' interests
According to the register of Directors' interests maintained by HSBC Holdings
pursuant to section 352 of the Securities and Futures Ordinance of Hong Kong,
at 30 June 2024 the Directors of HSBC Holdings had the following interests,
all beneficial unless otherwise stated, in the shares or debentures of HSBC
Holdings and its associated corporations:
Directors' interests - shares and debentures
At 1 Jan 2024 or date of appointment, if later At 30 Jun 2024 or date of retirement, if earlier
Total interests Beneficial Child Jointly with spouse/other Trustee Total
owner under 18 interests
or spouse
HSBC Holdings ordinary shares
Geraldine Buckingham(1) 15,000 15,000 - - - 15,000
Rachel Duan(1) 15,000 15,000 - - - 15,000
Georges Elhedery(2) 753,467 894,799 - - - 894,799
Dame Carolyn Fairbairn 15,000 15,000 - - - 15,000
James Forese(1) 115,000 115,000 - - - 115,000
Ann Godbehere(1) 15,000 - - 15,000 - 15,000
Steven Guggenheimer(1) 15,000 - - 15,000 - 15,000
José Antonio Meade Kuribreña(1) 15,000 15,000 - - - 15,000
Kalpana Morparia(1) 15,000 15,000 - - - 15,000
Eileen Murray(1) 75,000 75,000 - - - 75,000
Brendan Nelson - - - - - -
David Nish (retired on 3 May 2024) 50,000 - 50,000 - - 50,000
Noel Quinn(2) 1,721,465 2,000,730 - - - 2,000,730
Swee Lian Teo 15,200 15,200 - - - 15,200
Sir Mark Tucker 307,352 307,352 - - - 307,352
1 Geraldine Buckingham has an interest in 3,000, Rachel Duan in 3,000,
James Forese in 23,000, Ann Godbehere in 3,000, Steven Guggenheimer in 3,000,
José Antonio Meade Kuribreña in 3,000, Kalpana Morparia in 3,000 and Eileen
Murray in 15,000 listed American Depositary Shares ('ADSs'), which are
categorised as equity derivatives under Part XV of the Securities and Futures
Ordinance of Hong Kong. Each ADS represents five HSBC Holdings ordinary
shares.
2 Executive Directors' other interests in HSBC Holdings ordinary
shares arising from the HSBC Holdings Savings-Related Share Option Plan (UK)
and the HSBC Share Plan 2011 are set out on the following pages. At 30 June
2024, the aggregate interests under the Securities and Futures Ordinance of
Hong Kong in HSBC Holdings ordinary shares, including interests arising
through employee share plans, were: Noel Quinn - 5,690,240 and Georges
Elhedery - 2,545,618. Each Director's total interests represents approximately
0.03% of the shares in issue and 0.01% of the shares in issue, respectively.
HSBC Holdings Savings-Related Share Option Plan (UK)
Currently no executive Directors participate in a Savings-Related Share Option
Plan.
HSBC Share Plan 2011
Share awards
Vesting of deferred share awards is normally subject to the Director remaining
an employee on the vesting date. The awards may vest at an earlier date in
certain circumstances. Under the Securities and Futures Ordinance of Hong
Kong, interests in conditional share awards are categorised as the interests
of the beneficial owner.
Deferred share, immediate share and fixed pay allowance awards
HSBC Holdings ordinary shares
Dates of award Award price (£)(1) Usually vesting At 1 Jan 2024 Granted in period Vested in period Lapsed in period Cancelled in period At 30 Jun 2024
from to
Noel Quinn 27 Feb 2017(2) 6.503 1 Mar 2020 31 Mar 2024 19,886 - 19,886 - - -
26 Feb 2018(3) 7.234 1 Mar 2021 31 Mar 2025 43,011 - 21,504 - - 21,507
25 Feb 2019(4) 6.235 1 Mar 2022 31 Mar 2026 84,351 - 28,117 - - 56,234
24 Feb 2020(5) 5.622 1 Mar 2023 31 Mar 2027 161,362 - 40,340 - - 121,022
26 Feb 2024(6) 5.972 26 Feb 2024 - 168,955 168,955 - - -
8 May 2024(7) 7.126 8 May 2024 - 42,146 42,146 - - -
1 Jan to 30 Jun 2024(8) - 1 Mar 2024 31 Mar 2024 - 812 812 - - -
Georges Elhedery 25 Feb 2019(9) 6.235 1 Mar 2020 31 Mar 2024 17,193 - 17,193 - - -
24 Feb 2020(6) 5.622 1 Mar 2023 31 Mar 2027 118,129 - 29,532 - - 88,597
1 Mar 2021(10) 4.262 1 Mar 2024 31 Mar 2028 305,523 - 61,104 - - 244,419
28 Feb 2022(11) 5.38 1 Mar 2025 31 Mar 2029 273,163 - - - - 273,163
26 Feb 2024(6) 5.972 26 Feb 2024 - 107,752 107,752 - - -
8 May 2024(7) 7.126 8 May 2024 - 26,899 26,899 - - -
1 The award price is the closing price on the day before the grant date.
In all cases the purchase price is nil.
2 The award vested in five equal annual tranches. The final tranche
vested on 11 March 2024 at a market value of £5.7534. Shares equivalent in
number to those that vest under
the award (net of tax liabilities) must be retained for six months from the
vesting date. The closing price of the shares immediately before the date on
which the awards were vested was £5.7990.
3 Shares equivalent in number to those that vest under the award (net
of tax liabilities) must be retained for one year from the vesting date. The
award will vest in five equal
annual tranches. The fourth tranche vested on 12 March 2024 at a market value
of £5.8992. The closing price of the shares immediately before the date on
which the awards were vested was £5.7580.
4 Shares equivalent in number to those that vest under the award (net
of tax liabilities) must be retained for one year from the vesting date. The
award will vest in five equal annual tranches. The third tranche vested on 11
March 2024 at a market value of £5.7534. The closing price of the shares
immediately before the date on which the awards were vested was £5.7990.
5 Shares equivalent in number to those that vest under the award (net
of tax liabilities) must be retained for one year from the vesting date. The
award will vest in five equal annual tranches. The second tranche vested on 11
March 2024 at a market value of £5.7534. The closing price of the shares
immediately before the date on which the awards were vested was £5.7990.
6 The non-deferred award vested immediately on 26 February 2024 and
was based on the market value of £5.9605. Shares equivalent in number to
those that vest under the award (net of tax liabilities) must be retained for
one year from the vesting date. The closing price of the shares immediately
before 26 February 2024, the date on which the awards were granted and vested,
was £5.9720. The fair value of the awards granted on 26 February 2024 was
£5.9570 based on IFRS 2 accounting standards.
7 The fixed pay allowance award vested immediately on 8 May 2024 at a
value of £7.2080. Individual tax liabilities were settled in cash, therefore
the number of shares awarded reflects the net of tax number of shares. The
awards are subject to a retention period and release annually on a pro-rata
basis over five years starting in March 2025. The closing price of the shares
immediately before 8 May 2024, the date on which the awards were granted, was
£7.1260. The fair value of the awards granted on 8 May 2024 was £7.2080
based on IFRS 2 accounting standards.
8 Relates to the allocation of dividend equivalent shares in relation
to eligible awards.
9 Shares equivalent in number to those that vest under the award (net
of tax liabilities) must be retained for six months from the vesting date. The
award vested in five equal annual tranches. The final tranche vested on 11
March 2024 at a market value of £5.7534. The closing price of the shares
immediately before the date on which the awards were vested was £5.7990.
10 Shares equivalent in number to those that vest under the award (net of
tax liabilities) must be retained for one year from the vesting date. The
award will vest in five equal annual tranches. The first tranche vested on 12
March 2024 at a market value of £5.8992. The closing price of the shares
immediately before the date on which the awards were vested was £5.7580.
11 The award will vest in five equal annual tranches commencing in 2025.
Shares equivalent in number to those that vest under the award (net of tax
liabilities) must be retained for one year from the vesting date.
Long-term incentive awards
The long-term incentive award is an award of shares with a three-year
performance period. At the end of this performance period and subject to the
award terms, the number of shares that vest will be determined based on an
assessment against financial and non-financial measures. Details of these
measures can be found in the Directors' remuneration report in the Annual
Report and Accounts. Subject to that assessment, the shares will vest in five
equal annual instalments, with the first instalment vesting on or around the
third anniversary of the grant date and the last instalment vesting on or
around the seventh anniversary of the grant date. On vesting, awards are
subject to a retention period of up to one year. Under the Securities and
Futures Ordinance of Hong Kong, interests in share awards are categorised as
interests of the beneficial owner.
Long-term incentive awards
HSBC Holdings ordinary shares
Dates of award Award price (£)(1) Usually vesting At 1 Jan 2024 Granted in period Vested in period Lapsed in period Cancelled in period At 30 Jun 2024
from to
Noel Quinn 1 Mar 2021 4.262 1 Mar 2024 31 Mar 2028 1,118,554 - 167,782(2) 279,639 - 671,133
28 Feb 2022 5.38 1 Mar 2025 31 Mar 2029 983,339 - - - - 983,339
27 Feb 2023 6.357 1 Mar 2026 31 Mar 2030 861,422 - - - - 861,422
26 Feb 2024(3) 5.972 1 Mar 2027 31 Mar 2031 - 974,853 - - - 974,853
Georges Elhedery 28 Feb 2022 5.38 1 Mar 2025 31 Mar 2029 223,989 - - - - 223,989
27 Feb 2023 6.357 1 Mar 2026 31 Mar 2030 251,474 - - - - 251,474
26 Feb 2024(3) 5.972 1 Mar 2027 31 Mar 2031 - 569,177 - - - 569,177
1 The award price is the closing price on the day before the grant
date. In all cases the purchase price is nil.
2 The performance conditions were assessed and confirmed at 75%. The
remaining 25% of the award was forfeited. Shares equivalent in number to those
that vest under the award (net of tax liabilities) must be retained for one
year from the vesting date. The award vests in five equal annual tranches
commencing in 2024. The first tranche vested on 12 March 2024 at a market
value of £5.8992. The closing price of the shares immediately before the date
on which the awards were vested was £5.7580.
3 The closing price of the shares on the day before the grant date was
£5.972. The fair value of the awards was £2.028 based on IFRS 2 accounting
standards.
No Directors held any short position (as defined in the Securities and Futures
Ordinance of Hong Kong) in the shares or debentures of HSBC Holdings and its
associated corporations. Save as stated in the tables above, none of the
Directors had an interest in any shares or debentures of HSBC Holdings or any
associates at the beginning or at the end of the period, and none of the
Directors or members of their immediate families were awarded or exercised any
right to subscribe for any shares or debentures in any HSBC corporation during
the period.
There have been no changes in the shares or debentures of the Directors from
30 June 2024 to the date of this report.
2 Employee share plans
Summaries of the share options and share awards granted, exercised/vested or
lapsed during the first half of 2024 and other details required to be
disclosed pursuant to Chapter 17 of the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited, including detailed
summaries of the HSBC share plans, are available on our website at
www.hsbc.com/who-we-are/leadership-and-governance/remuneration and on the
website of The Stock Exchange of Hong Kong Limited at www.hkex.com.hk, or can
be obtained on request from the Group Company Secretary and Chief Governance
Officer, 8 Canada Square, London, E14 5HQ.
Particulars of options held by Directors of HSBC Holdings are set out on page
142 (#Section37) .
3 Share buy-back
(Reviewed)
On 1 November 2023, HSBC Holdings commenced a share buy-back to purchase its
ordinary shares up to a maximum consideration of $3.0bn. The share buy-back
continued in 2024 and was concluded on 16 February 2024, with 64,733,089
ordinary shares repurchased for cancellation on UK trading venues and
79,414,800 ordinary shares repurchased for cancellation on The Stock Exchange
of Hong Kong Limited ('HKEx') in January and February 2024.
On 23 February 2024, HSBC Holdings commenced a further share buy-back of its
ordinary shares of $0.50 each up to a maximum consideration of $2.0bn. This
share buy-back concluded on 23 April 2024 with 127,570,463 ordinary shares
repurchased for cancellation on UK trading venues and 127,412,800 ordinary
shares repurchased for cancellation on HKEx.
On 8 May 2024, HSBC Holdings commenced a further share buy-back of its
ordinary shares of $0.50 each up to a maximum consideration of $3.0bn. As at
30 June 2024, 135,376,852 ordinary shares had been repurchased for
cancellation on UK trading venues and 118,148,000 ordinary shares were
repurchased for cancellation on HKEx.
The purpose of the share buy-backs is to reduce HSBC's number of outstanding
ordinary shares.
As at 30 June 2024, the total number of ordinary shares repurchased during the
year was 652,656,004, representing a nominal value of $326,328,002 and an
aggregate consideration paid by HSBC of £2,123,749,873 on UK trading venues
and HK$20,762,986,458 on HKEx. The shares repurchased represent 3.505% of the
shares in issue. Of the repurchased shares, 45,010,444 shares were awaiting
cancellation as at 30 June 2024.
The table that follows outlines details of the shares purchased and cancelled
on a monthly basis during 2024.
Share buy-back - UK venues
Number of shares purchased Highest price Lowest price Average price Aggregate
paid per share paid per share paid per share price paid
£ £ £ £
Jan 2024 64,733,089 6.4300 5.8190 6.1356 397,174,665
Feb 2024 17,761,890 6.2050 5.9270 6.0468 107,403,375
Mar 2024 59,048,017 6.2810 5.7290 6.0295 356,031,979
Apr 2024 50,760,556 6.6960 6.1950 6.4603 327,930,581
May 2024 59,069,838 7.2440 6.8240 6.9678 411,587,427
Jun 2024 76,307,014 7.0080 6.7040 6.8620 523,621,846
Total 327,680,404 2,123,749,873
Share buy-back - Hong Kong venues
Number of shares purchased Highest price Lowest price Average price Aggregate
paid per share paid per share paid per share price paid
HK$ HK$ HK$ HK$
Jan 2024 57,819,600 63.8000 57.8500 61.0549 3,530,172,280
Feb 2024 33,790,800 62.4500 58.8500 60.8394 2,055,810,581
Mar 2024 63,110,400 61.9500 58.1000 60.1891 3,798,555,480
Apr 2024 52,106,800 64.9500 61.1000 63.0989 3,287,883,380
May 2024 53,104,800 70.6500 67.5000 68.7465 3,650,768,500
Jun 2024 65,043,200 69.7500 67.0500 68.2592 4,439,796,237
Total 324,975,600 20,762,986,458
4 Other equity instruments
Additional tier 1 capital - contingent convertible securities
HSBC Holdings continues to issue contingent convertible securities that are
included in its capital base as fully CRR II-compliant additional tier 1
capital securities on an end point basis. These securities are marketed
principally and subsequently allotted to corporate investors and fund
managers. The net proceeds of the issuances are typically used for HSBC
Holdings' general corporate purposes and to further strengthen its capital
base to meet requirements under CRR II. These securities bear a fixed rate of
interest until their initial call dates. After the initial call dates, if they
are not redeemed, the securities will bear interest at rates fixed
periodically in advance for five-year periods based on credit spreads, fixed
at issuance, above prevailing market rates. Interest on the contingent
convertible securities will be due and payable only at the sole discretion of
HSBC Holdings, and HSBC Holdings has sole and absolute discretion at all times
to cancel for any reason (in whole or part) any interest payment that would
otherwise be payable on any payment date. Distributions will not be paid if
they are prohibited under UK banking regulations or if the Group has
insufficient reserves or fails to meet the solvency conditions defined in the
securities' terms.
The contingent convertible securities are undated and are repayable at the
option of HSBC Holdings in whole typically at the initial call date or on any
fifth anniversary after this date. In addition, the securities are repayable
at the option of HSBC in whole for certain regulatory or tax reasons. Any
repayments require the prior consent of the PRA. These securities rank pari
passu with HSBC Holdings' sterling preference shares and therefore rank ahead
of ordinary shares. The contingent convertible securities will be converted
into fully paid ordinary shares of HSBC Holdings at a predetermined price,
should HSBC's consolidated non-transitional CET1 ratio fall below 7.0%.
Therefore, in accordance with the terms of the securities, if HSBC's
non-transitional CET1 ratio breaches the 7.0% trigger, the securities will
convert into ordinary shares at fixed contractual conversion price in the
currency of the relevant securities. During the first half of 2024, HSBC
Holdings issued SGD1,500m contingent convertible securities.
5 Notifiable interests in share capital
Between 1 January 2024 and 30 June 2024, HSBC Holdings did not receive any
notification of major holdings of voting rights pursuant to the requirements
of Rule 5 of the Disclosure, Guidance and Transparency Rules, which had not
been amended or withdrawn. No further notifications had been received between
30 June 2024 and 20 July 2024.
Previous notifications received, which have not been amended or withdrawn, are
as follows:
- BlackRock, Inc. gave notice on 3 March 2020 that on 2 March 2020 it had
the following: an indirect interest in HSBC Holdings ordinary shares of
1,235,558,490; qualifying financial instruments with 7,294,459 voting rights
that may be acquired if the instruments are exercised or converted; and
financial instruments with a similar economic effect to qualifying financial
instruments, which refer to 2,441,397 voting rights, representing 6.07%, 0.03%
and 0.01%, respectively, of the total voting rights at 2 March 2020.
- Ping An Asset Management Co., Ltd. gave notice on 6 December 2017 that
on 4 December 2017 it had an indirect interest in HSBC Holdings ordinary
shares of 1,007,946,172, representing 5.04% of the total voting rights at that
date.
-
At 30 June 2024, according to the register maintained by HSBC Holdings
pursuant to section 336 of the Securities and Futures Ordinance of Hong Kong,
the following notifications of major holdings have been made to HSBC Holdings
and have not been amended or withdrawn:
- BlackRock, Inc. gave notice on 7 June 2024 that on 4 June 2024 it had
the following interests in HSBC Holdings ordinary shares: a long position of
1,667,403,488 shares and a short position of 18,161,531 shares, representing
8.89% and 0.10%, respectively, of the ordinary shares in issue at that date.
- Ping An Asset Management Co., Ltd. gave notice on 10 May 2024 that on 7
May 2024 it had a long position of 1,502,584,731 in HSBC Holdings ordinary
shares, representing 7.98% of the ordinary shares in issue at that date.
-
6 Dealings in HSBC Holdings listed securities
HSBC has policies and procedures that, except where permitted by statute and
regulation, prohibit it undertaking specified transactions in respect of its
securities listed on The Stock Exchange of Hong Kong Limited ('HKEx'). Except
for dealings as intermediaries or as trustees by subsidiaries of HSBC
Holdings, or in relation to HSBC Holdings ordinary share buy-backs, neither
HSBC Holdings nor any of its subsidiaries has purchased, sold or redeemed any
of its securities listed on HKEx during the half-year ended 30 June 2024.
7 Second interim dividend for 2024
On 31 July 2024, the Directors approved a second interim dividend in respect
of the financial year ending 31 December 2024 of $0.10 per ordinary share (the
'dividend'), a distribution of approximately $1.849bn. The dividend will be
payable on 27 September 2024 to holders of record on the Principal Register in
the UK, the Hong Kong Overseas Branch Register or the Bermuda Overseas Branch
Register on 16 August 2024.
The dividend will be payable in US dollars, or in pounds sterling or Hong Kong
dollars at the forward exchange rates quoted by HSBC Bank plc in London at or
about 11.00am on 16 September 2024. The ordinary shares in London, Hong Kong
and Bermuda will be quoted ex-dividend on 15 August 2024. American Depositary
Shares ('ADSs') in New York will be quoted ex-dividend on 16 August 2024.
The default currency on the Principal Register in the UK is pounds sterling,
and dividends can also be paid in Hong Kong dollars or US dollars, or a
combination of these currencies. International shareholders can register to
join the Global Dividend Service to receive dividends in their local
currencies. Please register and read the terms and conditions at
www.investorcentre.co.uk. UK shareholders can also register their sterling
bank mandates at www.investorcentre.co.uk.
The default currency on the Hong Kong Overseas Branch Register is Hong Kong
dollars, and dividends can also be paid in US dollars or pounds sterling, or a
combination of these currencies. Shareholders can arrange for direct credit of
Hong Kong dollar cash dividends into their bank account, or arrange to send US
dollar or pound sterling cheques to the credit of their bank account.
Shareholders can register for these services at www.investorcentre.com/hk.
Shareholders can also download a dividend currency election form from
www.hsbc.com/dividends, www.investorcentre.com/hk, or www.hkexnews.hk.
The default currency on the Bermuda Overseas Branch Register is US dollars,
and dividends can also be paid in Hong Kong dollars or pounds sterling, or a
combination of these currencies. Shareholders can change their dividend
currency election by contacting the Bermuda investor relations team.
Shareholders can download a dividend currency election form from
www.hsbc.com/dividends.
Changes to currency elections must be received by 12 September 2024 to be
effective for this dividend.
The dividend will be payable on ADSs, each of which represents five ordinary
shares, on 27 September 2024 to holders of record on 16 August 2024. The
dividend of $0.50 per ADS will be payable by the depositary in US dollars.
Alternatively, the cash dividend may be invested in additional ADSs by
participants in the dividend reinvestment plan operated by the depositary.
Elections must be received by 6 September 2024.
Any person who has acquired ordinary shares registered on the Principal
Register in the UK, the Hong Kong Overseas Branch Register or the Bermuda
Overseas Branch Register but who has not lodged the share transfer with the
Principal Registrar in the UK, Hong Kong Overseas Branch Registrar or Bermuda
Overseas Branch Registrar should do so before 4.00pm local time on 16 August
2024 in order to receive the dividend.
Ordinary shares may not be removed from or transferred to the Principal
Register in the UK, the Hong Kong Overseas Branch Register or the Bermuda
Overseas Branch Register on 16 August 2024. Any person wishing to remove
ordinary shares to or from each register must do so before 4.00pm local time
on 15 August 2024.
Transfer of ADSs must be lodged with the depositary by 11.00am on 16 August
2024 in order to receive the dividend. ADS holders who receive a cash dividend
will be charged a fee, which will be deducted by the depositary, of $0.005 per
ADS per cash dividend.
8 Dividend on preference share
A quarterly dividend of £0.01 per Series A sterling preference share is
payable on 15 March, 17 June, 16 September and 16 December 2024 for the
quarter then ended at the sole and absolute discretion of the Board of HSBC
Holdings plc. Accordingly, the Board of HSBC Holdings plc has approved a
quarterly dividend to be payable on 16 September 2024 to holders of record on
30 August 2024.
9 Proposed interim dividends for 2024
As previously communicated, we have established a dividend payout ratio of 50%
of earnings per ordinary share ('EPS') for 2023 and 2024. EPS for this purpose
excludes material notable items and related impacts. Material notable items in
1H24 and 2023 included the planned sale of our business in Argentina, the sale
of our retail banking operations in France, the sale of our banking business
in Canada, the gain following the acquisition of SVB UK and the impairment of
our investment in BoCom. We also exclude HSBC Bank Canada's financial results
from the 30 June 2022 net asset reference date until completion, as the gain
on sale was recognised through a combination of the consolidation of HSBC Bank
Canada's results in the Group's results since this date, and the remaining
gain on sale was recognised at completion, inclusive of the recycling of
related reserves and fair value gains on related hedges. The Board has adopted
a dividend policy designed to provide sustainable cash dividends, while
retaining the flexibility to invest and grow the business in the future,
supplemented by additional shareholder distributions, if appropriate.
Dividends are declared in US dollars and, at the election of the shareholder,
paid in cash in one of US dollars, pounds sterling or Hong Kong dollars.
10 Earnings release
An earnings release for the three-month period ending 30 September 2024 is
expected to be issued on 29 October 2024.
11 Final results
The results for the year to 31 December 2024 are expected to be announced on
19 February 2025.
12 Corporate governance
We are subject to corporate governance requirements in both the UK and Hong
Kong. Throughout the six months ended 30 June 2024, we complied with the
applicable provisions of the UK Corporate Governance Code, and also the
requirements of the Hong Kong Corporate Governance Code. The UK Corporate
Governance Code is available at www.frc.org.uk and the Hong Kong Corporate
Governance Code is available at www.hkex.com.hk. We note that the Financial
Reporting Council have issued a new UK Corporate Governance Code, which will
apply to financial reporting periods from 1 January 2025, and that The Stock
Exchange of Hong Kong Limited is currently consulting on changes to the Hong
Kong Corporate Governance Code. The Group will take the necessary actions to
ensure that we continue to be compliant with both Codes as the new provisions
come into force.
The Board has codified obligations for transactions in Group securities in
accordance with the requirements of the UK Market Abuse Regulation and the
rules governing the listing of securities on the HKEx, save that the HKEx has
granted waivers from strict compliance with the rules that take into account
accepted practices in the UK, particularly in respect of employee share plans.
All Directors have confirmed that they have complied with their obligations in
respect of transacting in Group securities throughout the period.
There have been no material changes to the information disclosed in the Annual
Report and Accounts 2023 in respect of the remuneration of employees,
remuneration policies, bonus and share option plans and training schemes.
Details of the number of employees are provided on page 34 of the Interim
Report 2024.
13 Changes in Directors' details
Changes in current Directors' details since the date of the Annual Report and
Accounts 2023, which are required to be disclosed pursuant to Rule 13.51(2)
and Rule 13.51B(1) of the Hong Kong Listing Rules, are set out below.
Ann Godbehere
Appointed to the Group Audit Committee on 21 February 2024. Appointed Senior
Independent Director on 3 May 2024.
Steven Guggenheimer
Appointed to the Group Technology Committee on 1 March 2024.
Kalpana Morparia
Appointed to the Group Technology Committee on 1 March 2024.
Eileen K Murray
Appointed Chair of the Group Technology Committee on 1 March 2024.
Brendan Nelson
Appointed Chair of the Group Audit Committee on 21 February 2024 and to the
Group Technology Committee on 1 March 2024.
David Nish
Retired from the Board, Group Audit Committee, Group Risk Committee and
Nomination & Corporate Governance Committee on 3 May 2024.
Swee Lian Teo
Appointed to the Group Technology Committee on 1 March 2024.
14 Going concern basis
As mentioned in Note 1 'Basis of preparation and material accounting policies'
on page 120, the financial statements are prepared on a going concern basis as
the Directors are satisfied that the Group and parent company have the
resources to continue in business for the foreseeable future. In making this
assessment, the Directors considered a wide range of information relating to
present and future conditions, including future projections of profitability,
cash flows, capital requirements and capital resources. These considerations
include persistently high interest rate and inflationary stress scenarios that
reflect the intensification of ongoing global energy supply issues, the impact
of the Russia-Ukraine and Israel-Hamas wars, as well as the potential impacts
from other top and emerging risks, and the related impact on profitability,
capital and liquidity.
In particular, HSBC's principal activities, business and operating models,
strategic direction, and top and emerging risks are addressed in the Overview
section. A financial summary, including a review of the consolidated income
statement and consolidated balance sheet, is provided in the 'Interim
management report' section. HSBC's objectives, policies and processes for
managing credit, liquidity and market risk are described in the 'Risk review'
section of the Annual Report and Accounts 2023. HSBC's approach to capital
management and allocation is described in the 'Treasury risk' section of the
Annual Report and Accounts 2023.
15 Telephone and online share dealing service
For shareholders on the Principal Register who are resident in the UK, with a
UK postal address, and who hold an HSBC Bank plc personal current account, the
HSBC InvestDirect share dealing service is available for buying and selling
HSBC Holdings plc ordinary shares. Details are available from: HSBC
InvestDirect, Forum 1, Parkway, Whiteley PO15 7PA; or UK telephone: +44 (0)
3456 080848, or from an overseas telephone: +44 (0) 1226 261090; or website:
www.hsbc.co.uk/investments/products-and-services/invest-direct.
16 Stock symbols
HSBC Holdings plc ordinary shares trade under the following stock symbols:
London Stock Exchange HSBA
Hong Kong Stock Exchange 5
New York Stock Exchange (ADS) HSBC
Bermuda Stock Exchange HSBC.BH
17 Copies of the Interim Report 2024 and shareholder enquiries and communications
Further copies of the Interim Report 2024 may be obtained from Global
Communications, HSBC Holdings plc, 8 Canada Square, London E14 5HQ, United
Kingdom; from Communications (Asia), The Hongkong and Shanghai Banking
Corporation Limited, 1 Queen's Road Central, Hong Kong; or from US
Communications, HSBC Bank USA, N.A., 1 West 39th Street, 9th Floor, New York,
NY 10018, USA. The Interim Report 2024 may also be downloaded from the HSBC
website, www.hsbc.com.
Shareholders may at any time choose to receive corporate communications in
printed form or to receive notifications of their availability on HSBC's
website. To receive notifications of the availability of a corporate
communication on HSBC's website by email, or to revoke or amend an
instruction to receive such notifications by email, go to
www.hsbc.com/investors/shareholder-information/manage-your-shareholding. If
you provide an email address to receive electronic communications from HSBC,
we will also send notifications of any future dividend entitlements by email.
If you received a notification of the availability of this document on HSBC's
website and would like to receive a printed copy or, if you would like to
receive future corporate communications in printed form, please write or send
an email (quoting your shareholder reference number) to the appropriate
Registrar at the address given below. Printed copies will be provided without
charge.
Any enquiries relating to your shareholdings on the share register (for
example transfers of shares, change of name or address, lost share
certificates or dividend cheques) should be sent to the Registrar at the
address given below. The Registrars offer an online facility, Investor Centre,
which enables shareholders to manage their shareholding electronically.
Principal Register: Computershare Investor Services PLC Telephone: +44 (0) 370 702 0137
The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ, www.investorcentre.co.uk/contactus
United Kingdom Investor Centre: www.investorcentre.co.uk
Hong Kong Overseas Branch Register: Computershare Hong Kong Investor Telephone: +852 2862 8555
Services Limited hsbc.ecom@computershare.com.hk
Rooms 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Hong Kong Investor Centre: www.investorcentre.com/hk
Bermuda Overseas Branch Register: Investor Relations Team hbbm.shareholder.services@hsbc.bm
HSBC Bank Bermuda Limited, 37 Front Street, Hamilton HM 11, Bermuda Investor Centre: www.investorcentre.com/bm
ADS Depository: The Bank of New York Mellon Telephone (US): +1 877 283 5786
Shareowner Services, P.O. Box 43006, Providence RI, 02940-3078, USA Telephone (International): +1 201 680 6825
shrrelations@cpushareownerservices.com
www.mybnymdr.com
A Chinese translation of this and future documents may be obtained on request
from the Registrar. Please also contact the Registrar if you have received a
Chinese translation of this document and do not wish to receive such
translations in future.
Persons whose shares are held on their behalf by another person may have been
nominated to receive communications from HSBC pursuant to section 146 of the
UK Companies Act 2006 ('nominated person'). The main point of contact for a
nominated person remains the registered shareholder (for example your
stockbroker, investment manager, custodian or other person who manages
the investment on your behalf). Any changes or queries relating to a
nominated person's personal details and holding (including any administration
thereof) must continue to be directed to the registered shareholder and not
HSBC's Registrar. The only exception is where HSBC, in exercising one of its
powers under the UK Companies Act 2006, writes to nominated persons directly
for a response.
本中期業績報告及日後的相關文件均備有中譯本，如有需要，請向適當的股份登記處索取。股東如收到本報告的中譯本，但不希望再收取此等中譯本，亦請聯絡股份登記處。
Cautionary statement regarding forward-looking statements
This Interim Report 2024 contains certain forward-looking statements with
respect to HSBC's: financial condition; results of operations and business,
including the strategic priorities; financial, investment and capital targets;
and ESG targets, commitments and ambitions described herein.
Statements that are not historical facts, including statements about HSBC's
beliefs and expectations, are forward-looking statements. Words such as 'may',
'will', 'should', 'expects', 'targets', 'anticipates', 'intends', 'plans',
'believes', 'seeks', 'estimates', 'potential' and 'reasonably possible', or
the negative thereof, other variations thereon or similar expressions are
intended to identify forward-looking statements. These statements are based on
current plans, information, data, estimates and projections, and therefore
undue reliance should not be placed on them. Forward-looking statements speak
only as of the date they are made. HSBC makes no commitment to revise or
update any forward-looking statements to reflect events or circumstances
occurring or existing after the date of any forward-looking statements.
Written and/or oral forward-looking statements may also be made in the
periodic reports to the US Securities and Exchange Commission, summary
financial statements to shareholders, offering circulars and prospectuses,
press releases and other written materials, and in oral statements made by
HSBC's Directors, officers or employees to third parties, including financial
analysts.
Forward-looking statements involve inherent risks and uncertainties. Readers
are cautioned that a number of factors could cause actual results to differ,
in some instances materially, from those anticipated or implied in any
forward-looking statement.
These include, but are not limited to:
- changes in general economic conditions in the markets in which we
operate, such as new, continuing or deepening recessions, prolonged
inflationary pressures and fluctuations in employment levels and the
creditworthiness of customers beyond those factored into consensus forecasts;
the Russia-Ukraine war and the Israel-Hamas war and their impact on global
economies and the markets where HSBC operates, which could have a material
adverse effect on (among other things) our financial condition, results of
operations, prospects, liquidity, capital position and credit ratings;
deviations from the market and economic assumptions that form the basis for
our ECL measurements (including, without limitation, as a result of the
Russia-Ukraine war and the Israel-Hamas war, inflationary pressures, commodity
price changes, and ongoing developments in the commercial real estate sector
in mainland China); potential changes in HSBC's dividend policy; changes and
volatility in foreign exchange rates and interest rates levels, including the
accounting impact resulting from financial reporting in respect of
hyperinflationary economies; volatility in equity markets; lack of liquidity
in wholesale funding or capital markets, which may affect our ability to meet
our obligations under financing facilities or to fund new loans, investments
and businesses; geopolitical tensions or diplomatic developments producing
social instability or legal uncertainty, such as the Russia-Ukraine war or the
Israel-Hamas war (including the continuation and escalation thereof) and the
related imposition of sanctions and trade restrictions, supply chain
restrictions and disruptions, sustained increases in energy prices and key
commodity prices, claims of human rights violations, diplomatic tensions,
including between China and the US, the UK, the EU, India and other countries,
and developments in Hong Kong and Taiwan, alongside other potential areas of
tension, which may adversely affect HSBC by creating regulatory, reputational
and market risks; the efficacy of government, customer, and HSBC's actions in
managing and mitigating ESG risks, in particular climate risk, nature-related
risks and human rights risks, and in supporting the global transition to net
zero carbon emissions, each of which can impact HSBC both directly and
indirectly through our customers and which may result in potential financial
and non-financial impacts; illiquidity and downward price pressure in national
real estate markets; adverse changes in central banks' policies with respect
to the provision of liquidity support to financial markets; heightened market
concerns over sovereign creditworthiness in over-indebted countries; adverse
changes in the funding status of public or private defined benefit pensions;
societal shifts in customer financing and investment needs, including consumer
perception as to the continuing availability of credit; exposure to
counterparty risk, including third parties using us as a conduit for illegal
activities without our knowledge; the discontinuation of certain key Ibors and
the transition of the remaining legacy Ibor contracts to near risk-free
benchmark rates, which continues to expose HSBC to some financial and
non-financial risks; and price competition in the market segments we serve;
- changes in government policy and regulation, including the monetary,
interest rate and other policies of central banks and other regulatory
authorities in the principal markets in which we operate and the consequences
thereof (including, without limitation, actions taken as a result of changes
in government following national elections in the jurisdictions where the
Group operates); initiatives to change the size, scope of activities and
interconnectedness of financial institutions in connection with the
implementation of stricter regulation of financial institutions in key markets
worldwide; revised capital and liquidity benchmarks, which could serve to
deleverage bank balance sheets and lower returns available from the current
business model and portfolio mix; changes to tax laws and tax rates applicable
to HSBC, including the imposition of levies or taxes designed to change
business mix and risk appetite; the practices, pricing or responsibilities of
financial institutions serving their consumer markets; expropriation,
nationalisation, confiscation of assets and changes in legislation relating to
foreign ownership; the UK's relationship with the EU, which continues to be
characterised by uncertainty and political disagreement, despite the signing
of the Trade and Cooperation Agreement between the UK and the EU, particularly
with respect to the potential divergence of UK and EU law on the regulation of
financial services; changes in government approach and regulatory treatment in
relation to ESG disclosures and reporting requirements, and the current lack
of a single standardised regulatory approach to ESG across all sectors and
markets; changes in UK macroeconomic and fiscal policy, which may result in
fluctuations in the value of the pound sterling; general changes in government
policy (including, without limitation, actions taken as a result of changes in
government following national elections in the jurisdictions where the Group
operates) that may significantly influence investor decisions; the costs,
effects and outcomes of regulatory reviews, actions or litigation, including
any additional compliance requirements; and the effects of competition in the
markets where we operate including increased competition from non-bank
financial services companies; and
- factors specific to HSBC, including our success in adequately
identifying the risks we face, such as the incidence of loan losses or
delinquency, and managing those risks (through account management, hedging and
other techniques); our ability to achieve our financial, investment, capital
and ESG targets, commitments and ambitions (including the positions set forth
in our thermal coal phase-out policy and our energy policy and our targets to
reduce our on-balance sheet financed emissions and, where applicable,
facilitated emissions in our portfolio of selected high-emitting sectors),
which may result in our failure to achieve any of the expected benefits of our
strategic priorities; evolving regulatory requirements and the development of
new technologies, including artificial intelligence, affecting how we manage
model risk; model limitations or failure, including, without limitation, the
impact that high inflationary pressures and rising interest rates have had on
the performance and usage of financial models, which may require us to hold
additional capital, incur losses and/or use compensating controls, such as
judgemental post-model adjustments, to address model limitations; changes to
the judgements, estimates and assumptions we base our financial statements on;
changes in our ability to meet the requirements of regulatory stress tests; a
reduction in the credit ratings assigned to us or any of our subsidiaries,
which could increase the cost or decrease the availability of our funding and
affect our liquidity position and net interest margin; changes to the
reliability and security of our data management, data privacy, information and
technology infrastructure, including threats from cyber-attacks, which may
impact our ability to service clients and may result in financial loss,
business disruption and/or loss of customer services and data; the accuracy
and effective use of data, including internal management information that may
not have been independently verified; changes in insurance customer behaviour
and insurance claim rates; our dependence on loan payments and dividends from
subsidiaries to meet our obligations; changes in our reporting frameworks and
accounting standards, which have had and may continue to have a material
impact on the way we prepare our financial statements; our ability to
successfully execute planned strategic acquisitions and disposals; our success
in adequately integrating acquired businesses into our business, including the
integration of SVB UK into our CMB business; changes in our ability to manage
third-party, fraud, financial crime and reputational risks inherent in our
operations; employee misconduct, which may result in regulatory sanctions
and/or reputational or financial harm; changes in skill requirements, ways of
working and talent shortages, which may affect our ability to recruit and
retain senior management and diverse and skilled personnel; and changes in our
ability to develop sustainable finance and ESG-related products consistent
with the evolving expectations of our regulators, and our capacity to measure
the environmental and social impacts from our financing activity (including as
a result of data limitations and changes in methodologies), which may affect
our ability to achieve our ESG ambitions, targets and commitments, including
our net zero ambition, our targets to reduce on-balance sheet financed
emissions and, where applicable, facilitated emissions in our portfolio of
selected high-emitting sectors and the positions set forth in our thermal coal
phase-out policy and our energy policy, and increase the risk of greenwashing.
Effective risk management depends on, among other things, our ability through
stress testing and other techniques to prepare for events that cannot be
captured by the statistical models it uses; our success in addressing
operational, legal and regulatory, and litigation challenges; and other risks
and uncertainties we identify in 'Risk overview' and 'Risk - Geopolitical and
macroeconomic risk' on pages 25 to 27 and 62 to 64 of this Interim Report
2024.
Additional detailed information concerning important factors, including but
not limited to ESG-related factors, that could cause actual results to differ
materially from those anticipated or implied in any forward-looking statement
in this Interim Report 2024 is available in our Annual Report and Accounts for
the fiscal year ended 31 December 2023, which was filed with the SEC on Form
20-F on 22 February 2024.
This Interim Report 2024 contains a number of images, graphics, text boxes and
credentials which aim to give a high-level overview of certain elements of our
disclosures and to improve accessibility for readers. These images, graphics,
text boxes and credentials are designed to be read within the context of the
Interim Report 2024 as a whole.
Certain defined terms
Unless the context requires otherwise, 'HSBC Holdings' means HSBC Holdings plc
and 'HSBC', the 'Group', 'we', 'us' and 'our' refer to HSBC Holdings together
with its subsidiary undertakings. 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 and capital securities issued by HSBC
Holdings classified as equity. The abbreviations '$m', '$bn' and '$tn'
represent millions, billions (thousands of millions) and trillions of US
dollars, respectively.
Abbreviations
Currencies
£ British pound sterling
CA$ Canadian dollar
€ Euro
HK$ Hong Kong dollar
RMB Chinese renminbi
SGD Singapore dollar
$ United States dollar
Abbreviation
1H23 First half of 2023
1H24 First half of 2024
1Q23 First quarter of 2023
1Q24 First quarter of 2024
2H23 Second half of 2023
2Q23 Second quarter of 2023
2Q24 Second quarter of 2024
4Q23 Fourth quarter of 2023
A
ABS Asset-backed security
ADS American Depositary Share
AI Artificial intelligence
AIBL Average interest-bearing liabilities
AIEA Average interest-earning assets
ALCO Asset and Liability Management Committee
ANP Annualised new business premiums
ASEAN Association of Southeast Asian Nations
AT1 Additional tier 1
B
Banking NII Banking net interest income
Basel Basel Committee on Banking Supervision
Basel III Basel Committee's reforms to strengthen global capital and liquidity rules
Basel 3.1 Outstanding measures to be implemented from the Basel III reforms
BoCom Bank of Communications Co., Limited, one of China's largest banks
BoE Bank of England
Bps Basis points. One basis point is equal to one hundredth of a percentage point
C
CAPM Capital asset pricing model
CDOR Canadian dollar offered rate
CEA Commodity Exchange Act (US)
CET1 Common equity tier 1
CMB Commercial Banking, a global business
CMC Capital maintenance charge
CODM Chief Operating Decision Maker
COFINS Contribution for the Financing of Social Security, a Brazilian federal
corporation tax
CPI Consumer price index
CRD IV Capital Requirements Regulation and Directive
CRE Commercial real estate
CRR Customer risk rating
CRR II The regulatory requirements of the Capital Requirements Regulation and
Directive, the CRR II regulation and the PRA Rulebook
CSM Contractual service margin
D
Dec December
DPD Days past due
DPF Discretionary participation feature of insurance and investment contracts
DVA Debit valuation adjustment
E
EBA European Banking Authority
EC European Commission
ECB European Central Bank
ECL Expected credit losses. In the income statement, ECL is recorded as a change
in expected credit losses and other credit impairment charges. In the balance
sheet, ECL is recorded as an allowance for financial instruments to which only
the impairment requirements in IFRS 9 are applied.
EEA European Economic Area
Eonia Euro Overnight Index Average
EPS Earnings per ordinary share
ESG Environmental, social and governance
EU European Union
Euribor Euro interbank offered rate
EVE Economic value of equity
F
FCA Financial Conduct Authority (UK)
FRB Federal Reserve Board (US)
FTE Full-time equivalent staff
FVOCI Fair value through other comprehensive income
FX Foreign exchange
G
GAAP Generally accepted accounting principles
GBM Global Banking and Markets, a global business
GDP Gross domestic product
GEC Group Executive Committee
GPS Global Payments Solutions, the business formerly known as Global Liquidity and
Cash Management
Group HSBC Holdings together with its subsidiary undertakings
GTS Global Trade Solutions, the business formerly known as Global Trade and
Receivables Finance
H
HIBOR Hong Kong interbank offered rate
HKEx The Stock Exchange of Hong Kong Limited
HKMA Hong Kong Monetary Authority
Holdings ALCO HSBC Holdings Asset and Liability Management Committee
Hong Kong Hong Kong Special Administrative Region of the People's Republic of China
HQLA High-quality liquid assets
HSBC HSBC Holdings together with its subsidiary undertakings
HSBC Bank plc HSBC Bank plc, also known as the non-ring-fenced bank
HSBC Bank Middle East HSBC Bank Middle East Limited
HSBC Canada The sub-group, HSBC Bank Canada, HSBC Trust Company Canada, HSBC Mortgage
Corporation Canada and HSBC Securities Canada, consolidated for liquidity
purposes
HSBC Continental Europe HSBC Continental Europe
HSBC Holdings HSBC Holdings plc, the parent company of HSBC
HSBC UK HSBC UK Bank plc, also known as the ring-fenced bank
HSSL HSBC Securities Services (Luxembourg)
I
IAS International Accounting Standards
IASB International Accounting Standards Board
Ibor Interbank offered rate
ICAAP Internal capital adequacy assessment process
IFRS Accounting International Financial Reporting Standards as issued by the International
Accounting Standards Board
Standards
ILAAP Internal liquidity adequacy assessment process
IVB HSBC Innovation Banking
J
Jan January
Jun June
JV Joint venture
L
LCR Liquidity coverage ratio
Libor London interbank offered rate
LTI Long-term incentive
LTV Loan to value
M
M&A Mergers and acquisitions
Mainland China People's Republic of China excluding Hong Kong
and Macau
Mar March
MENAT Middle East, North Africa and Türkiye
MREL Minimum requirement for own funds and eligible liabilities
MSS Markets and Securities Services, HSBC's capital markets and securities
services businesses in Global Banking and Markets
N
Net operating income Net operating income before change in expected credit losses and other credit
impairment charges, also referred to as revenue
NII Net interest income
NIM Net interest margin
NSFR Net stable funding ratio
O
OCI Other comprehensive income
OECD Organisation of Economic Co-operation and Development
OTC Over-the-counter
P
PCAF Partnership for Carbon Accounting Financials
PD Probability of default
PIS Contribution to the Social Integration Programme, a Brazilian federal
corporation tax
POCI Purchased or originated credit-impaired financial assets
PRA Prudential Regulation Authority (UK)
Premier HSBC Premier, HSBC's premium personal global banking service
PVIF Present value of in-force long-term insurance business and long-term
investment contracts with DPF
PwC The member firms of the PwC network, including PricewaterhouseCoopers LLP
R
RAF Bank of England's Resolvability Assessment Framework
RES Resource and experience sharing agreement
RFR Risk-free rate
RoE Return on average ordinary shareholders' equity
RoTE Return on average tangible equity
RWAs Risk-weighted assets
S
SAB Saudi Awwal Bank
SEC Securities and Exchange Commission (US)
ServCo group Separately incorporated group of service companies established in response to
UK ring-fencing requirements
Sibor Singapore interbank offered rate
SME Small and medium-sized enterprise
SOFR Secured Overnight Financing Rate
SVB UK Silicon Valley Bank UK Limited, now HSBC Innovation Bank Limited
T
TNFD Taskforce on Nature-related Financial Disclosures
U
UAE United Arab Emirates
UK United Kingdom
UN United Nations
US United States of America
V
VaR Value at risk
VIU Value in use
W
WPB Wealth and Personal Banking, a global business
This document comprises the Interim Report 2024 and information herein has
been filed on Form 6-K with the US Securities and Exchange Commission for HSBC
Holdings plc and its subsidiary and associated undertakings.
HSBC Holdings plc
Incorporated in England with limited liability. Registered in England: number
617987
Registered Office and Group Head Office
8 Canada Square, London E14 5HQ, United Kingdom
Web: www.hsbc.com
Tel: +44(0)20 7991 8888
© Copyright HSBC Holdings plc 2024
All rights reserved
No part of this publication may be reproduced, stored in a retrieval system,
or transmitted, in any form or by any means, electronic, mechanical,
photocopying, recording, or otherwise, without the prior written permission of
HSBC Holdings plc.
Published by Global Finance, HSBC Holdings plc, London
Designed by Design Bridge and Partners, London (cover) and by Global Finance
with Design Bridge and Partners (rest of the Interim Report 2024)
Printed by Park Communications Limited, London, on Nautilus SuperWhite board
and paper using vegetable oil-based inks.
Made in Austria, the stocks comprise 100% de-inked
post-consumer waste. Pulps used are totally chlorine-free.
The FSC® recycled logo identifies a paper which contains
100% post-consumer recycled fibre certified in accordance
with the rules of the Forest Stewardship Council®.
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