FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the
month of February
HSBC Holdings plc
42nd
Floor, 8 Canada Square, London E14 5HQ, England
(Indicate
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F).
Form
20-F X Form 40-F
19 February 2025
HSBC Holdings plc 2024
results
Georges Elhedery, Group CEO, said:
"Our strong 2024 performance provides firm financial foundations
upon which to build for the future, as we prioritise delivering
sustainable strategic growth and the best outcomes for our
customers. Since becoming CEO, I have focused on simplifying how we
operate and injected energy and intent into the way we deliver our
strategy. We are creating a simple, more agile, focused bank built
on our core strengths. We continue to take deliberate and decisive
steps. This includes creating four complementary, clearly
differentiated businesses, aligning our structure to our strategy
and reshaping our portfolio at pace and with purpose. I have put in
place a smaller, core team of exceptionally talented leaders driven
by a growth orientated mindset and a firm focus on dynamically
managing our costs and capital. We are embedding this approach
across the organisation to ensure we are continually focused on
these two important principles. Each targeted action we are taking
is designed to unlock HSBC's full potential. We look to the future
with confidence and clarity of purpose."
2024 financial performance (vs 2023)
- Profit
before tax rose by $2.0bn to $32.3bn, including
a $1.0bn net favourable impact from notable items. In 2024, these
included a gain of $4.8bn on the disposal of our banking business
in Canada, the impacts of the disposal of our business in
Argentina, comprising a $1.0bn loss on disposal, and the recycling
of foreign currency reserve losses and other reserves of $5.2bn. In
2023, notable items included an impairment of $3.0bn on our
associate, Bank of Communications Co., Limited ('BoCom'), disposal
losses of $1.0bn on Treasury repositioning and risk management and
a $1.6bn gain recognised on the acquisition of Silicon Valley Bank
UK Limited ('SVB UK'). Profit after
tax increased by $0.4bn to $25.0bn.
- Constant
currency profit before tax excluding notable items increased by
$1.4bn to $34.1bn, primarily
reflecting revenue growth in Wealth and Personal Banking ('WPB')
and Global Banking and Markets ('GBM'), partly offset by a rise in
operating expenses, in line with our cost growth
targets.
- Revenue
of $65.9bn was stable. There
was growth in revenue from higher customer activity in Wealth in
WPB, and in Equities and Securities Financing in GBM. In addition,
2023 included disposal losses of $1.0bn related to Treasury
repositioning and risk management. This was offset by the net
adverse impact of certain strategic transactions described above,
as well as a $0.2bn loss on the early redemption of legacy
securities.
- Constant
currency revenue excluding notable items rose by $2.9bn to
$67.4bn.
- Net
interest income ('NII') decreased by $3.1bn, reflecting
the impact of business disposals and higher funding costs
associated with the redeployment of our commercial surplus to the
trading book, where the related revenue is recognised in 'net
income from financial instruments held for trading or managed on a
fair value basis', partly offset by higher NII in HSBC UK,
reflecting the benefit of our structural
hedge. Banking NII of
$43.7bn fell by $0.4bn or 1% compared with 2023, as increased deployment of
our commercial surplus to the trading book only partly mitigated
the reductions in NII.
- Net
interest margin ('NIM') of 1.56% decreased by 10 basis points
('bps'), mainly
due to increased deployment of our commercial surplus to the
trading book.
- Expected
credit losses and other credit impairment charges ('ECL') of $3.4bn
were stable. ECL
were $1.8bn in Commercial Banking ('CMB') and $0.2bn in GBM. This
included stage 3 charges relating to the commercial real estate
sector in mainland China ($0.4bn), the onshore Hong Kong real
estate sector ($0.1bn), and a charge related to a single CMB
customer in the UK. ECL in WPB were $1.3bn and primarily related to
our legal entities in Mexico, Hong Kong and the
UK. ECL were 36bps
of average gross loans, including loans and advances classified as
held for sale (2023:
32bps).
- Operating
expenses grew by $1.0bn or 3% to $33.0bn, mainly
due to higher spend and investment in technology and the impacts of
inflation, partly offset by reductions related to our business
disposals in Canada and France, and from lower levies in the UK and
the US.
- Target
basis operating expenses rose by 5%, in line with our cost growth
target. This
increase primarily reflected higher spend and investment in
technology, and the impact of inflation. This is measured on a
constant currency basis, excluding notable items, the impact of
retranslating the prior year results of hyperinflationary economies
at constant currency, and the direct costs from the sales of our
French retail banking operations and our banking business in
Canada.
- Customer
lending balances fell by $8bn on a reported basis but rose by $14bn
on a constant currency basis. Growth
included lending balance growth in CMB and higher mortgage balances
in WPB.
- Customer
accounts rose by $43bn on a reported basis, and $75bn on a constant
currency basis, with
growth across all of our global businesses, primarily in
Asia.
- Common
equity tier 1 ('CET1') capital ratio of 14.9% rose by 0.1 of a
percentage point, mainly
due to capital generation and a reduction in RWAs through strategic
transactions, offset by dividends, share buy-backs and organic
balance sheet growth.
- The
Board has approved a fourth interim
dividend of $0.36 per share, resulting in a total of $0.87 per
share in respect of 2024, inclusive of a special
dividend of $0.21 per share. We also intend
to initiate a share buy-back of up to $2bn, which we expect to complete
by our first quarter 2025 results
announcement.
4Q24 financial performance (vs 4Q23)
- Reported
profit before tax up $1.3bn to
$2.3bn. The increase reflected the
non-recurrence of an impairment charge in 4Q23 of $3.0bn relating
to the investment in our associate BoCom. This was partly offset by
a reduction in revenue, which included the recycling of foreign
currency losses and other reserves of $5.2bn recognised following
the completion of sale of our business in Argentina in 4Q24, while
4Q23 included the impact of an impairment relating to the sale of
our retail banking operations in France of $2.0bn as we
reclassified these operations as held for
sale. On a constant
currency basis, profit before tax up $1.5bn to $2.3bn. Reported
profit after tax up $0.4bn to $0.6bn.
- Reported
revenue down 11% to $11.6bn, due
to the recycling of foreign currency losses and other reserves
relating to the sale of our business in Argentina, as mentioned
above. This was partly offset by the non-recurrence of a 4Q23
impairment relating to the sale of our retail banking operations in
France, disposal losses relating to Treasury repositioning and risk
management, and the impact of hyperinflationary accounting in
Argentina. In addition, revenue increased in Wealth in WPB and in
Markets and Securities Services ('MSS') in
GBM. Constant
currency revenue excluding notable items increased by $1.2bn to
$16.5bn.
- Reported
ECL up $0.3bn to $1.4bn. ECL
in 4Q24 comprised charges in CMB of $0.8bn, primarily related to
stage 3 exposures which included charges relating to the commercial
real estate sector in mainland China of $0.2bn and a charge
relating to a single exposure in the UK. Charges in WPB of $0.4bn
were concentrated in our legal entities in Mexico and Hong
Kong.
- Reported
operating expenses stable at $8.6bn, as
higher spend and investment in technology and inflation were
broadly offset by lower levies in the UK and the US, a reduction in
performance related pay and lower costs due to the impact of our
disposals in Canada and France.
Outlook
- We
have announced measures to simplify the Group and we are focused on
opportunities that build on our strong platform for
growth.
- We
are now targeting a mid-teens return on average tangible equity
('RoTE') in each of the three years from 2025 to
2027 excluding
notable items, while acknowledging the outlook for interest rates
remains volatile and uncertain, particularly in the medium
term.
- We
expect banking NII of around $42bn in 2025. Our
current expectation reflects modelling of a number of
market-dependent factors. If changes in these factors impact the
output of our modelling, we would update our expectation for 2025
Banking NII in future quarterly results
announcements.
- We
retain a Group-wide focus on cost
discipline. We are
targeting growth in target basis operating expenses of
approximately 3% in 2025 compared with 2024.
- Our
target basis operating expenses for 2025 excludes the direct cost
impact of the business disposals in Canada and Argentina, notable
items and the impact of retranslating the prior year results of
hyperinflationary economies at constant
currency.
- Our
cost target includes the impact of simplification-related saves
associated with our announced reorganisation, which aims to
generate approximately $0.3bn of cost
reductions in 2025, with a commitment to
an annualised
reduction of $1.5bn in our cost base expected by the end of
2026. To
deliver these reductions, we plan to incur severance and other
up-front costs of $1.8bn over 2025 and 2026, which will be
classified as notable items. We are focused on opportunities where
we have a clear competitive advantage and accretive returns, and we
aim to redeploy around $1.5bn of additional costs from
non-strategic activities into these areas, over the medium
term.
- We
expect ECL charges as a percentage of average gross loans to
continue to be within our medium-term planning range of 30bps to
40bps in 2025 (including
lending held for sale balances).
- Over
the medium to long term, we continue to
expect mid-single
digit percentage growth for year-on-year customer lending
balances.
- We
expect double-digit
percentage average annual growth in fee and other income in
Wealth over the
medium-term.
- We
intend to continue to manage the CET1 capital ratio within our
medium-term target range of 14% to 14.5%, with a dividend payout
ratio target basis of 50% for 2025, excluding
material notable items and related impacts.
Our targets and expectations reflect our current outlook for
the global macroeconomic environment and market-dependent factors,
such as market-implied interest rates (as of mid-January 2025) and
rates of foreign exchange, as well as customer behaviour and
activity levels.
We do not reconcile our forward guidance on RoTE
excluding the impact of notable items, target basis operating
expenses, dividend payout ratio target basis or banking NII to
their equivalent reported measures.
|
Key financial metrics
|
|
|
|
|
|
For the year ended
|
||
|
Reported results
|
2024
|
2023
|
2022
|
|
Profit before tax ($m)
|
32,309
|
30,348
|
17,058
|
|
Profit after tax ($m)
|
24,999
|
24,559
|
16,249
|
|
Revenue ($m)
|
65,854
|
66,058
|
50,620
|
|
Cost efficiency ratio (%)
|
50.2
|
48.5
|
64.6
|
|
Net interest margin (%)
|
1.56
|
1.66
|
1.42
|
|
Basic earnings per share ($)
|
1.25
|
1.15
|
0.72
|
|
Diluted earnings per share ($)
|
1.24
|
1.14
|
0.72
|
|
Dividend per ordinary share (in respect of the period)
($)1
|
0.87
|
0.61
|
0.32
|
|
Dividend payout ratio (%)2
|
50
|
50
|
44
|
|
|
|
|
|
|
Alternative performance measures
|
|
|
|
|
Constant currency profit before tax ($m)
|
32,309
|
29,903
|
16,302
|
|
Constant currency revenue ($m)
|
65,854
|
64,912
|
49,587
|
|
Constant currency cost efficiency ratio (%)
|
50.2
|
48.5
|
65.0
|
|
Constant currency profit before tax excluding notable items
($m)
|
34,122
|
32,680
|
23,057
|
|
Constant currency revenue excluding notable items ($m)
|
67,434
|
64,489
|
53,383
|
|
Constant currency profit before tax excluding notable items and
strategic transactions ($m)
|
34,037
|
32,217
|
N/A
|
|
Constant currency revenue excluding notable items and strategic
transactions ($m)
|
67,256
|
63,043
|
N/A
|
|
Expected credit losses and other credit impairment charges ('ECL')
as % of average gross loans and advances to customers
(%)
|
0.36
|
0.34
|
0.36
|
|
Expected credit losses and other credit impairment charges ('ECL')
as % of average gross loans and advances to customers, including
held for sale (%)
|
0.36
|
0.32
|
0.36
|
|
Basic earnings per share excluding material notable items and
related impacts ($)
|
1.31
|
1.22
|
N/A
|
|
Return on average ordinary shareholders' equity (%)
|
13.6
|
13.6
|
9.0
|
|
Return on average tangible equity (%)
|
14.6
|
14.6
|
10.0
|
|
Return on average tangible equity excluding notable items
(%)
|
16.0
|
16.2
|
11.8
|
|
Target basis operating expenses ($m)
|
32,648
|
31,074
|
N/A
|
|
|
At 31 December
|
||
|
Balance sheet
|
2024
|
2023
|
2022
|
|
Total assets ($m)
|
3,017,048
|
3,038,677
|
2,949,286
|
|
Net loans and advances to customers ($m)
|
930,658
|
938,53
|
923,561
|
|
Customer accounts ($m)
|
1,654,955
|
1,611,647
|
1,570,303
|
|
Average interest-earning assets ($m)
|
2,099,285
|
2,161,746
|
2,143,758
|
|
Loans and advances to customers as % of customer accounts
(%)
|
56.2
|
58.2
|
58.8
|
|
Total shareholders' equity ($m)
|
184,973
|
185,329
|
177,833
|
|
Tangible ordinary shareholders' equity ($m)
|
154,295
|
155,710
|
146,927
|
|
Net asset value per ordinary share at period end ($)
|
9.26
|
8.82
|
8.01
|
|
Tangible net asset value per ordinary share at period end
($)
|
8.61
|
8.19
|
7.44
|
|
|
|
|
|
|
Capital, leverage and liquidity
|
|
|
|
|
Common equity tier 1 capital ratio (%)3,4
|
14.9
|
14.8
|
14.2
|
|
Risk-weighted assets ($m)3,4
|
838,254
|
854,114
|
839,720
|
|
Total capital ratio (%)3,4
|
20.6
|
20.0
|
19.3
|
|
Leverage ratio (%)3,4
|
5.6
|
5.6
|
5.8
|
|
High-quality liquid assets (liquidity value)
($m)4,5
|
649,210
|
647,505
|
647,046
|
|
Liquidity coverage ratio (%)4,5,6
|
138
|
136
|
132
|
|
Net stable funding ratio (%)4,5,6,7
|
143
|
138
|
141
|
|
Share count
|
|
|
|
|
Period end basic number of $0.50 ordinary shares outstanding, after
deducting own shares held (millions)
|
17,918
|
19,006
|
19,739
|
|
Period end basic number of $0.50 ordinary shares outstanding and
dilutive potential ordinary shares, after deducting own shares held
(millions)
|
18,062
|
19,135
|
19,876
|
|
Average basic number of $0.50 ordinary shares outstanding, after
deducting own shares held (millions)
|
18,357
|
19,478
|
19,849
|
For reconciliation and analysis of our reported results on a
constant currency basis, including lists of notable items, see page
99 of the Annual Report and Accounts 2024. Definitions and
calculations of other alternative performance measures are included
in 'Reconciliation of alternative performance measures' on page 120
of the Annual Report and Accounts 2024.
1 In 2024, dividend per share includes the special
dividend of $0.21 per ordinary share arising from the proceeds of
the sale of our banking business in Canada to Royal Bank of
Canada.
2 In 2024 and 2023, our dividend payout ratio was
adjusted for material notable items and related impacts, including
all associated income statement impacts relating to those items. In
2022, our dividend payout ratio was adjusted for the loss on
classification to held for sale of our retail banking business in
France, items relating to the sale of our banking business in
Canada, and the recognition of certain deferred tax
assets.
3 Unless otherwise stated, regulatory capital ratios
and requirements are based on the transitional arrangements of the
Capital Requirements Regulation in force at the time. References to
EU regulations and directives (including technical standards)
should, as applicable, be read as references to the UK's version of
such regulation or directive, as onshored into UK law under the
European Union (Withdrawal) Act 2018, and as may be subsequently
amended under UK law.
4 Regulatory numbers and ratios are as presented at
the date of reporting. Small changes may exist between these
numbers and ratios and those submitted in regulatory filings. Where
differences are significant, we may restate in subsequent
periods.
5 The liquidity coverage ratio is based on the
average value of the preceding 12 months. The net stable funding
ratio is based on the average value of four preceding
quarters.
6 We enhanced our liquidity consolidation process in
2Q24 by revising provisions that addressed historical limitations.
As our Group LCR and NSFR are reported on an average basis, the
benefit of these changes incrementally increased our LCR and NSFR
by circa 3% and 11% during the year, respectively. Compared to year
ended 31 December 2023, the increase in LCR was mainly driven by
these enhancements. The associated NSFR increase driven by these
changes was partly offset by higher required stable funding
primarily due to a rise in financial investments and derivatives
activities.
7 We have enhanced our calculation processes during
1Q24 and our NSFR comparatives have been restated.
Highlights
|
|
Year ended 31 Dec
|
|
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Reported
|
|
|
|
Revenue1,3
|
65,854
|
66,058
|
|
Change in expected credit losses and other credit impairment
charges
|
(3,414)
|
(3,447)
|
|
Operating expenses5
|
(33,043)
|
(32,070)
|
|
Share of profit in associates and joint ventures less
impairment6
|
2,912
|
(193)
|
|
Profit before tax
|
32,309
|
30,348
|
|
Tax charge
|
(7,310)
|
(5,789)
|
|
Profit after tax
|
24,999
|
24,559
|
|
Constant currency2
|
|
|
|
Revenue1,3
|
65,854
|
64,912
|
|
Change in expected credit losses and other credit impairment
charges
|
(3,414)
|
(3,259)
|
|
Operating expenses5
|
(33,043)
|
(31,494)
|
|
Share of profit in associates and joint ventures less
impairment6
|
2,912
|
(256)
|
|
Profit before tax
|
32,309
|
29,903
|
|
Tax charge
|
(7,310)
|
(5,567)
|
|
Profit after tax
|
24,999
|
24,336
|
|
Notable items
|
|
|
|
Revenue
|
|
|
|
Disposals, acquisitions and related costs3,4
|
(1,343)
|
1,298
|
|
Fair value movements on financial instruments
|
-
|
14
|
|
Disposal losses on Markets Treasury repositioning
|
-
|
(977)
|
|
Early redemption of legacy securities
|
(237)
|
-
|
|
Operating expenses
|
|
|
|
Disposals, acquisitions and investment in new
businesses
|
(199)
|
(321)
|
|
Restructuring and other related costs5
|
(34)
|
136
|
|
Impairment of interest in
associate6
|
-
|
(3,000)
|
|
Tax
|
|
|
|
Tax credit on notable items
|
108
|
207
|
|
Uncertain tax positions
|
-
|
427
|
1 Net operating income before change in expected
credit losses and other credit impairment charges, also referred to
as revenue.
2 Constant currency performance is computed by
adjusting reported results of comparative periods for the effects
of foreign currency translation differences, which distort
period-on-period comparisons.
3 The amount in 2024 includes a $1.0bn loss on
disposal and a $5.2bn loss on the recycling in foreign currency
translation reserve losses and other reserves arising on sale of
our business in Argentina.This was partly offset by a gain of
$4.8bn gain on disposal of our banking business in Canada,
inclusive of a $0.3bn gain on the foreign exchange hedging of the
sales proceeds, the recycling of $0.6bn in foreign currency
translation reserve losses and $0.4bn of other reserves
losses.
4 The amount in 2023 includes the gain of $1.6bn
recognised in respect of the acquisition of SVB UK and the impact
of the sale of our retail banking operations in
France.
5 Amounts relate to restructuring provisions
recognised in 2024 and reversals of restructuring provisions
recognised during 2022.
6 Relates to an impairment loss of $3.0bn recognised
in respect of the Group's investment in BoCom. See Note 18 on page
401 to 402 of the Annual Report and Accounts 2024.
Group Chairman's shareholder letter
In 2024, global economic growth was mixed. In the West, the US
remained an outperformer, while growth across Europe was
disappointing. In Asia and the Middle East, there was broadly
steady growth. With inflation falling and with signs of the labour
market softening, the US Federal Reserve was able to start cutting
rates, as did most advanced economies.
This was against a backdrop of significant geopolitical
uncertainty, heightened by numerous and consequential elections
across the world. The war in Ukraine, now entering its fourth year,
and the conflicts and continuing tensions in the Middle East, have
had a tragic human impact. Our thoughts are with all those who have
suffered and continue to experience the devastating
consequences.
In this context, our focus is on our customers, leveraging our
global network to help them navigate the challenges and capture the
opportunities that emerge. That approach, combined with the
disciplined execution of our strategy, delivered another strong
financial performance and increased returns in 2024.
And we are very well positioned for the future.
HSBC's 160th Anniversary
2025 will mark HSBC's 160th anniversary.
In 1865, HSBC's founders started out with a clear and simple
objective: to establish a bank in Hong Kong and Shanghai that would
facilitate local and international trade, connecting East and West,
and the many places in-between.
That objective is as relevant and significant today as it was
then.
2024 progress and performance
In 2024, we delivered profit before tax of $32.3bn - an increase of
$2.0bn compared with 2023. Our return on average tangible equity
was 14.6%, or 16% excluding the impact of notable
items.
We delivered increased returns for our shareholders. The Board
approved a fourth quarterly dividend of $0.36 per share, bringing
the total dividend announced for 2024 to $0.87 per share. This
includes the special dividend of $0.21 per share that was paid in
June following the completion of the sale of HSBC Bank Canada. In
addition, we announced three share buy-backs in respect of 2024
worth a total of $9bn. And today, we announced a further share
buy-back of up to $2bn.
Since the start of 2023, we have repurchased 11% of the issued
share count. Combined with our sustained levels of profitability,
this led to greater earnings and dividends per share for our
shareholders.
Dividends paid in 2024, together with a more than 20% increase in
the share price, delivered a total shareholder return for the year
of more than 30%.
Our performance demonstrates that our strategy is working. To
maintain, and indeed accelerate, the momentum, we are being very
deliberate in creating investment capacity for priority areas,
focusing on long-term strategic growth.
Optimising cost and capital allocation, we completed the sale of
our businesses in Canada, Russia, Argentina, and Armenia, as well
as our retail banking operations in France and Mauritius. We
announced the planned sale of our business in South Africa and of
our private banking business in Germany, as well as the planned
sale of our life insurance business in France.
In parallel, our strategic investments are yielding significant
results. In Wealth, for instance, revenue grew by 18% in 2024,
including a 21% increase in fee and other income. The continued
inflow of Net New Invested Assets and growth in total customers
point to the material upside opportunity. In Hong Kong, for
instance, we added approximately 800k new-to-bank
customers.
At the same time, we secured multiple additional licences to expand
our operations in mainland China. In India, we received an approval
earlier this year to open bank branches in 20 new cities that are
at the centre of the expanding wealth and international
opportunity.
We will continue to focus on and invest in growth opportunities
where we have a clear competitive advantage.
Leadership and Board Changes
Following Noel Quinn's decision to retire as Group Chief Executive,
the Board ran a rigorous and robust process to appoint his
successor.
I would like to once again pay tribute to Noel's exceptional
leadership and thank him for his unwavering commitment and
dedication to HSBC during his 37 years of service. We wish him the
very best in all of his future endeavours.
In September, Georges Elhedery became our Group Chief Executive. He
brings a wealth of experience and an outstanding track record of
delivery, achieved over a career spent working in Asia, the Middle
East and Europe.
In a little over five months, he has already made his
mark.
From 1 January 2025, we began operating through four businesses:
Hong Kong, the UK, Corporate and Institutional Banking, and
International Wealth and Premier Banking. The objective is to
create a simpler and more dynamic organisation - with faster
decision-making and clear lines of accountability.
Georges was succeeded as Group Chief Financial Officer by Pam Kaur,
who joined the Board as an Executive Director, having previously
served as Group Chief Risk and Compliance Officer.
At the 2024 Annual General Meeting ('AGM'), David Nish retired from
the Board. David made invaluable contributions over eight years,
particularly as Chair of the Group Audit Committee and as Senior
Independent Director. Ann Godbehere took over as Senior Independent
Director. Ann's extensive financial services experience, over a
30-year career spanning insurance, retail and private banking, and
wealth management, positions her very well for this role. Brendan
Nelson took over as Chair of the Group Audit Committee. His UK and
international financial and auditing expertise and experience are
enormously valuable.
In 2024, the Board held meetings in mainland China, Dubai,
Singapore, New York, and London. On each occasion, we had the
privilege and pleasure to meet with valued clients, government
officials, regulators, and colleagues.
Our AGM in London and the Informal Meeting of our Hong Kong
Shareholders provided substantive opportunities to engage with our
shareholders, on important issues related to the
Group.
Global outlook
The economic outlook remains uncertain with potential downside
risks to global growth from trade frictions and supply chain
disruptions. Inflation has declined but is proving stubborn and
could be impacted by oil and gas prices, as well as any trade
tariffs.
Global growth is expected to remain fairly stable in 2025, with the
US still likely to remain the major engine of growth. However,
policy priorities are adding to uncertainties regarding growth
prospects around the world. Already, it appears that the
improvement in world trade growth may be starting to
falter.
In China, the package of fiscal and monetary measures announced in
the final quarter of 2024 was welcome and helped it reach its
annual target of 'around 5%' GDP growth. Aided by its
transformation to a consumption-led and innovation-focused economic
model, we expect it to deliver a comparable performance in 2025.
Hong Kong should also continue to expand, with its growth directly
linked to mainland China.
Elsewhere in Asia, changing supply chains and resilient local
demand helped to drive growth in a number of markets, including
India. Over the longer term, the demographic dividend will benefit
countries like India and markets across South and Southeast
Asia.
As this happens, we also continue to see great potential in the
fast-growing corridor between Asia and the Middle East, where
strong demographics combine with large scale capital spending on
infrastructure and further diversification, which are set to
continue.
In Europe, with inflation pressures easing and interest rates on a
downward trajectory, consumer spending should rise. As a result, we
expect the Eurozone to expand this year. Meanwhile, the new UK
government is pursuing a pro-growth agenda, which we fully
support.
Our people
I want to end by expressing the Board's immense appreciation and
gratitude to all our colleagues for driving our Group
forward.
All that we delivered in 2024 was only made possible by their
sustained efforts, energies, and execution focus. They are the
lifeblood of the HSBC Group, serving our customers and creating
value for shareholders.
Sir Mark E Tucker
Group Chairman
19 February 2025
Group CEO's shareholder letter
Dear fellow shareholders,
The opportunity to lead HSBC is a privilege. Even more so as we
celebrate our 160th anniversary. Like each of my predecessors, I
see my responsibility as delivering sustainable strategic growth
for our shareholders. This begins by putting our customers at the
centre of everything we do. Our financial strength, international
network, heritage, and brand mean we build upon firm
foundations.
We look to the future with confidence.
We begin from a position of strength, which is reinforced by our
2024 performance. During the year, we delivered a return on average
tangible equity ('RoTE') of 14.6%. This includes several notable
items, in particular related to strategic disposals. Excluding
these, our RoTE was 16.0%, achieving our 'mid-teens' target. Our
common equity tier 1 ('CET1') capital ratio was 14.9%, reflecting
our long-standing financial strength. With our continued focus on
cost discipline, we managed cost growth on our target basis of
around 5%, which was in line with our targeted cost growth. This
strong performance enabled us to announce $26.9 billion in returns
to our shareholders through dividends and share buy-backs, which we
expect to remain central to our strategy.
Simple, more agile, focused
The world in which we operate is changing quickly. We are adapting
to help our customers navigate new complexities. By doing so, we
will open up a world of opportunity as we serve their needs,
delivering on our strategy.
Since assuming the role in September, I have focused on injecting
energy and intent into the way we deliver our strategy. We are
being more agile in the way we allocate our resources and invest to
prepare for the future. That includes retiring non-strategic assets
and embracing the productive power of new technologies and tools to
modernise HSBC and enhance the way we serve our
customers.
We have renewed vigour in finding the efficiencies that will
optimise our resource allocation, be that geographical, business
line or balance sheet. This will enhance the way we actively and
dynamically manage costs and capital, and target
investments.
We will be guided by three overarching priorities:
- Focus
on our customers, delivering high levels of
satisfaction;
- Drive
long-term growth by focusing on our strengths, increasing our
leadership and market share in the areas where we can generate
attractive returns;
- Simplify
our structure and operating model. Reshape and rationalise our
portfolio, to meet the needs of a fast-changing
world.
To achieve this, I have put in place a smaller, core team of
exceptionally talented leaders. They are each committed to
fostering a culture of excellence for our colleagues, driven by a
growth-orientated mindset. HSBC's many talented colleagues around
the world are key to delivering the exceptional customer experience
that will drive our future growth.
We have also simplified the organisation in two important
ways.
First, by moving away from a complex matrix governance structure
built around three business lines and five geographical regions to
create four new businesses. Each firmly rooted in our core
strengths:
- Corporate
and Institutional Banking, which combines our two wholesale
businesses;
- International
Wealth and Premier Banking, to focus on accelerating the build out
of our global wealth proposition;
- Our
two home markets of Hong Kong and the UK, where we have scale and
market-leading positions.
HSBC's supporting infrastructure is being simplified and realigned
to enable these four businesses to grow.
Simply put, we are aligning our structure to our
strategy.
Second, we are significantly improving our operating model, led by
a tighter team at the Group Operating Committee, that
will:
- Provide
clarity of accountability, empower colleagues to make faster
decisions and accelerate the pace at which we generate greater
productivity;
- Make
HSBC simple, with fewer management lines and layers, and less
committees, designed to reduce bureaucracy, create closer
collaboration, emphasise teamwork, and facilitate the flow of ideas
and innovation;
- Adapt
quickly to the factors that are shaping the economies and
industries in which our customers operate;
- Sharpen
and strengthen our focus on capital efficiency and firm-wide risk
management.
This will create a step change in the way we work, the way we serve
customers and the way we generate sustainable strategic growth,
driving higher returns for our shareholders.
In short, unlocking HSBC's full potential.
Designed to deliver strong, sustainable strategic
growth
For 160 years, HSBC has been defined by its financial strength and
international network. Both remain enablers of everything we do.
What is changing is the clarity, speed and intensity with which we
are repositioning HSBC around our four complementary, clearly
differentiated businesses.
Corporate and Institutional Banking ('CIB') is an international
wholesale bank with significant competitive advantages. It has a
powerful deposit franchise with financing capabilities supported by
the strength of our balance sheet and our network. It has the
products and skills required to serve the global banking needs of
international corporate clients, particularly in transaction
banking where we continue to invest. This positions us to better
capture global and intra-regional flows as supply chains
reconfigure, new trade routes emerge, economies grow, and
customers' expectations of financial services evolve.
The future economy will require financing and investment in sectors
such as advanced technologies, specifically digitalisation,
computing and generative AI, as well as clean energy and
healthcare. CIB is well positioned to facilitate this by helping
entrepreneurs to secure the capital they need to build the
businesses of the future and by supporting our customers as they
look to decarbonise.
International Wealth and Premier Banking ('IWPB') is ideally placed
to capture the increasing number of affluent and high-net-worth
customers. Especially those with international banking needs who
seek new investment opportunities to help them to protect and grow
their wealth. Our recognised brand, financial strength and
complementary footprints across Asia and the Middle East serve to
reinforce HSBC's position in the world's fastest-growing wealth
markets. We also have an asset management business with distinct
specialism in both regions offering customers access to investment
opportunities across asset classes.
The Hong Kong and UK businesses give us strong platforms in our
home markets. We serve personal banking customers and small and
medium enterprises in these businesses. In Hong Kong specifically,
where HSBC was founded, Hang Seng Bank, a customer-centric
community bank, is a strategically important investment of the HSBC
Group, which enhances the strength of our franchise and
market-leading position. We also have a fast-growing insurance
manufacturing business in Hong Kong, leveraging the inflows that
are propelling Hong Kong to become the leading international wealth
hub. In the UK, we have a leading retail, commercial and
innovation-focused bank which continues to build market
share.
Customers in Hong Kong and the UK with global banking needs will be
able to access the power of our international network through our
CIB and IWPB businesses, that are anchored in these two leading
international financial centres.
Delivering on our priorities to customers and
shareholders
HSBC is a highly connected, global organisation. Our international
network is a significant differentiator.
By refocusing on our core strengths, we are creating a simple, more
agile, focused organisation structured to better serve our
customers and deliver for our shareholders.
We have taken the first deliberate and decisive steps. We continue
to move at pace and with a relentless focus on actively managing
our costs. Not as a one off, but as an embedded
mindset.
How we deliver on our three priorities is equally important. We are
instilling a culture of excellence, leadership and accountability
throughout the firm. We are also undergoing a comprehensive
transformation of our operations, modernising our infrastructure,
and investing in technology such as AI, generative AI, data and
analytics. This will enhance customer experience as well as drive
operational excellence.
The aim being to create a refocused, reinvigorated HSBC, firmly
rooted in four complementary businesses with the ambition to
generate high levels of total shareholder returns.
Today's actions define a confident future
I am confident about our future and what we can
achieve.
As we celebrate our 160th anniversary,
our history and heritage stand us in good stead. In so many ways,
adapting to new economic realities and technologies is what we have
always done. It brings out the best in our people and culture,
especially when acting as a trusted advisor to our customers as
they navigate the world's economic uncertainties and look towards
new opportunities.
As we look to the future, our strategic priorities are clear, our
leadership team is now in place, supported by a simplified
structure that enables action.
We have clarity on who we are and what we seek to achieve. We are
driven by a precision of purpose that guides the way we do
business, the values we uphold and the way we serve our customers,
colleagues and communities.
We are prioritising a high-performance culture where employees are
passionate about what they can achieve and rewarded for their
strong customer focus, skills, ambition and initiative. We will
invest in our people, one of our most valuable assets, providing
them with expansive career opportunities and supporting them in
developing future-focused skills, establishing HSBC as an employer
of choice and a great place to work.
A strong culture and effective leadership will be key to our
long-term success.
I would like to thank all of my colleagues for their valuable
contributions to our results. It is a privilege to work with such
talented people. Their dedication, commitment, and desire to
deliver for our customers differentiates HSBC and is key to
delivering long-term growth.
The actions we are taking will have clear and tangible impact. Our
ambition is to unlock HSBC's full potential for the benefit of all
our stakeholders, provide excellent customer outcomes that enhance
our franchise and brand, generating the strategic growth that will
deliver attractive returns for you, our shareholders.
Georges Elhedery
Group CEO
19 February 2025
Financial summary
|
|
Year ended 31 December
|
|
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
For the year
|
|
|
|
Profit before tax
|
32,309
|
30,348
|
|
Profit attributable to:
|
|
|
|
- ordinary shareholders of the parent company
|
22,917
|
22,432
|
|
Dividends on ordinary shares
|
15,348
|
10,492
|
|
|
|
|
|
|
At 31 December
|
|
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Total shareholders' equity
|
184,973
|
185,329
|
|
Total regulatory capital
|
172,386
|
171,204
|
|
Customer accounts
|
1,654,955
|
1,611,647
|
|
Total assets
|
3,017,048
|
3,038,677
|
|
Risk-weighted assets
|
838,254
|
854,114
|
|
|
|
|
|
Per ordinary share
|
$
|
$
|
|
Basic earnings per share
|
1.25
|
1.15
|
|
Dividend per ordinary share (in respect of the period)
|
0.87
|
0.61
|
|
Dividends per ordinary share (paid in the period)
|
0.82
|
0.53
|
|
Net asset value per ordinary share at period end1
|
9.26
|
8.82
|
|
Tangible net asset value per ordinary share at period
end2
|
8.61
|
8.19
|
|
|
|
|
|
Share information
|
|
|
|
Number of $0.50 ordinary shares in issue (millions)
|
17,947
|
19,263
|
|
Basic number of $0.50 ordinary shares outstanding
(millions)
|
17,918
|
19,006
|
|
Basic number of $0.50 ordinary shares outstanding and dilutive
potential ordinary shares (millions)
|
18,062
|
19,135
|
1 The definition of net asset value per
ordinary share is total shareholders' equity, less non-cumulative
preference shares and capital securities, divided by the number of
ordinary shares in issue, excluding own shares held by the company,
including those purchased and held in treasury.
2 The definition of tangible net asset
value per ordinary share is total ordinary shareholders' equity
excluding goodwill and other intangible assets (net of deferred
tax), divided by the number of basic ordinary shares in issue,
excluding own shares held by the company, including those purchased
and held in treasury.
Distribution of results by global business
|
Constant currency profit/(loss) before tax
|
||||
|
|
Year ended 31 Dec
|
|||
|
|
2024
|
2023
|
||
|
|
$m
|
%
|
$m
|
%
|
|
Wealth and Personal Banking
|
12,182
|
37.7
|
11,625
|
38.9
|
|
Commercial Banking
|
11,860
|
36.7
|
13,155
|
44.0
|
|
Global Banking and Markets
|
7,063
|
21.9
|
5,582
|
18.7
|
|
Corporate Centre
|
1,204
|
3.7
|
(459)
|
(1.6)
|
|
Profit before tax
|
32,309
|
100.0
|
29,903
|
100.0
|
|
|
Distribution of results by legal entity
|
Reported profit/(loss) before tax
|
||||
|
|
Year ended 31 Dec
|
|||
|
|
2024
|
2023
|
||
|
|
$m
|
%
|
$m
|
%
|
|
HSBC UK Bank plc
|
7,213
|
22.2
|
8,270
|
27.2
|
|
HSBC Bank plc
|
2,645
|
8.2
|
2,639
|
8.7
|
|
The Hongkong and Shanghai Banking Corporation Limited
|
20,470
|
63.4
|
16,167
|
53.3
|
|
HSBC Bank Middle East Limited
|
1,114
|
3.4
|
1,239
|
4.1
|
|
HSBC North America Holdings Inc.
|
832
|
2.6
|
518
|
1.7
|
|
HSBC Bank Canada
|
186
|
0.6
|
871
|
2.9
|
|
Grupo Financiero HSBC, S.A. de C.V.
|
730
|
2.3
|
805
|
2.6
|
|
Other trading entities1
|
1,829
|
5.7
|
2,359
|
7.8
|
|
- of which: other Middle East entities (including Oman,
Türkiye, Egypt and Saudi Arabia)
|
833
|
2.6
|
748
|
2.5
|
|
- of which: Saudi Awwal Bank
|
596
|
1.8
|
538
|
1.8
|
|
Holding companies, shared service centres and intra-Group
eliminations
|
(2,710)
|
(8.4)
|
(2,520)
|
(8.3)
|
|
Profit before tax
|
32,309
|
100.0
|
30,348
|
100.0
|
1 Other trading entities includes the
results of entities located in Oman, Türkiye, Egypt and Saudi
Arabia (including our share of the results of Saudi Awwal Bank)
which do not consolidate into HSBC Bank Middle East Limited.
Supplementary analysis is provided on page 120 in the Annual Report
and Accounts 2024 for a fuller picture of the MENAT regional
performance.
HSBC constant currency profit before tax and balance sheet
data
|
|
2024
|
||||
|
|
Wealth and
Personal
Banking
|
Commercial Banking
|
Global Banking and Markets
|
Corporate Centre
|
Total
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
Net operating income/(expense) before
change in expected credit losses and other credit impairment
charges1
|
28,674
|
21,580
|
17,529
|
(1,929)
|
65,854
|
|
- external
|
20,460
|
21,565
|
30,698
|
(6,869)
|
65,854
|
|
- inter-segment
|
8,214
|
15
|
(13,169)
|
4,940
|
-
|
|
of which: net interest income/(expense)2
|
20,352
|
17,261
|
7,488
|
(12,368)
|
32,733
|
|
Change in expected credit losses and other credit impairment
charges
|
(1,335)
|
(1,815)
|
(235)
|
(29)
|
(3,414)
|
|
Net operating income/(expense)
|
27,339
|
19,765
|
17,294
|
(1,958)
|
62,440
|
|
Total operating expenses
|
(15,204)
|
(7,906)
|
(10,231)
|
298
|
(33,043)
|
|
Operating profit/(loss)
|
12,135
|
11,859
|
7,063
|
(1,660)
|
29,397
|
|
Share of profit in associates and joint ventures less
impairment
|
47
|
1
|
-
|
2,864
|
2,912
|
|
Constant currency profit/(loss) before tax
|
12,182
|
11,860
|
7,063
|
1,204
|
32,309
|
|
|
%
|
%
|
%
|
%
|
%
|
|
Share of HSBC's constant currency profit before tax
|
37.7
|
36.7
|
21.9
|
3.7
|
100.0
|
|
Constant currency cost efficiency ratio
|
53.0
|
36.6
|
58.4
|
15.4
|
50.2
|
|
Constant currency balance sheet data
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
Loans and advances to customers (net)
|
447,085
|
306,926
|
169,516
|
7,131
|
930,658
|
|
Interests in associates and joint ventures
|
558
|
25
|
108
|
28,218
|
28,909
|
|
Total external assets
|
890,080
|
603,841
|
1,388,845
|
134,282
|
3,017,048
|
|
Customer accounts
|
823,267
|
490,475
|
340,898
|
315
|
1,654,955
|
|
Constant currency risk-weighted assets4
|
181,131
|
337,874
|
231,878
|
87,371
|
838,254
|
|
|
|
|
|
|
|
|
|
2023
|
||||
|
Net operating income/(expense) before change in expected credit
losses and other credit impairment charges1
|
26,848
|
22,396
|
15,771
|
(103)
|
64,912
|
|
- external
|
18,669
|
23,686
|
27,618
|
(5,061)
|
64,912
|
|
- inter-segment
|
8,179
|
(1,290)
|
(11,847)
|
4,958
|
-
|
|
of which: net interest income/(expense)2
|
19,902
|
16,289
|
6,860
|
(8,899)
|
34,152
|
|
Change in expected credit losses and other credit impairment
charges
|
(935)
|
(2,006)
|
(317)
|
(1)
|
(3,259)
|
|
Net operating income/(expense)
|
25,913
|
20,390
|
15,454
|
(104)
|
61,653
|
|
Total operating expenses
|
(14,352)
|
(7,234)
|
(9,872)
|
(36)
|
(31,494)
|
|
Operating profit/(loss)
|
11,561
|
13,156
|
5,582
|
(140)
|
30,159
|
|
Share of profit/(loss) in associates and joint
ventures3
|
64
|
(1)
|
-
|
(319)
|
(256)
|
|
Constant currency profit/(loss) before tax
|
11,625
|
13,155
|
5,582
|
(459)
|
29,903
|
|
|
%
|
%
|
%
|
%
|
%
|
|
Share of HSBC's constant currency profit before tax
|
38.9
|
44.0
|
18.7
|
(1.6)
|
100.0
|
|
Constant currency cost efficiency ratio
|
53.5
|
32.3
|
62.6
|
(35.0)
|
48.5
|
|
Constant currency balance sheet data
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
Loans and advances to customers (net)
|
444,856
|
301,103
|
170,868
|
262
|
917,089
|
|
Interests in associates and joint ventures
|
539
|
23
|
107
|
26,226
|
26,895
|
|
Total external assets
|
915,062
|
613,124
|
1,298,065
|
146,296
|
2,972,547
|
|
Customer accounts
|
792,710
|
465,095
|
321,226
|
582
|
1,579,613
|
|
Constant currency risk-weighted assets4
|
186,163
|
341,930
|
213,655
|
87,093
|
828,841
|
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
Corporate Centre includes $11.4bn (2023: $8.7bn) 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.
3 Includes an impairment loss of $3.0bn
recognised in respect of the Group's investment in BoCom in
2023.
4 Constant currency risk-weighted assets
are calculated using reported risk-weighted assets adjusted for the
effects of currency translation differences.
Consolidated income statement
for the year ended 31 December 2024
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Net interest income
|
32,733
|
35,796
|
|
- interest income1,2
|
108,631
|
100,868
|
|
- interest expense3
|
(75,898)
|
(65,072)
|
|
Net fee income
|
12,301
|
11,845
|
|
- fee income
|
16,266
|
15,616
|
|
- fee expense
|
(3,965)
|
(3,771)
|
|
Net income from financial instruments held for trading or managed
on a fair value basis4
|
21,116
|
16,661
|
|
Net income/(expense) from assets and liabilities of insurance
businesses, including related derivatives, measured at fair value
through profit or loss
|
5,901
|
7,887
|
|
Insurance finance (expense)/income
|
(5,978)
|
(7,809)
|
|
Insurance service result
|
1,310
|
1,078
|
|
- insurance revenue
|
2,752
|
2,259
|
|
- insurance service expense
|
(1,442)
|
(1,181)
|
|
Gain on acquisition5
|
-
|
1,591
|
|
Gains/(losses) recognised on sale of business
operations6
|
(1,752)
|
(61)
|
|
Other operating income/(expense)7
|
223
|
(930)
|
|
Net operating income before change in
expected credit losses and other credit impairment
charges8
|
65,854
|
66,058
|
|
Change in expected credit losses and other credit impairment
charges
|
(3,414)
|
(3,447)
|
|
Net operating income
|
62,440
|
62,611
|
|
Employee compensation and benefits
|
(18,465)
|
(18,220)
|
|
General and administrative expenses
|
(10,498)
|
(10,383)
|
|
Depreciation and impairment of property, plant and equipment and
right-of-use assets9
|
(1,845)
|
(1,640)
|
|
Amortisation and impairment of intangible assets
|
(2,235)
|
(1,827)
|
|
Total operating expenses
|
(33,043)
|
(32,070)
|
|
Operating profit
|
29,397
|
30,541
|
|
Share of profit in associates and joint ventures
|
2,912
|
2,807
|
|
Impairment of interest in associate
|
-
|
(3,000)
|
|
Profit before tax
|
32,309
|
30,348
|
|
Tax expense
|
(7,310)
|
(5,789)
|
|
Profit for the year
|
24,999
|
24,559
|
|
Attributable to:
|
|
|
|
- ordinary shareholders of the parent company
|
22,917
|
22,432
|
|
- other equity holders
|
1,062
|
1,101
|
|
- non-controlling interests
|
1,020
|
1,026
|
|
Profit for the year
|
24,999
|
24,559
|
|
|
$
|
$
|
|
Basic earnings per ordinary share
|
1.25
|
1.15
|
|
Diluted earnings per ordinary share
|
1.24
|
1.14
|
1 Interest income includes $93,388m (2023:
$88,657m) of interest recognised on financial assets measured at
amortised cost and $15,273m (2023: $12,134m) of interest recognised
on financial assets measured at fair value through other
comprehensive income. It also includes a net $237m loss related to
the early redemption of legacy securities.
2 Interest income is calculated using the
effective interest method and comprises interest recognised on
financial assets measured at either amortised cost or fair value
through other comprehensive income.
3 Interest expense includes $72,594m (2023:
$62,095m) of interest on financial instruments, excluding interest
on debt instruments issued by HSBC for funding purposes that are
designated under the fair value option to reduce an accounting
mismatch and on derivatives managed in conjunction with those debt
instruments included in interest expense.
4 Includes a $255m gain (2023: $315m loss)
on the foreign exchange hedging of the proceeds from the sale of
our banking business in Canada and a $114m mark-to-market gain
(2023:nil) on interest rate hedging of the portfolio of retained
loans post sale of our retail banking business in
France.
5 Gain recognised in respect of the
acquisition of SVB UK.
6 This line item has been updated to
include amounts from Other operating income relating to all sales
of business operations; in the 2023 Annual Report and Accounts,
this line item only reflected the disposal of our France retail
banking business. The amount in 2024 includes a $1.0bn loss
on disposal and a $5.2bn loss on the recycling in foreign currency
translation reserve losses and other reserves arising on sale of
our business in Argentina. This was partly offset by a gain of
$4.6bn, inclusive of the recycling of $0.6bn in foreign currency
translation reserve losses and $0.4bn of other reserves losses but
excluding the $255m gain on the foreign exchange hedging (see
footnote 4 above) on the sale of our banking business in Canada.
The amount in 2023 primarily reflected losses due to restrictions
impacting the recoverability of assets in Russia, partly offset by
a gain on sale of our retail banking operations in
France.
7 Other operating income/(expense) includes
a loss on net monetary positions of $1,187m (2023: $1,667m) as a
result of applying IAS 29 'Financial Reporting in Hyperinflationary
Economies'.
8 Net operating income before change in
expected credit losses and other credit impairment charges also
referred to as revenue.
9 Includes depreciation of the right-of-use
assets of $711m (2023: $663m).
Consolidated statement of comprehensive income
for the year ended 31 December 2024
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Profit for the year
|
24,999
|
24,559
|
|
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
|
163
|
2,599
|
|
- fair value gains/(losses)
|
41
|
2,381
|
|
- fair value losses/(gains) transferred to the income
statement on disposal
|
69
|
905
|
|
- expected credit (recoveries)/losses recognised in the
income statement
|
(6)
|
59
|
|
- disposal of subsidiary
|
85
|
-
|
|
- income taxes
|
(26)
|
(746)
|
|
Cash flow hedges
|
(52)
|
2,953
|
|
- fair value gains/(losses)
|
(282)
|
2,534
|
|
- fair value (gains)/losses reclassified to the income
statement
|
(135)
|
1,463
|
|
- disposal of subsidiary
|
262
|
-
|
|
- income taxes
|
103
|
(1,044)
|
|
Share of other comprehensive income/(expense) of associates and
joint ventures
|
462
|
47
|
|
- share for the year
|
462
|
47
|
|
Net finance income/(expenses) from insurance contracts
|
(142)
|
(364)
|
|
- before income taxes
|
(191)
|
(491)
|
|
- income taxes
|
49
|
127
|
|
Exchange differences
|
833
|
(204)
|
|
- foreign exchange losses reclassified to the income
statement on disposal of a foreign operation
|
5,816
|
-
|
|
- other exchange differences
|
(4,983)
|
(204)
|
|
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)
|
(228)
|
(314)
|
|
- before income taxes
|
(342)
|
(413)
|
|
- income taxes
|
114
|
99
|
|
Changes in fair value of financial liabilities designated at fair
value upon initial recognition arising from changes in own credit
risk
|
(439)
|
(1,219)
|
|
- before income taxes
|
(579)
|
(1,617)
|
|
- income taxes
|
140
|
398
|
|
Equity instruments designated at fair value through other
comprehensive income
|
99
|
(120)
|
|
- fair value gains/(losses)
|
141
|
(120)
|
|
- income taxes
|
(42)
|
-
|
|
Effects of hyperinflation
|
1,239
|
1,604
|
|
Other comprehensive income/(expense) for the year, net of
tax
|
1,940
|
4,983
|
|
Total comprehensive income/(expense) for the year
|
26,939
|
29,542
|
|
Attributable to:
|
|
|
|
- ordinary shareholders of the parent company
|
24,833
|
27,397
|
|
- other equity holders
|
1,062
|
1,101
|
|
- non-controlling interests
|
1,044
|
1,044
|
|
Total comprehensive income/(expense) for the year
|
26,939
|
29,542
|
|
Consolidated balance sheet
|
|
|
|
at 31 December 2024
|
|
|
|
|
At
|
|
|
|
31 Dec 2024
|
31 Dec 2023
|
|
|
$m
|
$m
|
|
Assets
|
|
|
|
Cash and balances at central banks
|
267,674
|
285,868
|
|
Hong Kong Government certificates of indebtedness
|
42,293
|
42,024
|
|
Trading assets
|
314,842
|
289,159
|
|
Financial assets designated and otherwise mandatorily measured at
fair value through profit or loss
|
115,769
|
110,643
|
|
Derivatives
|
268,637
|
229,714
|
|
Loans and advances to banks
|
102,039
|
112,902
|
|
Loans and advances to customers
|
930,658
|
938,535
|
|
Reverse repurchase agreements - non-trading
|
252,549
|
252,217
|
|
Financial investments
|
493,166
|
442,763
|
|
Assets held for sale
|
27,234
|
114,134
|
|
Prepayments, accrued income and other assets1
|
152,740
|
171,597
|
|
Current tax assets
|
1,313
|
1,536
|
|
Interests in associates and joint ventures
|
28,909
|
27,344
|
|
Goodwill and intangible assets
|
12,384
|
12,487
|
|
Deferred tax assets
|
6,841
|
7,754
|
|
Total assets
|
3,017,048
|
3,038,677
|
|
Liabilities
|
|
|
|
Hong Kong currency notes in circulation
|
42,293
|
42,024
|
|
Deposits by banks
|
73,997
|
73,163
|
|
Customer accounts
|
1,654,955
|
1,611,647
|
|
Repurchase agreements - non-trading
|
180,880
|
172,100
|
|
Trading liabilities
|
65,982
|
73,150
|
|
Financial liabilities designated at fair value
|
138,727
|
141,426
|
|
Derivatives
|
264,448
|
234,772
|
|
Debt securities in issue
|
105,785
|
93,917
|
|
Liabilities of disposal groups held for sale
|
29,011
|
108,406
|
|
Accruals, deferred income and other liabilities1
|
130,340
|
143,901
|
|
Current tax liabilities
|
1,729
|
2,777
|
|
Insurance contract liabilities
|
107,629
|
120,851
|
|
Provisions
|
1,724
|
1,741
|
|
Deferred tax liabilities
|
1,317
|
1,238
|
|
Subordinated liabilities
|
25,958
|
24,954
|
|
Total liabilities
|
2,824,775
|
2,846,067
|
|
Equity
|
|
|
|
Called up share capital
|
8,973
|
9,631
|
|
Share premium account
|
14,810
|
14,738
|
|
Other equity instruments
|
19,070
|
17,719
|
|
Other reserves
|
(10,282)
|
(8,907)
|
|
Retained earnings
|
152,402
|
152,148
|
|
Total shareholders' equity
|
184,973
|
185,329
|
|
Non-controlling interests
|
7,300
|
7,281
|
|
Total equity
|
192,273
|
192,610
|
|
Total liabilities and equity
|
3,017,048
|
3,038,677
|
1 In 2023 'Items in the course of
collection from other banks' ($6.3bn) were presented on the face of
the balance sheet but are now reported within 'Prepayments, accrued
income and other assets' in the Annual Report and Accounts 2024.
Similarly, 'Items in the course of transmission to other banks'
($7.3bn) are now presented within 'Accruals, deferred income and
other liabilities'.
Consolidated statement of changes in equity
for the year ended 31 December 2024
|
|
|
|
Other reserves
|
|
|
|
|
||||
|
|
Called up
share capital
and share
premium
|
Other
equity
instru-ments
|
Financial
assets at
FVOCI
reserve
|
Cash
flow
hedging
reserve
|
Foreign
exchange
reserve
|
Merger
and other
reserves1,2
|
Insurance
finance
reserve3
|
Retained earnings
1,4
|
Total
share-
holders'
equity
|
Non-
controlling
interests
|
Total
equity
|
|
|
$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 year
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
23,979
|
23,979
|
1,020
|
24,999
|
|
Other comprehensive income (net of tax)
|
-
|
-
|
259
|
(46)
|
863
|
5
|
(183)
|
1,018
|
1,916
|
24
|
1,940
|
|
- debt instruments at fair value through other comprehensive
income
|
-
|
-
|
62
|
-
|
-
|
-
|
-
|
-
|
62
|
16
|
78
|
|
- equity instruments designated at fair value through other
comprehensive income
|
-
|
-
|
75
|
-
|
-
|
-
|
-
|
-
|
75
|
24
|
99
|
|
- cash flow hedges
|
-
|
-
|
-
|
(312)
|
-
|
-
|
-
|
-
|
(312)
|
(2)
|
(314)
|
|
- changes in fair value of financial liabilities designated
at fair value upon initial recognition arising from changes in own
credit risk
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(439)
|
(439)
|
-
|
(439)
|
|
- property revaluation
|
-
|
-
|
-
|
-
|
-
|
5
|
-
|
-
|
5
|
-
|
5
|
|
- remeasurement of defined benefit
asset/liability
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(244)
|
(244)
|
16
|
(228)
|
|
- share of other comprehensive income of associates and joint
ventures
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
462
|
462
|
-
|
462
|
|
- effects of hyperinflation
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,239
|
1,239
|
-
|
1,239
|
|
- foreign exchange reclassified to income statement on
disposal of a foreign operation5
|
-
|
-
|
-
|
-
|
5,816
|
-
|
-
|
-
|
5,816
|
-
|
5,816
|
|
- other reserves reclassified to income statement on disposal
of a foreign operation
|
-
|
-
|
85
|
262
|
-
|
-
|
-
|
-
|
347
|
-
|
347
|
|
- insurance finance income/(expense) recognised in other
comprehensive income
|
-
|
-
|
-
|
-
|
-
|
-
|
(142)
|
-
|
(142)
|
-
|
(142)
|
|
- exchange differences
|
-
|
-
|
37
|
4
|
(4,953)
|
-
|
(41)
|
-
|
(4,953)
|
(30)
|
(4,983)
|
|
Total comprehensive income for the year
|
-
|
-
|
259
|
(46)
|
863
|
5
|
(183)
|
24,997
|
25,895
|
1,044
|
26,939
|
|
Shares issued under employee remuneration and
share plans
|
77
|
-
|
-
|
-
|
-
|
-
|
-
|
(77)
|
-
|
-
|
-
|
|
Capital securities issued6
|
-
|
3,601
|
-
|
-
|
-
|
-
|
-
|
-
|
3,601
|
-
|
3,601
|
|
Dividends to shareholders
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(16,410)
|
(16,410)
|
(690)
|
(17,100)
|
|
Redemption of securities7
|
-
|
(2,250)
|
-
|
-
|
-
|
-
|
-
|
-
|
(2,250)
|
-
|
(2,250)
|
|
Transfers8
|
-
|
-
|
-
|
-
|
-
|
(2,945)
|
-
|
2,945
|
-
|
-
|
-
|
|
Cost of share-based payment arrangements
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
529
|
529
|
-
|
529
|
|
Share buy-back9
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(11,043)
|
(11,043)
|
-
|
(11,043)
|
|
Cancellation of shares
|
(663)
|
-
|
-
|
-
|
-
|
663
|
-
|
-
|
-
|
-
|
-
|
|
Other movements
|
-
|
-
|
2
|
-
|
3
|
4
|
-
|
(687)
|
(678)
|
(335)
|
(1,013)
|
|
At 31 Dec 2024
|
23,783
|
19,070
|
(3,246)
|
(1,079)
|
(32,887)
|
26,328
|
602
|
152,402
|
184,973
|
7,300
|
192,273
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated statement of changes in equity
(continued)
|
|||||||||||
|
for the year ended 31 December 2023
|
|||||||||||
|
|
|
|
Other reserves
|
|
|
|
|
||||
|
|
Called up share capital and share premium
|
Other
equity
instru-ments
|
Financial assets at FVOCI reserve
|
Cash flow
hedging
reserve
|
Foreign
exchange
reserve
|
Merger
and other reserves1,2
|
Insurance
finance
reserve3
|
Retainedearnings
1,4
|
Total
share-
holders'
equity
|
Non-
controlling
interests
|
Total
equity
|
|
|
$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 year
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
23,533
|
23,533
|
1,026
|
24,559
|
|
Other comprehensive income (net of tax)
|
-
|
-
|
2,402
|
3,030
|
(211)
|
1
|
(371)
|
114
|
4,965
|
18
|
4,983
|
|
- debt instruments at fair value through other comprehensive
income
|
-
|
-
|
2,574
|
-
|
-
|
-
|
-
|
-
|
2,574
|
25
|
2,599
|
|
- equity instruments designated at fair value through other
comprehensive income
|
-
|
-
|
(93)
|
-
|
-
|
-
|
-
|
-
|
(93)
|
(27)
|
(120)
|
|
- cash flow hedges
|
-
|
-
|
-
|
2,919
|
-
|
-
|
-
|
-
|
2,919
|
34
|
2,953
|
|
- changes in fair value of financial liabilities designated
at fair value upon initial recognition arising from changes in own
credit risk
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,220)
|
(1,220)
|
1
|
(1,219)
|
|
- property revaluation
|
-
|
-
|
-
|
-
|
-
|
1
|
-
|
-
|
1
|
-
|
1
|
|
- remeasurement of defined benefit
asset/liability
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(317)
|
(317)
|
3
|
(314)
|
|
- share of other comprehensive income of associates and joint
ventures
|
-
|
-
|
-
|
-
|
-
|
-
|
|
47
|
47
|
-
|
47
|
|
- effects of hyperinflation
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,604
|
1,604
|
-
|
1,604
|
|
- insurance finance income/(expense) recognised in other
comprehensive income
|
-
|
-
|
-
|
-
|
-
|
-
|
(364)
|
-
|
(364)
|
-
|
(364)
|
|
- exchange differences
|
-
|
-
|
(79)
|
111
|
(211)
|
-
|
(7)
|
-
|
(186)
|
(18)
|
(204)
|
|
Total comprehensive income for the year
|
-
|
-
|
2,402
|
3,030
|
(211)
|
1
|
(371)
|
23,647
|
28,498
|
1,044
|
29,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued under employee remuneration and
share plans
|
79
|
-
|
-
|
-
|
-
|
-
|
-
|
(79)
|
-
|
-
|
-
|
|
Capital securities issued
|
-
|
1,996
|
-
|
-
|
-
|
-
|
-
|
-
|
1,996
|
-
|
1,996
|
|
Dividends to shareholders
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(11,593)
|
(11,593)
|
(603)
|
(12,196)
|
|
Redemption of securities
|
-
|
(4,023)
|
-
|
-
|
-
|
-
|
-
|
20
|
(4,003)
|
-
|
(4,003)
|
|
Transfers8
|
-
|
-
|
-
|
-
|
-
|
(5,130)
|
-
|
5,130
|
-
|
-
|
-
|
|
Cost of share-based payment arrangements
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
482
|
482
|
-
|
482
|
|
Share buy-back
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(7,025)
|
(7,025)
|
-
|
(7,025)
|
|
Cancellation of shares
|
(521)
|
-
|
-
|
-
|
-
|
521
|
-
|
-
|
-
|
-
|
-
|
|
Other movements
|
-
|
-
|
1,129
|
(255)
|
(967)
|
-
|
77
|
(843)
|
(859)
|
(524)
|
(1,383)
|
|
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 Cumulative goodwill amounting to $5,138m
was charged against reserves in respect of acquisitions of
subsidiaries prior to 1 January 1998, including $3,469m charged
against the merger reserve arising on the acquisition of HSBC Bank
plc. The balance of $1,669m was charged against retained
earnings.
2 Statutory share premium relief under
section 131 of the Companies Act 1985 was taken in respect of the
acquisition of HSBC Bank plc in 1992, HSBC Continental Europe
in 2000 and HSBC Finance Corporation in 2003, and the shares issued
were recorded at their nominal value only. In HSBC's consolidated
financial statements, the fair value differences of $8,290m in
respect of HSBC Continental Europe and $12,768m in respect of HSBC
Finance Corporation were recognised in the merger reserve. The
merger reserve created on the acquisition of HSBC Finance
Corporation subsequently became attached to HSBC Overseas Holdings
(UK) Limited, following a number of intra-Group reorganisations,
and has since been transferred to retained earnings as part of the
impairment recognised in respect of HSBC Overseas Holding (UK)
Limited. During 2009, pursuant to section 131 of the Companies Act
1985, statutory share premium relief was taken in respect of the
rights issue and $15,796m was recognised in the merger
reserve.
3 The insurance finance reserve reflects
the impact of the 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').
4 At 31 December 2024, retained earnings
included 28,744,609 own shares held. These include own shares held
within HSBC's insurance business's retirement funds for the benefit
of policyholders or beneficiaries within employee trusts for the
settlement of shares expected to be delivered under employee share
schemes or bonus plans, and the market-making activities in Markets
and Securities Services.
5 At 31 December 2024, accumulated foreign
currency translation reserve losses of $5,816m were recycled to the
income statement, including $5,166m upon completion of the sale of
our business in Argentina and $564m upon completion of the sale of
our banking business in Canada.
6 HSBC Holdings issued SGD1,500m 5.250%
contingent convertible securities in June 2024, and a further
$1,350m 6.875% and $1,150m 6.950% contingent convertible securities
in September 2024. All instruments were recorded net of
issuance costs.
7 In September 2024, HSBC Holdings redeemed
its $2,250m 6.375% contingent convertible securities.
8 At 31 December 2024, an impairment of
$11,442m (2023: $5,512m) of HSBC Overseas Holdings (UK) Limited was
recognised, resulting in a permitted transfer of $2,945m (2023:
$5,130m) from the remaining historical merger reserve to retained
earnings, and a realisation of nil share-based payment reserve
(2023: $382m) within retained earnings.
9 HSBC Holdings announced the following
share buy-backs during the year: a share buy-back of up to $2.0bn
in February 2024, which was completed in April 2024; a share
buy-back of up to $3.0bn in April 2024, which was completed in July
2024; a share buy-back of up to $3.0bn in July 2024, which was
completed in October 2024; and a share buy-back of up to $3.0bn in
October 2024, which was completed in February 2025.
|
Consolidated statement of cash flows
|
||
|
for the year ended 31 December 2024
|
||
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Profit before tax
|
32,309
|
30,348
|
|
Adjustments for non-cash items:
|
|
|
|
Depreciation, amortisation and impairment
|
4,080
|
3,466
|
|
Net loss from investing activities
|
180
|
1,213
|
|
Share of profit in associates and joint ventures
|
(2,912)
|
(2,807)
|
|
Impairment of interest in associate
|
-
|
3,000
|
|
(Gain)/loss on acquisition/disposal of subsidiaries, businesses,
associates and joint ventures
|
1,704
|
(1,775)
|
|
Change in expected credit losses gross of recoveries and other
credit impairment charges
|
3,674
|
3,717
|
|
Provisions including pensions
|
299
|
266
|
|
Share-based payment expense
|
529
|
482
|
|
Other non-cash items included in profit before tax
|
(5,290)
|
(4,299)
|
|
Elimination of exchange differences1
|
26,734
|
(10,678)
|
|
Changes in operating assets and liabilities
|
|
|
|
Change in net trading securities and derivatives
|
(41,385)
|
(63,247)
|
|
Change in loans and advances to banks and customers
|
7,275
|
(14,145)
|
|
Change in reverse repurchase agreements - non-trading
|
(4,227)
|
(2,095)
|
|
Change in financial assets designated and otherwise mandatorily
measured at fair value
|
(20,662)
|
(9,994)
|
|
Change in other assets
|
7,685
|
(10,254)
|
|
Change in deposits by banks and customer accounts
|
44,237
|
45,021
|
|
Change in repurchase agreements - non-trading
|
8,700
|
43,366
|
|
Change in debt securities in issue
|
11,942
|
11,945
|
|
Change in financial liabilities designated at fair
value
|
(2,248)
|
10,097
|
|
Change in other liabilities
|
(1,603)
|
8,742
|
|
Dividends received from associates
|
1,062
|
1,067
|
|
Contributions paid to defined benefit plans
|
(167)
|
(208)
|
|
Tax paid
|
(6,611)
|
(4,117)
|
|
Net cash from operating activities
|
65,305
|
39,111
|
|
Purchase of financial investments
|
(523,454)
|
(563,561)
|
|
Proceeds from the sale and maturity of financial
investments
|
453,502
|
504,174
|
|
Net cash flows from the purchase and sale of property, plant and
equipment
|
(1,344)
|
(1,145)
|
|
Net cash flows from disposal of loan portfolio and customer
accounts
|
-
|
623
|
|
Net investment in intangible assets
|
(2,542)
|
(2,550)
|
|
Net cash inflow on acquisition/disposal of subsidiaries,
businesses, associates and joint ventures2
|
9,891
|
1,239
|
|
Net cash outflow on acquisition/disposal of subsidiaries,
businesses, associates and joint ventures3
|
(12,617)
|
(1,692)
|
|
Net cash from investing activities
|
(76,564)
|
(62,912)
|
|
Issue of ordinary share capital and other equity
instruments
|
3,602
|
1,996
|
|
Cancellation of shares
|
(11,348)
|
(5,812)
|
|
Net purchases of own shares for market-making and investment
purposes
|
(541)
|
(614)
|
|
Net cash flow from change in stake of subsidiaries
|
-
|
(19)
|
|
Redemption of preference shares and other equity
instruments
|
(3,433)
|
(4,003)
|
|
Subordinated loan capital issued
|
4,361
|
5,237
|
|
Subordinated loan capital repaid4
|
(2,000)
|
(2,147)
|
|
Dividends paid to shareholders of the parent company and
non-controlling interests
|
(17,100)
|
(12,196)
|
|
Net cash from financing activities
|
(26,459)
|
(17,558)
|
|
Net decrease in cash and cash equivalents
|
(37,718)
|
(41,359)
|
|
Cash and cash equivalents at 1 Jan
|
490,933
|
521,671
|
|
Exchange differences in respect of cash and cash
equivalents
|
(18,275)
|
10,621
|
|
Cash and cash equivalents at 31
Dec5
|
434,940
|
490,933
|
|
|
|
|
|
Cash and cash equivalents comprise:
|
|
|
|
- cash and balances at central banks
|
267,674
|
285,868
|
|
- loans and advances to banks of one month or
less
|
69,803
|
76,620
|
|
- reverse repurchase agreements with banks of one month or
less
|
58,290
|
64,341
|
|
- treasury bills, other bills and certificates of deposit
less than three months7
|
27,307
|
33,303
|
|
- cash collateral, net settlement accounts and items in
course of collection from/transmission to other banks
|
9,827
|
14,866
|
|
- cash and cash equivalents held for sale6
|
2,039
|
15,935
|
|
Cash and cash equivalents at 31
Dec5
|
434,940
|
490,933
|
Interest received was $110,106m (2023: $98,910m), interest paid was
$81,680m (2023: $65,980m) and dividends received (excluding
dividends received from associates, which are presented separately
above) were $2,812m (2023: $1,869m).
1 Adjustment to bring changes between
opening and closing balance sheet amounts to average rates. This is
not done on a line-by-line basis, as details cannot be determined
without unreasonable expense.
2 This includes $9.3bn from the sale of our
banking business in Canada.
3 This includes $10.6bn from the sale of
our retail banking business in France and $1.8bn from the sale of
our business in Argentina.
4 Subordinated liabilities changes during
the year are attributable to repayments of $(2.0)bn (2023:
$(2.1)bn) of securities. Non-cash changes during the year included
foreign exchange gains/losses of $1.6bn gain (2023: $0.6bn loss)
and fair value gains/losses of $1.0bn
gain (2023: $0.8bn loss).
5 At 31 December 2024, $50.4bn (2023:
$61.8bn) was not available for use by HSBC due to a range of
restrictions, including currency exchange and other
restrictions.
6 Includes
$1.9bn (2023: $5.6bn) of cash and balances at central banks and
$0.1bn (2023: $10.5bn) of loans and advances to banks of one month
or less. There is nil balance in 2024 for reverse repurchase
agreements with banks of one month or less (2023: $0.2bn) and cash
collateral, net settlement accounts and items in course of
collection from / transition to other banks (2023:
$(0.4)bn).
7 The amount in this line is included in
the 'Financial investments' and 'Financial assets designated and
otherwise mandatorily measured at fair value through profit or
loss' line items in the Consolidated balance sheet on page
14.
1 Basis of preparation and material accounting
policies
The basis of preparation and summary of material accounting
policies applicable to the consolidated financial statements of
HSBC and the separate financial statements of HSBC Holdings can be
found in Note 1, or the relevant Note, in the Financial Statements
in the Annual Report and Accounts 2024.
(a) Compliance with International Financial Reporting
Standards
The consolidated financial statements of HSBC and the separate
financial statements of HSBC Holdings comply with UK-adopted
international accounting standards and with the requirements of the
Companies Act 2006, and have also applied international financial
reporting standards adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union. These financial
statements are also prepared in accordance with International
Financial Reporting Standards as issued by the International
Accounting Standards Board ('IFRS Accounting Standards'), including
interpretations issued by the IFRS Interpretations Committee, as
there are no applicable differences from IFRS Accounting Standards
for the periods presented. There were no unendorsed standards
effective for the year ended 31 December 2024 affecting
these consolidated and separate financial
statements.
IFRS Accounting Standards adopted during the year ended 31 December
2024
There were no new standards, amendments to standards or
interpretations that had an effect on these financial statements.
Accounting policies have been applied consistently.
(b) Differences between IFRS Accounting Standards and Hong
Kong Financial Reporting Standards
There are no significant differences between IFRS Accounting
Standards and Hong Kong Financial Reporting Standards in terms of
their application to HSBC, and consequently there would be no
significant differences had the financial statements been prepared
in accordance with Hong Kong Financial Reporting Standards. The
'Notes on the financial statements', taken together with the
'Report of the Directors' in the Annual Report and Accounts 2024,
include the aggregate of all disclosures necessary to satisfy IFRS
Accounting Standards and Hong Kong Financial Reporting
Standards.
(c) 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, liquidity, capital
requirements and capital resources.
These considerations include stressed scenarios that reflect the
uncertainty in the macroeconomic environment following uncertain
inflation, rapidly changing interest rates, slower Chinese economic
activity, and disrupted supply chains as a result of the
Russia-Ukraine war, conflict in the Middle East and US-China
tensions. They also included other top and emerging risks,
including climate change, as well as the related impacts on
profitability, capital and liquidity.
|
|
2 Tax
|
Tax expense
|
||
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Current tax1
|
6,115
|
5,718
|
|
- for this year
|
5,863
|
5,737
|
|
- adjustments in respect of prior years
|
31
|
(19)
|
|
- Pillar 2 and qualifying domestic top-up taxes
|
221
|
-
|
|
Deferred tax
|
1,195
|
71
|
|
- origination and reversal of temporary
differences
|
1,288
|
19
|
|
- effect of changes in tax rates
|
(2)
|
17
|
|
- adjustments in respect of prior years
|
(91)
|
35
|
|
Year ended 31 Dec2
|
7,310
|
5,789
|
1 Current tax included Hong Kong profits
tax of $1,615m (2023: $1,328m). The Hong Kong tax rate applying to
the profits of subsidiaries assessable in Hong Kong was 16.5%
(2023: 16.5%).
2 In addition to amounts recorded in the
income statement, a tax credit of $12m (2023:
credit of $41m) was recorded directly to
equity.
Tax reconciliation
The tax charged to the income statement differs from the tax charge
that would apply if all profits had been taxed at the UK
corporation tax rate as follows:
|
|
2024
|
2023
|
||
|
|
$m
|
%
|
$m
|
%
|
|
Profit before tax
|
32,309
|
|
30,348
|
|
|
Tax expense
|
|
|
|
|
|
Taxation at UK corporation tax rate of 25.0% (2023:
23.5%)
|
8,077
|
25.0
|
7,132
|
23.5
|
|
Impact of differently taxed overseas profits in overseas
locations
|
(1,351)
|
(4.2)
|
(612)
|
(2.0)
|
|
UK banking surcharge
|
215
|
0.7
|
350
|
1.2
|
|
Items increasing tax charge in 2024:
|
|
|
|
|
|
- tax impact of sale of HSBC Argentina
|
1,536
|
4.8
|
-
|
-
|
|
- local taxes and overseas withholding taxes
|
584
|
1.8
|
419
|
1.4
|
|
- movements in unrecognised deferred tax
|
259
|
0.7
|
(22)
|
(0.1)
|
|
- impacts of hyperinflation
|
327
|
1.0
|
348
|
1.1
|
|
- other permanent disallowables
|
344
|
1.0
|
227
|
0.7
|
|
- Global Minimum Tax top-up charge
|
221
|
0.7
|
-
|
-
|
|
- bank levy
|
73
|
0.2
|
112
|
0.4
|
|
- movements in provisions for uncertain tax
positions
|
38
|
0.1
|
(472)
|
(1.6)
|
|
- impact of changes in tax rates
|
6
|
-
|
17
|
0.1
|
|
- impairment of interest in associate
|
-
|
-
|
705
|
2.3
|
|
Items reducing tax charge in 2024:
|
|
|
|
|
|
- non-taxable gain on disposal of HSBC Canada
|
(1,174)
|
(3.6)
|
-
|
-
|
|
- non-taxable income and gains
|
(1,079)
|
(3.3)
|
(1,189)
|
(3.9)
|
|
- effect of profits in associates and joint
ventures
|
(456)
|
(1.4)
|
(571)
|
(1.9)
|
|
- deductions for AT1 coupon payments
|
(249)
|
(0.8)
|
(229)
|
(0.7)
|
|
- adjustments in respect of prior period
|
(46)
|
(0.1)
|
16
|
0.1
|
|
- tax impact of sale of French retail banking
business
|
(15)
|
-
|
-
|
-
|
|
- accounting gain on acquisition of SVB UK
|
-
|
-
|
(442)
|
(1.5)
|
|
Year ended 31 Dec
|
7,310
|
22.6
|
5,789
|
19.1
|
The Group's profits are taxed at different rates depending on the
country or territory in which the profits arise. The key applicable
tax rates for 2024 include Hong Kong (16.5%), the US (21%) and the
UK (25%). If the Group's profits were taxed at the statutory rates
of the countries in which the profits arose, then the tax rate for
the year would have been 21.4% (2023: 22.6%).
The effective tax rate for the year of 22.6% was higher than in the
previous year (2023: 19.1%). The effective tax rate for the year
was reduced by 3.6% by the non-taxable gain arising on the disposal
of HSBC Canada, increased by 4.8% by the non-deductible loss
arising on the disposal of HSBC Argentina, increased by 70.0% by
movements in unrecognised deferred tax, primarily relating to
French tax losses, and increased by 70.0% by the Group's Pillar 2
Global Minimum Tax charge. The effective tax rate for 2023 was
increased by 2.3% by the non-taxable impairment of the Group's
investment in BoCom, reduced by 1.6% by the release of provisions
for uncertain tax positions and reduced by 1.5% by the non-taxable
accounting gain on the acquisition of SVB UK.
In July 2023, the UK enacted legislation to introduce the 'Pillar
Two' global minimum tax model rules of the OECD's Inclusive
Framework on Base Erosion and Profit Shifting ('BEPS') and a UK
qualified domestic minimum top-up tax, with effect from 1 January
2024. Under the Pillar Two rules, a top-up tax liability arises
where the Group's effective tax rate in a jurisdiction is below
15%. The Group has recorded a Pillar Two global minimum tax charge
of $221m for the period, primarily related to the non-taxation of
dividends and income on government bonds in Hong Kong (which have
the effect of reducing the effective tax rate from the statutory
rate of 16.5% to below 15%) and low or nil statutory tax rates in
jurisdictions such as Bermuda and the Channel Islands. For the
current period, this tax expense will be substantially payable in
the UK by HSBC Holdings.
Many jurisdictions have introduced or announced the introduction of
domestic minimum tax rules that are closely aligned to the OECD's
Pillar Two model rules, as well as new or amended corporate income
tax rules, with effect from 2024 or 2025. As and when such taxes
are introduced, they will have the effect of increasing local tax
liabilities, eliminating or reducing the top-up tax liability
payable in the UK by HSBC Holdings in respect of those
jurisdictions. Hong Kong, Bermuda and the Channel Islands have
introduced such new tax rules with effect from 1 January
2025.
Accounting for taxes involves some estimation because tax law is
uncertain and its application requires a degree of judgement, which
authorities may dispute. Liabilities are recognised based on best
estimates of the probable outcome, taking into account external
advice where appropriate. Exposures relating to legacy tax cases
were reassessed during 2024, resulting in a charge of $38m to the
income statement. We do not expect significant liabilities to arise
in excess of the amounts provided. HSBC only recognises current and
deferred tax assets where recovery is probable.
|
Movement of deferred tax assets and liabilities
|
|||||||
|
|
Loan
impairment
provisions
|
Unused tax
losses and
tax credits
|
Financial assets at FVOCI
|
Cash flow hedges
|
Retirement obligations
|
Other
|
Total
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
Assets
|
1,158
|
4,544
|
876
|
419
|
-
|
2,933
|
9,930
|
|
Liabilities
|
-
|
-
|
-
|
-
|
(1,814)
|
(1,600)
|
(3,414)
|
|
At 1 Jan 2024
|
1,158
|
4,544
|
876
|
419
|
(1,814)
|
1,333
|
6,516
|
|
Income statement
|
(74)
|
(640)
|
100
|
-
|
(85)
|
(431)
|
(1,130)
|
|
Other comprehensive income
|
-
|
-
|
(49)
|
84
|
114
|
189
|
338
|
|
Foreign exchange and other adjustments
|
(14)
|
(40)
|
(311)
|
(61)
|
18
|
208
|
(200)
|
|
At 31 Dec 2024
|
1,070
|
3,864
|
616
|
442
|
(1,767)
|
1,299
|
5,524
|
|
Assets1
|
1,070
|
3,864
|
616
|
442
|
-
|
2,906
|
8,898
|
|
Liabilities1
|
-
|
-
|
-
|
-
|
(1,767)
|
(1,607)
|
(3,374)
|
|
|
|
|
|
|
|
|
|
|
Assets
|
1,062
|
4,397
|
850
|
1,271
|
-
|
3,048
|
10,628
|
|
Liabilities
|
-
|
-
|
-
|
-
|
(1,673)
|
(1,567)
|
(3,240)
|
|
At 1 Jan 2023
|
1,062
|
4,397
|
850
|
1,271
|
(1,673)
|
1,481
|
7,388
|
|
Income statement
|
(39)
|
102
|
541
|
1
|
(114)
|
(562)
|
(71)
|
|
Other comprehensive income
|
-
|
-
|
(598)
|
(974)
|
99
|
399
|
(1,074)
|
|
Foreign exchange and other adjustments
|
135
|
45
|
83
|
121
|
(126)
|
15
|
273
|
|
At 31 Dec 2023
|
1,158
|
4,544
|
876
|
419
|
(1,814)
|
1,333
|
6,516
|
|
Assets1
|
1,158
|
4,544
|
876
|
419
|
-
|
2,933
|
9,930
|
|
Liabilities1
|
-
|
-
|
-
|
-
|
(1,814)
|
(1,600)
|
(3,414)
|
1 After netting off balances within
countries, the balances as disclosed in the accounts are as
follows: deferred tax assets of $6,841m (2023: $7,754m) and
deferred tax liabilities of $1,317m (2023: $1,238m).
In applying judgement in recognising deferred tax assets,
management has assessed all relevant information, including future
business profit projections and the track record of meeting
forecasts. Management's assessment of the likely availability of
future taxable profits against which to recover deferred tax assets
is based on the most recent financial forecasts approved by
management, which cover a five-year period and are extrapolated
where necessary, and takes into consideration the reversal of
existing taxable temporary differences and past business
performance. When forecasts are extrapolated beyond five years, a
number of different scenarios are considered, reflecting different
downward risk adjustments, in order to assess the sensitivity of
our recognition and measurement conclusions in the context of such
longer-term forecasts.
The Group's net deferred tax asset of $5.5bn (2023: $6.5bn)
included $2.6bn (2022: $3.3bn) of deferred tax assets relating to
the UK, $3.0bn (2023: $3.1bn) of deferred tax assets relating to
the US and a net deferred asset of $0.5bn (2023: $0.9bn) in
France.
The UK deferred tax asset of $2.6bn excluded a $1.8bn deferred tax
liability arising on the UK pension scheme surplus, the reversal of
which is not taken into account when estimating future taxable
profit due to the level of uncertainty as to the timing and manner
of its reversal. The UK deferred tax assets are supported by
forecasts of taxable profit, also taking into consideration the
history of profitability in the relevant businesses. The majority
of the deferred tax asset relates to tax attributes which do not
expire and are forecast to be recovered within 3 years and as such
are less sensitive to changes in long-term profit
forecasts.
The net US deferred tax asset of $3.0bn included $1.2bn related to
US tax losses, of which $0.9bn expire in 10 to 15 years. Management
expects the US deferred tax asset to be substantially recovered
within 13 years, with the majority recovered in the first five
years.
The net deferred tax asset in France of $0.5bn included $0.5bn
related to tax losses, which are expected to be substantially
recovered within
12 years. Unused tax losses with a tax value of $0.2bn have not
been recognised due to the absence of convincing evidence regarding
the availability of sufficient future taxable profits against which
to recover them.
Unrecognised deferred tax
The amount of gross temporary differences, unused tax losses and
tax credits for which no deferred tax asset is recognised in the
balance sheet was $11.0bn (2023: $10.4bn). This amount included
unused US state tax losses of $3.8bn (2023: $4.0) for which there
is insufficient evidence of future taxable profits to support
recognition, and unused UK tax losses of $0.7bn (2023: nil) for
which there is insufficient evidence of future taxable profits to
support recognition, and unused UK tax losses of $3.5bn (2023:
$4.5bn), which arose prior to 1 April 2017 and can only be
recovered against future taxable profits of HSBC Holdings. No
deferred tax was recognised on these losses due to the absence of
convincing evidence regarding the availability of sufficient future
taxable profits against which to recover them. Deferred tax asset
recognition is reassessed at each balance sheet date based on the
available evidence. Of the total amounts on which deferred tax was
not recognised, $6.0bn (2023: $5.1bn) had no expiry date, $1.0bn
(2023: $0.5bn) was scheduled to expire within 10 years and the
remaining balance is expected to expire after 10
years.
Deferred tax is not recognised in respect of the Group's
investments in subsidiaries and branches where HSBC is able to
control the timing of remittance or other realisation and where
remittance or realisation is not probable in the foreseeable
future. The aggregate temporary differences relating to
unrecognised deferred tax liabilities arising on investments in
subsidiaries and branches was $15.2bn (2023: $14.4bn) and the
corresponding unrecognised deferred tax liability was $0.7bn (2023:
$0.7bn).
3 Dividends
|
Dividends to shareholders of the parent company
|
||||
|
|
2024
|
2023
|
||
|
|
Per
share
|
Total
|
Per
share
|
Total
|
|
|
$
|
$m
|
$
|
$m
|
|
Dividends paid on ordinary shares
|
|
|
|
|
|
In respect of previous year:
|
|
|
|
|
|
- second interim dividend
|
-
|
-
|
0.23
|
4,589
|
|
- 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
|
-
|
-
|
|
- second interim dividend
|
0.10
|
1,852
|
0.10
|
1,956
|
|
- third interim dividend
|
0.10
|
1,805
|
0.10
|
1,946
|
|
Total
|
0.82
|
15,348
|
0.53
|
10,492
|
|
Total coupons on capital securities classified as
equity
|
|
1,062
|
|
1,101
|
|
Dividends to shareholders
|
|
16,410
|
|
11,593
|
On 6 January 2025, HSBC paid a coupon on its €1,250m
subordinated capital securities, representing a total distribution
of €30m ($31m). No liability was recorded in the balance
sheet at 31 December 2024 in respect of this coupon
payment.
Fourth interim dividend for 2024
On 19 February 2025, the Directors approved a fourth interim
dividend in respect of the financial year ended 31 December 2024 of
$0.36 per ordinary share (the 'dividend'), an expected distribution
of approximately $6.4bn. The dividend will be payable on 25 April
2025 to holders of record on the Principal Register in the UK, the
Hong Kong Overseas Branch Register or the Bermuda Overseas Branch
Register on 7 March 2025. No liability was recorded in
the financial statements in respect of the fourth interim dividend
for 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 14 April 2025. The
ordinary shares in London, Hong Kong and Bermuda will be quoted
ex-dividend on 6 March 2025. American Depositary Shares ('ADSs') in
New York will be quoted ex-dividend on 7 March 2025.
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 pounds 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 pounds
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 10 April 2025 to
be effective for this dividend.
The dividend will be payable on ADSs, each of which represents five
ordinary shares, on 25 April 2025 to holders of record on
7 March 2025. The dividend of $1.80 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 4 April 2025.
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 7 March 2025 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 7 March 2025.
Any person wishing to remove ordinary shares to or from each
register must do so before 4.00pm local time on 6 March
2025.
Shares repurchased under HSBC Holdings plc buy-backs, which have
not yet been cancelled from the Hong Kong custodians' CCASS account
as at the record date, will not be eligible for the
dividend.
Transfers of ADSs must be lodged with the depositary by 11.00am on
7 March 2025 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.
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,
after deducting 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
|
||||||
|
|
2024
|
2023
|
||||
|
|
Profit
|
Number of shares
|
Per share
|
Profit
|
Number of shares
|
Per share
|
|
|
$m
|
(millions)
|
$
|
$m
|
(millions)
|
$
|
|
Basic1
|
22,917
|
18,357
|
1.25
|
22,432
|
19,478
|
1.15
|
|
Effect of dilutive potential ordinary shares
|
|
128
|
|
|
122
|
|
|
Diluted1
|
22,917
|
18,485
|
1.24
|
22,432
|
19,600
|
1.14
|
1 Weighted average number of ordinary
shares outstanding (basic) or assuming dilution (diluted) after
deducting own shares held.
The number of anti-dilutive employee share options excluded from
the weighted average number of dilutive potential ordinary shares
was Nil (2023: 23 million).
|
|
5 Constant currency balance sheet
reconciliation
|
|
At
|
|||
|
|
31 Dec 2024
|
31 Dec 2023
|
||
|
|
Reported and constant currency
|
Constant currency
|
Currency translation
|
Reported
|
|
|
$m
|
$m
|
$m
|
$m
|
|
Loans and advances to customers (net)
|
930,658
|
917,089
|
21,446
|
938,535
|
|
Interests in associates and joint ventures
|
28,909
|
26,895
|
449
|
27,344
|
|
Total external assets
|
3,017,048
|
2,972,547
|
66,130
|
3,038,677
|
|
Customer accounts
|
1,654,955
|
1,579,613
|
32,034
|
1,611,647
|
|
|
6 Reported and constant currency
results1
|
|
Year ended
|
|
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Revenue2
|
|
|
|
Reported
|
65,854
|
66,058
|
|
Currency translation
|
-
|
(1,146)
|
|
Constant currency
|
65,854
|
64,912
|
|
Change in expected credit losses and other credit impairment
charges
|
|
|
|
Reported
|
(3,414)
|
(3,447)
|
|
Currency translation
|
-
|
188
|
|
Constant currency
|
(3,414)
|
(3,259)
|
|
Operating expenses
|
|
|
|
Reported
|
(33,043)
|
(32,070)
|
|
Currency translation
|
-
|
576
|
|
Constant currency
|
(33,043)
|
(31,494)
|
|
Share of profit in associates and joint ventures less
impairment
|
|
|
|
Reported3
|
2,912
|
(193)
|
|
Currency translation
|
-
|
(63)
|
|
Constant currency
|
2,912
|
(256)
|
|
Profit before tax
|
|
|
|
Reported
|
32,309
|
30,348
|
|
Currency translation
|
-
|
(445)
|
|
Constant currency
|
32,309
|
29,903
|
1 In the current period constant currency
results are equal to reported as there is no currency
translation.
2 Net operating income before change in
expected credit losses and other credit impairment charges, also
referred to as revenue.
3 Amounts in 2023 relate to an impairment
loss of $3.0bn recognised in respect of the Group's investment in
BoCom. See Note 18 on page 402 of the Annual Report and Accounts
2024.
|
Notable items
|
||
|
|
Year ended
|
|
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Revenue
|
|
|
|
Disposals, acquisitions and related costs1
|
(1,343)
|
1,298
|
|
Fair value movements on financial instruments2
|
-
|
14
|
|
Restructuring and other related costs
|
-
|
-
|
|
Disposal losses on Markets Treasury repositioning
|
-
|
(977)
|
|
Operating expenses
|
|
|
|
Disposals, acquisitions and related costs
|
(199)
|
(321)
|
|
Restructuring and other related costs3
|
(34)
|
136
|
|
Impairment of interest in
associate4
|
-
|
(3,000)
|
|
Tax
|
|
|
|
Tax credit on notable items
|
108
|
207
|
|
Uncertain tax positions
|
-
|
427
|
1 Amounts in 2024 include a $1.0bn loss on
disposal and a $5.2bn loss on the recycling in foreign currency
translation reserve losses and other reserves arising on sale of
our business in Argentina. This is partly offset by $4.8bn gain on
disposal of our banking business in Canada, inclusive of a $0.3bn
gain on the foreign exchange hedging of the sales proceeds, the
recycling of $0.6bn in foreign currency translation reserve losses
and $0.4bn of other reserves losses.
2 Fair value movements on non-qualifying
hedges in HSBC Holdings.
3 Amounts relate to restructuring
provisions recognised in 2024 and reversals of restructuring
provisions recognised during 2022.
4 Amounts in 2023 relate to an impairment
loss of $3.0bn recognised in respect of the Group's investment in
BoCom. See Note 18 on page 402 of the Annual Report and Accounts
2024.
|
|
7 Contingent liabilities, contractual
commitments and guarantees
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Guarantees and other contingent liabilities:
|
|
|
|
- financial guarantees
|
16,998
|
17,009
|
|
- performance and other guarantees
|
92,723
|
94,277
|
|
- other contingent liabilities
|
298
|
636
|
|
At 31 Dec
|
110,019
|
111,922
|
|
Commitments1:
|
|
|
|
- documentary credits and short-term trade-related
transactions
|
7,096
|
7,818
|
|
- forward asset purchases and forward deposits
placed
|
61,017
|
78,535
|
|
- standby facilities, credit lines and other commitments to
lend
|
793,465
|
810,797
|
|
At 31 Dec
|
861,578
|
897,150
|
1 Includes $619,367m of commitments at 31
December 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 are 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 28 of the Annual Report and Accounts
2024.
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, regulatory
and other matters against Group companies are excluded from this
note but are disclosed in Notes 28 and 35 of the Annual Report and
Accounts 2024.
Financial Services Compensation Scheme
The Financial Services Compensation Scheme ('FSCS') provides
compensation, up to certain limits, to eligible customers of
financial services firms that are unable, or likely to be unable,
to pay claims against them. The FSCS may impose a further levy on
the Group to the extent the industry levies imposed to date are not
sufficient to cover the compensation due to customers in any future
possible collapse. The ultimate FSCS levy to the industry as a
result of a collapse cannot be estimated reliably. It is dependent
on various uncertain factors including the potential recovery of
assets by the FSCS, changes in the level of protected products
(including deposits and investments) and the population of FSCS
members at the time.
Associates
HSBC's share of associates' contingent liabilities, contractual
commitments and guarantees amounted to $74.5bn at 31 December 2024
(2023: $69.9bn). No matters arose where HSBC was severally
liable.
8 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 2024. 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 31 December 2024 (see Note 28 of the Annual
Report and Accounts 2024). 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.
Trustee litigation: The
Madoff Securities trustee (the 'Trustee') has brought lawsuits in
the US against various HSBC companies and others seeking recovery
of alleged transfers from Madoff Securities to the HSBC companies
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 Trustee has filed a claim against various HSBC companies in the
High Court of England and Wales seeking recovery of alleged
transfers from Madoff Securities to the HSBC companies. The claim
has not yet been served and the amount claimed has not been
specified.
Fairfield Funds litigation:
Fairfield Sentry Limited, Fairfield Sigma Limited and Fairfield
Lambda Limited (together, the 'Fairfield Funds') (in liquidation)
have brought lawsuits in the US against various HSBC companies and
others seeking recovery of alleged transfers from the Fairfield
Funds to the HSBC companies (that acted as nominees for clients) in
the amount of $382m (plus interest). Fairfield Funds' claims
against most of the HSBC companies have been dismissed, but remain
pending on appeal before the US Court of Appeals for the Second
Circuit. Fairfield Funds' claims against HSBC Private Bank (Suisse)
SA ('PBRS') and HSBC Securities Services Luxembourg ('HSSL') have
not been dismissed and are ongoing before the US Bankruptcy Court
for the Southern District of New York. PBRS and HSSL have appealed
the decision not to dismiss them and these appeals are pending
before the US Court of Appeals for the Second
Circuit.
Herald Fund SPC ('Herald') litigation: HSSL
and HSBC Bank plc are defending an action brought by Herald (in
liquidation) before the Luxembourg District Court seeking
restitution of securities and cash in the amount of $2.5bn (plus
interest), or damages in the amount of $5.6bn (plus interest). In
2013, the Luxembourg District Court dismissed Herald's securities
restitution claim and stayed the cash restitution and damages
claims. In December 2024, the Luxembourg Court of Appeal reversed
the Luxembourg District Court's dismissal and determined that
Herald's claims for restitution of securities and cash were founded
in principle. HSSL has appealed this decision. Herald's claim
against HSBC Bank plc is pending.
Alpha Prime Fund Limited ('Alpha Prime')
litigation: Various HSBC
companies are defending a number of actions brought by Alpha Prime
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.
In November 2024, Alpha Prime served various HSBC companies with a
lawsuit filed in the Bermuda Supreme Court seeking damages for
unspecified amounts for alleged breach of contract and negligence.
This claim is currently stayed.
Senator Fund SPC ('Senator') litigation: HSSL and the Luxembourg branch of HSBC Bank plc
are defending a number of actions brought by Senator 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 these 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, which has been paid. In January 2023, the
European Court of Justice dismissed an appeal by HSBC and upheld
the EC's findings on HSBC's liability. In November 2024, the
General Court of the European Union rejected a separate appeal by
HSBC concerning the amount of the fine. This matter is now
closed.
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. Two individual US dollar Libor-related
actions seeking damages from HSBC 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. Lawsuits
alleging foreign exchange-related misconduct remain pending against
HSBC and other banks in courts in Brazil.
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. Both the Competition Commission and HSBC
Bank plc have appealed to the Constitutional Court of South
Africa.
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.
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.
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.
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 have been defending a class action 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. In January 2025, the court approved a
settlement reached with the plaintiffs to resolve this action. This
matter is now closed.
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.
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.
Tax-related investigations
Since 2023, the French National Financial Prosecutor has been
investigating 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 has been
investigating HSBC and four other banks for suspected
anti-competitive conduct in relation to the historical trading of
gilts and related derivatives. This matter is nearing conclusion.
The impact on HSBC is not expected to be significant.
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. Certain of the
defendants, including HSBC Bank plc and HSBC Securities (USA) Inc.,
have reached a settlement with the plaintiffs to resolve this
matter. The settlement remains subject to court approval. 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.
Korean short selling indictment
In March 2024, the Korean Prosecutors' Office issued a criminal
indictment against The Hongkong and Shanghai Banking Corporation
Limited ('HBAP') 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. In February 2025, the
Korean court acquitted HBAP of all charges. The Korean Prosecutors'
Office has the right to appeal this decision. Proceedings against
the individual defendants have been suspended.
First Citizens 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 Silicon
Valley Bank ('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.
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. Nearly all of these lawsuits have either been settled or
dismissed; one action remains 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.
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.
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 unspecified damages. In January 2025, the court denied
the defendants' motion to dismiss the plaintiffs' third amended
complaint, and this action is proceeding.
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.
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.
9 Impairment of interest in
associate
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 or reversal.
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 amount. No further
impairment was required for the year ended 31 December
2024.
If the Group did not have significant influence in BoCom, the
investment would be carried at fair value rather than the current
carrying amount.
On 24 September 2024, the People's Bank of China, National
Financial Regulatory Administration and China Securities Regulatory
Commission announced several policies aimed at promoting growth and
economic development. These included monetary stimulus, property
market support and capital market strengthening measures, as well
as measures to recapitalise the largest commercial banks. In the
absence of further details on how the recapitalisation of the
largest commercial banks may be enacted, there is no change to the
impairment test result at 31 December 2024. As further details
become available, the impairment test will be updated to reflect
their impact and may result in a change to the carrying value of
our investment in BoCom. These developments have the potential to
impact on the Group's reported earnings, but are unlikely to have
an impact on HSBC's capital or capital ratios.
We remain supportive of our relationship with BoCom and will
consider any broader implications on the carrying value of our
investment as further details become available.
At 31 December 2024, the carrying amount of the investment was
$22.4bn (2023: $21.2bn) with fair value of $11.6bn (2023: $8.8bn).
The Group has concluded there is no indication of further
impairment (or indication that an impairment may no longer exist or
may have decreased) since 31 December 2023. As part of this
assessment, the Group updated the VIU calculation which supported
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 31 December
2024.
For further details, see Note 18: Interests in associates and
joint ventures on page 401 of our Annual Report and Accounts
2024.
10 Events after the balance sheet date
A fourth interim dividend for 2024 of $0.36 per ordinary share (a
distribution of approximately $6.4bn was approved by the Directors
after 31 December 2024. On 19 February 2025, HSBC Holdings
announced a share buy-back to purchase its ordinary shares up to a
maximum consideration of $2.0bn, which is expected to commence
shortly and complete by our first quarter 2025 results
announcement. On 30 January 2025, HSBC Holdings called $1,750m
2.999% fixed rate/floating rate senior unsecured and $500m floating
rate senior unsecured securities. These securities are expected to
be redeemed and cancelled on 10 March 2025. On 7 February 2025,
HSBC Holdings called $2,450m 6.375% perpetual subordinated
contingent convertible securities which are expected to be redeemed
and cancelled on 30 March 2025. The accounts were approved by
the Board of Directors on 19 February 2025 and authorised for
issue.
11 Capital structure
|
Capital ratios
|
||
|
|
At 31 Dec
|
|
|
|
2024
|
2023
|
|
|
%
|
%
|
|
Transitional basis
|
|
|
|
Common equity tier 1 ratio
|
14.9
|
14.8
|
|
Tier 1 ratio
|
17.2
|
16.9
|
|
Total capital ratio
|
20.6
|
20.0
|
|
|
|
|
|
End point basis
|
|
|
|
Common equity tier 1 ratio
|
14.9
|
14.8
|
|
Tier 1 ratio
|
17.2
|
16.9
|
|
Total capital ratio
|
20.1
|
19.6
|
|
Total regulatory capital and risk-weighted assets
|
||
|
|
At 31 Dec
|
|
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Transitional basis
|
|
|
|
Common equity tier 1 capital
|
124,911
|
126,501
|
|
Additional tier 1 capital
|
19,216
|
17,662
|
|
Tier 2 capital
|
28,259
|
27,041
|
|
Total regulatory capital
|
172,386
|
171,204
|
|
Risk-weighted assets
|
838,254
|
854,114
|
|
|
|
|
|
End point basis
|
|
|
|
Common equity tier 1 capital
|
124,911
|
126,501
|
|
Additional tier 1 capital
|
19,216
|
17,662
|
|
Tier 2 capital
|
24,401
|
22,894
|
|
Total regulatory capital
|
168,528
|
167,057
|
|
Risk-weighted assets
|
838,254
|
854,114
|
|
Leverage ratio
|
|
|
|
|
At 31 Dec
|
|
|
|
2024
|
2023
|
|
|
$bn
|
$bn
|
|
Tier 1 capital
|
144.1
|
144.2
|
|
Total leverage ratio exposure
|
2,571.1
|
2,574.8
|
|
|
%
|
%
|
|
Leverage ratio
|
5.6
|
5.6
|
12 Statutory accounts
The information in this news release does not constitute statutory
accounts within the meaning of section 434 of the Companies
Act 2006 ('the Act'). The statutory accounts for the year
ended 31 December 2024 will be delivered to the Registrar of
Companies in England and Wales in accordance with section 441
of the Act. The auditor has reported on those accounts. Its report
was unqualified and did not contain a statement under section
498(2) or (3) of the Act.
13 Dealings in HSBC Holdings plc listed
securities
The Group has policies and procedures that, except where permitted
by statute and regulation, prohibit specified transactions in
respect of its securities listed on The Stock Exchange of Hong Kong
Limited. Except for dealings as intermediaries or as trustees by
subsidiaries of HSBC Holdings, and purchases by HSBC Holdings under
the share buy-backs, neither HSBC Holdings nor any of its
subsidiaries has purchased, sold or redeemed any of its securities
listed on The Stock Exchange of Hong Kong Limited during the
year ended 31 December 2024.
14 Interim dividends for 2025
As previously communicated, we established and achieved a target
dividend payout ratio of 50% of earnings per ordinary share ('EPS')
for 2023 and 2024, excluding the special dividend. EPS for this
purpose excludes material notable items and related impacts.
Material notable items in 2023 and 2024 included the sale of our
businesses in Canada and Argentina, the sale of our retail banking
operations in France, 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 on 29 March 2024, as the gain on
sale 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. The Board has
established a target dividend payout ratio of 50% for 2025, subject
to meeting capital requirements.
Dividends are approved in US dollars and, at the election of the
shareholder, paid in cash in one of, or in a combination of, US
dollars, pounds sterling and Hong Kong dollars.
15 Distributable reserves
As at 31 December 2024, the distributable reserves of HSBC Holdings
were $28.3bn, inclusive of $24.8bn in profits and other reserves
movements generated in 2024. As at the date of this news release,
HSBC Holdings intends to increase its distributable reserves
subject to shareholder and court approval. Shareholder approval
will be sought at the 2025 Annual General Meeting ('AGM'). The
process will involve the conversion of the amount standing to the
credit of each of the share premium account ($14.8bn) and capital
redemption reserve ($1.8bn) as at 31 December 2024 into retained
earnings, and will have no impact on regulatory capital. Further
information will be included in the Notice of the 2025 AGM which
will be circulated to shareholders on 21 March 2025. The process is
expected to complete by the end of July 2025.
16 Earnings releases and interim results
First and third quarter results for 2025 will be released on 29
April 2025 and 28 October 2025, respectively. The interim results
for the six months to 30 June 2025 will be issued on 30 July
2025.
17 Corporate governance codes
HSBC is subject to corporate governance requirements in both the UK
and Hong Kong. During 2024, HSBC complied with the provisions and
requirements of both the UK and Hong Kong Corporate Governance
Codes.
Under the Hong Kong Corporate Governance Code, the audit committee
should be responsible for the oversight of all risk management and
internal control systems. During 2024, the Board approved changes
to the scope of the Group Audit Committee's responsibilities in
relation to internal controls to extend these to cover oversight of
the effectiveness of all internal controls. HSBC's Group Risk
Committee retains oversight of internal controls relating to risk
management and risk management systems and provides input to the
Group Audit Committee on these.
HSBC Holdings 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 HKEx. The Group has been granted certain waivers by HKEx from
strict compliance with rules that take into account accepted
practices in the UK, particularly in respect of employee share
plans. During the year, all Directors were reminded of their
obligations in respect of transacting in HSBC Group securities.
Following specific enquiry all Directors have confirmed that they
have complied with their obligations.
The Group Audit Committee has reviewed and provided assurance to
support the HSBC Holdings Board's approval and publication of the
Annual Report and Accounts 2024.
The Directors of HSBC Holdings plc as at the date of this
announcement comprise:
Sir Mark Edward Tucker*, Georges Bahjat Elhedery, Geraldine Joyce
Buckingham†,
Rachel Duan†,
Dame Carolyn Julie Fairbairn†,
James Anthony Forese†,
Ann Frances Godbehere†,
Steven Craig Guggenheimer†,
Manveen (Pam) Kaur, Dr José Antonio Meade
Kuribreña†,
Kalpana Jaisingh Morparia†,
Eileen K Murray†,
Brendan Robert Nelson† and
Swee Lian Teo†.
* Non-executive Group Chairman
† Independent non-executive Director
18 Cautionary statement regarding forward-looking
statements
This news release may contain projections, estimates, forecasts,
targets, commitments, ambitions, opinions, prospects, results,
returns and forward-looking statements with respect to the
financial condition, results of operations, capital position, ESG
related matters, strategy and business of the Group which can be
identified by the use of forward-looking terminology such as 'may',
'will', 'should', 'expect', 'anticipate', 'project', 'estimate',
'seek', 'intend', 'target', 'plan', 'believe', 'potential' or
'reasonably possible', or the negatives thereof or other variations
thereon or comparable terminology (together, 'forward-looking
statements'), including the strategic priorities and any financial,
investment and capital targets and any ESG ambitions, targets and
commitments described herein.
Any such forward-looking statements are not a reliable indicator of
future performance, as they may involve significant stated or
implied assumptions and subjective judgements which may or may not
prove to be correct. There can be no assurance that any of the
matters set out in forward-looking statements are attainable, will
actually occur or will be realised or are complete or accurate. The
assumptions and judgements may prove to be incorrect and involve
known and unknown risks, uncertainties, contingencies and other
important factors, many of which are outside the control of the
Group.
Actual achievements, results, performance or other future events or
conditions may differ materially from those stated, implied and/or
reflected in any forward-looking statements due to a variety of
risks, uncertainties and other factors (including without
limitation those which are referable to general market or economic
conditions, regulatory and government policy changes, including in
relation to trade and tariff policies, increased volatility in
interest rates and inflation levels and other macroeconomic risks,
geopolitical tensions such as the Russia-Ukraine war and the
conflict in the Middle East and potential resurgence, continuation
or escalation thereof, specific economic developments, such as the
uncertain performance of the commercial real estate sector in
mainland China, or as a result of data limitations and changes in
applicable methodologies in relation to ESG related
matters).
Any such forward-looking statements are based on the beliefs,
expectations and opinions of the Group at the date the statements
are made, and the Group does not assume, and hereby disclaims, any
obligation or duty to update, revise or supplement them if
circumstances or management's beliefs, expectations or opinions
should change. For these reasons, recipients should not place
reliance on, and are cautioned about relying on, any
forward-looking statements. No representations or warranties,
expressed or implied, are given by or on behalf of the Group as to
the achievement or reasonableness of any projections, estimates,
forecasts, targets, commitments, ambitions, prospects or returns
contained herein.
Additional detailed information concerning important factors,
including but not limited to ESG related factors, that could cause
actual results to differ materially from this news release is
available in our Annual Report and Accounts for the fiscal year
ended 31 December 2024, which we expect to file with the U.S.
Securities and Exchange Commission on Form 20-F on or around 20
February 2025.
19 Use of alternative performance measures
This news release contains non-IFRS measures used by management
internally that constitute alternative performance measures under
European Securities and Markets Authority guidance and non-GAAP
financial measures defined in and presented in accordance with US
Securities and Exchange Commission rules and regulations
('alternative performance measures'). The primary alternative
performance measures we use are presented on a 'constant currency'
basis which is computed by adjusting reported results for the
effects of foreign currency translation differences, which distort
period-on-period comparisons. We consider constant currency
performance to provide useful information for investors by aligning
internal and external reporting, and reflecting how management
assesses period-on-period performance. We separately disclose
'notable items', which are components of our income statement that
management would consider as outside the normal course of business
and generally non-recurring in nature. Reconciliations between
alternative performance measures and the most directly comparable
measures under IFRS are provided in our Annual Report and Accounts
2024, which is available at www.hsbc.com.
20 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 subsidiaries. Within this document
the Hong Kong Special Administrative Region of the People's
Republic of China is referred to as 'Hong Kong'. When used in the
terms 'shareholders' equity' and 'total shareholders' equity',
'shareholders' means holders of HSBC Holdings ordinary shares and
those preference shares 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.
21 For further information contact:
|
Media Relations
UK - Gillian James
Telephone: +44 (0)7584 404 238
Email: [email protected]
Hong Kong - Aman Ullah
Telephone: +852 3941 1120
Email: [email protected]
|
Investor Relations
UK - Neil Sankoff
Telephone: +44 (0) 20 7991 5072
Email: [email protected]
Hong Kong - Yafei Tian
Telephone: +852 2899 8909
Email: [email protected]
|
22 Registered Office and Group Head Office
8 Canada Square
London E14 5HQ
United Kingdom
Web: www.hsbc.com
Incorporated in England and Wales with limited liability.
Registration number 617987
Please click on the following link to view the associated data
pack:
http://www.rns-pdf.londonstockexchange.com/rns/6198X_1-2025-2-19.pdf
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
|
HSBC
Holdings plc
|
|
|
|
|
|
|
By:
|
|
|
Name:
Aileen Taylor
|
|
|
Title:
Group Company Secretary and Chief Governance Officer
|
|
|
|
|
|
Date:
19 February 2025
|