HSBC HOLDINGS PLC Delivering while de-levering · 13.05.2008 · UBS Conference - Delivering while...
Transcript of HSBC HOLDINGS PLC Delivering while de-levering · 13.05.2008 · UBS Conference - Delivering while...
HSBC HOLDINGS PLC
Delivering while de-leveringDOUGLAS FLINTCHIEF FINANCE DIRECTOR
13 MAY 2008:
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Forward-looking statements
This presentation and subsequent discussion may contain certain forward-looking statements with respect to the financial condition, results of operations and business of the Group.
These forward-looking statements represent the Group’s expectations or beliefs concerning future events and involve known and unknown risks and uncertainty that could cause actual results, performance or events to differ materially from those expressed or implied in such statements.
Additional detailed information concerning important factors that could cause actual results to differ materially is available in our Annual Report.
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The challenge for banks in 2008
•Restore trust and transparency
•Redefine business model and prove sustainable returns
•Address volatility in capital requirements and profits
• Engage to avoid disproportionate regulatory / political response
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Results by geography and customer groupProfit before tax: US$24.2bn
Customer group % share % change 2007 vs 2006
+24
-38
+5+19
-50 -20 10 40 70
n/a
24%
25%
6%
30%
15% Personal Financial Services Commercial Banking Global Banking and Markets Private BankingOther
Geography % share % change 2007 vs 2006
-98+23
+57
+26+26
-130 -100 -70 -40 -10 20 50 80
50%
5%9%
36%Asia Pacific (50%)Middle East (5%)Latin America (9%)Europe (36%)North America (0%)
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0.490.61
0.69
0.540.66
0.80
0.630.76
0.99
1.18
1.36 1.40
1.65
0.350.41
0.31
0.900.81
0.730.660.60
0.530.480.440.340.310.280.22
0.10 0.12 0.14 0.16
0.00
0.50
1.00
1.50
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Earnings Per Share Dividends Per Share
Where we have come fromFinancial performance over 15 years
(1) UK gaap to 2003, IFRS basis from 2004(2) Dividends per share in respect of each year
US$
Asian crisis
Argentine crisis
Sub-primecrisis
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Signature capital strength: Tier 1 capital ratios (%)
8.4%8.3%7.9%7.6%
0.9%1.1%1.1%1.3%
9.3%8.9% 9.0% 9.4%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2004 2005 2006 2007
Shareholders' equity, minority interest and preference shares less deductions Innovative Tier 1 capital
Basel 2Tier 1:9.0%
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Capital allocated focussedBusiness models which define our ‘right to win’
Products where global scaleis critical to effectiveness: efficiency, expertise and brand
3 Global Product Platforms(eg Cards, HSBC Direct)
Businesses with international customerswhere Emerging Markets connectivity is critical
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Businesses with local customers where efficiency can be achieved through global scale
2 Mass Market(PFS)
Small & Medium Sized Businesses
(CMB)
Personal Financial Services125 millioncustomers
Commercial Banking
2.8 millioncustomers
Private Banking95,944 customers
Global Banking andMarkets
4,193 customersCIB
Mass Affluent
(PFS)Corporates
HNWI
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Inter-connectivity is increasing… being at both ends matters
Developed | Developed
Emerging | Emerging
Developed | EmergingEmerging | Developed
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Backdrop to 2008
• De-leveraging of the financial system •Conservative balance sheet with strong capital base
•Emphasis on Emerging Markets gives us a better position compared to many of our competitors
• Emerging markets; increasingly strong long term drivers for growth
HSBCThe World
•We are underway in reconfiguring our US business to dovetail fully with our Group strategy
• US economy likely to get worse before it gets better
•Strong asset-liability position and conservative advance-deposit ratio• Continuing illiquidity in financial services
•Leadership in servicing trade based on unique international connectivity
• World economic growth and continued trends in globalisation and trade flows
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Delivering in a de-leveraging world
Using capital and liquidity strength to
build long term shareholder value
Targeting efficiency and high value segments in
developed markets
Continue to build out organically and selectively
through acquisition in emerging markets
Reinforcing our global linkages and sustained
customer relationship model as others retreat to core
Recapturing value from a restructured / refocused US consumer finance business
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Building on HSBC’s heritageOur strategy is focused on delivering superior growth and earnings over time
Our strategy: shaping our business to deliver
Align presence with global trends
Invest primarily in developing markets
Focus developed markets businesses
on international connectivity
Maintain financial strength
Our execution: joining up to create value
Leverage brand and network to
increase revenues
Use scale to maximise efficiency
Align objectives and incentives to ensure
our people are engaged
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Our heritage
Asian trade origins
Deep roots in many geographies
International management culture
Financial strength
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Financial targets: range
Return on total shareholders’equity (through the cycle)
15-19%
Cost efficiency ratio
48-52%
Tier 1 capital(Basel 2)
7.5-9.0%
Total shareholder return
Above peer group average
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HSBC GroupWe are the world’s local bank
Largest international emerging markets bank
Widespread international network
Uniquely international customer base
Signature financial strength