HSBC Holdings plc 1Q24 Results
Presentation to Investors and Analysts
1Q24 Results
Georges Elhedery
Group Chief Financial Officer
1Q24 results | Appendix |
Summary
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$12.7bn PBT, down $(0.3)bn vs. 1Q23
$9.0bn PBT excluding notable items, down $(0.4)bn vs. 1Q23
26.1% reported RoTE1
16.4% RoTE excluding notable items1
$2bn buyback completed ($9bn completed since YE22)
1.2bn of shares repurchased since 1 January 2023 (6% of YE22 share count)
$8.8bn of further distributions announced:
- $0.10 ordinary DPS
- $0.21 special DPS
- Up to $3bn share buyback
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Reconfirming FY24 guidance, including a mid-teens RoTE excluding notable items and approximately (5)% cost growth vs. FY23 on a target basis2
Unless otherwise stated, this presentation is presented on a constant currency basis. denotes a measure shown on a reported FX basis. In this presentation, % changes relating to ECLs and costs in ( ) | 2 |
represent adverse movements. Figures throughout this presentation may be subject to rounding adjustments and may not sum precisely to totals given in charts, tables or commentary |
Financial performance
Constant currency, $bn | 1Q23 | 1Q24 | Δ, $ | Δ, % |
Revenue | 20.2 | 20.8 | 0.5 | 3 % |
ECL | (0.4) | (0.7) | (0.3) | (68)% |
Costs | (7.6) | (8.2) | (0.6) | (8)% |
Associates | 0.7 | 0.8 | 0.1 | 10 % |
PBT | 12.9 | 12.7 | (0.3) | (2)% |
0 | ||||
Customer loans | 963 | 933 | (30) | (3)% |
Customer deposits | 1,603 | 1,570 | (33) | (2)% |
CET1 ratio, % | 14.7 | 15.2 | . | 0.5ppts |
0 | ||||
Memo items: | . | . | . | . |
Target basis costs1 | (7.4) | (7.9) | (0.5) | (7)% |
Total notable items | 3.6 | 3.7 | 0.1 | 2 % |
0 | ||||
Reported FX basis : | . | . | . | . |
PAOS | 10.3 | 10.2 | (0.1) | (1)% |
EPS, $ | 0.52 | 0.54 | $0.02 | 4 % |
EPS excl. material notable items | 0.36 | 0.34 | $(0.02) | (6)% |
and related impacts, $ | ||||
DPS, $2 | 0.10 | 0.31 | $0.21 | >100% |
RoTE, %3 | 27.4 | 26.1 | . (1.3)ppts | |
RoTE excl. notable items, %3 | 18.4 | 16.4 | . (2.0)ppts | |
1Q24 results | Appendix |
- $12.7bn PBT included $3.7bn notable items, principally:
- $4.8bn gain on sale of Canada4
- $(1.1)bn impairment on classifying Argentina to held-for-sale
- $9.0bn PBT excluding notable items, down $(0.4)bn vs. 1Q23 as higher revenue was offset by higher costs and ECLs
PBT excluding notable items, $bn
12.9 | 12.7 | ||||
(4)% | |||||
9.3 | 0.5 | (0.3) | (0.6) | 0.1 | 9.0 |
1Q23 | Revenue | ECL | Costs | Associates | 1Q24 |
Constant currency (includes notable items)
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1Q24 results | Appendix |
Revenue
$20.8bn, up $0.5bn vs. 1Q23, primarily Banking NII $17.0bn excluding notable items, up $0.5bn vs. 1Q23
Constant currency, $bn | 1Q23 | 1Q24 | Δ 1Q23 |
Revenue | |||
20.2 | 20.8 | 0.5 | |
Banking NII | |||
10.1 | 11.3 | 1.2 | |
Fee and other income | 10.1 | 9.5 | (0.7) |
o/w: Wholesale Transaction Banking | 2.9 | 2.6 | (0.3) |
o/w: Wealth | 0.2 | ||
1.6 | 1.8 | ||
o/w: Other (includes notable items) | 5.7 | 5.1 | (0.6) |
Memo: revenue notable items | 3.7 | 3.7 | 0.1 |
Primarily:
- $(0.3)bn Argentina, excluding the $(1.1)bn impairment
- $(0.2)bn Markets Treasury (favourable mark to market
movements on swaps in 1Q23)
- Partly offset by +$0.1bn notable
items
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Banking NII
Stable run-rate QoQ; reconfirming at least $41bn FY24 guidance1
Banking NII (reported FX), $bn
Canada | 11.6 | 11.5 | 11.3 | ||||||
0.3 | |||||||||
Argentina | 0.3 | Canada | |||||||
0.4 | 0.3 | ||||||||
0.4 | |||||||||
10.7 | |||||||||
0.5 | Argentina | ||||||||
0.3 | |||||||||
10.3 | |||||||||
0.0 | |||||||||
0.3 | |||||||||
0.2 | 10.9 | 10.8 | 10.4 | 10.5 | |||||
9.7 | |||||||||
1Q232 | 2Q232 | 3Q23 | 4Q23* | 1Q24 |
- Canada: no further contribution in 2024 given sale completed on 28 March
- Argentina: sale expected to complete within the next 12 months. Argentina Banking NII will be volatile in future quarters due to hyperinflation accounting
- FY24 Banking NII guidance of at least $41bn unchanged1; assumes $1bn contribution from Argentina (FY23: $1.0bn)
1Q24 results | Appendix |
1Q24 vs. 4Q23
$11.3bn Banking NII, up $0.6bn, driven by:
- $0.5bn Argentina
- $0.2bn non-recurrence of cash flow hedge reclassification*
- $(0.1)bn impact of the disposal of our retail banking operations in France
- UK RFB broadly stable
- Down modestly in Hong Kong:
- Lower average HKD rates (1m HIBOR down c.(60)bps)
- Stable time deposits as a % of customer accounts
* 4Q23 included impacts of $(0.5)bn from Argentina hyperinflation and $(0.3)bn from the reclassification of cash flow hedge revenue between NII and non-NII (of which $(0.2)bn related to 9M23) | 5 |
1Q24 results | Appendix |
Fee and other income: Wholesale Transaction Banking and Wealth
Strong growth in Wealth, particularly in Asia
Wholesale Transaction Banking: down (9)%, primarily in FX
Wealth up 14%: growth across all products
$bn
(9)% | ||||
2.9 | 2.7 | 2.6 | ||
2.5 | 2.6 |
vs. | |
1Q23 | |
GTRF | 3% |
GPS | 6% |
Securities
Services (3)%
FX1(18)%
$bn
+14%
1.8
1.6 1.6 1.5
1.3
vs.
1Q23
Asset8%
Management
Life3%
Insurance
Private34%
Banking
Investment
Distribution 14%
1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 |
1Q23 2Q23 3Q23 4Q23 1Q24
- FX down as 1Q23 benefited from higher market volatility
- GPS up due to increased client flows, including new mandates
- Private Banking up due to strong brokerage and trading in Asia
- Investment Distribution up due to strong sales of mutual funds, structured products and bonds across Asia
- $27bn NNIA during the quarter ($19bn Asia); $1.2tn invested assets (up 4% vs. 4Q23 on a reported basis)
- $0.8bn insurance new business CSM, up $0.4bn vs. 1Q23, primarily in HK; global CSM balance of $11.9bn, up $1.1bn in the quarter
See slide 18 for further details | 6 |
Credit performance
Stable; mainland China CRE charge immaterial
ECL charge trend, $bn
(17)bps | (35)bps | (41)bps | (38)bps | (30)bps | |
(0.4) | (0.9) | (1.1) | (1.0) | (0.7) | |
1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | |
(0.1) | (0.3) | (0.5) | (0.2) | (0.1) | |
ECL charge as a % of gross loans and advances1 | Mainland China CRE charge * |
1Q24 ECL charge, $bn
Stage 1-2 | Stage 3 | Total | |
Wholesale | (0.1) | (0.2) | (0.3) |
Personal | (0.0) | (0.3) | (0.3) |
Total | (0.1) | (0.5) | (0.7)‡ |
1Q24 results | Appendix |
- $(0.7)bn 1Q24 ECL charge:
- $(0.3)bn Wholesale; immaterial mainland China CRE charge
- $(0.3)bn Personal, stable QoQ
- $21.3bn stage 3 balances (2.3% of customer loans), up $2.0bn / 0.3ppts vs. 4Q23 on a reported basis
- (30)bps ECL charge at 1Q24; reiterate ECL guidance of c.(40)bps for FY241
* Mainland China CRE charge 1Q24: $(54)m | 7 |
‡ Total charge includes other instruments which are not classified as Wholesale or Personal |
1Q24 results | Appendix |
Costs
Reconfirming cost growth guidance of approximately (5)% vs. FY231
$bn | 1Q23 | 1Q24 |
Constant currency costs | (7.6) | (8.2) |
Less: notable items | 0.1 | 0.1 |
Add: impact of retranslating results of | (0.1) | - |
hyperinflationary economies at constant currency | ||
Less: Canada direct costs | 0.2 | 0.2 |
Less: France direct costs | 0.1 | - |
Target basis costs | (7.4) | (7.9) |
1Q24 vs. 1Q23 (target basis), $bn
(7)% | (0.2) | ||||||||||||
(0.1) | |||||||||||||
(0.2) | (0.1) | (7.9) | |||||||||||
(7.4) | |||||||||||||
1Q23 | Phasing of | Acquisition | Levies* | Technology, | 1Q24 | ||||||||
performance- | of SVB UK | inflation and | |||||||||||
related pay | other |
- Target basis costs up (7)%, of which:
- (2)ppts from a change in the phasing of accrual for performance-related pay (PRP) relative to 2023
- (1)ppt from the costs of HSBC Innovation Banking (SVB UK acquired in March 2023)
- (1)ppt from incremental levies*
- While 1Q24 PRP accrual was higher than in 1Q23, our target basis cost guidance assumes PRP for FY24 to be broadly in line with FY23
- Reconfirming cost growth guidance of approximately (5)% vs. FY23 on a target basis1 (FY23 baseline: $(31.2)bn)
* Bank of England levy and the incremental FDIC special assessment | 8 |
Totals may not cast due to rounding | |
Customer loans and deposits
Broadly stable vs. 4Q23
Customer loans, $bn
+1% | ||||||||||||||||||||||||||
933 | ||||||||||||||||||||||||||
928 | 9 | |||||||||||||||||||||||||
(1) | ||||||||||||||||||||||||||
(4) | ||||||||||||||||||||||||||
1 | ||||||||||||||||||||||||||
4Q23 | Argentina | Hong Kong | UK RFB | Other legal | 1Q24 | |||||||||||||||||||||
moved to | entities | |||||||||||||||||||||||||
held-for-sale | ||||||||||||||||||||||||||
Customer deposits, $bn | ||||||||||||||||||||||||||
(2)% | ||||||||||||||||||||||||||
1,594 | ||||||||||||||||||||||||||
(3) | (16) | |||||||||||||||||||||||||
1,570 | ||||||||||||||||||||||||||
(3) | ||||||||||||||||||||||||||
(2) | ||||||||||||||||||||||||||
4Q23 | Argentina | Hong Kong | UK RFB | Other legal | 1Q24 |
moved to | entities |
held-for-sale
1Q24 results | Appendix |
- Loans up $5bn / 1%. Reductions in Hong Kong were offset by growth in other markets:
- $(4)bn Hong Kong, primarily Wholesale, due to lower market-wide demand
- +$1bn mortgage growth in the UK RFB
- +$9bn other entities, including: $3bn Wholesale growth in HSBC Bank plc, $3bn growth in the rest of Asia, $1bn HSBC Middle East and $1bn Mexico
- Deposits down $(24)bn / (2)%, primarily in Wholesale, reflecting seasonality, our focus on margins and customer deleveraging:
- $(16)bn Hong Kong: $(8)bn WPB, including migration from time deposits to Wealth products; $(8)bn Wholesale
- $(3)bn UK RFB in CMB, reflecting seasonality
- $(2)bn other entities: $(6)bn Wholesale reduction in the rest of Asia was partially offset by WPB growth in the region and Wholesale growth in HSBC Bank plc
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HSBC Holdings plc published this content on 30 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2024 04:16:10 UTC.