Our investment case

HSBC is one of the world’s leading international banks. We have a clear strategy to deliver revenue and profit growth, enhance the service we provide to customers, and empower our people, while improving returns to shareholders.

Who we are

>40m

CUSTOMERS

$21.7bn

ADJUSTED PROFIT BEFORE TAX IN 2018 (in US dollars)

65

COUNTRIES AND TERRITORIES

HSBC is one of the world’s largest banking and financial services organisations. Our four global businesses serve more than 40 million customers. Our international network, access to high-growth markets and balance sheet strength help us deliver long-term value for our stakeholders.

A leading international bank

Our strategic advantages as a leading international bank position us to capitalise on long-term global trends affecting the financial services industry.

The 65 countries and territories in our network enable exceptional access to high-growth developing markets in Asia, the Middle East and Latin America. Our investment plans are aligned with these high growth markets to help deliver shareholder value. This includes continuing to invest in Asia, where HSBC has strong foundations, and more than 80 per cent of our adjusted profit before tax is from this region.

Global flows of trade, finance and data are also expected to continue to grow. Our network helps us to meet the international needs of customers, for example:

  • Multinational companies raising capital on international markets and investing overseas
  • Importers and exporters financing trade
  • Small businesses borrowing to expand in new markets
  • Entrepreneurs managing their finances as they travel for work

The importance of our international network is reflected in our performance. More than half of the HSBC Group’s client revenue comes from clients with an international presence.

Investor relations

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Our global network

The markets that make up our international network can be split into three broad categories. In our eight “scale” markets we are – or aspire to be – one of the leading domestic banks. In a further eight markets we aim to be the leading international bank in the country. In the remaining markets, HSBC’s role is to connect foreign and local customers to our broader network.

Growing the business

After a period of significant restructuring, HSBC’s global businesses are well-placed to manage risk, work together to meet customers’ needs, and grow revenue and profit.

Adjusted revenue and profit in HSBC’s global businesses, US$ billion

Retail Banking and Wealth Management

FY18 Profit: US$7.1bn, Revenue: US$21.9bn

FY17 Profit: US$6.5bn, Revenue: US$20.2bn

FY16 Profit: US$5.3bn, Revenue: US$18.5bn

Commercial Banking

FY18 Profit: US$7.7bn, Revenue: US$14.9bn

FY17 Profit: US$6.8bn, Revenue: US$13.2bn

FY16 Profit: US$5.9bn, Revenue: US$12.7bn

Global Banking and Markets

FY18 Profit: US$6.1bn, Revenue: US$15.5bn

FY17 Profit: US$5.8bn, Revenue: US$15.3bn

FY16 Profit: US$5.5bn, Revenue: US$14.8bn

Global Private Banking

FY18 Profit: US$0.3bn, Revenue: US$1.8bn

FY17 Profit: US$0.3bn, Revenue: US$1.7bn

FY16 Profit: US$0.3bn, Revenue: US$1.8bn

Adjusted revenue by region in FY18, US$ billion

* Adjusted basis, includes inter-regional eliminations.

TOTAL US$53.9 billion*

Asia US$28.7bn

Europe US$17.8bn

North America US$6.8bn

Latin America US$3.1bn

Middle East and North Africa US$2.7bn

Balance sheet strength

We continue to maintain a strong capital, funding and liquidity position with a diversified business model. We take a conservative approach to credit risk and liquidity management.

Our capital base supports our ability to invest in business growth, meet current and future regulatory requirements, and sustain returns for shareholders.

At the end of 2018, HSBC held US$2.6 trillion in total assets, including loans to customers as well as government securities and cash.

Over recent years we have set ourselves targets for allocating Group capital into areas of higher growth and return, such as Asia, and we continue to meet them.

HSBC deposits, loans and advances, US$ billion*

Customer accounts and deposits by banks rose by 2.1 per cent per year between 2016 and 2018 on an annualised basis. Loans and advances increased by 3.5 per cent in the same period.

31 Dec 2018 Customer accounts: US$1362.6bn, Loans and advances to customers: US$981.7bn

Deposits by banks: US$56.3bn, Loans and advances to banks: US$72.2bn

01 Jan 2018 Customer accounts: US$1360.2bn, Loans and advances to customers: US$949.7bn

Deposits by banks: US$64.5bn, Loans and advances to banks: US$82.6bn

31 Dec 2016 Customer accounts: US$1272.4bn, Loans and advances to customers: US$861.5bn

Deposits by banks: US$59.9bn, Loans and advances to banks: US$88.1bn

* 01 Jan 2018 and 31 Dec 2018 prepared under IFRS9; 31 Dec 2016 data prepared under IAS39 and not re-stated

HSBC common equity tier 1 ratio, %

Our common equity tier 1 ratio is a key measure of our capital strength. We expect it to be greater than 14 per cent in 2019 and 2020.

31 Dec 2018 14.0%

31 Dec 2017 14.5%

31 Dec 2016 13.6%

Shareholder returns

HSBC declared US$10.2 billion of dividends in 2018. We plan to sustain the annual dividend at current levels for the foreseeable future. We will seek to neutralise scrip dividends with share buybacks over the medium term, subject to regulatory approval.

We returned a total of US$2 billion to shareholders through share buybacks in 2018.

31 Dec 2018 6.2%

29 Dec 2017 4.9%

30 Dec 2016 6.3%

Dividend yield

Strategic priorities

Our strategy is clear. We aim to deliver revenue and profit growth, improve returns to shareholders, and enhance the service we provide to customers.

We set out eight strategic priorities in June 2018 in support of these aims, backed by investment of US$15-17 billion in growth and technology between 2018 and 2020.

We believe that pursuing our strategic priorities will make us a more profitable, more efficient, more competitive bank, generating better returns – and with an excellent platform for further growth.



Financial information last updated: 25 February 2019