HSBC Group Factbook: HY20

Group Factbook

30 June 2020

HSBC at a glance

With assets of $2.9tn and operations in 64 countries and territories, HSBC is one of the largest banking and financial services organisations in the world.

We aim to deliver long-term value for our shareholders through:

1	Our extensive
	international network

2	Our access to
	high-growth markets

3	Our balance sheet
	strength

3

64

90

>40m

>

%

Personal, corporate

Interconnected

Countries and

Of global GDP, trade

and institutional

global businesses

territories

and capital flows*

customers

share balance sheets

covered by our

and liquidity

footprint

1H20 Key financial metrics1

PBT

Reported PBT

Revenue

ECL

1H19: $12.3bn

1H19: $9.9bn

1H19: $27.8bn

1H19: $(1.1)bn

$5.6bn

$3.1bn

$26.5bn

$(6.9)bn

PAOS**

RoTE

EPS

TNAV per share

1H19: $8.5bn

1H19: 11.2%

1H19: $0.42

1H19: $7.19

$2.0bn

3.8%

$0.10

$7.34

CET1 ratio2

HQLA3

Customer loans

Customer deposits

1H19: $14.3%

1H19: $533bn

1H19: $1,003bn

1H19: $1,357bn

15.0%

$654bn

$1,019bn

$1,532bn

Denotes an alternative performance measure. For a reconciliation from reported to adjusted measures, please see the HSBC Holdings plc Interim Report 2020.

Note: Variances are calculated on data in the HSBC Holdings plc Interim Report 2020, so where balances are stated in $bn, corresponding variances in the table may not cast due to rounding

*As at 31 December 2019	1
**Profit attributable to ordinary shareholders of the parent company

1H20 key takeaways

1	Adjusted PBT of $5.6bn, down 54% vs. 1H19 due to lower revenues and a higher ECL
	charge, partly offset by good cost performance, with adjusted costs down 5% vs. 1H19
2	Resilience in Asia; adjusted PBT of $7.4bn, despite higher ECL of $1.8bn
	Strong funding, liquidity and capital; deposits increased by 9% on an adjusted basis vs. FY19;
3
	CET1 ratio of 15.0%
	We intend to provide an update on our medium-term financial targets and dividend policy at our
4
year-end results for 2020
5	We are committed to the strategic plan announced in Feb 2020:

 Reduction in RWAs, particularly focused on the US, NRFB and GBM  Reallocation of capital towards Asia

 Significant reduction in the operating complexity and cost base of the bank

1H20 key financial metrics

Revenue by global business

Corporate Centre

Revenue by region4

LAM

UK RFB

GBM

31%

0%

$26.5bn 43% WPB

NAM
	5%	13%
MENA	12%	NRFB
				12%
5%
		$26.5bn			Europe -
		4%
							Other

26%

CMB

RWAs by global business

Corporate Centre	WPB
10%
19%

GBM 32% $855bn

39% CMB

		49%
		Asia
RWAs by region5
	NAM	LAM	UK RFB
		4%		12%
	15%
	MENA 7%	$855bn	19% NRFB
							Europe -
						0%
		43%				Other
		Asia

2

Wealth and Personal Banking

We provide a full range of retail banking and wealth services to more than 39 million customers from personal banking to ultra high net worth individuals and their families.

We offer locally-tailored products and services across multiple channels for our customers' everyday banking needs, as well as insurance, investment management and Private Wealth Solutions for those with more sophisticated requirements. Our global presence provides for customers with international needs.

	Management view of adjusted revenue										1H20 vs. 1H19
	$m				1H19		2H19	1H20	$	%
	Retail banking			7,649	7,879	6,896		(753)	(10)
	Wealth management			4,506	4,056	3,606		(900)	(20)
	Investment distribution		1,696	1,554	1,602		(94)	(6)
	Life insurance manufacturing		1,371	1,078	587		(784)	(57)
	Global Private Banking		925	927	921		(4)	-
	Asset management			514	497	496		(18)	(4)
	Other revenue, including Balance Sheet Management,		706	557	749		43	6
	Holdings interest expense and Argentina hyperinflation
	Total			12,861	12,492	11,251		(1,610)	(13)
	ECL				(527)	(829)	(2,202)		(1,675)	>(100)
	Operating expenses				(7,551)	(7,685)	(7,346)		205	3
	Associates				41	11	(8)		(49)	>(100)
	Profit before tax				4,824	3,989	1,695		(3,129)	(65)
	RoTE (annualised, YTD) excluding significant items and UK	22.1%	19.7%	6.0%			(16.1)ppt
	bank levy
Customer segments						Wealth balances7, $bn
	Ultra	Revenue					3%
	multiple6
	high net								1,421	1,418
	>$30m				1,372
	worth	>250x
				361		353
			341
	High net
	worth	>$5m				370	380		357
	Jade			>30x	412	433		445
	>$1m
					249	247		263
	Premier			>4x		2Q19	4Q19	2Q20
	>$100k				Global Private Banking
								Client Assets
	Personal banking		1x			Retail Wealth Balances
				Premier and Jade deposits
		Eligibility						Asset Management
		criteria*						third party distribution

* Indicates investable assets, representing indicative eligibility criteria for each tier. Eligibility criteria vary by market

3

Commercial Banking

We support approximately 1.3 million business customers in 53 countries and territories, ranging from small enterprises focused primarily on their domestic markets to large companies operating globally.

We help entrepreneurial businesses grow by supporting their financial needs, facilitating cross- border trade and payment services, and providing access to products and services offered by other global businesses.

Management view of adjusted revenue
					1H20 vs. 1H19
$m			1H19	2H19	1H20	$		%
Global Trade and Receivables Finance		920	890	892	(28)		(3)
Credit and Lending			2,685	2,674	2,741	56		2
Global Liquidity and Cash Management		2,986	2,909	2,347	(639)		(21)
Markets products, Insurance and Investments and other
revenue, including Balance Sheet Management, Holdings	1,056	906	1,020	(36)		(3)
interest expense and Argentina hyperinflation
Total			7,647	7,379	7,000	(647)	(8)
ECL			(478)	(684)	(3,526)	(3,048)		>(100)
Operating expenses			(3,258)	(3,498)	(3,290)	(32)		(1)
Associates			-	-	-	-		-
Profit before tax			3,911	3,197	184	(3,727)		(95)
RoTE (annualised, YTD) excluding significant items and	15.3%	13.0%	(1.6)%	(16.9)ppt
UK bank levy
Providing deep international coverage across four tiers
						Number of
	Global					customers8
	Banking >$5bn
	Large
						>8k
	Corporates
	>$500m
Entrepreneurial	Mid Market
heartland					>28k
	Corporates
		>$50m

Business Banking Upper

>$5m	>1.3m

Business Banking Mass

Retail Business Banking

Our strong competitive position allows us to offer product depth and global connectivity to the entrepreneurial heartland of mid-market corporates

4

Global Banking and Markets

We support major government, corporate and institutional clients worldwide. Our product specialists deliver a comprehensive range of transaction banking, financing, advisory, capital markets and risk management services.

Management view of adjusted revenue
			1H20 vs. 1H19
$m	1H19	2H19	1H20	$	%
Global Markets	3,096	2,584	4,272	1,176	38
FICC:	2,493	2,204	3,913	1,420	57
Foreign Exchange	1,275	1,370	1,917	642	50
Rates	865	575	1,351	486	56
Credit	353	259	645	292	83
Equities	603	380	359	(244)	(40)
Securities Services	985	1,020	944	(41)	(4)
Global Banking	1,887	1,953	1,944	57	3
Global Liquidity and Cash Management	1,357	1,349	1,094	(263)	(19)
Global Trade and Receivables Finance	398	394	393	(5)	(1)
Principal Investments	120	138	(12)	(132)	>(100)
Credit and funding valuation adjustments	14	18	(355)	(369)	>(100)
Other revenue, including Balance Sheet Management,	(267)	(343)	(102)	165	62
Holdings interest expense and Argentina hyperinflation
Total	7,590	7,113	8,178	588	8
ECL	(97)	(61)	(1,118)	(1,021)	>(100)
Operating expenses	(4,758)	(4,656)	(4,512)	246	5
Associates	-	-	-	-	-
Profit before tax	2,735	2,396	2,548	(187)	(7)
RoTE (annualised, YTD) excluding significant items and	10.2%	9.8%	7.7%	(2.5)ppt
UK bank levy

Corporate Centre

Corporate Centre primarily comprises the share of profit from our interests in our associates and joint ventures, Central Treasury, stewardship costs and consolidation adjustments.

Management view of adjusted revenue
			1H20 vs. 1H19
$m	1H19	2H19	1H20	$	%
Central Treasury	138	41	201	63	46
Valuation differences on long-term debt and associated	143	(313)	195	52	36
swaps
Legacy credit / portfolios	(83)	(28)	(48)	35	42
Other revenue	(338)	(365)	(105)	233	69
Total	(283)	(352)	48	331	>100
ECL	14	20	(12)	(26)	>(100)
Operating expenses	(172)	(609)	206	378	>100
Associates	1,244	1,019	966	(278)	(22)
Profit before tax	803	78	1,208	405	50

5

Hong Kong

 HSBC was founded in Hong Kong in 1865 and is the largest bank incorporated in Hong Kong

• Hang Seng Bank was established in 1933, and became majority-owned by HSBC Group in 1965
• We have market shares of 22% in loans9 (30% of Hong Kong dollar loans as at FY19) and 28% in deposits10. Within retail, we have 47% in personal mortgages 11 and 46% in credit card loan balances12
• Our PayMe app has >2m users with 70%13 market share of person to person payments
• We were the first commercial bank to offer fully remote customer on-boarding

PBT

Revenue

RWAs

Customer loans

Customer deposits

1H19: $6.5bn

1H19: $10.1bn

1H19: $190bn

1H19: $307bn

1H19: $492bn

$5.1bn

$9.1bn

$196bn

$309bn

$514bn

Financials $m

1H19

2H19

1H20



A resilient and strong balance sheet

NII

5,565

5,780

5,136



30% of the Group's customer loans

Non interest income

4,501

3,773

3,923



Average LTV of 43% in the retail

Revenue

10,066

9,553

9,059

mortgage portfolio



>69% of Asia's PBT is generated in

ECL

(135)

(328)

(516)

Hong Kong, with WPB generating

Costs

(3,417)

(3,514)

(3,450)

>50% of Hong Kong's PBT

Associates

24

8

(7)

Adjusted PBT

6,538

5,719

5,086

United Kingdom (RFB)

• HSBC has conducted business in the UK since 1836
• HSBC UK was established in 2018 and is the Group's UK ring-fenced bank

 We serve >15 million active customers through four diversified retail brands: HSBC UK, first direct, M&S Bank, and John Lewis Financial Services

• We have market shares of 14.2%14 in personal current accounts and 6.9%15 in retail mortgages

PBT	Revenue		RWAs		Customer loans		Customer deposits
1H19: $1.4bn	1H19: $4.2bn		1H19: $118bn		1H19: $222bn		1H19: $257bn
$(0.5)bn		$3.9bn		$109bn		$229bn		$298bn

• A resilient and strong balance sheet
• 22% of the Group's customer loans
• Average LTV of 51% in the retail mortgage portfolio
• >$10bn of lending support provided for wholesale customers and granted >200k personal payment holidays

Financials $m	1H19	2H19	1H20
NII	3,072	3,075	2,877
Non interest income	1,103	1,082	982
Revenue	4,175	4,157	3,859
ECL	(419)	(356)	(2,019)
Costs	(2,323)	(2,388)	(2,291)
Adjusted PBT	1,433	1,413	(451)

6

Our network

	Europe				Asia
	UK	Isle of Man		Hong Kong	Mauritius
	Armenia	Italy		Australia	Mainland China
	Austria	Luxembourg		Bangladesh	Philippines
	Belgium	Malta		India	Singapore
	Channel Islands	Netherlands		Indonesia	South Korea
	Czech Republic	Poland		Japan	Sri Lanka
	France	Russia		Macau	Taiwan
	Germany	Spain		New Zealand	Thailand
	Greece	Sweden		Malaysia	Vietnam
	Ireland	Switzerland		Maldives
Middle East and North Africa	North America		Latin America
UAE	Oman	US		Mexico
Algeria	Qatar	Canada		Argentina
Bahrain	Saudi	Bermuda		Brazil
Egypt	Arabia	British Virgin Islands		Chile
Kuwait	South	Cayman Islands		Colombia
Lebanon	Africa					Peru
Turkey
Morocco					Uruguay
Israel

7

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.

CET1 ratio2	Leverage ratio		LDR16	HQLA3		LCR17
(1H19: 14.3%)	(1H19: 5.4%)		(1H19: 74.0%)	(1H19: $533bn)		(1H19: 136%)
15.0%		5.3%	66.5%	$654bn	148%

Customer deposits

9%

1,357 1,400 1,532

1H19 FY19 1H20

Adjusted customer accounts (on a constant currency basis)

Customer deposits by type (average), $bn

At FY19	75
	279
	$1,380bn
	1,026

Demand & other - non-interest bearing and demand - interest bearing

Savings

Time and other

Source: Form 20-F; average balances on a reported basis

Net loans and advances to customers

1%

1,003 1,007 1,019

Gross loans and advances to customers by type, $bn

318

$1,032bn

610

104

Mortgages Other personal Wholesale

1H19 FY19 1H20

Adjusted net loans and advances to customers (on a constant currency basis)

Gross mortgage lending

UK $132bn,		Hong Kong $89bn,
Average LTV: 51%		Average LTV: 43%

8

Appendix: Selected financial information

1H20 vs. 1H19

$m	1H19	2H19	1H20	$	%
NII	14,897	15,216	14,483	(414)	(3)
Non interest income	12,918	11,416	11,994	(924)	(7)
Total revenue	27,815	26,632	26,477	(1,338)	(5)
ECL	(1,088)	(1,554)	(6,858)	(5,770)	>(100)
Costs	(15,739)	(16,448)	(14,942)	797	5
Associates and JVs	1,285	1,030	958	(327)	(25)
Adjusted PBT	12,273	9,660	5,635	(6,638)	(54)
Significant items18 and FX translation	134	(8,720)	(1,317)	(1,451)	>(100)
Reported PBT	12,407	940	4,318	(8,089)	(65)
Profit attributable to ordinary shareholders	8,507	(2,538)	1,977	(6,530)	(77)
EPS (basic), $	0.42	(0.13)	0.10	(0.32)	(76)
RoTE (annualised, YTD), %	11.2%	8.4%	3.8%		(7.4)ppt

1H20 vs. 1H19

$bn	1H19	2H19	1H20	$	%
Customer loans	1,003	1,007	1,019	16	2
Customer deposits	1,357	1,400	1,532	175	13
Total assets	2,751	2,715	2,923	172	6
RWAs	869	821	855	(14)	(2)
CET1 ratio, %	14.3%	14.7%	15.0%		0.7ppt
Leverage ratio, %	5.4%	5.3%	5.3%		(0.1)ppt
Loan to Deposit Ratio, %	74.0%	72.0%	66.5%		(7.5)ppt
ECL (annualised) / average gross loans	0.22%	0.30%	1.33%		(111)bps
and advances to customers
TNAV per share, $	7.19	7.13	7.34	0.15	2

Note: Variances are calculated on underlying data in the HSBC Holdings plc Interim Report 2020, so where balances are stated in $bn, corresponding variances in the table may not cast due to rounding.

9

Disclaimer

Important notice

The information, statements and opinions set out in this presentation and accompanying discussion ("this Presentation") are for informational and reference purposes only and do not constitute a public offer for the purposes of any applicable law or an offer to sell or solicitation of any offer to purchase any securities or other financial instruments or any advice or recommendation in respect of such securities or otherfinancial instruments.

This Presentation, which does not purport to be comprehensive nor render any form of legal, tax, investment, accounting, financial or other advice, has been provided by HSBC Holdings plc (together with its consolidated subsidiaries, the "Group") and has not been independently verified by any person. You should consult your own advisers as to legal, tax investment, accounting, financial or other related matters concerning any investment in any securities. No responsibility, liability or obligation (whether in tort, contract or otherwise) is accepted by the Group or any member of the Group or any of their affiliates or any of its or their officers, employees, agents or advisers (each an "Identified Person") as to or in relation to this Presentation (including the accuracy, completeness or sufficiency thereof) or any other written or oral information made available or any errors contained therein or omissions therefrom, and any such liability is expressly disclaimed.

No representations or warranties, express or implied, are given by any Identified Person as to, and no reliance should be placed on, the accuracy or completeness of any information contained in this Presentation, any other written or oral information provided in connection therewith or any data which such information generates. No Identified Person undertakes, or is under any obligation, to provide the recipient with access to any additional information, to update, revise or supplement this Presentation or any additional information or to remedy any inaccuracies in or omissions from this Presentation. Past performance is not necessarily indicative of future results. Differences between past performance and actual results maybe material and adverse..

Forward-looking statements

This Presentation may contain projections, estimates, forecasts, targets, opinions, prospects, results, returns and forward- looking statements with respect to the financial condition, results of operations, capital position, 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" or "believe" 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 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 judgments 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 conditions, regulatory changes or due to the impact of Covid-19). 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,prospects or returns contained herein.

Additional detailed information concerning important factors that could cause actual results to differ materially from this Presentation is available in our Annual Report and Accounts for the fiscal year ended 31 December 2019 filed with the Securities and Exchange Commission (the "SEC") on Form 20-F on 19 February 2020 (the "2019 Form 20-F"), our 1Q 2020 Earnings Release furnished to the SEC on Form 6-K on 28 April 2020 (the "1Q 2020 Earnings Release"), and our Interim Report for the six months ended 30 June 2020 which we furnished to the SEC on Form 6-K on 03 August 2020 (the "2020 Interim Report").

Non-GAAP financial information

This Presentation contains non-GAAP financial information. The primary non-GAAP financial measures we use are presented on an "adjusted performance" basis which is computed by adjusting reported results for the period-on-period effects of foreign currency translation differences and significant items which distort period-on-period comparisons. Significant items are those items which management and investors would ordinarily identify and consider separately when assessing performance in order to better understand the underlying trends in the business.

Reconciliations between non-GAAP financial measurements and the most directly comparable measures under GAAP are provided in our 2019 Form 20-F, our 1Q 2020 Earnings Release, our 2020 Interim Report and the corresponding Reconciliations of Non-GAAPFinancial Measures document,each of which are available at www.hsbc.com.

Information in this Presentation was prepared as at 03 August 2020.

10

Investor Relations key contacts

Richard O'Connor	Neil Sankoff	Mark Phin
Global Head of Investor	Head of Equity Investor	Head of Investor
Relations	Relations	Relations, Asia-Pacific
[e-mail]	[e-mail]	[e-mail]
[phone]	[phone]	[phone]

Tim Fradin	Greg Case	Laurence Chan
Head of Analysts	Head of Fixed Income	Senior Investor Relations
[e-mail]	Investor Relations	Manager, Asia
[phone]	[e-mail]	[e-mail]
	[phone]	[phone]

Jenny Lewis	James Klikis	Ruschelle Thompson
Investor Relations Manager	Investor Relations Manager	Investor Relations Manager
[e-mail]	[e-mail]	[e-mail]
[phone]	[phone]	[phone]

Footnotes

1. A list of definitions can be found in the HSBC Holdings plc Interim Report 2020.
2. Unless otherwise stated, risk-weighted assets and capital amounts at 30 June 2020 are calculated in accordance with the revised Capital Requirements Regulation and Directive, as implemented ('CRR II'), and specifically using its transitional arrangements for capital instruments and for IFRS9 Financial instruments
3. High quality liquid assets. Gross HQLA of $784bn (pre regulatory haircuts to reflect limitations in intragroup fungibility of liquid assets) up $138bn in 1H20
4. Regional percentage composition calculated with regional figures that include intra-Group revenue. Intra-Group revenue is excluded from the total Group revenue number.
5. Risk-weightedassets are non-additive across geographical regions due to market risk diversification effects within the Group.
6. FY19 revenue per customer as a multiple of personal banking customers. Analysis excludes PayMe, Hang Seng, John Lewis and M&S, as well as life insurance manufacturing and asset management revenue. GPB data excludes Private Wealth Solutions revenue, revenue from closed clients and revenue not associated with client relationships
7. Includes Private Bank client assets, retail wealth balances including insurance investment balances, Premier & Jade deposits, and asset management funds distributed to third parties
8. Customer numbers for personal banking includes Retail Business Banking, PayMe, and Hang Seng customers
9. Market share of loans as 30 June 2020, source: HKMA. (Including Hang Seng)
10. Market share of deposits as at 30 June 2020, source: HKMA. (Including Hang Seng)
11. Market share of outstanding credit card balances as at 31 December 2019, source: HKMA. (Including Hang Seng)
12. Market share of outstanding mortgage balances as at 30 June 2020, source: HKMA. (Including Hang Seng)
13. 70% of peer-to-peer transactions by value during 4Q19
14. Current account market share as at 31 December 2019, source: CACI
15. Mortgage market share as at 31 May 2020, source: Bank of England
16. Calculated on values to full precision in the HSBC Holdings plc Interim Report 2020
17. The methodology used in the Group consolidated LCR in relation to the treatment of part of our HQLA is currently under review with our regulators
18. 1H20 significant items include a software intangibles impairment of $1,198m. Of this: $1,025m related to changes in long-term growth rates to applicable cash-generating units and $173m was due to planned restructuring activity. FY19 significant items includes goodwill impairment of $7.3bn, of which $4.0bn in GBM and $2.5bn in CMB.

11