HSBC Holdings plc
Annual Report and Accounts 2018
Connecting customers to opportunities
HSBC aims to be where the growth is, enabling businesses to thrive and economies to prosper, and ultimately helping people to fulfil their hopes and realise their ambitions.
Cover image
Our global marketing campaign explores how HSBC helps people prosper. The Group's iconic hexagon becomes a lens through which to look at the world, showing how we help individuals, businesses and communities to grow and flourish. This includes our commitment to the development of renewable energy sources that can support the global transition to a low-carbon economy. We have pledged to provide $100 billion in sustainable financing and investments by 2025.
Inside front cover image
We are investing in digital technology to improve the service we provide to our customers. Our award-winning mobile apps are one of the ways we help them manage their money more quickly, conveniently and safely. This picture was taken by Terry Tam, who works for HSBC as an IT developer.
Employee photos
All the photos on the inside pages of this report, with the exception of Board and executive profiles, were taken by people working for HSBC in locations including the UK, China, India, Malta and Bangladesh. Many more employees across the Group's international network have contributed to HSBC Now Photo, an ongoing project that allows them to demonstrate their talent as photographers and show the diversity of the world around them.
Contents
This Strategic Report was approved by the Board on 19 February 2019. Mark E Tucker
Group Chairman
Strategic Report
An overview of how we are structured, what we do and where, our strategic priorities, the principal risks we face, and high-level performance information.
The section is introduced by both the Group Chairman and the Group Chief Executive, and also explains the role of the Board.
2 Highlights
4 Group Chairman's statement
7 Group Chief Executive's review
10 Our strategy
12 Strategic priorities
14 Financial overview
18 Global businesses
22 How we do business
30 Risk overview
32 Remuneration
StrategicReport
None of the websites referred to in this Annual Report and Accounts (including where a link is provided), and none of the information contained on such websites, are incorporated by reference in this report.
Our values
Our values define who we are as an organisation and make us distinctive.
Dependable
We are dependable, standing firm for what is right and delivering on commitments.
Open
We are open to different ideas and cultures, and value diverse perspectives.
Connected
We are connected to our customers, communities, regulators and each other, caring about individuals and their progress.
As a reminder
Reporting currency
We use US dollars.
Adjusted measures
We supplement our IFRS figures with alternative performance measures used by management internally. These measures are highlighted with the following symbol:
Further explanation may be found on page 34.
Financial Review
Detailed reporting of our financial performance, at Group level as well as within our matrix structure. It also includes our full risk report and reporting on how we manage capital.
34 Financial summary
47 Global businesses and geographical regions
65 Other information
69 Risk
148 Capital
Corporate Governance
Details of our Board of Directors and senior management, and our approach to corporate governance and remuneration.
152 Corporate governance report
153 Biographies of Directors and senior management
157 Board of Directors
158 Board committees
164 Internal control
165 Going concern and viability
166 Share capital and other disclosures
169 Employees
172 Directors' remuneration report
206
Financial Statements
Our financial statements and related notes and reports.
207 Report of the independent auditors
214 Financial statements
224 Notes on the financial statements
Additional Information
Important information for our shareholders, including contact information. Like any industry and company, we have our set of abbreviations and terminology. Accordingly, we provide an explanation of the abbreviations used. A glossary of key terms is available online atwww.hsbc.com/investors.
Directors' responsibility statement
310 Shareholder information
314 Forward-looking statements / Certain defined terms
316 Abbreviations
Financial ReviewCorporate GovernanceFinancial StatementsAdditional Information
HSBC Holdings plc Annual Report and Accounts 2018
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Strategic Report
Highlights
Our international network, access to high-growth markets and balance sheet strength help us deliver long-term value for our stakeholders.
Group
For year ended 31 Dec 2018
$19.9bn
$21.7bn
$53.8bn
(2017: $17.2bn)
(2017: $21.1bn)
(2017: $51.4bn)
At 31 Dec 2018
Reported risk-weighted assets ($bn)
2018 14.0 2018 2,558
871 857
2017 14.5 2017 2,522
2016 13.6 2016 2,375
$865bn
14.0%
$2,558bn
(2017: $871bn)
(2017: 14.5%)
(2017: $2,522bn)
Reported risk-weighted assets ($bn)1 2018 865 | |
2017 | 871 |
2016 | 857 |
About HSBC
With assets of $2.6tn at
31 December 2018, HSBC is one of the world's largest banking and financial services organisations.
More than
39 million
customers bank with us
We employ around
235,000
people around the world2
We have around
200,000
shareholders in 130 countries and territories
For footnotes, see page 67.
Strategy highlights
In June 2018, we set out eight strategic priorities against which we committed to tracking our performance until the end of 2020. Below is a selection of highlights from our progress in 2018.
11% 14%
adjusted revenue growth in Asiarevenue growth in transaction bankingpercentage point improvement in employee engagement to 66%
6of
HSBC 'scale markets' improved by two ranks or maintained a top-three rank in customer satisfaction for RBWM
Awards
Selected awards and recognitions Euromoney Trade Finance Survey 2019
Top Global Trade Finance Bank
Euromoney Cash Management Survey 2018
Best Global Cash Manager for Corporates Best Global Cash Manager for Financial Institutions
Euromoney Awards for Excellence 2018
World's Best Bank for Transaction Services World's Best Bank for Corporates
North America's Best Bank for Transaction Services
Asia's Best Bank for Sustainable Finance Middle East's Best Bank for Financing
Insurance Asset Management Awards 2018
Best Emerging Markets Manager of the Year
The Banker Investment Banking
Awards 2018
Most Innovative Investment Bank of the Year
PWM/The Banker Global Private Banking Awards 2018
Best Private Bank in Hong Kong Best Private Bank in the UK
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HSBC Holdings plc Annual Report and Accounts 2018
Highlights
Our global businesses
Our operating model consists of four global businesses and a Corporate Centre, supported by HSBC Operations, Services and Technology, and 11 global functions, including risk, finance, compliance, legal, marketing and human resources.
Retail Banking and Wealth Management ('RBWM')Commercial Banking ('CMB')
Global Banking and Markets ('GB&M')Global Private Banking ('GPB')
We help 38 million customers across the world to manage their finances, buy their homes, and save and invest for the future.
Our HSBC Premier and Advance propositions are aimed at mass affluent and emerging affluent customers who value international connectivity. For customers with simpler banking needs, we offer a full range of products and services reflecting local requirements.
We support approximately 1.5 million business customers in 53 countries and territories, ranging from small enterprises focused primarily on their domestic markets, through to large companies operating globally.
We serve approximately 4,100 clients in more than 50 countries and territories. We support major government, corporate and institutional clients worldwide.
We serve high net worth and ultra high net worth individuals and families, including those with international banking needs.
Our services include working capital, term loans, payment services and international trade facilitation, as well as expertise in mergers and acquisitions, and access to financial markets.
Our product specialists continue to deliver a comprehensive range of transaction banking, financing, advisory, capital markets and risk management services.
Services provided include Investment Management, which includes advisory and brokerage services, and Private Wealth Solutions, which comprises trusts and estate planning, to protect and preserve wealth for future generations.
Adjusted profit before tax
$7.1bn
$7.7bn
$6.1bn
$0.3bn
(2017: $6.5bn)
(2017: $6.8bn)
(2017: $5.8bn)
(2017: $0.3bn)
Adjusted risk-weighted assets
$126.9bn
$321.2bn
$281.0bn
$16.8bn
(31 Dec 2017: $118.1bn)
(31 Dec 2017: $289.8bn)
(31 Dec 2017: $293.2bn)
(31 Dec 2017: $15.8bn)
Our global businesses are presented on an adjusted basis, which is consistent with the way in which we assess the performance of our global businesses.
Delivery against Group financial targets
Return on tangible equity
Adjusted jawsDividends per ordinary share in respect of 2018
8.6%
(1.2)%
$0.51
Target: >11% by 2020 (2017: 6.8%)
Target: positive
Target: sustain
For further details, see page 17.
StrategicReport
Financial ReviewCorporate GovernanceFinancial StatementsAdditional Information
HSBC Holdings plc Annual Report and Accounts 2018
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Disclaimer
HSBC Holdings plc published this content on 19 February 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 19 February 2019 04:47:08 UTC