Actions to resize and simplify the Group


Action Targeted outcome Progress
1. Reduce risk-weighted assets (RWAs) across the Group by about USD290 billion * USD290 billion reduction in Group RWAs

* Global Banking and Markets to represent less than one third of Group RWAs and to return to Group target profitability
* RWA reduction from management actions of USD280 billion, more than 100 per cent of our FX-adjusted target
2. Optimise our global network * Reduced footprint * Completed sale of Brazil business on 1 July 2016; maintained a Brazil presence to serve large corporate clients’ international needs

* Announced transactions/closures in Monaco, Lebanon (completed), Brunei, Palestine (completed)
3. Rebuild profitability in the North American Free Trade Agreement (NAFTA) region * Profit before tax in the US of about USD2 billion a year

* Profit before tax in Mexico of about USD0.6 billion a year
* Material improvement in adjusted profit before tax in 1Q 2017 compared with 1Q 2016 in Canada (up 72 per cent), the US (up 32 per cent) and Mexico (up 15 per cent)

* Closed two transactions of US CML (consumer mortgage and lending) legacy portfolio with cumulative balances of USD4.8 billion; remaining CML portfolio reduced to USD2.2 billion with plans to liquidate by the end of 2017

* Continued market share gains in strategic product areas: ranked no. 3 for Yankee Bonds (source: Dealogic)

* We are now aiming to deliver the US target post-2017
4. Set up a UK ring-fenced bank * Completion by 2018 * 51 per cent of the c.1000 roles have been filled or are now accounted for in Birmingham
5. Deliver USD4.5 billion to USD5.0 billion in cost savings * Annualised costs at December 2017 to be the same as 2014 operating expenses * Achieved annualised run-rate savings of USD4.3 billion

* Continued to migrate activities to offshore locations with 28 per cent of full-time equivalents now located offshore

* Further simplification of the IT infrastructure: total application demise to 542 against an end-2017 target of 750

Actions to redeploy capital and invest


Action Targeted outcome Progress
6. Deliver revenue growth above GDP growth from our international network * Revenue growth of international network above GDP growth * Global Liquidity and Cash Management revenue of USD1.6 billion in 1Q 2017, up 9 per cent on 1Q 2016

* Global Trade and Receivables Finance of USD0.6 billion in 1Q 2017, unchanged on 1Q 2016: strong growth in strategic product areas

* 6 per cent growth in revenues from synergies between global businesses

* We are now aiming to deliver this target post-2017
7. Capture growth opportunities in Asia, including in China’s Pearl River Delta, in the Association of Southeast Asian Nations (ASEAN), and in our Asset Management and Insurance businesses * Market share gains

* About 10 per cent growth per year in assets under management in Asia
* Pearl River Delta: customer advances up 17 per cent compared with 1Q 2016, with mortgage loans up 54 per cent and CMB lending up 20 per cent

* Insurance annualised new business premiums up 13 per cent and Asset Management assets under management distributed up 15 per cent compared with 1Q 2016

* Launched PayMe App in Hong Kong allowing both HSBC and non-HSBC customers to send and receive money via WhatsApp, SMS and Facebook Messenger
8. Grow business from the internationalisation of the Chinese currency, the renminbi (RMB) * USD2.0 billion to USD2.5 billion revenue * Ranked number 1 (32 per cent market share) in offshore RMB bond underwriting as of 1Q 2017 (source: Bloomberg)

* Ranked number 1 among foreign banks in China’s cross-border RMB transaction volume as of February 2017 (source: People’s Bank of China)

* Largest fund house in terms of assets under management in the Southbound Mutual Recognition of Fund scheme, with 33.5 per cent share as of December 2016 (source: WIND Information Co.)

* Awarded ‘Best Overall Provider of Offshore RMB Products and Services’ (source: Asiamoney)

* We are now aiming to deliver this target post-2017
9. Global Standards – safeguarding against financial crime * By end 2017: AML and sanctions policy framework in place; major compliance IT systems introduced across the Group, including for customer due diligence, transaction monitoring and sanctions screening

* Post 2017: Policy framework and associated operational processes fully integrated in day-to-day financial crime risk management practices in an effective and sustainable way; IT systems continue to be fine-tuned
* Continued progress towards putting in place an effective and sustainable anti-money laundering (AML) and sanctions compliance programme, including through the creation of a new Financial Crime Risk function and improvements in technology and systems to manage financial crime risk