It was a challenging year in 2014. We continued to work hard to improve business performance while managing the impact of a higher operating cost environment. Reported profit before tax was USD18.7 billion in 2014, USD3.9 billion lower than in the previous year. Adjusted profit before tax, which excludes the effect of currency translation differences and significant items, was broadly unchanged at USD22.8 billion.

Though profits disappointed, there were encouraging signs in a number of areas. Asia continued to provide a strong contribution and Middle East and North Africa delivered a record reported profit before tax. Commercial Banking also delivered a record reported profit, which is evidence of the successful execution of our strategy. Our Payments and Cash Management business increased customer mandates. We also consolidated our leadership of the rapidly growing renminbi market.

Global Banking and Markets performed relatively well for the first three quarters but, like many financial services companies, suffered a poor fourth quarter. Revenue was lower in 2014, particularly in our Markets businesses, but all other client-facing businesses delivered year-on-year growth. As expected, revenue was lower in Retail Banking and Wealth Management, primarily because of the continued run-off of the consumer and mortgage lending portfolio in the US.

We continued to work hard to improve business performance while managing the impact of a higher operating cost environment

We continued the comprehensive overhaul of Global Private Banking which we have accelerated since 2011. We are implementing tough financial crime, regulatory compliance and tax transparency measures. The number of customer accounts in our Swiss Private Bank is now nearly 70 per cent lower than at its peak. One consequence of remodelling has been a reduction in revenue, but in 2014 we also grew parts of the business that fit our new model, attracting USD14 billion of net new money.

It is clear that the regulatory costs of operating a global business model have increased since we announced our strategy for HSBC in 2011. Improving our regulatory and compliance abilities remains a priority. We have more than doubled the size of our compliance teams since 2011 and there is more work still to do. We have increased the level of capital we hold by 60 per cent since before the financial crisis.

We maintain a sharp focus on generating net savings to offset increased costs, but in today’s operating environment the targets we set for the Group in 2011 are no longer realistic. We have set new medium-term targets that better reflect the new environment. We are setting a revised return on equity target of more than 10 per cent. Our cost target will be to grow our revenue faster than costs on an adjusted basis. We are also restating our commitment to grow the dividend. The progression of our dividend should be consistent with the growth of the overall profitability of the Group and is predicated on our ability to meet regulatory capital requirements in a timely manner.

Our balance sheet remained strong and, excluding the effects of currency translation, we increased overall loans and advances by USD28 billion. The common equity tier 1 ratio on a CRD IV end-point basis was 11.1 per cent at 31 December 2014.*

This year is HSBC’s 150th anniversary. We were founded to finance local and international trade and our ability to connect customers across the world remains central to the bank’s strategy today. There are still a number of historical issues left to resolve and we will make further progress on them in 2015. The macroeconomic environment remains favourable, however, despite low interest rates, and the business remains in a good position structurally to capitalise on broader market trends. We will continue to focus on the execution of our strategy and delivering value to shareholders.

*For details of the implementation of the Capital Requirements Directive (CRD) IV, see the Annual Report and Accounts 2014.