Strategy execution

  • Announcing a share buy-back of up to $2.5bn in the second half of 2016 ('2H16') following the successful disposal of HSBC Bank Brazil on 1 July 2016.

  • Reported and adjusted operating expenses down; tight cost control with run-rate saves of more than $2.0bn since the commencement of our cost-savings programme.

  • US successfully achieved a non-objection to its capital plan, which included a dividend payment in 2017, as part of the Comprehensive Capital Analysis and Review ('CCAR').

  • Further reduced RWAs in 1H16 by $48bn through management actions bringing the total since 2014 to $172bn.

  • Continued to capture value from our international network and gained market share in key Asian markets and businesses.

  • Commitment to sustain annual ordinary dividend in respect of the year at current levels for the foreseeable future.

Stuart Gulliver, Group Chief Executive, said:

“Following the successful sale of our Brazil business and having received the appropriate regulatory clearances, I am pleased to announce that we will execute a share buy-back of up to $2.5bn, which should benefit all shareholders and demonstrates the strength and flexibility of our balance sheet. We performed reasonably well in the first half. I am particularly pleased with our progress in reducing costs and continuing to reduce risk-weighted assets. Our highly diversified, universal banking business model helped to drive growth in a number of areas and we captured market share in many of the product categories that are central to our strategy. While economic conditions remain difficult, we are making progress in all of the areas within our control. In the meantime, our balanced business model, strong liquidity and strict cost management make us highly resilient.”

Financial performance

  • Reported profit before tax (‘PBT’) in 1H16 of $9,714m, down by $3,914m; adjusted PBT of $10,795m, down $1,755m – a reasonable performance in the face of considerable uncertainty.

  • Adjusted revenue of $27,868m, down 4% compared with a strong 1H15; client-facing GB&M and BSM down 7% and Principal RBWM down 6%. Continued momentum in CMB, up 2%.

  • Adjusted loan impairment charges of $2,366m reflecting charges in the oil and gas, and metals and mining sectors, and from Brazil; in line with 1Q16.

  • Strong capital base with a CRD IV end point CET1 capital ratio of 12.1%, up from 11.9% at 31 December 2015.

  • Leverage ratio remained strong at 5.1%.

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