Strategic execution

  • Delivered growth from our international network with a 7% increase in revenue from transaction banking products and a 17% rise in revenue synergies between global businesses.

  • Achieved annualised run-rate savings of $4.7bn since our Investor Update in 2015, while continuing to invest in growth, and regulatory programmes and compliance. Incremental savings in 1H17 were $1.0bn.

  • Targeted initiatives removed a further $29bn of RWAs in the first half of 2017. Exceeded our RWA reduction target; extracting a total of $296bn of RWAs from the business since the start of 2015.

  • Obtained regulatory approval to establish HSBC Qianhai Securities; the first securities company in mainland China to be majority-owned by an international bank.

  • Maintained momentum in Asian Insurance and Asset Management, with annualised new business premiums and assets under management up 14% and 17% respectively.

  • Successfully achieved a non-objection to our US capital plan, as part of the Comprehensive Capital Analysis and Review (‘CCAR’).

Stuart Gulliver, Group Chief Executive, said:

“We have had an excellent first half of 2017, reflecting the changes we have made since our Investor Update in 2015 and the strength of our competitive position. Our three main global businesses performed well, increasing profit before tax and growing market share in many of the products that are central to our strategy. We remain on track to complete the majority of our strategic actions by the end of the year.”

Financial performance

  • Reported profit before tax of $10.2bn up $0.5bn or 5%, despite adverse movements in significant items including fair value movements on our own debt from changes in our own credit spread in 1H16; adjusted profit before tax of $12.0bn, up $1.3bn or 12% compared with 1H16, reflecting adjusted revenue growth and lower adjusted LICs.

  • Reported revenue of $26.2bn down $3.3bn was 11% lower primarily due to currency translation differences, the absence of fair value movements on our own debt and revenue from the operations in Brazil that we sold, which were the key elements of the adverse movement in significant items; adjusted revenue of $26.1bn, up $0.8bn or 3%, mainly in RBWM from insurance manufacturing and growth in current accounts, savings and deposits, and in GB&M from FICC, as well as in Equities.

  • Reported operating expenses of $16.4bn were $2.2bn or 12% lower due to a reduction in significant items including costs from the operations in Brazil that we sold, the write-off of goodwill in our GPB business in Europe in 1H16 and a reduction in settlement and provisions in connection with legal matters; adjusted operating expenses of $14.6bn were $0.4bn or 3% higher, in part due to a credit in the prior year relating to the 2015 UK bank levy, as well as investment in growth programmes, primarily in RBWM where investments were partly funded by one-off disposal proceeds.

  • Adjusted jaws was positive 0.5%.

  • Compared with 2Q16, reported profit before tax of $5.3bn up $1.7bn; adjusted profit before tax of $6.0bn up $0.7bn.

  • Strong capital base with a common equity tier 1 (‘CET1’) ratio of 14.7% and a leverage ratio of 5.7%.

  • The Board has determined to return to shareholders up to a further US$2bn by way of a share buy-back which is expected to commence shortly and complete in the second half of 2017. This takes announced buy-backs since the second half of 2016 to $5.5bn.

Media enquiries to:

Media Relations

Heidi Ashley
Telephone: +44 (0)20 7992 2045

Gareth Hewett
Telephone: +852 2822 4929

Robert Sherman
Telephone: +1 212 525 6901

Investor Relations

UK
Richard O’Connor
Telephone: +44 (0)20 7991 6590

HK
Hugh Pye
Telephone: +852 2822 4908