At a glance
Our international network, universal banking model and capital strength deliver long-term value for customers and shareholders.
Our operating model consists of four global businesses and a Corporate Centre, supported by HSBC Operations, Services and Technology and 11 global functions.
For year ending 31 December 2017
At 31 December 2017
Delivering our strategy
- Delivered growth from our international network, with a 6% increase in transaction banking product revenue and a 13% rise in revenue synergies between global businesses compared with 2016
- Achieved annualised run-rate savings of US$6.1bn since our Investor Update in 2015, while continuing to invest in growth, and regulatory programmes and compliance
- Exceeded our target for reducing our risk-weighted assets (RWAs); we have removed a total of US$338bn of RWAs from the business since the start of 2015
- Generated returns from our pivot to Asia: the region drove more than 75% of Group reported and adjusted profit in 2017
Group Chairman’s Statement
“With an international network covering 90% of global trade flows and a leading presence in the world’s fastest-growing region, we are in a prime position to help our customers capitalise on broad-based global growth.”
Mark E Tucker, HSBC Group Chairman
20 February 2018
Transparency and disclosure
It is important not just to achieve good results, but to treat all of our stakeholders – employees, customers, regulators and shareholders – in a fair and transparent way. We are committed to holding ourselves to account in meeting that aim, and to being accountable to our stakeholders for our actions.
Group Chief Executive’s Review
“After the most extensive transformation programme in HSBC’s 153-year history, HSBC is simpler, stronger and more secure than it was in 2011, and better able to connect customers to opportunities in the world’s fastest-growing regions.”
Stuart Gulliver, HSBC Group Chief Executive
20 February 2018
Shareholder value
We have delivered excellent value to shareholders through a higher share price, US$64.7bn in declared dividends and US$5.5bn in share buy-backs, representing a total shareholder return of 70.3% from 2011 to the end of 2017.
Our businesses
Retail Banking and Wealth Management
We help millions of people across the world to manage their finances, buy their homes, and save and invest for the future. Our Insurance and Asset Management businesses support all our global businesses in meeting their customers’ needs.
2017 adjusted profit before tax: US$6.5bn
(2016: US$5.2bn)
Global Banking and Markets
We provide financial services and products to companies, governments and institutions. Our comprehensive range of products and solutions, across capital financing, advisory and transaction banking services, can be combined and customised to meet clients’ specific objectives.
2017 adjusted profit before tax: US$5.8bn
(2016: US$5.5bn)
Commercial Banking
We provide financial services and products to companies, governments and institutions. Our comprehensive range of products and solutions, across capital financing, advisory and transaction banking services, can be combined and customised to meet clients’ specific objectives.
2017 adjusted profit before tax: US$5.8bn
(2016: US$5.5bn)
Global Private Banking
We help high net worth individuals and their families to grow, manage and preserve their wealth.
2017 adjusted profit before tax: US$0.3bn
(2016: US$0.3bn)
Our Corporate Centre recorded an adjusted profit before tax of US$1.7bn (2016: US$2.0bn).
Our strategy
We have developed a long-term strategy that reflects our purpose and enables us to capture value from our international network.
Our long-term, two-part strategy is to:
Develop our international network
To serve enterprises across geographies and facilitate international trade and capital flows, thereby helping our clients to grow their businesses.
Invest in wealth and retail businesses with local scale
To make the most of global social mobility, wealth creation and long-term demographic changes in our selected retail banking and wealth management markets.
Value of the network and our strategy
- Access to global growth opportunities: Our unparalleled network covers countries accounting for approximately 90% of global GDP, trade and capital flows. We have a leading presence in large and fast-growing economies
- Lower risk profile and volatility: We operate a balanced universal banking model across both wholesale and retail businesses and we are also geographically diversified. This has resulted in a lower risk profile and lower earnings volatility compared to our global peers
- Strong capital and funding base: Common equity tier 1 ratio of 14.5% supported by increased shareholders’ equity to meet new regulatory requirements since the end of 2010. Four interconnected, global businesses share balance sheets and liquidity in addition to strong commercial links
- Stable shareholder returns: Industry-leading dividend – approximately US$65bn declared from 2011 to 2017, as well as about US$5.5bn of share repurchases
Selected awards
Euromoney Trade Finance Survey 2018
Top Global Trade Finance Bank
Euromoney Awards for Excellence 2017
World’s Best Bank
World’s Best Investment Bank in the Emerging Markets
Asia’s Best Bank
North America’s Best Bank for Transaction Services
Euromoney Cash Management Survey 2017
Best Global Cash Manager for Corporates
Best Global Cash Manager for Financial Institutions for all Transactions
Asiamoney New Silk Road Finance Awards 2017
Best Overall International Bank for Belt and Road Initiative
Financial targets
Return on equity (%)
Our medium-term target is to achieve a return on equity (RoE) of more than 10%. In 2017, we achieved an RoE of 5.9%, compared with 0.8% in 2016. In 2016, significant items, which included a write-off of goodwill in Global Private Banking in Europe, costs to achieve and adverse fair value movements arising from changes in credit spread on our own debt designated at fair value, had a significant effect on our reported RoE.
We will continue to invest for growth and manage our capital efficiently to achieve our medium-term target of an RoE of more than 10%.
Adjusted jaws
Jaws measures the difference between the rates of change for revenue and costs. Positive jaws occurs when the figure for the annual percentage change in revenue is higher than, or less negative than, the corresponding rate for costs.
We calculate adjusted jaws using adjusted revenue and costs. Our target is to maintain positive adjusted jaws. In 2017, adjusted revenue increased by 5% and our adjusted operating expenses increased by 4%. Adjusted jaws was therefore positive 1%.
Total dividends declared in respect of the year (US$bn)
In the current uncertain environment, we plan to sustain the annual dividend in respect of the year at its current level for the foreseeable future. Growing our dividend will depend on the overall profitability of the Group, delivering further release of less efficiently deployed capital and meeting regulatory capital requirements in a timely manner. Actions to address these points were core elements of our Investor Update in June 2015.
Video
Group Finance Director Iain Mackay discusses HSBC’s strategic progress and strong position in Asia.
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Main photograph: Bus journey at Cape Point, South Africa by David George, HSBC Egypt