HSBC Holdings plc Interim Management Statement 1Q 2014

  • Reported profit before tax (‘PBT’) down 20% in the first quarter of 2014 (‘1Q14’) at US$6,785m compared with US$8,434m in the same period in 2013 (‘1Q13’).
  • Underlying PBT was down US$968m or 13% in 1Q14 at US$6,621m, compared with US$7,589m in 1Q13, primarily reflecting the reduced impact of significant items (US$741m net reduction in PBT between 1Q13 and 1Q14, comprising lower revenue items of US$1,076m and lower operating expense items of US$335m).
  • Earnings per share and dividends per ordinary share for the first quarter of 2014 were US$0.27 and US$0.10, respectively, compared with US$0.34 and US$0.10 for the equivalent period in 2013.
  • Return on average ordinary shareholders’ equity (annualised) was 3.2% lower at 11.7%, compared with 14.9% for the equivalent period in 2013.
  • Lower 1Q14 revenue – 1Q14 underlying revenue was US$15,709m, down 8% from US$17,135m in the same period in 2013 mainly reflecting the reduced impact from significant items of US$1,076m. Excluding these items, revenue was lower by US$350m or 2%, driven by Retail Banking and Wealth Management and Global Banking and Markets, partly offset by growth in Commercial Banking.
  • Further progress made on executing against strategy with market share gains in several product categories in Global Banking and Markets including equity and debt capital markets, advisory and lending. We also achieved positive net new money in targeted areas of growth in Global Private Banking.
  • Lower 1Q14 underlying operating expenses – 1Q14 operating expenses were US$8,843m, down 2% from US$9,014m in the same period in 2013. Excluding significant items, operating expenses increased by 2% in part reflecting increased investment in Global Standards, Risk and Compliance, and inflation, partly offset by cost saving initiatives.
  • Capital – at 1Q14, the CRD IV transitional basis CET1 capital ratio was 10.7%, down from 10.8% at 31 December 2013, and the end point CET1 capital ratio was 10.8%, down from 10.9%. This largely reflected increased RWAs resulting from regulatory change

Group Chief Executive, Stuart Gulliver, commented:

"In the first quarter we maintained control of costs and further demonstrated our capital resilience. Whilst revenue was lower than the previous year's first quarter, which benefited from a number of specific items, we have seen progress in revenue over the trailing quarters. Loan impairment charges fell, reflecting the changes to the portfolio since 2011. Our return on equity was 11.7%.

"Global Banking and Markets had a relatively good performance and we grew our market share in several product categories. Commercial Banking saw revenue growth but, in our Principal Retail Banking and Wealth Management business, revenues were impacted by changes in incentive plans and product pricing."

Media enquiries to:

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

Gareth Hewett
Tel: +852 2822 4929

Investor Relations enquiries to:

Guy Lewis
+ 44 20 7992 1938

Hugh Pye
+ 852 2822 4908

Note to editors:

HSBC Holdings plc
HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from over 6,300 offices in over 75 countries and territories in Europe, Asia, North and Latin America, and the Middle East and North Africa. With assets of US$2,758bn at 31 March 2014, HSBC is one of the world’s largest banking and financial services organisations.

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