HSBC Holdings plc 3Q 2015 Earnings Release

Highlights

3Q15 results (vs 3Q14)

  • Reported PBT up 32% in 3Q15 at $6,097m compared with $4,609m in 3Q14. This reflected the impact of a net favourable movement in significant items.
  • Adjusted PBT down 14% in 3Q15 at $5,512m compared with $6,424m in 3Q14.
  • Adjusted revenue down 4% in 3Q15 at $14,044m mainly in RBWM (insurance manufacturing) and GB&M (Credit, Rates and Foreign Exchange).
  • Adjusted operating expenses up 2% in 3Q15 at $8,583m in part reflecting investment in regulatory programmes and compliance.
  • Adjusted operating expenses down 4% from 2Q15, in part reflecting the initial impact of our cost savings initiatives.

9M15 results (vs 9M14)

  • Reported PBT up 16% for 9M15 at $19,725m compared with $16,949m for 9M14.
  • Adjusted PBT down 3% for 9M15 at $18,514m compared with $19,119m for 9M14.
  • Adjusted revenue up 2% for 9M15 at $44,816m compared with $44,141m for 9M14, driven by revenue growth in client-facing GB&M, principally in Equities and Foreign Exchange. Revenue also increased in CMB and Principal RBWM.
  • Adjusted operating expenses up 6% at $26,225m compared with $24,830m for 9M14, reflecting investment in growth, and regulatory programmes and compliance costs.

Dividends and capital

  • Earnings per ordinary share and dividends per ordinary share (in respect of the period) for 9M15 were $0.73 and $0.30, respectively, compared with $0.67 and $0.30 for 9M14. The third interim dividend was $0.10 per ordinary share.
  • Strong capital base with a CRD IV end point CET1 capital ratio of 11.8%, up from 11.6% at 30 June 2015. This was a result of continued capital generation together with reduced RWAs from the implementation of a broad range of RWA initiatives.
  • Leverage ratio remained strong at 5.0%.

Group Chief Executive, Stuart Gulliver, commented:

Business performance

Our third quarter performance was resilient against a tough market backdrop.

Revenue was down compared to the third quarter of 2014. In particular, the stock market correction in Asia affected Principal Retail Banking & Wealth Management, and revenue was also lower in Global Banking & Markets.

Despite slowing growth in the mainland Chinese economy and market volatility in Asia, there has been no visible impact on our Asian credit quality in 3Q15.

Our operating expenses were higher than the same period last year, as expected, although our cost programmes have started to gain traction. Our third quarter costs were lower than our second quarter costs.

Strategy execution

We have continued to implement the strategic actions we announced at our Investor Update in June.

Our targeted initiatives reduced risk-weighted assets by an additional $32bn, bringing the total reduction to $82bn since the start of the year. This means we are already nearly 30% of the way towards our targeted reduction of $290bn by the end of 2017. We remain focused on reducing our risk-weighted assets quickly and efficiently.

Our cost-reduction measures are beginning to have an impact on our cost base. There is more to achieve on costs and we expect the measures we have already taken to have a further impact in the fourth quarter. We also started a number of additional initiatives in the third quarter that will deliver savings before the end of the year.

Achieving our strategic targets remains our primary focus. We will provide a further update on our progress at our full-year results in February.

Media enquiries to:

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

Gareth Hewett
Tel: +852 2822 4929

Investor Relations enquiries to:

UK
Tel: +44 (0) 20 7991 3643

Hong Kong
Tel: +852 2822 4908

USA
Tel: +1 224 880 7979

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