HSBC Holdings PLC · LSE:HSBA
HSBC — Investor Day (May 2011)
33 slides from HSBC's investor day presentation, May 11, 2011
Slide 1: HSBC Holdings plc Investor Day
Abc 11 May 2011 HSBC HOLDINGS PLC INVESTOR DAY The presentation given today by Stuart Gulliver, Group Chief Executive, is attached and will be available to view at www.hsbc.com. ends/all Registered Office and Group Head Office: This news release is issued by 8 Canada Square, London E14 5HQ, United K
Slide 2: Group Strategy Investor Day
11 May 2011 Group Strategy Investor Day Stuart Gulliver Group Chief Executive
Slide 3: Forward-looking statements
Forward-looking statements This presentation and subsequent discussion may contain certain forward-looking statements with respect to the financial condition, results of operations and business of the Group. These forward- looking statements represent the Group’s expectations or beliefs concerning f
Slide 4: HSBC heritage and business model
HSBC heritage and business model 3
Slide 5: Total shareholder return over the last 16 years
Context Total shareholder return over the last 16 years Total shareholder return1 TSR rebased to 100 on 30/12/1994 700 HSBC Holdings plc MSCI World Banks Index 600 500 400 +542% 300 200 +81% 100 0 1995 2000 2005 2010 2011 May Outperformance Resilient in the Flat vs. market vs. market financial crisi
Slide 6: Why should you own HSBC?
HSBC distinctive position Why should you own HSBC? Distinctive position aligned with key trends Clear strategy and execution focus Network of Strategy drives investment countries relevant 1 I priorities and capital for international allocation connectivity Access and Action plan addressing growth ex
Slide 7: Importance of global connectivity will increase
HSBC distinctive position 1 Importance of global connectivity will increase Trade will continue to grow Imbalances continue to drive capital flows Trade growth1, USDtn Net funding gap/surplus2, USDtn, 2020E US (3.8) France (1.2) 33 Brazil (0.8) 8.9% Canada (0.7) CAGR Korea (0.3) Ireland (0.2) Russia
Slide 8: Trade and capital flows connectivity is concentrated
HSBC distinctive position 1 Trade and capital flows connectivity is concentrated Cumulative growth in total merchandise export and import, 2010-2020 100% = USD37.1tn 100% 90% 80% 35 markets represent 90% growth in Cumulative growth 70% trade flows Similar degree of concentration in: 60% – Extern
Slide 9: Rebalancing of the world economy
HSBC distinctive position 2 Rebalancing of the world economy GDP of top 30 economies USDtn 106 Largest Share of 2050 countries GDP1 (%) China 20 19 of the top 30 India 7 economies in 57 Brazil 2 2050 will be from Mexico 2 currently deemed Turkey 2 “emerging Other 14 emerging 14 markets” 37 US 18 Eme
Slide 10: HSBC has exposure to markets with strong fundamentals driving wealth creation
HSBC distinctive position 2 HSBC has exposure to markets with strong fundamentals driving wealth creation Top economies by 2050 Income per capita in 2050 GDP, USDtn USD thousands Multiple over 2010 income China 24.6 17 7.3x US 22.3 55 1.5x India 8.2 5 6.4x Japan 6.4 63 1.6x Germany 3.7 53 2.1x UK 3.
Slide 11: A well diversified business with ample access to funding and liquidity
HSBC distinctive position 3 A well diversified business with ample access to funding and liquidity HSBC has a well diversified business… … with ample access to funding and liquidity Distribution of revenues, 20101 Customer accounts, 31/12/2010, USDm Europe (32%) Europe 492 Hong Kong (14%) Rest of As
Slide 12: Legacy positions have affected our results
HSBC distinctive position 3 Legacy positions have affected our results HSBC Finance Corporation GBM AFS ABS reserve Consumer loans run-off portfolio, USDbn1 USDbn2 100.4 91.2 82.2 (2.2) 78.9 68.8 (5.8) 58.4 (6.4) 55.7 (8.3) (8.1) (12.2) (17.5) (18.7) Dec Jun Dec Dec Jun Dec Mar Dec Jun Dec Jun Dec J
Slide 13: HSBC has meaningful improvement opportunities
HSBC distinctive position 3 HSBC has meaningful improvement opportunities Evolving regulation resulting in higher capital Regulation requirements which, in light of continued uncertainty, and capital we assume to be 9.5-10.5% Common Equity Tier 1 Common Equity Requirements under Basel III Tier 1 r
Slide 14: Why should you own HSBC?
Clear strategy and execution focus Why should you own HSBC? Distinctive position aligned with key trends Clear strategy and execution focus Strategy drives investment Network of countries relevant for I priorities and capital international connectivity allocation Action plan addressing Access and ex
Slide 15: To be the leading international bank
Clear strategy and execution focus I To be the leading international bank Two main elements This means . . . International connectivity Presence in key markets that matter for international connectivity Businesses that are internationally connected: – GBM hub-and-spoke model with global reach –
Slide 16: Improve capital deployment – Five filters
Clear strategy and execution focus I Improve capital deployment – Five filters What is the strategic Are the current relevance? returns attractive? Resulting actions 1.Connectivity 3.Profitability 2.Economic 4.Efficiency development 5.Liquidity Markets with strong connectivity in CMB and GBM Yes I
Slide 17: Improve cost efficiency and organisational effectiveness
Clear strategy and execution focus II Improve cost efficiency and organisational effectiveness Sustainable cost saves Approach USD2.5-3.5bn of sustainable cost 1 2 saves targeted over the next 3 years Implement Achieve 48-52% CER by 2013 Re-engineer Consistent Business Models Global Functions
Slide 18: Global Banking and Markets (GBM)
Clear strategy and execution focus II Global Banking and Markets (GBM) Emerging markets-led, financing focused with greater emphasis on connectivity GBM key financials Position PBT, USDbn Business built organically and run as a global 10.5 business Total PBT07-10: 9.5 Reached new base level of U
Slide 19: Commercial Banking (CMB)
Clear strategy and execution focus II Commercial Banking (CMB) Strengthen our position as the leading international trade and business bank CMB key financials Position PBT, USDbn Heritage of the Group in international trade Organic growth since the Group’s foundation Total PBT07-10: Present in
Slide 20: Retail Banking and Wealth Management (RBWM)
Clear strategy and execution focus II Retail Banking and Wealth Management (RBWM) World class banking and wealth solutions PFS key historical financials (going forward RBWM1) Position PBT, USDbn Global propositions: Premier and Advance Top 15 markets concentrate majority of profits Total PBT07-1
Slide 21: Global Private Banking (GPB)
Clear strategy and execution focus II Global Private Banking (GPB) Become the world’s leading international private bank GPB key financials Position PBT, USDbn Well established footprint and in most attractive growth markets, particularly Asia Total PBT07-10: USD5.1bn Efficient platform to deliv
Slide 22: North America
Clear strategy and execution focus II North America To build an internationally connected, sustainable business model, aligned with overall group strategy Strategic market Present North America Not present In the US, explore other options to reallocate capital: – Finance business in run-off except
Slide 23: Latin America
Clear strategy and execution focus II Latin America Becoming the leading international bank serving key growth segments and markets Strategic market Present Not present Latin America ■ Position to capture social mobility and wealth creation opportunity ■ Organic growth in Brazil, Mexico and Argentin
Slide 24: Europe
Clear strategy and execution focus II Europe Be the leading international bank connecting Europe Strategic market UK Present Continue to develop Wealth Management through Not present Premier, Advance and other key products, e.g., mortgages Europe 2010 Be the UK’s leading bank for international b
Slide 25: Middle East and North Africa
Clear strategy and execution focus II Middle East and North Africa The leading international bank connecting Middle East and North Africa with the rest of the world and capturing its wealth opportunity Middle East and North Africa Align coverage of both individuals MENA 2010 and corporates to capt
Slide 26: Asia
Clear strategy and execution focus II Asia Connecting Asia and the world Greater China Strategic market Present Maintain leadership in Hong Kong Not present Continued leadership as China’s top foreign bank Be the leading international bank for RMB worldwide Build on historic success of inves
Slide 27: Experienced Management team
Clear strategy and execution focus III Experienced Management team Group management board Sandy Flockhart Iain Mackay Samir Assaf Chairman EMEA, Group Finance Global Banking and Latin America and Director Markets Commercial Banking Alan Keir Paul Thurston Niall Booker Commercial Retail Banking and N
Slide 28: Experienced Management team
Clear strategy and execution focus III Experienced Management team Other management members Muhammad Al Christophe de Tuwaijri Peter Boyles Pat Burke Simon Cooper John Coverdale Backer Irene Dorner Conrado Engel John Flint David Fried Joe Garner Naina Kidwai Mark McCombe Chris Meares Sean O’Sullivan
Slide 29: In summary…
In summary… Distinctive position Clear strategy and execution focus Strategy drives investment Network of countries relevant for priorities and capital international connectivity allocation Action plan addressing Access and exposure to high growth growth and cost efficiency markets and businesses ac
Slide 30: Report card
Report card Key execution elements Actions (examples) In 12 months progress on1. . . Five filters driving disposals and Transactions announced closures of non-strategic and/or and executed Capital Deployment underperforming positions/businesses Tangible progress in Turnaround of strategicall
Slide 31: Basis of preparation (1/2)
Basis of preparation (1/2) Actuals Actual numbers presented are on a reported basis and include the effect of movements in the fair value of HSBC’s own debt related to credit spreads AMG The Global Asset Management business formed part of GBM in 2010, but has been included in RBWM for the RoRWA targ
Slide 32: Basis of preparation (2/2)
Basis of preparation (2/2) RoE Return on equity (‘RoE’) is profit attributable to ordinary shareholders of the parent company divided by average ordinary shareholders’ equity RoRWA The metric, return on risk weighted assets (‘RoRWA’), is the profit before tax divided by average RWAs. The RWAs have b
Slide 33: Acronyms and definitions
Acronyms and definitions A/D ratio Ratio of customer advances to customer deposits ETF Exchange traded funds NYSE New York Stock Exchange Advance HSBC Advance, a global banking proposition for the EU European Union OCC Office of the Comptroller of Currency mass-affluent segment of customers AFS Avai