HSBC Holdings PLC · LSE:HSBA
HSBC — Non-Deal Roadshow (December 2007)
96 slides from HSBC's roadshow presentation, Dec 3, 2007
Slide 1: Chicago Investor Roadshow
Chicago Investor Roadshow 3 December 2007
Slide 2: Disclosure statement
Disclosure statement Company Logo This presentation, including the accompanying slides and additional presentations and subsequent discussion, contains certain forward- looking information with respect to the financial condition, results of operations and business of HSBC Holdings plc, HSBC Finance
Slide 3: Presentations
Presentations Company Logo • HSBC – North America (USA and Canada) Brendan McDonagh and Iain Mackay • Operations and Credit Niall Booker and Bruce Fletcher • Consumer Lending and Mortgage Services Tom Detelich • Bank Card, Retail Cards and Group Card Walter Menezes • HSBC Global Technology Ken Harve
Slide 4: HSBC North America
HSBC NORTH AMERICA HSBC North America BRENDAN MC DONAGH 3 December 2007 CHIEF EXECUTIVE OFFICER, HSBC Finance Corporation CHIEF OPERATING OFFICER, HSBC North America Holdings Inc IAIN MACKAY CHIEF FINANCIAL OFFICER, HSBC North America Holdings Inc
Slide 5: Agenda
Agenda Company Logo • HSBC – North America (USA and Canada) • HSBC Finance Corporation • Global Consumer Finance 5
Slide 6: HSBC – North America (USA and Canada) profile
HSBC – North America (USA and Canada) profile Company Logo • A top 10 US bank holding company, with assets exceeding USD500 billion(1) at 30 June 2007 • Over 56,000 employees • Operating in over 46 states and across Canadian provinces • Comprised 17 per cent of Group’s profit before tax in 1H 2007 –
Slide 7: HSBC North America Holdings Inc legal entity structure
HSBC North America Holdings Inc Company Logo Legal entity structure HSBC Holdings plc HSBC North America Holdings Inc HSBC Finance Corporation HSBC USA Inc HSBC Markets (USA) Inc HSBC Bank Canada HSBC Bank USA, NA HSBC Securities (USA) Inc 7
Slide 8: HSBC – North America financial performance
HSBC – North America financial performance Company Logo (USD millions, IFRS) Pre-tax profits 1H 2006 2H 2006 1H 2007 United States Personal Financial Services (PFS)(1) $2,886 $242 $1,336 Commercial Banking (CB) 206 236 215 Corporate, Investment Banking and Markets (CIBM) 273 (74) 292 Private Banking
Slide 9: Agenda
Agenda Company Logo • HSBC – North America (USA and Canada) • HSBC Finance Corporation • Global Consumer Finance 9
Slide 10: HSBC Finance Corporation businesses
HSBC Finance Corporation businesses Company Logo Consumer and Mortgage Lending • One of the largest consumer lending companies, in 46 states • Real estate secured and unsecured loans to non-prime customers • HFC and Beneficial brand names • Over three million active customer accounts Auto Finance •
Slide 11: HSBC Finance Corporation businesses… continued
HSBC Finance Corporation businesses… continued Company Logo Card and Retail Services • Fifth largest MasterCard(1) or VISA(1) issuer in the US (based on receivables) • Programs include the GM Card® (GM), the AFL-CIO Union Plus® card, HSBC-branded and Direct Merchants Bank cards • Offers credit cards
Slide 12: HSBC Finance Corporation businesses… continued
HSBC Finance Corporation businesses… continued Company Logo HSBC Financial Corporation (Canada) • Secured and unsecured loans and lines of credit, credit cards, and real estate secured loans • Branches in 10 provinces with merchant and auto dealer relationships Taxpayer Financial Services • Provider
Slide 13: Nationwide coverage and well diversified
HSBC Finance Corporation Company Logo Nationwide coverage and well diversified WEST NORTHEAST Consumer Lending 9% Consumer Lending 12% Mortgage Services 10% Mortgage Services 6% Credit Services 7% MIDWEST Credit Services 14% Private Label 4% Private Label 9% Consumer Lending 21% Auto Finance 6% Auto
Slide 14: HSBC Finance Corporation – quarterly financial results
HSBC Finance Corporation – quarterly Company Logo Financial results USDm % Better/(Worse) versus 3Q versus 2Q 3Q 2006 2Q 2007 3Q 2007 2006 2007 Net operating income before loan USD3,758 USD3,914 USD4,672 24.3% 19.4% impairment charges (1) Loan impairment and other related charges (1,564) (2,185) (3,
Slide 15: HSBC Finance Corporation financial summary
HSBC Finance Corporation Company Logo Financial summary Profit before tax 3Q 2007 results highlights • 3Q 2007 loss before tax of USD1.6 billion was USD1.8 billion below prior quarter due to goodwill impairment of USD1.3 billion and higher loan impairment charges 0.9 0.7 4Q 3Q • Higher net operating
Slide 16: Loan impairment charges
HSBC Finance Corporation Company Logo Loan impairment charges (USD billions, IFRS Management basis) 3.2 3.5 3.5 2.8 3.0 2.5 2.2 1.9 1.8 2.0 1.6 1.6 1.6 1.5 1.4 1.5 1.0 0.7 0.4 0.4 0.5 0.2 0.0 3Q 2006 4Q 2006 1Q 2007 2Q 2007 3Q 2007 Total Excluding Mortgage Services Mortgage Services • 3Q 2007 loan i
Slide 17: Customer loans and advances
HSBC Finance Corporation Company Logo Customer loans and advances (USD billions, IFRS Management basis) 200.0 182.5 177.5 179.9 178.1 178.3 168.5 174.3 163.8 21.5 21.6 21.4 21.4 21.4 160.0 20.9 21.3 20.8 12.7 12.8 12.9 13 13.2 12.1 12.4 11.9 19.3 20.6 19.5 19.8 20.3 18.4 19 120.0 19.7 25.7 26.3 28.3
Slide 18: 2007 Strategic actions and initiatives
HSBC Finance Corporation Company Logo 2007 Strategic actions and initiatives • Strategic repositioning of the Mortgage • Right-sizing and recalibrating our Services business businesses – Closed wholesale broker mortgage – Proactively reducing risk through refined origination business (3Q 2007) produ
Slide 19: Ongoing areas of focus
HSBC Finance Corporation Company Logo Ongoing areas of focus In unpredictable, turbulent markets, focused on what we can control: • Continued Mortgage Services portfolio reductions • Tightening of underwriting and intensified risk management • Reducing Retail Branch network • Cost reductions across
Slide 20: Agenda
Agenda Company Logo • HSBC – North America (USA and Canada) • HSBC Finance Corporation • Global Consumer Finance 20
Slide 21: Group Consumer Finance
Group Consumer Finance Company Logo Core consumer Leveraging global Leveraging global lending platforms expertise across expertise across US (HSBC Finance Corp) Credit bureau environments Argentina Brazil (Losango) Australia Product offerings Mexico Central Eastern Europe Distribution channels China
Slide 22: Global Consumer Finance – update
Global Consumer Finance – update Company Logo The Global Consumer Finance (CF) expansion is a benefit of Household acquisition – leveraging expertise by exporting management throughout the Global Network. • Globally, Consumer Finance continues to be a large, growing and profitable market • Acquisiti
Slide 23: Credit cards: A leading global proposition
Credit cards: A leading global proposition in cards Company Logo building on our global presence and scale economies Global scale • 75 per cent cards on a global platform • Top five global issuer over 120 million cards in force • Issuing in 40 countries, with cutting-edge analytics and Global distri
Slide 24: Operations and credit
HSBC FINANCE CORPORATION Operations and credit NIALL BOOKER 3 December 2007 CHIEF OPERATING OFFICER HSBC FINANCE CORPORATION BRUCE FLETCHER CHIEF RETAIL CREDIT OFFICER HSBC NORTH AMERICA HOLDINGS INC
Slide 25: Who are we?
Who are we? Company Logo New COO Role B. McDonagh Chief Executive Officer • Encompasses risk and business line responsibilities N. Booker • Tighten and enhance risk control Chief Operating Officer environment J. Davis M. Melas • Portfolio management Operational Risk Corporate Real Estate B. Fletcher
Slide 26: Who is the typical HSBC Finance customer?
Who is the typical HSBC Finance customer? Company Logo Lifestyle • Financially unsophisticated • Payment sensitive versus pricing Credit behavior sensitive • Leveraged • Limited discretionary income • Inconsistent payers • Living the ‘American Dream’ of • Minimal savings homeownership • Some with ir
Slide 27: What has changed for the customer?
What has changed for the customer? Company Logo Event Reaction • Declining or stagnant home prices • Inability to use home equity as income • Reduced credit availability • Inability to refinance into a lower payment • Expiration of teaser rate ARM • Significant payment shock without a products way t
Slide 28: What are we hearing from customers?
What are we hearing from customers? Company Logo HSBC conducted focus groups with both current and delinquent customers to gain insight into the customer mindset A typical HSBC Finance customer: • Is aware of the ‘mortgage meltdown’ • In most areas, sees mortgage payments as a high priority • If the
Slide 29: How should we manage our business?
How should we manage our business? Company Logo Factors that we can control include the following: • Reduce the risk profile to deal with the tougher environment and portfolio performance • Enhance default management and focus on loss mitigation – Proactive account management – Concentrate on keepin
Slide 30: What is driving our performance?
What is driving our performance? Company Logo Market • The unprecedented credit tightening and worsening housing market (both unknown depth and duration) is affecting both performance and liquidation, as well as the outlook for next year, and is also affecting employment Vintage • While performance
Slide 31: Which geographies are impacted most?
Which geographies are impacted most? Company Logo • Some metropolitan areas, notably in California and Florida, have rising unemployment as well as falling housing prices and may already be in recession S&P/case-Shiller Monthly Home Price Indices September 2007 Y/Y % change Miami -10.0% San Diego -9
Slide 32: What can we do?
What can we do? Company Logo Reduce risk profile • Discontinue operations of Mortgage Services, Decision One, and the sub-prime mortgage broker based business in HSBC Financial (Canada) • Tighten product and underwriting – Loan-to-value, credit score, debt-to-income – Retail Services and Canada orig
Slide 33: How do we mitigate losses through default management?
How do we mitigate losses through Company Logo default management? Main goal • To identify customer needs and match them with the right treatment option to prevent foreclosure and build sustainable customer relationships What are we doing today? • Increased collection capacity • Proactive ARM contac
Slide 34: How we deal with an ARM Reset customer
Here’s how we deal with an ARM Reset customer Company Logo Screenshot of MS ARM Reset Modification tool Process • Customer receives an ‘ARM Awareness Letter’ advising of pending ARM rate increase, and inviting them to call us to discuss • Letter is followed up with an outbound callout campaign • Cus
Slide 35: Treatment enhancements
Treatment enhancements Company Logo Illustration of risk segmentation and possible treatment 1. Low value of home limits options 1 2. Loan type creates difficulty for customer Product risk HH High 3. Behavior of customer defines risk Market risk 6 4. Customer and market risk High 2 5. Product and cu
Slide 36: What else are we working on in Default Management?
What else are we working on in Default Management? Company Logo Current practices are under evaluation to determine level of success and impact to P&L. As of now, we plan to: • Do more long-term modifications, rewrites, and extensions • Determine the profitability of foreclosure versus modification
Slide 37: What are we doing to reduce costs?
What are we doing to reduce costs? Company Logo Right sizing the business to drive lower costs, higher efficiencies and effectiveness. Consolidation/Integration/Cost-related initiatives • Operations consolidation – Expanded use of operational support provided by GSCs – Consolidate similar functions
Slide 38: FTE considerations
FTE considerations Company Logo Domestic FTE • Branch FTE – Tied to number of branches = Will decrease pro rata as number of branches declines • Non-branch FTE – Slight decline over last five years while shift to offshore resources occurred over same time period to support business growth Offshore F
Slide 39: Operating expenses
Operating expenses Company Logo Operating Expense • Savings generated through efficiencies and lower offshore costs allowed for re-investment in marketing and system spend • Even with the above investments, cost-to-income ratio is 36.8 per cent (1) currently (1) From HFC 3Q 2007 Form 8-K, page 5 nor
Slide 40: Appendix
Appendix HSBC €X> The world’s local bank
Slide 41: TFS update and 2007 accomplishments
TFS update and 2007 accomplishments Company Logo Strategic review – reducing risk, complexity and volumes • Elimination of high risk products (eg pre-season loans) • Reduction of business partners through non-renewal or early release of contracts • Product availability period shortened 41
Slide 42: Canada update and 2007 accomplishments
Canada update and 2007 accomplishments Company Logo Credit quality • Canadian economy is experiencing, strong growth, low unemployment and low levels of delinquency. Non-prime mortgage business is more conservative (eg no reset arms etc) relative to the US. Delinquency at historical lows and likely
Slide 43: UK update and 2007 accomplishments
UK update and 2007 accomplishments Company Logo Volume growth key in driving improved results: • Branch network: Focus on secured loan growth to decrease credit exposure and build scale • Retail Partnerships: Focused on major retailers – Launched new B&Q program in February, UK’s largest home improv
Slide 44: Consumer Lending and Mortgage Services
HSBC FINANCE CORPORATION Consumer Lending and Mortgage Services TOM DETELICH 3 December 2007 GROUP EXECUTIVE
Slide 45: 2+ Delinquencies (%)
HSBC Finance Corporation Company Logo Real estate secured 2+ delinquency 12 11.2 Total MS RE 2+ delinquency 10 2+ Delinquencies (%) 7 .9 percentage increased from 7 .5 6.2 per cent at June to 8.2 8 per cent at September 5 .8 6 4 .8 3 .7 3 .9 Total CL RE 2+ delinquency 4 3 .6 2 .9 percentage increase
Slide 46: Delinquency deterioration in formerly high-appreciation states
This increase is driven by delinquency deterioration in states that Company Logo were previously rapidly appreciating in home prices and are now depreciating • Factors such as LTV, FICO, and CGS (proprietary credit score) are not strongly correlated with deterioration in delinquency performance. How
Slide 47: CL 2+ delinquency levels versus industry sub-prime
CL 2+ delinquency levels are below industry fixed-rate sub-prime. MS Company Logo compares favorably to total sub-prime because of higher proportion of fixed-rate loans CML RE portfolios 2+ CML RE portfolios 2+ versus MBA Industry Benchmark versus Credit Suisse Industry Data (June 2007) (September 2
Slide 48: CML has implemented several measures to manage risk
CML has implemented several measures to Company Logo manage risk Limit sub-prime • Closed correspondent originations (MS) originations to retail • Exited Decision One wholesale business • Eliminate higher risk products such as high LTV home Tighten credit equity (PHL) loans, pre-approved prospect ma
Slide 49: Sub-prime market originations
The collapse of higher risk products and pricing in the market Company Logo may be an opportunity to greater share and profitability for the surviving retailers Market projection Industry sub-prime originations and share of retail channel • CL and some other retail players did not participate in the
Slide 50: Market view and HSBC objectives shaping our business model
This market view and HSBC objectives for the Finance Company Logo Company are shaping our business model Sub-prime market view New business model elements • Shrinking market near-term • Build future around long-term viable retail • HPA returning to long-term average driving a origination model recov
Slide 51: Execution of strategic initiatives to migrate the business model
Execution of our strategic initiatives is critical to Company Logo successfully migrate the business model • Shrink the branch network to 1,000 branches from 1,359 • Reduce support costs in line with the smaller network Lower cost • Rationalise servicing systems across CML and potentially CCS • Clos
Slide 52: Several required elements already exist today
Several required elements already exist today Company Logo • Focus on sub-prime and near-prime customers • Belief in our Customer Value proposition • Face-to-face relationship selling as our primary branch sales approach • Expanded customer relationships through multiple lending and ancillary produc
Slide 53: Managing the Mortgage Services Portfolio
Managing the Mortgage Services Portfolio
Slide 54: Mortgage services – real estate secured portfolio overview
Mortgage services – Company Logo Real estate secured portfolio overview (IFRS management basis) 30 September 2007 (USD93 billion) 31 December 2006 (USD99 billion) 31 December 2005 (USD86 billion) 42% 58% 50% 50% 52% 48% Consumer Lending and all other (USD49.7 bn) Consumer Lending and all other (USD4
Slide 55: Mortgage services – real estate secured portfolio overview
Mortgage services – Company Logo Real estate secured portfolio overview (IFRS management basis) 30 September 2007 (USD38.9 billion) 31 December 2006 (USD49.6 billion) 31 December 2005 (USD44.3 billion) 7.5 10.2 8.0 31.4 39.4 36.3 First Lien (81% ) Second Lien (19% ) First Lein (80% ) Second Lien (20
Slide 56: Adjustable Rate Mortgages – ARM Resets
HSBC Finance Corporation Company Logo Adjustable Rate Mortgages – ARM Resets USDbn 4Q 2006 2Q 2007 3Q 2007 12.0 10.7 9.9 10.0 8.0 5.8 6.0 5.1 5.3 3.8 4.1 4.0 4.0 3.0 3.0 2.8 2.9 2.0 1.3 1.1 1.1 0.8 0.5 0.2 0.0 2007 2008 2H 2007 2008 4Q 2007 2008 Total HBIO Mortgage Services Retail Branch RE • Proact
Slide 57: Mortgage Services loans – Vintages
HSBC Finance Corporation Company Logo Mortgage Services loans – Vintages Vintages (USDbn) December 2006 March 2007 June 2007 September 2007 2007 0.6 1.4 1.5 2006 15.2 15.0 13.5 12.9 2005 19.9 18.0 15.6 14.2 2004 9.3 8.3 6.7 6.3 Pre 2004 5.2 4.8 4.3 4.0 49.6 46.7 41.5 38.9 • Continued progress in red
Slide 58: Significant changes in Mortgage Services servicing operation
Significant changes are in place for the Mortgage Company Logo Services servicing operation • The senior management team has been significantly upgraded (80 per cent in People role less than 12 months) • Dedicated Managing Director for Ring Fence in place • Director of analytics from CL installed ov
Slide 59: Bankcard, Retail Cards and Group Card
HSBC FINANCE CORPORATION Bankcard, Retail Cards and Group Card WALTER MENEZES 3 December 2007 GROUP EXECUTIVE
Slide 60: Agenda
Agenda Company Logo • US Bankcard • US Retail Cards • Group Cards 60
Slide 61: US Bankcard overview
US Bankcard overview Company Logo • Fifth-largest US MasterCard/Visa issuer • USD29.6 billion in managed receivables • 21 million active accounts • Unique capability to issue all four brands: MasterCard, VISA, American Express and Discover Receivables (USD billions) 28.2 29.6 26.0 19.6 2004 2005 200
Slide 62: GM Program overview
GM Program overview Company Logo • Fifteen-year relationship with General Motors • Largest automobile credit card rewards program • Stable receivable base • Primarily prime and super-prime customers • Strong value proposition of three per cent and five per cent of spend drives customer loyalty and v
Slide 63: UP Program overview
UP Program overview Company Logo • Eleven-year relationship with AFL-CIO • Largest affinity card portfolio in the USA • Relationships with 14 million union members • Strong endorsement from union leadership and internationals • Each union marketed under its own brand • Above industry average portfol
Slide 64: Metris Portfolio update
Metris Portfolio update Company Logo • Acquired December 2005 (USD5.3 billion in receivables) • Primarily serves near-prime segment • Continues to perform above expectations • Leverages all four networks (MasterCard, VISA, American Express and Discover) • Fully integrated into HSBC business; leverag
Slide 65: Competitive advantages of Card Business
Competitive advantages of Card Business Company Logo • Full-spectrum lender • Large customised partnership programs • Analytically driven decision-making (sales and marketing, risk management, operations and collections) • Efficient, low-cost operations • Global strengths of HSBC franchise • Low cos
Slide 66: Bankcard performance
Bankcard performance Company Logo Receivables (billions) Net Interest Margin 2004-06 CAGR approximately 20% $35 14% $29.6 11.9% 11.8% $30 $28.2 12% $26.0 10.8% 10.4% $25 10% $19.6 $20 8% $15 6% $10 4% $5 2% $0 0% 2004 2005 2006 Sep-07 2004 2005 2006 YTD Sep-07 Net Income (millions) Return on Average
Slide 67: Card Credit trends
Card Credit trends Company Logo Net Charge-offs 8.0% 8.0% 7.2% 7.1% 6.9% 6.9% 7.0% 6.2% 6.8% 5.8% 5.5% 6.0% 4.0% 4.0% 2.0% 0.0% Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 6.0% 2+ Delinquency 5.2% 4.6% 4.5% 4.4% 4.5% 4.6% 4.5% 4.5% 4.1% 4.2% 4.0% 3.7% 2.0% 0.0% Mar-0
Slide 68: Actions to mitigate credit risk – Bankcard
Actions to mitigate credit risk – Bankcard Company Logo • Slowing receivable and account growth, and tightening initial credit line assignment criteria • Closing inactive accounts • Decreasing credit lines and tightening credit line increase criteria • Holding prime/non-prime mix flat • Reducing bal
Slide 69: Agenda
Agenda Company Logo • US Bankcard • US Retail Cards • Group Cards 69
Slide 70: Retail Cards overview
Retail Cards overview Company Logo • Third-largest private label issuer • USD18 billion in managed receivables • Almost 16 million active accounts • More than 60 active merchant relationships Receivables (USD billions) 18.1 18.0 17.1 15.6 2004 2005 2006 Sep '07 Note: results reported on an IFRS Mana
Slide 71: Diversified portfolio
Diversified portfolio Company Logo General merchandise Department 6% store 13% Home improvement 4% Furniture Recreational 11% vehicles 34% Consumer electronics 32% As of September 2007 71
Slide 72: Partnerships with some of the nation's largest retailers
Partnerships with some of the nation’s largest Company Logo retailers 72
Slide 73: Competitive advantages
Competitive advantages Company Logo • Strong partnership culture • Flexible program structure • Ability to serve multiple origination channels • Efficient, low-cost operations • Global strengths of HSBC franchise • Low cost of funds and capital 73
Slide 74: Retail Cards performance
Retail Cards performance Company Logo Receivables (billions) Net Interest Margin 2004-06 CAGR approximately 8% $25 10% 8.9% 8.4% $20 $18.1 $18.0 8% 7.6% $17.1 6.9% $15.6 $15 6% $10 4% $5 2% $0 0% 2004 2005 2006 Sep-07 2004 2005 2006 YTD Sep-07 Net Income (millions) Return on Average Assets 2004-06 C
Slide 75: Retail Cards Credit trends
Retail Cards Credit trends Company Logo Net Charge-offs 6.0% 4.2% 4.4% 4.3% 4.3% 3.9% 4.2% 4.1% 3.8% 3.8% 4.0% 4.0% 3.5% 2.0% 0.0% Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 4.0% 2+ Delinquency 3.1% 3.0% 2.7% 2.8% 2.8% 2.7% 2.7% 2.5% 2.4% 2.5% 2.4% 2.5% 2.0% 1.0% 0.
Slide 76: Actions to mitigate risk – Retail Cards
Actions to mitigate risk – Retail Cards Company Logo • Implementing numerous credit-tightening efforts across retail merchant base, including power sports industry • Reducing contingent lines within inactive accounts • Increasing collections capacity and intensity – Increasing outbound calling – Hir
Slide 77: Card and Retail practice change summary
Card and Retail practice change summary Company Logo Deliver high brand values and strong customer value proposition in our products and service. Key changes to our practices include: • Eliminating over-limit fees when occurrence is due to finance charges or fee assessment • Extending time customers
Slide 78: Agenda
Agenda Company Logo • US Bankcard • US Retail Cards • Group Cards 78
Slide 79: Group Cards presence
Group Cards presence Company Logo • HSBC issues cards in approximately 40 countries across five continents, making it one of the few truly global players in the industry • Over 100 million cards in force 79
Slide 80: Exporting best practices globally
Exporting best practices globally Company Logo • HSBC has established global cards centres of excellence to implement best practices and deliver low cost in customer care and collections • In Asia and Latin America, we leveraged underwriting, modelling and consulting expertise from HBIO to enhance c
Slide 81: Exporting best practices globally (continued)
Exporting best practices globally (continued) Company Logo • Leveraging our experience in North America, we have formed major relationships globally: – Marks & Spencer and John Lewis Partnership in the UK – Dixons in Central and Eastern European countries – Best Buy in Canada, Mexico and China – BR
Slide 82: Building global scale
Building global scale Company Logo • WHIRL, our global card system, now services 86 million cards (comprising 75 per cent of our business) across 16 countries • Since 2003, new cards businesses have launched in Australia, Canada, China, the Czech Republic, Iraq, Poland and Uruguay • Plans are underw
Slide 83: Update – developing countries
Update – developing countries Company Logo • China – Launched Wal-Mart co-branded card in August 2006 (joint venture with the Bank of Communications) • Mexico – Leveraging the branch network through bundled products like Tu Cuenta • India – Growth has been achieved through multiple sales channels in
Slide 84: Our aspirations
Our aspirations Company Logo • Leverage our expertise from developed markets to substantially grow our business in developing markets • We will achieve this by: – Providing successful acquisition tools to gain new customers – Being the first choice for our relationship-banked customers – Growing our
Slide 85: HSBC is well-positioned for global growth
HSBC is well-positioned for global growth Company Logo • Size and scale, complemented by strong local presence • Strong balance sheet, funding and capital market access • Full-spectrum lending capabilities • Global Resourcing and low-cost structure • Strong position across card spectrum (MasterCard/
Slide 86: HSBC Global Technology
HSBC Global Technology KEN HARVEY 3 December 2007 CHIEF INFORMATION OFFICER
Slide 87: HSBC Technology and Services: Global systems update
HSBC Technology and Services Company Logo Global systems update • Converged on a single computing infrastructure that allows global leverage of applications • Global platform upgrade is ahead of plan and early business success warrants acceleration • Refined and improved the method of converting cou
Slide 88: IT spend trends
IT spend trends Company Logo Run-the-Bank (RTB) versus Change-the-Bank (CTB) 2005 2006 2007 29% 27% 29% 54% 53% 52% 17% 20% 19% RTB total = 71% RTB total = 73% RTB total = 71% 2008 guideline 32% RTB – Infrastructure (including Gold Library ITO) 50% RTB – Application maintenance CTB – Application dev
Slide 89: Technology and services
Technology and services Company Logo HSBC IT continues to provide strong economies of scale The world’s largest privately operated integrated corporate network • Four global data centre pairs • 80 global ‘Group’ platforms Reducing unit cost • Over 40 per cent of development in low-cost centres of pr
Slide 90: Number of workstations
Completed the migration to a single desktop Company Logo Common Windows Desktop (CWD) Active directory (AD) Migration to Group CWD Migration to Group AD 350,000 350,000 Number of workstations Number of active users 300,000 300,000 250,000 250,000 200,000 200,000 150,000 150,000 100,000 100,000 50,00
Slide 91: CIBM's global platform
CIBM’s global platform Company Logo From 43 systems… …to 26 (including 12 core global trading systems) Recognition from the 2007 European Banking Technology Awards: • Treats in Europe (TiE), our treasury trading system won Best Treasury/Cash Management Achievement for its Satellite Site Strategy • T
Slide 92: Volumes migrated
R2 Enterprise Application Integration (EAI) Company Logo Allows any service, in any channel, anywhere 65 per cent of all transactions Total monthly volume as of October 2007 – 1,111,490,140 1,200,000,000 Volumes migrated 1,000,000,000 800,000,000 600,000,000 400,000,000 200,000,000 0 May-06 Jun-06 J
Slide 93: HSBC's multi-channel development
HSBC’s multi-channel development Company Logo ‘Build once, deploy many’ is the foundation of new global offerings Deploy many Common Balance enquiry Order card Customer locate Bill payment functions Build once Messaging and transformation layer (EAI) Global Global Customer One HSBC One HSBC Global G
Slide 94: One HSBC Services
One HSBC distribution Company Logo Implementation/Transition model Account information Customer Bill pay and facing collections One HSBC Services Offers, rewards and points Disputes and fraud Credit Staff Search facing Legacy front end 94
Slide 95: The benefits of 'build once, deploy many'
The benefits of ‘build once, deploy many’ Company Logo • Transaction volumes will grow exponentially • Process jobs will continue to decline • Information management will rule • Regions run the ‘back office’ for each other 95
Slide 96: Technology and services One HSBC 24/7 delivery
Technology and services Company Logo One HSBC – ‘build once, deploy many’ World-class credit 2G cards system Global internet 75 per cent of cards in force Deployed to 64 per cent on a global platform registered and 74 per cent public customers HSBCnet HSBC Universal Banking In 68 countries with Used