HSBC Holdings PLC · LSE:HSBA
HSBC — Investor Day (November 2003)
26 slides from HSBC's investor day presentation, Nov 27, 2003
Slide 1: North America & Consumer Finance
North America & Consumer Finance =>@ =>@A
Slide 2: Forward-looking statements
Forward-looking Forward-looking statements statements This This presentation presentation and and subsequent subsequent discussion discussion may may contain contain certain certain forward-looking forward-looking statements statements with with respect respect to to the the financial financial cond
Slide 3: Agenda
Agenda ➣ Profile of HSBC North America ➣ Integration update ➣ Household update ➣ HSBC USA ➣ Long-term goals Investor Day - 27 November 2003 3
Slide 4: HSBC North America
HSBC North America ➣ 13th largest financial services company in North America ➣ Over 50,000 employees ➣ Operates in 46 states and Canada ➣ 1,800 branches Investor Day - 27 November 2003 4
Slide 5: Integration update
Integration update ➣ Integration efforts are on track ➣ Benefits are being driven by funding and cost saves Investor Day - 27 November 2003 5
Slide 6: Funding benefits should exceed $1 billion annually
Funding benefits should exceed $1 billion annually ➣ $9.2 billion in funding received from HSBC and clients in ’03 ➣ Asset transfers to HSBC Bank USA • $3 billion of mortgages pending for December ’03 • $22 billion of managed credit cards available in ’04 ➣ Credit spreads have tightened on new issue
Slide 7: Cost savings
Cost savings Should produce benefits exceeding $200 million per year within two years ➣ Largest savings from combining technology teams and data centers ➣ Consolidated purchasing ➣ Merged credit card businesses ➣ Combined management of mortgage lending ➣ Reduced layers of management and support func
Slide 8: Revenue synergies
Revenue synergies ➣ Full spectrum lending ➣ Exporting the Household model ➣ Retail sales partnerships Investor Day - 27 November 2003 8
Slide 9: Household's key issues
Household’s key issues ➣ Funding ➣ Growth ➣ Credit Investor Day - 27 November 2003 9
Slide 10: Receivable growth
Receivable growth * ➣ 12% annualized growth for first nine months of ’03 ➣ Branch sales are improving ➣ Expect low double-digit receivable growth for the year * Managed basis The above information includes non-GAAP financial measures and is provided for comparison of our operating trends only and sh
Slide 11: Charge-offs have improved
Charge-offs have improved * First quarterly drop in 11 quarters 5.5 4.89 5.0 4.75 4.68 4.39 4.39 4.5 4.26 % 4.09 3.90 4.0 3.71 3.74 3.56 3.5 3.41 3.0 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2000 2001 2002 2003 * Managed basis The above information includes non-GAAP financial measures and is provided for
Slide 12: Reserves are at record level
Reserves are at record level * Continue to build reserves 6.0 5.7 5.5 5.1 5.0 $ Billions 4.5 3.8 4.0 3.5 3.2 3.0 2.7 2.5 2.5 2.5 2.0 '97 '98 '99 '00 '01 '02 3Q'03 * Managed basis The above information includes non-GAAP financial measures and is provided for comparison of our operating trends only an
Slide 13: Reserve coverage is stronger
Reserve coverage is stronger % of Managed receivables * 5.50 4.89 5.00 4.74 4.50 3.99 3.99 4.00 3.72 3.78 3.65 3.50 3.00 '97 '98 '99 '00 '01 '02 3Q'03 * Managed basis The above information includes non-GAAP financial measures and is provided for comparison of our operating trends only and should be
Slide 14: Non-performing coverage is stable
Non-performing coverage is stable * 1.5 1.16 1.10 1.13 1.12 1.07 1.05 1.00 1.0 % 0.5 0.0 '97 '98 '99 '00 '01 '02 9'03 * Reserves as a proportion of non-performing receivables, Managed basis The above information includes non-GAAP financial measures and is provided for comparison of our operating tre
Slide 15: Risk-adjusted returns are stable
Risk-adjusted returns are stable * 8.0 7.64 7.5 7.40 7.31 7.21 % 7.14 7.18 7.07 ** 7.0 6.5 '97 '98 '99 '00 '01 '02 9'03 * Managed basis ** Excludes $378.2 million loss on disposition of Thrift assets and deposits The above information includes non-GAAP financial measures and is provided for comparis
Slide 16: HSBC USA: The opportunity
HSBC USA The opportunity 2002 Ranking / Institution Return on Assets • Fifth Third Bank 2.18% • Wells Fargo 1.69 • M&T Bank 1.52 • Charter One 1.47 • Washington Mutual 1.44 • Bank One 1.25 • HSBC USA .97 A 1.50% ROA translates to over $400 million of incremental net income Investor Day - 27 November
Slide 17: Revenue growth
Revenue growth The opportunity Ranking / Institution Growth Rate * • Washington Mutual 27.8% • M&T Bank 14.3 • Charter One 9.8 • Fifth Third Bank 9.3 • Wells Fargo 7.5 • Bank One 2.5 • HSBC USA 1.1 * CAGR for the three years through 2002 Investor Day - 27 November 2003 17
Slide 18: HSBC USA 2004 priorities
HSBC USA 2004 priorities ➣ Focus on customer service ➣ Improve capital allocation ➣ Achieve high single-digit revenue growth ➣ Lower efficiency ratio < 50% Investor Day - 27 November 2003 18
Slide 19: Long-Term Goals
HSBC North America Long-Term Goals ➣ Become one of the top 5 financial institutions in profitability Investor Day - 27 November 2003 19
Slide 20: Long-Term Goals
HSBC North America Long-Term Goals ➣ Become one of the top 5 financial institutions in profitability ➣ Be low-cost producer in financial services Investor Day - 27 November 2003 20
Slide 21: Efficiency Ratio
Efficiency Ratio 9 Months 2003 Household * 35% HSBC USA 54% Combined 39% * Managed basis The above information includes non-GAAP financial measures and is provided for comparison of our operating trends only and should be read in conjunction with our owned basis GAAP financial information. Please re
Slide 22: Long-term goals
HSBC North America Long-term goals ➣ Become one of the top 5 financial institutions in profitability ➣ Be low-cost producer in financial services ➣ Attract and retain the best people • People are Key to Success Investor Day - 27 November 2003 22
Slide 23: Employer of choice
Employer of choice “100 Best Companies for Working Mothers” Working Mother, September 2003 “100 Best Places to Work in IT - #27 Computerworld, June 2003 Training – “Training Top 100,” #76 March 2003 Training, March 2003 Investor Day - 27 November 2003 23
Slide 24: Summary
Summary ➣ Household/HSBC integration is proceeding well and will deliver promised results ➣ Credit quality trends look good ➣ Growth is improving along with economic outlook ➣ 2004 focus will be on building and growing the business Investor Day - 27 November 2003 24
Slide 25: This presentation, including the accompanying slides and subsequent discussion, contains certain forward-looking info…
This presentation, including the accompanying slides and subsequent discussion, contains certain forward-looking information with respect to the financial condition, results of operations and business of HSBC USA and Household. This information represents expectations or beliefs concerning future ev
Slide 26: Slide 26