HSBC Holdings PLC · LSE:HSBA
HSBC — Non-Deal Roadshow (November 2012)
32 slides from HSBC's roadshow presentation, Nov 6, 2012
Slide 1: HSBC Latin America Barclays investor roadshow
HSBC Latin America Barclays investor roadshow Sao Paulo Victor Jimenez Chief Financial Officer, HSBC Latin America 6 November 2012
Slide 2: 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 fu
Slide 3: Agenda
Agenda 1 World economic outlook 2 The Latin America region 3 Importance of the region to HSBC 4 Strategic direction 5 Business performance and progress in the region 6 Closing remarks 2
Slide 4: 1. World economic outlook
1. World economic outlook HSBC «>
Slide 5: Economic indicators: improved Latin American fundamentals beyond world average
Economic indicators Improved Latin American fundamentals beyond world average GDP growth Export growth (%) End of year (%) 4.4 2.4 Fiscal budget balance Consumer spending (domestic demand) (% of GDP) Growth y-o-y (%) 2.2 4 Source: HSBC Global research, Global economics 4Q12
Slide 6: World economy size GDP
World economy size GDP 2010: USDbn 40,160 2050: USDbn 122,722 Economic growth in Asia and Latin America will rebalance the world economy 5 Source: HSBC Research – The World in 2050 1 The World in 2010 and 2050 using 2000 exchange rates
Slide 7: Importance of Latin America in the future
Importance of Latin America in the future Income per capita in 2050 Top economies by 2050 Multiple over GDP (USDtn) 2010 income China 24.6 7.3x US 22.3 1.5x India 8.2 6.4x Japan 6.4 1.6x Germany 3.7 2.1x UK 3.6 1.8x Brazil 3.0 2.9x Mexico 2.8 3.5x France 2.8 1.7x Canada 2.3 2.0x Turkey 2.1 4.3x 2.5
Slide 8: 2. The Latin America region
2. The Latin America region HSBC «>
Slide 9: Macroeconomics: economic recovery and positive perspectives
Latin America Macroeconomics Economic recovery and positive perspectives 8 Source: HSBC Global Research, Latin America economics 4Q12
Slide 10: Macroeconomics: sound government and monetary policies
Latin America Macroeconomics Sound government and monetary policies 9 Source: HSBC Global Research, Latin America economics 4Q12
Slide 11: Latin America Demography
Latin America Demography 550 million people in 2010… 600 million people in 2020… 90 - 94 90 - 94 80 - 84 80 - 84 70 - 74 70 - 74 60 - 64 60 - 64 30 million 50 - 54 50 - 54 additional 40 - 44 economically 40 - 44 active 30 - 34 30 - 34 population 20 - 24 20 - 24 (20-64 years) 10 - 14 10 - 14 0- 4 0-
Slide 12: The region has increased its openness to trade and is well diversified
Latin America The region has increased its openness to trade and is well diversified US Europe Asia Other Argentina 5.5 17.0 14.7 62.8 Brazil 10.1 20.7 21.6 47.6 Chile 11.3 18.2 26.5 44.1 Colombia 42.4 17.1 5.4 35.1 Mexico 78.7 5.9 4.1 11.3 Panama 15.2 12.7 10.1 62.0 Peru 15.3 20.7 20.7 43.3 Uruguay
Slide 13: Connectivity fast growing
Latin America Connectivity fast growing • Trade between Latin America and other regions was USD1.6 trillion1 in 2011 (5% of world trade) • Latin America trade will grow from USD1.6 to USD3.0 trillion by 2020 (7.0% CAGR) 1% 42% 17% 25% 4% 11%1 • Latin America includes some of the fastest growing cros
Slide 14: Credit penetration opportunity
Latin America Credit penetration opportunity Domestic credit (% GDP) 214% 127% 81% 85% 49% LatAm average 19% 13% Argentina Mexico Brazil Chile Panama China United Kingdom Low financial domestic credit / GDP penetration, but improving following economic growth and stable environment Source: Internati
Slide 15: Political outlook
Latin America Political outlook Latin America elections Brazil Year: 2010 President elected: Dilma The current Latin American political outlook for 2012 and 2013 Rousseff is one of continuity, due to the general positive economic Mexico environment Year: 2012 President elected: Enrique Peña Nieto
Slide 16: 3. Importance of the region to HSBC
3. Importance of the region to HSBC
Slide 17: Brazil and Mexico are strategically important countries for HSBC
Brazil and Mexico are strategically important countries for HSBC • Brazil, Mexico and Argentina have been included in HSBC´s Strategy as "Priority Growth Markets" • Brazil and Mexico are the 4th and 7th largest PBT contributors to the Group in 1H12 • The Brazilian and Mexican Retail Banking and Weal
Slide 18: Importance of Latin America to the Group
Importance of Latin America to the Group Share of GDP 2012e (%)1 No. of offices per country2 Country profit contribution 1H12 USDm3 Top 3 Latin Latin countries: America: America: ~68% ~33% ~10% Sources: 17 1. IMF, World Economic Outlook, April 2012 2. HSBC International Network 3. 2012 HSBC Holdings
Slide 19: 4. Strategic direction
4. Strategic direction HSBC «>
Slide 20: Group Strategy: key execution metrics
Group Strategy Key execution metrics Progress to date Disposals and closures of non-strategic / 6 transactions to dispose of Capital Deployment underperforming businesses or close businesses Five Filters Turnaround of strategically relevant businesses c. USD220m sustainable savings in 2011 a
Slide 21: Group Strategy: committed to delivering on our financial targets
Group Strategy Committed to delivering on our financial targets Capital Profitability Efficiency Common equity tier 1 ROE target of CER target of ratio of 12 – 15% 48 – 52% 9.5 – 10.5% 20
Slide 22: Five Filters: reduced fragmentation in Latin America
Five Filters Reduced fragmentation in Latin America Costa Rica Full exit El Salvador Full exit Honduras Full exit Priority Markets Chile Exit RBWM; become network market to Argentina Footprint support CMB, GBM simplification Brazil Colombia Onshore exit; move to rep office model Mexico Peru On
Slide 23: Footprint
Latin America Footprint June 2012: More than 2,400 branches throughout June 2012: Approximately 2,100 branches throughout 15 countries 4 countries Presence in: Main presence in: Mexico Mexico Guatemala Panama El Salvador Brazil Honduras Argentina Nicaragua Costa Rica Panama Colombia Peru Venezuela B
Slide 24: Strategic direction and actions overview
Latin America Strategic direction and actions overview Retail Banking and Wealth Commercial Banking Global Banking and Markets Management Move from a product Develop unique offerings based Connect corporate oriented approach to a on international network, e.g., customers throughout Latin clien
Slide 25: Country initiatives
Latin America Country initiatives Brazil Mexico Wealth Management: Grow premium Cards and consumer credit: new client base and revenues sales, targeted campaigns and early activation Continue driving profitable growth in GBM and CMB Commercial Banking - Capture Business Banking opportunity Leverage
Slide 26: 5. Business performance and progress in the region
5. Business performance and progress in the region
Slide 27: HSBC is a key player in the Latin American region
Latin America HSBC is a key player in the Latin American region Figures as of 30 June 2012 LatAm Share of total (USDm) Group Mexico: 5th largest Total Assets 138,968 5% bank1 Loans and advances to customers (net) 52,960 5% Brazil: 5th largest private bank2 Customer accounts 69,594 5% Argentina
Slide 28: Significant growth in the region since 2010
Latin America Significant growth in the region since 2010 Nine months ended Half-year to 30 Sep 30 Sep 30 Jun 30 Jun 30 Jun CAGR (USDm) 2012 2011 2012 2011 2010 Jun10-12 (%) Net operating income before loan impairment charges and other credit risk provisions 8,260 8,708 5,565 5,683 4,715 8.6 Loan im
Slide 29: Improved financial ratios
Latin America Improved financial ratios Nine months ended Half-year to 30 Sep 30 Sep 30 Jun 31 Dec 30 Jun 31 Dec 30 Jun 2012 2011 2012 2011 2011 2010 2010 RoRWA 2.4% 2.5% 2.2% 2.2% 2.2% 2.0% 2.1% Cost efficiency ratio 58.3% 62.9% 59.0% 61.4% 65.3% 67.4% 63.9% JAWS 6.9% 3.5% 3.7% 6.1% 3.5% -5.8% -1.2
Slide 30: Profit/(loss) before tax by global business
Latin America Profit/(loss) before tax by global business Nine months ended Half-year to 30 Sep 30 Sep 30 Jun 30 Jun 30 Jun CAGR (USDm) 2012 2011 2012 2011 2010 Jun10-12 (%) Retail Banking and Wealth Management 379 590 214 336 168 12.9 Commercial Banking 593 713 381 475 236 27.1 Global Banking and M
Slide 31: 6. Closing remarks
6. Closing remarks HSBC «>
Slide 32: In summary…
In summary… • Latin America’s macroeconomic fundamentals have recovered, putting it as a key region with a future positive economic outlook • The region presents sound fiscal and monetary policies, resulting in economic stability • Latin American banking system is under control, well capitalised and