HSBC Holdings PLC · LSE:HSBA
HSBC — Non-Deal Roadshow (November 2012)
32 slides from HSBC's roadshow presentation, November 2012
Slide 1: Global Banking and Markets Investor roadshow
Global Banking and Markets Investor roadshow Samir Assaf Group Managing Director, Chief Executive, Global Banking and Markets Date: 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 f
Slide 3: HSBC Group management matrix
HSBC Group management matrix Hong Kong and rest Middle East and Europe North America Latin America of Asia Pacific North Africa RBWM Retail Banking and Wealth Management (RBWM) CMB Commercial Banking (CMB) GBM Global Banking and Markets (GBM) GPB Global Private Banking (GPB) Global Functions Corpora
Slide 4: Four integrated Global Businesses
Four integrated Global Businesses Sep YTD 2012 net operating Sep YTD 2012 net operating income USD12,400m1 income USD14,654m1 FY2011 net operating FY2011 net operating income income USD15,611m1 USD17,057m1 2009 – 2011 cumulative PBT 2009 – 2011 cumulative PBT USD18,312m1 USD26,526m1 20
Slide 5: GBM strategy is aligned to the strategy of the Group
GBM strategy is aligned to the strategy of the Group Group strategy GBM strategy International trade and capital flows International network connecting Emerging emerging and mature markets, covering International network in markets markets led key growth areas that matter 4 main hubs and 6 str
Slide 6: How is GBM structured
How is GBM structured Global Banking and Markets Coverage Groups Clients – over 4,000 mastergroups1 FX Credit and Lending Payments and Cash Balance Sheet Credit Equity Capital Management (PCM) Management (BSM) Rates Markets (ECM) Securities Services GBM Equities Project and Expor
Slide 7: Strong GBM financial performance diversified by product and geography (Average 2009-2011)
Strong GBM financial performance diversified by product and geography Average 2009-2011 Managed view of operating income1 Profit before tax1 % average 2009-2011 % average 2009-2011 Total: USD19bn Total: USD9bn Credit (8%) Europe (28%) Rates (11%) FX (16%) Hong Kong (15%) Equities (4%) Securities Ser
Slide 8: Strong GBM financial performance diversified by product and geography (YTD Sep 2012)
Strong GBM financial performance diversified by product and geography YTD Sep 2012 Managed view of operating income1 Profit before tax2 % YTD Sep 2012 % YTD Sep 2012 Total: USD14.7bn Total: USD7.3bn Credit (4%) Europe (20%) Rates (15%) FX (17%) Hong Kong (16%) Equities (4%) Securities Services (8%)
Slide 9: Diversified and resilient client base
Diversified and resilient client base Financial institutions relationship revenue split by product1 Security Services Payments and Cash Management Financial Institutions FX Credit and Lending Trade Governments Asset Management Equities Rates Asset and Structured Finance Corporates Credit/DCM Other F
Slide 10: In response to regulatory change GBM has clear competitive advantages
In response to regulatory change GBM has clear competitive advantages Impact Concerns Strengths Leverage in ring-fenced bank Precise composition of ring- Ability to service customers Minimum loss absorbing fenced bank from subsidiary balance Structural capital requirements Geographic reach
Slide 11: Wholesale banking industry is changing and facing profitability challenges
Wholesale banking industry is changing and facing profitability challenges Industry changes in product profitability ROE (%) Pre-regulation Post-regulation and post-mitigation FX 30 c.19 Cash Equities 25 c.18 Struc Equity Derivs 27 c.12-13 Flow Rates 19 c.11-12 Prime Services 15 c.11-12 Commodities
Slide 12: GBM regulatory challenged products represent 14% of total operating income
GBM regulatory challenged products represent 14% of total operating income1 GBM total operating income2 ex BSM and other Minimum, maximum and average 2007 – 2011 (USDm) Average (USDm) Share of 2011 total operating income (%) Foreign Exchange 3,005 24% Financing & ECM 2,983 24% Rates 1,873 10% Securi
Slide 13: Transaction banking is a core and strategic product delivered to GBM clients
Transaction banking is a core and strategic product delivered to GBM clients Benefits from stable annuity-like revenues with further NII upside from interest rates increase Supports both Group and GBM’s liquidity position Strategic product with strong cross-selling potential for other products
Slide 14: Payments and Cash Management – a key funding engine
Payments and Cash Management – a key funding engine HSBC payments grow faster than global payments Global payment volumes1 (m) CAGR +8% 4,165 3,841 3,579 Continued strong growth in GBM’s contribution to PCM revenues – 2009 2010 2011 USD1.3bn, YTD SEP122 HSBC payment volumes1 (m) Comprehensive pr
Slide 15: Trade Finance – HSBC is the world's leading bank
Trade Finance – HSBC is the world’s leading bank1 HSBC exports turnover grows faster than world exports turnover World exports turnover (USDbn)2 CAGR +13.6% 4,167 4,586 3,551 2009 2010 2011 Trade financing provides access to the wider corporate relationship HSBC exports turnover3 CAGR +30.3% Our
Slide 16: Markets – strength in core product capabilities
Markets – strength in core product capabilities Market leadership in our product suite Strength in vanilla flow, G10 FX, Credit, Rates Top tier primary bond position in Asia, Latin America and Europe and leading secondary trading capabilities Innovative Client solutions, including RMB developm
Slide 17: FX – HSBC derives a larger quantity of its FX activity from non-FI clients
FX – HSBC derives a larger quantity of its FX activity from non-FI clients than any other competitor Euromoney 2011 FX Survey1 Non-FI FX volume as a proportion of each bank’s total FX volume (with banks’ average rebased to 1) 2.19 Bank 1 1.88 Bank 2 1.72 Bank 3 1.03 Average 10 banks 1.00 Bank 4 0.79
Slide 18: Equities – continue to target opportunities in chosen markets
Equities – continue to target opportunities in chosen markets The Global Equities targeted approach by country, core or relevant in selected markets, aligned with Research and Banking is the right one and will continue Equities wallet share increased in all relevant markets between 2008 and 2011
Slide 19: Debt Capital Markets – leading emerging markets platform
Debt Capital Markets – leading emerging markets platform HSBC EM issuance volumes grow faster than global EM volumes Global Emerging Market Bonds issuance volumes1 (USDbn) 2 CAGR +21% 716 851 846 635 Leadership in Global EM DCM Diverse and multi currency Global EM 2009 2010 2011 YTD SEP12 DCM pl
Slide 20: Event products – strength in core product capabilities
Event products – strength in core product capabilities Business highlights Rankings 2012 Significant momentum in ECM in Asia ex HK/China IPOs (HK block Equity Capital Markets1 9 trades/South East Asia/India) as well as LatAm (Mexico) M&A continues its momentum in cross-border, emerging markets t
Slide 21: RMB internationalisation – HSBC is at the forefront
RMB internationalisation – HSBC is at the forefront Business highlights Market leader in Dim Sum bond market with 24% market share Market innovator – supporting 6 new “currency crosses” to help Asiamoney declared, “HSBC is considered the clear leader for offshore renminbi reduce FX costs for cor
Slide 22: Connectivity – synergies with Global Businesses to generate increasing revenues
Connectivity – synergies with Global Businesses to generate increasing revenues Potential upside Initiatives in the medium term Aspiration: increase incremental CMB collaboration revenues in the medium term – In 2011, incremental revenues of c.USD500m1 Commercial Banking – In 2012, 8% growth in co
Slide 23: BSM – revenues stabilising after two exceptional years
BSM – revenues stabilising after two exceptional years Balance Sheet Management Revenues (USDm) 3,500 3,350 BSM has a clear governance 3,000 structure BSM does not manage structural 2,500 2,269 credit risks 2,206 2,000 1,988 2,041 Counterparty risk is mostly short 1,833 1,765 1,723 term exposu
Slide 24: Costs – remain a key area of focus
Costs – remain a key area of focus GBM Total Operating Expenses Examples of costs initiatives (USDbn) 2.7 People - streamlined management structures through review in 2.5 2.4 2.4 2.4 2.4 2.4 2H2011 and 1H2012 2.3 2.2 Clients – reviewing client base and enhancing due diligence standards Infrast
Slide 25: RWAs and Legacy Credit
RWAs and Legacy Credit Industry changes in product profitability Actively managing down legacy exposure Legacy In 2011, disposal actions taken to mitigate USD7bn RWA increase; but RWAs increased USD24bn largely due to regulatory changes Clear economic framework for hold versus dispose decision
Slide 26: Disciplined approach to risk appetite for capital market activities
Disciplined approach to risk appetite for capital market activities Overall Strategy and Risk Appetite is set first by the HSBC Board and ultimately defines the shape of our capital markets activities Chief Risk Officer is actively involved in the Strategy setting and the Five Filters have criti
Slide 27: GBM Governance Structure Overview (simplified)
GBM Governance Structure Overview (simplified) Committees Legal Entity Committees Oversight Senior GBM Audit and Risk Committee (HSBC North America Holdings Inc, Hongkong (Group Level Oversight – Chaired by David Shaw, and Shanghai Banking Corp Ltd, HSBC Bank plc, HSBC Advisor to the Holdings Board)
Slide 28: Why you should own HSBC
Why you should own HSBC The world is changing . . . HSBC’s distinctive position Long-term trends 1. Privileged access to growth Increasing imbalances in opportunities (cohesive portfolio) international trade and capital flows International network supporting Rebalancing of the world economy ou
Slide 29: Appendix
Appendix
Slide 30: GBM league table rankings show strengths in Asia, MENA, Latam
Appendix GBM league table rankings1 show strengths in Asia, MENA, Latam in Transaction Banking, Global Banking and vanilla Global Markets products Transaction Banking Global Banking Global Markets Trade and Project and Securities PCM Receivable Export ECM M&A FX DCM Rates Credit Equities Services Fi
Slide 31: GBM Financials
Appendix GBM Financials1 (USDm) Sep YTD 2012 Sep YTD 2011 Credit 656 311 Rates 2,168 1,114 Foreign Exchange 2,469 2,442 Equities 536 873 Securities Services 1,199 1,284 Asset and Structured Finance 509 405 Global Markets 7,536 6,429 Financing and Equity Capital Markets 2,367 2,468 Payments and Cash
Slide 32: GBM strategy is underpinned by trends in growing international trade and capital flows
Appendix GBM strategy is underpinned by trends in growing international trade and capital flows Major trade flows1 Country trade growth2 2011 Imports and Exports, USDtn CAGR 2011-2021 % Intra-regional Intra-regional trade: trade: Europe 29.5% 11 China 3.6 6.7 North America 3.5% USA 3.7 6 2.8 Germany