HSBC (HSBA) Fixed Income Call summary

Financial performance and guidance

• Reported half-year profit before tax was $21.6 billion, or $18.1 billion excluding notable items, stable year-on-year.

• Reported revenue for 1H24 reached $37.3 billion, up 1% year-on-year; revenue excluding notable items rose 2% to $33.7 billion.

• Banking net interest income (NII) for 2024 is now expected to be around $43 billion, reflecting reduced sensitivity to interest rates.

• Return on average tangible equity was 17% excluding notable items, with mid-teens guidance for 2024 and 2025.

• Announced up to $3 billion share buyback and $1.8 billion in dividends on ordinary shares.

Business transformation and portfolio management

• Completed sales of Canadian, French retail, and Russian businesses, progressing with Argentina and Armenia exits.

• Focus has shifted to core franchises in Hong Kong, the UK, and international wholesale and wealth activities.

• Significant growth in international retail and wholesale client revenue, with 60% of wholesale revenue from multi-jurisdictional clients.

• Wealth business delivered 12% YoY revenue growth; Asia net new invested assets up 43% YoY.

• Home markets (Hong Kong and UK) saw profit growth, with Hong Kong PBT up 1% and UK PBT up 11% YoY (excluding SVB UK gain).

Capital, liquidity, and funding

• CET1 ratio stands at 15%, above the 14-14.5% target range, with plans to bring it down over time.

• MREL ratio is 31.8% of RWAs, 4.6 percentage points above requirement.

• Total deposit base is $1.6 trillion, loan-to-deposit ratio at 59%, and high-quality liquid assets near $800 billion.

• Customer loans and deposits grew for the second consecutive quarter, up 1% and 2% respectively since 1Q24.

• Holdco Senior issuance plan for 2024 is $10 billion, with net negative issuance due to $12 billion in maturities and $5 billion tendered.