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Half-year Report - 2022 Interim Report - Part 4

1 Aug 2022 16:37

RNS Number : 5086U

HSBC Holdings PLC

01 August 2022

Independent review report to HSBC Holdings plc

Report on the interim condensed financial statements

Our conclusion

We have reviewed HSBC Holdings plc's interim condensed financial statements (the 'interim financial statements') in the interim report of HSBC Holdings plc and its subsidiaries (the 'Group') for the 6 month period ended 30 June 2022 (the 'period').

Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with UK-adopted International Accounting Standard 34, 'Interim Financial Reporting', International Accounting Standard 34, 'Interim Financial Reporting' as issued by the IASB, International Accounting Standard 34, 'Interim Financial Reporting' as adopted by the European Union, and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

What we have reviewed

The interim financial statements comprise:

• the consolidated balance sheet as at 30 June 2022;

• the consolidated income statement and consolidated statement of comprehensive income for the period then ended;

• the consolidated statement of cash flows for the period then ended;

• the consolidated statement of changes in equity for the period then ended; and

• the notes to the interim financial statements and certain other information1.

The interim financial statements included in the interim report of the Group have been prepared in accordance with, UK-adopted International Accounting Standard 34, 'Interim Financial Reporting', International Accounting Standard 34, 'Interim Financial Reporting' as issued by the IASB, International Accounting Standard 34, 'Interim Financial Reporting' as adopted by the European Union, and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

Basis for conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Financial Reporting Council for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the interim report of the Group and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

Conclusions relating to going concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed. This conclusion is based on the review procedures performed in accordance with this ISRE. However, future events or conditions may cause the Group to cease to continue as a going concern.

Responsibilities for the interim financial statements and the review

Our responsibilities and those of the directors

The interim report of the Group, including the interim financial statements, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the interim report of the Group in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority. In preparing the interim report of the Group, including the interim financial statements, the directors are responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Our responsibility is to express a conclusion on the interim financial statements in the interim report of the Group based on our review. Our conclusion, including our Conclusions relating to going concern, is based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion paragraph of this report. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

PricewaterhouseCoopers LLP

Chartered Accountants

London

1 August 2022

1 'Certain other information' comprises the following tables: 'Reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to banks and customers including loan commitments and financial guarantees' and 'Distribution of financial instruments to which the impairment requirements of IFRS 9 are applied, by credit quality and stage allocation'.

Interim condensed financial statements
	Page
Consolidated income statement	115
Consolidated statement of comprehensive income	116
Consolidated balance sheet	117
Consolidated statement of cash flows	118
Consolidated statement of changes in equity	119

Consolidated income statement
		Half-year to
		30 Jun	30 Jun	31 Dec
		2022	2021	2021
	Notes*	$m	$m	$m
Net interest income		14,451	13,098	13,391
- interest income		20,855	17,960	18,228
- interest expense		(6,404)	(4,862)	(4,837)
Net fee income	2	6,064	6,674	6,423
- fee income		7,949	8,458	8,330
- fee expense		(1,885)	(1,784)	(1,907)
Net income from financial instruments held for trading or managed on a fair value basis		4,921	4,184	3,560
Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss		(3,051)	2,795	1,258
Change in fair value of designated debt and related derivatives		(158)	(67)	(115)
Changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss		68	548	250
Gains less losses from financial investments		21	433	136
Net insurance premium income		7,646	5,663	5,207
Other operating income		723	155	347
Total operating income		30,685	33,483	30,457
Net insurance claims and benefits paid and movement in liabilities to policyholders		(5,449)	(7,932)	(6,456)
Net operating income before change in expected credit losses and other credit impairment charges		25,236	25,551	24,001
Change in expected credit losses and other credit impairment charges		(1,090)	719	209
Net operating income		24,146	26,270	24,210
Employee compensation and benefits		(9,071)	(9,610)	(9,132)
General and administrative expenses		(5,445)	(5,675)	(5,917)
Depreciation and impairment of property, plant and equipment and right-of-use assets		(1,075)	(1,160)	(1,101)
Amortisation and impairment of intangible assets		(828)	(642)	(796)
Goodwill impairment		-	-	(587)
Total operating expenses		(16,419)	(17,087)	(17,533)
Operating profit		7,727	9,183	6,677
Share of profit in associates and joint ventures		1,449	1,656	1,390
Profit before tax		9,176	10,839	8,067
Tax credit/(charge)		39	(2,417)	(1,796)
Profit for the period		9,215	8,422	6,271
Attributable to:
- ordinary shareholders of the parent company		8,289	7,276	5,331
- preference shareholders of the parent company		-	7	-
- other equity holders		626	666	637
- non-controlling interests		300	473	303
Profit for the period		9,215	8,422	6,271
		$	$	$
Basic earnings per ordinary share	4	0.42	0.36	0.26
Diluted earnings per ordinary share	4	0.41	0.36	0.26

* For Notes on the interim condensed financial statements, see page 110.

Consolidated statement of comprehensive income
	Half-year to
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$m	$m	$m
Profit for the period	9,215	8,422	6,271
Other comprehensive income/(expense)
Items that will be reclassified subsequently to profit or loss when specific conditions are met:
Debt instruments at fair value through other comprehensive income	(4,907)	(1,368)	(771)
- fair value losses	(6,328)	(1,392)	(878)
- fair value gains transferred to the income statement on disposal	(53)	(375)	(89)
- expected credit recoveries/(losses) recognised in the income statement	20	(26)	(23)
- income taxes	1,454	425	219
Cash flow hedges	(2,063)	(238)	(426)
- fair value gains/(losses)	(1,646)	877	(282)
- fair value gains reclassified to the income statement	(1,127)	(1,195)	(319)
- income taxes and other movements	710	80	175
Share of other comprehensive income/(expense) of associates and joint ventures	(141)	104	(1)
- share for the period	(141)	104	(1)
Exchange differences	(8,521)	(449)	(1,944)
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit asset/(liability)	95	(747)	473
- before income taxes	(132)	(775)	668
- income taxes	227	28	(195)
Changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in own credit risk	2,263	155	376
- before income taxes	3,030	(2)	514
- income taxes	(767)	157	(138)
Equity instruments designated at fair value through other comprehensive income	158	(348)	(98)
- fair value gains/(losses)	158	(345)	(98)
- income taxes	-	(3)	-
Effects of hyperinflation	417	166	149
Other comprehensive expense for the period, net of tax	(12,699)	(2,725)	(2,242)
Total comprehensive (expense)/income for the period	(3,484)	5,697	4,029
Attributable to:
- ordinary shareholders of the parent company	(4,246)	4,612	3,153
- preference shareholders of the parent company	-	7	-
- other equity holders	626	666	637
- non-controlling interests	136	412	239
Total comprehensive (expense)/income for the period	(3,484)	5,697	4,029

Consolidated balance sheet
		At
		30 Jun	31 Dec
		2022	2021
	Notes*	$m	$m
Assets
Cash and balances at central banks		363,608	403,018
Items in the course of collection from other banks		8,073	4,136
Hong Kong Government certificates of indebtedness		43,866	42,578
Trading assets		217,350	248,842
Financial assets designated and otherwise mandatorily measured at fair value through profit or loss		45,873	49,804
Derivatives	8	262,923	196,882
Loans and advances to banks		96,429	83,136
Loans and advances to customers		1,028,356	1,045,814
Reverse repurchase agreements - non-trading		244,451	241,648
Financial investments	9	430,796	446,274
Prepayments, accrued income and other assets		185,823	139,982
Current tax assets		1,151	970
Interests in associates and joint ventures	10	29,446	29,609
Goodwill and intangible assets		21,625	20,622
Deferred tax assets		5,650	4,624
Total assets		2,985,420	2,957,939
Liabilities and equity
Liabilities
Hong Kong currency notes in circulation		43,866	42,578
Deposits by banks		105,275	101,152
Customer accounts		1,651,301	1,710,574
Repurchase agreements - non-trading		129,707	126,670
Items in the course of transmission to other banks		9,673	5,214
Trading liabilities		80,569	84,904
Financial liabilities designated at fair value		126,006	145,502
Derivatives	8	251,469	191,064
Debt securities in issue		87,944	78,557
Accruals, deferred income and other liabilities		163,600	123,778
Current tax liabilities		685	698
Liabilities under insurance contracts		113,130	112,745
Provisions	11	1,900	2,566
Deferred tax liabilities		2,894	4,673
Subordinated liabilities		20,711	20,487
Total liabilities		2,788,730	2,751,162
Equity
Called up share capital		10,188	10,316
Share premium account		14,662	14,602
Other equity instruments		21,691	22,414
Other reserves		(8,576)	6,460
Retained earnings		150,417	144,458
Total shareholders' equity		188,382	198,250
Non-controlling interests		8,308	8,527
Total equity		196,690	206,777
Total liabilities and equity		2,985,420	2,957,939

* For Notes on the interim condensed financial statements, see page 110.

Consolidated statement of cash flows
	Half-year to
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$m	$m	$m
Profit before tax	9,176	10,839	8,067
Adjustments for non-cash items:
Depreciation, amortisation and impairment	1,903	1,802	2,484
Net (gain)/loss from investing activities	174	(485)	(162)
Share of profits in associates and joint ventures	(1,449)	(1,656)	(1,390)
Gain on acquisition of subsidiary	(71)	-	-
Change in expected credit losses gross of recoveries and other credit impairment charges	1,246	(484)	(35)
Provisions including pensions	208	301	762
Share-based payment expense	177	254	213
Other non-cash items included in profit before tax	(866)	205	305
Change in operating assets	15,987	(3,811)	(232)
Change in operating liabilities	(27,501)	49,015	22,161
Elimination of exchange differences1	49,417	5,212	13,725
Dividends received from associates	60	10	798
Contributions paid to defined benefit plans	(102)	(342)	(167)
Tax paid	(1,264)	(997)	(2,080)
Net cash from operating activities	47,095	59,863	44,449
Purchase of financial investments	(271,382)	(263,198)	(229,844)
Proceeds from the sale and maturity of financial investments	248,983	298,596	222,594
Net cash flows from the purchase and sale of property, plant and equipment	(590)	(375)	(711)
Net cash flows from (purchase)/disposal of customer and loan portfolios	(3,756)	1,063	1,996
Net investment in intangible assets	(1,240)	(1,011)	(1,468)
Net cash flow on (acquisition)/disposal of subsidiaries, businesses, associates and joint ventures	(525)	(84)	(22)
Net cash from investing activities	(28,510)	34,991	(7,455)
Issue of ordinary share capital and other equity instruments	-	1,996	-
Cancellation of shares	(1,840)	-	(707)
Net sales/(purchases) of own shares for market-making and investment purposes	(443)	1	(1,387)
Purchase of non-controlling interest in subsidiary	(197)	-	-
Redemption of preference shares and other equity instruments	(723)	(3,450)	-
Subordinated loan capital issued	2,659	-	-
Subordinated loan capital repaid	(11)	(852)	(12)
Dividends paid to shareholders of the parent company and non-controlling interests	(4,497)	(4,121)	(2,262)
Net cash from financing activities	(5,052)	(6,426)	(4,368)
Net increase in cash and cash equivalents	13,533	88,428	32,626
Cash and cash equivalents at the beginning of the period	574,032	468,323	551,933
Exchange differences in respect of cash and cash equivalents	(40,243)	(4,818)	(10,527)
Cash and cash equivalents at the end of the period	547,322	551,933	574,032

Interest received was $22,011m (1H21: $19,761m; 2H21: $20,414m), interest paid was $7,146m (1H21: $6,552m; 2H21: $6,143m) and dividends received (excluding dividends received from associates, which are presented separately above) were $800m (1H21: $801m; 2H21: $1,097m).

1 Adjustments to bring changes between opening and closing balance sheet amounts to average rates. This is not done on a line-by-line basis, as details cannot be determined without unreasonable expense.

Consolidated statement of changes in equity
				Other reserves
	Called up share capital and share premium	Other equity instru-ments	Retained earnings	Financial assets at FVOCI reserve	Cashflowhedgingreserve	Foreignexchangereserve	Merger and other reserves	Total share-holders' equity	Non-controllinginterests	Total equity
	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m
At 1 Jan 2022	24,918	22,414	144,458	(634)	(197)	(22,769)	30,060	198,250	8,527	206,777
Profit for the period	-	-	8,915	-	-	-	-	8,915	300	9,215
Other comprehensive income (net of tax)	-	-	2,637	(4,723)	(2,035)	(8,414)	-	(12,535)	(164)	(12,699)
- debt instruments at fair value through other comprehensive income	-	-	-	(4,844)	-	-	-	(4,844)	(63)	(4,907)
- equity instruments designated at fair value through other comprehensive income	-	-	-	121	-	-	-	121	37	158
- cash flow hedges	-	-	-	-	(2,035)	-	-	(2,035)	(28)	(2,063)
- changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in own credit risk	-	-	2,263	-	-	-	-	2,263	-	2,263
- remeasurement of defined benefit asset/liability	-	-	98	-	-	-	-	98	(3)	95
- share of other comprehensive income of associates and joint ventures	-	-	(141)	-	-	-	-	(141)	-	(141)
- effects of hyperinflation	-	-	417	-	-	-	-	417	-	417
- exchange differences	-	-	-	-	-	(8,414)	-	(8,414)	(107)	(8,521)
Total comprehensive income for the period	-	-	11,552	(4,723)	(2,035)	(8,414)	-	(3,620)	136	(3,484)
Shares issued under employee remuneration and share plans	65	-	(65)	-	-	-	-	-	-	-
Dividends to shareholders	-	-	(4,202)	-	-	-	-	(4,202)	(295)	(4,497)
Redemption of securities	-	(723)	-	-	-	-	-	(723)	-	(723)
Cost of share-based payment arrangements	-	-	177	-	-	-	-	177	-	177
Cancellation of shares4	(133)	-	(1,000)	-	-	-	133	(1,000)	-	(1,000)
Other movements	-	-	(503)	3	-	-	-	(500)	(60)	(560)
At 30 Jun 2022	24,850	21,691	150,417	(5,354)	(2,232)	(31,183)	30,193	188,382	8,308	196,690

At 1 Jan 2021	24,624	22,414	140,572	1,816	457	(20,375)	26,935	196,443	8,552	204,995
Profit for the period	-	-	7,949	-	-	-	-	7,949	473	8,422
Other comprehensive income (net of tax)	-	-	(337)	(1,629)	(234)	(464)	-	(2,664)	(61)	(2,725)
- debt instruments at fair value through other comprehensive income	-	-	-	(1,351)	-	-	-	(1,351)	(17)	(1,368)
- equity instruments designated at fair value through other comprehensive income	-	-	-	(278)	-	-	-	(278)	(70)	(348)
- cash flow hedges	-	-	-	-	(234)	-	-	(234)	(4)	(238)
- changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in own credit risk	-	-	155	-	-	-	-	155	-	155
- remeasurement of defined benefit asset/liability	-	-	(762)	-	-	-	-	(762)	15	(747)
- share of other comprehensive income of associates and joint ventures	-	-	104	-	-	-	-	104	-	104
- effects of hyperinflation	-	-	166	-	-	-	-	166	-	166
- exchange differences	-	-	-	-	-	(464)	-	(464)	15	(449)
Total comprehensive income for the period	-	-	7,612	(1,629)	(234)	(464)	-	5,285	412	5,697
Shares issued under employee remuneration and share plans	352	-	(335)	-	-	-	-	17	-	17
Capital securities issued1	-	2,000	(4)	-	-	-	-	1,996	-	1,996
Dividends to shareholders	-	-	(3,732)	-	-	-	-	(3,732)	(389)	(4,121)
Redemption of securities2	-	(2,000)	-	-	-	-	-	(2,000)	-	(2,000)
Cost of share-based payment arrangements	-	-	254	-	-	-	-	254	-	254
Other movements	-	-	(48)	3	-	-	-	(45)	(29)	(74)
At 30 Jun 2021	24,976	22,414	144,319	190	223	(20,839)	26,935	198,218	8,546	206,764

Consolidated statement of changes in equity (continued)
				Other reserves
	Called upshare capitaland share premium	Otherequity instru-ments	Retained earnings	Financial assets at FVOCI reserve	Cashflowhedgingreserve	Foreign exchange reserve	Merger and other reserves	Totalshare-holders'equity	Non-controllinginterests	Total equity
	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m
At 1 Jul 2021	24,976	22,414	144,319	190	223	(20,839)	26,935	198,218	8,546	206,764
Profit for the period	-	-	5,968	-	-	-	-	5,968	303	6,271
Other comprehensive income (net of tax)	-	-	998	(826)	(420)	(1,930)	-	(2,178)	(64)	(2,242)
- debt instruments at fair value through other comprehensive income	-	-	-	(754)	-	-	-	(754)	(17)	(771)
- equity instruments designated at fair value through other comprehensive income	-	-	-	(72)	-	-	-	(72)	(26)	(98)
- cash flow hedges	-	-	-	-	(420)	-	-	(420)	(6)	(426)
- changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in own credit risk	-	-	376	-	-	-	-	376	-	376
- remeasurement of defined benefit asset/liability	-	-	474	-	-	-	-	474	(1)	473
- share of other comprehensive income of associates and joint ventures	-	-	(1)	-	-	-	-	(1)	-	(1)
- effects of hyperinflation	-	-	149	-	-	-	-	149	-	149
- exchange differences	-	-	-	-	-	(1,930)	-	(1,930)	(14)	(1,944)
Total comprehensive income for the period	-	-	6,966	(826)	(420)	(1,930)	-	3,790	239	4,029
Shares issued under employee remuneration and share plans	2	-	(1)	-	-	-	-	1	-	1
Dividends to shareholders	-	-	(2,058)	-	-	-	-	(2,058)	(204)	(2,262)
Transfers3	-	-	(3,065)	-	-	-	3,065	-	-	-
Cost of share-based payment arrangements	-	-	213	-	-	-	-	213	-	213
Cancellation of shares	(60)	-	(2,004)	-	-	-	60	(2,004)	-	(2,004)
Other movements	-	-	88	2	-	-	-	90	(54)	36
At 31 Dec 2021	24,918	22,414	144,458	(634)	(197)	(22,769)	30,060	198,250	8,527	206,777

1 In 2021, HSBC Holdings issued $2,000m of additional tier 1 instruments on which there were $4m of external issue costs.

2 During 2021, HSBC Holdings redeemed $2,000m 6.875% perpetual subordinated contingent convertible securities.

3 Permitted transfers from the merger reserve to retained earnings were made when the investment in HSBC Overseas Holdings (UK) Limited was previously impaired.

4 HSBC announced a share buy-back of $2.0bn in 2021 which was completed in April 2022. Additionally, HSBC announced a share buy-back of up to $1.0bn in February 2022, which concluded on 28 July 2022. At 30 June 2022, 264,942,444 ordinary shares had been purchased and cancelled, representing a nominal value of $133m, which has been transferred from share capital to capital redemption reserve within merger and other reserves.

Notes on the interim condensed financial statements
		Page			Page
1	Basis of preparation and significant accounting policies	121	10	Interests in associates and joint ventures	133
2	Net fee income	122	11	Provisions	136
3	Dividends	122	12	Contingent liabilities, contractual commitments and guarantees	136
4	Earnings per share	123	13	Legal proceedings and regulatory matters	137
5	Segmental analysis	123	14	Transactions with related parties	139
6	Fair values of financial instruments carried at fair value	127	15	Business acquisitions and disposals	139
7	Fair values of financial instruments not carried at fair value	131	16	Events after the balance sheet date	140
8	Derivatives	132	17	Interim Report 2022 and statutory accounts	140
9	Financial investments	133

1	Basis of preparation and significant accounting policies

(a) Compliance with International Financial Reporting Standards

Our interim condensed consolidated financial statements have been prepared on the basis of the policies set out in the 2021 annual financial statements and in accordance with IAS 34 'Interim Financial Reporting' as adopted by the UK, IAS 34 'Interim Financial Reporting' as issued by the International Accounting Standards Board ('IASB'), IAS 34 'Interim Financial Reporting' as adopted by the EU, and the Disclosure Guidance and Transparency Rules sourcebook of the UK's Financial Conduct Authority. Therefore, they include an explanation of events and transactions that are significant to an understanding of the changes in HSBC's financial position and performance since the end of 2021.

These financial statements should be read in conjunction with the Annual Report and Accounts 2021, which were prepared in accordance with UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006 and international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. These financial statements were also prepared in accordance with International Financial Reporting Standards ('IFRSs') as issued by the IASB, including interpretations issued by the IFRS Interpretations Committee.

At 30 June 2022, there were no unendorsed standards effective for the half-year to 30 June 2022 affecting these financial statements, and there was no difference between IFRSs adopted by the UK, IFRSs as adopted by the EU, and IFRSs issued by the IASB in terms of their application to HSBC.

Standards applied during the half-year to 30 June 2022

There were no new standards or amendments to standards that had an effect on these interim condensed financial statements.

(b) Use of estimates and judgements

Management believes that our critical accounting estimates and judgements are those that relate to impairment of amortised cost and FVOCI debt financial assets, the valuation of financial instruments, deferred tax assets, provisions, interests in associates, impairment of goodwill and non-financial assets, and post-employment benefit plans. Management's judgement with respect to the recognition of a deferred tax asset on the historical tax losses of HSBC Holdings changed during the period and a deferred tax asset of $1.8bn was recognised at 1H22. Management's view is that improved profit forecasts for the UK, which reflect higher market interest rates and expectations of future increases, as well as the results for 1H22, represent convincing evidence that sufficient future taxable profits will be available to support recognition of the deferred tax asset. The improved forecasts reduced the expected recovery period of these tax losses, reducing the estimation uncertainty such that recognition of a deferred tax asset was considered appropriate.

Apart from the above deferred tax matter and estimates relating to ECL impairment, there were no material changes in the current period to any of the other critical accounting estimates and judgements disclosed in 2021, which are stated on pages 90 and 319 of the Annual Report and Accounts 2021.

There were no material changes in the composition of the Group in the half-year to 30 June 2022. For further details of future business acquisitions and disposals, see Note 15 'Business acquisitions and disposals'.

(d) Future accounting developments

IFRS 17 'Insurance Contracts' was issued in May 2017, with amendments to the standard issued in June 2020 and December 2021. It has been adopted in its entirety for use in the UK. IFRS 17 has been adopted by the EU subject to certain optional exemptions, except for the December 2021 requirements which are pending adoption.

The standard sets out the requirements that an entity should apply in accounting for insurance contracts it issues and reinsurance contracts it holds. Following the amendments, IFRS 17 will be effective from 1 January 2023. The Group is in the process of implementing IFRS 17. Industry practice and interpretation of the standard are still developing. Therefore, the likely impact of its implementation remains uncertain. However, compared with the Group's current accounting policy for insurance, there will be no present value of in-force long-term insurance business ('PVIF') asset recognised. Instead, the estimated future profit will be included in the measurement of the insurance contract liability as the contractual service margin and gradually recognised in revenue as services are provided over the duration of the insurance contract.

(e) Going concern

The financial statements are prepared on a going concern basis, as the Directors are satisfied that the Group and parent company have the resources to continue in business for the foreseeable future. In making this assessment, the Directors have considered a wide range of information relating to present and future conditions, including future projections of profitability, cash flows, capital requirements and capital resources. These considerations include stressed scenarios, as well as considering potential impacts from other top and emerging risks, and the related impact on profitability, capital and liquidity.

(f) Accounting policies

The accounting policies that we applied for these interim condensed consolidated financial statements are consistent with those described on pages 318 to 328 of the Annual Report and Accounts 2021, as are the methods of computation.

2	Net fee income

	Half-year to
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$m	$m	$m
Net fee income by product
Funds under management	1,224	1,304	1,352
Cards	1,201	1,035	1,178
Credit facilities	790	827	800
Account services	720	714	738
Broking income	707	895	706
Unit trusts	408	603	485
Underwriting	257	576	441
Global custody	471	500	478
Remittances	394	361	414
Imports/exports	321	300	320
Insurance agency commission	163	176	165
Other	1,293	1,167	1,253
Fee income	7,949	8,458	8,330
Less: fee expense	(1,885)	(1,784)	(1,907)
Net fee income	6,064	6,674	6,423
Net fee income by global business
Wealth and Personal Banking	2,619	3,042	2,852
Commercial Banking	1,919	1,786	1,853
Global Banking and Markets	1,526	1,857	1,746
Corporate Centre	-	(11)	(28)

Dividends

On 1 August 2022, the Directors approved an interim dividend for the 2022 half-year of $0.09 per ordinary share in respect of the financial year ending 31 December 2022. This distribution amounts to approximately $1,800m and will be payable on 29 September 2022. No liability is recognised in the financial statements in respect of these dividends.

Dividends paid to shareholders of HSBC Holdings plc
	Half-year to
	30 Jun 2022			30 Jun 2021			31 Dec 2021
	Per share	Total	Settled in scrip	Per share	Total	Settled in scrip	Per share	Total	Settled in scrip
	$	$m	$m	$	$m	$m	$	$m	$m
Dividends paid on ordinary shares
In respect of previous year:
- interim dividend	-	-	-	0.15	3,059	-	-	-	-
- second interim dividend	0.18	3,576	-	-	-	-	-	-	-
In respect of current year:
- interim dividend	-	-	-	-	-	-	0.07	1,421	-
Total	0.18	3,576	-	0.15	3,059	-	0.07	1,421	-
Total dividends on preference shares classified as equity (paid quarterly)1	-	-		4.99	7		-	-
Total coupons on capital securities classified as equity		626			666			637
Dividends to shareholders		4,202			3,732			2,058

1 HSBC Holdings called $1,450m 6.20% non-cumulative US dollar preference shares on 10 December 2020. The security was redeemed and cancelled on 13 January 2021.

Total coupons on capital securities classified as equity
			Half-year to
			30 Jun	30 Jun	31 Dec
			2022	2021	2021
	First call date	Per security	$m	$m	$m
Perpetual subordinated contingent convertible securities1
- $2,000m issued at 6.875%2	Jun 2021	$68.750	-	69	-
- $2,250m issued at 6.375%	Sep 2024	$63.750	72	72	71
- $2,450m issued at 6.375%	Mar 2025	$63.750	78	78	78
- $3,000m issued at 6.000%	May 2027	$60.000	90	90	90
- $2,350m issued at 6.250%	Mar 2023	$62.500	73	73	74
- $1,800m issued at 6.500%	Mar 2028	$65.000	59	59	58
- $1,500m issued at 4.600%	Dec 2030	$46.000	34	35	34
- $1,000m issued at 4.000%3	Mar 2026	$40.000	20	-	20
- $1,000m issued at 4.700%4	Mar 2031	$47.000	24	-	24
- €1,500m issued at 5.250%	Sep 2022	€52.500	44	47	46
- €1,000m issued at 6.000%	Sep 2023	€60.000	33	34	36
- €1,250m issued at 4.750%	July 2029	€47.500	34	36	36
- £1,000m issued at 5.875%	Sep 2026	£58.750	37	41	39
- SGD1,000m issued at 4.700%5	Jun 2022	SGD47.000	14	18	17
- SGD750m issued at 5.000%	Sep 2023	SGD50.000	14	14	14
Total			626	666	637

1 Discretionary coupons are paid twice a year on the perpetual subordinated contingent convertible securities, in denominations of 1,000 per security in each security's issuance currency.

2 This security was called by HSBC Holdings on 15 April 2021 and was redeemed and cancelled on 1 June 2021.

3 This security was issued by HSBC Holdings on 9 March 2021. The first call date commences six calendar months prior to the reset date of 9 September 2026.

4 This security was issued by HSBC Holdings on 9 March 2021. The first call date commences six calendar months prior to the reset date of 9 September 2031.

5 This security was called by HSBC Holdings on 4 May 2022 and was redeemed and cancelled on 8 June 2022.

4	Earnings per share

Basic earnings per ordinary share is calculated by dividing the profit attributable to ordinary shareholders of the parent company by the weighted average number of ordinary shares outstanding, excluding own shares held. Diluted earnings per ordinary share is calculated by dividing the basic earnings, which require no adjustment for the effects of dilutive potential ordinary shares, by the weighted average number of ordinary shares outstanding, excluding own shares held, plus the weighted average number of ordinary shares that would be issued on conversion of dilutive potential ordinary shares.

Profit attributable to ordinary shareholders of the parent company
	Half-year to
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$m	$m	$m
Profit attributable to shareholders of the parent company	8,915	7,949	5,968
Dividend payable on preference shares classified as equity	-	(7)	-
Coupon payable on capital securities classified as equity	(626)	(666)	(637)
Profit attributable to ordinary shareholders of the parent company	8,289	7,276	5,331

Basic and diluted earnings per share
	Half-year to
	30 Jun 2022			30 Jun 2021			31 Dec 2021
	Profit	Number of shares	Amount per share	Profit	Number of shares	Amount per share	Profit	Number of shares	Amount per share
	$m	(millions)	$	$m	(millions)	$	$m	(millions)	$
Basic1	8,289	19,954	0.42	7,276	20,211	0.36	5,331	20,183	0.26
Effect of dilutive potential ordinary shares		130			97			103
Diluted1	8,289	20,084	0.41	7,276	20,308	0.36	5,331	20,286	0.26

1 Weighted average number of ordinary shares outstanding (basic) or assuming dilution (diluted).

5	Segmental analysis

The Group Chief Executive, supported by the rest of the Group Executive Committee ('GEC'), is considered the Chief Operating Decision Maker ('CODM') for the purposes of identifying the Group's reportable segments. Global business results are assessed by the CODM on the basis of adjusted performance that removes the effects of significant items and currency translation from reported results. Therefore, we disclose these results as required by IFRSs. The 2021 adjusted performance information is presented on a constant currency basis. The income statements for the half-years to 30 June 2021 and 31 December 2021 are converted at the average rates of exchange for 2022, and the balance sheets at 30 June 2021 and 31 December 2021 at the prevailing rates of exchange on 30 June 2022.

Our operations are closely integrated and, accordingly, the presentation of data includes internal allocations of certain items of income and expense. These allocations include the costs of certain support services and global functions to the extent that they can be meaningfully attributed to global businesses. While such allocations have been made on a systematic and consistent basis, they necessarily involve a degree of subjectivity. Costs that are not allocated to global businesses are included in Corporate Centre.

Where relevant, income and expense amounts presented include the results of inter-segment funding along with inter-company and inter-business line transactions. All such transactions are undertaken on arm's length terms. The intra-Group elimination items for the global businesses are presented in Corporate Centre.

Our global businesses

We provide a comprehensive range of banking and related financial services to our customers in our three global businesses. The products and services offered to customers are organised by these global businesses:

• Wealth and Personal Banking ('WPB') provides a full range of retail banking and wealth products to our customers from personal banking to ultra high net worth individuals. Typically, customer offerings include retail banking products, such as current and savings accounts, mortgages and personal loans, credit cards, debit cards and local and international payment services. We also provide wealth management services, including insurance and investment products, global asset management services, investment management and Private Wealth Solutions for customers with more sophisticated and international requirements.

• Commercial Banking ('CMB') offers a broad range of products and services to serve the needs of our commercial customers, including small and medium-sized enterprises, mid-market enterprises and corporates. These include credit and lending, international trade and receivables finance, treasury management and liquidity solutions (payments and cash management and commercial cards), commercial insurance and investments. CMB also offers customers access to products and services offered by other global businesses, such as Global Banking and Markets, which include foreign exchange products, raising capital on debt and equity markets and advisory services.

• Global Banking and Markets ('GBM') provides tailored financial solutions to major government, corporate and institutional clients and private investors worldwide. The client-focused business lines deliver a full range of banking capabilities, including financing, advisory and transaction services, a markets business that provides services in credit, rates, foreign exchange, equities, money markets and securities services, and principal investment activities.

HSBC adjusted profit before tax and balance sheet data
	Half-year to 30 Jun 2022
	Wealth and Personal Banking	Commercial Banking	Global Banking and Markets	Corporate Centre	Total
	$m	$m	$m	$m	$m
Net operating income/(expense) before change in expected credit losses and other credit impairment charges1	10,922	7,217	7,841	(290)	25,690
- external	10,569	7,281	8,867	(1,027)	25,690
- inter-segment	353	(64)	(1,026)	737	-
- of which: net interest income/(expense)	7,658	5,007	2,296	(496)	14,465
Change in expected credit losses and other credit impairment (charges)/recoveries	(573)	(288)	(227)	(2)	(1,090)
Net operating income	10,349	6,929	7,614	(292)	24,600
Total operating expenses	(7,411)	(3,351)	(4,735)	121	(15,376)
Operating profit	2,938	3,578	2,879	(171)	9,224
Share of profit in associates and joint ventures	8	-	-	1,441	1,449
Adjusted profit before tax	2,946	3,578	2,879	1,270	10,673
	%	%	%	%	%
Share of HSBC's adjusted profit before tax	27.6	33.5	27.0	11.9	100.0
Adjusted cost efficiency ratio	67.9	46.4	60.4	41.7	59.9
Adjusted balance sheet data	$m	$m	$m	$m	$m
Loans and advances to customers (net)	475,464	348,253	204,097	542	1,028,356
Interests in associates and joint ventures	484	14	121	28,827	29,446
Total external assets	882,490	619,490	1,318,425	165,015	2,985,420
Customer accounts	836,026	479,680	335,033	562	1,651,301

HSBC adjusted profit before tax and balance sheet data (continued)
	Half-year to 30 Jun 2021
	Wealth and Personal Banking	Commercial Banking	Global Banking and Markets	Corporate Centre	Total
	$m	$m	$m	$m	$m
Net operating income/(expense) before change in expected credit losses and other credit impairment charges1	10,980	6,353	7,518	(117)	24,734
- external	10,782	6,326	8,305	(679)	24,734
- inter-segment	198	27	(787)	562	-
- of which: net interest income/(expense)	6,807	4,172	1,937	(374)	12,542
Change in expected credit losses and other credit impairment charges	38	228	405	4	675
Net operating income/(expense)	11,018	6,581	7,923	(113)	25,409
Total operating expenses	(7,277)	(3,371)	(4,724)	(148)	(15,520)
Operating profit/(loss)	3,741	3,210	3,199	(261)	9,889
Share of profit in associates and joint ventures	10	1	-	1,638	1,649
Adjusted profit before tax	3,751	3,211	3,199	1,377	11,538
	%	%	%	%	%
Share of HSBC's adjusted profit before tax	32.5	27.8	27.7	12.0	100.0
Adjusted cost efficiency ratio	66.3	53.1	62.9	(126.5)	62.7
Adjusted balance sheet data	$m	$m	$m	$m	$m
Loans and advances to customers (net)	458,573	329,873	205,044	1,065	994,555
Interests in associates and joint ventures	467	15	121	27,315	27,918
Total external assets	859,383	581,741	1,164,916	184,436	2,790,476
Customer accounts	793,277	455,006	316,865	794	1,565,942

	Half-year to 31 Dec 2021
Net operating income/(expense) before change in expected credit losses and other credit impairment charges1	10,439	6,556	6,878	(296)	23,577
- external	10,354	6,460	7,676	(913)	23,577
- inter-segment	85	96	(798)	617	-
- of which: net interest income/(expense)	6,955	4,387	2,032	(353)	13,021
Change in expected credit losses and other credit impairment (charges)/recoveries	215	40	(80)	(1)	174
Net operating income/(expense)	10,654	6,596	6,798	(297)	23,751
Total operating expenses	(7,574)	(3,355)	(4,831)	313	(15,447)
Operating profit	3,080	3,241	1,967	16	8,304
Share of profit in associates and joint ventures	24	-	-	1,353	1,377
Adjusted profit before tax	3,104	3,241	1,967	1,369	9,681
	%	%	%	%	%
Share of HSBC's adjusted profit before tax	32.1	33.5	20.3	14.1	100.0
Adjusted cost efficiency ratio	72.6	51.2	70.2	105.7	65.5
Adjusted balance sheet data	$m	$m	$m	$m	$m
Loans and advances to customers (net)	462,452	332,710	198,854	686	994,702
Interests in associates and joint ventures	490	13	119	27,938	28,560
Total external assets	889,349	589,834	1,157,478	175,688	2,812,349
Customer accounts	820,564	481,781	324,239	590	1,627,174

1 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

Reported external net operating income is attributed to countries and territories on the basis of the location of the branch responsible for reporting the results or advancing the funds:

	Half-year to
	30 Jun 2022	30 Jun 2021	31 Dec 2021
	$m	$m	$m
Reported external net operating income by country/territory1	25,236	25,551	24,001
- UK	6,554	5,610	5,299
- Hong Kong	6,837	7,476	6,769
- US	1,964	1,993	1,802
- France	1,158	1,228	951
- other countries/territories	8,723	9,244	9,180

1 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

Adjusted results reconciliation
	Half-year to
	30 Jun 2022			30 Jun 2021				31 Dec 2021
	Adjusted	Significant items	Reported	Adjusted	Currency translation	Significant items	Reported	Adjusted	Currency translation	Significant items	Reported
	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m
Revenue1	25,690	(454)	25,236	24,734	1,069	(252)	25,551	23,577	711	(287)	24,001
ECL	(1,090)	-	(1,090)	675	44	-	719	174	35	-	209
Operating expenses	(15,376)	(1,043)	(16,419)	(15,520)	(749)	(818)	(17,087)	(15,447)	(510)	(1,576)	(17,533)
Share of profit in associates and joint ventures	1,449	-	1,449	1,649	7	-	1,656	1,377	13	-	1,390
Profit before tax	10,673	(1,497)	9,176	11,538	371	(1,070)	10,839	9,681	249	(1,863)	8,067

1 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

Adjusted balance sheet reconciliation
	At 30 Jun 2022	At 31 Dec 2021
	Reported and adjusted	Adjusted	Currency translation	Reported
	$m	$m	$m	$m
Loans and advances to customers (net)	1,028,356	994,702	51,112	1,045,814
Interests in associates and joint ventures	29,446	28,560	1,049	29,609
Total external assets	2,985,420	2,812,349	145,590	2,957,939
Customer accounts	1,651,301	1,627,174	83,400	1,710,574

Adjusted profit reconciliation
	Half-year to
	30 Jun 2022	30 Jun 2021	31 Dec 2021
	$m	$m	$m
Adjusted profit before tax	10,673	11,538	9,681
Significant items	(1,497)	(1,070)	(1,863)
- customer redress programmes (revenue)	(14)	18	(7)
- disposals, acquisitions and investment in new businesses (revenue)1	(288)	-	-
- fair value movements on financial instruments2	(220)	(194)	(48)
- restructuring and other related costs (revenue)3	68	(70)	(237)
- customer redress programmes (operating expenses)	6	(17)	(32)
- impairment of goodwill and other intangible assets	(9)	-	(587)
- restructuring and other related costs (operating expenses)	(1,040)	(848)	(988)
- currency translation on significant items		41	36
Currency translation		371	249
Reported profit before tax	9,176	10,839	8,067

1 Includes losses from classifying businesses as held-for-sale as part of a broader restructuring of our European business.

2 Includes fair value movements on non-qualifying hedges and debt valuation adjustments on derivatives.

3 Comprises gains and losses relating to the business update in February 2020, including losses associated with RWA reduction commitments.

6	Fair values of financial instruments carried at fair value

The accounting policies, control framework and hierarchy used to determine fair values at 30 June 2022 are consistent with those applied for the Annual Report and Accounts 2021.

Financial instruments carried at fair value and bases of valuation
		Valuation techniques
	Quoted market price Level 1	Using observable inputs Level 2	With significant unobservable inputs Level 3	Total
Recurring fair value measurements	$m	$m	$m	$m
At 30 Jun 2022
Assets
Trading assets	148,156	66,218	2,976	217,350
Financial assets designated and otherwise mandatorily measured at fair value through profit or loss	15,558	15,252	15,063	45,873
Derivatives	2,556	258,256	2,111	262,923
Financial investments	191,631	82,237	2,709	276,577
Liabilities
Trading liabilities	60,623	19,595	351	80,569
Financial liabilities designated at fair value	1,135	116,406	8,465	126,006
Derivatives	2,758	246,391	2,320	251,469

At 31 Dec 2021
Assets
Trading assets	180,423	65,757	2,662	248,842
Financial assets designated and otherwise mandatorily measured at fair value through profit or loss	17,937	17,629	14,238	49,804
Derivatives	2,783	191,621	2,478	196,882
Financial investments	247,745	97,838	3,389	348,972
Liabilities
Trading liabilities	63,437	20,682	785	84,904
Financial liabilities designated at fair value	1,379	136,243	7,880	145,502
Derivatives	1,686	186,290	3,088	191,064

Transfers between Level 1 and Level 2 fair values
	Assets				Liabilities
	Financial investments	Trading assets	Designated and otherwise mandatorily measured at fair value	Derivatives	Trading liabilities	Designated at fair value	Derivatives
	$m	$m	$m	$m	$m	$m	$m
At 30 Jun 2022
Transfers from Level 1 to Level 2	2,407	1,937	538	-	55	-	-
Transfers from Level 2 to Level 1	4,066	3,488	99	-	203	-	-

At 31 Dec 2021
Transfers from Level 1 to Level 2	8,477	6,553	1,277	103	181	-	212
Transfers from Level 2 to Level 1	6,007	4,132	768	-	638	-	-

Transfers between levels of the fair value hierarchy are deemed to occur at the end of each quarterly reporting period. Transfers into and out of levels of the fair value hierarchy are primarily attributable to observability of valuation inputs and price transparency.

Fair value adjustments

We adopt the use of fair value adjustments when we take into consideration additional factors not incorporated within the valuation model that would otherwise be considered by a market participant. We classify fair value adjustments as either 'risk-related' or 'model-related'. The majority of these adjustments relate to GBM. Movements in the level of fair value adjustments do not necessarily result in the recognition of profits or losses within the income statement. For example, as models are enhanced, fair value adjustments may no longer be required. Similarly, fair value adjustments will decrease when the related positions are unwound, but this may not result in profit or loss.

Global Banking and Markets fair value adjustments
	At 30 Jun 2022		At 31 Dec 2021
	GBM	Corporate Centre	GBM	Corporate Centre
	$m	$m	$m	$m
Type of adjustment
Risk-related	800	28	868	42
- bid-offer	427	-	412	-
- uncertainty	78	1	66	1
- credit valuation adjustment	300	21	228	35
- debt valuation adjustment	(204)	-	(92)	-
- funding fair value adjustment	199	6	254	6
- other	-	-	-	-
Model-related	61	-	57	-
- model limitation	61	-	57	-
- other	-	-	-	-
Inception profit (Day 1 P&L reserves)1	99	-	106	-
Total	960	28	1,031	42

1 See Note 8 on the interim condensed financial statements on page 121.

The reduction in fair value adjustments was predominantly driven by changes in the rates and credit environment.

For further details of our risk-related and model-related adjustments, see pages 345 and 346 of the Annual Report and Accounts 2021.

Fair value valuation bases

Financial instruments measured at fair value using a valuation technique with significant unobservable inputs - Level 3
	Assets					Liabilities
	Financial investments	Trading assets	Designated and otherwise mandatorily measured at fair value through profit or loss	Derivatives	Total	Trading liabilities	Designated at fair value	Derivatives	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m
Private equity including strategic investments	647	90	14,704	-	15,441	91	-	-	91
Asset-backed securities	468	114	29	-	611	-	-	-	-
Structured notes	-	-	-	-	-	-	8,465	-	8,465
Derivatives with monolines	-	-	-	-	-	-	-	-	-
Other derivatives	-	-	-	2,111	2,111	-	-	2,320	2,320
Other portfolios	1,594	2,772	330	-	4,696	260	-	-	260
At 30 Jun 2022	2,709	2,976	15,063	2,111	22,859	351	8,465	2,320	11,136

Private equity including strategic investments	544	2	13,732	-	14,278	9	-	-	9
Asset-backed securities	1,008	132	1	-	1,141	-	-	-	-
Structured notes	-	-	-	-	-	-	7,879	-	7,879
Other derivatives	-	-	-	2,478	2,478	-	-	3,088	3,088
Other portfolios	1,837	2,528	505	-	4,870	776	1	-	777
At 31 Dec 2021	3,389	2,662	14,238	2,478	22,767	785	7,880	3,088	11,753

The basis for determining the fair value of the financial instruments in the table above is explained on page 347 of the Annual Report and Accounts 2021.

Reconciliation of fair value measurements in Level 3 of the fair value hierarchy

Movement in Level 3 financial instruments
	Assets				Liabilities
	Financial investments	Trading assets	Designated and otherwise mandatorily measured at fair value through profit or loss	Derivatives	Trading liabilities	Designated at fair value	Derivatives
	$m	$m	$m	$m	$m	$m	$m
At 1 Jan 2022	3,389	2,662	14,238	2,478	785	7,880	3,088
Total gains/(losses) recognised in profit or loss	(7)	(22)	310	408	(45)	(1,103)	165
- net income/(losses) from financial instruments held for trading or managed on a fair value basis	-	(22)	-	408	(45)	-	165
- changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss	-	-	310	-	-	(1,103)	-
- gains less losses from financial investments held at fair value through other comprehensive income	(7)	-	-	-	-	-	-
Total gains/(losses) recognised in other comprehensive income ('OCI')	(287)	(165)	(336)	(191)	(12)	(398)	(231)
- financial investments: fair value losses	(140)	-	-	-	-	(18)	-
- exchange differences	(147)	(165)	(336)	(191)	(12)	(380)	(231)
Purchases	506	1,026	1,707	-	13	-	-
New issuances	-	-	-	-	4	2,511	-
Sales	(186)	(698)	(299)	-	(95)	(22)	-
Settlements	(273)	(373)	(561)	(509)	(636)	(723)	(580)
Transfers out	(501)	(287)	(36)	(290)	(7)	(549)	(437)
Transfers in	68	833	40	215	344	869	315
At 30 Jun 2022	2,709	2,976	15,063	2,111	351	8,465	2,320
Unrealised gains/(losses) recognised in profit or loss relating to assets and liabilities held at 30 Jun 2022	-	(37)	291	929	1	423	3,494
- net income/(losses) from financial instruments held for trading or managed on a fair value basis	-	(37)	-	929	1	-	3,494
- changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss	-	-	291	-	-	423	-

At 1 Jan 2021	3,654	2,499	11,477	2,670	162	5,306	4,188
Total gains/(losses) recognised in profit or loss	2	(155)	1,038	195	15	(456)	466
- net income/(losses) from financial instruments held for trading or managed on a fair value basis	-	(155)	-	195	15	-	466
- changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss	-	-	1,038	-	-	(456)	-
- gains less losses from financial investments held at fair value through other comprehensive income	2	-	-	-	-	-	-
Total losses recognised in other comprehensive income ('OCI')	(391)	23	(114)	23	(3)	2	29
- financial investments: fair value losses	(360)	-	-	-	-	-	-
- exchange differences	(31)	23	(114)	23	(3)	2	29
Purchases	390	1,094	1,631	-	482	-	-
New issuances	-	-	-	-	24	2,725	-
Sales	(214)	(244)	(499)	-	-	-	-
Settlements	(177)	(494)	(436)	(359)	(8)	(896)	(1,537)
Transfers out	(311)	(512)	(159)	(126)	(1)	(339)	(221)
Transfers in	290	298	50	274	186	895	496
At 30 Jun 2021	3,243	2,509	12,988	2,677	857	7,237	3,421
Unrealised gains/(losses) recognised in profit or loss relating to assets and liabilities held at 30 Jun 2021	-	(99)	885	175	2	106	(4)
- net income/(losses) from financial instruments held for trading or managed on a fair value basis	-	(99)	-	175	2	-	(4)
- changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss	-	-	885	-	-	106	-

Movement in Level 3 financial instruments (continued)
	Assets				Liabilities
	Financial investments	Trading assets	Designated and otherwise mandatorily measured at fair value through profit or loss	Derivatives	Trading liabilities	Designated at fair value	Derivatives
	$m	$m	$m	$m	$m	$m	$m
At 1 Jul 2021	3,243	2,509	12,988	2,677	857	7,237	3,421
Total gains recognised in profit or loss	(12)	(223)	715	2,042	1	(380)	2,117
- net income from financial instruments held for trading or managed on a fair value basis	-	(223)	-	2,042	1	-	2,117
- changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss	-	-	715	-	-	(380)	-
- gains less losses from financial investments held at fair value through other comprehensive income	(12)	-	-	-	-	-	-
Total gains recognised in other comprehensive income ('OCI')	(130)	(41)	(171)	(50)	(5)	(63)	(55)
- financial investments: fair value gains	(68)	-	-	-	-	-	-
- exchange differences	(62)	(41)	(171)	(50)	(5)	(63)	(55)
Purchases	635	894	2,061	-	532	1	-
New issuances	-	-	-	-	11	3,244	-
Sales	(366)	(229)	(717)	-	(4)	(27)	-
Settlements	(159)	(253)	(613)	(1,988)	(673)	(2,026)	(2,425)
Transfers out	(72)	(515)	(25)	(292)	(6)	(365)	(513)
Transfers in	250	520	-	89	72	259	543
At 31 Dec 2021	3,389	2,662	14,238	2,478	785	7,880	3,088
Unrealised gains/(losses) recognised in profit or loss relating to assets and liabilities held at 31 Dec 2021	-	(309)	1,509	1,298	-	166	(969)
- net income/(losses) from financial instruments held for trading or managed on a fair value basis	-	(309)	-	1,298	-	-	(969)
- changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss	-	-	1,509	-	-	166	-

Effect of changes in significant unobservable assumptions to reasonably possible alternatives

The following table shows the sensitivity of Level 3 fair values to reasonably possible alternative assumptions:

Sensitivity of fair values to reasonably possible alternative assumptions
	Reflected in profit or loss		Reflected in OCI
	Favourable changes	Unfavourable changes	Favourable changes	Unfavourable changes
	$m	$m	$m	$m
Derivatives, trading assets and trading liabilities1	172	(179)	-	-
Financial assets and liabilities designated and otherwise mandatorily measured at fair value through profit or loss	979	(977)	-	-
Financial investments	12	(6)	142	(143)
At 30 Jun 2022	1,163	(1,162)	142	(143)

Derivatives, trading assets and trading liabilities1	179	(197)	-	-
Financial assets and liabilities designated and otherwise mandatorily measured at fair value through profit or loss	795	(793)	-	-
Financial investments	24	(24)	105	(104)
At 30 Jun 2021	998	(1,014)	105	(104)

Derivatives, trading assets and trading liabilities1	143	(146)	-	-
Financial assets and liabilities designated and otherwise mandatorily measured at fair value through profit or loss	849	(868)	-	-
Financial investments	20	(20)	113	(112)
At 31 Dec 2021	1,012	(1,034)	113	(112)

1 'Derivatives, trading assets and trading liabilities' is presented as one category to reflect the manner in which these financial instruments are risk-managed.

The sensitivity analysis aims to measure a range of fair values consistent with the application of a 95% confidence interval. Methodologies take account of the nature of the valuation technique employed, as well as the availability and reliability of observable proxy and historical data.

When the fair value of a financial instrument is affected by more than one unobservable assumption, the table above reflects the most favourable or the most unfavourable change from varying the assumptions individually.

Key unobservable inputs to Level 3 financial instruments

The following table lists key unobservable inputs to Level 3 financial instruments and provides the range of those inputs at 30 June 2022. There has been no change to the key unobservable inputs to Level 3 financial instruments and inter-relationships therein, which are detailed on pages 349 and 350 of the Annual Report and Accounts 2021.

Quantitative information about significant unobservable inputs in Level 3 valuations
	Fair value		Valuation techniques	Key unobservable inputs	30 Jun 2022		31 Dec 2021
	Assets	Liabilities			Full range of inputs		Full range of inputs
	$m	$m			Lower	Higher	Lower	Higher
Private equity including strategic investments	15,441	91	See footnote 1	See footnote 1
Asset-backed securities ('ABS')	611	-
- collateralised loan/debt obligation	25	-	Market proxy	Prepayment rate			-	-
- collateralised loan/debt obligation	25	-	Market proxy	Bid quotes	-	98	-	100
- other ABSs	586	-	Market proxy	Bid quotes	-	97	-	100
Loans held for securitisation	-	-
Structured notes	-	8,465
- equity-linked notes	-	6,648	Model - Option model	Equity volatility	6%	95%	6%	124%
- equity-linked notes	-	6,648	Model - Option model	Equity correlation	30%	98%	22%	99%
- Foreign exchange ('FX')-linked notes	-	994	Model - Option model	FX volatility	3%	40%	1%	99%
- other	-	823
Derivatives with monolines	-	-	Model - Discounted cash flow	Credit spread	-	-	-	-
Other derivatives	2,111	2,320
- interest rate derivatives	448	588
securitisation swaps	260	367	Model - Discounted cash flow	Prepayment rate	5%	10%	5%	10%
long-dated swaptions	31	50	Model - Option model	Interest rate volatility	10%	42%	15%	35%
other	157	171
- FX derivatives	291	354
FX options	112	193	Model - Option model	FX volatility	1%	40%	1%	99%
other	179	161
- equity derivatives	1,232	1,154
long-dated single stock options	537	703	Model - Option model	Equity volatility	6%	124%	4%	138%
other	695	451
- credit derivatives	140	224
other	140	224
Other portfolios	4,696	260
- repurchase agreements	993	232	Model - Discounted cash flow	Interest rate curve	1%	5%	1%	5%
- other2	3,703	28
At 30 Jun 2022	22,859	11,136

1 Given the bespoke nature of the analysis in respect of each private equity holding, it is not practical to quote a range of key unobservable inputs.

2 'Other' includes a range of smaller holdings.

7	Fair values of financial instruments not carried at fair value

The bases for measuring the fair values of loans and advances to banks and customers, financial investments, deposits by banks, customer accounts, debt securities in issue, subordinated liabilities and non-trading repurchase and reverse repurchase agreements are explained on pages 350 and 351 of the Annual Report and Accounts 2021.

Fair values of financial instruments not carried at fair value on the balance sheet
	At 30 Jun 2022		At 31 Dec 2021
	Carrying amount	Fair value	Carrying amount	Fair value
	$m	$m	$m	$m
Assets
Loans and advances to banks	96,429	96,445	83,136	83,293
Loans and advances to customers	1,028,356	1,021,944	1,045,814	1,044,575
Reverse repurchase agreements - non-trading	244,451	244,381	241,648	241,652
Financial investments - at amortised cost	154,219	148,456	97,302	102,267
Liabilities
Deposits by banks	105,275	105,197	101,152	101,149
Customer accounts	1,651,301	1,651,234	1,710,574	1,710,733
Repurchase agreements - non-trading	129,707	129,705	126,670	126,670
Debt securities in issue	87,944	85,581	78,557	79,243
Subordinated liabilities	20,711	21,683	20,487	26,206

Other financial instruments not carried at fair value are typically short term in nature and reprice to current market rates frequently. Accordingly, their carrying amount is a reasonable approximation of fair value.

8	Derivatives

Notional contract amounts and fair values of derivatives by product contract type held by HSBC
	Notional contract amount		Fair value amount
	Assets and liabilities		Assets			Liabilities
	Trading	Hedging	Trading	Hedging	Total	Trading	Hedging	Total
	$m	$m	$m	$m	$m	$m	$m	$m
Foreign exchange	8,856,919	38,611	127,897	2,187	130,084	122,431	247	122,678
Interest rate	15,558,726	237,907	220,316	3,620	223,936	220,007	1,181	221,188
Equities	573,332	-	11,919	-	11,919	10,843	-	10,843
Credit	199,195	-	3,255	-	3,255	3,321	-	3,321
Commodity and other	102,053	-	1,815	-	1,815	1,525	-	1,525
Gross total fair values	25,290,225	276,518	365,202	5,807	371,009	358,127	1,428	359,555
Offset					(108,086)			(108,086)
At 30 Jun 2022	25,290,225	276,518	365,202	5,807	262,923	358,127	1,428	251,469

Foreign exchange	7,723,034	43,839	79,801	1,062	80,863	77,670	207	77,877
Interest rate	14,470,539	162,921	151,631	1,749	153,380	146,808	966	147,774
Equities	659,142	-	12,637	-	12,637	14,379	-	14,379
Credit	190,724	-	2,175	-	2,175	3,151	-	3,151
Commodity and other	74,159	-	1,205	-	1,205	1,261	-	1,261
Gross total fair values	23,117,598	206,760	247,449	2,811	250,260	243,269	1,173	244,442
Offset					(53,378)			(53,378)
At 31 Dec 2021	23,117,598	206,760	247,449	2,811	196,882	243,269	1,173	191,064

The notional contract amounts of derivatives held for trading purposes and derivatives designated in qualifying hedge accounting relationships indicate the nominal value of transactions outstanding at the balance sheet date, not amounts at risk. Derivative assets and liabilities increased during 1H22, reflecting changes in yield curves and the market environment.

Derivatives valued using models with unobservable inputs

The following table shows the difference between the fair value at initial recognition, which is the transaction price, and the value that would have been derived had valuation techniques used for subsequent measurement been applied at initial recognition, less subsequent releases.

Unamortised balance of derivatives valued using models with significant unobservable inputs
	Half-year to
	30 Jun	30 Jun	31 Dec
	2022	2021	2021
	$m	$m	$m
Unamortised balance at beginning of period	106	104	120
Deferral on new transactions	100	187	124
Recognised in the income statement during the period	(99)	(172)	(136)
- amortisation	(61)	(89)	(88)
- subsequent to unobservable inputs becoming observable	-	(3)	(1)
- maturity, termination or offsetting derivative	(38)	(80)	(47)
Exchange differences	(8)	1	(2)
Unamortised balance at end of period1	99	120	106

1 This amount is yet to be recognised in the consolidated income statement.

Hedge accounting derivatives

The notional contract amounts of derivatives held for hedge accounting purposes indicate the nominal value of transactions outstanding at the balance sheet date, not amounts at risk.

Notional contract amounts of derivatives held for hedging purposes by product type
	At 30 Jun 2022		At 31 Dec 2021
	Cash flow hedges	Fair value hedges	Cash flow hedges	Fair value hedges
	$m	$m	$m	$m
Foreign exchange	12,150	4	17,930	4
Interest rate	100,673	137,234	72,365	90,556
Total	112,823	137,238	90,295	90,560

The Group applies hedge accounting in respect of certain consolidated net investments. Hedging is undertaken using forward foreign exchange contracts or by financing with foreign currency borrowings. At 30 June 2022, the notional contract values of outstanding financial instruments designated as hedges of net investments in foreign operations were $26,457m (31 December 2021: $25,905m).

Interest rate benchmark reform: Amendments to IFRS 9 and IAS 39 'Financial Instruments'

HSBC has applied both the first set of amendments ('Phase 1') and the second set of amendments ('Phase 2') to IFRS 9 and IAS 39 applicable to hedge accounting. The items in hedge accounting relationships that are affected by Phase 1 and Phase 2 amendments are presented in the balance sheet as 'Financial assets designated and otherwise mandatorily measured at fair value through other comprehensive income', 'Loans and advances to customers', 'Debt securities in issue' and 'Deposits by banks'. The notional value of the derivatives impacted by the Ibor reform, including those designated in hedge accounting relationships, is disclosed on page 62 in the section 'Financial instruments impacted by Ibor reform'. For further details on Ibor transition, see 'Areas of special interest' on page 61.

The most significant Ibor benchmark in which the Group continues to have hedging instruments is US dollar Libor. During 2022 those instruments continued to be transitioned. It is expected that the transition out of US dollar Libor hedging derivatives will be largely completed by the end of 2022. This transition does not necessitate any new approaches compared with the mechanisms used so far for transition and it will not be necessary to change the transition risk management strategy. There is no significant judgement required for US dollar Libor to determine whether and when the transition uncertainty has been resolved.

For some of the Ibors included under the 'Other' header in the table below, judgement has been needed to establish whether a transition is required. This is because there are Ibor benchmarks subject to computation improvements and insertion of fallback provisions where their administrators have yet to provide full clarity on whether or when these Ibor benchmarks will be demised.

The notional amounts of interest rate derivatives designated in hedge accounting relationships do not represent the extent of the risk exposure managed by the Group but they are expected to be directly affected by market-wide Ibor reform and in scope of Phase 1 amendments and are shown in the table below. The cross-currency swaps designated in hedge accounting relationships and affected by Ibor reform are not significant and have not been presented below:

Hedging instrument impacted by Ibor reform
	Hedging instrument
	Impacted by Ibor reform					Not impacted by Ibor reform	Notional amount3
	€1	£	$	Other2	Total	Not impacted by Ibor reform	Notional amount3
	$m	$m	$m	$m	$m	$m	$m
Fair value hedges	9,094	-	7,903	10,461	27,458	109,776	137,234
Cash flow hedges	6,342	-	100	21,058	27,500	73,173	100,673
At 30 Jun 2022	15,436	-	8,003	31,519	54,958	182,949	237,907

Fair value hedges	6,178	-	18,525	6,615	31,318	59,238	90,556
Cash flow hedges	7,954	-	100	8,632	16,686	55,679	72,365
At 31 Dec 2021	14,132	-	18,625	15,247	48,004	114,917	162,921

1 The notional contract amounts of euro interest rate derivatives impacted by Ibor reform mainly comprise hedges with a Euribor benchmark, which are 'Fair value hedges' of $9,094m (31 December 2021: $6,178m) and 'Cash flow hedges' of $6,342m (31 December 2021: $7,954m).

2 Other benchmarks impacted by Ibor reform comprise mainly of Canadian dollar offered rate ('CDOR'), Hong Kong interbank offered rate ('HIBOR') and Mexican interbank equilibrium interest rate ('TIIE') related derivatives.

3 The notional contract amounts of interest rate derivatives designated in qualifying hedge accounting relationships indicate the nominal value of transactions outstanding at the balance sheet date. They do not represent amounts at risk.

9	Financial investments

Carrying amounts of financial investments
	30 Jun	31 Dec
	2022	2021
	$m	$m
Financial investments measured at fair value through other comprehensive income	276,577	348,972
- treasury and other eligible bills	59,602	100,158
- debt securities	215,163	246,998
- equity securities	1,812	1,770
- other instruments	-	46
Debt instruments measured at amortised cost	154,219	97,302
- treasury and other eligible bills	55,392	21,634
- debt securities	98,827	75,668
At the end of the period	430,796	446,274

10	Interests in associates and joint ventures

At 30 June 2022, the carrying amount of HSBC's interests in associates and joint ventures was $29,446m (31 December 2021: $29,609m).

Principal associates of HSBC
	At 30 Jun 2022		At 31 Dec 2021
	Carrying amount	Fair value1	Carrying amount	Fair value1
	$m	$m	$m	$m
Bank of Communications Co., Limited	23,559	9,764	23,616	8,537
The Saudi British Bank	4,472	6,910	4,426	5,599

1 Principal associates are listed on recognised stock exchanges. The fair values are based on the quoted market prices of the shares held (Level 1 in the fair value hierarchy).

Bank of Communications Co., Limited

The Group's investment in Bank of Communications Co., Limited ('BoCom') is classified as an associate. Significant influence in BoCom was established with consideration of all relevant factors, including representation on BoCom's Board of Directors and participation in a resource and experience sharing agreement ('RES'). Under the RES, HSBC staff have been seconded to assist in the maintenance of BoCom's financial and operating policies. Investments in associates are recognised using the equity method of accounting in accordance with IAS 28 whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the Group's share of BoCom's net assets. An impairment test is required if there is any indication of impairment.

Impairment testing

At 30 June 2022, the fair value of the Group's investment in BoCom had been below the carrying amount for approximately 10 years. As a result, the Group performed an impairment test on the carrying amount, which confirmed that there was no impairment at 30 June 2022 as the recoverable amount as determined by a value-in-use ('VIU') calculation was higher than the carrying value.

	At 30 Jun 2022			At 31 Dec 2021
	VIU	Carrying value	Fair value	VIU	Carrying value	Fair value
	$bn	$bn	$bn	$bn	$bn	$bn
BoCom	24.3	23.6	9.8	24.8	23.6	8.5

The headroom, which is defined as the extent to which the VIU exceeds the carrying value, decreased by $0.5bn compared with 31 December 2021. The decrease in headroom was principally due to revisions to management's best estimates of BoCom's future earnings in the short to medium term, partly offset by the impact on the VIU from BoCom's actual performance, which was better than earlier estimates.

In future periods, the VIU may increase or decrease depending on the effect of changes to model inputs. The main model inputs are described below and are based on factors observed at period-end. The factors that could result in a change in the VIU and an impairment include a short-term underperformance by BoCom, a change in regulatory capital requirements, or an increase in uncertainty regarding the future performance of BoCom resulting in a downgrade of the forecast of future asset growth or profitability. An increase in the discount rate could also result in a reduction of VIU and an impairment. At the point where the carrying value exceeds the VIU, impairment would be recognised.

If the Group did not have significant influence in BoCom, the investment would be carried at fair value rather than the current carrying value.

Basis of recoverable amount

The impairment test was performed by comparing the recoverable amount of BoCom, determined by a VIU calculation, with its carrying amount. The VIU calculation uses discounted cash flow projections based on management's best estimates of future earnings available to ordinary shareholders prepared in accordance with IAS 36. Significant management judgement is required in arriving at the best estimate. There are two main components to the VIU calculation. The first component is management's best estimate of BoCom's earnings, which is based on explicit forecasts over the short to medium term. This results in forecast earnings growth that is lower than recent historical actual growth and also reflects the uncertainty arising from the current economic outlook. Reflecting management's intent to continue to retain its investment, earnings beyond the short to medium term are then extrapolated into perpetuity using a long-term growth rate to derive a terminal value, which comprises the majority of the VIU. The second component is the capital maintenance charge ('CMC'), which is management's forecast of the earnings that need to be withheld in order for BoCom to meet capital requirements over the forecast period, meaning that CMC is deducted when arriving at management's estimate of future earnings available to ordinary shareholders. The principal inputs to the CMC calculation include estimates of asset growth, the ratio of risk-weighted assets to total assets, and the expected capital requirements. An increase in the CMC as a result of a change to these principal inputs would reduce VIU. Additionally, management considers other qualitative factors, to ensure that the inputs to the VIU calculation remain appropriate.

Key assumptions in value-in-use calculation

We used a number of assumptions in our VIU calculation, in accordance with the requirements of IAS 36:

• Long-term profit growth rate: 3% (31 December 2021: 3%) for periods after 2025, which does not exceed forecast GDP growth in mainland China and is similar to forecasts by external analysts.

• Long-term asset growth rate: 3% (31 December 2021: 3%) for periods after 2025, which is the rate that assets are expected to grow to achieve long-term profit growth of 3%.

• Discount rate: 10.03% (31 December 2021: 10.03%), which is based on a capital asset pricing model ('CAPM'), using market data. The discount rate used is within the range of 8.2% to 10.2% (31 December 2021: 8.7% to 10.1%) indicated by the CAPM. While the CAPM range sits at the lower end of the range adopted by selected external analysts of 9.9% to 13.5% (31 December 2021: 9.9% to 13.5%), we continue to regard the CAPM range as the most appropriate basis for determining this assumption.

• Expected credit losses ('ECL') as a percentage of customer advances: ranges from 0.99% to 1.15% (31 December 2021: 0.98% to 1.12%) in the short to medium term, reflecting reported credit experience through the ongoing Covid-19 pandemic in mainland China followed by an expected reversion to recent historical levels. For periods after 2025, the ratio is 0.97% (31 December 2021: 0.97%), which is higher than BoCom's average ECL as a percentage of customer advances in recent years prior to the Covid-19 pandemic.

• Risk-weighted assets as a percentage of total assets: ranges from 61.0% to 63.2% (31 December 2021: 61.0% to 62.4%) in the short to medium term, reflecting reductions that may arise from a subsequent lowering of ECL and a continuation of the trend of strong retail loan growth. For periods after 2025, the ratio is 61.0% (31 December 2021: 61.0%). These rates are similar to BoCom's actual results in recent years and forecasts disclosed by external analysts.

• Operating income growth rate: ranges from 4.6% to 7.3% (31 December 2021: 5.1% to 6.2%) in the short to medium term, and is lower than BoCom's actual results in recent years and the forecasts disclosed by external analysts, reflecting BoCom's most recent actual results, global trade tensions and industry developments in mainland China.

• Cost-income ratio: ranges from 35.5% to 35.8% (31 December 2021: 35.5% to 36.1%) in the short to medium term. These ratios are similar to BoCom's actual results in recent years and forecasts disclosed by external analysts.

• Effective tax rate: ranges from 7.6% to 15.0% (31 December 2021: 6.8% to 15.0%) in the short to medium term, reflecting BoCom's actual results and an expected increase towards the long-term assumption through the forecast period. For periods after 2025, the rate is 15.0% (31 December 2021: 15.0%), which is higher than the recent historical average, and aligned to the minimum tax rate as proposed by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting.

• Capital requirements: capital adequacy ratio of 12.5% (31 December 2021: 12.5%) and tier 1 capital adequacy ratio of 9.5% (31 December 2021: 9.5%), based on BoCom's capital risk appetite and capital requirements respectively.

The following table shows the change to each key assumption in the VIU calculation that on its own would reduce the headroom to nil:

Key assumption	Changes to key assumption to reduce headroom to nil
• Long-term profit growth rate	Decrease by 17 basis points
• Long-term asset growth rate	Increase by 15 basis points
• Discount rate	Increase by 23 basis points
• Expected credit losses as a percentage of customer advances	Increase by 2 basis points
• Risk-weighted assets as a percentage of total assets	Increase by 122 basis points
• Operating income growth rate	Decrease by 31 basis points
• Cost-income ratio	Increase by 70 basis points
• Long-term effective tax rate	Increase by 203 basis points
• Capital requirements - capital adequacy ratio	Increase by 25 basis points
• Capital requirements - tier 1 capital adequacy ratio	Increase by 169 basis points

The following table further illustrates the impact on VIU of reasonably possible changes to key assumptions. This reflects the sensitivity of the VIU to each key assumption on its own and it is possible that more than one favourable and/or unfavourable change may occur at the same time. The selected rates of reasonably possible changes to key assumptions are based on external analysts' forecasts, statutory requirements and other relevant external data sources, which can change period to period.

Sensitivity of VIU to reasonably possible changes in key assumptions
	Favourable change			Unfavourable change
		Increase in VIU	VIU		Decrease in VIU	VIU
	bps	$bn	$bn	bps	$bn	$bn
At 30 Jun 2022
Long-term asset/profit growth rate1	(75) / 82	3.3 / 4.0	27.6 / 28.3	82 / (75)	(4.5) / (2.9)	19.8 / 21.4
Discount rate	(183)	8.0	32.3	207	(5.2)	19.1
Expected credit losses as a percentage of customer advances	2022 to 2025: 103 2026 onwards: 91	1.6	25.9	2022 to 2025: 123 2026 onwards: 105	(2.8)	21.5
Risk-weighted assets as a percentage of total assets	(110)	0.1	24.4	247	(2.1)	22.2
Operating income growth rate	51	1.2	25.5	(69)	(1.7)	22.6
Cost-income ratio	(113)	1.1	25.4	188	(2.0)	22.3
Long-term effective tax rate	(426)	1.5	25.8	1,000	(3.6)	20.7
Capital requirements - capital adequacy ratio	-	-	24.3	274	(8.8)	15.5
Capital requirements - tier 1 capital adequacy ratio	-	-	24.3	304	(5.2)	19.1

At 31 Dec 2021
Long-term asset/profit growth rate1	(69) / 87	2.9 / 4.2	27.7 / 29.0	87 / (69)	(4.7) / (2.7)	20.1 / 22.1
Discount rate	(133)	5.4	30.2	207	(5.3)	19.5
Expected credit losses as a percentage of customer advances	2021 to 2025: 103 2026 onwards: 91	1.5	26.3	2021 to 2025: 121 2026 onwards: 105	(2.7)	22.1
Risk-weighted assets as a percentage of total assets	(111)	0.2	25.0	280	(2.1)	22.7
Operating income growth rate	37	1.0	25.8	(58)	(1.8)	23.0
Cost-income ratio	(152)	1.7	26.5	174	(1.7)	23.1
Long-term effective tax rate	(104)	0.3	25.1	1,000	(3.6)	21.2
Capital requirements - capital adequacy ratio	-	-	24.8	325	(10.0)	14.8
Capital requirements - tier 1 capital adequacy ratio	-	-	24.8	364	(6.5)	18.3

1 The reasonably possible ranges of the long-term profit growth rate and long-term asset growth rate assumptions reflect the close relationship between these assumptions, which would result in offsetting changes to each assumption.

Considering the interrelationship of the changes set out in the table above, management estimates that the reasonably possible range of VIU is $18.5bn to $29.0bn (31 December 2021: $19.0bn to $29.3bn). The range is based on impacts set out in the table above arising from the favourable/unfavourable change in the earnings in the short to medium term, the long-term expected credit losses as a percentage of customer advances and a 50bps increase/decrease in the discount rate. All other long-term assumptions, and the basis of the CMC have been kept unchanged when determining the reasonably possible range of the VIU.

The Saudi British Bank

The Group's investment in The Saudi British Bank ('SABB') is classified as an associate. HSBC is the largest shareholder in SABB with a shareholding of 31%. Significant influence in SABB is established via representation on the Board of Directors. Investments in associates are recognised using the equity method of accounting in accordance with IAS 28, as described previously for BoCom.

Impairment testing

There were no indicators of impairment at 30 June 2022. The fair value of the Group's investment in SABB of $6.9bn was above the carrying amount of $4.5bn.

11	Provisions

	Restructuring costs	Legal proceedings and regulatory matters	Customer remediation	Other provisions	Total
	$m	$m	$m	$m	$m
Provisions (excluding contractual commitments)
At 31 Dec 2021	383	619	386	558	1,946
Additions	105	110	34	104	353
Amounts utilised	(147)	(275)	(49)	(132)	(603)
Unused amounts reversed	(41)	(74)	(38)	(66)	(219)
Exchange and other movements	12	(10)	(34)	(55)	(87)
At 30 Jun 2022	312	370	299	409	1,390
Contractual commitments1
At 31 Dec 2021					620
Net change in expected credit loss provision and other movements					(110)
At 30 Jun 2022					510
Total provisions
At 31 Dec 2021					2,566
At 30 Jun 2022					1,900

1 Contractual commitments include the provision for contingent liabilities measured under IFRS 9 'Financial Instruments' in respect of financial guarantees and the expected credit loss provision on off-balance sheet guarantees and commitments.

Further details of 'Legal proceedings and regulatory matters' are set out in Note 13. Legal proceedings include civil court, arbitration or tribunal proceedings brought against HSBC companies (whether by way of claim or counterclaim); or civil disputes that may, if not settled, result in court, arbitration or tribunal proceedings. 'Regulatory matters' refers to investigations, reviews and other actions carried out by, or in response to, the actions of regulators or law enforcement agencies in connection with alleged wrongdoing by HSBC.

Customer remediation refers to HSBC's activities to compensate customers for losses or damages associated with a failure to comply with regulations or to treat customers fairly. Customer remediation is often initiated by HSBC in response to customer complaints and/or industry developments in sales practices, and is not necessarily initiated by regulatory action. Further details of customer remediation are set out in this note.

At 30 June 2022, $123m (31 December 2021: $173m) of the customer remediation provision related to the estimated liability for redress in respect of the possible mis-selling of payment protection insurance ('PPI') policies in previous years. Payments totalling $18m were made during the first six months of 2022, and the provision was decreased by $16m coupled with favourable foreign exchange movements of $16m.

At 30 June 2022, a provision of $83m (31 December 2021: $87m) was held relating to the liability for redress payable to customers following a review of collections and recoveries practices in the UK. During the first six months of 2022, redress payments and incurred operating costs totalled $14m and the provision was increased by $19m and saw favourable foreign exchange movements of $9m.

For further details of the impact of IFRS 9 on undrawn loan commitments and financial guarantees, presented in 'Contractual commitments', see Note 12. Further analysis of the movement in the expected credit loss provision is disclosed within the 'Reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to banks and customers including loan commitments and financial guarantees' table on page 75.

12	Contingent liabilities, contractual commitments and guarantees

	At
	30 Jun	31 Dec
	2022	2021
	$m	$m
Guarantees and contingent liabilities:
- financial guarantees	17,586	27,795
- performance and other guarantees	84,103	85,534
- other contingent liabilities	816	858
At the end of the period	102,505	114,187
Commitments:1
- documentary credits and short-term trade-related transactions	9,972	8,827
- forward asset purchases and forward deposits placed	76,144	47,184
- standby facilities, credit lines and other commitments to lend	740,313	759,463
At the end of the period	826,429	815,474

1 Includes $633,091m of commitments at 30 June 2022 (31 December 2021: $627,637m), to which the impairment requirements in IFRS 9 are applied where HSBC has become party to an irrevocable commitment.

The preceding table discloses the nominal principal amounts of off-balance sheet liabilities and commitments for the Group, which represent the maximum amounts at risk should the contracts be fully drawn upon and the clients default. As a significant portion of guarantees and commitments is expected to expire without being drawn upon, the total of the nominal principal amounts is not indicative of future liquidity requirements. The expected credit loss provision relating to guarantees and commitments under IFRS 9 is disclosed in Note 11.

The majority of the guarantees have a term of less than one year, while guarantees with terms of more than one year are subject to HSBC's annual credit review process.

Contingent liabilities arising from legal proceedings and regulatory and other matters against Group companies are excluded from this note but are disclosed in Note 13.

13	Legal proceedings and regulatory matters

HSBC is party to legal proceedings and regulatory matters in a number of jurisdictions arising out of its normal business operations. Apart from the matters described below, HSBC considers that none of these matters are material. The recognition of provisions is determined in accordance with the accounting policies set out in Note 1 of the Annual Report and Accounts 2021. While the outcomes of legal proceedings and regulatory matters are inherently uncertain, management believes that, based on the information available to it, appropriate provisions have been made in respect of these matters as at 30 June 2022 (see Note 11). Where an individual provision is material, the fact that a provision has been made is stated and quantified, except to the extent that doing so would be seriously prejudicial. Any provision recognised does not constitute an admission of wrongdoing or legal liability. It is not practicable to provide an aggregate estimate of potential liability for our legal proceedings and regulatory matters as a class of contingent liabilities.

Bernard L. Madoff Investment Securities LLC

Various non-US HSBC companies provided custodial, administration and similar services to a number of funds incorporated outside the US whose assets were invested with Bernard L. Madoff Investment Securities LLC ('Madoff Securities'). Based on information provided by Madoff Securities as at 30 November 2008, the purported aggregate value of these funds was $8.4bn, including fictitious profits reported by Madoff. Based on information available to HSBC, the funds' actual transfers to Madoff Securities minus their actual withdrawals from Madoff Securities during the time HSBC serviced the funds are estimated to have totalled approximately $4bn. Various HSBC companies have been named as defendants in lawsuits arising out of Madoff Securities' fraud.

US litigation: The Madoff Securities Trustee has brought lawsuits against various HSBC companies and others in the US Bankruptcy Court for the Southern District of New York (the 'US Bankruptcy Court'), seeking recovery of transfers from Madoff Securities to HSBC in an amount not yet pleaded or determined. Following an initial dismissal of certain claims, which was later reversed on appeal, the cases were remanded to the US Bankruptcy Court, where they are now pending.

Fairfield Sentry Limited, Fairfield Sigma Limited and Fairfield Lambda Limited (together, 'Fairfield') (in liquidation since July 2009) have brought a lawsuit in the US against fund shareholders, including HSBC companies that acted as nominees for clients, seeking restitution of redemption payments. In December 2018, the US Bankruptcy Court dismissed certain claims by the Fairfield liquidators and granted a motion by the liquidators to file amended complaints. In May 2019, the liquidators appealed certain issues from the US Bankruptcy Court to the US District Court for the Southern District of New York (the 'New York District Court'), and these appeals remain pending.

In January 2020, the Fairfield liquidators filed amended complaints on the claims remaining in the US Bankruptcy Court. In December 2020, the US Bankruptcy Court dismissed the majority of those claims. In March 2021, the liquidators and defendants appealed the US Bankruptcy Court's decision to the New York District Court, and these appeals are currently pending. In May 2022, the liquidators voluntarily dismissed their claims against HSBC Bank USA N.A. ('HSBC Bank USA') in the US Bankruptcy Court. Meanwhile, proceedings before the US Bankruptcy Court with respect to the remaining claims and other HSBC companies that were not dismissed are ongoing.

UK litigation: The Madoff Securities Trustee has filed a claim against various HSBC companies in the High Court of England and Wales, seeking recovery of transfers from Madoff Securities to HSBC in an amount not yet pleaded or determined. The deadline for service of the claim has been extended to September 2022 for UK-based defendants and November 2022 for all other defendants.

Cayman Islands litigation: In February 2013, Primeo Fund ('Primeo') (in liquidation since April 2009) brought an action against HSBC Securities Services Luxembourg ('HSSL') and Bank of Bermuda (Cayman) Limited (now known as HSBC Cayman Limited), alleging breach of contract and breach of fiduciary duty and claiming damages and equitable compensation. The trial concluded in February 2017 and, in August 2017, the court dismissed all claims against the defendants. In September 2017, Primeo appealed to the Court of Appeal of the Cayman Islands and, in June 2019, the Court of Appeal of the Cayman Islands dismissed Primeo's appeal. In August 2019, Primeo filed a notice of appeal to the UK Privy Council. Two hearings before the UK Privy Council took place during 2021. Judgment was given against HSBC in respect of the first hearing and judgment is pending in respect of the second hearing.

Luxembourg litigation: In April 2009, Herald Fund SPC ('Herald') (in liquidation since July 2013) brought an action against HSSL before the Luxembourg District Court, seeking restitution of cash and securities that Herald purportedly lost because of Madoff Securities' fraud, or money damages. The Luxembourg District Court dismissed Herald's securities restitution claim, but reserved Herald's cash restitution and money damages claims. Herald has appealed this judgment to the Luxembourg Court of Appeal, where the matter is pending. In late 2018, Herald brought additional claims against HSSL and HSBC Bank plc before the Luxembourg District Court, seeking further restitution and damages.

In October 2009, Alpha Prime Fund Limited ('Alpha Prime') brought an action against HSSL before the Luxembourg District Court, seeking the restitution of securities, or the cash equivalent, or money damages. In December 2018, Alpha Prime brought additional claims before the Luxembourg District Court seeking damages against various HSBC companies. These matters are currently pending before the Luxembourg District Court.

In December 2014, Senator Fund SPC ('Senator') brought an action against HSSL before the Luxembourg District Court, seeking restitution of securities, or the cash equivalent, or money damages. In April 2015, Senator commenced a separate action against the Luxembourg branch of HSBC Bank plc asserting identical claims before the Luxembourg District Court. In December 2018, Senator brought additional claims against HSSL and HSBC Bank plc Luxembourg branch before the Luxembourg District Court, seeking restitution of Senator's securities or money damages. These matters are currently pending before the Luxembourg District Court.

There are many factors that may affect the range of possible outcomes, and any resulting financial impact, of the various Madoff-related proceedings described above, including but not limited to the multiple jurisdictions in which the proceedings have been brought. Based upon the information currently available, management's estimate of the possible aggregate damages that might arise as a result of all claims in the various Madoff-related proceedings is around $600m, excluding costs and interest. Due to uncertainties and limitations of this estimate, any possible damages that might ultimately arise could differ significantly from this amount.

Anti-money laundering and sanctions-related matters

In December 2012, HSBC Holdings entered into a number of agreements, including an undertaking with the UK Financial Services Authority (replaced with a Direction issued by the UK Financial Conduct Authority ('FCA') in 2013 and again in 2020) as well as a cease-and-desist order with the US Federal Reserve Board ('FRB'), both of which contained certain forward-looking anti-money laundering ('AML') and sanctions-related obligations. For several years thereafter, HSBC retained a Skilled Person under section 166 of the Financial Services and Markets Act and an Independent Consultant under the FRB cease-and-desist order to produce periodic assessments of the Group's AML and sanctions compliance programme. The Skilled Person completed its engagement in the second quarter of 2021, and the FCA determined that no further Skilled Person work is required. Separately, the Independent Consultant has completed its latest review pursuant to the FRB cease-and-desist order, which remains in place. The roles of each of the FCA Skilled Person and the FRB Independent Consultant are discussed on page 209 of the Annual Report and Accounts 2021.

Since November 2014, a number of lawsuits have been filed in federal courts in the US against various HSBC companies and others on behalf of plaintiffs who are, or are related to, victims of terrorist attacks in the Middle East. In each case, it is alleged that the defendants aided and abetted the unlawful conduct of various sanctioned parties in violation of the US Anti-Terrorism Act. Currently, nine actions remain pending in federal courts in New York or the District of Columbia. The courts have granted HSBC's motions to dismiss in five of these cases; appeals remain pending in two cases, and the remaining three dismissals are also subject to appeal. The four remaining actions are at an early stage.

Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of these matters, including the timing or any possible impact on HSBC, which could be significant.

London interbank offered rates, European interbank offered rates and other benchmark interest rate investigations and litigation

Euro interest rate derivatives: In December 2016, the European Commission ('EC') issued a decision finding that HSBC, among other banks, engaged in anti-competitive practices in connection with the pricing of euro interest rate derivatives in early 2007. The EC imposed a fine on HSBC based on a one-month infringement. In September 2019, the General Court of the European Union (the 'General Court') issued a decision largely upholding the EC's findings on liability but annulling the fine. HSBC and the EC both appealed the General Court's decision to the European Court of Justice (the 'Court of Justice'). In June 2021, the EC adopted a new fining decision for an amount that was 5% less than the previously annulled fine, and subsequently withdrew its appeal to the Court of Justice. HSBC has appealed the EC's June 2021 fining decision to the General Court, and its appeal to the Court of Justice on liability also remains pending.

US dollar Libor: Beginning in 2011, HSBC and other panel banks have been named as defendants in a number of private lawsuits filed in the US with respect to the setting of US dollar Libor. The complaints assert claims under various US laws, including US antitrust and racketeering laws, the US Commodity Exchange Act ('US CEA') and state law. The lawsuits include individual and putative class actions, most of which have been transferred and/or consolidated for pre-trial purposes before the New York District Court. HSBC has reached class settlements with five groups of plaintiffs, and the court has approved these settlements. HSBC has also resolved several of the individual actions, although a number of other US dollar Libor-related actions remain pending against HSBC in the New York District Court.

Singapore interbank offered rate ('Sibor') and Singapore swap offer rate ('SOR'): In 2016, HSBC and other panel banks were named as defendants in a putative class action filed in the New York District Court on behalf of persons who transacted in products related to the Sibor and SOR benchmark rates. The complaint alleges, among other things, misconduct related to these benchmark rates in violation of US antitrust, commodities and racketeering laws, and state law.

In October 2021, The Hongkong and Shanghai Banking Corporation Limited reached a settlement in principle with the plaintiffs to resolve this action, the agreement for which was executed in May 2022. The settlement received preliminary court approval in June 2022, and the final approval hearing is scheduled for November 2022.

There are many factors that may affect the range of outcomes, and the resulting financial impact, of these matters, which could be significant.

Foreign exchange-related investigations and litigation

In December 2021, the EC issued a settlement decision finding that a number of banks, including HSBC, had engaged in anti-competitive practices in an online chatroom between 2011 and 2012 in the foreign exchange spot market. The EC imposed a €174.3m fine on HSBC in connection with this matter, which has been paid.

In December 2016, Brazil's Administrative Council of Economic Defense initiated an investigation into the onshore foreign exchange market and identified a number of banks, including HSBC, as subjects of its investigation.

In June 2020, the Competition Commission of South Africa, having initially referred a complaint for proceedings before the South African Competition Tribunal in February 2017, filed a revised complaint against 28 financial institutions, including HSBC Bank plc and HSBC Bank USA, for alleged anti-competitive behaviour in the South African foreign exchange market. In December 2021, a hearing on HSBC Bank plc's and HSBC Bank USA's applications to dismiss the revised complaint took place before the South African Competition Tribunal, where a decision remains pending.

Beginning in 2013, various HSBC companies and other banks have been named as defendants in a number of putative class actions filed in, or transferred to, the New York District Court arising from allegations that the defendants conspired to manipulate foreign exchange rates. HSBC has reached class settlements with two groups of plaintiffs, including direct and indirect purchasers of foreign exchange products, and the court has granted final approval of these settlements. A putative class action by a group of retail customers of foreign exchange products remains pending.

In November and December 2018, complaints alleging foreign exchange-related misconduct were filed in the New York District Court and the High Court of England and Wales against HSBC and other defendants by certain plaintiffs that opted out of the direct purchaser class action settlement in the US. The High Court claim has since been transferred to the Competition Appeals Tribunal and these matters remain pending. Additionally, lawsuits alleging foreign exchange-related misconduct remain pending against HSBC and other banks in courts in Brazil and Israel. It is possible that additional civil actions will be initiated against HSBC in relation to its historical foreign exchange activities.

Precious metals fix-related litigation

Gold: Beginning in March 2014, numerous putative class actions were filed in the New York District Court and the US District Courts for the District of New Jersey and the Northern District of California, naming HSBC and other members of The London Gold Market Fixing Limited as defendants. The complaints, which were consolidated in the New York District Court, allege that, from January 2004 to June 2013, the defendants conspired to manipulate the price of gold and gold derivatives for their collective benefit in violation of US antitrust laws, the US CEA and New York state law. In October 2020, HSBC reached a settlement with the plaintiffs to resolve the consolidated action, and the court granted final approval of the settlement in May 2022.

Beginning in December 2015, numerous putative class actions under Canadian law were filed in the Ontario and Quebec Superior Courts of Justice against various HSBC companies and other financial institutions. The plaintiffs allege that, among other things, from January 2004 to March 2014, the defendants conspired to manipulate the price of gold and gold derivatives in violation of the Canadian Competition Act and common law. These actions are ongoing.

Silver: Beginning in July 2014, numerous putative class actions were filed in federal district courts in New York, naming HSBC and other members of The London Silver Market Fixing Limited as defendants. The complaints, which were consolidated in the New York District Court, allege that, from January 2007 to December 2013, the defendants conspired to manipulate the price of silver and silver derivatives for their collective benefit in violation of US antitrust laws, the US CEA and New York state law. In February 2022, following the conclusion of pre-class certification discovery, the defendants filed a motion seeking to dismiss the plaintiffs' antitrust claims, which remains pending.

In April 2016, two putative class actions under Canadian law were filed in the Ontario and Quebec Superior Courts of Justice against various HSBC companies and other financial institutions. The plaintiffs in both actions allege that, from January 1999 to August 2014, the defendants conspired to manipulate the price of silver and silver derivatives in violation of the Canadian Competition Act and common law. These actions are ongoing.

Platinum and palladium: Between late 2014 and early 2015, numerous putative class actions were filed in the New York District Court, naming HSBC and other members of The London Platinum and Palladium Fixing Company Limited as defendants. The complaints allege that, from January 2008 to November 2014, the defendants conspired to manipulate the price of platinum group metals ('PGM') and PGM-based financial products for their collective benefit in violation of US antitrust laws and the US CEA. In March 2020, the court granted the defendants' motion to dismiss the plaintiffs' third amended complaint but granted the plaintiffs leave to re-plead certain claims. The plaintiffs have filed an appeal.

Film finance litigation

In July and November 2015, two actions were brought by individuals against HSBC Private Bank (UK) Limited ('PBGB') in the High Court of England and Wales seeking damages on various alleged grounds, including breach of duty to the claimants, in connection with their participation in certain Ingenious film finance schemes. In December 2018 and June 2019, two further actions were brought against PBGB in the High Court of England and Wales by multiple claimants in connection with lending provided by PBGB to third parties in respect of certain Ingenious film finance schemes in which the claimants participated. In January 2022, the parties reached an agreement to resolve these disputes and, in February 2022, the actions against HSBC UK Bank plc (as successor to PBGB) were discontinued.

In June 2020, two separate claims were issued against HSBC UK Bank plc (as successor to PBGB) in the High Court of England and Wales by two separate groups of investors in Eclipse film finance schemes in connection with PBGB's role in the development of such schemes. These actions are ongoing.

In April 2021, HSBC UK Bank plc (as successor to PBGB) was served with a claim issued in the High Court of England and Wales in connection with PBGB's role in the development of the Zeus film finance schemes. This action is at an early stage.

There are many factors that may affect the range of outcomes, and the resulting financial impact, of these matters, which could be significant.

Other regulatory investigations, reviews and litigation

HSBC Holdings and/or certain of its affiliates are subject to a number of other investigations and reviews by various regulators and competition and law enforcement authorities, as well as litigation, in connection with various matters relating to the firm's businesses and operations, including:

• investigations by tax administration, regulatory and law enforcement authorities in Argentina, India and elsewhere in connection with allegations of tax evasion or tax fraud, money laundering and unlawful cross-border banking solicitation;

• an investigation by the US Commodity Futures Trading Commission regarding interest rate swap transactions related to bond issuances, among other things;

• investigations by US regulators concerning compliance with records preservation requirements relating to the use of unapproved electronic messaging platforms for business communications;

• an investigation by the PRA in connection with depositor protection arrangements in the UK;

• an investigation by the FCA in connection with collections and recoveries operations in the UK;

• an investigation by the UK Competition and Markets Authority into potentially anti-competitive arrangements involving historical trading activities relating to certain UK-based fixed income products and related financial instruments;

• a putative class action brought in the New York District Court relating to the Mexican government bond market;

• two group actions pending in the US courts and a claim issued in the High Court of England and Wales in connection with HSBC Bank plc's role as a correspondent bank to Stanford International Bank Ltd from 2003 to 2009; and

• litigation brought against various HSBC companies in the US courts relating to residential mortgage-backed securities, based primarily on (a) claims brought against HSBC Bank USA in connection with its role as trustee on behalf of various securitisation trusts; and (b) claims against several HSBC companies seeking that the defendants repurchase various mortgage loans.

There are many factors that may affect the range of outcomes, and the resulting financial impact, of these matters, which could be significant.

14	Transactions with related parties

There were no changes in the related party transactions described in the Annual Report and Accounts 2021 that have had a material effect on the financial position or performance of HSBC in the half-year to 30 June 2022. All related party transactions that took place in the half-year to 30 June 2022 were similar in nature to those disclosed in the Annual Report and Accounts 2021.

15	Business acquisitions and disposals

Business acquisitions

The following recently announced acquisitions form part of our strategy to become a market leader in Asian wealth management:

• On 23 December 2021, HSBC Asset Management (India) Private Ltd, a subsidiary of the Group, entered into an agreement with L&T Finance Holdings Limited to fully acquire L&T Investment Management Limited for $0.4bn. Completion is expected to occur during 4Q22. L&T Investment Management Limited is a wholly-owned subsidiary of L&T Finance Holdings Limited and the investment manager of the L&T Mutual Fund, with assets under management of $8.9bn at 31 May 2022 and over 2.4 million active folios.

• On 28 January 2022, HSBC Insurance (Asia-Pacific) Holdings Limited, a subsidiary of the Group, notified the shareholders of Canara HSBC Life Insurance Company Limited ('Canara HSBC') of its intention to increase its shareholding in Canara HSBC up to 49%. HSBC currently has a 26% shareholding, which is accounted for as an associate. Any increase in shareholding is subject to agreement with other shareholders in Canara HSBC, as well as internal and regulatory approvals. Established in 2008, Canara HSBC is a life insurance company based in India.

• On 11 February 2022, HSBC Insurance (Asia-Pacific) Holdings Limited completed the acquisition of 100% of AXA Insurance Pte Limited (AXA Singapore) for $0.5bn. A provisional gain on acquisition of $0.1bn was recorded, reflecting the excess of the fair value of net assets acquired (gross assets of $4.5bn and gross liabilities of $3.9bn) over the acquisition price.

• On 6 April 2022, The Hongkong and Shanghai Banking Corporation Limited, a subsidiary of the Group, announced it had increased its shareholding in HSBC Qianhai Securities Limited, a partially-owned subsidiary, from 51% to 90%.

• On 23 June 2022, HSBC Insurance (Asia) Limited, a subsidiary of the Group, acquired the remaining 50% equity interest in HSBC Life Insurance Company Limited. Headquartered in Shanghai, HSBC Life Insurance Company Limited offers a comprehensive range of insurance solutions covering annuity, whole life, critical illness and unit-linked insurance products.

Business disposals

In 2021 and 2022, we accelerated the pace of execution on our strategic ambition to be the preferred international financial partner for our clients with the announcements of the planned sales of our retail banking businesses in France and branch operations in Greece, as well as the exit of domestic mass market retail banking in the US. The planned sales in France and Greece are expected to complete in 2023, and the US exit has since completed.

US retail banking business

On 26 May 2021, we announced our intention to exit our US mass market retail banking business, including our Personal and Advance propositions, as well as retail business banking, and rebranding approximately 20 to 25 of our retail branches into international wealth centres to serve our Premier and Jade customers. In conjunction with the execution of this strategy, HSBC Bank USA, N.A. entered into definitive sale agreements with Citizens Bank and Cathay Bank to sell 90 of our retail branches along with substantially all residential mortgage, unsecured and retail business banking loans and all deposits in our branch network not associated with our Premier, Jade and Private Banking customers. As a result of entering into these sale agreements, assets and liabilities related to the agreements were transferred to held for sale during the second quarter of 2021.

In February 2022, we completed the sale of the branch disposal group and recognised a net gain on sale of approximately $0.1bn, which is subject to customary closing adjustments. Included in the sale were $2.1bn of loans and advances to customers and $6.9bn of customer accounts. Certain assets under management associated with our mass market retail banking operations were also transferred. The remaining branches not sold or rebranded have been closed.

Planned sale of the retail banking business in France

HSBC Continental Europe signed a framework agreement with Promontoria MMB SAS ('My Money Group') and its subsidiary Banque des Caraïbes SA, regarding the planned sale of HSBC Continental Europe's retail banking business in France.

The sale, which is subject to regulatory approvals and the satisfaction of other relevant conditions, includes: HSBC Continental Europe's French retail banking business; the Crédit Commercial de France ('CCF') brand; and HSBC Continental Europe's 100% ownership interest in HSBC SFH (France) and its 3% ownership interest in Crédit Logement. The disposal group is currently expected to be classified as held for sale in 2H22 and the sale would generate an estimated loss before tax including related transaction costs for the Group of $2.1bn, together with an additional $0.5bn impairment of goodwill.

At 30 June 2022, a deferred tax liability of $0.4bn was recognised as a consequence of the temporary difference in tax and accounting treatment in respect of the provision for loss on disposal, which was deductible in the French tax return in 2021 but will be accounted for when the disposal group is classified as held for sale in accordance with IFRS 5, at which time the deferred tax liability will reverse. The vast majority of the estimated loss for the write-down of the disposal group to fair value less costs to sell will also be recognised when it is classified as held for sale. Subsequently, the disposal group classified as held for sale will be remeasured at the lower of carrying amount and fair value less costs to sell at each reporting period. Any remaining gain or loss not previously recognised will be recognised at closing, which is currently anticipated to be in 2023.

At 30 June 2022, the disposal group included total assets of $25.6bn.

Planned sale of the retail banking business in Greece

On 24 May 2022, HSBC Continental Europe signed a sale and purchase agreement for the sale of its branch operations in Greece to Pancreta Bank SA. Completion of the transaction is subject to regulatory approval and is currently expected to occur in the first half of 2023. At 30 June 2022, the disposal group included $0.4bn of loans and advances to customers and $2.3bn of customer accounts which met the criteria to be classified as held for sale. In 2Q22, we recognised a loss of $0.1bn, including goodwill impairment, upon reclassification as held for sale in accordance with IFRS 5.

Planned sale of the business in Russia

Following a strategic review of our business in Russia, HSBC Europe BV (a wholly-owned subsidiary of HSBC Bank plc) has entered into an agreement to sell its wholly-owned subsidiary HSBC Bank (RR) (Limited Liability Company), subject to regulatory approvals.

16	Events after the balance sheet date

In its assessment of events after the balance sheet date, HSBC has considered and concluded that no material events have occurred resulting in adjustments to the financial statements.

An interim dividend for the 2022 half-year in respect of the financial year ending 31 December 2022 was approved by the Directors on 1 August 2022, as described in Note 3.

17	Interim Report 2022 and statutory accounts

The information in this Interim Report 2022 is unaudited and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. This Interim Report 2022 was approved by the Board of Directors on 1 August 2022. The statutory accounts of HSBC Holdings plc for the year ended 31 December 2021 have been delivered to the Registrar of Companies in England and Wales in accordance with section 447 of the Companies Act 2006. The Group's auditor PricewaterhouseCoopers LLP ('PwC') has reported on those accounts. Its report was unqualified, did not include a reference to any matters to which PwC drew attention by way of emphasis without qualifying its report and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

Shareholder information
		Page			Page
1	Directors' interests	131	10	Earnings release	135
2	Employee share plans	133	11	Final results	135
3	Share buy-back	133	12	Corporate governance	135
4	Other equity instruments	134	13	Changes in Directors' details	136
5	Notifiable interests in share capital	134	14	Going concern basis	136
6	Dealings in HSBC Holdings listed securities	134	15	Telephone and online share dealing service	136
7	Interim dividend for the 2022 half-year	134	16	Stock symbols	136
8	Dividend on preference shares	135	17	Copies of the Interim Report 2022 and shareholder enquiries and communications	136
9	Proposed interim dividends for 2022	135	17		136

1	Directors' interests

According to the register of Directors' interests maintained by HSBC Holdings pursuant to section 352 of the Securities and Futures Ordinance of Hong Kong, at 30 June 2022 the Directors of HSBC Holdings had the following interests, all beneficial unless otherwise stated, in the shares or debentures of HSBC Holdings and its associated corporations:

Directors' interests - shares and debentures
	At 1 Jan 2022 or date of appointment, if later Total interests	At 30 Jun 2022 or date of retirement, if earlier
		Beneficial owner	Child under 18 or spouse	Jointly with another person	Trustee	Total interests
HSBC Holdings ordinary shares
Geraldine Buckingham1 (appointed to the Board on 1 May 2022)	-	15,000	-	-	-	15,000
Rachel Duan1	-	15,000	-	-	-	15,000
Dame Carolyn Fairbairn	-	15,000	-	-	-	15,000
James Forese1	115,000	115,000	-	-	-	115,000
Steven Guggenheimer1	15,000	-	-	15,000	-	15,000
Irene Lee (retired on 29 Apr 2022)	15,000	15,000	-	-	-	15,000
José Antonio Meade Kuribreña1	15,000	15,000	-	-	-	15,000
Eileen Murray1	75,000	75,000	-	-	-	75,000
David Nish	50,000	-	50,000	-	-	50,000
Noel Quinn2	1,131,278	1,305,310	-	-	-	1,305,310
Ewen Stevenson2	838,154	989,735	-	-	-	989,735
Jackson Tai1,3	66,515	32,800	11,965	21,750	-	66,515
Mark Tucker	307,352	307,352	-	-	-	307,352
Pauline van der Meer Mohr (retired on 29 Apr 2022)	15,000	15,000	-	-	-	15,000

1 Geraldine Buckingham has an interest in 3,000, Rachel Duan has an interest in 3,000, James Forese has an interest in 23,000, Steven Guggenheimer has an interest in 3,000, José Antonio Meade Kuribreña has an interest in 3,000, Eileen Murray has an interest in 15,000 and Jackson Tai has an interest in 13,303 listed American Depositary Shares ('ADSs'), which are categorised as equity derivatives under Part XV of the Securities and Futures Ordinance of Hong Kong. Each ADS represents five HSBC Holdings ordinary shares.

2 Executive Directors' other interests in HSBC Holdings ordinary shares arising from the HSBC Holdings Savings-Related Share Option Plan (UK) and the HSBC Share Plan 2011 are set out on the following pages. At 30 June 2022, the aggregate interests under the Securities and Futures Ordinance of Hong Kong in HSBC Holdings ordinary shares, including interests arising through employee share plans, were: Noel Quinn - 3,822,453 and Ewen Stevenson - 3,060,950. Each Director's total interests represents approximately 0.02% of the shares in issue and 0.02% of the shares in issue excluding treasury shares.

3 Jackson Tai's holding includes a non-beneficial interest in 11,965 shares of which he is custodian.

HSBC Holdings Savings-Related Share Option Plan (UK)

Currently no executive Directors participate in a Savings-Related Share Option Plan. For further details on the Savings-Related Share Option Plan, see page 133.

HSBC Share Plan 2011

Conditional awards of deferred shares

Vesting of deferred share awards is normally subject to the Director remaining an employee on the vesting date. The awards may vest at an earlier date in certain circumstances. Under the Securities and Futures Ordinance of Hong Kong, interests in conditional share awards are categorised as the interests of the beneficial owner.

Deferred share awards
			HSBC Holdings ordinary shares
	Date of award	Year in which awards may vest	Awards held at	Awards made during the period to 30 Jun 2022		Awards vested during the period to 30 Jun 2022		Awards held at
	Date of award	Year in which awards may vest	1 Jan 2022	Number	Monetary value	Number	Monetary value	30 Jun 2022
					£000		£000
Noel Quinn	27/2/20171	2020-2024	53,328	-	-	18,229	89	36,5652
	26/2/20183	2021-2025	86,019	-	-	21,504	103	64,515
	25/2/20194	2022-2026	140,585	-	-	28,117	137	112,468
	24/2/20205	2023-2027	201,702	-	-	-	-	201,702
	28/2/20226	2022	-	147,769	795	147,769	795	-
Ewen Stevenson	28/5/20197	2020-2025	264,755	-	-	74,759	365	189,996
	28/5/20198	2022-2026	241,988	-	-	48,397	236	193,591
	28/2/20226	2022	-	90,892	489	90,892	489	-

1 At the date of the award (27 February 2017), the market value per share was £6.5030. The award will vest in five equal annual tranches. The third tranche vested on 14 March 2022 at a market value of £4.8772. Shares equivalent in number to those that vest under the award (net of tax liabilities) must be retained for six months from the vesting date.

2 Includes any additional shares arising from dividend equivalents.

3 At the date of the award (26 February 2018), the market value per share was £7.2340. Shares equivalent in number to those that vest under the award (net of tax liabilities) must be retained for one year from the vesting date. The award will vest in five equal annual tranches. The second tranche vested on 15 March 2022 at a market value of £4.7884.

4 At the date of the award (25 February 2019), the market value per share was £6.2350. Shares equivalent in number to those that vest under the award (net of tax liabilities) must be retained for one year from the vesting date. The award will vest in five equal annual tranches. The first tranche vested on 14 March 2022 at a market value of £4.8772.

5 At the date of the award (24 February 2020), the market value per share was £5.6220. Shares equivalent in number to those that vest under the award (net of tax liabilities) must be retained for one year from the vesting date. The award will vest in five equal annual tranches commencing in March 2023.

6 The non-deferred award vested immediately on 28 February 2022 and was based on the market value of £5.3800. Shares equivalent in number to those that vest under the award (net of tax liabilities) must be retained for one year from the vesting date.

7 The award was granted on 28 May 2019 using a market value per share of £6.6430 as at 30 November 2018. Shares equivalent in number to those that vest under the award (net of tax liabilities) must be retained for up to one year from the vesting date. The third tranche vested on 14 March 2022 at a market value of £4.8772. The award replaced the 2015 to 2018 long-term incentive ('LTI') plans forfeited by the Royal Bank of Scotland Group plc ('RBS') (now renamed as NatWest Group plc ('NatWest')), and is subject to any performance adjustments assessed and disclosed in the relevant annual report and accounts of NatWest.

8 The award was granted on 28 May 2019 using a market value per share of £6.2350 as at 22 February 2019. Shares equivalent in number to those that vest under the award (net of tax liabilities) must be retained for up to one year from the vesting date. The award will vest in five annual tranches. The first tranche vested on 14 March 2022 at a market value of £4.8772. The award is in respect of the 2018 performance year granted based on Ewen Stevenson's maximum opportunity under NatWest's policy and the outcome of the 2018 scorecard as disclosed in NatWest's Annual Report and Accounts 2018. The number of shares that vest may be adjusted based on any 'pre-vest performance test' assessed and disclosed in NatWest's Annual Report and Accounts.

Long-term incentive awards

The long-term incentive award is an award of shares with a three-year performance period. At the end of this performance period and subject to the award terms, the number of shares that vest will be determined based on an assessment against financial and non-financial measures. Subject to that assessment, the shares will vest in five equal annual instalments. On vesting, awards are subject to a retention period of up to one year. Under the Securities and Futures Ordinance of Hong Kong, interests in share awards are categorised as interests of the beneficial owner.

Long-term incentive awards
			HSBC Holdings ordinary shares
	Date of award1	Year in which awards may vest	Awards held at	Awards made during the period to 30 Jun 2022		Awards vested during the period to 30 Jun 2022		Awards held at
	Date of award1	Year in which awards may vest	1 Jan 2022	Number	Monetary value	Number	Monetary value	30 Jun 2022
				Number	£000	Number	£000
	1 Mar 2021	2024-2028	1,118,554	-	-	-	-	1,118,554
Noel Quinn	28 Feb 2022	2025-2029	-	983,339	5,290			983,339
	24 Feb 2020	2023-2027	476,757	-	-	-	-	476,757
	1 Mar 2021	2024-2028	637,197	-	-	-	-	637,197
Ewen Stevenson	28 Feb 2022	2025-2029	-	573,674	3,086			573,674

1 Awards made on 24 February 2020 were based on the market value of £5.6220, awards made on 1 March 2021 were based on the market value of £4.2620, and awards made on 28 February 2022 were based on the market value of £5.3800.

No Directors held any short position (as defined in the Securities and Futures Ordinance of Hong Kong) in the shares or debentures of HSBC Holdings and its associated corporations. Save as stated in the tables above, none of the Directors had an interest in any shares or debentures of HSBC Holdings or any associates at the beginning or at the end of the period, and none of the Directors or members of their immediate families were awarded or exercised any right to subscribe for any shares or debentures in any HSBC corporation during the period.

There have been no changes in the shares or debentures of the Directors from 30 June 2022 to the date of this report.

2	Employee share plans

Share options and discretionary awards of shares are granted under HSBC share plans to help align the interests of employees with those of shareholders. The following are particulars of outstanding share options, including those held by employees working under employment contracts that are regarded as 'continuous contracts' for the purposes of the Hong Kong Employment Ordinance. The options were granted at nil consideration. No options have been granted to substantial shareholders, suppliers of goods or services, or in excess of the individual limit for each share plan. No options were cancelled by HSBC during the period to 30 June 2022.

A summary of the total number of options granted, exercised or lapsed during the period is shown in the table below. Particulars of options held by Directors of HSBC Holdings are set out on page 131. Further details required to be disclosed pursuant to Chapter 17 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited are available on our website at www.hsbc.com, and on the website of The Stock Exchange of Hong Kong Limited at www.hkex.com.hk. Copies may be obtained upon request from the Group Company Secretary and Chief Governance Officer, 8 Canada Square, London E14 5HQ.

All-employee share plans

The HSBC Holdings Savings-Related Share Option Plan (UK) is an all-employee share option plan under which eligible employees have been granted options to acquire HSBC Holdings ordinary shares. The HSBC International Employee Share Purchase Plan was introduced in 2013 and now includes employees based in 28 jurisdictions, although no options are granted under this plan. During 2021, approximately 190,000 employees were offered participation in these plans.

For options granted under the HSBC Holdings Savings-Related Share Option Plan (UK), employees may make contributions of up to £500 each month over a period of three or five years. The contributions may be used within six months following the third or fifth anniversary of the commencement of the relevant savings contract, at the employee's election, to exercise the options. Alternatively, the employee may elect to have the savings, plus (where applicable) any interest or bonus, repaid in cash. In the case of redundancy, ceasing employment on grounds of injury or disability, retirement, death, the transfer of the employing business to another party, or a change of control of the employing company, options may be exercised before completion of the relevant savings contract. In certain circumstances, the exercise period of options awarded under the all-employee share option plans may be extended; for example, on the death of a participant, the executors may exercise the option up to six months beyond the normal exercise period or, if a participant has chosen to defer up to 12 contributions, the start of the normal exercise period will be delayed by up to 12 months.

Under the HSBC Holdings Savings-Related Share Option Plan (UK), the option exercise price is determined by reference to the average market value of the HSBC Holdings ordinary shares on the five business days immediately preceding the invitation date, then applying a discount of 20%. The HSBC Holdings Savings-Related Share Option Plan (UK) has an expiry date of 24 April 2030 (by which time the plan may be extended with approval from shareholders) unless the Directors resolve to terminate the plan at an earlier date.

HSBC Holdings all-employee share option plan
						HSBC Holdings ordinary share options
Dates of award		Exercise price		Usually exercisable		1 Jan 2022	Granted in period	Exercised in period1	Lapsed in period	30 Jun 2022
from	to	from	to	from	to
HSBC Savings-Related Share Option Plan (UK)
22 Sep 2015	22 Sep 2021	(£) 2.6270	(£) 5.9640	1 Nov 2020	30 April 2027	123,196,850	-	1,533,755	8,078,210	113,584,885

1 The weighted average closing price of the shares immediately before the dates on which options were exercised was £5.1506.

3	Share buy-back

On 20 April 2022, HSBC Holdings completed a share buy-back programme of its ordinary shares of $0.50 each, which commenced on 26 October 2021. A total of 311,832,807 ordinary shares were repurchased for cancellation at a volume weighted average price of £4.8128 per ordinary share for a total consideration of approximately $2bn. On 3 May 2022, HSBC Holdings commenced a new share buy-back to purchase its ordinary shares up to a maximum consideration of $1.0bn. This programme concluded on 28 July 2022. In addition to repurchasing shares on UK trading venues, the second buy-back also purchased shares on The Stock Exchange of Hong Kong Limited. The purpose of the buy-back programmes is to reduce HSBC's number of outstanding ordinary shares.

As at 30 June 2022, 243,996,444 ordinary shares had been purchased and cancelled from the UK register, representing a nominal value of $121,998,222 and an aggregate consideration paid by HSBC of £1,247,447,284. The shares cancelled represented 1.20% of the shares in issue and 1.22% of the shares in issue, excluding treasury shares.

As at 30 June 2022, 36,827,200 ordinary shares had been purchased from the Hong Kong register, representing a nominal value of $18,413,600 and an aggregate consideration paid by HSBC of HK$1,873,178,838. The shares purchased represented 0.181% of the shares in issue and 0.184% of the shares in issue, excluding treasury shares. The shares purchased are cancelled in batches, with 20,946,000 shares cancelled as at 30 June 2022.

The table that follows outlines details of the shares purchased and cancelled on a monthly basis during 2022.

Share buy-back
	Number of shares purchased and cancelled	Highest price paid per share	Lowest price paid per share	Average price paid per share	Aggregate price paid
	Number of shares purchased and cancelled	£	£	£	£
Jan 2022	25,382,519	5.27	4.4555	4.9784	126,363,981
Feb 2022	19,064,151	5.551	5.153	5.3395	101,793,492
Mar 2022	72,125,062	5.404	4.4935	4.9129	354,343,000
Apr 2022	74,894,361	5.41	5.146	5.2608	394,002,122
May 2022	21,447,447	5.27	4.78	4.9911	107,047,291
Jun 2022	31,082,904	5.496	4.978	5.2729	163,897,398
Total	243,996,444				1,247,447,284

Share buy-back (continued)
	Number of shares purchased	Highest price paid per share	Lowest price paid per share	Average price paid per share	Aggregate price paid
	Number of shares purchased	HK$	HK$	HK$	HK$
May 2022	5,244,800	52.85	46.5	50.8537	266,717,438
Jun 2022	31,582,400	52.7	48.25	50.8657	1,606,461,400
Total	36,827,200				1,873,178,838

4	Other equity instruments

Additional tier 1 capital - contingent convertible securities

HSBC Holdings continues to issue contingent convertible securities that are included in its capital base as fully CRR II-compliant additional tier 1 capital securities on an end point basis. These securities are marketed principally and subsequently allotted to corporate investors and fund managers. The net proceeds of the issuances are typically used for HSBC Holdings' general corporate purposes and to further strengthen its capital base to meet requirements under CRR II. These securities bear a fixed rate of interest until their initial call dates. After the initial call dates, if they are not redeemed, the securities will bear interest at rates fixed periodically in advance for five-year periods based on credit spreads, fixed at issuance, above prevailing market rates. Interest on the contingent convertible securities will be due and payable only at the sole discretion of HSBC Holdings, and HSBC Holdings has sole and absolute discretion at all times to cancel for any reason (in whole or part) any interest payment that would otherwise be payable on any payment date. Distributions will not be paid if they are prohibited under UK banking regulations or if the Group has insufficient reserves or fails to meet the solvency conditions defined in the securities' terms.

The contingent convertible securities are undated and are repayable at the option of HSBC Holdings in whole typically at the initial call date or on any fifth anniversary after this date. In addition, the securities are repayable at the option of HSBC Holdings in whole for certain regulatory or tax reasons. Any repayments require the prior consent of the PRA. These securities rank pari passu with HSBC Holdings' sterling preference share and therefore rank ahead of ordinary shares. The contingent convertible securities will be converted into fully paid ordinary shares of HSBC Holdings at a predetermined price, should HSBC's consolidated non-transitional CET1 ratio fall below 7.0%. Therefore, in accordance with the terms of the securities, if HSBC's non-transitional CET1 ratio breaches the 7.0% trigger, the securities will convert into ordinary shares at the fixed contractual conversion prices in the issuance currencies of the relevant securities, equivalent to £2.70 at the prevailing rate of exchange on the issuance date, subject to anti-dilution adjustments. During the first half of 2022, HSBC issued no contingent convertible securities.

5	Notifiable interests in share capital

Between 1 January 2022 and 30 June 2022, HSBC Holdings did not receive any notification of major holdings of voting rights pursuant to the requirements of Rule 5 of the Disclosure, Guidance and Transparency Rules. No further notifications had been received between 30 June 2022 and 20 July 2022.

Previous notifications received are as follows:

• BlackRock, Inc. gave notice on 3 March 2020 that on 2 March 2020 it had the following: an indirect interest in HSBC Holdings ordinary shares of 1,235,558,490; qualifying financial instruments with 7,294,459 voting rights that may be acquired if the instruments are exercised or converted; and financial instruments with a similar economic effect to qualifying financial instruments, which refer to 2,441,397 voting rights, representing 6.07%, 0.03% and 0.01%, respectively, of the total voting rights at 2 March 2020.

• Ping An Asset Management Co., Ltd. gave notice on 6 December 2017 that on 4 December 2017 it had an indirect interest in HSBC Holdings ordinary shares of 1,007,946,172, representing 5.04% of the total voting rights at that date.

At 30 June 2022, according to the register maintained by HSBC Holdings pursuant to section 336 of the Securities and Futures Ordinance of Hong Kong:

• BlackRock, Inc. gave notice on 9 March 2022 that on 4 March 2022 it had the following interests in HSBC Holdings ordinary shares: a long position of 1,701,656,169 shares and a short position of 19,262,061 shares, representing 8.27% and 0.09%, respectively, of the ordinary shares in issue at that date.

• Ping An Asset Management Co., Ltd, gave notice on 25 September 2020 that on 23 September 2020 it had a long position of 1,655,479,531 in HSBC Holdings ordinary shares, representing 8.00% of the ordinary shares in issue at that date.

•

6	Dealings in HSBC Holdings listed securities

HSBC has policies and procedures that, except where permitted by statute and regulation, prohibit it undertaking specified transactions in respect of its securities listed on The Stock Exchange of Hong Kong Limited ('HKEx'). Except for dealings as intermediaries or as trustees by subsidiaries of HSBC Holdings, or in relation to the HSBC Holdings ordinary share buy-back, neither HSBC Holdings nor any of its subsidiaries has purchased, sold or redeemed any of its securities listed on HKEx during the half-year ended 30 June 2022.

7	Interim dividend for the 2022 half-year

On 1 August 2022, the Directors approved an interim dividend for the 2022 half-year of $0.09 per ordinary share in respect of the financial year ending 31 December 2022. The dividend will be payable on 29 September 2022 to holders on the Principal Register in the UK, the Hong Kong Overseas Branch Register or the Bermuda Overseas Branch Register on 19 August 2022.

The dividend will be payable in US dollars, or in pounds sterling or Hong Kong dollars at the forward exchange rates quoted by HSBC Bank plc in London at or about 11.00am on 19 September 2022, or a combination of these currencies. Particulars of these arrangements will be sent to shareholders on or about 26 August 2022 and changes to currency elections must be received by 15 September 2022. The ordinary shares in London, Hong Kong and Bermuda, and American Depositary Shares ('ADSs') in New York will be quoted ex-dividend on 18 August 2022. As announced on 23 February 2021, the Group has decided to discontinue the scrip dividend option.

The dividend will be payable on ADSs, each of which represents five ordinary shares, on 29 September 2022 to holders of record on 19 August 2022. The dividend of $0.45 per ADS will be payable by the depositary in US dollars. Alternatively, the cash dividend may be invested in additional ADSs by participants in the dividend reinvestment plan operated by the depositary. Elections must be received by 9 September 2022.

Any person who has acquired ordinary shares registered on the Principal Register in the UK, the Hong Kong Overseas Branch Register or the Bermuda Overseas Branch Register but who has not lodged the share transfer with the Principal Registrar in the UK, Hong Kong Overseas Branch Registrar or Bermuda Overseas Branch registrar should do so before 4.00pm local time on 19 August 2022 in order to receive the dividend.

Ordinary shares may not be removed from or transferred to the Principal Register in the UK, the Hong Kong Overseas Branch Register or the Bermuda Overseas Branch Register on 19 August 2022. Any person wishing to remove ordinary shares to or from each register must do so before 4.00pm local time on 18 August 2022.

Transfer of ADSs must be lodged with the depositary by 11.00am on 19 August 2022 in order to receive the dividend. ADS holders who receive a cash dividend will be charged a fee, which will be deducted by the depositary, of $0.005 per ADS per cash dividend.

8	Dividend on preference share

A quarterly dividend of £0.01 per Series A sterling preference share is payable on 15 March, 15 June, 15 September and 15 December 2022 for the quarter then ended at the sole and absolute discretion of the Board of HSBC Holdings plc. Accordingly, the Board of HSBC Holdings plc has approved a quarterly dividend to be payable on 15 September 2022 to holders of record on 31 August 2022.

9	Proposed interim dividends for 2022

We announced on 22 February 2022 that the Group was not intending to pay quarterly dividends during 2022. We now expect to revert to quarterly dividends in 2023. The Board has adopted a policy designed to provide sustainable cash dividends, while retaining the flexibility to invest and grow the business in the future, supplemented by additional shareholder distributions, if appropriate. Our target dividend payout ratio is 40% to 55% of reported earnings per ordinary share ('EPS'), with the flexibility to adjust EPS for non-cash significant items. Given our current forecast returns trajectory, we now expect a dividend payout ratio of around 50% for 2023 and 2024. In line with our dividend policy, in 2022 we intend to exclude the $1.8bn gain following the recognition of a deferred tax asset when calculating our dividend payout ratio. As previously disclosed, we also intend to exclude the 2H22 forecast loss on the sale of our retail banking operations in France when calculating our dividend payout ratio.

Dividends are declared in US dollars and, at the election of the shareholder, paid in cash in one of, or in a combination of, US dollars, pounds sterling and Hong Kong dollars.

10	Earnings release

An earnings release for the three-month period ending 30 September 2022 is expected to be issued on 25 October 2022.

11	Final results

The results for the year to 31 December 2022 are expected to be announced on 21 February 2023.

12	Corporate governance

We are subject to corporate governance requirements in both the UK and Hong Kong. Throughout the six months ended 30 June 2022, we complied with the applicable provisions of the UK Corporate Governance Code, save to the extent referred to in the next paragraph, and also the requirements of the Hong Kong Corporate Governance Code. The UK Corporate Governance Code is available at www.frc.org.uk and the Hong Kong Corporate Governance Code is available at www.hkex.com.hk.

Dame Carolyn Fairbairn was appointed as Chair to the Group Remuneration Committee on 29 April 2022. In approving Dame Carolyn Fairbairn's appointment, the Board considered the UK Corporate Governance Code expectation that the Chair has served at least 12 months as a member on the committee before assuming the position of Chair. Given her previous experience as both a member and chair of the remuneration committees of other UK listed companies, the Board approved the appointment of Dame Carolyn Fairbairn as Chair.

Under the Hong Kong Code, the Group Audit Committee should be responsible for the oversight of all risk management and internal control systems, unless expressly addressed by a separate risk committee. Our Group Risk Committee is responsible for oversight of internal control, other than internal financial controls, and risk management systems.

The Board has codified obligations for transactions in Group securities in accordance with the requirements of the Market Abuse Regulation and the rules governing the listing of securities on the HKEx, save that the HKEx has granted waivers from strict compliance with the rules that take into account accepted practices in the UK, particularly in respect of employee share plans.

Following specific enquiries all Directors have confirmed that they have complied with their obligations in respect of transacting in Group securities throughout the period.

There have been no material changes to the information disclosed in the Annual Report and Accounts 2021 in respect of the remuneration of employees, remuneration policies, bonus and share option plans and training schemes. Details of the number of employees are provided on page 33 of the Interim Report 2022.

13	Changes in Directors' details

Changes in current Directors' details since the date of the Annual Report and Accounts 2021, which are required to be disclosed pursuant to Rule 13.51(2) and Rule 13.51B(1) of the Hong Kong Listing Rules, are set out below.

Geraldine Buckingham

Appointed to the Board and the Nomination & Corporate Governance Committee on 1 May 2022 and appointed to the Group Remuneration Committee and the Group Risk Committee on 1 June 2022.

Rachel Duan

Appointed to the Group Audit Committee on 1 June 2022.

Dame Carolyn Fairbairn

Appointed as Chair to the Group Remuneration Committee on 29 April 2022.

James Anthony Forese

Stepped down from the Group Audit Committee on 1 June 2022.

Irene Lee

Retired from the Board and the Nomination & Corporate Governance Committee on 29 April 2022.

Eileen K Murray

Appointed to the Group Audit Committee and stepped down from the Group Risk Committee on 1 June 2022.

José Antonio Meade Kuribreña

Appointed as Independent non-executive Director with responsibility for workforce engagement and stepped down from the Group Risk Committee on 1 June 2022.

Pauline van der Meer Mohr

Retired from the Board, Group Audit Committee, Nomination & Corporate Governance Committee and Group Remuneration Committee on 29 April 2022.

14	Going concern basis

As mentioned in Note 1 'Basis of preparation and significant accounting policies' on page 110, the financial statements are prepared on a going concern basis as the Directors are satisfied that the Group and parent company have the resources to continue in business for the foreseeable future. In making this assessment, the Directors considered a wide range of information relating to present and future conditions, including future projections of profitability, cash flows, capital requirements and capital resources. These considerations include stressed scenarios that reflect the inflationary pressures and uncertainty that the global Covid-19 pandemic has had on HSBC's operations, as well as the potential impacts from other top and emerging risks, and the related impact on profitability, capital and liquidity.

In particular, HSBC's principal activities, business and operating models, strategic direction, and top and emerging risks are addressed in the Overview section. A financial summary, including a review of the consolidated income statement and consolidated balance sheet, is provided in the 'Interim management report' section. HSBC's objectives, policies and processes for managing credit, liquidity and market risk are described in the 'Risk review' section of the Annual Report and Accounts 2021. HSBC's approach to capital management and allocation is described in the 'Treasury risk' section of the Annual Report and Accounts 2021.

15	Telephone and online share dealing service

For shareholders on the Principal Register who are resident in the UK, with a UK postal address, and who hold an HSBC Bank plc personal current account, the HSBC InvestDirect share dealing service is available for buying and selling HSBC Holdings plc ordinary shares. Details are available from: HSBC InvestDirect, Forum 1, Parkway, Whiteley PO15 7PA; or UK telephone: +44 (0) 3456 080848, or from an overseas telephone: +44 (0) 1226 261090; or website: www.hsbc.co.uk/investments/products-and-services/invest-direct.

16	Stock symbols

HSBC Holdings plc ordinary shares trade under the following stock symbols:

London Stock Exchange	HSBA
Hong Kong Stock Exchange	5
New York Stock Exchange (ADS)	HSBC
Bermuda Stock Exchange	HSBC.BH

17	Copies of the Interim Report 2022 and shareholder enquiries and communications

Further copies of the Interim Report 2022 may be obtained from Global Communications, HSBC Holdings plc, 8 Canada Square, London E14 5HQ, United Kingdom; from Communications (Asia), The Hongkong and Shanghai Banking Corporation Limited, 1 Queen's Road Central, Hong Kong; or from US Communications, HSBC Bank USA, N.A., 1 West 39th Street, 9th Floor, New York, NY 10018, USA. The Interim Report 2022 may also be downloaded from the HSBC website, www.hsbc.com.

Shareholders may at any time choose to receive corporate communications in printed form or to receive notifications of their availability on HSBC's website. To receive notifications of the availability of a corporate communication on HSBC's website by email, or to revoke or amend an instruction to receive such notifications by email, go to www.hsbc.com/ecomms. If you provide an email address to receive electronic communications from HSBC, we will also send notifications of any future dividend entitlements by email. If you received a notification of the availability of this document on HSBC's website and would like to receive a printed copy or, if you would like to receive future corporate communications in printed form, please write or send an email (quoting your shareholder reference number) to the appropriate Registrar at the address given below. Printed copies will be provided without charge.

Any enquiries relating to your shareholdings on the share register (for example transfers of shares, change of name or address, lost share certificates or dividend cheques) should be sent to the Registrar at the address given below. The Registrars offer an online facility, Investor Centre, which enables shareholders to manage their shareholding electronically.

Principal Register

Hong Kong Overseas Branch Register

Bermuda Overseas Branch Register

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol BS99 6ZZ

United Kingdom

Computershare Hong Kong Investor

Services Limited

Rooms 1712-1716, 17th Floor

Hopewell Centre

183 Queen's Road East

Hong Kong

Investor Relations Team

HSBC Bank Bermuda Limited

37 Front Street

Hamilton HM 11

Bermuda

Telephone: +44 (0) 370 702 0137

Email: web.queries@computershare.co.uk

Web: www.investorcentre.co.uk/contactus

Telephone: +852 2862 8555

Email: hsbc.ecom@computershare.com.hk

Web: www.investorcentre.com/hk

Telephone: +1 441 299 6737

Email: hbbm.shareholder.services@hsbc.bm

Web: www.investorcentre.com/bm

Any enquiries relating to ADSs should be sent to the depositary at:

The Bank of New York Mellon

Shareowner Services

PO Box 505000

Louisville, KY 40233-5000

USA

Telephone (US): +1 877 283 5786

Telephone (international): +1 201 680 6825

Email: shrrelations@cpushareownerservices.com

Web: www.mybnymdr.com

A Chinese translation of this and future documents may be obtained on request from the Registrar. Please also contact the Registrar if you have received a Chinese translation of this document and do not wish to receive such translations in future.

Persons whose shares are held on their behalf by another person may have been nominated to receive communications from HSBC pursuant to section 146 of the UK Companies Act 2006 ('nominated person'). The main point of contact for a nominated person remains the registered shareholder (for example your stockbroker, investment manager, custodian or other person who manages the investment on your behalf). Any changes or queries relating to a nominated person's personal details and holding (including any administration thereof) must continue to be directed to the registered shareholder and not HSBC's Registrar. The only exception is where HSBC, in exercising one of its powers under the UK Companies Act 2006, writes to nominated persons directly for a response.

本中期業績報告及日後的相關文件均備有中譯本，如有需要，請向適當的股份登記處索取。股東如收到本報告的中譯本，但不希望再收取此等中譯本，亦請聯絡股份登記處。

Cautionary statement regarding forward-

looking statements

This Interim Report 2022 contains certain forward-looking statements with respect to HSBC's: financial condition; results of operations and business, including the strategic priorities; financial, investment and capital targets; and ESG targets, commitments and ambitions described herein.

Statements that are not historical facts, including statements about HSBC's beliefs and expectations, are forward-looking statements. Words such as 'may', 'will', 'should', 'expects', 'targets', 'anticipates', 'intends', 'plans', 'believes', 'seeks', 'estimates', 'potential' and 'reasonably possible', or the negative thereof, other variations thereon or similar expressions are intended to identify forward-looking statements. These statements are based on current plans, information, data, estimates and projections, and therefore undue reliance should not be placed on them. Forward-looking statements speak only as of the date they are made. HSBC makes no commitment to revise or update any forward-looking statements to reflect events or circumstances occurring or existing after the date of any forward-looking statements.

Written and/or oral forward-looking statements may also be made in the periodic reports to the US Securities and Exchange Commission, summary financial statements to shareholders, proxy statements, offering circulars and prospectuses, press releases and other written materials, and in oral statements made by HSBC's Directors, officers or employees to third parties, including financial analysts.

Forward-looking statements involve inherent risks and uncertainties. Readers are cautioned that a number of factors could cause actual results to differ, in some instances materially, from those anticipated or implied in any forward-looking statement. These include, but are not limited to:

• changes in general economic conditions in the markets in which we operate, such as new, continuing or deepening recessions, inflationary pressures and fluctuations in employment and creditworthy customers beyond those factored into consensus forecasts (including, without limitation, as a result of the Russia-Ukraine war and the Covid-19 pandemic); the Covid-19 pandemic and its impact on global economies could have a material adverse effect on (among other things) our financial condition, results of operations, prospects, liquidity, capital position and credit ratings; deviations from the market and economic assumptions that form the basis for our ECL measurements (including, without limitation, as a result of the Russia-Ukraine war, inflationary pressures and the Covid-19 pandemic); potential changes in HSBC's dividend policy; changes in foreign exchange rates and interest rates, including the accounting impact resulting from financial reporting in respect of hyperinflationary economies; volatility in equity markets; lack of liquidity in wholesale funding or capital markets, which may affect our ability to meet our obligations under financing facilities or to fund new loans, investments and businesses; geopolitical tensions or diplomatic developments producing social instability or legal uncertainty, such as the Russia-Ukraine war and the related imposition of sanctions, the US's approach to strategic competition with China, supply chain restrictions, claims of human rights violations, diplomatic tensions, including between China and the US, the UK, the EU, Australia and India and other countries, and developments in Hong Kong and Taiwan, alongside other potential areas of tension, which may affect HSBC by creating regulatory, reputational and market risks; the efficacy of government, customer and HSBC's actions in managing and mitigating ESG risks, in particular climate risk, nature-related risks and human rights risks, and in supporting the global transition to net zero carbon emissions, each of which can impact HSBC both directly and indirectly through our customers and which may cause both idiosyncratic and systemic risks resulting in potential financial and non-financial impacts; illiquidity and downward price pressure in national real estate markets; adverse changes in central banks' policies with respect to the provision of liquidity support to financial markets; heightened market concerns over sovereign creditworthiness in over-indebted countries; adverse changes in the funding status of public or private defined benefit pensions; societal shifts in customer financing and investment needs, including consumer perception as to the continuing availability of credit; exposure to counterparty risk, including third parties using us as a conduit for illegal activities without our knowledge; the discontinuation of certain key Ibors and the development of near risk-free benchmark rates, as well as the transition of legacy Ibor contracts to near risk-free benchmark rates, which exposes HSBC to material execution risks, and increases some financial and non-financial risks; and price competition in the market segments we serve;

• changes in government policy and regulation, including the monetary, interest rate and other policies of central banks and other regulatory authorities in the principal markets in which we operate and the consequences thereof (including, without limitation, actions taken as a result of the Covid-19 pandemic and the impact of the Russia-Ukraine war on inflation); initiatives to change the size, scope of activities and interconnectedness of financial institutions in connection with the implementation of stricter regulation of financial institutions in key markets worldwide; revised capital and liquidity benchmarks, which could serve to deleverage bank balance sheets and lower returns available from the current business model and portfolio mix; changes to tax laws and tax rates applicable to HSBC, including the imposition of levies or taxes designed to change business mix and risk appetite; the practices, pricing or responsibilities of financial institutions serving their consumer markets; expropriation, nationalisation, confiscation of assets and changes in legislation relating to foreign ownership; the UK's relationship with the EU following the UK's withdrawal from the EU, which continues to be characterised by uncertainty despite the signing of the Trade and Cooperation Agreement between the UK and the EU; passage of the Hong Kong national security law and restrictions on telecommunications, as well as the US Hong Kong Autonomy Act, which have caused tensions between China, the US and the UK; general changes in government policy that may significantly influence investor decisions; the costs, effects and outcomes of regulatory reviews, actions or litigation, including any additional compliance requirements; and the effects of competition in the markets where we operate including increased competition from non-bank financial services companies; and

• factors specific to HSBC, including our success in adequately identifying the risks we face, such as the incidence of loan losses or delinquency, and managing those risks (through account management, hedging and other techniques); our ability to achieve our financial, investment, capital and ESG targets, commitments and ambitions (including with respect to the commitments set forth in our thermal coal phase-out policy and our targets to reduce our on-balance sheet financed emissions in the oil and gas, and power and utilities sectors), which may result in our failure to achieve any of the expected benefits of our strategic priorities; model limitations or failure, including, without limitation, the impact that high inflationary concerns and the consequences of the Covid-19 pandemic have had on the performance and usage of financial models, which may require us to hold additional capital, incur losses and/or use compensating controls, such as judgemental post-model adjustments, to address model limitations; changes to the judgements, estimates and assumptions we base our financial statements on; changes in our ability to meet the requirements of regulatory stress tests; a reduction in the credit ratings assigned to us or any of our subsidiaries, which could increase the cost or decrease the availability of our funding and affect our liquidity position and net interest margin; changes to the reliability and security of our data management, data privacy, information and technology infrastructure, including threats from cyber-attacks, which may impact our ability to service clients and may result in financial loss, business disruption and/ or loss of customer services and data; the accuracy and effective use of data, including internal management information that may not have been independently verified; changes in insurance customer behaviour and insurance claim rates; our dependence on loan payments and dividends from subsidiaries to meet our obligations; changes in accounting standards, including the implementation of IFRS 17 'Insurance Contracts', which may have a material impact on the way we prepare our financial statements and (with respect to IFRS 17) may negatively affect the profitability of HSBC's insurance business; changes in our ability to manage third-party, fraud and reputational risks inherent in our operations; employee misconduct, which may result in regulatory sanctions and/or reputational or financial harm; changes in skill requirements, ways of working and talent shortages, which may affect our ability to recruit and retain senior management and diverse and skilled personnel; and changes in our ability to develop sustainable finance and climate-related products consistent with the evolving expectations of our regulators, and our capacity to measure the climate impact from our financing activity (including as a result of data limitations and changes in methodologies), which may affect our ability to achieve our climate ambition, our targets to reduce financed emissions in our oil and gas, and power and utilities portfolio and the commitments set forth in our thermal coal phase-out policy, and increase the risk of greenwashing. Effective risk management depends on, among other things, our ability through stress testing and other techniques to prepare for events that cannot be captured by the statistical models it uses; our success in addressing operational, legal and regulatory, and litigation challenges; and other risks and uncertainties we identify in 'Top and emerging risks' on pages 27 to 28 of the Interim Report 2022.

Certain defined terms

Unless the context requires otherwise, 'HSBC Holdings' means HSBC Holdings plc and 'HSBC', the 'Group', 'we', 'us' and 'our' refer to HSBC Holdings together with its subsidiaries. Within this document the Hong Kong Special Administrative Region of the People's Republic of China is referred to as 'Hong Kong'. When used in the terms 'shareholders' equity' and 'total shareholders' equity', 'shareholders' means holders of HSBC Holdings ordinary shares and those preference shares and capital securities issued by HSBC Holdings classified as equity. The abbreviations '$m', '$bn' and '$tn' represent millions, billions (thousands of millions) and trillions of US dollars, respectively.

Abbreviations

Currencies
£	British pound sterling
CA$	Canadian dollar
€	Euro
HK$	Hong Kong dollar
RMB	Chinese renminbi
SGD	Singapore dollar
$	United States dollar
Abbreviation
1H21	First half of 2021
1H22	First half of 2022
1Q21	First quarter of 2021
1Q22	First quarter of 2022
2H21	Second half of 2021
2Q21	Second quarter of 2021
2Q22	Second quarter of 2022
4Q21	Fourth quarter of 2021
A
ABS	Asset-backed security
ADS	American Depositary Share
AGM	Annual General Meeting
AIEA	Average interest-earning assets
ALCO	Asset and Liability Management Committee
AML	Anti-money laundering
ANP	Annualised new business premiums
AT1	Additional tier 1
B
Basel	Basel Committee on Banking Supervision
Basel III	Basel Committee's reforms to strengthen global capital and liquidity rules
Basel 3.1	Outstanding measures to be implemented from the Basel III reforms
BGF	Business Growth Fund, an investment firm that provides growth capital for small and mid-sized businesses in the UK and Ireland
BoCom	Bank of Communications Co., Limited, one of China's largest banks
BoE	Bank of England
Bps	Basis points. One basis point is equal to one hundredth of a percentage point
C
CAPM	Capital asset pricing model
CDOR	Canadian dollar offered rate
CEA	Commodity Exchange Act (US)
CET1	Common equity tier 1
CMB	Commercial Banking, a global business
CMC	Capital maintenance charge
CODM	Chief Operating Decision Maker
CRD IV	Capital Requirements Regulation and Directive
CRR	Customer risk rating
CRR II	Revised Capital Requirements Regulation and Directive, as implemented
D
DoJ	US Department of Justice
DPD	Days past due
DPF	Discretionary participation feature of insurance and investment contracts
DVA	Debt valuation adjustment
E
EBA	European Banking Authority
EC	European Commission
ECB	European Central Bank
ECL	Expected credit losses. In the income statement, ECL is recorded as a change in expected credit losses and other credit impairment charges. In the balance sheet, ECL is recorded as an allowance for financial instruments to which only the impairment requirements in IFRS 9 are applied.
EEA	European Economic Area
Eonia	Euro Overnight Index Average
EPC	Energy performance certificate
EPS	Earnings per ordinary share
ESG	Environmental, social and governance
EU	European Union
Euribor	Euro interbank offered rate
EVE	Economic value of equity
F
FCA	Financial Conduct Authority (UK)
FRB	Federal Reserve Board (US)
FTE	Full-time equivalent staff
FVOCI	Fair value through other comprehensive income
FX	Foreign exchange
G
GAAP	Generally accepted accounting principles
GBM	Global Banking and Markets, a global business
GDP	Gross domestic product
GEC	Group Executive Committee
GLCM	Global Liquidity and Cash Management
Group	HSBC Holdings together with its subsidiary undertakings
GTRF	Global Trade and Receivables Finance
H
HIBOR	Hong Kong interbank offered rate
HKEx	The Stock Exchange of Hong Kong Limited
HKMA	Hong Kong Monetary Authority
HNAH	HSBC North America Holdings Inc.
Holdings ALCO	HSBC Holdings Asset and Liability Management Committee
Hong Kong	Hong Kong Special Administrative Region of the People's Republic of China
HQLA	High-quality liquid assets
HSBC	HSBC Holdings together with its subsidiary undertakings
HSBC Bank plc	HSBC Bank plc, also known as the non-ring-fenced bank
HSBC Bank Middle East	HSBC Bank Middle East Limited
HSBC Canada	The sub-group, HSBC Bank Canada, HSBC Trust Company Canada, HSBC Mortgage Corporation Canada and HSBC Securities Canada, consolidated for liquidity purposes
HSBC Continental Europe	HSBC Continental Europe
HSBC Holdings	HSBC Holdings plc, the parent company of HSBC
HSBC UK	HSBC UK Bank plc, also known as the ring-fenced bank
HSBC USA	The sub-group, HSBC USA Inc and HSBC Bank USA, consolidated for liquidity purposes
HSI	HSBC Securities (USA) Inc.
HSSL	HSBC Securities Services (Luxembourg)
I
IAS	International Accounting Standards
IASB	International Accounting Standards Board
Ibor	Interbank offered rate
ICAAP	Internal capital adequacy assessment process
IFRSs	International Financial Reporting Standards
ILAAP	Internal liquidity adequacy assessment process
IRB	Internal ratings-based
J
JV	Joint venture
L
LCR	Liquidity coverage ratio
LGD	Loss given default
Libor	London interbank offered rate
LTI	Long-term incentive
LTV	Loan to value
M
Mainland China	People's Republic of China excluding Hong Kong and Macau
MENA	Middle East and North Africa
MREL	Minimum requirement for own funds and eligible liabilities
MSS	Markets and Securities Services, HSBC's capital markets and securities services businesses in Global Banking and Markets
N
Net operating income	Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue
NII	Net interest income
NIM	Net interest margin
NSFR	Net stable funding ratio
O
OCI	Other comprehensive income
OECD	Organisation of Economic Co-operation and Development
OTC	Over-the-counter
P
PBT	Profit before tax
PD	Probability of default
POCI	Purchased or originated credit-impaired financial assets
PPI	Payment protection insurance
PRA	Prudential Regulation Authority (UK)
Premier	HSBC Premier, HSBC's premium personal global banking service
PVIF	Present value of in-force long-term insurance business and long-term investment contracts with DPF
PwC	The member firms of the PwC network, including PricewaterhouseCoopers LLP
R
RFR	Risk-free rate
RNIV	Risk not in VaR
RoE	Return on average ordinary shareholders' equity
RoTE	Return on average tangible equity
RWA	Risk-weighted asset
S
SABB	The Saudi British Bank
SEC	Securities and Exchange Commission (US)
ServCo group	Separately incorporated group of service companies established in response to UK ring-fencing requirements
Sibor	Singapore interbank offered rate
SME	Small and medium-sized enterprise
SOFR	Secured Overnight Financing Rate
U
UAE	United Arab Emirates
UK	United Kingdom
UN	United Nations
US	United States of America
V
VaR	Value at risk
VIU	Value in use
W
WPB	Wealth and Personal Banking, a global business
Y
YTD	Year to date

Registered Office and Group Head Office:

8 Canada Square

London E14 5HQ

United Kingdom

Web: www.hsbc.com

Incorporated in England with limited liability.

Registered number 617987

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END

IR FLFFETFILIIF

Date		Source	Headline
3rd May 2024	3:20 pm	RNS	AGM poll results + changes Board+Ctte composition
3rd May 2024	11:06 am	RNS	HSBC Holdings plc - AGM Statements
1st May 2024	4:30 pm	RNS	Director Declaration
1st May 2024	4:00 pm	RNS	Publication of base prospectus supplement
30th Apr 2024	4:15 pm	RNS	Director/PDMR Shareholding
30th Apr 2024	7:00 am	RNS	HSBC Holdings 1Q 2024 webcast presentation
30th Apr 2024	7:00 am	RNS	Retirement of Group Chief Executive
30th Apr 2024	7:00 am	RNS	HSBC Holdings 1Q24 earnings release
29th Apr 2024	4:30 pm	RNS	Total Voting Rights
29th Apr 2024	4:15 pm	RNS	Director/PDMR Shareholding
23rd Apr 2024	6:04 pm	RNS	Transaction in Own Shares & Conclusion of Buy-Back
22nd Apr 2024	5:59 pm	RNS	Transaction in Own Shares
19th Apr 2024	5:57 pm	RNS	Transaction in Own Shares
19th Apr 2024	8:40 am	RNS	Post Stabilisation Notice
18th Apr 2024	5:58 pm	RNS	Transaction in Own Shares
18th Apr 2024	10:00 am	RNS	Overseas Regulatory Announcement - Board Meeting
17th Apr 2024	6:15 pm	RNS	Transaction in Own Shares
16th Apr 2024	6:00 pm	RNS	Transaction in Own Shares
15th Apr 2024	6:24 pm	RNS	Transaction in Own Shares
15th Apr 2024	1:00 pm	RNS	Fourth Interim Dividend for 2023 - Exchange Rate
12th Apr 2024	5:57 pm	RNS	Transaction in Own Shares
12th Apr 2024	3:35 pm	RNS	Notice of redemption
11th Apr 2024	6:25 pm	RNS	Transaction in Own Shares
11th Apr 2024	10:00 am	RNS	Overseas Regulatory Announcement - Grant of Awards
10th Apr 2024	6:09 pm	RNS	Transaction in Own Shares
9th Apr 2024	5:53 pm	RNS	Transaction in Own Shares
9th Apr 2024	7:00 am	RNS	HSBC AGREES TO SELL ITS BUSINESS IN ARGENTINA
8th Apr 2024	6:10 pm	RNS	Transaction in Own Shares
5th Apr 2024	10:00 am	RNS	Director Declaration
4th Apr 2024	6:24 pm	RNS	Transaction in Own Shares
3rd Apr 2024	6:14 pm	RNS	Transaction in Own Shares
2nd Apr 2024	5:59 pm	RNS	Transaction in Own Shares
2nd Apr 2024	7:00 am	RNS	Completion of the sale of HSBC Bank Canada to RBC
28th Mar 2024	6:01 pm	RNS	Transaction in Own Shares
28th Mar 2024	4:30 pm	RNS	Director/PDMR Shareholding
28th Mar 2024	4:00 pm	RNS	Total Voting Rights
27th Mar 2024	5:58 pm	RNS	Transaction in Own Shares
27th Mar 2024	3:45 pm	RNS	Publication of base prospectus
26th Mar 2024	5:54 pm	RNS	Transaction in Own Shares
25th Mar 2024	5:58 pm	RNS	Transaction in Own Shares
22nd Mar 2024	5:50 pm	RNS	Transaction in Own Shares
22nd Mar 2024	2:00 pm	RNS	Issuance of subordinated unsecured notes
22nd Mar 2024	10:00 am	RNS	2024 AGM - Documents available at NSM
21st Mar 2024	6:03 pm	RNS	Transaction in Own Shares
21st Mar 2024	11:00 am	RNS	Issuance of subordinated unsecured notes
20th Mar 2024	5:51 pm	RNS	Transaction in Own Shares
20th Mar 2024	10:00 am	RNS	Hong Kong Waiver-Contingent Convertible Securities
19th Mar 2024	5:46 pm	RNS	Transaction in Own Shares
19th Mar 2024	10:00 am	RNS	Overseas Regulatory Announcement - Grant of Awards
18th Mar 2024	5:54 pm	RNS	Transaction in Own Shares

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