HSBC Holdings Regulatory News (HSBA)

5 Mar 2007 08:15

HSBC Holdings PLC05 March 2007 3. Earnings and dividends per ordinary share Year ended Figures in US$ 31DEC06 31DEC05 Basic earnings per ordinary share 1.40 1.36 Diluted earnings per ordinary share 1.39 1.35 Dividends per ordinary share 0.76 0.69 Dividend pay out ratio^ 54% 51% ^ Dividends per ordinary share expressed as a percentage of earnings per share. Basic earnings per ordinary share was calculated by dividing the earnings ofUS$15,699 million by the weighted average number of ordinary shares outstanding,excluding own shares held, of 11,210 million shares (2005: earnings of US$15,060million and 11,038 million shares). Year ended Figures in US$m 31DEC06 31DEC05 Profit attributable to shareholders of the parent company 15,789 15,081Dividend payable on preference shares classified as equity (90) (21)Profit attributable to the ordinary shareholders of the parent company 15,699 15,060 Diluted earnings per share was calculated by dividing the basic earnings, whichrequire no adjustment for the effects of dilutive potential ordinary shares(including share options outstanding not yet exercised), by the weighted averagenumber of ordinary shares outstanding, excluding own shares held, plus theweighted average number of ordinary shares that would be issued on ordinaryconversion of all the dilutive potential ordinary shares in 2006 of 11,320million shares (2005: 11,171 million shares). 4. Taxation Year ended Figures in US$m 31DEC06 31DEC05 UK corporation tax charge 650 692Overseas taxation 4,552 3,993Current taxation 5,202 4,685Deferred taxation 13 408Total charge for taxation 5,215 5,093 Effective tax rate 23.6% 24.3% HSBC Holdings and its subsidiaries in the United Kingdom provided for UKcorporation tax at 30 per cent (2005: 30 per cent). Overseas tax included HongKong profits tax of US$751 million (2005: US$639 million) provided at the rateof 17.5 per cent (2005: 17.5 per cent) on the profits assessable in Hong Kong.Other overseas subsidiaries and overseas branches provided for taxation at theappropriate rates in the countries in which they operate. Analysis of overall tax expense Year ended Figures in US$m 31DEC06 31DEC05 Taxation at UK corporate tax rate of 30 per cent (2005: 30 per cent) 6,626 6,290 Impact of overseas profits in principal locations taxed at different rates (568) (342)Tax-free gains (199) (220)Adjustments in respect of prior period liabilities (106) (187)Low income housing credits (108) (110)Other items (177) (145)Effect of profits from associates and joint ventures (253) (193)Overall tax charge 5,215 5,093 5. Capital resources At 31DEC06 At 31DEC05Capital ratios (%) Total capital ratio 13.5 12.8Tier 1 capital ratio 9.4 9.0 Composition of capital Figures in US$m Tier 1: Shareholders' funds 108,352 92,432 Minority interests and preference shares 7,413 6,741 Innovative tier 1 securities 9,932 9,383 Less: Goodwill capitalised and intangible assets (36,489) (32,821) Other regulatory adjustments (1,366) (1,332) Total qualifying tier 1 capital 87,842 74,403 Tier 2: Reserves arising from revaluation of property and unrealised gains in AFS equities 2,982 1,593 Collective impairment allowances 11,077 8,749 Perpetual subordinated debt 3,396 3,640 Term subordinated debt 30,677 24,519 Minority and other interests in tier 2 capital 425 425 Total qualifying tier 2 capital 48,557 38,926 Unconsolidated investments (7,512) (6,437)Investments in other banks (1,419) (1,147)Other deductions (394) (296)Total capital 127,074 105,449 Total risk-weighted assets 938,678 827,164 The above figures were computed in accordance with the EU Banking ConsolidationDirective. 6. Notes on cash flow statement Year ended Figures in US$m 31DEC06 31DEC05 (a) Non-cash items included in net profitDepreciation and amortisation and impairment 2,528 2,213Revaluations on investment property (164) (201)Loan impairment losses gross of recoveries 11,331 8,295Provisions for liabilities and charges 498 327Impairment of financial investments 21 -Charge for defined benefit pension schemes 664 676Accretion of discounts and amortisation of premiums (776) (446)Share-based payment expense 854 540 14,956 11,404 (b) Change in operating assetsChange in prepayments and accrued income (2,478) 7,121Change in net trading securities and net derivatives (13,620) 4,940Change in loans and advances to banks (11,505) 307Change in loans and advances to customers (132,987) (80,150)Change in financial assets designated at fair value (4,883) (15,048)Change in other assets (7,796) (8,923) (173,269) (91,753) (c) Change in operating liabilitiesChange in accruals and deferred income 3,549 (3,810)Change in deposits by banks 28,378 (14,328)Change in customer accounts 149,849 46,394Change in debt securities in issue 42,253 (19,047)Change in financial liabilities designated at fair value 8,382 61,837Change in other liabilities 4,967 1,166 237,378 72,212 (d) Cash and cash equivalents compriseCash and balances at central banks 12,732 13,712Items in the course of collection from other banks 14,144 11,300Loans and advances to banks of one month or less 162,998 100,527Treasury bills, other bills and certificates of deposit less than three months 38,237 22,790Less: items in the course of transmission to other banks (12,625) (7,022)Total cash and cash equivalents 215,486 141,307 7. Loan impairment charges Half-year ended Half-year endedFigures in US$m 30JUN06 31DEC06 2006 30JUN05 31DEC05 2005By category: Loan impairment charge Individually assessed impairment allowances: - Net new allowances 253 333 586 245 472 717 - Recoveries (75) (53) (128) (83) (116) (199) 178 280 458 162 356 518Collectively assessed impairment allowances: - Net new allowances 3,986 6,754 10,740 3,264 4,373 7,637 - Recoveries (268) (383) (651) (139) (156) (295) 3,718 6,371 10,089 3,125 4,217 7,342 Total charge for impairment losses 3,896 6,651 10,547 3,287 4,573 7,860Customers 3,896 6,654 10,550 3,291 4,576 7,867Banks - (3) (3) (4) (3) (7) 8. Analysis of net fee income Half-year ended Half-year endedFigures in US$m 30JUN06 31DEC06 2006 30JUN05 31DEC05 2005 Account services 1,688 1,945 3,633 1,522 1,610 3,132Credit facilities 462 460 922 504 376 880Remittances 223 249 472 193 203 396Cards 2,642 3,066 5,708 2,085 2,614 4,699Imports/Exports 383 397 780 357 365 722Underwriting 150 136 286 147 127 274Insurance 533 484 1,017 558 524 1,082Mortgage servicing 47 50 97 37 39 76Trust income 113 135 248 108 91 199Broking income 728 626 1,354 529 575 1,104Global custody 423 374 797 310 346 656Maintenance income on operating leases 59 63 122 99 81 180Funds under management 1,571 1,147 2,718 874 957 1,831Unit trusts 265 255 520 223 165 388Corporate finance 95 160 255 124 87 211Other 1,059 1,092 2,151 888 768 1,656Total fee income 10,441 10,639 21,080 8,558 8,928 17,486Less: fees expense (2,061) (1,837) (3,898) (1,514) (1,516) (3,030)Net fee income 8,380 8,802 17,182 7,044 7,412 14,456 9. Geographical distribution of results HSBC European Operations Half-year ended Half-year endedFigures in US$m 30JUN06 31DEC06 2006 30JUN05 31DEC05 2005Interest income 11,765 13,484 25,249 10,458 10,565 21,023Interest expense (7,671) (9,289) (16,960) (6,402) (6,400) (12,802)Net interest income 4,094 4,195 8,289 4,056 4,165 8,221Fee income 4,874 4,709 9,583 4,141 3,940 8,081Fee expense (1,361) (1,114) (2,475) (982) (800) (1,782)Net fee income 3,513 3,595 7,108 3,159 3,140 6,299Net trading income 2,187 2,342 4,529 1,385 1,651 3,036Net income from finan- cial instruments designated at fair value 129 15 144 224 138 362Gains less losses from financial investments 266 358 624 209 230 439Dividend income 121 62 183 42 21 63Net earned insurance premiums 668 630 1,298 870 729 1,599Other operating income 633 795 1,428 731 872 1,603Total operating income 11,611 11,992 23,603 10,676 10,946 21,622Net insurance claims incurred and movement in policyholders' liabilities (287) (244) (531) (502) (316) (818)Net operating income before loan impairment charges and other credit risk provisions 11,324 11,748 23,072 10,174 10,630 20,804Loan impairment charges and other credit risk provisions (935) (1,220) (2,155) (933) (996) (1,929)Net operating income 10,389 10,528 20,917 9,241 9,634 18,875Total operating expenses (6,723) (7,148) (13,871) (6,364) (6,275) (12,639)Operating profit 3,666 3,380 7,046 2,877 3,359 6,236Share of profit in associates and joint ventures (66) (6) (72) 9 111 120Profit before tax 3,600 3,374 6,974 2,886 3,470 6,356 HSBC Hong Kong Operations Half-year ended Half-year endedFigures in US$m 30JUN06 31DEC06 2006 30JUN05 31DEC05 2005Interest income 5,207 5,890 11,097 3,168 4,251 7,419Interest expense (3,049) (3,363) (6,412) (1,149) (2,206) (3,355)Net interest income 2,158 2,527 4,685 2,019 2,045 4,064Fee income 1,197 1,251 2,448 976 991 1,967Fee expense (197) (195) (392) (134) (159) (293)Net fee income 1,000 1,056 2,056 842 832 1,674Net trading income 306 311 617 380 166 546Net income from finan- cial instruments designated at fair value 6 254 260 (21) 15 (6)Gains less losses from financial investments 122 40 162 65 43 108Dividend income 59 2 61 29 12 41Net earned insurance premiums 1,317 1,311 2,628 866 1,468 2,334Other operating income 443 391 834 423 382 805Total operating income 5,411 5,892 11,303 4,603 4,963 9,566Net insurance claims incurred and movement in policyholders' liabilities (1,193) (1,506) (2,699) (751) (1,308) (2,059)Net operating income before loan impairment charges and other credit risk provisions 4,218 4,386 8,604 3,852 3,655 7,507Loan impairment charges and other credit risk provisions (70) (102) (172) (56) (90) (146)Net operating income 4,148 4,284 8,432 3,796 3,565 7,361Total operating expenses (1,504) (1,765) (3,269) (1,381) (1,486) (2,867)Operating profit 2,644 2,519 5,163 2,415 2,079 4,494Share of profit in associates and joint ventures 10 9 19 4 19 23Profit before tax 2,654 2,528 5,182 2,419 2,098 4,517 This information is provided by RNS The company news service from the London Stock Exchange