HSBC Holdings Regulatory News (HSBA)

31 Jul 2006 09:15

HSBC Holdings PLC31 July 2006 1. Accounting policies The accounting policies adopted by HSBC for these interim consolidated financialstatements are consistent with those described in the Annual Report and Accounts2005 except for 'Amendments to IAS 39 and IFRS 4 - Financial GuaranteeContracts', which was adopted by HSBC on 1 January 2006. HSBC hasretrospectively adopted the amendment in accordance with IAS 8 'AccountingPolicies, Changes in Accounting Estimates and Errors'. Retrospective adoption ofthe amendment had no material impact on HSBC's consolidated financialstatements. In accordance with the amendment, HSBC accounts for certain types of financialguarantee contracts it issues as financial liabilities. Financial guaranteecontracts are initially recognised at fair value and subsequently measured atthe higher of the initial fair value less cumulative amortisation, determined inaccordance with IAS 18 'Revenue', and, in the event HSBC has to reimburse theholder for any loss incurred, the amount that would be recognised as aprovision. 2. Dividend The Directors have declared a second interim dividend for 2006 of US$0.15 perordinary share, a distribution of approximately US$1,725 million. The secondinterim dividend will be payable on 4 October 2006, to holders of ordinaryshares on the Register at the close of business on 18 August 2006. The dividendwill be payable in cash, in US dollars, sterling or Hong Kong dollars, or acombination of these currencies, at the exchange rates quoted by HSBC Bank plcin London at or about 11:00 am on 25 September 2006, and with a scrip dividendalternative. Particulars of these arrangements will be mailed to shareholders onor about 30 August 2006, and elections must be received by 20 September 2006. Asthis dividend was declared after the balance sheet date, it has not beenincluded in 'Other liabilities' at 30 June 2006. The dividend will be payable on shares held through Euroclear France, thesettlement and central depositary system for Euronext Paris, on 4 October 2006to the holders of record on 18 August 2006. The dividend will be payable incash, in euros at the exchange rate on 25 September 2006, or as a scripdividend. Particulars of these arrangements will be announced through EuronextParis on 17 August 2006 and 23 August 2006. The dividend will be payable on American Depositary Shares ('ADSs'), each ofwhich represents five ordinary shares, on 4 October 2006 to holders of record on18 August 2006. The dividend of US$0.75 per ADS will be payable in cash in USdollars or as a scrip dividend of new ADSs. Particulars of these arrangementswill be mailed to holders on or about 25 August 2006. Elections must be receivedby the depositary on or before 15 September 2006. Alternatively, the cashdividend may be invested in additional ADSs for participants in the dividendreinvestment plan operated by the depositary. HSBC Holdings plc ordinary shares will be quoted ex-dividend in London, HongKong and Bermuda on 16 August 2006 and in Paris on 21 August 2006. The ADSs willbe quoted ex-dividend in New York on 16 August 2006. 3. Earnings and dividends per share Half-year to Half-year to Half-year toFigures in US$ 30Jun06 30 Jun05 31Dec05 Basic earnings per ordinary share 0.78 0.69 0.67 Diluted earnings per ordinary share 0.77 0.68 0.67 Dividends per ordinary share 0.46 0.41 0.28 Dividend payout ratio^ 59% 59% 42% ^ Dividends per ordinary share expressed as a percentage of earnings perordinary share. Basic earnings per ordinary share was calculated by dividing the earningsattributable to ordinary shareholders of the parent company, of US$8,684million, by the weighted average number of ordinary shares outstanding,excluding own shares held, of 11,148 million (first half of 2005: earnings ofUS$7,596 million and 11,007 million shares; second half of 2005: earnings ofUS$7,464 million and 11,069 million shares). Half-year Half-year Half-year to to toFigures in US$m 30Jun06 30Jun05 31Dec05 Profit attributable to shareholders of the parent company 8,729 7,596 7,485Dividend payable on preference shares classified as equity (45) - (21) Profit attributable to the ordinary shareholders of the parent company 8,684 7,596 7,464 Diluted earnings per ordinary share was calculated by dividing the basicearnings, which require no adjustment for the effects of dilutive potentialordinary shares (including share options outstanding not yet exercised), by theweighted average number of ordinary shares outstanding, excluding own sharesheld, plus the weighted average number of ordinary shares that would be issuedon ordinary conversion of all the dilutive potential ordinary shares in 2006, of11,304 million (first half of 2005: 11,152 million shares; second half of 2005:11,190 million shares). 4. Taxation Half-year Half-year Half-year to to toFigures in US$m 30Jun06 30Jun05 31Dec05 United Kingdom corporation tax charge 536 340 352 Overseas tax 2,254 2,045 1,948Current tax 2,790 2,385 2,300 Deferred tax 482 273 135 Tax expense 3,272 2,658 2,435 Effective tax rate 26.1% 25.0% 23.6% 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$387 million (first half of 2005: US$362 million; secondhalf of 2005: US$277 million) provided at the rate of 17.5 per cent (2005: 17.5per cent) on the profits for the period assessable in Hong Kong. Other overseassubsidiaries and overseas branches provided for taxation at the appropriaterates in the countries in which they operate. The following table reconciles the overall tax expense which would apply if allprofits had been taxed at the UK corporation tax rate: Analysis of overall tax expense Half-year Half-year Half-year to to toFigures in US$m 30Jun06 30Jun05 31Dec05 Taxation at UK corporate tax rate of 30 per cent (2005: 30 per cent) 3,756 3,192 3,098 Impact of overseas profits in principal locations taxed at different rates (187) (142) (200) Tax-free gains (97) (76) (144) Adjustments in respect of prior period liabilities 36 (45) (142) Low income housing tax credits (55) (53) (57)Other items (81) (105) (40)Impact of profits from associates and joint ventures (100) (113) (80)Overall tax expense 3,272 2,658 2,435 5. Capital resources At 30Jun06 At 30Jun05 At 31Dec05 Capital ratios (%) Total capital ratio 13.4 12.8 12.8Tier 1 capital ratio 9.4 8.7 9.0 Composition of capital Figures in US$m Tier 1: Shareholders' funds 101,381 86,713 92,432 Minority interests and preference shares 6,734 6,180 6,741 Innovative tier 1 securities 9,601 9,629 9,383 Less: Goodwill capitalised and intangible assets (33,992) (31,344) (32,821) Other regulatory adjustments^ (1,586) (2,052) (1,332)Total qualifying tier 1 capital 82,138 69,126 74,403 Tier 2: Reserves arising from revaluation of property and unrealised gains on AFS equities 2,040 1,794 1,593 Collective impairment allowances 9,087 8,905 8,749 Perpetual subordinated debt 3,665 3,678 3,640 Term subordinated debt 27,446 22,101 24,519 Minority and other interests in tier 2 capital 425 501 425Total qualifying tier 2 capital 42,663 36,979 38,926 Unconsolidated investments (6,441) (3,008) (6,437)Investments in other banks (1,419) (1,146) (1,147)Other deductions (305) (229) (296)Total regulatory capital 116,636 101,722 105,449 Total risk-weighted assets 872,893 794,834 827,164 The above figures were computed in accordance with the EU Banking ConsolidationDirective and the FSA policy statement PS05/5 'Implications of a ChangingAccounting Framework'. ^ Other regulatory adjustments mainly arise from the implementation of IFRSs inconjunction with the FSA's policy statement PS05/5. 6. Registers of shareholders The Overseas Branch Register of shareholders in Hong Kong will be closed for oneday, on Friday 18 August 2006. Any person who has acquired shares registered onthe Hong Kong Branch Register but who has not lodged the share transfer with theHong Kong Branch Registrar should do so before 4:00 pm on Thursday 17 August2006 in order to receive the second interim dividend for 2006, which will bepayable on 4 October 2006. Transfers may not be made to or from the Hong KongOverseas Branch Register while that Branch Register is closed. Any person who has acquired shares registered on the Principal Register in theUnited Kingdom but who has not lodged the share transfer with the PrincipalRegistrar should do so before 4:00 pm on Friday 18 August 2006 in order toreceive the dividend. Any person who has acquired shares registered on the Overseas Branch Register ofshareholders in Bermuda but who has not lodged the share transfer with theBermuda Branch Registrar should do so before 4:00 pm on Friday 18 August 2006 inorder to receive the dividend. Transfers of American Depositary Shares should be lodged with the depositary by12 noon on Friday 18 August 2006 in order to receive the dividend. 7. Foreign currency amounts The sterling and Hong Kong dollar equivalent figures in the interim consolidatedincome statement and balance sheet are for information only. These aretranslated at the average rate for the period for the income statement and theclosing rate for the balance sheet as follows: Period-end 30Jun06 30Jun05 31Dec05 Closing : HK$/US$ 7.767 7.774 7.754 £/US$ 0.542 0.558 0.581 Average : HK$/US$ 7.758 7.793 7.763 £/US$ 0.559 0.534 0.566 8. Litigation HSBC, through a number of its subsidiaries, is named in and is defending legalactions in various jurisdictions arising from its normal business. None of theseproceedings is regarded as material litigation. This information is provided by RNS The company news service from the London Stock Exchange