HSBC Holdings Regulatory News (HSBA)

Half-year to

30 June

2015

30 June

2014

31 December

2014

Notes

$m

$m

$m

Interest income

24,019

25,435

25,520

Interest expense

(7,575)

(8,030)

(8,220)

Net interest income

16,444

17,405

17,300

Fee income

9,372

10,031

9,514

Fee expense

(1,647)

(1,854)

(1,734)

Net fee income

7,725

8,177

7,780

Trading income excluding net interest income

3,520

2,362

2,491

Net interest income on trading activities

1,053

913

994

Net trading income

4,573

3,275

3,485

Changes in fair value of long-term debt issued and related derivatives

1,324

438

70

Net income from other financial instruments designated at fair value

1,342

1,222

743

Net income from financial instruments designated at fair value

2,666

1,660

813

Gains less losses from financial investments

1,874

946

389

Dividend income

68

88

223

Net insurance premium income

5,607

6,137

5,784

Other operating income

836

538

593

Total operating income

39,793

38,226

36,367

Net insurance claims and benefits paid and movement in liabilities to policyholders

(6,850)

(7,059)

(6,286)

Net operating income before loan impairment charges andother credit risk provisions

32,943

31,167

30,081

Loan impairment charges and other credit risk provisions

(1,439)

(1,841)

(2,010)

Net operating income

31,504

29,326

28,071

Employee compensation and benefits

(10,041)

(9,978)

(10,388)

General and administrative expenses

(8,129)

(7,127)

(11,438)

Depreciation and impairment of property, plant and equipment

(604)

(712)

(670)

Amortisation and impairment of intangible assets

(413)

(449)

(487)

Total operating expenses

(19,187)

(18,266)

(22,983)

Operating profit

12,317

11,060

5,088

Share of profit in associates and joint ventures

1,311

1,280

1,252

Profit before tax

13,628

12,340

6,340

Tax expense

2

(2,907)

(2,022)

(1,953)

Profit for the period

10,721

10,318

4,387

Profit attributable to shareholders of the parent company

9,618

9,746

3,942

Profit attributable to non-controlling interests

1,103

572

445

$

$

$

Basic earnings per ordinary share

4

0.48

0.50

0.19

Diluted earnings per ordinary share

4

0.48

0.50

0.19

Half-year to

30 June

30 June

31 December

2015

2014

2014

$m

$m

$m

,

Profit for the period

10,721

10,318

4,387

Other comprehensive income/(expense)

Items that will be reclassified subsequently to profit or loss when specific conditionsare met:

Available-for-sale investments

(2,445)

958

2,014

- fair value gains/(losses)

(355)

2,183

2,611

- fair value gains reclassified to the income statement

(2,317)

(643)

(1,029)

- amounts reclassified to the income statement in respect of impairment losses

2

15

359

- income taxes

225

(597)

73

Cash flow hedges

(150)

(17)

205

- fair value gains/(losses)

341

(44)

1,556

- fair value (gains)/losses reclassified to the income statement

(538)

50

(1,294)

- income taxes

47

(23)

(57)

Share of other comprehensive income/(expense) of associates and joint ventures

2

(16)

96

- share for the period

2

(18)

96

- reclassified to income statement on disposal

-

2

-

Exchange differences

(3,267)

670

(9,573)

- foreign exchange gains reclassified to the income statement on disposal of a foreign operation

-

(21)

-

- other exchange differences

(3,395)

691

(9,608)

- income tax attributable to exchange differences

128

-

35

Items that will not be reclassified subsequently to profit or loss:

Remeasurement of defined benefit asset/liability

(1,680)

316

1,669

- before income taxes

(2,085)

421

1,998

- income taxes

405

(105)

(329)

Other comprehensive income/(expense) for the period, net of tax

(7,540)

1,911

(5,589)

Total comprehensive income/(expense) for the period

3,181

12,229

(1,202)

Attributable to:

- shareholders of the parent company

2,856

11,706

(2,461)

- non-controlling interests

325

523

1,259

Total comprehensive income/(expense) for the period

3,181

12,229

(1,202)

At 30 June

At 30 June

At 31 December

2015

2014

2014

Notes

$m

$m

$m

Assets

Cash and balances at central banks

144,324

132,137

129,957

Items in the course of collection from other banks

10,190

8,144

4,927

Hong Kong Government certificates of indebtedness

28,104

26,640

27,674

Trading assets

6

283,138

347,106

304,193

Financial assets designated at fair value

9

25,168

31,823

29,037

Derivatives

10

296,942

269,839

345,008

Loans and advances to banks

109,405

127,387

112,149

Loans and advances to customers

953,985

1,047,241

974,660

Reverse repurchase agreements - non-trading

149,384

198,301

161,713

Financial investments

11

404,682

423,710

415,467

Assets held for sale

12

60,929

10,248

7,647

Prepayments, accrued income and other assets

55,489

75,520

67,529

Current tax assets

566

1,068

1,309

Interests in associates and joint ventures

14

18,705

17,497

18,181

Goodwill and intangible assets

24,913

29,740

27,577

Deferred tax assets

5,789

7,192

7,111

Total assets

2,571,713

2,753,593

2,634,139

Liabilities and equity

Liabilities

Hong Kong currency notes in circulation

28,104

26,640

27,674

Deposits by banks

71,140

92,764

77,426

Customer accounts

1,335,800

1,415,705

1,350,642

Repurchase agreements - non-trading

81,506

165,506

107,432

Items in the course of transmission to other banks

12,711

9,936

5,990

Trading liabilities

15

181,435

228,135

190,572

Financial liabilities designated at fair value

69,485

82,968

76,153

Derivatives

10

289,984

263,494

340,669

Debt securities in issue

102,656

96,397

95,947

Liabilities of disposal groups held for sale

12

53,226

12,361

6,934

Accruals, deferred income and other liabilities

42,224

50,882

46,462

Current tax liabilities

1,322

1,434

1,213

Liabilities under insurance contracts

69,494

75,223

73,861

Provisions

17

5,125

4,283

4,998

Deferred tax liabilities

1,338

1,091

1,524

Subordinated liabilities

24,781

28,052

26,664

Total liabilities

2,370,331

2,554,871

2,434,161

Equity

Called up share capital

9,758

9,535

9,609

Share premium account

12,290

11,582

11,918

Other equity instruments

13,991

5,851

11,532

Other reserves

15,180

28,355

20,244

Retained earnings

141,208

134,958

137,144

Total shareholders' equity

192,427

190,281

190,447

Non-controlling interests

8,955

8,441

9,531

Total equity

201,382

198,722

199,978

Total liabilities and equity

2,571,713

2,753,593

2,634,139

Half-year to

30 June 2015

30 June 2014

31 December 2014

$m

$m

$m

Cash flows from operating activities

Profit before tax

13,628

12,340

6,340

-....

Adjustments for:

- net gain from investing activities

(1,926)

(979)

(949)

- share of profit in associates and joint ventures

(1,311)

(1,280)

(1,252)

- (gain)/loss on disposal of associates, joint ventures, subsidiaries and businesses

-

(18)

27

- other non-cash items included in profit before tax

4,522

4,284

6,978

- change in operating assets

12,077

(86,266)

112,143

- change in operating liabilities

(15,544)

59,108

(152,922)

- elimination of exchange differences

3,951

(5,486)

30,057

- dividends received from associates

770

127

630

- contributions paid to defined benefit plans

(226)

(315)

(366)

- tax paid

(1,351)

(1,358)

(2,215)

Net cash generated from/(used in) operating activities

14,590

(19,843)

(1,529)

Cash flows from investing activities

Purchase of financial investments

(211,669)

(187,934)

(196,265)

Proceeds from the sale and maturity of financial investments

208,637

194,335

188,502

Purchase of property, plant and equipment

(620)

(523)

(954)

Proceeds from the sale of property, plant and equipment

56

55

33

Net cash inflow/(outflow) from disposal of customer and loan portfolios

321

950

(1,985)

Net purchase of intangible assets

(400)

(385)

(518)

Net cash inflow/(outflow) from disposal of subsidiaries, businesses, associates and joint ventures

7

(140)

(102)

Net cash outflow from acquisition of or increase in stake of associates

(1)

(30)

-

-

Net cash generated from/(used in) investing activities

(3,669)

6,328

(11,289)

Cash flows from financing activities

Issue of ordinary share capital

9

14

253

Net sales/(purchases) of own shares for market-making and investment purposes

139

(25)

(71)

Issue of other equity instruments

2,459

-

5,681

Redemption of preference shares and other equity instruments

(462)

234

(468)

Subordinated loan capital issued

1,680

3,500

-

Subordinated loan capital repaid

(778)

(3,042)

(121)

Dividends paid to ordinary shareholders of the parent company

(1,834)

(1,755)

(4,856)

Dividends paid to non-controlling interests

(386)

(350)

(289)

Dividends paid to holders of other equity instruments

(428)

(287)

(286)

-

Net cash generated from/(used in) financing activities

399

(1,711)

(157)

Net increase/(decrease) in cash and cash equivalents

11,320

(15,226)

(12,975)

Cash and cash equivalents at the beginning of the period

301,301

346,281

334,498

Exchange differences in respect of cash and cash equivalents

(3,829)

3,443

(20,222)

Cash and cash equivalents at the end of the period

308,792

334,498

301,301

Other reserves

Called up share capital

Share

premium

Other equity instru-

ments2

Retained

earnings

Available-

for-sale

fair value

reserve3

Cash flow

hedging

reserve3

Foreign exchange

reserve3

Merger

reserve

Total share- holders' equity

Non-

controlling

interests

Total equity

$m

$m

$m

$m

$m

$m

$m

$m

$m

$m

$m

At 1 January 2015

9,609

11,918

11,532

137,144

2,143

58

(9,265)

27,308

190,447

9,531

199,978

Profit for the period

-

-

-

9,618

-

-

-

-

9,618

1,103

10,721

Other comprehensive income (net of tax)

-

-

-

(1,693)

(1,735)

(151)

(3,183)

-

(6,762)

(778)

(7,540)

- available-for-sale investments

-

-

-

-

(1,735)

-

-

-

(1,735)

(710)

(2,445)

- cash flow hedges

-

-

-

-

-

(151)

-

-

(151)

1

(150)

- remeasurement of defined benefit asset/liability

-

-

-

(1,695)

-

-

-

-

(1,695)

15

(1,680)

- share of other comprehensive income of associatesand joint ventures

-

-

-

2

-

-

-

-

2

-

2

- exchange differences

-

-

-

-

-

-

(3,183)

-

(3,183)

(84)

(3,267)

Total comprehensive income for the period

-

-

-

7,925

(1,735)

(151)

(3,183)

-

2,856

325

3,181

Shares issued under employee remuneration and share plans

31

490

-

(512)

-

-

-

-

9

-

9

Shares issued in lieu of dividends and amounts arising thereon

118

(118)

-

2,242

-

-

-

-

2,242

-

2,242

Dividends to shareholders

-

-

-

(6,224)

-

-

-

-

(6,224)

(432)

(6,656)

Capital securities issued

-

-

2,459

-

-

-

-

-

2,459

-

2,459

Cost of share-based payment arrangements

-

-

-

444

-

-

-

-

444

-

444

Other movements

-

-

-

189

5

-

-

-

194

(469)

(275)

At 30 June 2015

9,758

12,290

13,991

141,208

413

(93)

(12,448)

27,308

192,427

8,955

201,382

At 1 January 2014

9,415

11,135

5,851

128,728

97

(121)

(542)

27,308

181,871

8,588

190,459

Profit for the period

-

-

-

9,746

-

-

-

-

9,746

572

10,318

Other comprehensive income (net of tax)

-

-

-

300

956

(16)

720

-

1,960

(49)

1,911

- available-for-sale investments

-

-

-

-

956

-

-

-

956

2

958

- cash flow hedges

-

-

-

-

-

(16)

-

-

(16)

(1)

(17)

- remeasurement of defined benefit asset/liability

-

-

-

316

-

-

-

-

316

-

316

- share of other comprehensive income of associatesand joint ventures

-

-

-

(16)

-

-

-

-

(16)

-

(16)

- exchange differences

-

-

-

-