HSBC Holdings Limited – 2010 Interim Results

London, UK – 02 August, 2010 - HSBC Holdings Limited (the “Company”; Ticker: HSBC.BH) has released the Company’s interim results to 30 June, 2010. 

Strong increase in profitability

• Pre-tax profit more than doubled to US$11.1 billion on a reported basis – US$10 billion1 excluding fair value on own debt, up 34 per cent.
• Underlying pre-tax profit up by US$2.2 billion or 30 per cent to US$9.6 billion.
• Profit attributable to shareholders more than doubled to US$6.8 billion on a reported basis.
• Loan impairment charges and other credit risk provisions down US$6.4 billion to US$7.5 billion, the lowest since the start of the financial crisis.
• Earnings per share up 81 per cent to US$0.38 (first half 2009: US$0.21).
• Declared dividends of US$2.8 billion or 16 cents per ordinary share in respect of the period.

Universal banking model delivering profits through the cycle

• Profitable in every customer group and in all regions outside North America2.
• Diversified Global Banking and Markets business delivered another very strong performance.
• Commercial Banking exceptionally well placed to support rebounding international trade.
• Strategic repositioning of Personal Financial Services driving improved profitability.
• Strong Asia profits reflect investment in building presence across the region.

Financial strength core to our philosophy and key to future growth

• Profits added US$6.0 billion to tier 1 capital. Tier 1 ratio 11.5 per cent, well above target range; core tier 1 ratio 9.9 per cent.
• Funding strength underpinned by customer deposits of US$1.15 trillion and customer advances-to-deposits ratio below 80 per cent.
• Lending up in all regions since 31 December 20092.

Building our customer base and investing for the long term

• Customer acquisition focused on international financial needs:
• Premier customers up to 3.9 million; on target for six million by the end of 2011.
• Commercial Banking customers up to 3.5 million, 85 per cent of new customers in emerging markets.
• Leadership in emerging markets extended by additional investments in India, China, Vietnam and Kazakhstan.
• Strengthened position as leading international bank in China: opened 100th mainland outlet; supported Bank of Communications rights issue; grew leadership in renminbi services.
• World’s most valuable banking brand for third year running3; Euromoney’s ‘Best Global Emerging Markets Bank’.

HSBC HOLDINGS REPORTS PRE-TAX PROFIT OF US$11,104 MILLION

HSBC made a profit before tax of US$11,104 million, an increase of US$6,085 million, or 121 per cent, compared with the first half of 2009.

Net interest income of US$19,757 million was US$781 million, or 3.8 per cent, lower than the first half of 2009.

Net operating income before loan impairment charges and other credit risk provisions of US$35,551 million was US$810 million, or 2.3 per cent, higher than the first half of 2009.

Total operating expenses of US$18,111 million increased by US$1,453 million, or 8.7 per cent, compared with the first half of 2009. On an underlying basis, and expressed in terms of constant currency, operating expenses increased by 5 per cent.

HSBC’s cost efficiency ratio was 50.9 per cent compared with 47.9 per cent in the first half of 2009.

Loan impairment charges and other credit risk provisions were US$7,523 million in the first half of 2010, US$6,408 million lower than the first half of 2009.

The Directors have declared a second interim dividend for 2010 of US$0.08 per ordinary share, a distribution of approximately US$1,401 million.

The core tier 1 ratio and tier 1 ratio for the Group remained strong at 9.9 per cent and 11.5 per cent, respectively, at 30 June 2010.

The Group’s total assets at 30 June 2010 were US$2,418 billion, an increase of US$54 billion, or 2.3 per cent, since 31 December 2009.

Dividends

The Directors have declared a second interim dividend in respect of the financial year ending 31 December 2010 of US$0.08 per ordinary share, a distribution of approximately US$1,401 million. The second interim dividend will be payable on 6 October 2010 to holders of record on 19 August 2010 on the Hong Kong Overseas Branch Register and 20 August 2010 on the Principal Register in the United Kingdom or the Bermuda Overseas Branch Register.

The dividend will be payable in cash, in US dollars, sterling or Hong Kong dollars, or a combination of these currencies, at the forward exchange rates quoted by HSBC Bank plc in London at or about 11.00 am on 27 September 2010, and with a scrip dividend alternative. Particulars of these arrangements will be mailed to shareholders on or about 1 September 2010 and elections must be received by 22 September 2010. As this dividend was declared after the balance sheet date, it has not been included in ‘Other liabilities’ at 30 June 2010.

The dividend will be payable on ordinary shares held through Euroclear France, the settlement and central depositary system for Euronext Paris, on 6 October 2010 to the holders of record on 20 August 2010. The dividend will be payable in cash, in euros at the exchange rate quoted on 27 September 2010, and with a scrip dividend alternative. Particulars of these arrangements will be announced through Euronext Paris on 16 August 2010 and 25 August 2010.

The dividend will be payable on American Depositary Shares (‘ADSs’), each of which represents five ordinary shares, on 6 October 2010 to holders of record on 20 August 2010. The dividend of US$0.40 per ADS will be payable in cash, in US dollars, and with a scrip dividend alternative of new ADSs. Particulars of these arrangements will be mailed to holders on or about 1 September 2010. Elections must be received by the depositary on or before 15 September 2010. Alternatively, the cash dividend may be invested in additional ADSs for participants in the dividend reinvestment plan operated by the depositary.

HSBC Holdings’ ordinary shares will be quoted ex-dividend in London, Hong Kong, Paris and Bermuda on 18 August 2010. The ADSs will be quoted ex-dividend in New York on 18 August 2010. On 15 July 2010, HSBC paid a further coupon on the capital securities of US$0.508 per security, a distribution of US$45 million. No liability is recorded in the balance sheet at 30 June 2010 in respect of this coupon payment.

Interim Report

The Interim Report 2010 will be mailed to shareholders on or about 13 August 2010. Copies of the Interim Report and this Media Release may be obtained from Group Communications, HSBC Holdings plc, 8 Canada Square, London E14 5HQ, United Kingdom; from Group Communications (Asia), The Hongkong and Shanghai Banking Corporation Limited, 1 Queen’s Road Central, Hong Kong; from Internal Communications, HSBC-North America, 26525 N Riverwoods Boulevard, Mettawa, Illinois 60045, USA; or from the HSBC Group website www.hsbc.com.

A Chinese translation of the Interim Report 2010 may be obtained on request from Computershare Hong Kong Investor Services Limited, Hopewell Centre, Rooms 1712-1716, 17th Floor, 183 Queen’s Road East, Hong Kong.

The Interim Report 2010 will be available on the Stock Exchange of Hong Kong’s website www.hkex.com.hk.

For further information contact: