RNS Number : 2060X
HSBC Holdings PLC
26 August 2015
 



Consolidated income statement

for the half-year to 30 June 2015



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 and
other 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

The accompanying notes on pages 107 to 139 form an integral part of these financial statements1.

For footnote, see page 106.


Consolidated statement of comprehensive income

for the half-year to 30 June 2015


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 conditions
are 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)

The accompanying notes on pages 107 to 139 form an integral part of these financial statements1.

For footnote, see page 106.

 


Consolidated balance sheet

at 30 June 2015



                               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

The accompanying notes on pages 107 to 139 form an integral part of these financial statements1.

For footnote, see page 107.

 


Consolidated statement of cash flows

for the half-year to 30 June 2015


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

 


Consolidated statement of changes in equity

for the half-year to 30 June 2015










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 associates
and 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 associates
and joint ventures


-


-


-


(16)


-


-


-


-


(16)


-


(16)

- exchange differences


-


-


-


-


-


-


720


-


720


(50)


670















































Total comprehensive income for the period


-


-


-


10,046


956


(16)


720


-


11,706


523


12,229











-


-


-


-







Shares issued under employee remuneration and share plans


28


539


-


(553)


-


-


-


-


14


-


14

Shares issued in lieu of dividends and amounts arising thereon


92


(92)


-


2,111


-


-


-


-


2,111


-


2,111

Dividends to shareholders


-


-


-


(5,774)


-


-


-


-


(5,774)


(432)


(6,206)

Cost of share-based payment arrangements


-


-


-


333


-


-


-


-


333


-


333

Other movements


-


-


-


67


(39)


(8)


-


-


20


(238)


(218)
























At 30 June 2014


9,535


11,582


5,851


134,958


1,014


(145)


178


27,308


190,281


8,441


198,722

 

 


Consolidated statement of changes in equity for the half-year to 30 June 2015 (continued)










Other reserves







 



      Called up              share            capital


            Share

      premium


            Other            equity            instru-           ments


    Retained

    earnings


    Available-          for-sale      fair value          reserve


     Cash flow

        hedging

         reserve


         Foreign      exchange          reserve


Merger

reserve


              Total            share-        holders'            equity


              Non-

   controlling

       interests


              Total            equity

 



$m


$m


$m


               $m


$m


$m


$m


$m


$m


$m


$m

 
























 

At 1 July 2014


9,535


11,582


5,851


134,958


1,014


(145)


178


27,308


190,281


8,441


198,722

Profit for the period


-


-


-


3,942


-


-


-


-


3,942


445


4,387
























Other comprehensive income (net of tax)


-


-


-


1,766


1,069


205


(9,443)


-


(6,403)


814


(5,589)

- available-for-sale investments


-


-


-


-


1,069


-


-


-


1,069


945


2,014

- cash flow hedges


-


-


-


-


-


205


-


-


205


-


205

- remeasurement of defined benefit asset/liability


-


-


-


1,670


-


-


-


-


1,670


(1)


1,669

- share of other comprehensive income of associates
and joint ventures


-


-


-


96


-


-


-


-


96


-


96

- exchange differences


-


-


-


-


-


-


(9,443)


-


(9,443)


(130)


(9,573)















































Total comprehensive income for the period


-


-


-


5,708


1,069


205


(9,443)


-


(2,461)


1,259


(1,202)
























Shares issued under employee remuneration and share plans


32


378


-


(157)


-


-


-


-


253


-


253

Shares issued in lieu of dividends and amounts arising thereon


42


(42)


-


598


-


-


-


-


598


-


598

Dividends to shareholders


-


-


-


(4,119)


-


-


-


-


(4,119)


(280)


(4,399)

Capital securities issued


-


-


5,681


-


-


-


-


-


5,681


-


5,681

Cost of share-based payment arrangements


-


-


-


399


-


-


-


-


399


-


399

Other movements


-


-


-


(243)


60


(2)


-


-


(185)


111


(74)
























At 31 December 2014


9,609


11,918


11,532


137,144


2,143


58


(9,265)


27,308


190,447


9,531


199,978

The accompanying notes on pages 107 to 139 form an integral part of these financial statements1.

 

Footnotes to financial statements

1   The tables: 'Gross loans and advances to customers by industry sector and by geographical region' (see page 61), 'Movement in impairment allowances on loans and advances to customers and banks' (see page 66), and the Composition of regulatory capital within 'Capital' (see page 94) also form an integral part of these financial statements.

2   During March 2015, HSBC Holdings issued $2,450m of Perpetual Subordinated Contingent Convertible Capital Securities, after issuance costs of $8m and tax benefits of $17m, which are classified as equity under IFRSs.

3   At 30 June 2015, our operations in Brazil were classified as held for sale (see Note 12).The cumulative amount of other reserves attributable to these operations were as follows: available-for-sale fair value reserve debit of $65m, cash flow hedging reserve debit of $29m and foreign exchange reserve debit of $1,724m.


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