At a glance
Our operating model consists of four global businesses and five geographical regions supported by 11 global functions.
Key highlights
- Resilient performance despite challenging market conditions: adjusted profit before tax down 18%
- Costs broadly unchanged, reflecting tight cost control and continued impact of cost saving plans
- Strong capital position with a common equity tier 1 (CET1) ratio of 11.9%
- Dividends per ordinary share in respect of 1Q 2016 were $0.10
Group Chief Executive
“Our first quarter performance was resilient in tough market conditions that affected the entire banking sector. Profits were down against a very strong first quarter of 2015, but we increased market share in many of the product areas that are critical to our strategy.”
Stuart Gulliver, HSBC Group Chief Executive
03 May 2016
Implementing our strategy
We remain on track to hit our risk-weighted asset reduction target. We are confident of hitting our cost target by the end of 2017. Our Asia businesses continue to gain momentum. We made important market share gains in debt capital markets, China mergers and acquisitions, and syndicated lending in the first quarter, and had strong business wins on the back of our investment in Asia. We also extended our leadership in services related to renminbi internationalisation.
We maintain sharp focus on implementing the strategic actions from our Investor Update last June.
Our strategy
Capturing value from our international network
Our ambition is to be recognised as the world's leading and most respected international bank.
Distinctive advantages
Unrivalled global presence
Our network provides access to more than 90% of global GDP, trade and capital flows. We use it to offer products that facilitate trade and investment, and help clients participate in global growth opportunities. Our global presence helps us build deeper and more enduring relationships with businesses and individuals with international needs.
Universal banking model
Our four global businesses serve the full range of banking customers, from individual savers to large multinational companies. This universal banking model enables us to meet clients’ diverse financial needs effectively. Our balanced mix of businesses supports a strong capital and funding base, reduces our risk profile and volatility, and generates stable shareholder returns.
Long-term strategy
Develop our international network
We have an unparalleled presence in, and a long-term commitment to, our strategic markets. We aim to develop our network of businesses to support future growth and increasing global connectivity. Our global reach and range of services place us in a strong position to connect customers to opportunities, helping both businesses and individuals to grow and prosper.
Invest in wealth management and select retail businesses
We aim to capture opportunities arising from social mobility, wealth creation and long-term demographic changes in our priority markets. We invest in full-scale retail businesses in markets where we can achieve profitable scale.
The international flow of goods, services and finance continues to expand, aided by the development of technology and data in personal and commercial exchanges.
Major trade and economic zones
Financial targets
Delivering on our Group financial targets
Target
more than
>10%
Return on average ordinary shareholders’ equity (Annualised basis)
Our medium-term target is to achieve a return on equity of more than 10%. This target is modelled on a CET1 ratio in the range of 12% to 13%. Return on equity on an annualised basis was 9.0% in 1Q 2016, compared with 11.5% in 1Q 2015.
Adjusted jaws
1Q 2016 adjusted jaws
-2.8%
Target
Positive
Adjusted jaws
Our target is to grow revenue faster than operating expenses on an adjusted basis. This is referred to as positive jaws. In the first three months of 2016 jaws were negative. This was mainly due to a 4% decline in adjusted revenue, which exceeded a 1% fall in adjusted costs.
Target
Progressive
We are committed to increasing the dividend we pay to shareholders. This is measured by dividends per ordinary share declared in respect of the calendar year. Prospective dividend growth remains dependent upon the long-term overall profitability of the Group and delivering further release of less efficiently deployed capital. Actions to address these points are core elements of the Investor Update provided last June.
Dividends declared in respect of the quarter (US$ per ordinary share)
The first interim dividend for 2016 was $0.10 per ordinary share.
Video
Iain Mackay, Group Finance Director, HSBC, discusses the bank’s 1Q 2016 Earnings Release and the progress made in implementing the strategic actions outlined in June 2015.
