HSBC 2009 results

Bilibala comments: quite disappointed result, net interest income down, loss provision up, and deposit down. The only good is thx to its AOCI balance up, equity balance up 37% compare to last year. Further investigation is required to determine HSBC's updated fair value.

Underlying performance significantly ahead

• Underlying pre-tax profit up US$4.7 billion or 56 per cent to US$13.3 billion, after excluding the goodwill impairment in North America in 2008.
• On a reported basis, pre-tax profit down 24 per cent to US$7.1 billion.
• Reported profit attributable to shareholders up 2 per cent to US$5.8 billion.
• Positive jaws, with revenues up 8 per cent, costs down 4 per cent, and cost efficiency ratio 47.5 per cent on an underlying basis, after excluding the goodwill impairment in North America in 2008.
• Dividends in respect of 2009 totalled US$5.9 billion, or US$0.34 per ordinary share, with a fourth interim dividend for 2009 declared of US$0.10 per ordinary share.
• One of leading dividend payers in financial services. HSBC has declared dividends in respect of last three years totalling more than US$24 billion.
• Earnings per share down 17 per cent to US$0.34 (2008: US$0.41).

Capital advantage and strong liquidity position maintained

• Generated capital in every quarter. US$10.2 billion added to capital base through underlying profit generation.
• Successful rights issue. US$17.8 billion added to shareholders' equity.
• Enhanced capital position. Tier 1 ratio improved to 10.8 per cent, ahead of target range.
• Distinctive liquidity position maintained. Held over US$1 trillion in deposits and ratio of customer advances-to-deposits was 77.3 per cent at 31 December 2009.

Diversified business model delivering profits through the cycle

• Profitable in all regions excluding North America, but performance constrained by lower demand and deposit spread compression.
• Loan impairment charges improved in US. In run-off consumer finance business, loan impairment charges fell by US$1.6 billion, offset by a rise in other regions.
• Achieved very strong results in Global Banking and Markets.
• Commercial Banking delivered profits in every region despite economic challenges.
• Built on position as leading international bank in mainland China. Market value of strategic investments increased to US$25.4 billion and expanded our own network to 98 outlets.
  Supported our customers through downturn. In the UK we made available £15 billion of new mortgage lending.

Well positioned for economic recovery

• Two-speed economy. Expect emerging markets to grow three times faster than developed ones in 2010.
• CEO's principal office relocated to Hong Kong, at heart of our most strategically important region.
• Regulatory environment remains uncertain, but HSBC's strong capital and liquidity position and transparent structure position us strongly.
• World's most valuable banking brand and Euromoney's 'Best Global Bank'.

HSBC HOLDINGS REPORTS PRE-TAX PROFIT OF US$7,079 MILLION