HSBC ANNUAL RESULTS 2011

Please see the attached press release on HSBC Holdings plc's 2011 Annual Results and the attached release on HSBC’s performance in Asia.

Please visit www.hsbc.com to access the full Annual Report.

Please note, although included, these results are not specific to HSBC New Zealand. HSBC New Zealand's 2011 results will be released on 31 March 2012.

27 February 2012
HSBC HOLDINGS PLC
2011 RESULTS – HIGHLIGHTS

• Reported profit before tax US$21.9bn, up 15% on 2010, including US$3.9bn of favourable fair value movements on own debt*

• Gained traction in 1st year of 3 year strategy to reshape the Group, improve returns and position for growth

• As part of reshaping the Group, announced disposal/closure of 16 businesses in 2011, and 3 to date, in 2012

• Strong performance in faster-growing markets, revenue up 12% in Asia, Latin America and MENA, which now account for 49% of Group revenue

• Record year in Commercial Banking with profit before tax of US$7.9bn up 31%

• Global Banking and Markets profit before tax US$7.0bn, down 24%, but growth in 6 of 9 business lines

• Strong growth in cross-selling revenues between Commercial Banking and Global Banking and Markets

• Retail Banking and Wealth Management profit before tax US$4.3bn, up 11%

• Cost efficiency ratio weakened from 55.2% to 57.5%

• Achieved sustainable cost saves of US$0.9bn with strong pipeline of further savings

• Costs rose by 10%, reflecting higher staff costs, largely in faster-growing markets, and included a number of significant items including restructuring costs of US$1.1bn, partially offset by sustainable savings

• Return on average ordinary shareholders’ equity 10.9%, up from 9.5% in 2010, including fair value on debt

• Profit attributable to ordinary shareholders of US$16.2bn, up 27% on 2010 of which US$7.3bn was declared in dividends in respect of the year. This compared with US$3.4bn of variable pay awarded (net of tax) to our employees

• Earnings per share US$0.92, up 26% on 2010

• Dividends declared in respect of 2011 US$0.41 per ordinary share, up 14% on 2010, with a fourth interim dividend for 2011 of US$0.14 per ordinary share

• Core tier 1 capital ratio 10.1%, down from 10.5% in 2010, largely reflecting the absorption of Basel 2.5 and credit growth. Our core capital strength is supported by our consistent retention of profit and investment in profit generating capacity, further building reserves

• Focused on 2013 targets: return on average shareholders’ equity 12-15%, cost efficiency ratio 48-52%

Stuart Gulliver, Group Chief Executive said:

“2011 was a year of major progress for HSBC. We gained traction in our strategy designed to simplify the structure and improve the management and control of the Group, thereby improving returns and positioning HSBC for growth. We recorded a strong performance in faster-growing markets and had a record year in commercial banking. I am pleased with our progress but there is a lot more to do and we remain focused on delivering our targets.”

[…]

20120227_HSBC_Holdings_FY2011_FINAL.pdf
20120227_The_HK_and_Shanghai_Bking_Corp_FY2011_FINAL.pdf

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