TIDMHSBA
RNS Number : 0816S
HSBC Holdings PLC
06 March 2019
Shareholder information
Page
Fourth interim dividend for 2018 310
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Interim dividends for 2019 310
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2018 Annual General Meeting 311
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Earnings releases and interim
results 311
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Shareholder enquiries and communications 311
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Stock symbols 312
----
Investor relations 312
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Where more information about
HSBC is available 312
----
Cautionary statement regarding
forward-looking statements 314
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Certain defined terms 315
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Abbreviations 316
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A glossary of terms used in this Annual Report and Accounts can
be found in
the Investors section of www.hsbc.com.
Fourth interim dividend for 2018
The Directors have declared a fourth interim dividend for 2018
of $0.21 per ordinary share. Information on the scrip dividend
scheme and currencies in which shareholders may elect to have the
cash dividend paid will be sent to shareholders on or about 6 March
2019. The timetable for the dividend is:
Footnotes
19 February
Announcement 2019
Shares quoted ex-dividend in London, Hong Kong, Paris
and Bermuda and American Depositary Shares ('ADS') quoted
ex-dividend 21 February
in New York 2019
------------
22 February
Record date - London, Hong Kong, New York, Paris, Bermuda 1 2019
------------
Mailing of Annual Report and Accounts 2018 and/or Strategic
Report 2018 and dividend documentation 6 March 2019
------------
Final date for receipt by registrars of forms of election,
Investor Centre electronic instructions and revocations 21 March
of standing instructions for scrip dividends 2019
------------
Exchange rate determined for payment of dividends in sterling 25 March
and Hong Kong dollars 2019
Payment date: dividend warrants, new share certificates
or transaction advices and notional tax vouchers mailed
and shares credited to stock accounts in CREST 8 April 2019
-------------------------------------------------------------- ---------- ------------
1 Removals to and from the Overseas Branch register of
shareholders in Hong Kong will not be permitted on this date.
Interim dividends for 2019
The Board has adopted a policy of paying quarterly interim
dividends on ordinary shares. Under this policy it is intended to
have a pattern of three equal interim dividends with a variable
fourth interim dividend. It is envisaged that the first interim
dividend in respect of 2019 will be $0.10 per ordinary share.
Dividends are declared in US dollars and, at the election of the
shareholder, paid in cash in one of, or in a combination of, US
dollars, pounds sterling and Hong Kong dollars, or, subject to the
Board's determination that a scrip dividend is to be offered in
respect of that dividend, may be satisfied in whole or in part by
the issue of new shares in lieu of a cash dividend.
Other equity instruments
Additional tier 1 capital - contingent convertible
securities
HSBC continues to issue contingent convertible securities that
are included in its capital base as fully CRD IV-compliant
additional tier 1 capital securities on an end point basis. These
securities are marketed principally and subsequently allotted to
corporate investors and fund managers. The net proceeds of the
issuances are used for HSBC's general corporate purposes and to
further strengthen its capital base to meet requirements under CRD
IV. These securities bear a fixed rate of interest until their
initial call dates. After the initial call dates, if they are not
redeemed, the securities will bear interest at rates fixed
periodically in advance for five-year periods based on credit
spreads, fixed at issuance, above prevailing market rates. Interest
on the contingent convertible securities will be due and payable
only at the sole discretion of HSBC, and HSBC has sole and absolute
discretion at all times to cancel for any reason (in whole or part)
any interest payment that would otherwise be payable on any payment
date. Distributions will not be paid if they are prohibited under
UK banking regulations or if the company has insufficient reserves
or fails to meet the solvency conditions defined in the securities'
terms.
The contingent convertible securities are undated and are
repayable at the option of HSBC in whole at the initial call date
or on any fifth anniversary after this date. In addition, the
securities are repayable at the option of HSBC in whole for certain
regulatory or tax reasons. Any repayments require the prior consent
of the PRA. These securities rank pari passu with HSBC's dollar and
sterling preference shares and therefore rank ahead of ordinary
shares. The contingent convertible securities will be converted
into fully paid ordinary shares of HSBC at a predetermined price,
should HSBC's consolidated end point CET1 ratio fall below 7.0%.
Therefore, in accordance with the terms of the securities, if the
end point CET1 ratio breaches the 7.0% trigger, the securities will
convert into ordinary shares at fixed contractual conversion prices
in the issuance currencies of the relevant securities, equivalent
to GBP2.70 at the prevailing rate of exchange on the issuance date,
subject to anti-dilution adjustments.
Additional tier 1 capital instruments issued during 2018
Issue Market
Nominal price price Net price Issue date
$m % % %
------- ------ ------ --------- ------------
$2,350m 6.250% perpetual subordinated 23 March
contingent convertible securities 2,350 100.00 93.80 100.00 2018
----------------------------------------- ------- ------ ------ --------- ------------
$1,800m 6.500% perpetual subordinated 23 March
contingent convertible securities 1,800 100.00 91.75 100.00 2018
----------------------------------------- ------- ------ ------ --------- ------------
SGD750m 5.000% perpetual subordinated 24 September
contingent convertible securities 550 100.00 100.29 100.00 2018
----------------------------------------- ------- ------ ------ --------- ------------
GBP1,000m 5.875% perpetual subordinated 28 September
contingent convertible securities 1,301 100.00 95.89 100.00 2018
----------------------------------------- ------- ------ ------ --------- ------------
2018 Annual General Meeting
All resolutions considered at the 2018 Annual General Meeting
held at 11.00am on 20 April 2018 at the Queen Elizabeth II
Conference Centre, London SW1P 3EE were passed on a poll.
Earnings releases and interim results
Earnings releases are expected to be issued on or around 3 May
2019 and 28 October 2019. The interim results for the six months to
30 June 2019 are expected to be issued on 5 August 2019.
Shareholder enquiries and communications
Enquiries
Any enquiries relating to shareholdings on the share register
(for example, transfers of shares, changes of name or address, lost
share certificates or dividend cheques) should be sent to the
Registrars at the address given below. The Registrars offer an
online facility, Investor Centre, which enables shareholders to
manage their shareholding electronically.
Hong Kong Overseas Branch Bermuda Overseas Branch
Principal Register: Register: Register:
Computershare Investor Computershare Hong Kong Investors Relations
Services PLC Investor Team
The Pavilions Services Limited HSBC Bank Bermuda Limited
Rooms 1712-1716, 17th
Bridgwater Road Floor 37 Front Street
Bristol BS99 6ZZ Hopewell Centre Hamilton HM 11
United Kingdom 183 Queen's Road East Bermuda
Telephone: +44 (0) 370 Telephone: +1 441 299
702 0137 Hong Kong 6737
Telephone: +852 2862 Email:
Email via website: 8555 hbbm.shareholder.services@hsbc.bm
www.investorcentre.co.uk/contactus Email: hsbc.ecom@computershare.com.hk
Investor Centre: Investor Centre: Investor Centre:
www.investorcentre.co.uk www.investorcentre.com/hk www.investorcentre.com/bm
Any enquiries relating to ADSs should be sent to the
depositary:
The Bank of New York Mellon
Shareowner Services
PO Box 505000
Louisville, KY 40233-5000
USA
Telephone (US): +1 877 283 5786
Telephone (International): +1
201 680 6825
Email: shrrelations@cpushareownerservices.com
Website: www.mybnymdr.com
Any enquiries relating to shares held through Euroclear France,
the settlement and central depositary system for NYSE Euronext
Paris, should be sent to the paying agent:
CACEIS Corporate Trust
14, rue Rouget de Lisle
92130 Issy-Les-Moulineaux
France
Telephone: +33 1 57 78 34 28
Email: ct-service-ost@caceis.com
Website: www.caceis.com
If you have elected to receive general shareholder
communications directly from HSBC Holdings, it is important to
remember that your main contact for all matters relating to your
investment remains the registered shareholder, or custodian or
broker, who administers the investment on your behalf. Therefore
any changes or queries relating to your personal details and
holding (including any administration of it) must continue to be
directed to your existing contact at your investment manager or
custodian or broker. HSBC Holdings cannot guarantee dealing with
matters directed to it in error.
Shareholders who wish to receive a hard copy should contact
HSBC's Registrars. Please visit
www.hsbc.com/investors/investor-contacts for further information.
You can also download an online version of the report from
www.hsbc.com.
Electronic communications
Shareholders may at any time choose to receive corporate
communications in printed form or to receive notifications of their
availability on HSBC's website. To receive notifications of the
availability of a corporate communication on HSBC's website by
email, or revoke or amend an instruction to receive such
notifications by email, go to www.hsbc.com/ecomms. If you provide
an email address to receive electronic communications from HSBC, we
will also send notifications of your dividend entitlements by
email. If you received a notification of the availability of this
document on HSBC's website and would like to receive a printed
copy, or if you would like to receive future corporate
communications in printed form, please write or send an email
(quoting your shareholder reference number) to the appropriate
Registrars at the address given above. Printed copies will be
provided without charge.
Chinese translation
A Chinese translation of this Annual Report and Accounts 2018
will be available upon request after 6 March 2019 from the
Registrars:
Computershare Hong Kong Investor Computershare Investor Services
Services Limited PLC
Rooms 1712-1716, 17th Floor The Pavilions
Hopewell Centre Bridgwater Road
183 Queen's Road East Bristol BS99 6ZZ
Hong Kong United Kingdom
Please also contact the Registrars if you wish to receive
Chinese translations of future documents, or if you have received a
Chinese translation of this document and do not wish to receive
them in future.
Stock symbols
HSBC Holdings ordinary shares trade under the following stock
symbols:
London Stock Exchange HSBA* Euronext Paris HSB
Hong Kong Stock Exchange 5 Bermuda Stock Exchange HSBC.BH
New York Stock Exchange
(ADS) HSBC
*HSBC's Primary market
Investor relations
Enquiries relating to HSBC's strategy or operations may be
directed to:
Richard O'Connor, Global Head of Hugh Pye, Head of Investor Relations,
Investor Relations Asia-Pacific
HSBC Holdings plc The Hongkong and Shanghai Banking
8 Canada Square Corporation Limited
London E14 5HQ 1 Queen's Road Central
United Kingdom Hong Kong
Telephone: +44 (0) 20 7991 6590 Telephone: 852 2822 4908
Email: investorrelations@hsbc.com Email: investorrelations@hsbc.com.hk
Where more information about HSBC is available
This
Annual Report and Accounts 2018
, and other information on HSBC, may be downloaded from HSBC's
website: www.hsbc.com.
Reports, statements and information that HSBC Holdings files
with the Securities and Exchange Commission are available at
www.sec.gov. Investors can also request hard copies of these
documents upon payment of a duplicating fee by writing to the SEC
at the Office of Investor Education and Advocacy, 100 F Street
N.E., Washington, DC 20549-0213 or by emailing PublicInfo@sec.gov.
Investors should call the Commission at (1) 202 551 8090 if they
require further assistance. Investors may also obtain the reports
and other information that HSBC Holdings files at www.nyse.com
(telephone number (1) 212 656 3000).
HM Treasury has transposed the requirements set out under CRD IV
and issued the Capital Requirements Country-by-Country Reporting
Regulations 2013. The legislation requires HSBC Holdings to publish
additional information in respect of the year ended 31 December
2018 by 31 December 2019. This information will be available on
HSBC's website: www.hsbc.com/tax.
Taxation of shares and dividends
Taxation - UK residents
The following is a summary, under current law and the current
published practice of UK HM Revenue and Customer ("HMRC"), of
certain UK tax considerations that are likely to be material to the
ownership and disposition of HSBC Holdings ordinary shares. The
summary does not purport to be a comprehensive description of all
the tax considerations that may be relevant to a holder of shares.
In particular, the summary deals with shareholders who are resident
solely in the UK for UK tax purposes and only with holders who hold
the shares as investments and who are the beneficial owners of the
shares, and does not address the tax treatment of certain classes
of holders such as dealers in securities. Holders and prospective
purchasers should consult their own advisers regarding the tax
consequences of an investment in shares in light of their
particular circumstances, including the effect of any national,
state or local laws.
Taxation of dividends
Currently, no tax is withheld from dividends paid by HSBC
Holdings.
UK resident individuals
UK resident individuals are generally entitled to a tax-free
annual allowance in respect of dividends received. The amount of
the allowance for the tax year beginning 6 April 2018 is GBP2,000.
To the extent that dividend income received by an individual in the
relevant tax year does not exceed the allowance, a nil tax rate
will apply. Dividend income in excess of this allowance will be
taxed at 7.5% for basic rate taxpayers, 32.5% for higher rate
taxpayers and 38.1% for additional rate taxpayers.
UK resident companies
Shareholders that are within the charge to UK corporation tax
should generally be entitled to an exemption from UK corporation
tax on any dividends received from HSBC Holdings. However, the
exemptions are not comprehensive and are subject to anti-avoidance
rules.
If the conditions for exemption are not met or cease to be
satisfied, or a shareholder within the charge to UK corporation tax
elects for an otherwise exempt dividend to be taxable, the
shareholder will be subject to UK corporation tax on dividends
received from HSBC Holdings at the rate of corporation tax
applicable to that shareholder.
Scrip dividends
Information on the taxation consequences of the HSBC Holdings
scrip dividends offered in lieu of the 2017 fourth interim dividend
and the first, second and third interim dividends for 2018 was set
out in the Secretary's letters to shareholders of 7 March, 31 May,
29 August and 24 October 2018. In no case was the difference
between the cash dividend forgone and the market value of the scrip
dividend in excess of 15% of the market value. Accordingly, for
individual shareholders, the amount of the dividend income
chargeable to tax, and the acquisition price of the HSBC Holdings
ordinary shares for UK capital gains tax purposes, was the cash
dividend forgone.
Taxation of capital gains
The computation of the capital gains tax liability arising on
disposals of shares in HSBC Holdings by shareholders subject to UK
tax on capital gains can be complex, partly depending on whether,
for example, the shares were purchased since April 1991, acquired
in 1991 in exchange for shares in The Hongkong and Shanghai Banking
Corporation Limited, or acquired subsequent to 1991 in exchange for
shares in other companies.
For capital gains tax purposes, the acquisition cost for
ordinary shares is adjusted to take account of subsequent rights
and capitalisation issues. Any capital gain arising on a disposal
of shares in HSBC Holdings by a UK company may also be adjusted to
take account of indexation allowance if the shares were acquired
before 1 January 2018, although the level of indexation allowance
that is given in calculating the gain would be frozen at the value
that would apply to the disposal of assets acquired on or after 1
January 2018. If in doubt, shareholders are recommended to consult
their professional advisers.
Stamp duty and stamp duty reserve tax
Transfers of shares by a written instrument of transfer
generally will be subject to UK stamp duty at the rate of 0.5% of
the consideration paid for the transfer (rounded up to the next
GBP5), and such stamp duty is generally payable by the transferee.
An agreement to transfer shares, or any interest therein, normally
will give rise to a charge to stamp duty reserve tax at the rate of
0.5% of the consideration. However, provided an instrument of
transfer of the shares is executed pursuant to the agreement and
duly stamped before the date on which the stamp duty reserve tax
becomes payable, under the current published practice of HMRC it
will not be necessary to pay the stamp duty reserve tax, nor to
apply for such tax to be cancelled. Stamp duty reserve tax is
generally payable by the transferee.
Paperless transfers of shares within CREST, the UK's paperless
share transfer system, are liable to stamp duty reserve tax at the
rate of 0.5% of the consideration. In CREST transactions, the tax
is calculated and payment made automatically. Deposits of shares
into CREST generally will not be subject to stamp duty reserve tax,
unless the transfer into CREST is itself for consideration.
Following the case HSBC pursued before the European Court of
Justice (Case C-569/07 HSBC Holdings plc and Vidacos Nominees Ltd v
The Commissioners for HM Revenue & Customs) and a subsequent
case in relation to depositary receipts, HMRC accepts that the
charge to stamp duty reserve tax at 1.5% on the issue of shares
(and transfers integral to capital raising) to a depositary receipt
issuer or a clearance service is incompatible with European Union
law, and will not be imposed.
At Autumn Budget 2017, the UK government announced that it will
continue its policy of not charging a 1.5% stamp duty and stamp
duty reserve tax on issues of shares to overseas clearance services
and depositary receipt issuers following the UK's departure from
the European Union, although no further confirmations or assurances
have been given since then.
Taxation - US residents
The following is a summary, under current law, of the principal
UK tax and US federal income tax considerations that are likely to
be material to the ownership and disposition of shares or American
Depositary Shares ('ADSs') by a holder that is a US holder, as
defined below, and who is not resident in the UK for UK tax
purposes.
The summary does not purport to be a comprehensive description
of all of the tax considerations that may be relevant to a holder
of shares or ADSs. In particular, the summary deals only with US
holders that hold shares or ADSs as capital assets, and does not
address the tax treatment of holders that are subject to special
tax rules, such as banks, tax-exempt entities, insurance companies,
dealers in securities or currencies, persons that hold shares or
ADSs as part of an integrated investment (including a 'straddle' or
'hedge') comprised of a share or ADS and one or more other
positions, and persons that own, directly or indirectly, 10% or
more (by vote or value) of the stock of HSBC Holdings. This
discussion is based on laws, treaties, judicial decisions and
regulatory interpretations in effect on the date hereof, all of
which are subject to change.
For the purposes of this discussion, a 'US holder' is a
beneficial holder that is a citizen or resident of the United
States, a US domestic corporation or otherwise is subject to US
federal income taxes on a net income basis in respect thereof.
Holders and prospective purchasers should consult their own
advisers regarding the tax consequences of an investment in shares
or ADSs in light of their particular circumstances, including the
effect of any national, state or local laws.
Any US federal tax advice included in this Annual Report and
Accounts 2018 is for informational purposes only; it was not
intended or written to be used, and cannot be used, for the purpose
of avoiding US federal tax penalties.
Taxation of dividends
Currently, no tax is withheld from dividends paid by HSBC
Holdings. For US tax purposes, a US holder must include cash
dividends paid on the shares or ADSs in ordinary income on the date
that such holder or the ADS depositary receives them, translating
dividends paid in UK pounds sterling into US dollars using the
exchange rate in effect on the date of receipt. A US holder that
elects to receive shares in lieu of a cash dividend must include in
ordinary income the fair market value of such shares on the
dividend payment date, and the tax basis of those shares will equal
such fair market value.
Subject to certain exceptions for positions that are held for
less than 61 days, and subject to a foreign corporation being
considered a 'qualified foreign corporation' (which includes not
being classified for US federal income tax purposes as a passive
foreign investment company), certain dividends ('qualified
dividends') received by an individual US holder generally will be
subject to US taxation at preferential rates. Based on the
company's audited financial statements and relevant market and
shareholder data, HSBC Holdings was not and does not anticipate
being classified as a passive foreign investment company.
Accordingly, dividends paid on the shares or ADSs generally should
be treated as qualified dividends.
Taxation of capital gains
Gains realised by a US holder on the sale or other disposition
of shares or ADSs normally will not be subject to UK taxation
unless at the time of the sale or other disposition the holder
carries on a trade, profession or vocation in the UK through a
branch or agency or permanent establishment and the shares or ADSs
are or have been used, held or acquired for the purposes of such
trade, profession, vocation, branch or agency or permanent
establishment. Such gains will be included in income for US tax
purposes, and will be long-term capital gains if the shares or ADSs
were held for more than one year. A long-term capital gain realised
by an individual US holder generally will be subject to US tax at
preferential rates.
Inheritance tax
Shares or ADSs held by an individual whose domicile is
determined to be the US for the purposes of the United
States-United Kingdom Double Taxation Convention relating to estate
and gift taxes (the 'Estate Tax Treaty') and who is not for such
purposes a national of the UK will not, provided any US federal
estate or gift tax chargeable has been paid, be subject to UK
inheritance tax on the individual's death or on a lifetime transfer
of shares or ADSs except in certain cases where the shares or ADSs
(i) are comprised in a settlement (unless, at the time of the
settlement, the settlor was domiciled in the US and was not a
national of the UK), (ii) are part of the business property of a UK
permanent establishment of an enterprise, or (iii) pertain to a UK
fixed base of an individual used for the performance of independent
personal services. In such cases, the Estate Tax Treaty generally
provides a credit against US federal tax liability for the amount
of any tax paid in the UK in a case where the shares or ADSs are
subject to both UK inheritance tax and to US federal estate or gift
tax.
Stamp duty and stamp duty reserve tax - ADSs
If shares are transferred to a clearance service or American
Depositary Receipt ('ADR') issuer (which will include a transfer of
shares to the Depositary) under the current published HMRC
practice, UK stamp duty and/or stamp duty reserve tax will be
payable. The stamp duty or stamp duty reserve tax is generally
payable on the consideration for the transfer and is payable at the
aggregate rate of 1.5%.
The amount of stamp duty reserve tax payable on such a transfer
will be reduced by any stamp duty paid in connection with the same
transfer.
No stamp duty will be payable on the transfer of, or agreement
to transfer, an ADS, provided that the ADR and any separate
instrument of transfer or written agreement to transfer remain at
all times outside the UK, and provided further that any such
transfer or written agreement to transfer is not executed in the
UK. No stamp duty reserve tax will be payable on a transfer of, or
agreement to transfer, an ADS effected by the transfer of an
ADR.
US backup withholding tax and information reporting
Distributions made on shares or ADSs and proceeds from the sale
of shares or ADSs that are paid within the US, or through certain
financial intermediaries to US holders, are subject to information
reporting and may be subject to a US 'backup' withholding tax.
General exceptions to this rule happen when the US holder:
establishes that it is a corporation (other than an S corporation)
or other exempt holder; or provides a correct taxpayer
identification number, certifies that no loss of exemption from
backup withholding has occurred and otherwise complies with the
applicable requirements of the backup withholding rules. Holders
that are not US taxpayers generally are not subject to information
reporting or backup withholding tax, but may be required to comply
with applicable certification procedures to establish that they are
not US taxpayers in order to avoid the application of such
information reporting requirements or backup withholding tax to
payments received within the US or through certain financial
intermediaries.
Cautionary statement regarding
forward-looking statements
The
Annual Report and Accounts 2018
contains certain forward-looking statements with respect to
HSBC's financial condition, results of operations and business,
including the strategic priorities and 2020 financial, investment
and capital targets described herein.
Statements that are not historical facts, including statements
about HSBC's beliefs and expectations, are forward-looking
statements. Words such as 'expects', 'targets', 'anticipates',
'intends', 'plans', 'believes', 'seeks', 'estimates', 'potential'
and 'reasonably possible', variations of these words and similar
expressions are intended to identify forward-looking statements.
These statements are based on current plans, estimates and
projections, and therefore undue reliance should not be placed on
them. Forward-looking statements speak only as of the date they are
made. HSBC makes no commitment to revise or update any
forward-looking statements to reflect events or circumstances
occurring or existing after the date of any forward-looking
statements.
Written and/or oral forward-looking statements may also be made
in the periodic reports to the US Securities and Exchange
Commission, summary financial statements to shareholders, proxy
statements, offering circulars and prospectuses, press releases and
other written materials, and in oral statements made by HSBC's
Directors, officers or employees to third parties, including
financial analysts.
Forward-looking statements involve inherent risks and
uncertainties. Readers are cautioned that a number of factors could
cause actual results to differ, in some instances materially, from
those anticipated or implied in any forward-looking statement.
These include, but are not limited to:
-- Changes in general economic conditions in the markets in
which we operate, such as continuing or deepening recessions and
fluctuations in employment beyond those factored into consensus
forecasts; changes in foreign exchange rates and interest rates,
including the accounting impact resulting from financial reporting
in respect of hyperinflationary economies; volatility in equity
markets; lack of liquidity in wholesale funding markets;
illiquidity and downward price pressure in national real estate
markets; adverse changes in central banks' policies with respect to
the provision of liquidity support to financial markets; heightened
market concerns over sovereign creditworthiness in over-indebted
countries; adverse changes in the funding status of public or
private defined benefit pensions; and consumer perception as to the
continuing availability of credit and price competition in the
market segments we serve; and deviations from the market and
economic assumptions that form the basis for our ECL
measurements;
-- Changes in government policy and regulation, including the
monetary, interest rate and other policies of central banks and
other regulatory authorities; initiatives to change the size, scope
of activities and interconnectedness of financial institutions in
connection with the implementation of stricter regulation of
financial institutions in key markets worldwide; revised capital
and liquidity benchmarks which could serve to deleverage bank
balance sheets and lower returns available from the current
business model and portfolio mix; imposition of levies or taxes
designed to change business mix and risk appetite; the practices,
pricing or responsibilities of financial institutions serving their
consumer markets; expropriation, nationalisation, confiscation of
assets and changes in legislation relating to foreign ownership;
changes in bankruptcy legislation in the principal markets in which
we operate and the consequences thereof; general changes in
government policy that may significantly influence investor
decisions; extraordinary government actions as a result of current
market turmoil; other unfavourable political or diplomatic
developments producing social instability or legal uncertainty
which in turn may affect demand for our products and services; the
costs, effects and outcomes of product regulatory reviews, actions
or litigation, including any additional compliance requirements;
and the effects of competition in the markets where we operate
including increased competition from non-bank financial services
companies, including securities firms.
-- Factors specific to HSBC, including our success in adequately
identifying the risks we face, such as the incidence of loan losses
or delinquency, and managing those risks (through account
management, hedging and other techniques). Effective risk
management depends on, among other things, our ability through
stress testing and other techniques to prepare for events that
cannot be captured by the statistical models it uses; and our
success in addressing operational, legal and regulatory, and
litigation challenges; and other risks and uncertainties we
identify in 'top and emerging risks' on pages 69 to 73.
Certain defined terms
Unless the context requires otherwise, 'HSBC Holdings' means
HSBC Holdings plc and 'HSBC', the 'Group', 'we', 'us' and 'our'
refer to HSBC Holdings together with its subsidiaries. Within this
document the Hong Kong Special Administrative Region of the
People's Republic of China is referred to as 'Hong Kong'. When used
in the terms 'shareholders' equity' and 'total shareholders'
equity', 'shareholders' means holders of HSBC Holdings ordinary
shares and those preference shares and capital securities issued by
HSBC Holdings classified as equity. The abbreviations '$m', '$bn'
and '$tn' represent millions, billions (thousands of millions) and
trillions of US dollars, respectively.
Abbreviations
Currencies
GBP British pound sterling
CA$ Canadian dollar
EUR Euro
HK$ Hong Kong dollar
MXN Mexican peso
RMB Chinese renminbi
---------------
SGD Singapore dollar
--------------- -----------------------------------------------
$ United States dollar
--------------- -----------------------------------------------
A
--------------- -----------------------------------------------
ABS(1) Asset-backed security
ADR American Depositary Receipt
ADS American Depositary Share
AFS Available for sale
AGM Annual General Meeting
AIEA Average interest-earning
assets
ALCM Asset, Liability and Capital
Management
ALCO Asset and Liability Management
Committee
AML Anti-money laundering
AML DPA Five-year deferred prosecution
agreement with the US Department
of Justice, entered into
in December 2012
--------------- -----------------------------------------------
ASEAN Association of Southeast
Asian Nations
AT1 Additional tier 1
B
--------------- -----------------------------------------------
Basel Basel Committee on Banking
Committee Supervision
Basel 2006 Basel Capital Accord
II(1)
Basel Basel Committee's reforms
III(1) to strengthen global capital
and liquidity rules
BIS Bank for International Settlements
BoCom Bank of Communications Co.,
Limited, one of China's
largest banks
BoE Bank of England
Bps(1) Basis points. One basis
point is equal to one-hundredth
of a percentage point
--------------- -----------------------------------------------
BSA Bank Secrecy Act (US)
BSM Balance Sheet Management
BVI British Virgin Islands
C
--------------- -----------------------------------------------
C&L Credit and Lending
--------------- -----------------------------------------------
CAPM Capital asset pricing model
CCAR Federal Reserve Comprehensive
Capital Analysis and Review
CDOs Collateralised debt obligations
CDS(1) Credit default swap
CEA Commodity Exchange Act (US)
CET1(1) Common equity tier 1
CGUs Cash-generating units
--------------- -----------------------------------------------
CMB Commercial Banking, a global
business
CMC Capital maintenance charge
CML(1) Consumer and Mortgage Lending
(US)
--------------- -----------------------------------------------
CODM Chief Operating Decision
Maker
--------------- -----------------------------------------------
COSO 2013 Committee of the Sponsors
of the Treadway Commission
(US)
CP(1) Commercial paper
CRD(1) Capital Requirements Directive
CRD IV Capital Requirements Regulation
and Directive
--------------- -----------------------------------------------
CRR(1) Customer risk rating
--------------- -----------------------------------------------
CSA Credit support annex
--------------- -----------------------------------------------
CVA(1) Credit valuation adjustment
--------------- -----------------------------------------------
D
--------------- -----------------------------------------------
DDOS Distributed denial of service
--------------- -----------------------------------------------
Deferred Awards of deferred shares
Shares define the number of HSBC
Holdings ordinary shares
to which the employee will
become entitled, generally
between one and seven years
from the date of the award,
and normally subject to
the individual remaining
in employment
--------------- -----------------------------------------------
Dodd-Frank Dodd-Frank Wall Street Reform
and Consumer Protection
Act (US)
DoJ US Department of Justice
DPD Days past due
DPF Discretionary participation
feature of insurance and
investment contracts
DVA(1) Debit valuation adjustment
E
--------------- -----------------------------------------------
EAD(1) Exposure at default
EBA European Banking Authority
EC European Commission
ECB European Central Bank
EEA European Economic Area
ECL Expected credit losses.
In the income statement,
ECL is recorded as a change
in expected credit losses
and other credit impairment
charges. In the balance
sheet, ECL is recorded as
an allowance for financial
instruments to which only
the impairment requirements
in IFRS 9 are applied.
-----------------------------------------------
EL(1) Expected loss
ESG Environmental, Social and
Governance
EU European Union
Euribor Euro interbank offered rate
EVE Economic value of equity
F
--------------- -----------------------------------------------
FCA Financial Conduct Authority
(UK)
FFVA Funding fair value adjustment
estimation methodology on
derivative contracts
--------------- -----------------------------------------------
FPA Fixed pay allowance
--------------- -----------------------------------------------
FRB Federal Reserve Board (US)
--------------- -----------------------------------------------
FRC Financial Reporting Council
--------------- -----------------------------------------------
FSB Financial Stability Board
--------------- -----------------------------------------------
FSCS Financial Services Compensation
Scheme
--------------- -----------------------------------------------
FSVC Financial System Vulnerabilities
Committee
FTE Full-time equivalent staff
FTSE Financial Times - Stock
Exchange index
FuM Funds under management
FVOCI(1) Fair value through other
comprehensive income
FVPL(1) Fair value through profit
or loss
FX DPA Three-year deferred prosecution
agreement with the US Department
of Justice, entered into
in January 2018
-----------------------------------------------
G
--------------- -----------------------------------------------
GAAP Generally accepted accounting
principles
GAC Group Audit Committee
GB&M Global Banking and Markets,
a global business
GDP Gross domestic product
--------------- -----------------------------------------------
GDPR General Data Protection
Regulation
GLCM Global Liquidity and Cash
Management
Global HSBC's capital markets services
Markets in Global Banking and Markets
--------------- -----------------------------------------------
GMB Group Management Board
GMP Guaranteed minimum pension
GPB Global Private Banking,
a global business
GPSP Group Performance Share
Plan
GRC Group Risk Committee
--------------- -----------------------------------------------
Group HSBC Holdings together with
its subsidiary undertakings
GSM The Group's Global Standards
Manual
GTRF Global Trade and Receivables
Finance
H
--------------- -----------------------------------------------
Hang Seng Hang Seng Bank Limited,
Bank one of Hong Kong's largest
banks
--------------- -----------------------------------------------
HKEx The Stock Exchange of Hong
Kong Limited
--------------- -----------------------------------------------
HKMA Hong Kong Monetary Authority
HMRC HM Revenue and Customs
HNAH HSBC North America Holdings
Inc.
Holdings HSBC Holdings Asset and
ALCO Liability Management Committee
Hong Kong Hong Kong Special Administrative
Region of the People's Republic
of China
HOST HSBC Operations Services
and Technology
HQLA High-quality liquid assets
HSBC HSBC Holdings together with
its subsidiary undertakings
HSBC Bank HSBC Bank plc
HSBC Bank HSBC Bank Middle East Limited
Middle
East
--------------- -----------------------------------------------
HSBC Bank HSBC Bank USA, N.A., HSBC's
USA retail bank
in the US
--------------- -----------------------------------------------
HSBC Canada The sub-group, HSBC Bank
Canada, HSBC Trust Company
Canada, HSBC Mortgage Corporation
Canada and HSBC Securities
Canada, consolidated for
liquidity purposes
HSBC Colombia HSBC Bank (Colombia) S.A.
HSBC Finance HSBC Finance Corporation,
the US consumer finance
company (formerly Household
International, Inc.)
HSBC France HSBC's French banking subsidiary,
formerly CCF S.A.
HSBC Holdings HSBC Holdings plc, the parent
company of HSBC
HSBC Private HSBC Private Bank (Suisse)
Bank (Suisse) SA, HSBC's private bank
in Switzerland
HSBC UK HSBC UK Bank plc
--------------- -----------------------------------------------
HSBC USA The sub-group, HSBC USA
Inc (the holding company
of HSBC Bank USA) and HSBC
Bank USA, consolidated for
liquidity purposes
HSI HSBC Securities (USA) Inc.
HSSL HSBC Securities Services
(Luxembourg)
HTIE HSBC International Trust
Services (Ireland) Limited
HTM Held to maturity
--------------- -----------------------------------------------
I
--------------- -----------------------------------------------
IAS International Accounting
Standards
IASB International Accounting
Standards Board
Ibor Interbank offered rate
-----------------------------------------------
ICAAP Internal capital adequacy
assessment process
IFRSs International Financial
Reporting Standards
ILAAP Individual liquidity adequacy
assessment process
IRB(1) Internal ratings-based
IRRBB Interest rate risk in the
banking book
ISDA International Swaps and
Derivatives Association
-----------------------------------------------
J
--------------- -----------------------------------------------
Jaws Adjusted jaws measures the
difference between the rates
of change in adjusted revenue
and adjusted operating expenses.
--------------- -----------------------------------------------
K
--------------- -----------------------------------------------
KMP Key Management Personnel
--------------- -----------------------------------------------
L
--------------- -----------------------------------------------
LCR Liquidity coverage ratio
LFRF Liquidity and funding risk
management framework
LGBT+ Lesbian, gay, bisexual and
transgender. The plus sign
denotes other non-mainstream
groups on the spectrums
of sexual orientation and
gender identity
LGD(1) Loss given default
Libor London interbank offered
rate
LICs Loan impairment charges
and other credit risk provisions
--------------- -----------------------------------------------
LMA Loan Markets Association
--------------- -----------------------------------------------
LTI Long-term incentive
--------------- -----------------------------------------------
LTV(1) Loan-to-value ratio
--------------- -----------------------------------------------
M
--------------- -----------------------------------------------
Mainland People's Republic of China
China excluding Hong Kong
Malachite Malachite Funding Limited,
a term-funding vehicle
Mazarin Mazarin Funding Limited,
an asset-backed CP conduit
MBS US mortgage-backed security
MENA Middle East and North Africa
MOCs Model Oversight Committees
Monoline Monoline insurance company
MRT(1) Material Risk Taker
--------------- -----------------------------------------------
N
--------------- -----------------------------------------------
NII Net interest income
NSFR Net stable funding ratio
NYSE New York Stock Exchange
O
--------------- -----------------------------------------------
OCC Office of the Comptroller
of the Currency (US)
OCI Other comprehensive income
OECD Organisation of Economic
Co-operation and Development
OFAC Office of Foreign Assets
Control
ORMF Operational risk management
framework
OTC(1) Over-the-counter
P
--------------- -----------------------------------------------
PD(1) Probability of default
--------------- -----------------------------------------------
Performance Awards of HSBC Holdings
shares(1) ordinary shares under employee
share plans that are subject
to corporate performance
conditions
Ping An Ping An Insurance (Group)
Company of China, Ltd, the
second-largest life insurer
in the PRC
POCI Purchased or originated
credit-impaired financial
assets
PBT Profit before tax
PIT Point-in-time
PPI Payment protection insurance
PRA Prudential Regulation Authority
(UK)
PRC People's Republic of China
Principal HSBC Bank (UK) Pension Scheme
plan
PVIF Present value of in-force
long-term insurance business
and long-term investment
contracts with DPF
PwC The member firms of the
PwC network, including PricewaterhouseCoopers
LLP
R
--------------- -----------------------------------------------
RAS Risk appetite statement
RBWM Retail Banking and Wealth
Management, a global business
Repo(1) Sale and repurchase transaction
Reverse Security purchased under
repo commitments to sell
--------------- -----------------------------------------------
RFB Ring-fenced bank
--------------- -----------------------------------------------
RFR Risk-free rate
--------------- -----------------------------------------------
RMM Risk Management Meeting
of the Group Management
Board
--------------- -----------------------------------------------
RNIV Risk not in VaR
RoE Return on equity
--------------- -----------------------------------------------
RoRWA Return on average risk-weighted
assets
--------------- -----------------------------------------------
RoTE Return on tangible equity
RWA(1) Risk-weighted asset
S
-----------------------------------------------
SAPS Self-administered pension
scheme
SDG United Nation's Sustainable
Development Goals
SE(1) Structured entity
SEC Securities and Exchange
Commission (US)
ServCo Separately incorporated
group group of service companies
planned in response to UK
ring-fencing proposals
SFR Stable funding ratio
Sibor Singapore interbank offered
rate
SIC Securities investment conduit
SID Senior Independent Director
SME Small- and medium-sized
enterprise
Solitaire Solitaire Funding Limited,
a special purpose entity
managed by HSBC
SPE(1) Special purpose entity
SPPI Solely payments of principal
and interest
SRI Socially responsible investment
T
--------------- -----------------------------------------------
T1 Tier 1
T2 Tier 2
--------------- -----------------------------------------------
TCFD(1) Task Force on Climate-related
Financial Disclosures
--------------- -----------------------------------------------
TLAC(1) Total loss-absorbing capacity
TSR(1) Total shareholder return
--------------- -----------------------------------------------
U
--------------- -----------------------------------------------
UAE United Arab Emirates
UK United Kingdom
--------------- -----------------------------------------------
UN United Nations
UN PRI United Nations Principles
of Responsible Investment
--------------- -----------------------------------------------
US United States of America
US run-off Includes our CML, vehicle
portfolio finance and Taxpayer Financial
Services businesses and
insurance, commercial, corporate
and treasury activities
in HSBC Finance on an IFRSs
management basis
--------------- -----------------------------------------------
V
--------------- -----------------------------------------------
VaR(1) Value at risk
VIU Value in use
--------------- -----------------------------------------------
1 A full definition is included in the glossary to the Annual
Report and Accounts 2018 which is available at
www.hsbc.com/investors.
HSBC Holdings plc
Incorporated in England on 1 January
1959 with
limited liability under the UK Companies
Act
Registered in England: number 617987
Registered Office and Group Head
Office
8 Canada Square
London E14 5HQ
United Kingdom
Telephone: 44 020 7991 8888
Facsimile: 44 020 7992 4880
Web: www.hsbc.com
Registrars
Principal Register
Computershare Investor Services
PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
United Kingdom
Telephone: 44 0370 702 0137
Email: via website
Web: www.investorcentre.co.uk/contactus
Hong Kong Overseas Branch Register
Computershare Hong Kong Investor
Services
Limited
Rooms 1712-1716, 17th floor
Hopewell Centre
183 Queen's Road East
Hong Kong
Telephone: 852 2862 8555
Email: hsbc.ecom@computershare.com.hk
Web: www.investorcentre.com/hk
Bermuda Overseas Branch Register
Investor Relations Team
HSBC Bank Bermuda Limited
37 Front Street
Hamilton HM11
Bermuda
Telephone: 1 441 299 6737
Email: hbbm.shareholder.services@hsbc.bm
Web: www.investorcentre.com/bm
ADR Depositary
The Bank of New York Mellon
Shareowner Services
PO Box 505000
Louisville, KY 40233-5000
USA
Telephone (US): 1 877 283 5786
Telephone (International): 1 201
680 6825
Email: shrrelations@cpushareownerservices.com
Web: www.mybnymdr.com
Paying Agent (France)
CACEIS Corporate Trust
14, rue Rouget de Lisle
92130 Issy-Les-Moulineaux
France
Telephone: 33 1 57 78 34 28
Email: ct-service-ost@caceis.com
Web: www.caceis.com
Corporate Brokers
Goldman Sachs International
Peterborough Court
133 Fleet Street
London EC4A 2BB
United Kingdom
Credit Suisse Securities (Europe)
Limited
1 Cabot Square
London E14 4QT
United Kingdom
HSBC Bank plc
8 Canada Square
London E14 5HQ
United Kingdom
(c) Copyright HSBC Holdings plc 2019
All rights reserved
No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means,
electronic, mechanical, photocopying, recording, or otherwise,
without the prior written permission of HSBC Holdings plc.
Published by Global Finance, HSBC Holdings plc, London
Designed by Superunion (formerly Addison Group), London
(Strategic Report) and by Global Finance with Superunion (rest of
Annual Report and Accounts)
Photography
Highlights (pages 2 to 3): Lavender field in Provence, France.
Taken by Andrea A Attard, who works in our corporate treasury
solutions team in Malta
Our strategy (pages 10 to 13): Boat navigating off the coast of
Thailand. Taken by Joanna S Ellis, who supports with retail
customer due diligence and is based in India
Global businesses (pages 18 to 21): Hong Kong skyline at night.
Taken by John Oldham, who works in the legal team in the UK
How we do business (pages 22 to 23): Fish off Raja Ampat,
Indonesia, one of the world's most diverse marine regions. Taken by
Faith Li, who works in asset management in China
How we do business (pages 28 to 29): Thrunton Woods,
Northumberland. Taken by Ciara Jennings, who works in the UK's
digital technology team
Risk overview (pages 30 to 31): Raindrops on a peacock feather.
Taken by Noman Anwar, who works in communications in Bangladesh
Inside back cover: Crowds below an escalator in Incheon Airport,
South Korea. Taken by Michael Hu, who works in China's finance
team
Group Chairman and Group Chief Executive portraits: Taken by
Charles Best
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
ACSEAKDKEFPNEFF
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March 06, 2019 12:06 ET (17:06 GMT)
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