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COMPANY PROFILE

HSBC Holdings plc

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PUBLICATION DATE: 2 Sep 2015
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HSBC Holdings plc

TABLE OF CONTENTS

TABLE OF CONTENTS
Company Overview..............................................................................................3
Key Facts...............................................................................................................3
Business Description...........................................................................................4
History...................................................................................................................5
Key Employees...................................................................................................10
Key Employee Biographies................................................................................12
Major Products and Services............................................................................22
Revenue Analysis...............................................................................................24
SWOT Analysis...................................................................................................26
Top Competitors.................................................................................................31
Company View.....................................................................................................32
Locations and Subsidiaries...............................................................................37

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HSBC Holdings plc

Company Overview

COMPANY OVERVIEW
HSBC Holdings plc (HSBC or the group) is a banking and financial services organization, which
provides retail banking, commercial banking, private banking and wealth management services to
its clients. The group operates in Europe, Asia, the Middle East, Africa, and the Americas. It is
headquartered in London, the UK, and employed 266,000 people as of December 31, 2014.
The group recorded revenues of $74,593 million during the financial year ended December 2014
(FY2014), a decrease of 4.8% compared to FY2013. The operating profit of the group was $16,148
million in FY2014, a decrease of 20.2% compared to FY2013. The net profit of the group was $13,688
million in FY2014, a decrease of 15.5% compared to FY2013.

KEY FACTS
Head Office

HSBC Holdings plc

8 Canada Square
London E14 5HQ
GBR

Phone

44 20 7991 8888

Fax

44 20 7992 4880

Web Address

http://www.hsbc.com

Revenue / turnover 74,593.0

(USD Mn)
Financial Year End

December

Employees

266,000

London Stock
Exchange Ticker

HSBA

New York Stock

Exchange Ticker

HSBC

Hong Kong Stock

Exchange Ticker

0005

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HSBC Holdings plc

Business Description

BUSINESS DESCRIPTION
HSBC Holdings plc (HSBC or the group) is a UK based banking and financial services organization
that provides retail banking, commercial banking, private banking and wealth management services
to its clients. The group operates in Europe, Asia, the Middle East, Africa, and the Americas.
The group operates through five business segments: Asia; Europe; Latin America: North America:
and Middle East and North Africa (MENA). The group also reports its business through five product
lines: retail banking and wealth management (RBWM); global banking and markets (GB&M);
commercial banking (CMB); other; and global private banking (GPB).
The RBWM segment offers a range of products and services to meet the personal banking and
wealth management needs of individual customers. The customer offerings include personal banking
products such as current and savings accounts, mortgages and personal loans, credit cards, debit
cards and local and international payment services; and wealth management services, including
insurance and investment products, global asset management services and financial planning
services.
The GB&M segment provides financial solutions to major government, corporate and institutional
clients and private investors worldwide. The client-focused business lines deliver a full range of
banking capabilities including financing, advisory and transaction services; a markets business that
provides services in credit, rates, foreign exchange, equities, money markets and securities services;
and principal investment activities.
The CMB segment offers a range of products and services to serve the needs of the groups
commercial customers, including small and medium sized enterprises, mid-market enterprises and
corporates. These include credit and lending, international trade and receivables finance, treasury
management and liquidity solutions (payments and cash management and commercial cards),
commercial insurance and investments. The segment also offers its customers access to products
and services offered by other global businesses, including foreign exchange products, raising capital
on debt and equity markets and advisory services.
The other segment includes HSBCs certain property activities, unallocated investment activities,
centrally held investment companies, movements in fair value of own debt and HSBCs holding
company and financing operations. The segment also includes gains and losses on the disposal of
certain significant subsidiaries or business units.
The GPB segment provides a range of services to high net worth individuals and families with
complex and international needs within the groups priority markets.

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HSBC Holdings plc

History

HISTORY
HSBC Holdings plc (HSBC or the group) is renamed after its founding bank, the Hong Kong and
Shanghai Banking Corporation Limited, which was established in 1865 to finance the growing trade
between China and Europe. Soon after the formation, the group established its presence across
various geographies including Europe and North America. By 1900, the branch network in Asia
extended to India (1867), the Philippines (1875) and Singapore (1877), and to cities in Malaysia,
Myanmar, Sri Lanka and Vietnam.
The group acquired Mercantile Bank in 1959, in the Asia Pacific region. In 1965, HSBC purchased
a controlling interest in Hang Seng Bank in Hong Kong. The group established Hong Kong Bank of
Canada in 1981. Egyptian British Bank was formed in 1982, with the group holding a 40% interest,
and Hong Kong Bank of Australia was formed in 1986. In 1987, Marine Midland Bank became the
group's wholly owned subsidiary in the US. In the same year, the group obtained a banking license
in New Zealand.
In 1991, the group's member companies were brought together under the single ownership and
control of HSBC Holdings. In the following year, HSBC's acquisition of Midland Bank created one
of the largest banking and financial services organizations in the world.
Throughout the 1990s, HSBC continued its policy of growth through mergers and acquisitions, and
acquired banks in Brazil and Argentina. In 1999, it purchased Republic New York Corporation.
Inorganic growth continued in 2000, with the acquisition of Credit Commercial de France. In 2001,
an 8% share in the Bank of Shanghai was purchased and, in the following year, HSBC acquired a
10% share in Ping An Insurance Company of China. In 2002, the group completed the acquisition
of Group Financiero Bital de in Mexico.
In 2003, HSBC, with its joint venture partners, formed Beijing HSBC Insurance Brokers with 24.9%
stake in the new company, to offer insurance broking and risk management services to domestic
and international clients in Mainland China. In the same year, HSBC acquired a stake in the UTI
bank, an Indian based retail bank. The group also increased its stake in Asset Management
Technology Korea to 93% in 2003. In the US, HSBC's purchase of Household International added
substantially to the group's business profile in the country. In the same year, HSBC acquired Keppel
Insurance, a provider of life insurance and Islamic insurance in Singapore; and took full ownership
of Equator Holdings.
HSBC continued to grow organically and also through acquisitions in 2004. In the UK, HSBC bought
the retail financial services arm of the Marks and Spencer Group for a consideration of 762 million
($1,195.7 million). Late in the year, a majority of HSBCs North American businesses, including
Household International, were united under the name HSBC North America.
In 2005, HSBC opened new branches in Chongqing and Chengdu in China, to provide local currency
services from its branch in Beijing. In the same year, HSBC began selling insurance through Ping

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History

An Insurance, and increased its stake in the company to 19.9%. In the Middle East, HSBC reopened
its branch in Kuwait, while in the US, the integration of Household International with the groups
North American operations was completed, under the name HSBC Finance Corporation.
The groups wholly owned subsidiary, HSBC Latin America Holdings (UK) (HSBC Latin America),
acquired a majority of Lloyds TSBs branch assets in Paraguay in 2006. This was followed by the
acquisition of a stake in Financiera Independencia, a company in Mexicos sub-prime consumer
loan market. In late 2006, the group purchased Panama based Group Banistmo to gain access to
the markets of Colombia, Costa Rica, El Salvador, Honduras and Nicaragua. In 2006, HSBC made
further acquisitions such as BNL Inversiones Argentinas, Australian custody business from Westpac
Banking Corporation, Solstice Capital Group and Group Banistmo.
Early in 2007, the group acquired Chailease Credit Services, Taiwan's sixth largest factoring company.
In the same year, the group increased its stake in Vietnam Technological and Commercial Joint-Stock
Bank (Techcombank) from 10% to 15% for a total consideration of VND539.4 billion (approximately
$33.7 million). HSBC established a bank in rural China, after receiving approval from the China
Banking Regulatory Commission in 2007. The group set up a wholly-owned entity, HSBC Rural
Bank Company, which is based in Central China in the Cengdu County of Suizhou City in Hubei
Province.
In 2007, HSBC acquired a 10% stake in Vietnam's leading insurance and financial services group,
Vietnam Insurance Corporation (Bao Viet), for VND4,121 billion ($257.5 billion). Furthermore in the
same year, HSBC launched its insurance operations in Taiwan by officially opening HSBC Life
(International) Limited in Taiwan. At the end of 2007, the group acquired The Chinese Bank Co.,
Ltd. in Taiwan.
In 2008, HSBC raised its stake in Techcombank to 20% for a total consideration of VND1,272 billion
(approximately $79.5 billion). In the same year, HSBC Bank Malaysia Berhad incorporated its new
Islamic banking subsidiary, HSBC Amanah Malaysia Berhad, in Malaysia. Also in the same year,
HSBC Bank China officially opened its new branch in Changsha, China. In the same year, HSBC
entered into Japan's retail banking market with the launch of HSBC Premier, its global personal
wealth management service.
During 2008, the group along with Canara Bank and Oriental Bank of Commerce, established a joint
venture company, Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited in
India. In the same year, HSBC's investment division, HSBC Financial Services Middle East acquired
a 4.99% stake in Yes Bank. Also in the same year, HSBC opened its new commercial international
banking center in Singapore to serve the small and medium-sized enterprises (SMEs). In the same
year, HSBC increased its stake in Aviva Group to 9.69%. In 2008, HSBC and Global Payments
formed a joint venture, HSBC Merchant Services Limited to build the group's point-of-sale card
payments business. In the same year, HSBC expanded its operations to Central Asia by opening
its first branch in Astana, the capital of Kazakhstan. HSBC acquired 93.86% of Indian retail brokerage
firm IL&FS Investsmart Limited, for INR13,110 million ($296.4 million) in 2008.

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History

In 2009, HSBC through its wholly-owned subsidiary, HSBC Asia Pacific Holdings (UK) Limited
completed the acquisition of 88.89% of PT Bank Ekonomi Raharja Tbk for $607.5 million. In the
same year, HSBC sold its 49% holding in HSBC Merchant Services Limited to its partner in the
venture, Global Payments Inc., for $307.7 million. Also in the same year, HSBC raised stake in Bank
Ekonomi to over 98%. During the year, HSBC Insurance (Asia), an indirect subsidiary of the group,
formed a joint venture insurance company with the Beijing based strategic partner National Trust.
In the second quarter of 2010, SB HSBC Bank Kazakhstan JSC (HSBC), a wholly owned subsidiary
of HSBC, acquired the retail banking assets of the Royal Bank of Scotland's Kazakhstan business,
JSC SB RBS (Kazakhstan). As per the terms of the agreement, HSBC acquired RBS Kazakhstan's
personal customer loan and credit card portfolios, together with four branches, 80 ATMs and two
support offices. In the third quarter of 2010, HSBC formed a strategic alliance in energy trading with
Total Oil Trading SA (TOTSA), the trading arm of Total, to offer energy-specific OTC derivative
products to its clients.
During the same quarter, HSBC, through its wholly owned subsidiary, The Hongkong and Shanghai
Banking Corporation Limited acquired The Royal Bank of Scotland Group plc's (RBS) retail and
commercial banking businesses in India. HSBC acquired a majority stake in South Africa based
Nedbank Group Limited from Old Mutual plc. HSBC Private Equity (Asia) Ltd., the regional
private-equity arm of the group, completed its management buyout and was renamed Headland
Capital Partners Ltd., in the fourth quarter of 2010.
During the second quarter of 2011, the group closed down its retail banking operations in Russia.
In the same quarter, the groups wholly owned subsidiary, OOO HSBC Bank (RR) (HSBC Russia),
sold certain elements of its Russian retail banking business to ZAO Citibank (Citibank). In the following
quarter, the group's HSBC Insurance Services Holdings Limited sold its wholly owned subsidiary,
HSBC Insurance (UK) Limited (HIUK) to Syndicate Holding Corp.
In the third quarter of 2011, HSBC, through its wholly-owned subsidiary, HSBC Bank Canada sold
the full-service investment advisory business of HSBC Securities (Canada) Inc. to a wholly-owned
subsidiary of National Bank of Canada. In the fourth quarter of 2011, the group sold its private
banking business in Japan to Credit Suisse AG and Credit Suisse Securities (Japan) Limited.
In early 2012, HSBC Bank plc, a wholly-owned subsidiary of HSBC, sold its 73% shareholding in
HSBC (HELLAS) Mutual Funds Management SA (HSBC AEDAK), its mutual fund business in Greece,
to HSBC AEDAK. During the second quarter of 2012, HSBC Bank USA, N.A., a wholly-owned
subsidiary of HSBC, entered into a strategic relationship with PHH Mortgage Corporation (PHH
Mortgage), a subsidiary of PHH Corporation, to manage HSBC's mortgage processing and servicing
operations. In the same quarter, HSBC USA Inc., HSBC Finance and HSBC Technology and Services
(USA) Inc. sold their US card and retail services business to Capital One Financial Corporation.
In the second quarter of 2012, HSBC merged its operations in Oman with the Oman International
Bank S.A.O.G., for a total consideration of $200 million. During the fourth quarter of 2012, HSBC
announced plans to restructure its Islamic finance business and offer Islamic finance in Malaysia,
Indonesia and Saudi Arabia (through SABB) and global wholesale Islamic financing/Sukuk products

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HSBC Holdings plc

History

(from Malaysia and Saudi Arabia). In the same quarter, HSBC acquired the onshore retail and
commercial banking business of Lloyds Banking Group in the UAE for $0.1 billion.
HSBC Bank (Panama) S.A., an indirect, wholly owned subsidiary of HSBC sold its banking operations
in Costa Rica, El Salvador and Honduras to Banco Davivienda S.A., a Colombian-listed banking
group at the end of 2012.
During early 2013, HSBC entered into 10-year bancassurance agreement with AIG Europe Limited
to distribute AIG non-life insurance products to customers in Turkey, France, and other countries in
Continental Europe. In the first quarter of 2013, HSBCs indirect wholly-owned subsidiaries, HSBC
Insurance Holdings Limited and The Hongkong and Shanghai Banking Corporation Limited sold
their entire shareholdings in Ping An Insurance (Group) Company of China, Ltd., representing 15.57%
of the issued share capital of Ping An Insurance, to indirect wholly-owned subsidiaries of Charoen
Pokphand Group Company Limited.
In the same quarter, HSBC Finance Corporation (HFC) completed the sale of its personal unsecured
loan and personal homeowner loan portfolios to SpringCastle Acquisition LLC, a Delaware-based
company. HSBC Insurance (Singapore) sold its group term life insurance and group medical insurance
portfolios in Singapore to AXA Life Insurance Singapore in the second quarter of 2013.
During the same quarter, HSBC China received approval from China's central bank for direct trading
of the Renminbi (RMB) and Australian dollar (A$) in China's interbank foreign exchange market. In
the same quarter, HSBC Insurance (Asia) reached an agreement to dispose of its general insurance
business in Macau to QBE Insurance (International). In the second quarter of 2013, HSBC Insurance
(Asia-Pacific) Holdings sold its 50% less one share in Hana HSBC Life Insurance Company Limited
to Hana Financial Group Inc.
In the following quarter, the groups wholly owned Luxembourg subsidiary, HSBC Trinkaus & Burkhardt
AG sold its private banking activities and private banking-related fund business to VP Bank Group.
During the third quarter of 2013, the groups indirect wholly owned subsidiary, HSBC Retail Services
Limited, sold its consumer private label credit card portfolio to TD Financing Services, a wholly owned
subsidiary of The Toronto-Dominion Bank. In the following quarter, HSBC Latin America completed
the sale of HSBC Bank (Panama) SA to Bancolombia SA for $2.1 billion.
In the fourth quarter of 2013, HSBC disposed of its market indices and data cleansing provider,
Quantitative Techniques, to Euromoney Trading Limited. At the end of 2013, Grupo Financiero HSBC
(HSBC Mexico), an indirect subsidiary of the group, sold HSBC Fianzas to Afianzadora Aserta.
In May 2014, HSBC Bank Australia, an indirect wholly-owned subsidiary of HSBC, signed an
agreement to sell its Woolworths white label credit card portfolio in Australia to Macquarie Bank. In
the following month, HSBC Private Bank (Suisse) SA, an indirect wholly-owned subsidiary of the
group, sold a portfolio of its private banking assets in Switzerland (with assets under management
of $12.5 billion as of December 31, 2013) to LGT Bank (Switzerland) Ltd, a wholly-owned subsidiary
of the LGT Group Foundation.

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HSBC Holdings plc

History

During June 2014, HSBC, the UK Export Finance (UKEF) and a leading Chinese company signed
a Memorandum of Understanding to co-operate together towards finding a workable structure for
the purposes of funding future capital equipment financing in Renminbi. Also in June 2014, HSBC
Life (UK) Limited, an indirect wholly-owned subsidiary of the group, entered into an agreement to
sell its UK pensions business to ReAssure Limited, a wholly-owned subsidiary of Admin Re Group,
part of the Swiss Re Group.
In October 2014, HSBC Bank Middle East, an indirect wholly-owned subsidiary of HSBC, sold its
banking business in Pakistan to Meezan Bank through a scheme of amalgamation under the Pakistan
Banking Companies Ordinance, 1962. In the following month, the group completed the sale of 100%
of the share capital of SB JSC HSBC Bank Kazakhstan to JSC Halyk Bank for $176 million in cash.
In August 2015, HSBC entered into an agreement to sell its entire business in Brazil to Bradesco
for a consideration of $5.2 billion.

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HSBC Holdings plc

Key Employees

KEY EMPLOYEES
Name

Job Title

Board

Stuart Gulliver

Group Chief Executive

Executive Board

7619000 GBP

Iain Mackay

Group Finance Director

Executive Board

4080000 GBP

Marc Moses

Executive Director and Group Chief Executive Board

Risk Officer

4239000 GBP

Douglas Flint

Group Chairman

Executive Board

2532000 GBP

Simon Robertson

Deputy Chairman

Executive Board

266000 GBP

Phillip Ameen

Independent Non Executive Director Non Executive Board

Kathleen Casey

Independent Non Executive Director Non Executive Board

141000 GBP

Safra Catz

Independent Non Executive Director Non Executive Board

99000 GBP

Laura Cha

Independent Non Executive Director Non Executive Board

219000 GBP

Lord Evans of Weardale

Independent Non Executive Director Non Executive Board

181000 GBP

Joachim Faber

Independent Non Executive Director Non Executive Board

155000 GBP

Rona Fairhead

Independent Non Executive Director Non Executive Board

513000 GBP

Sam Laidlaw

Independent Non Executive Director Non Executive Board

140000 GBP

Irene Lee

Independent Non Executive Director Non Executive Board

John Lipsky

Independent Non Executive Director Non Executive Board

195000 GBP

Rachel Lomax

Independent Non Executive Director Non Executive Board

226000 GBP

Heidi Miller

Independent Non Executive Director Non Executive Board

52000 GBP

Jonathan Symonds

Independent Non Executive Director Non Executive Board

368000 GBP

Ben Mathews

Group Company Secretary

Samir Assaf

Group Managing Director and Chief Senior Management

Executive, Global Banking and
Markets

Peter Boyles

Group Managing Director and Chief Senior Management

Executive, Global Private Banking

Simon Cooper

Group Managing Director and Chief Senior Management

Executive, Global Commercial
Banking

John Flint

Group Managing Director and Chief Senior Management

Executive, Retail Banking and
Wealth Management

Pam Kaur

Group Managing Director and Group Senior Management

Head, Internal Audit

Alan Keir

Chief Executive, HSBC Bank plc

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Compensation

Senior Management

Senior Management

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HSBC Holdings plc

Key Employees

Name

Job Title

Stuart Levey

Group Managing Director and Chief Senior Management

Legal Officer

Andy Maguire

Group Chief Operating Officer

Senior Management

Peter Wong

Deputy Chairman and Chief

Executive, The Hongkong and
Shanghai Banking Corporation
Limited

Senior Management

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Board

Compensation

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HSBC Holdings plc

Key Employee Biographies

KEY EMPLOYEE BIOGRAPHIES

Stuart Gulliver
Board: Executive Board
Job Title: Group Chief Executive
Since: 2011
Age: 55
Mr. Gulliver has been the Group Chief Executive of HSBC Holdings plc (HSBC) since 2011. He has
also been the Chairman of The Hongkong and Shanghai Banking Corporation Limited since 2011.
Mr. Gulliver joined HSBC in 1980 and held a number of key roles in the group's operations worldwide,
including postings in London, Hong Kong, Tokyo, Kuala Lumpur and the UAE. Before his appointment
as the Group Chief Executive of HSBC, he was the Chairman of Europe, the Middle East and Global
Businesses of HSBC. Mr. Gulliver was appointed as the Chief Executive of Global Banking and
Markets and HSBC Global Asset Management in 2006. He has also served as the Deputy Chairman
of Trinkaus & Burkhardt AG, Chairman of HSBC Private Banking Holdings (Suisse) SA and on the
Boards of HSBC USA Inc., HSBC Bank USA, N.A., HSBC Bank plc and HSBC Bank Middle East
Limited. Mr. Gulliver holds an MA degree from Oxford University.

Iain Mackay
Board: Executive Board
Job Title: Group Finance Director
Since: 2010
Age: 53
Mr. Mackay has been the Group Finance Director of HSBC since 2010. He joined HSBC in 2007.
Mr. Mackay initially served as the Chief Financial Officer of HSBC North America Holdings Inc. From
2009 until his appointment as the Group Finance Director, he was the Chief Financial Officer,
Asia-Pacific, of HSBC. Before joining HSBC, he worked at General Electric (GE) in the US from
1996 to 2007. Mr. Mackay joined GE as the Controller of the Global Consumer Finance unit, which
specialized in providing credit cards and personal loans. He then became the Chief Financial Officer
of GE Consumer Finance-Americas, then the Chief Financial Officer of GE Healthcare-Global
Diagnostic Imaging. Mr. Mackay holds an MA in Business Studies and Accounting from Aberdeen
University in Scotland.

Marc Moses
Board: Executive Board
Job Title: Executive Director and Group Chief Risk Officer
Since: 2014

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Key Employee Biographies

Age: 57
Mr. Moses has been an Executive Director at HSBC since 2014 and the Group Chief Risk Officer
of HSBC since 2010. He joined HSBC in 2005 as the Chief Financial and Risk Officer with global
responsibility for leading and managing the finance and risk functions of Global Banking and Markets.
In 2008, Mr. Moses was also appointed the Chief of Staff, responsible for infrastructure in global
banking and markets.

Douglas Flint
Board: Executive Board
Job Title: Group Chairman
Since: 2010
Age: 59
Mr. Flint has been the Group Chairman of HSBC since 2010. He began his career at Peat Marwick
Mitchell & Co (now KPMG) where he trained as a Chartered Accountant. Mr. Flint was appointed a
Partner at the firm in 1988. He joined the HSBC Group as the Group Finance Director in 1995 and
was appointed to the Board in 1995. In 2010, Mr. Flints responsibilities were broadened to that of
Chief Financial Officer, and Executive Director, Risk and Regulation. He was educated at Glasgow
University where he gained a B.Acc (Hons) degree. Mr. Flint also completed the PMD course at
Harvard Business School in 1983. He is a Member of the Institute of Chartered Accountants of
Scotland and the Association of Corporate Treasurers. Mr. Flint is a Fellow at The Chartered Institute
of Management Accountants.

Simon Robertson
Board: Executive Board
Job Title: Deputy Chairman
Since: 2010
Age: 73
Mr. Robertson has been the Deputy Chairman of HSBC since 2010. He has been an Independent
Non Executive Director at HSBC since 2006. Mr. Robertson has international experience, including
working in France, Germany, the UK and the US. He served as the Non Executive Chairman of
Rolls-Royce Holdings plc from 2011 to 2013. Mr. Robertson was the Chairman of Rolls-Royce Group
plc, formerly the holding company of the Rolls-Royce group of companies, until 2011.

Phillip Ameen
Board: Non Executive Board
Job Title: Independent Non Executive Director
Since: 2015
Age: 66

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Key Employee Biographies

Mr. Ameen has been an Independent Non Executive Director at HSBC since 2015. He also serves
as a Non-Executive Director at HSBC North America Holdings Inc., HSBC Bank USA, HSBC Finance
Corporation, HSBC USA Inc., Skyonic Corporation and R3 Fusion, Inc. Mr. Ameen previously served
as the Vice President, Comptroller and Principal Accounting Officer of General Electric Corp and a
Technical Audit Partner at Peat Marwick Mitchell & Co. (now KPMG).

Kathleen Casey
Board: Non Executive Board
Job Title: Independent Non Executive Director
Since: 2014
Age: 48
Ms. Casey has been an Independent Non Executive Director at HSBC since 2014. She is a former
Commissioner of the US Securities and Exchange Commission. Ms. Casey serves as the Chairman
of the Alternative Investment Management Association, Senior Advisor of Patomak Global Partners,
a Member of the Board of Trustees of Pennsylvania State University, the Trust Fund Board of the
Library of Congress and the Advisory Council of the Public Company Accounting Oversight Board.
She also served as the Staff Director and Counsel of the US Senate Committee on Banking, Housing,
and Urban Affairs and Legislative Director and Chief of Staff for a US Senator.

Safra Catz
Board: Non Executive Board
Job Title: Independent Non Executive Director
Since: 2008
Age: 53
Ms. Catz has been an Independent Non Executive Director at HSBC since 2008. She is the President
and Chief Financial Officer of Oracle Corporation. Ms. Catz joined Oracle in 1999 and was appointed
to the Board of Directors in 2001. She was formerly the Managing Director of Donaldson, Lufkin &
Jenrette.

Laura Cha
Board: Non Executive Board
Job Title: Independent Non Executive Director
Since: 2011
Age: 65
Ms. Cha has been an Independent Non Executive Director at HSBC since 2011. She has regulatory
and policymaking experience in the finance and securities sector in Hong Kong and mainland China.
Ms. Cha was formerly the Vice Chairman of the China Securities Regulatory Commission. She was
a Non Executive Director at the Bank of Communications Co., Ltd., Baoshan Iron and Steel Co.

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Key Employee Biographies

Limited, Johnson Electric Holdings Limited, and China Telecom Corporation Limited; and was the
Chairman of the University Grants Committee in Hong Kong from 2007 to 2011.

Lord Evans of Weardale

Board: Non Executive Board
Job Title: Independent Non Executive Director
Since: 2013
Age: 57
Lord Evans has been an Independent Non Executive Director at HSBC since 2013. He is a
Non-Executive Director at the UK National Crime Agency and a Senior Adviser of Accenture plc.
Lord Evans is a Member of the advisory board of Darktrace Limited and of Facewatch Limited. He
held various positions in the UK Security Service over a 30 year career with responsibility for the
oversight of the Joint Terrorist Analysis Centre and the Centre for the Protection of National
Infrastructure and attended the National Security Council.

Joachim Faber
Board: Non Executive Board
Job Title: Independent Non Executive Director
Since: 2012
Age: 64
Mr. Faber has been an Independent Non Executive Director at HSBC since 2012. He was formerly
the Chief Executive Officer of Allianz Global Investors AG and a Member of the Management Board
of Allianz SE until 2011. He has 14 years experience at Citigroup Inc, holding positions in Trading
and Project Finance and as the Head of Capital Markets for Europe, North America and Japan. Mr.
Faber has a Doctorate from the German University of Administrative Sciences in Speyer.

Rona Fairhead
Board: Non Executive Board
Job Title: Independent Non Executive Director
Since: 2004
Age: 53
Ms. Fairhead has been an Independent Non Executive Director at HSBC since 2004. She is currently
the Chairman of HSBC North America Holdings Inc.; a Non Executive Director at PepsiCo, Inc.
Formerly, Ms. Fairhead was the Executive Vice President, Strategy and Group Control of Imperial
Chemical Industries plc; Finance Director of Pearson plc; and the Chairman and a Director of
Interactive Data Corporation. She served as the Chief Executive Officer and a Director at Financial
Times Group Limited.

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Key Employee Biographies

Sam Laidlaw
Board: Non Executive Board
Job Title: Independent Non Executive Director
Since: 2008
Age: 59
Mr. Laidlaw has been an Independent Non Executive Director at HSBC since 2008. He served as
the Chief Executive Officer of Centrica plc and the Lead Non Executive Board Member of the UK
Department for Transport. His previous roles also include the Executive Vice President of Chevron
Corporation; a Non Executive Director at Hanson PLC; Chief Executive Officer of Enterprise Oil plc;
and President and Chief Operating Officer of Amerada Hess Corporation. Mr. Laidlaw is a qualified
Solicitor and has a Master's degree in Business Administration from INSEAD.

Irene Lee
Board: Non Executive Board
Job Title: Independent Non Executive Director
Since: 2015
Ms. Lee has been an Independent Non Executive Director at HSBC since 2015. She is currently a
Non-Executive Director at The Hongkong and Shanghai Banking Corporation Limited and Hang
Seng Bank Limited; the Executive Chairman of Hysan Development Company Limited and a
Non-Executive Director at Cathay Pacific Airways Limited, China Light & Power Holdings Limited
and Noble Group Limited. Ms. Lee served as a Member of the Advisory Council of JP Morgan
Australia from 2005 to 2013 and has previously held Non-Executive Director roles for companies
including QBE Insurance Group Limited, Keybridge Capital Limited and ING Bank (Australia) Limited.

John Lipsky
Board: Non Executive Board
Job Title: Independent Non Executive Director
Since: 2012
Age: 68
Mr. Lipsky has been an Independent Non Executive Director at HSBC since 2012. He served at the
International Monetary Fund as the First Deputy Managing Director, Acting Managing Director from
2011, and as the Special Advisor from 2011, until retirement in the fourth quarter of 2011. Previously,
Mr. Lipsky was the Vice Chairman of the J P Morgan Investment Bank; a Director at the American
Council on Germany and the Japan Society; and a Trustee at the Economic Club of New York. He
has a PhD from Stanford University.

Rachel Lomax

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Key Employee Biographies

Board: Non Executive Board

Job Title: Independent Non Executive Director
Since: 2008
Age: 69
Ms. Lomax has been an Independent Non Executive Director at HSBC since 2008. Her previous
appointments include Deputy Governor, Monetary Stability, at the Bank of England (BoE) and a
Member of the BoEs Monetary Policy Committee; Permanent Secretary at the UK Government
Departments for Transport and Work and Pensions and the Welsh Office; and Vice President and
Chief of Staff to the President of the World Bank. Ms. Lomax is the Chairman of the International
Regulatory Strategy Group, a Director at TheCityUK and the President of the Institute of Fiscal
Studies.

Heidi Miller
Board: Non Executive Board
Job Title: Independent Non Executive Director
Since: 2014
Age: 61
Ms. Miller has been an Independent Non Executive Director at HSBC since 2014. She is currently
is a Non-Executive Director at First Data Corporation and General Mills Inc. and a Trustee of the
International Financial Reporting Standards Foundation. Ms. Miller previously served as a
Non-Executive Director at Merck & Co. Inc. and Progressive Corp. She was an Executive Vice
President and Chief Executive Officer, Treasury and Securities Services at JPMorgan Chase & Co.;
Executive Vice President and Chief Financial Officer of Bank One Corporation; Senior Executive
Vice President of Priceline.com Inc.; and Executive Vice President and Chief Financial Officer of
Citigroup Inc.

Jonathan Symonds
Board: Non Executive Board
Job Title: Independent Non Executive Director
Since: 2014
Age: 55
Mr. Symonds has been an Independent Non Executive Director at HSBC since 2014. He is the
Chairman of HSBC Bank plc, HSBCs European subsidiary; Chairman of Innocoll AG; and a
Non-Executive Director at Genomics England Limited and Proteus Digital Health Inc. Mr. Symonds
served as the Chief Financial Officer of Novartis AG from 2009 to 2013. Before joining Novartis, he
was a Partner and Managing Director of Goldman Sachs (2007-09); Chief Financial Officer of
AstraZeneca plc (1997-2007); and a Partner at KPMG (1992-97).

Ben Mathews

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Key Employee Biographies

Board: Senior Management

Job Title: Group Company Secretary
Since: 2013
Age: 48
Mr. Mathews has been the Group Company Secretary of HSBC since 2013. He joined the group
from Rio Tinto where he served as the Company Secretary from 2007 to 2013. Before that, Mr
Mathews spent more than five years with BG Group plc, the leading natural gas major. He qualified
as a Chartered Company Secretary with PricewaterhouseCoopers in London. Mr. Mathews graduated
with honours in European Studies and French.

Samir Assaf
Board: Senior Management
Job Title: Group Managing Director and Chief Executive, Global Banking and Markets
Since: 2011
Age: 54
Mr. Assaf has been a Group Managing Director and the Chief Executive of Global Banking and
Markets of HSBC since 2011. He has worked at HSBC and CCF (which HSBC acquired in 2000)
for 16 years. At HSBC, he started as the Head of Fixed Income Trading, Europe, and Head of Global
Markets, HSBC France. In 2006, Mr. Assaf was promoted to the Head of Global Markets for Europe,
the Middle East and Africa. He became a Director at HSBC Bank Egypt SAE and a Director at HSBC
Trinkaus & Burkhardt AG in 2011. Mr. Assaf holds a BSc degree in Finance from L'Institut d'Etudes
Politiques in Paris and a MBA in Economics from La Sorbonne University.

Peter Boyles
Board: Senior Management
Job Title: Group Managing Director and Chief Executive, Global Private Banking
Since: 2013
Age: 59
Mr. Boyles has been a Group Managing Director at HSBC since 2013. He also serves as the Chief
Executive of Global Private Banking at HSBC. He joined the group in 1975 and worked in Asia, the
Middle East and Europe. Mr. Boyles is a Director at HSBC Global Asset Management Limited. He
was named a Group General Manager in 2006. Mr. Boyles was the Chief Executive of HSBC France
from 2007 to 2010 and of Continental Europe from 2010 to 2012. Mr Boyles was also a Director at
HSBC Bank plc and HSBC Bank Malta plc.

Simon Cooper
Board: Senior Management
Job Title: Group Managing Director and Chief Executive, Global Commercial Banking

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Key Employee Biographies

Since: 2013
Age: 47
Mr. Cooper has been a Group Managing Director and the Chief Executive of Global Commercial
Banking at HSBC since 2013. He joined HSBC in 1989 and worked in the UK, Asia and the Middle
East. Mr. Cooper is a Director at HSBC Bank plc. Previously, he was the Chief Executive of HSBC
Korea from 2006 to 2009 and the Head of Corporate and Investment Banking at HSBC Singapore
from 2004 to 2006. Mr. Cooper was appointed a Group General Manager in 2008 and the Deputy
Chairman and Chief Executive of HSBC Middle East and North Africa in 2009. He was also the
Chairman of HSBC Bank Egypt SAE until 2013.

John Flint
Board: Senior Management
Job Title: Group Managing Director and Chief Executive, Retail Banking and Wealth Management
Since: 2013
Age: 46
Mr. Flint has been a Group Managing Director and the Chief Executive of Retail Banking and Wealth
Management at HSBC since 2013. He has also been a Director at HSBC Private Banking Holdings
(Suisse) SA since 2013. Mr. Flint joined the HSBC Group in 1989 and served as the Chief of Staff
to the Group Chief Executive and Group Head of Strategy and Planning; Chief Executive Officer,
HSBC Global Asset Management; Group Treasurer; and Deputy Head of Global Markets. He holds
a BA (Honors) in Economics and is a Member of the Institute of International Finance (IIF) Market
Monitoring Group.

Pam Kaur
Board: Senior Management
Job Title: Group Managing Director and Group Head, Internal Audit
Since: 2013
Age: 51
Ms. Kaur has been a Group Managing Director and the Group Head of Internal Audit at HSBC since
2013. Before joining HSBC, she was the Global Head of Group Audit at Deutsche Bank. Her other
previous roles include the Chief Financial Officer and Chief Operating Officer, Restructuring and
Risk Division at The Royal Bank of Scotland and Group Head of Compliance and Anti-Money
Laundering at Lloyds TSB. Between 1990 and 2005, Ms. Kaur worked at Citigroup in a variety of
roles including as the Group Director of Compliance, Global Consumer Group, and the Head of
Business Risk and Control, Global Derivatives. She has an MBA in Finance, and a B.Com (Hons)
from Punjab University in India.

Alan Keir

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Key Employee Biographies

Board: Senior Management

Job Title: Chief Executive, HSBC Bank plc
Since: 2013
Age: 56
Mr. Keir has been a Group Managing Director at HSBC since 2011 and Chief Executive of HSBC
Bank plc since 2013. He began his career at HSBC in the International Division of Midland Bank in
1981. Mr. Keir completed the graduate training program and took up his first managerial position in
charge of graduate recruitment and development for the International Division. In 2008, he was
appointed the Group General Manager, Commercial Banking, Europe and also the Global Co-Head,
Global Commercial Banking. Mr. Keir has also served on the Board of HSBC Turkey AS. He took a
BSc in Economics and Politics at the University of Bradford and is an Associate of the Chartered
Institute of Bankers.

Stuart Levey
Board: Senior Management
Job Title: Group Managing Director and Chief Legal Officer
Since: 2012
Age: 51
Mr. Levey has been a Group Managing Director and the Chief Legal Officer of HSBC since 2012.
He was the first Under Secretary for Terrorism and Financial Intelligence in the US Department of
the Treasury, 2004 to 2011. Mr. Levey joined the Justice Department in 2001 after 11 years in private
practice at the Washington law firm Miller, Cassidy, Larroca & Lewin LLP (which merged into Baker
Botts LLP), where he had a litigation practice. He graduated from Harvard College summa cum
laude in 1986 and from Harvard Law School magna cum laude in 1989.

Andy Maguire
Board: Senior Management
Job Title: Group Chief Operating Officer
Since: 2012
Mr. Maguire has been the Group Chief Operating Officer of HSBC since 2015. He joined the group
in 2014. Prior to this, Mr. Maguire served at Lloyds Bank and Boston Consulting Group. He holds
a double Honours degree in Computer Engineering and Mathematics from Trinity College, Dublin.

Peter Wong
Board: Senior Management
Job Title: Deputy Chairman and Chief Executive, The Hongkong and Shanghai Banking Corporation
Limited
Age: 63

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Key Employee Biographies

Mr. Wong has been a Group Managing Director at HSBC since 2010. He also serves as the Deputy
Chairman and the Chief Executive of The Hongkong and Shanghai Banking Corporation Limited.
Mr. Wong Joined HSBC in 2005. He is the Chairman of HSBC Bank (China) Company Limited and
HSBC Bank Malaysia Berhad. Mr. Wong is a Non Executive Director at Hang Seng Bank Limited
and Bank of Communications Co. Ltd. His previous roles include Vice Chairman of HSBC Bank
(Vietnam) Ltd; Director at HSBC Bank Australia Limited; and a Director at Ping An Insurance (Group)
Company of China, Ltd.

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Major Products and Services

MAJOR PRODUCTS AND SERVICES

HSBC Holdings plc (HSBC or the group) is a banking and financial services organization, which
provides retail banking, commercial banking, private banking and wealth management services to
its clients.
The group's key products and services include the following:
Retail banking and wealth management:
Current account
Savings accounts
Loans
Home finance
Cards
Payments
Insurance
International payment services
Investment products
Global asset management services
Financial planning services
Global banking and markets:
Acquisition finance
Foreign exchange
Factoring
Derivatives
Global transaction banking
Corporate and institutional banking services
Private equity
Global research
Credit and rates
Money markets
Securities services
Investment activities
Commercial banking:
Asset finance
Business loans
Business credit cards
Commercial mortgages
Cash management

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Major Products and Services

Current account
Foreign exchange
Investment banking
Insurance
Trade services
Leasing
Retirement and pensions
Wealth management
Global private banking:
Investment services
Global wealth solutions
Specialist advisory services

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HSBC Holdings plc

Revenue Analysis

REVENUE ANALYSIS
HSBC Holdings plc
The group recorded revenues of $74,593 million during the financial year ended December 2014
(FY2014), a decrease of 4.8% compared to FY2013. In FY2014, the UK, the group's largest
geographic market**, accounted for 23.5% of the total revenues.
HSBC Holdings plc generates revenues through five business divisions: Asia (36.9% of the total
revenues* in FY2014), Europe (33.6%), Latin America (12.9%), North America (12.7%), and MENA
(4%).
Revenues by Division*
In FY2014, the Asia segment recorded revenues of $23,677 million, a decrease of 3.1% compared
to FY2013.
The Europe segment recorded revenues of $21,571 million in FY2014, an increase of 2.9% over
FY2013.
The Latin America segment recorded revenues of $8,272 million in FY2014, a decrease of 21.7%
compared to FY2013.
The North America segment recorded revenues of $8,152 million in FY2014, a decrease of 7.4%
compared to FY2013.
The MENA*** segment recorded revenues of $2,548 million in FY2014, an increase of 1.8% over
FY2013.
Revenues by Geography****
The UK, HSBC Holdings plc's largest geographical market, accounted for 23.5% of the total revenues
in FY2014. Revenues from the UK reached $14,392 million in FY2014, an increase of 7.8% over
FY2013.
Hong Kong accounted for 20.7% of the total revenues in FY2014. Revenues from Hong Kong reached
$12,656 million in FY2014, an increase of 5.2% over FY2013.
The US accounted for 9.4% of the total revenues in FY2014. Revenues from the US reached $5,736
million in FY2014, a decrease of 6.3% compared to FY2013.

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Revenue Analysis

Brazil accounted for 7.9% of the total revenues in FY2014. Revenues from Brazil reached $4,817
million in FY2014, a decrease of 10.2% compared to FY2013.
France accounted for 4.1% of the total revenues in FY2014. Revenues from France reached $2,538
million in FY2014, a decrease of 18.4% compared to FY2013.
The other countries accounted for 34.5% of the total revenues in FY2014. Revenues from other
countries reached $21,109 million in FY2014, a decrease of 14.4% compared to FY2013.

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SWOT Analysis

SWOT ANALYSIS
HSBC Holdings plc (HSBC or the group) is one of the largest banking and financial services
organizations in the world, with a market capitalization of $182 billion at December 31, 2014. HSBC
operates through long-established businesses and has an international network of over 6,100 offices
in 73 countries and territories in five geographical regions: Europe; Asia; Middle East and North
Africa (MENA); North America; and Latin America. The groups global scale and deep international
network help it capture benefits from global business trends. However, weak economic conditions
and increasing competition could reduce the groups revenues and profitability.
Strengths

Weaknesses

Global scale and deep international network

help capture global trend benefits
Diversified revenue mix reducing volatility
in revenue
Strong capital position and adequate
liquidity

Inability to contain operating expenses

impacting profits
Weak regulatory compliance impacting
financial performance

Opportunities

Threats

Disposals and closures of non-strategic

businesses likely to improve revenue
visibility
Investments in emerging markets likely to
increase growth rate and profitability
Positive outlook of the European retail
lending market

Regulatory changes could increase

compliance spending and alter business
plans
Competition for retail deposits likely to
increase funding costs
Sovereign debt, economic and banking
problems in Europe

Strengths

Global scale and deep international network help capture global trend benefits
HSBC is one of the largest banking and financial services organizations in the world, with a market
capitalization of $182 billion at December 31, 2014. HSBC operates through long-established
businesses and has an international network of over 6,100 offices in 73 countries and territories in
five geographical regions: Europe; Asia; the Middle East and North Africa (MENA); North America;
and Latin America. The groups global scale and deep international network help it capture benefits
from global business trends.
Diversified revenue mix reducing volatility in revenue

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SWOT Analysis

HSBC provides a range of financial services, including retail banking, commercial banking, private
banking and wealth management services. The group generates revenue through five product lines:
retail banking and wealth management (RBWM) accounted for 36.5% of the total revenues in FY2014,
followed by global banking and markets (GB&M) (26.4%), commercial banking (CMB) (24.2%),
global private banking (GPB) (3.5%), and other (9.4%). Similarly, the groups revenue mix in terms
of interest income and non-interest income has also been developing favorably. Diversified revenue
mix is helping the group in reducing volatility in revenue development.
Strong capital position and adequate liquidity
HSBCs capital and liquidity positions have developed favorably over the last few years. The groups
common equity tier 1 ratio*, an indicator of capital strength, improved from 10.9% at end FY2013 to
11.1% at end FY2014. Also its total capital ratio** improved from 14.9% at end FY2013 to 15.6% at
end FY2014. Moreover, the liquidity position of the group strengthened over the period, as it continued
to enjoy strong inflows of customer deposits and maintained good access to wholesale markets.
The ratio of customer advances to customer accounts declined to 72.2% at end FY2014 from 75.4%
at end FY2010, indicating adequate liquidity. Strong capital and liquidity positions provide stability
to the groups operations in volatile times and also provide scope for further business expansion.
*Common equity tier 1 ratio (end point) as per CRD IV legislation
**Total capital ratio (transitional) as per CRD IV legislation

Weaknesses

Inability to contain operating expenses impacting profits

The groups operating expenses management show deterioration (as indicated by efficiency ratio)
since FY2010. For banks, efficiency ratio is generally calculated as the ratio of expenses to revenue
(expenses/revenue). Lower efficiency ratio is better as that indicates higher operating profits. During
FY2010-14, HSBCs efficiency ratio increased unfavorably from 55.2% to 67.3%. Unfavorable trend
in efficiency ratio is attributable to increased operating expenses.The groups total operating expenses
has increased from $37,688 million in FY2010 to $41,249 million in FY2014. Unfavorable trend in
cost efficiency is limiting the groups profit expansion.
Weak regulatory compliance impacting financial performance
HSBC is subjected to several fines and penalties in the recent years. The groups inadequate
compliance with anti-money laundering and sanctions laws has led to heavy fines and penalties.
For instance, HSBC paid out $1.9 billion in FY2012 related to this. In addition, in FY2014, FY2013
and FY2012, the group paid out $1.3 billion, $1.2 billion and $2.3 billion respectively, due to increase
in provisions relating to the UK customer redress programs. During FY2014, the group incurred $1.8

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SWOT Analysis

billion of regulatory fines, provisions and penalties. The groups weak regulatory compliance is
impacting its financial performance.

Opportunities

Disposals and closures of non-strategic businesses likely to improve revenue visibility

The group made significant disposals and closures of non-strategic businesses in the recent years.
For instance, HSBC simplified its structure in 2012, bringing the total number of announced disposals
and closures of non-strategic businesses or non-core investments to 40 since the beginning of 2012,
including three in 2014. These are the few significant disposals that took place during 2012-14. In
May 2012, HSBC USA Inc., HSBC Finance and HSBC Technology and Services (USA) Inc. sold
their US card and retail services business to Capital One Financial Corporation. HSBC Bank (Panama)
S.A. sold its banking operations in Costa Rica, El Salvador and Honduras to Banco Davivienda S.A.,
a Colombian-listed banking group, in December 2012.
During February 2013, HSBC Insurance Holdings Limited and The Hongkong and Shanghai Banking
Corporation Limited sold their entire shareholdings in Ping An Insurance (Group) Company of China,
Ltd. to indirect wholly-owned subsidiaries of Charoen Pokphand Group Company Limited. In the
following month, HSBC Finance Corporation sold its personal unsecured loan and personal
homeowner loan portfolios to SpringCastle Acquisition. HSBC Insurance (Singapore) sold its group
term life insurance and group medical insurance portfolios in Singapore to AXA Life Insurance
Singapore in April 2013. At the end of the same month, HSBC Insurance (Asia-Pacific) Holdings
sold its 50% less one share in Hana HSBC Life Insurance Company Limited to Hana Financial Group
Inc. In August 2013, HSBC Retail Services Limited, sold its consumer private label credit card portfolio
to TD Financing Services. Two months later, HSBC Latin America completed the sale of HSBC Bank
(Panama) SA to Bancolombia SA. In October 2013, HSBC disposed of its market indices and data
cleansing provider, Quantitative Techniques, to Euromoney Trading Limited. The groups significant
disposals in 2014 include: private banking assets in Switzerland; UK pensions business; banking
business in Pakistan; and SB JSC HSBC Bank Kazakhstan. In August 2015, HSBC entered into an
agreement to sell its entire business in Brazil to Bradesco for a consideration of $5.2 billion. Disposals
and closures of non-strategic businesses are likely to drive revenue visibility for HSBC.
Investments in emerging markets likely to increase growth rate and profitability
HSBC has been incrementally increasing investments in emerging markets such as Asia-Pacific,
and Middle East. As the worlds fastest growing region, Asia is expected to drive incremental growth
in the global recovery. After the 2008-09 financial crisis, the economic condition in the Middle East
has begun to recover. According to the estimates of the World Bank, the real GDP of Middle East
and North Africa region is expected to expand 2.2% and 3.7% in 2015 and 2016 respectively.
Accelerated growth in these markets could provide profitable growth opportunities for the group.
Positive outlook of the European retail lending market

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SWOT Analysis

The European retail lending market is growing at a steady pace. According to MarketLine, the
European retail lending market grew by 2.4% in 2014 to reach a value of $9,418.9 billion. In 2019,
the European retail lending market is forecast to have a value of $11,237.9 billion, an increase of
19.3% since 2014. Mortgage lending is the largest segment of the retail lending market in Europe,
accounting for 84.2% of the market's total value. The UK accounts for 21.1% of the European retail
lending market value. HSBC is one of the largest banking and financial services organizations in
the world, with a market capitalization of $182 billion as at December 31, 2014. With the strong
market position, HSBC is well positioned to harness the growing potential of the European retail
lending market.

Threats

Regulatory changes could increase compliance spending and alter business plans
There are potential strategic and structural risks to the organization, nature and scope of the groups
business activities and opportunities posed by many of the proposals for regulatory reform being
debated both internationally and domestically in response to the 2008-09 financial crisis. The Basel
Committee on Banking Supervision issued a comprehensive reform package to address the lessons
of the crisis which includes proposals on strengthening global capital and liquidity regulations and
the resolution of systemically significant cross border banks such as HSBC. During FY2012, the UK
government increased the rate of levy applied on the global balance sheets of the UK domiciled
banks . The costs to HSBC of the revised levy for FY2014, FY2013 and FY2012 were $1,100 million,
$904 million and $571 million respectively. To comply with the regulatory complexity, the group had
to double its compliance staff to 7,000 worldwide, and it is making its way through billions in costs
associated with alleged misconduct, such as the mis-selling of payment protection insurance and
the rigging of foreign exchange rates. While misconduct costs, which totaled $11.2 billion in 2011-14,
may have peaked, these costs could continue to be substantial in the years to come as HSBC has
more than 250,000 employees and operates in more than 70 countries. Since, HSBC is subject to
several regulations across different geographies changes in regulations and compliance could have
an impact on its strategy, financial performance and health as well.
Competition for retail deposits likely to increase funding costs
The financial crisis reshaped the banking landscape globally and those institutions which have
emerged the strongest have reinforced both the importance of a core retail and commercial deposit
funding base and strong capitalization. As a consequence, financial firms sought to reduce the
proportion of their balance sheets funded in the wholesale markets. As a result, competitions for
retail deposits and tighter balance sheet control have resulted in re-pricing of loans and advances.
Competition for retail deposits is expected to intensify further as conditions in the global wholesale
markets are still not favorable. Consequently, funding costs could go up and thus decrease net
interest margin.
Sovereign debt, economic and banking problems in Europe

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SWOT Analysis

Countries in the European continent have been facing sovereign debt and economic problems.
Countries such as Portugal, Ireland, Italy and Greece have faced acute sovereign debt crisis in the
recent times. In addition, banks in Europe have also been facing problems related to asset quality
and debt refinancing. These problems in turn have impacted corporate borrowers and consumers
in this region. Since Europe is the largest contributor to the groups revenue and profits, continued
sovereign debt and, economic and banking problems could impact the groups revenue and profit
expansion in the foreseeable future.

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Top Competitors

TOP COMPETITORS

The following companies are the major competitors of HSBC Holdings plc

Bank of America Corporation

Barclays PLC
BNP Paribas Group
Citigroup Inc.
Commonwealth Bank of Australia
Credit Suisse Group
ING Groep N.V.
JP Morgan Chase & Co
Rabobank Group
Aberdeen Asset Management PLC
Banco Santander Central Hispano S.A.
Standard Chartered PLC
Lloyds TSB Group plc
The Royal Bank of Scotland Group plc
Royal Bank of Canada
Svenska Handelsbanken AB

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Company View

COMPANY VIEW
A statement by D.J. Flint, the Chairman of HSBC Holdings plc is given below. The statement has
been taken from the groups 2014 annual report.
As economic activity in much of the world failed to reach the levels required to rebuild sustainable
consumer confidence and prompt renewed investment expenditure, governments most impacted
expanded their stimulus measures and the major central banks maintained interest rates at their
unprecedented low levels. Concerns over deflationary trends, particularly in the eurozone, grew.
Although China delivered growth which comfortably surpassed all other major economies, expectations
of slower growth in the future weighed heavily on market sentiment and contributed to significant
commodity price falls and further curtailment of global investment spending.
Unsurprisingly in this environment, revenue growth opportunities were strongest in our Asian
businesses, with expansion in lending and debt capital financing. Cost progression continued globally
in large part to implement regulatory change and enhance risk controls, notably around financial
system integrity and conduct. Streamlining initiatives could only partly offset this cost expansion.
Further customer redress costs and regulatory penalties around past failings reinforced the Boards
continuing commitment to prioritise whatever further investment in systems and controls is necessary
to mitigate future repetition.
It is clear now that societal, regulatory and public policy expectations of our industry are changing
its long-term cost structure. Technological advancements around data analytics, including big data,
are providing much more sophisticated tools to enhance our capabilities to protect the financial
system from bad actors. Also, as more and more customers choose to transact online and through
mobile devices, we are making the necessary investment to protect ourselves and our customers
from cyber threats. Building the required analytical capabilities entails considerable investment in
systems and in maintaining customer data which is accurate and up to date. Reconfiguring customer
and transactional data to the digital age is no small endeavour given legacy systems and a multiplicity
of historical data standards globally. The benefits, however, of enhanced customer due diligence
capabilities and greater systems security essentially go to the core of our systemic role and allow
us to be more proactive in fulfilling that role as a key gatekeeper to the financial system.
As our industry reshapes in response to public policy and regulatory directives, we now need to
demonstrate, through clarity of our business model, the value to society of our scale and diversification.
We must never forget that investors have choices where to invest and individuals have choices
where to make their careers. Thus it is essential that we can demonstrate a positive contribution to
the societies we serve in order to bolster the business friendly environment that all agree is essential
for economic growth and prosperity.
For 150 years HSBC has been following trade and investment flows to serve customers as they fulfil
their financial ambitions. In a world which has moved from being interconnected to being

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Company View

interdependent, our business model is increasingly relevant to companies of all sizes and to individuals
whose financial future is linked to economic activity in multiple countries.
This can be seen most markedly in our Commercial Banking business, which delivered a record
year buoyed by the expansion of supply chain management solutions and increasing cross-border
payment flows. Our network coverage of the countries which originate more than 85% of the worlds
payment activity drives this key element of our business model. On the investment side, throughout
our network we saw corporate flows continuing to target the higher growth emerging markets. At
the same time, growth in outward investment from mainland China accelerated as its major companies
sought diversification and access to both skill bases and markets. These trends played to HSBCs
scale and presence in the key financial centres, allowing us to support customers with debt and
equity financing solutions, offering tailored liquidity and transactional banking support and providing
risk management solutions primarily against our clients interest rate and foreign exchange exposures.
Success was evidenced by growing recognition in industry awards, the most important of which are
referred to in the Group Chief Executives Review. Finally, our Retail Banking and Wealth Management
business continued its journey to build a sustainable customer focused business model, completing
the removal of formulaic links between product sales and performance related pay of our staff, and
expanding our digital and mobile offerings.
Performance in 2014
Profit before tax of US$18.7bn on a reported basis was US$3.9bn or 17% lower than that achieved
in 2013. This primarily reflected lower business disposal and reclassification gains and the negative
effect, on both revenue and costs, of significant items including fines, settlements, UK customer
redress and associated provisions. On the adjusted basis that is one of the key metrics used to
assess current year management and business performance, profit before tax was US$22.8bn,
broadly in line with 2013 on a comparable basis.
Earnings per share were US$0.69, against US$0.84 in 2013. The Groups capital position remained
strong with the transitional common equity tier 1 ratio standing at 10.9% at the end of the year,
compared with 10.8% 12 months earlier, and our end point ratio at 11.1% compared with 10.9%.
Based on this capital strength and the Groups capital generating capabilities, the Board approved
a fourth interim dividend in respect of 2014 of US$0.20 per share, taking the total dividends in respect
of the year to US$0.50 per share (US$9.6bn, US$0.4bn higher than in respect of 2013).
Taking into account this financial performance, together with the further progress made in reshaping
the Group, responding to regulatory change and implementing Global Standards, the Board considered
executive management to have made good progress during 2014 towards strengthening HSBCs
long-term competitive position.
The Group Chief Executives Review analyses in detail the important benchmarks and highlights of
2014.
Regulatory landscape becomes clearer but still much to do

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Company View

A great deal of progress was made during 2014 to finalise the framework under which globally
systemic banks like HSBC will be required to operate when it is fully implemented. This clarity is
essential if we are to be able to position our global businesses to meet the return expectations of
those who invest in us within an acceptable risk appetite.
In particular, major progress was made in addressing the challenge of too big to fail, largely through
finalising proposals to augment existing loss absorbing capacity with bail-inable debt and through
greater definition of how resolution frameworks would operate in practice. In both cases, this involved
the critical issue of how to address cross-border implications and home and host country regulatory
responsibilities.
There is, however, still much to complete. The regulatory reform agenda for 2015 is very full with
pending public policy decisions, regulatory consultations and impact studies in areas of far reaching
influence to the structure of our industry. These include the conclusion of structural separation
deliberations in Europe, further work on so called shadow banking including identifying non-bank
systemically important institutions, addressing the resolution framework for central counterparties,
finalising the calibration of the leverage ratio, calibrating the quantum of total loss absorbing capacity
to be raised and settling the disposition of that capacity within global groups.
In addition, further work will be undertaken on utilising standardised risk weights to overcome
regulatory loss of confidence in internally modelled capital measures and a fundamental review of
the trading book is also underway within the regulatory community to look again at capital support
for this activity. These measures, which in aggregate are designed to make the industry structurally
more stable, will take the next five or so years to implement, an indication of the scale of the
transformation to be completed.
During 2014, the UK government also confirmed the permanence of the UK bank levy. This was
introduced in 2010, in part to address the burden borne by taxpayers from failures during the global
financial crisis; in 2014, the cost to HSBC of the levy was US$1.1bn, an increase of US$0.2bn over
2013. 58% of the levy we pay does not relate to our UK banking activity.
Rebuilding trust
Restoration of trust in our industry remains a significant challenge as further misdeeds are uncovered
but it is a challenge we must meet successfully. We owe this not just to society but to our staff to
ensure they can be rightly proud of the organisation to which they have committed their careers.
When commentators extrapolate instances of control failure or individual misconduct to question
the culture of the firm it strikes painfully at the heart of our identity.
Swiss Private Bank
The recent disclosures around unacceptable historical practices and behaviour within the Swiss
private bank remind us of how much there still is to do and how far societys expectations have
changed in terms of banks responsibilities. They are also a reminder of the need for constant

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Company View

vigilance over the effectiveness of our controls and the imperative to embed a robust and ethical
compliance culture.
We deeply regret and apologise for the conduct and compliance failures highlighted which were in
contravention of our own policies as well as expectations of us.
In response to, and in parallel with, the tax investigations prompted by the data theft more than eight
years ago, we have been completely overhauling our private banking business, putting the entire
customer base through enhanced due diligence and tax transparency filters. Our Swiss Private Bank
customer base and the countries we serve are now both about one-third of the size they were in
2007. In addition, HSBC is already working to implement the OECDs Common Reporting Standard
and other measures to foster greater transparency. We cannot change the past. But, looking to the
future, we can and must reinforce controls and provide demonstrable evidence of their effectiveness.
This forms part of our commitment to Global Standards, to ensure that we will never knowingly do
business with counterparties seeking to evade taxes or use the financial system to commit financial
crime.
Banking standards
More broadly, following the publication in 2013 of the Parliamentary Commission on Banking
Standards, considerable progress has been made in giving effect to its recommendations. The
Financial Services (Banking Reform) Act of 2013 provided greater clarity on the accountabilities and
responsibilities of management and the Board. We welcome the appointment of Dame Colette Bowe
to lead the Banking Standards Review Council and have committed to support her fully in its work.
The current Fair and Effective Markets Review being conducted by the Bank of England, Her Majestys
Treasury and the Financial Conduct Authority is an extremely timely and important exercise to
re-establish the integrity of wholesale financial markets.
In terms of our own governance of these areas, the Conduct & Values Committee of the Board that
we created at the beginning of 2014 to focus on behavioural issues has established itself firmly as
the central support to the Board in these important areas.
Board changes
Since we reported at the interim stage we have taken further steps to augment the skills and
experience within the Board and to address succession to key roles.
On 1 January 2015, Phillip Ameen joined the Board and the Group Audit Committee as an independent
non-executive Director. Phil was formerly Vice President, Comptroller and Principal Accounting
Officer of General Electric Corp. He brings with him extensive financial and accounting experience
gained in one of the worlds leading international companies as well as a depth of technical knowledge
from his long service in the accounting standard setting world. As a serving Director on HSBCs US
businesses he also brings further detailed insight to Group Board discussions and enhances the
strong links that already exist between the Group Board and its major subsidiaries.

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Sir Simon Robertson had previously indicated his intention to retire from the Board at the upcoming
AGM. I am delighted to report that Simon has agreed to stay on for at least a further year as Deputy
Chairman. He has been a considerable support to me and to Stuart Gulliver, in addition to his role
leading the non-executives, and we are all delighted that we shall continue to benefit from his wisdom
and experience.
150th anniversary
2015 marks the 150th anniversary of our founding back in Hong Kong and Shanghai as a small
regional bank focused on trade and investment. All of us within HSBC owe a huge debt of gratitude
and respect to our forebears who charted the course that has taken HSBC to one of the most
important institutions serving the financial needs of this inter-dependent world.
Outlook
It is impossible not to reflect on the very broad range of uncertainties and challenges to be addressed
in 2015 and beyond, most of which are outside our control, particularly against a backdrop of patchy
economic recovery and limited policy ammunition. Unexpected outcomes arising from current
geopolitical tensions, eurozone membership uncertainties, political changes, currency and commodity
price realignments, interest rate moves and the effectiveness of central banks unconventional
policies, to name but a few, all could materially affect economic conditions and confidence around
investment and consumption decisions. One economic uncertainty stands out for a major financial
institution headquartered in the UK, that of continuing UK membership of the EU. Today, we publish
a major research study which concludes that working to complete the Single Market in services and
reforming the EU to make it more competitive are far less risky than going it alone, given the
importance of EU markets to British trade.
There are also many underlying positive trends that shape our thinking about the coming year. We
are very encouraged by the trends in outward investment from China, the potential for further
liberalization and internationalisation of the renminbi and the reshaping of the Chinese economy
from export dependence to domestic consumption. We are positive on the opportunities that will
arise from Capital Markets Union within Europe and the declared focus of the incoming Commission
on growth and jobs. The strength of the US economy and the benefits of lower oil prices should be
positive drivers of growth. There is much to be gained from successful negotiation of the Transatlantic
Trade and Investment Partnership and the Trans- Pacific Partnership. Current attention on funding
infrastructure investment globally is potentially of huge significance.
Finally, on behalf of the Board, I want again to express our thanks and gratitude to our 266,000
colleagues around the world who worked determinedly in 2014 to build an HSBC fit for the next 150
years.

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Locations and Subsidiaries

LOCATIONS AND SUBSIDIARIES

Head Office
HSBC Holdings plc
8 Canada Square
London E14 5HQ
GBR
P:44 20 7991 8888
F:44 20 7992 4880
http://www.hsbc.com

Other Locations and Subsidiaries

HSBC Asset Finance (UK) Limited
54 Hagley Road
Birmingham B16 8TH
GBR

HSBC Private Banking Holdings (Suisse)

SA
Quai du General Guisan 2
Geneva 1211
CHE

HSBC Trinkaus & Burkhardt AG

Knigsallee 21/23
Dusseldorf 40212
DEU

The Hongkong and Shanghai Banking

Corporation Limited
HSBC Main Building
1 Queens Road
Central
HKG

HSBC Life (International) Limited

18/f Hsbc Center
Tower 1
1 Sham Mong Road
Kowloon
HKG

HSBC Bank Australia Limited

Level 32
580 George Street
Sydney
NewSouthWales 2000
AUS

HSBC Bank Malaysia Berhad

No 2 Leboh Ampang
North Tower
Kuala Lumpur 50100
MYS

HSBC Securities (USA) Inc.

HSBC Tower
452 Fifth Avenue
New York
NewYork 10018
USA

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Locations and Subsidiaries

HSBC Bank Argentina S.A.

Florida 201
Buenos Aires C1005AAE
SGP

HSBC Holdings plc

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HSBC Bank Egypt S.A.E.

306 Corniche El Nil
Maadi
Cairo
EGY

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