FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of March, 2006
HSBC Holdings plc
42nd Floor, 8 Canada
Square, London E14 5HQ, England
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F).
Form 20-F X Form 40-F ......
(Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934).
Yes....... No X
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- ..............)
HSBC HOLDINGS PLC
2005 FINAL RESULTS - HIGHLIGHTS
- Total operating income up 10 per cent to US$61,704 million (US$55,988
million in 2004).
For the year:
- Net operating income up 10 per cent to US$49,836 million (US$45,162
million in 2004).
- Group pre-tax profit up 11 per cent to US$20,966 million (US$18,943
million in 2004).
- Profit attributable to shareholders of the parent company up 17 per cent
to US$15,081 million (US$12,918 million in 2004).
- Return on average invested capital of 15.9 per cent (15.0 per cent in
2004).
- Earnings per share up 15 per cent to US$1.36 (US$1.18 in 2004).
Dividend and capital position:
- Fourth interim dividend for 2005 of US$0.31 per share, an increase of 15
per cent; total dividends declared in respect of 2005 of US$0.73 per share,
an increase of 11 per cent over 2004.
- Tier 1 capital ratio of 9.0 per cent and total capital ratio of 12.8 per
cent.
HSBC HOLDINGS REPORTS PRE-TAX PROFIT OF US$20,966 MILLION
HSBC made a profit before tax of US$20,966 million, an increase of US$2,023
million, or 11 per cent, over 2004.
Net interest income of US$31,334 million was US$235 million, or 1 per cent,
higher than 2004.
Net operating income before loan impairment charges and other credit risk
provisions of US$57,637 million was US$6,284 million, or 12 per cent, higher
than 2004.
Operating expenses of US$29,514 million rose US$3,027 million, or 11 per cent,
compared with 2004. On an underlying basis and expressed in terms of constant
currency, operating expenses increased by 9 per cent.
HSBC's cost efficiency ratio was 51.2 per cent compared with 51.6 per cent in
2004.
Loan impairment charges and other credit risk provisions were US$7,801 million
in 2005, US$1,610 million higher than 2004.
The tier 1 capital and total capital ratios for the Group remained strong at 9.0
per cent and 12.8 per cent, respectively, at 31 December 2005.
The Group's total assets at 31 December 2005 were US$1,502 billion, an increase
of US$222 billion, or 17 per cent, since 31 December 2004.
Financial statements for the year to 31 December 2005 are prepared in accordance
with current IFRSs. Comparative figures for 2004 are also prepared under IFRSs
but reflect transition arrangements on the move to reporting under IFRSs and
therefore individual lines may not be strictly comparable. In particular,
comparative figures do not reflect the impact of IAS 32 'Financial Instruments:
Disclosure and Presentation', IAS 39 'Financial Instruments: Recognition and
Measurement' and IFRS 4 'Insurance Contracts' (see Note 1 'Accounting policies'
on page 16).
Geographical distribution of results
Year ended Year ended
Figures in US$m 31Dec05 31Dec04
Profit before tax
% %
Europe 6,356 30.3 5,756 30.4
Hong Kong 4,517 21.5 4,830 25.5
Rest of Asia-Pacific 2,574 12.3 1,847 9.8
North America 6,872 32.8 6,070 32.0
South America 647 3.1 440 2.3
20,966 100.0 18,943 100.0
Tax expense (5,093) (4,685)
Profit for the year 15,873 14,258
Profit attributable to shareholders
of the parent company 15,081 12,918
Profit attributable to minority
interests 792 1,340
Distribution of results by customer group
Year ended Year ended
Figures in US$m 31Dec05 31Dec04
Profit before tax
% %
Personal Financial Services 9,904 47.2 8,497 44.9
Commercial Banking 4,961 23.7 4,057 21.4
Corporate, Investment Banking
and Markets 5,163 24.6 5,288 27.9
Private Banking 912 4.4 697 3.7
Other 26 0.1 404 2.1
Total 20,966 100.0 18,943 100.0
Comment by Sir John Bond, Group Chairman
Our results reflect our success in growing revenues and improving productivity,
in line with our Managing for Growth strategic plan. They are a tribute to the
talents and dedication of the 284,000 people who work for HSBC in meeting our
customers' needs. Overall, 2005 was a year of sustained progress for HSBC and
our all round performance during the last three years has brought impressive
returns to our shareholders.
We grew profit attributable to shareholders by 17 per cent to US$15.1 billion.
This represents US$1.36 per share, an increase of 15 per cent. Our earnings
remained well diversified both geographically and by customer group. We have
continued to invest in the future of our business, particularly the growth of
our personal financial services in Asia, but at the same time we improved
productivity as the level of expenditure on the development of our investment
banking businesses passed its peak. We also achieved good growth and further
efficiencies in our core UK personal and commercial banking businesses.
Worldwide, we grew our commercial banking business strongly on the back of
recent investment. For the year as a whole, revenue growth of 12 per cent
exceeded cost growth by 1 percentage point. A strong second half performance
reversed a 4 percentage point deficit at the interim stage.
The Board has declared a fourth interim dividend of US$0.31 per share taking the
total dividend in respect of 2005 to US$0.73 per share, an increase of 10.6 per
cent over the dividends for 2004. The dividend is payable on 11 May 2006 to
shareholders on the register on 24 March 2006, with a scrip dividend alternative
available for shareholders who prefer this option.
The business climate
Economic conditions in 2005 reflected the growing impact of globalisation and
the imbalance between resource producers and consumers. International trade
flows were dominated by China's growing share of world manufacturing and by
further increases in commodity prices, notably energy prices. Trade in services
continued to expand, partly reflecting India's growing role. Other emerging
markets such as Mexico, Turkey and eastern Europe benefited from their proximity
to the major consumer markets and from continued foreign investment. Resource
rich countries such as Australia, Brazil and Canada enjoyed the strong global
demand for commodities. Liquidity in the oil exporting countries from higher oil
prices fuelled major infrastructure investment and, through the recycling of
petro-dollars, boosted asset prices elsewhere in the world. The US current
account deficit widened further as strong domestic demand and higher energy
prices raised the value of US imports.
Worldwide consumer spending remained resilient, supporting economic expansion.
Risk premia fell across most asset classes as investors sought higher yields
which in turn led to increased enthusiasm for emerging markets. The world's best
performing stock markets included Japan, where domestic growth recovered, and a
range of emerging markets, for example Egypt, Saudi Arabia, Russia and Turkey.
Core businesses, new initiatives
HSBC's core businesses in the US, Hong Kong and the UK produced robust
performances and we made good progress in a number of key areas of focus. In
particular, we stabilised the risk adjusted margins in our consumer finance
business in the US. We held costs flat and significantly increased revenues in
our UK personal and commercial businesses. We improved deposit spreads in Hong
Kong during the course of the year. We achieved robust growth in global
transaction banking for corporate clients on the back of strong trade flows and
we obtained our best ever ranking in foreign exchange surveys and debt capital
markets league tables. We also grew our loan books without materially changing
the risk profile of the portfolio.
Technology remains the key to productivity improvements and to increasing our
coverage in many markets without the need for establishing a significant
physical presence. At the same time, the investments we have made during the
last decade in developing HSBC's geographical coverage and product capabilities
and in building our brand, allowed us to benefit from the prevailing economic
conditions in many of our major markets and to capture returns for our
shareholders from an ever more diversified revenue base. In addition to the
performance of our core businesses, we achieved incremental revenues from a
number of new or developing areas. For example:
- Our operations in mainland China performed well in 2005. We expanded our
branch network and we retain the largest presence in China of any international
bank. In addition, the contribution to earnings from our strategic investments
continued to grow. Those in Bank of Communications, Industrial Bank, Ping An
Group and Bank of Shanghai accounted for over 70 per cent of our earnings in
mainland China in 2005. With the addition of HSBC Jintrust Fund Management Co
Ltd to our holdings, HSBC is well placed to benefit from China's continued
economic development and from the liberalisation of its financial services
sector which membership of the WTO will bring.
- In India, we expanded our global resourcing activities including
increasing our largest IT development centre to 2,500 people. We also used our
expertise and knowledge of the country to build the world's largest equity
investment fund focused on India. Through a combination of third party and
internal distribution we have grown the GIF Indian Equity fund from US$2.6
billion in 2004 to US$4.7 billion at the end of 2005.
- We achieved record results in Mexico, Turkey and the Middle East, increasing
their aggregate contribution to the Group's profit before tax by US$490 million,
or 42 per cent. The results reflected the benefits of co-operation with other
parts of the HSBC Group in areas as varied as consumer finance, capital markets,
payments and cash management, Amanah (Islamic) finance and insurance.
- Exceptional liquidity in the Middle East generated strong investment flows.
Our businesses in Saudi Arabia and Dubai more than doubled commissions from
retail brokerage. HSBC also advised on many outward investments by clients in
the region, including Dubai International Capital's acquisition of Tussauds
Group for US$1.5 billion in the UK. We also benefited from regional growth in
infrastructure spending, notable assignments including the Shuaibah and Taweelah
water and power projects in Saudi Arabia and Abu Dhabi respectively.
- The worldwide fall in risk premia generated strong demand for the higher
yields available from emerging markets and structured products. In addition to
the GIF Indian Equity fund described above, our GIF BRIC (Brazil, Russia, India
and China) Freestyle fund, also managed by HSBC Halbis Partners, attracted
considerable support, growing from US$21 million, to US$2.1 billion, during the
course of 2005. HSBC brought a growing number of initial public offerings to
investors, notably the Polish gas company PGNiG, Middle Eastern telecom provider
Investcom and three of the five largest in Hong Kong this year, including Bank
of Communications. In addition, HSBC used its experience in emerging markets to
advise on a number of cross-border deals, most notably Bank of America's US$3
billion investment in China Construction Bank.
- Exceptional liquidity in private equity markets afforded us opportunities to
realise attractive gains on historical investments and to refinance companies
with expensive capital structures.
- Responding to demand from the investment markets, we achieved significant
growth across all businesses in the manufacture and distribution of bespoke
products and solutions, mainly for corporate clients. In Global Markets we grew
market share significantly and profitably in complex derivative products,
reflecting recent investment in this area. Sinopia, the Group's specialist
manager of quantitative, structured and guaranteed investment products delivered
80 per cent growth in revenues.
- Strong investment flows into emerging market equities and into alternative
investment funds, brought significant growth in the Group's sub-custody and
clearing business, where we are particularly strong in Asia. They also benefited
our fund administration business, which was well positioned to meet clients'
service requirements for traditional and alternative investments, following the
integration of Bank of Bermuda. Revenue growth exceeded 40 per cent in our
sub-custody business, and 25 per cent in the global custody and fund
administration business.
Benign credit conditions
Throughout 2005, credit conditions remained broadly favourable, particularly in
the US which, despite steadily rising interest rates, experienced continued
economic growth, lower unemployment and rising wages. Due to the effect of
hurricanes and accelerated bankruptcy filings ahead of a change in the law,
credit charges in the US initially increased during the second half but are now
returning to more normal levels.
In the UK, 2005 saw a significant rise in personal bankruptcies following an
earlier relaxation in the law and a general expansion in credit availability. In
response to the increased levels of personal credit charges, the steps we took
on both underwriting and collection processes began to have a positive effect
during the second half. Furthermore, HSBC has been at the forefront of efforts
in the UK to broaden access to information sharing in order to strengthen
responsible lending practices.
Worldwide, corporate credit performance was strong with net recoveries in the
large corporate sector and a low level of charges in the commercial banking
sector. These conditions may not prove sustainable.
Corporate, Investment Banking and Markets
We are a little more than half way through our five year strategic plan for
developing our Corporate, Investment Banking and Markets business and we are
progressing well and gaining momentum in the areas of investment. Cost growth
peaked during the year and there is clear evidence of positive client response
to our expanded product capabilities.
We have established leadership positions in foreign exchange, ('FX') in
transaction banking, in project and export finance, and in funds administration.
We have developed strongly and gained market share in debt capital markets
globally, and in government bond trading in Europe. In higher added value
products our significant investment in quantitative skills and support systems
has been rewarded with strong growth in market share in FX options and
structured derivatives.
Our investment in recruiting a number of senior advisory bankers significantly
increased our coverage of major corporate relationships, building on the
foundations already in place and expanding the range of opportunities available.
Organic investment
With considerable excess capital in the banking sector and relatively few
investment opportunities available, prices for potential acquisitions were high
in 2005. In line with our strategy, we concentrated on organic growth. We made
only two significant investments in the year. We doubled our stake in Ping An
Insurance in China, in August, to 19.9 per cent, at a cost of US$1.0 billion. In
December we completed the acquisition of Metris, a US-based sub-prime credit
card business with four million clients, and complementary to HSBC Finance, for
US$1.6 billion.
During the last 12 months, organic investment has created some exciting
opportunities for the future. For example, in the US we launched a national
direct online savings product. By December this was attracting deposits at the
rate of US$75 million per week and had garnered US$1 billion in total. In Asia,
we expanded our card base to reach 10.3 million cards with 2.1 million cards
added during the year.
We established consumer finance operations in Argentina, Australia and India,
while in Mexico we launched several new products including 'Tu Cuenta' an
integrated current account, deposit and card product, which has attracted some
2,300 customers per day since its launch in February. In Turkey, our Personal
Financial Services business reported a three-fold increase in pre-tax profits,
reflecting strong organic growth and an increase in customers to 2.2 million.
Group Private Banking grew strongly in all regions; net new money inflows were
US$35.7 billion. We continued to invest in Asia, particularly in India, Japan
and Taiwan and we expanded our support of clients from mainland China. In Europe
we established regional offices in the UK, France and Russia, and we also
expanded our geographical presence in the US.
We continued to release capital through the sale of interests which lay outside
our core business or which lacked critical mass. These included the disposal of
the support functions of our fleet management business in the UK and the
contribution of our Asian merchant acquiring business into a joint venture. In
aggregate, we realised disposal gains of US$652 million in 2005. Last month we
announced completion of the sale of our 21.16 per cent interest in Laiki Group
for a consideration of US$235 million and the sale of 7.19 per cent from our
interest in UTI Bank for US$142 million. A profit on sale of US$170 million will
be included in our results for the first half of 2006 from these disposals.
Outlook
In the near term, the outlook is encouraging. The world economy continues to
grow steadily. The US economy is strong, the UK resilient, Japan and Germany are
recovering and the emerging markets are buoyant.
Longer term prospects are more uncertain. Apart from the possibility, however
remote, of a sudden shock to the world's financial system, we remain concerned
about the unprecedented level of trade imbalances. Similarly, the implications
of demographic change and of ageing populations for financial markets and
businesses will be profound. It is inevitable that, at some stage, a process of
adjustment will begin but the timing is open to question. So far, the financial
markets are taking a benign view of these potential sources of instability.
Progressively, globalisation is forcing countries and businesses operating
within them to re-evaluate their comparative advantages and to adjust to a world
in which emerging markets compete not only in terms of cost but also in skills
and technology. The globalisation of the services industry, spurred on by new
technologies and the rapid fall in communication costs, will afford huge
opportunities but also pose significant challenges to many areas of economic
activity including financial services. Incipient protectionism, resulting from a
reluctance to face up to the new competitive realities, remains a threat to the
continuing growth of the world economy.
In certain mature markets, under-funded pension plans threaten to become a
drain on companies' resources. Combined with the rising cost of long-term
healthcare they pose a considerable challenge to policy makers. Continuing
productivity growth is therefore increasingly important. Only if it is achieved
will financial markets be able to offer returns with a meaningful premium to the
risk-free rate embodied in government debt. Without such productivity gains and
associated financial returns the affordability of pension and healthcare
promises will become increasingly burdensome. The challenge to society of
managing the equitable distribution of wealth created between competing
generations may well become one of the most pressing of the next decade.
In this environment HSBC, with its unique international footprint, is determined
to continue to deliver profitable growth and value to its several
constituencies. Success ensures that we can offer good employment prospects to
an ever more diverse workforce. It means that we can afford to continue to
invest in expanding the platforms by which we deliver services to our customers.
It enables us to contribute to the savings and retirement needs of those who
invest in HSBC directly, or indirectly through pension plans and investment
funds.
Building on our achievements, our priority for the rest of 2006 is to continue
to implement our Managing for Growth strategy. We will achieve this by being
distinctive, reinforcing our brand values of trust and integrity in all our
dealings with customers. We will make ourselves even more relevant by broadening
the product, channel and geographical coverage we offer. Furthermore, we will
ensure that the scale and complexity needed to compete successfully will be
seamless from the perspective of our customers and manageable from that of our
colleagues.
Our businesses in Asia, Turkey, Mexico, Brazil and the Middle East see strong
opportunities for growth on the back of investments already made. We also see
opportunities to strengthen our position in our franchises in the UK, Hong Kong,
North America and France. We believe there is growing momentum from the
development of our new business streams within Corporate, Investment Banking and
Markets businesses. Overall, HSBC is well positioned for further growth.
2004 Year ended 31Dec 2005
US$m US$m GBPm HK$m
For the year
18,943 Profit before tax 20,966 11,531 163,073
Profit attributable to shareholders of
12,918 the parent company 15,081 8,295 117,300
6,932 Dividends 7,750 4,263 60,280
At year-end
85,522 Total shareholders' equity 92,432 53,704 716,718
90,780 Capital resources 105,449 61,266 817,652
777,127 Customer accounts and deposits by banks 809,146 470,112 6,274,118
1,279,974 Total assets 1,501,970 872,645 11,646,275
759,210 Risk-weighted assets 827,164 480,582 6,413,830
US$ Per share US$ GBP HK$
1.18 Basic earnings 1.36 0.75 10.58
1.17 Diluted earnings 1.35 0.74 10.50
0.63 Dividends^ 0.69 0.38 5.36
7.66 Net asset value 8.16 4.74 63.27
Share information
11,172m US$0.50 ordinary shares in issue 11,334m
US$190bn Market capitalisation US$182bn
GBP8.79 Closing market price per share GBP9.33
Over 1 Over 3 Over 5
year years years
Total shareholder return to 31Dec05^^ 111.3 158.8 121.2
Benchmarks: FTSE 100 120.8 158.4 105.9
MSCI World 123.1 159.1 99.1
^ The fourth interim dividend for 2005 of US$0.31 per share is translated at the
closing rate on 31 December 2005 (see note 11 on page 28). Where required, this
dividend will be converted into sterling or Hong Kong dollars at the exchange
rates on 2 May 2006 (see Note 2 on page 16). Under IFRSs accounting rules,
the dividend per share of US$0.69 shown in the accounts is the total of the
dividends declared during 2005. This represents the fourth interim dividend
for 2004 and the first, second and third interim dividends for 2005. As the
fourth interim dividend for 2005 was declared in 2006 it will be reflected in the
accounts for 2006.
^^ Total shareholder return ('TSR') is as defined in the Annual Report and
Accounts 2005 on page 220.
2004 Year ended 31 Dec 2005
Performance ratios (%)
15.0 Return on average invested capital^ 15.9
16.3 Return on average total shareholders' equity 16.8
1.14 Post-tax return on average total assets 1.06
2.13 Post-tax return on average risk-weighted assets 2.01
Efficiency and revenue mix ratios
51.6 Cost efficiency ratio 51.2
As a percentage of total operating income:
55.5 - Net interest income 50.8
23.1 - Net fee income 23.4
5.0 - Net trading income 9.5
Capital ratios
8.9 - Tier 1 capital 9.0
12.0 - Total capital 12.8
^ Return on invested capital is based on the profit attributable to ordinary
shareholders. Average invested capital is measured as average total
shareholders' equity after adding back goodwill previously written-off directly
to reserves, deducting average equity preference shares issued by HSBC Holdings
and deducting/(adding) average reserves for unrealised gains/(losses) on
effective cash flow hedges and available-for-sale securities. This measure reflects
capital initially invested and subsequent profit.
Consolidated Income Statement
31Dec04 Year ended 31Dec05
US$m US$m GBPm HK$m
50,471 Interest income 60,094 33,052 467,411
(19,372) Interest expense (28,760) (15,817) (223,694)
31,099 Net interest income 31,334 17,235 243,717
15,902 Fee income 17,486 9,617 136,006
(2,954) Fee expense (3,030) (1,666) (23,567)
12,948 Net fee income 14,456 7,951 112,439
Trading income excluding net interest
2,786 income 3,656 2,011 28,436
- Net interest income on trading activities 2,208 1,214 17,174
2,786 Net trading income 5,864 3,225 45,610
- Net income from financial instruments
- designated at fair value 1,034 569 8,042
Net investment income on assets backing
1,012 policyholders' liabilities - - -
Gains less losses from financial
540 investments 692 381 5,382
622 Dividend income 155 85 1,206
5,368 Net earned insurance premiums 5,436 2,990 42,280
1,613 Other operating income 2,733 1,502 21,256
55,988 Total operating income 61,704 33,938 479,932
Net insurance claims incurred and
(4,635) movement in policyholders' liabilities (4,067) (2,237) (31,633)
Net operating income before loan
impairment charges and other credit
51,353 risk provisions 57,637 31,701 448,299
Loan impairment charges and other
(6,191) credit risk provisions (7,801) (4,290) (60,677)
45,162 Net operating income 49,836 27,411 387,622
(14,523) Employee compensation and benefits (16,145) (8,880) (125,576)
(9,739) General and administrative expenses (11,183) (6,150) (86,977)
Depreciation of property, plant and
(1,731) equipment (1,632) (898) (12,694)
(494) Amortisation of intangible assets (554) (305) (4,309)
(26,487) Total operating expenses (29,514) (16,233) (229,556)
18,675 Operating profit 20,322 11,178 158,066
Share of profit in associates and joint
268 ventures 644 353 5,010
18,943 Profit before tax 20,966 11,531 163,076
(4,685) Tax expense (5,093) (2,800) (39,616)
14,258 Profit for the year 15,873 8,731 123,460
Profit attributable to shareholders of
12,918 the parent company 15,081 8,295 117,300
Profit attributable to minority
1,340 interests 792 436 6,160
Consolidated Balance Sheet
At 31Dec04 At 31Dec05
US$m US$m GBPm HK$m
ASSETS
9,944 Cash and balances at central banks 13,712 7,967 106,323
6,338 Items in the course of collection from 11,300 6,565 87,620
other banks
Hong Kong Government certificates of
11,878 indebtedness 12,554 7,294 97,344
122,160 Trading assets 190,257 110,539 1,475,251
Trading assets which may be repledged or
- resold by counterparties 42,652 24,781 330,724
- Financial assets designated at fair value 15,046 8,742 116,667
32,190 Derivatives 73,928 42,952 573,238
143,449 Loans and advances to banks 125,965 73,186 976,733
672,891 Loans and advances to customers 740,002 429,941 5,737,975
185,332 Financial investments 176,301 102,431 1,367,038
Financial investments which may be
- repledged or resold by counterparties 6,041 3,510 46,842
3,441 Interests in associates and joint ventures 7,249 4,212 56,209
34,495 Goodwill and intangible assets 33,200 19,289 257,433
15,624 Property, plant and equipment 15,206 8,835 117,907
23,077 Other assets 26,596 15,452 206,225
19,155 Prepayments and accrued income 11,961 6,949 92,746
1,279,974 Total assets 1,501,970 872,645 11,646,275
At 31Dec04 At 31Dec05
US$m US$m GBPm HK$m
LIABILITIES AND EQUITY
Liabilities
11,878 Hong Kong currency notes in 12,554 7,294 97,344
circulation
84,055 Deposits by banks 69,727 40,511 540,663
693,072 Customer accounts 739,419 429,601 5,733,455
Items in the course of transmission to
5,301 other banks 7,022 4,080 54,449
46,460 Trading liabilities 174,365 101,306 1,352,024
Financial liabilities designated at fair
- value 61,829 35,923 479,422
34,988 Derivatives 74,036 43,015 574,075
211,721 Debt securities in issue 188,072 109,271 1,458,310
6,475 Retirement benefit liabilities 4,869 2,829 37,754
20,581 Other liabilities 26,515 15,405 205,597
Liabilities under insurance contracts
- issued 14,144 8,218 109,673
Liabilities to policyholders under
19,190 long-term assurance business - - -
16,499 Accruals and deferred income 12,689 7,372 98,391
Provisions
1,435 - Deferred tax 530 308 4,110
2,636 - Other provisions 1,436 834 11,135
26,486 Subordinated liabilities 16,537 9,608 128,228
1,180,777 Total liabilities 1,403,744 815,575 10,884,630
Equity
5,587 Called up share capital 5,667 3,293 43,942
4,881 Share premium account 6,896 4,007 53,472
25,622 Other reserves 23,646 13,738 183,351
49,432 Retained earnings 56,223 32,666 435,953
85,522 Total shareholders' equity 92,432 53,704 716,718
13,675 Minority interests 5,794 3,366 44,927
99,197 Total equity 98,226 57,070 761,645
1,279,974 Total equity and liabilities 1,501,970 872,645 11,646,275
Consolidation Statement of Recognised Income and Expense
2004 Year ended 31Dec 2005
US$m US$m
Available-for-sale investments:
- - Fair value losses taken to equity (400)
- - Fair value gains transferred to income statement on disposal
or impairment (240)
Cash flow hedges:
- - Fair value changes taken to equity (92)
- - Fair value changes transferred to income statement (106)
- Share of changes in equity of associates and joint ventures 161
Exchange differences arising on net investments in foreign
3,720 operations (4,257)
(731) Actuarial losses on post-employment benefits (812)
2,989 (5,746)
319 Net deferred tax on items taken directly to equity 437
14,258 Profit for the year 15,873
17,566 Total recognised income and expense for the year 10,564
Effect of change in accounting policy
IFRSs transition adjustment at 1 January 2005
- - Available-for-sale fair value reserve 1,919
- - Cash flow hedging reserve 410
- - Foreign exchange reserve 686
- - Retained earnings (1,762)
- - Minority interests (10,077)
17,566 1,740
Total recognised income and expense for the year attributable to:
15,743 - Shareholders of the parent company 9,912
1,823 - Minority interests 652
17,566 10,564
Consolidated Cash Flow Statement
Year ended 31Dec
2005 2004
US$m US$m
Cash flows from operating activities
Profit before tax 20,966 18,943
Adjustments for:
Non-cash items included in net profit 1,358 368
Change in operating assets (82,710) (124,299)
Change in operating liabilities 70,933 178,014
Elimination of exchange differences 2,315 (8,664)
Net gain from investing activities (692) (540)
Share of profits in associates and joint ventures (644) (268)
Dividends received from associates 114 127
Tax paid (4,619) (3,784)
Net cash from operating activities 7,021 59,897
Cash flows from investing activities
Purchase of financial investments (378,103) (330,917)
Proceeds from the sale of financial investments 368,696 315,437
Purchase of property, plant and equipment (2,887) (2,830)
Proceeds from the sale of property, plant and equipment 620 371
Purchase of intangible assets (849) (108)
Net cash outflow from acquisition of and increase in stake of
subsidiaries (1,662) (2,431)
Net cash inflow from disposal of subsidiaries 705 27
Net cash outflow from acquisition of and increase in stake of
associates (2,569) (2,122)
Proceeds from disposal of associates 422 212
Net cash used in investing activities (15,627) (22,361)
Cash flows from financing activities
Issue of ordinary share capital 690 581
Issuance of preference shares 1,298 -
Net purchases and sales of own share for market-making purposes (55) 98
Purchases of own shares to meet share awards and share option awards (766) (345)
Own shares released on vesting of share awards and exercise of options 277 159
Decrease in non-equity minority interests - 1,480
Subordinated loan capital issued 2,093 6,021
Subordinated loan capital repaid (1,121) (1,740)
Dividends paid to the shareholders of the parent company (5,935) (4,425)
Dividends paid to minority interests - equity (508) (664)
- non-equity - (548)
Net cash (used in)/from financing activities (4,027) 617
Net(decrease)/increase in cash and cash equivalents (12,633) 38,153
Cash and cash equivalents at 1 January 160,956 117,558
Exchange differences in respect of cash and cash equivalents (7,016) 5,245
Cash and cash equivalents at 31December 141,307 160,956
Additional Information
1. Accounting policies
For all periods up to and including the year ended 31 December 2004, HSBC
prepared its consolidated financial statements in accordance with UK Generally
Accepted Accounting Principles ('UK GAAP'). From 1 January 2005, HSBC has
prepared its consolidated financial statements in accordance with International
Financial Reporting Standards ('IFRSs') as endorsed by the EU and effective for
HSBC's reporting for the year ended 31 December 2005.
In preparing its consolidated financial statements, HSBC has elected to take
advantage of certain transitional provisions within IFRS 1 'First-time Adoption
of International Financial Reporting Standards' ('IFRS 1') which offer exemption
from presenting comparative information or applying IFRSs retrospectively. The
most significant of these provisions is the exemption from presenting
comparative information in accordance with IAS 32 'Financial Instruments:
Presentation', IAS 39 'Financial Instruments: Recognition and Measurement', IFRS
4 'Insurance Contracts' and disclosures under IFRS 7 'Financial Instruments:
Disclosure'.
IFRSs accounting policies applicable to the consolidated financial statements
can be found in Notes 1 and 2 of the Annual Report and Accounts.
2. Dividend
On 6 March 2006, the Directors declared a fourth interim dividend for 2005 of
US$0.31 per ordinary share. The dividend will be payable on 11 May 2006, to
shareholders on the Register at the close of business on 24 March 2006. The
dividend will be payable in cash, in US dollars, sterling or Hong Kong dollars,
or a combination of these currencies, at the exchange rates quoted by HSBC Bank
plc in London at or about 11 am on 2 May 2006, and with a scrip dividend
alternative. Particulars of these arrangements will be mailed to shareholders on
or about 4 April 2006, and elections will be required to be made by 27 April
2006. As this dividend was declared after the balance sheet date, it has not
been included in 'Other liabilities' at 31 December 2005.
The dividend on shares held through Euroclear France, the settlement and central
depositary system for Euronext Paris, will be payable on 11 May 2006 to the
holders of record on 24 March 2006. The dividend will be payable in cash, in
euros at the exchange rate on 2 May 2006, or as a scrip dividend. Particulars of
these arrangements will be announced through Euronext Paris on 22 March 2006 and
29 March 2006.
The dividend on American Depositary Shares ('ADSs'), each of which represents
five ordinary shares, will be payable on 11 May 2006 to holders of record on 24
March 2006. The dividend of US$1.55 per ADS will be payable in cash in US
dollars or as a scrip dividend of new ADSs. Particulars of these arrangements
will be mailed to holders on or about 31 March 2006, and elections will be
required to be made by 17 April 2006. Alternatively, the cash dividend may be
invested in additional ADSs for participants in the dividend reinvestment plan
operated by the depositary.
The Company's shares will be quoted ex-dividend in London, Hong Kong and Bermuda
on 22 March 2006 and in Paris on 27 March 2006. The ADSs will be quoted
ex-dividend in New York on 22 March 2006.
3. Earnings and dividends per share
Year ended
31Dec05 31Dec04
Basic earnings per share 1.36 1.18
Diluted earnings per share 1.35 1.17
Dividends per share 0.69 0.63
Dividend pay out ratio^ 51% 53%
^ Dividends per share expressed as a percentage of earnings per share.
Basic earnings per ordinary share was calculated by dividing the earnings of
US$15,060 million by the weighted average number of ordinary shares outstanding,
excluding own shares held, of 11,038 million shares (2004: earnings of US$12,918
million and 10,907 million shares).
Year ended
Figures in US$m 31Dec05 31Dec04
Profit attributable to shareholders of the
parent company 15,081 12,918
Dividend payable on preference shares
classified as equity (21) -
Profit attributable to the ordinary
shareholders of the parent company 15,060 12,918
Diluted earnings per share was calculated by dividing the basic earnings, which
require no adjustment for the effects of dilutive potential ordinary shares
(including share options outstanding not yet exercised), by the weighted average
number of ordinary shares outstanding, excluding own shares held, plus the
weighted average number of ordinary shares that would be issued on ordinary
conversion of all the dilutive potential ordinary shares in 2005 of 11,171
million shares (2004: 11,054 million shares).
4. Taxation
Year ended
Figures in US$m 31Dec05 31Dec04
UK corporation tax charge 692 716
Overseas taxation 3,993 2,856
Current taxation 4,685 3,572
Deferred taxation 408 1,113
Total charge for taxation 5,093 4,685
Effective tax rate 24.3% 24.7%
HSBC Holdings and its subsidiaries in the United Kingdom provided for
UK corporation tax at 30 per cent (2004: 30 per cent). Overseas tax included
Hong Kong profits tax of US$639 million (2004: US$539 million) provided at the
rate of 17.5 per cent (2004: 17.5 per cent) on the profits assessable in Hong
Kong. Other overseas subsidiaries and overseas branches provided for
taxation at the appropriate rates in the countries in which they operate.
Analysis of overall tax expense
Year ended
Figures in US$m 31Dec05 31Dec04
Taxation at UK corporate tax rate of 30%
(2004: 30 per cent) 6,290 5,683
Impact of overseas profits in principal locations
taxed at different rates (342) (347)
Tax-free gains (220) (64)
Adjustments in respect of prior period liabilities (187) (229)
Deductible innovative tier 1 capital expense
presented below pre-tax profit - (192)
Low income housing credits (110) (95)
Other items (145) 9
Impact of profits from associates and joint ventures (193) (80)
Overall tax charge 5,093 4,685
5. Capital resources
At 31Dec05 At 31Dec04
Capital ratios (%)
Total capital ratio 12.8 12.0
Tier 1 capital ratio 9.0 8.9
Composition of capital
Figures in US$m
Tier 1:
Shareholders' funds 92,432 86,623
Minority interests and preference shares 6,741 4,253
Innovative tier 1 securities 9,383 10,077
Less: Goodwill capitalised and intangible assets (32,821) (31,190)
Other regulatory adjustments^ (1,332) (2,504)
Total qualifying tier 1 capital 74,403 67,259
Tier 2:
Reserves arising from revaluation of property
and unrealised gains in AFS equities 1,593 2,660
Collective impairment allowances 8,749 -
General provisions - 2,624
Perpetual subordinated debt 3,640 3,670
Term subordinated debt 24,519 21,373
Minority and other interests in
tier 2 capital 425 519
Total qualifying tier 2 capital 38,926 30,846
Unconsolidated investments (6,437) (6,361)
Investments in other banks (1,147) (799)
Other deductions (296) (165)
Total capital 105,449 90,780
Total risk-weighted assets 827,164 759,210
The above figures were computed in accordance with the EU Banking Consolidation
Directive and the FSA policy statement PS05/5 ('Implications of a Changing
Accounting Framework'). The comparative figures as at 31 December 2004 have not
been restated to reflect the implementation of IFRSs and FSA policy statement
PS05/5.
^ Other regulatory adjustments mainly arise from the implementation of
IFRSs in conjunction with the FSA's policy statement PS05/5.
6. Notes on cash flow statement
Year ended
Figures in US$m 31Dec05 31Dec04
(a) Non-cash items included in net profit
Depreciation and amortisation 2,213 2,225
Revaluations on investment property (201) -
Loan impairment losses 7,801 6,191
Loans written off net of recoveries (8,549) (7,931)
Provisions 327 1,181
Provisions utilised (327) (1,018)
Impairment of financial investments - (105)
Accretion of discounts and amortisation of premiums (446) (175)
Issue of share options 540 -
1,358 368
(b) Change in operating assets
Change in prepayments and accrued income 7,121 (5,329)
Change in net trading securities and net derivatives 4,940 2,695
Change in loans and advances to banks 307 10,825
Change in loans and advances to customers (71,107) (130,228)
Change in financial assets designated at fair value (15,048) -
Change in other assets (8,923) (2,262)
(82,710) (124,299)
(c) Change in operating liabilities
Change in accruals and deferred income (3,810) 2,578
Change in deposits by banks (14,328) 12,187
Change in customer accounts 46,394 104,877
Change in debt securities in issue (19,047) 52,256
Change in financial liabilities designated at
fair value 61,837 -
Change in other liabilities (113) 6,116
70,933 178,014
(d) Cash and cash equivalents comprise
Cash and balances at central banks 13,712 9,944
Items in the course of collection from other banks 11,300 6,338
Loans and advances to banks of one month or less 100,527 117,658
Treasury bills, other bills and certificates of
deposit less than three months 22,790 32,317
Less: items in the course of transmission to
other banks (7,022) (5,301)
141,307 160,956
7. Loan impairment charges
2005 Half-year ended 2004 Half-year ended
Figures in US$m 30Jun 31Dec 2005 30Jun 31Dec 2004
By category:
Loan impairment charge
Individually assessed
impairment allowances:
- New allowances 810 922 1,732 - - -
- Releases and
recoveries (648) (541) (1,189) - - -
162 381 543 - - -
Collectively assessed
impairment allowances:
- New allowances 3,594 4,814 8,408 - - -
- Releases and
recoveries (469) (622) (1,091) - - -
3,125 4,192 7,317 - - -
Specific provisions:
- New allowances - - - 4,134 4,739 8,873
- Releases and
recoveries - - - (1,136) (1,044) (2,180)
- - - 2,998 3,695 6,693
General provisions - - - (290) (208) (498)
Total charge for
impairment losses 3,287 4,573 7,860 2,708 3,487 6,195
Customers 3,291 4,576 7,867 2,713 3,492 6,205
Banks (4) (3) (7) (5) (5) (10)
8. Analysis of net fee income
2005 Half-year ended 2004 Half-year ended
Figures in US$m 30Jun 31Dec 2005 30Jun 31Dec 2004
Account services 1,522 1,610 3,132 1,336 1,443 2,779
Credit facilities 504 376 880 579 600 1,179
Remittances 193 203 396 166 187 353
Cards 1,955 2,744 4,699 1,826 2,161 3,987
Imports/Exports 357 365 722 332 360 692
Underwriting 147 127 274 117 117 234
Insurance 558 524 1,082 499 502 1,001
Mortgage servicing rights 37 39 76 39 41 80
Trust income 108 91 199 98 105 203
Broking income 529 575 1,104 517 426 943
Global custody 310 346 656 279 285 564
Maintenance income on
operating leases 99 81 180 95 95 190
Funds under management 874 957 1,831 792 687 1,479
Unit trusts 223 165 388 296 202 498
Corporate finance 124 87 211 100 93 193
Other 888 768 1,656 775 752 1,527
Total fee income 8,428 9,058 17,486 7,846 8,056 15,902
Less: fees expense (1,376) (1,654) (3,030) (1,422) (1,532) (2,954)
Net fee income 7,052 7,404 14,456 6,424 6,524 12,948
9. Geographical distribution of results
HSBC European Operations
2005 Half-year ended 2004 Half-year ended
Figures in US$m 30Jun 31Dec 2005 30Jun 31Dec 2004
Interest income 10,792 10,231 21,023 8,451 9,909 18,360
Interest expense (6,059) (6,743) (12,802) (4,144) (5,118) (9,262)
Net interest income 4,733 3,488 8,221 4,307 4,791 9,098
Fee income 4,087 3,994 8,081 3,711 3,835 7,546
Fee expense (844) (938) (1,782) (809) (757) (1,566)
Net fee income 3,243 3,056 6,299 2,902 3,078 5,980
Trading income 1,068 1,968 3,036 508 489 997
Net income from financial
instruments designated at
fair value (136) 498 362 - - -
Net investment income on
assets backing policyholder
liabilities - - - 130 441 571
Gains less losses from
financial investments 209 230 439 153 1 154
Dividend income 42 21 63 304 254 558
Net earned insurance premiums 786 813 1,599 931 944 1,875
Other operating income 731 872 1,603 541 634 1,175
Total operating income 10,676 10,946 21,622 9,776 10,632 20,408
Net insurance claims incurred
and movement in
policyholder's liabilities (502) (316) (818) (642) (986) (1,628)
Net operating income before
loan impairment charges and
other credit risk provisions 10,174 10,630 20,804 9,134 9,646 18,780
Loan impairment charges and
other credit risk provisions (933) (996) (1,929) (454) (579) (1,033)
Net operating income 9,241 9,634 18,875 8,680 9,067 17,747
Total operating expenses (6,364) (6,275) (12,639) (5,728) (6,300) (12,028)
Operating profit 2,877 3,359 6,236 2,952 2,767 5,719
Share of profit in associates
and joint ventures 9 111 120 17 20 37
Profit before tax 2,886 3,470 6,356 2,969 2,787 5,756
HSBC Hong Kong Operations
2005 Half-year ended 2004 Half-year ended
Figures in US$m 30Jun 31Dec 2005 30Jun 31Dec 2004
Interest income 3,168 4,251 7,419 2,424 2,709 5,133
Interest expense (1,149) (2,206) (3,355) (643) (852) (1,495)
Net interest income 2,019 2,045 4,064 1,781 1,857 3,638
Fee income 976 991 1,967 1,006 958 1,964
Fee expense (134) (159) (293) (118) (143) (261)
Net fee income 842 832 1,674 888 815 1,703
Trading income 380 166 546 380 279 659
Net income from financial
instruments designated at
fair value (21) 15 (6) - - -
Net investment income on
assets backing policyholder
liabilities - - - 24 290 314
Gains less losses from financial
investments 65 43 108 110 65 175
Dividend income 29 12 41 17 10 27
Net earned insurance premiums 866 1,468 2,334 1,063 1,184 2,247
Other operating income 423 382 805 259 277 536
Total operating income 4,603 4,963 9,566 4,522 4,777 9,299
Net insurance claims incurred
and movement in
policyholder's liabilities (751) (1,308) (2,059) (897) (1,257) (2,154)
Net operating income before
loan impairment charges and
other credit risk provisions 3,852 3,655 7,507 3,625 3,520 7,145
Loan impairment charges and
other credit risk provisions (56) (90) (146) 222 (2) 220
Net operating income 3,796 3,565 7,361 3,847 3,518 7,365
Total operating expenses (1,381) (1,486) (2,867) (1,241) (1,317) (2,558)
Operating profit 2,415 2,079 4,494 2,606 2,201 4,807
Share of profit in associates
and joint ventures 4 19 23 3 20 23
Profit before tax 2,419 2,098 4,517 2,609 2,221 4,830
HSBC Rest of Asia-Pacific Operations
2005 Half-year ended 2004 Half-year ended
Figures in US$m 30Jun 31Dec 2005 30Jun 31Dec 2004
Interest income 2,669 3,004 5,673 1,922 2,227 4,149
Interest expense (1,512) (1,749) (3,261) (938) (1,151) (2,089)
Net interest income 1,157 1,255 2,412 984 1,076 2,060
Fee income 763 856 1,619 615 672 1,287
Fee expense (131) (148) (279) (116) (130) (246)
Net fee income 632 708 1,340 499 542 1,041
Trading income 387 473 860 265 229 494
Net income from
financial instruments
designated at
fair value 14 44 58 - - -
Net investment
income on
assets backing
policyholder's
liabilities - - - 6 26 32
Gains less
losses from
financial
investments 2 16 18 4 13 17
Dividend income 4 1 5 1 2 3
Net earned
insurance premiums 29 126 155 57 40 97
Other operating
income 131 204 335 63 83 146
Total operating
income 2,356 2,827 5,183 1,879 2,011 3,890
Net insurance
claims incurred
and movement in
policyholder's
liabilities (37) (129) (166) (46) (36) (82)
Net operating
income before
loan impairment
charges and
other credit risk
provisions 2,319 2,698 5,017 1,833 1,975 3,808
Loan impairment
charges and
other credit
risk provision (23) (111) (134) 9 (98) (89)
Net operating
income 2,296 2,587 4,883 1,842 1,877 3,719
Total operating
expenses (1,264) (1,498) (2,762) (967) (1,120) (2,087)
Operating
profit 1,032 1,089 2,121 875 757 1,632
Share of
profit in
associates and
joint ventures 248 205 453 94 121 215
Profit before
tax 1,280 1,294 2,574 969 878 1,847
HSBC North American Operations
2005 Half-year ended 2004 Half-year ended
Figures in US$m 30Jun 31Dec 2005 30Jun 31Dec 2004
Interest income 11,893 12,481 24,374 10,084 11,197 21,281
Interest expense (3,917) (5,570) (9,487) (2,632) (3,656) (6,288)
Net interest income 7,976 6,911 14,887 7,452 7,541 14,993
Fee income 2,411 2,935 5,346 2,320 2,431 4,751
Fee expense (341) (399) (740) (414) (572) (986)
Net fee income 2,070 2,536 4,606 1,906 1,859 3,765
Trading income 275 738 1,013 221 361 582
Net income from
financial
instruments
designated at
fair value (257) 691 434 - - -
Net investment income
on assets backing
policyholder
liabilities - - - - - -
Gains less losses
from financial
investments 40 48 88 63 97 160
Dividend income 18 24 42 16 16 32
Net earned
insurance
premiums 290 312 602 267 286 553
Other operating
income 476 264 740 299 60 359
Total operating
income 10,888 11,524 22,412 10,224 10,220 20,444
Net insurance
claims incurred
and movement in
policyholder's
liabilities (173) (160) (333) (157) (155) (312)
Net operating
income before
loan impairment
charges and
other credit
risk provisions 10,715 11,364 22,079 10,067 10,065 20,132
Loan impairment
charges and
other credit
risk provisions (2,023) (3,015) (5,038) (2,377) (2,645) (5,022)
Net operating
income 8,692 8,349 17,041 7,690 7,420 15,110
Total
operating
expenses (5,026) (5,191) (10,217) (4,277) (4,755) (9,032)
Operating profit 3,666 3,158 6,824 3,413 2,665 6,078
Share of profit in
associates and
joint ventures 47 1 48 4 (12) (8)
Profit before tax 3,713 3,159 6,872 3,417 2,653 6,070
HSBC South American Operations
2005 Half-year ended 2004 Half-year ended
Figures in US$m 30Jun 31Dec 2005 30Jun 31Dec 2004
Interest income 2,469 1,458 3,927 1,069 1,307 2,376
Interest expense (1,664) (513) (2,177) (463) (603) (1,066)
Net interest income 805 945 1,750 606 704 1,310
Fee income 346 394 740 291 299 590
Fee expense (81) (122) (203) (62) (69) (131)
Net fee income 265 272 537 229 230 459
Trading income 218 191 409 26 28 54
Net income from
financial
instruments
designated at
fair value 46 140 186 - - -
Net investment
income on
assets backing
policyholder's
liabilities - - - 34 61 95
Gains less losses
from financial
investments 38 1 39 - 34 34
Dividend
income 2 2 4 1 1 2
Net earned
insurance
premiums 341 405 746 266 330 596
Other operating
income 38 150 188 4 24 28
Total
operating
income 1,753 2,106 3,859 1,166 1,412 2,578
Net insurance
claims incurred
and movement in
policyholder's
liabilities (297) (394) (691) (203) (256) (459)
Net operating
income before
loan impairment
charges and
other credit risk
provisions 1,456 1,712 3,168 963 1,156 2,119
Loan impairment
charges and
other credit
risk provisions (242) (312) (554) (140) (127) (267)
Net operating
income 1,214 1,400 2,614 823 1,029 1,852
Total operating
expenses (872) (1,095) (1,967) (667) (746) (1,413)
Operating
profit 342 305 647 156 283 439
Share of profit
in associates and
joint ventures - - - - 1 1
Profit before tax 342 305 647 156 284 440
10. Registers of shareholders
The Overseas Branch Register of shareholders in Hong Kong will be closed for one
day, on Friday 24 March 2006. Any person who has acquired shares registered on
the Hong Kong Branch Register but who has not lodged the share transfer with the
Hong Kong Branch Registrar should do so before 4.00pm on Thursday 23 March 2006
in order to receive the fourth interim dividend for 2005, which will be payable
on Thursday 11 May 2006. Transfers may not be made to or from the Hong Kong
Overseas Branch Register while that Branch Register is closed.
Any person who has acquired shares registered on the Principal Register in the
United Kingdom but who has not lodged the share transfer with the Principal
Registrar should do so before 4.00pm on Friday 24 March 2006 in order to receive
the dividend.
Any person who has acquired shares registered on the Overseas Branch Register of
shareholders in Bermuda but who has not lodged the share transfer with the
Bermuda Branch Registrar should do so before 4.00pm on Friday 24 March 2006 in
order to receive the dividend.
Transfers of American Depositary Shares should be lodged with the depositary by
12 noon on Friday 24 March 2006 in order to receive the dividend.
11. Foreign currency amounts
The sterling and Hong Kong dollar equivalent figures in the consolidated income
statement and balance sheet are for information only. These are translated at
the average rate for the period for the income statement and the closing rate
for the balance sheet as follows:
Year end 31Dec05 31Dec04
Closing : HK$/US$ 7.754 7.773
GBP/US$ 0.581 0.517
Average : HK$/US$ 7.778 7.789
GBP/US$ 0.550 0.546
12. Litigation
HSBC, through a number of its subsidiaries, is named in and is defending legal
actions in various jurisdictions arising from its normal business. None of these
proceedings is regarded as material litigation.
13. Dealings in HSBC Holdings plc shares
Except for dealings as intermediaries by HSBC Bank plc, HSBC Financial
Products (France) and The Hongkong and Shanghai Banking Corporation Limited,
which are members of a European Economic Area exchange, neither the Company nor
any subsidiaries has bought, sold or redeemed any securities of the Company
during the year ended 31 December 2005.
14. Statutory accounts
The information in this news release does not constitute statutory accounts
within the meaning of Section 240 of the Companies Act 1985 (the Act). The
statutory accounts for the year ended 31 December 2005 will be delivered to the
Registrar of Companies in England and Wales in accordance with Section 242 of
the Act. The auditor has reported on those accounts. Its report was unqualified
and did not contain a statement under Section 237(2) or (3) of the Act.
The comparative figures for the year ended 31 December 2004 are not the Group's
statutory accounts for that year. The statutory accounts for the year ended 31
December 2004, which were prepared under UK GAAP, have been delivered to the
Registrar of Companies in England and Wales in accordance with Section 242 of
the Act. The auditor has reported on those accounts. Its report was unqualified
and did not contain a statement under Section 237(2) or (3) of the Act.
15. Forward-looking statements
This news release contains certain forward-looking statements with respect to
the financial condition, results of operations and business of HSBC. These
forward-looking statements represent HSBC's expectations or beliefs
concerning future events and involve known and unknown risks and uncertainty
that could cause actual results, performance or events to differ materially from
those expressed or implied in such statements. Certain statements, such as those
that include the words 'potential', 'estimated', and similar expressions or
variations on such expressions may be considered 'forward-looking statements'.
16. Corporate governance
HSBC is committed to high standards of corporate governance. HSBC Holdings plc
has complied throughout 2005 with the applicable code provisions of the Combined
Code on Corporate Governance issued by the Financial Reporting Council. The
terms of reference of the Group Audit Committee and the Remuneration Committee
were modified in February 2005 to incorporate certain provisions set out in the
Code on Corporate Governance Practices in Appendix 14 to the Rules Governing the
Listing of Securities on the Stock Exchange of Hong Kong Limited which came into
effect on 1 January 2005. HSBC Holdings plc has complied throughout 2005 with
all other applicable code provisions of the Code on Corporate Governance
Practices in Appendix 14 to the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited.
The Board of HSBC Holdings plc has adopted a code of conduct for transactions in
HSBC Group securities by Directors that complies with The Model Code in the
Listing Rules of the Financial Services Authority and with The Model Code for
Securities Transactions by Directors of Listed Issuers ('Hong Kong Model Code')
set out in the Rules Governing the Listing of Securities on The Stock Exchange
of Hong Kong Limited save that The Stock Exchange of Hong Kong has granted
certain waivers from strict compliance with the Hong Kong Model Code, primarily
to take into account accepted practices in the UK, particularly in respect of
employee share plans. Following a specific enquiry, each Director has confirmed
he or she has complied with the code of conduct for transactions in HSBC Group
securities throughout 2005.
The Directors of HSBC Holdings plc are:
Sir John Bond, Baroness Dunn*, Sir Brian Moffat+, S K Green, A W Jebson, Lord
Butler+, R K F Ch'ien+, J D Coombe+, R A Fairhead+, D J Flint, W K L Fung+, M F
Geoghegan, S Hintze+, J W J Hughes-Hallett+, Sir John Kemp-Welch+, Sir Mark
Moody-Stuart+, S W Newton+, S M Robertson+, H Sohmen*, and Sir Brian
Williamson+.
* Non-executive Director
+ Independent non-executive Director
The Group Audit Committee has reviewed the annual results for 2005.
17. Annual Review and Annual Report and Accounts
The Annual Review 2005 and/or Annual Report and Accounts 2005 will be mailed to
shareholders on or about Tuesday 4 April 2006. Copies may be obtained from Group
Corporate Affairs, HSBC Holdings plc, 8 Canada Square, London E14 5HQ, United
Kingdom; Group Public Affairs, The Hongkong and Shanghai Banking Corporation
Limited, 1 Queen's Road Central, Hong Kong; Employee Communications, HSBC -
North America, 2700 Sanders Road, Prospect Heights, Illinois, 60070, USA; HSBC
France, Direction de la Communication, 103 avenue des Champs Elysees, 75419
Paris Cedex 08, France; or from the HSBC Group website - www.hsbc.com.
Chinese translations of the Annual Review and Annual Report and Accounts may be
obtained on request from Computershare Hong Kong Investor Services Limited,
Hopewell Centre, 46th Floor, 183 Queen's Road East, Wan Chai, Hong Kong.
A French translation of the Annual Review may be obtained on request from HSBC
France, Direction de la Communication, 103 avenue des Champs Elysees, 75419
Paris Cedex 08, France.
The Annual Review and Annual Report and Accounts will be available on the Stock
Exchange of Hong Kong's website - www.hkex.com.hk.
Custodians or nominees that wish to distribute copies of the Annual Review and/
or Annual Report and Accounts to their clients may request copies for collection
by writing to Group Corporate Affairs at the address given above. Requests must
be received no later than 13 March 2006.
18. Annual General Meeting
The Annual General Meeting of the Company will be held at the Barbican Hall,
Barbican Centre, London EC2 on Friday 26 May 2006 at 11 am.
Notice of the meeting will be mailed to shareholders on or about
Tuesday 4 April 2006.
19. Interim results for 2006
The interim results for the six months to 30 June 2006 will be announced on
Monday 31 July 2006.
20. Proposed interim dividends for 2006
The Board has adopted a policy of paying quarterly dividends. 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 2006 will be US$0.15 per ordinary share. The proposed
timetables for the dividends in respect of 2006 are:
First interim dividend for 2006
Announcement 2 May 2006
Shares quoted ex-dividend in London, Hong Kong
and Bermuda; American Depositary Shares quoted
ex-dividend in New York 17 May 2006
Record date and closure of Hong Kong
Overseas Branch Register of shareholders
for one day 19 May 2006
Shares quoted ex-dividend in Paris 22 May 2006
Payment date 6 July 2006
Second interim dividend for 2006
Announcement 31 July 2006
Shares quoted ex-dividend in London, Hong Kong
and Bermuda; American Depositary Shares quoted
ex-dividend in New York 16 August 2006
Record date and closure of Hong Kong
Overseas Branch Register of shareholders
for one day 18 August 2006
Shares quoted ex-dividend in Paris 21 August 2006
Payment date 4 October 2006
Third interim dividend for 2006
Announcement 6 November 2006
American Depositary Shares quoted ex-dividend
in New York 21 November 2006
Shares quoted ex-dividend in London, Hong Kong
and Bermuda 22 November 2006
Record date and closure of Hong Kong
Overseas Branch Register of shareholders
for one day 24 November 2006
Shares quoted ex-dividend in Paris 27 November 2006
Payment date 18 January 2007
Fourth interim dividend for 2006
Announcement 5 March 2007
Shares quoted ex-dividend in London, Hong Kong
and Bermuda; American Depositary Shares quoted
ex-dividend in New York 21 March 2007
Record date and closure of Hong Kong
Overseas Branch Register of shareholders
for one day 23 March 2007
Shares quoted ex-dividend in Paris 26 March 2007
Payment date 10 May 2007
21. News release
Copies of this news release may be obtained from Group Corporate Affairs, HSBC
Holdings plc, 8 Canada Square, London E14 5HQ, United Kingdom; The Hongkong and
Shanghai Banking Corporation Limited, 1 Queen's Road Central, Hong Kong; HSBC
Bank USA, 452 Fifth Avenue, New York, NY 10018, USA; HSBC France, Direction de
la Communication, 103 avenue des Champs Elysees, 75419 Paris Cedex 08, France.
The news release will also be available on the HSBC Group website -
www.hsbc.com.
22. For further information contact:
London Hong Kong
Michael Broadbent David Hall
Director of Group Corporate Affairs Head of Group Public Affairs (Asia)
Telephone: +44 20 7991 8980 Telephone: +852 2822 1133
Richard Beck Gareth Hewett
Head of Group External Relations Senior External Relations Manager
Telephone: +44 20 7991 0633 Telephone: +852 2822 4929
Patrick McGuinness
Senior Manager Investor Relations
Telephone: +44 20 7992 1938
Chicago Paris
Lisa Sodeika Chantal Nedjib
Executive Vice President, Managing Director,
Corporate Affairs Corporate Communications
Telephone: +1 847 564 6394 Telephone: +33 1 40 70 7729
Linda Recupero Gilberte Lombard
Executive Vice President, Investor Relations Director
Group Public Affairs Telephone: +33 1 40 70 2257
Telephone: +1 212 525 3800
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HSBC Holdings plc
By:
Name: P A Stafford
Title: Assistant Group Secretary
Date: 06 March, 2006