3 May 2024
HSBC HOLDINGS PLC - AGM
STATEMENTS
At the Annual General Meeting of HSBC Holdings
plc, held at The InterContinental London
O2, London, UK today, the following statements were
issued by Group Chairman, Mark Tucker and Group Chief
Executive, Noel Quinn.
Group Chairman's Statement:
When we met last year, you will
recall that we debated the resolutions tabled by a small group of
shareholders who proposed strategy and structural reviews for your
Bank and a restriction on your Board's ability to set the
dividend.
Noel and I set out the clear and
compelling reasons why we believed that it was in your best
interests, as well as those of our clients and customers, that we
stay the course and deliver on our current strategy.
I am pleased to say that the
overwhelming majority of shareholders agreed with us. That
agreement was expressed very clearly when you had the opportunity
to vote.
A year later, you can see the value
of your support for the Board's recommendations which is clearly
demonstrated by:
Firstly, the improved financial
performance of the Group; and
Secondly, the increased returns that
we delivered in 2023.
Let me expand briefly on performance
and returns.
I'll start with our improved
financial performance.
2023 was a very strong year for
HSBC.
We reported record profits before tax
which exceeded US$30bn for the first time in your Bank's 159-year
history.
Our reported return on tangible
equity was 14.6% which was our best performance in over a
decade.
We also demonstrated good,
broad-based profit generation through geographic and business
diversification.
This performance points to the fact
that our international strategy is working.
Our first quarter results which were
announced earlier this week provided further evidence that our
strategy is delivering.
Noel will speak to the first quarter
results in a moment.
Let me now turn to how our
performance, both in 2023 and in the first quarter of 2024, has
enabled us to reward you, our loyal shareholders.
Our 2023 record profit performance
allowed us to announce a full-year dividend of 61 US cents per
share which was our highest full-year dividend since
2008.
In total we returned approximately
US$19bn to shareholders in respect of 2023.
This included the three share
buy-backs announced last year totalling US$7bn.
On top of that we announced, during
our annual results presentation in February, an additional share
buy-back of up to US$2bn which has now been completed.
Earlier this week at our first
quarter results we announced a further US$8.8bn of dividends and
share buy-backs.
This consisted of:
(1) A first interim dividend
for 2024 of 10 US cents per share
(2) A special dividend of 21
US cents per share, following the completion of the sale of our
Canada business, which will be payable in June alongside the first
interim dividend.
(3) And a new share buy-back
of up to US$3bn which we will expect to initiate shortly and aim to
complete within three months.
Looking ahead, the dividend outlook
remains strong.
Our dividend payout ratio target for
2024 remains 50%, excluding material notable items and related
impacts.
And we continue to target a mid-teens
return on tangible equity in 2024.
We remain very focussed on, and
committed to, rewarding you for the trust that you have placed in
us.
Despite the continuing uncertain
economic environment globally, we are confident that we can
continue to deliver good performance and returns.
Higher interest rates in Western
economies are still weighing on global growth which HSBC's
economists forecast to come in at 2.6% in 2024 and 2025.
Inflation data remains key to the
global interest rate outlook.
Central banks are closely and
carefully watching the data and need to be confident that inflation
will continue to head down to target on a sustainable basis before
lowering rates.
Our economists continue to anticipate
a gradual reduction in inflation with our global inflation
forecasts at 5.8% in 2024 and 3.8% in 2025.
We expect the ECB and Bank of England
to cut rates in June, cutting by 150bps by year-end 2025. We expect
the Fed to cut in September, cutting by 100bps by year-end
2025.
However, with growth and employment
numbers holding up and inflationary pressures lingering, that
relative certainty in the central banks' decision-making process is
not easy to achieve and it may not be a steady glide
path.
But the silver lining of stronger
economic numbers, even with some recent stubbornness in inflation,
means that the economies are broadly resilient.
All of this is occurring in an
increasingly unpredictable context:
The wars between Russia and Ukraine
and between Israel and Hamas continue to have a devastating
humanitarian impact and to cause significant economic
disruption.
This year will also be the biggest
election year on record: more than four billion voters will go to
the polls. The US, UK, India and Mexico are among the countries
holding national elections.
The outcomes will have implications
that go beyond the national realm. They are likely to impact
international security arrangements, trade, and green policy to
name a few.
Through all this, our focus remains
on executing our strategy, navigating the challenges and making the
most of the opportunities.
Before I invite Noel to share his
views on your Bank's performance, I would like to add to what I
said earlier on his decision to retire from the Bank.
The Board and I would like to pay
tribute to Noel's exceptional leadership. As Group Chief Executive,
he drove our transformation strategy, creating a simpler, more
focused business. This enabled us to deliver the improved
performance I just outlined and to create a platform for future
growth and development.
It has been a pleasure and privilege
to work with and alongside him.
Group Chief Executive's Statement:
I'd like to begin by saying how
grateful I am to you, and to the Board, for all your support,
guidance, friendship and partnership.
I am proud of what my HSBC colleagues
and I have achieved together over the past five years.
Over that period, we have hit some
significant financial milestones - a number of which I will talk
about today.
We have also created a more focused
business, and I believe we have built a strong platform for the
Bank's next phase of development and growth.
I'd also like to thank you - my
fellow shareholders - for your continued support.
Leading our bank for the past five
years has been a privilege, as well as a great
responsibility.
My goal has always been to deliver
the improved financial performance and returns that we all wanted
to see, and you deserve.
As Mark said, we were therefore
pleased with the performance of the bank in 2023, and in the first
quarter of 2024.
Our strong financial performance was
reflected in the significant amount of capital distributions that
we announced for 2023.
At 61 cents per share, the full year
dividend was well above pre-Covid levels, whilst also still
enabling us to retain a good proportion of our earnings to invest
in the business
As Mark said, it's also the highest
full-year dividend since 2008.
In total, we returned around
US$19bn to you, our shareholders, through
dividends and share buy-backs in respect of 2023.
And the trend of strong capital
distribution continued in the first quarter of this
year.
We announced a further
US$8.8bn of distributions earlier this
week.
This included:
- A first interim dividend for 2024 of 10 cents per
share;
- A share buy-back of up to US$3bn;
- And a special dividend of 21 cents per share, as the first
priority use of the proceeds from the sale of HSBC Canada which
will be payable in June.
As I said, the key driver for these
strong distributions was the improved financial performance of your
bank.
2023 was a very good year for
HSBC.
Our reported profit before tax was
above US$30bn for the first time
ever.
Strong revenue growth across all
three global businesses helped us to achieve our best return on
tangible equity in more than a decade.
And there was good, broad-based
geographical growth, which underlines the value of our
model.
Our strategy is working, and there
was further evidence of this at our first quarter
results.
We reported US$12.7bn of profit before tax for the first
quarter.
On an annualised basis, we delivered
a return on tangible equity of 26.1%, or 16.4% excluding notable
items.
And we are on track to meet all of
our 2024 guidance, including a mid-teens return on tangible equity
excluding notable items, and our commitment to limit cost growth to
around 5% on a target basis.
So, your bank is performing well and
has strong momentum.
But we have also built a strong
platform for future growth.
Given the strength of our balance
sheet, we have benefited from supportive interest rates.
But we have worked hard to reduce our
sensitivity to interest rates.
And we are focused on implementing
revenue growth strategies that can offset the impact of declining
interest rates.
Let me describe just a
few.
The first opportunity is continued
growth in our two home markets of the UK and Hong Kong.
In the UK, we have good traction in
Commercial Banking and in Wealth and Personal Banking.
We were the number one bank for UK
large corporates as well as the best bank in the UK for SMEs, as
assessed by Euromoney.
We also attracted over one million
new-to-bank customers in the UK last year, and we have had steady
mortgage growth and have taken market share in
Mortgages.
And we are ideally positioned to
capitalise on the wealth accumulation in Hong Kong and mainland
China, driven by rapid urbanisation across mainland China and the
increased use of the Connect schemes with Hong Kong, and as Hong
Kong plays a key role facilitating investment via developing trade
corridors, like those between Asia and the Middle East.
The second opportunity is to grow our
strong international franchise.
We ranked number one for trade
revenue globally last year, second by revenue in our payments
business, and we've been number three globally by revenue in FX
since 2021.
But there is a significant amount of
untapped opportunity within our existing client base, which can
drive revenue growth in the face of declining interest
rates.
To provide some evidence of this, we
grew revenue from clients who bank with us in more than one market
by 29% in 2023.
In recent years, we have also ramped
up our investment in our Wealth and Personal Banking international
business.
40% of Wealth and Personal Banking
revenue already comes from international customers, and we believe
we can take it much further.
And I'm pleased that there was a very
strong performance in Wealth in the first quarter, with revenue up
by 12% on the same period last year.
Alongside this, we will continue to
diversify our revenue geographically.
And by maintaining a tight cost
discipline, we will invest in growth areas, including new
technology and our new global HSBC Innovation Banking proposition,
which has got off to a very good start since launching last
June.
Before I hand back to Mark, I also
want to speak about an area of our work that is incredibly
important to all of you, to the Bank and to the communities we
serve.
Supporting the transition to net zero
is one of HSBC's four strategic pillars.
As one of the world's largest
international banks, with a presence in the regions and sectors
where the most significant change is needed, we are well placed to
support the transition.
The transition is driving huge demand
for finance - estimates indicate up to US$40tn will be required globally by 2030, around 60% of which
will be needed in ASEAN and the Middle East.
So we operate in places where we can
have a real impact.
As you know, we set an ambition in
2020 to become a net zero bank by 2050, and net zero in our own
operations by 2030.
In January, we published our first
Net Zero Transition Plan.
It sets out, for the first time in
one place, how we intend to channel the distinctive strengths of
HSBC to have a meaningful impact on emissions reduction in the real
economy.
We want to be clear about our
approach and the changes that are underway.
But we also cannot do it
alone.
Our ability to transition relies on
decarbonisation in the real economy happening at the necessary
pace.
Our customers and the industries and
markets we serve will need to transition effectively, supported by
strong government policies and regulation, and substantially scaled
investment.
Engagement and collaboration are
therefore central to our approach.
As a bank, our success depends on
enabling our clients to succeed.
That's why our goal is to work with
our clients, to understand their plans to get to net zero and to
help make them a reality.
We don't have all the
answers.
But our approach and transition plan
will evolve over time, as we and others learn more, science evolves
and new technologies emerge at scale.
To conclude, I am pleased you are
seeing the benefits of our strategy through increased returns and
dividends.
Our strategy is working.
And we remain focused on delivering
the returns that we all want.
Thank you again for your continued
support.
Media
enquiries to:
Press
Office
+44 (0) 20 7991
8096
pressoffice@hsbc.com
Investor enquiries to:
Neil Sankoff
+44 (0)20 7991
5072
investorrelations@hsbc.com
Note to editors:
HSBC Holdings plc
HSBC Holdings plc, the parent company
of HSBC, is headquartered in London. HSBC serves customers
worldwide from offices in 62 countries and territories. With assets
of US$3,001bn at
31 March 2024, HSBC is one of the world's largest banking and
financial services organisations
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