HSBC 2005 Annual Report Download - page 48

HSBC HOLDINGS PLC
Financial Review (continued)
46
Personal Financial Services
Profit before tax Business highlights
Year ended 31 December
2005 2004
US$m US$m
Net interest income ............................. 23,351 21,422
Net fee income ................................... 7,313 6,406
Trading income excluding net
interest income ............................... 360 320
Net interest income
on trading activities ........................ 214 –
Net trading income1 ............................ 574 320
Net income from financial
instruments designated at fair
value ............................................... 574 –
Net investment income on assets
backing policyholders’ liabilities .... – 635
Gains less losses from financial
investments .................................... 19 79
Dividend income ................................ 16 16
Net earned insurance premiums .......... 4,864 3,652
Other operating income ...................... 729 360
Total operating income .................... 37,440 32,890
Net insurance claims2 ......................... (3,716) (2,953)
Net operating income before loan
impairment charges and other
credit risk provisions .................... 33,724 29,937
Loan impairment charges and other
credit risk provisions ...................... (7,537) (6,500)
Net operating income ....................... 26,187 23,437
Total operating expenses .................... (16,427) (15,009)
Operating profit ................................ 9,760 8,428
Share of profit in associates and
joint ventures .................................. 144 69
Profit before tax ................................ 9,904 8,497
By geographical region
Europe ................................................ 1,932 1,621
Hong Kong ......................................... 2,628 2,063
Rest of Asia-Pacific ............................ 377 336
North America .................................... 4,761 4,384
South America .................................... 206 93
Profit before tax .................................. 9,904 8,497
%%
Share of HSBC’s profit before tax ...... 47.2 44.9
Cost efficiency ratio ........................... 48.7 50.1
US$m US$m
Selected balance sheet data3
Loans and advances to customers
(net) ................................................ 398,884 370,576
Total assets4 ........................................ 471,760 441,114
Customer accounts ............................. 321,240 319,485
For footnotes, see page 55.
• Pre-tax profits from Personal Financial Services grew
by 17 per cent to US$9,904 million, driven by
improved performances in the core operations in the
UK, North America and Hong Kong. On an
underlying basis, growth in profit before tax was
15 per cent, and markedly strong rates of growth were
achieved in Turkey, Canada, the Middle East and
Brazil.
• The importance of direct sales channels continued to
increase globally. HSBC conducted 183 million
transactions online in 2005, an increase of 17 per cent
on 2004. Online sales to personal customers rose by
65 per cent and online revenues by 71 per cent.
• The number of customers using HSBC Premier grew
for the sixth consecutive year, to 1.3 million, an
increase of 17 per cent compared with 2004. HSBC
Premier was launched in Bangladesh and South
Korea during the year, and is now available in
35 countries.
Europe
• In the UK, investment in marketing and a range of
campaigns, including the first ever January sale for a
UK bank, heightened brand awareness and increased
market share in most product lines. In France,
marketing campaigns accompanying the rebranding
to ‘HSBC’ by CCF and four subsidiary banks
generated sales growth in mortgages, current
accounts and savings products. In Turkey, marketing
helped increase customer numbers by 7 per cent to
2.2 million.
• HSBC’s mortgage products in the UK were highly
rated: HSBC was named ‘Best Value National Bank’
for mortgage borrowing over two, five and ten years
by What Mortgage magazine for the fourth year
running, and ‘Best Bank’ for mortgages by Mortgage
magazine. First Direct was also named ‘Best Direct
Lender’ over two and ten years by What Mortgage
magazine, and ‘Best Offset Mortgage’ by Mortgage
magazine.
• The UK business was further streamlined, with the
product range simplified and strengthened and the
rollout of a branch refurbishment programme initially
covering 60 major branches. In the UK, the credit
card operations of HFC Bank and HSBC Bank were
merged. Good progress was made with the integration
and expansion of M&S Money.