HSBC 2007 Annual Report Download - page 393

391
By customer group
HSBC’s operations include a number of shared support services and head office functions. The costs of these
functions are allocated to customer groups, where appropriate, on a systematic and consistent basis. In addition, a
number of income and expense items include the effect of financial transactions entered into in the ordinary course of
business between customer groups co-operating within the integrated HSBC Group. The following analysis includes
inter-segment amounts within each customer group with the elimination shown in a separate column.
Profit before tax
Year ended 31 December 2007
Personal
Financial
Services
Commercial
Banking
Global
Banking
& Markets
Private
Banking Other
Intra-
HSBC
items Total
US$m US$m US$m US$m US$m US$m US$m
Net interest income/(expense) .... 29,069 9,055 4,430 1,216 (542) (5,433) 37,795
Net fee income/(expense) ........... 11,742 3,972 4,901 1,615 (228) – 22,002
Trading income excluding net
interest income ........................ 38 265 3,503 525 127 – 4,458
Net interest income/(expense)
on trading activities ................ 140 31 (236) 9 (1) 5,433 5,376
Net trading income ...................... 178 296 3,267 534 126 5,433 9,834
Net income/(expense) from
financial instruments
designated at fair value ........... 1,333 22 (164) (1) 2,893 – 4,083
Gains less losses from financial
investments ............................. 351 90 1,313 119 83 – 1,956
Gains arising from dilution in
interests in associates .............. – – – – 1,092 – 1,092
Dividend income ......................... 55 8 222 7 32 – 324
Net earned insurance premiums .. 8,271 733 93 – (21) – 9,076
Other operating income .............. 387 165 1,218 58 3,523 (3,912) 1,439
Total operating income ............ 51,386 14,341 15,280 3,548 6,958 (3,912) 87,601
Net insurance claims incurred
and movement in liabilities to
policyholders .......................... (8,147) (391) (70) – – – (8,608)
Net operating income1 ............... 43,239 13,950 15,210 3,548 6,958 (3,912) 78,993
Loan impairment charges and othe
r
credit risk provisions .............. (16,172) (1,007) (38) (14) (11) – (17,242)
Net operating income2 .............. 27,067 12,943 15,172 3,534 6,947 (3,912) 61,751
Operating expenses ..................... (21,757) (6,252) (9,358) (2,025) (3,562) 3,912 (39,042)
Operating profit ........................ 5,310 6,691 5,814 1,509 3,385 – 22,709
Share of profit in associates
and joint ventures ................... 590 454 307 2 150 – 1,503
Profit before tax ........................ 5,900 7,145 6,121 1,511 3,535 – 24,212
Capital expenditure incurred3 ..... 1,335 527 942 73 995 – 3,872
1 Net operating income before loan impairment charges and other credit risk provisions.
2 Net operating income:
External .................................. 21,059 11,442 23,595 2,144 3,511 – 61,751
Inter-segment .......................... 6,008 1,501 (8,423) 1,390 3,436 (3,912) –
3 Expenditure incurred on property, plant and equipment and intangible assets.