HSBC 2010 Annual Report Download - page 6

HSBC HOLDINGS PLC
Report of the Directors: Overview (continued)
Group Chairman’s Statement
4
Group Chairman’s Statement
When I took on the role of Chairman less than 90
days ago, I was acutely aware of the challenges
facing our industry. I was conscious too of the need
to demonstrate to all of our stakeholders that HSBC
understands the responsibilities that accompany the
systemic significance which continued success has
built for HSBC in many of the markets in which we
operate, not least those in Asia, given their historical
significance to the Group. 145 years after we were
founded, Hong Kong and the rest of Asia remain at
the heart of HSBC’s strength and identity and our
commitment to the region is unwavering.
I fully acknowledge that our scale, the trust that
our depositors place in us and our relevance to our
personal and corporate clients – for their financing,
banking, investment and risk management needs –
all depend upon our maintaining our reputation and
our integrity.
I also understand how important it is for you,
our shareholders, that HSBC builds sustainable long-
term value that is reflected through the share price
and rebuilds, as quickly as competing regulatory
demands allow, the dividend that was reduced during
the financial crisis.
I firmly believe that HSBC has the people, the
financial strength and the organisational structure
best able to deliver all of the above and it is a
privilege to have the opportunity to serve as Group
Chairman as we enter a fresh chapter in our history.
Before I go any further, I want to pay tribute to
both Stephen Green and Michael Geoghegan, who
stepped down at the end of last year from their roles
as Group Chairman and Group Chief Executive
after, respectively, 28 and 37 years’ service to
HSBC. It fell to them to be at the helm as HSBC
navigated its way through the worst financial crisis
since the 1930s. Mike led from the front in
addressing the problems in our consumer finance
subsidiary in the United States and in reshaping
HSBC’s organisational structure and operational
practices in order to better and more efficiently serve
an increasingly interconnected world. Stephen’s
personal reputation for integrity and probity stood
out and distinguished HSBC during a period of
intense disaffection with the banking industry. For
their contribution over many years we owe them a
deep debt of gratitude and wish them both well.
Our performance in 2010
The Group Chief Executive’s Business Review sets
out clearly how HSBC delivered a much improved
balance of profits in 2010. It is reassuring to see our
Personal Financial Services businesses returning to
profitability in aggregate and Commercial Banking
growing significantly, largely in emerging markets.
These achievements augmented another year of
strong performance in Global Banking and Markets.
Earnings per share improved strongly, rising by
115% to reach US$0.73 per share.
The Group’s capital position also strengthened
with the core tier 1 ratio, the ratio most favoured by
regulators as it comprises equity capital after
regulatory adjustments and deductions, increasing
from 9.4% to 10.5%, largely due to profit retention
throughout the year.
As a consequence of this strong capital
generation, together with greater clarity on the
direction of regulatory reform of capital
requirements and an improving economic backdrop
in the developed world – particularly in the United
States – the Board has approved increases in both the
final dividend payment in respect of 2010 and the
planned quarterly dividends for 2011. The final
dividend for 2010, payable on 5 May 2011 to
shareholders on the register on 17 March 2011, will
be 12 cents per ordinary share, up from 10 cents at
the same point last year. For the remainder of 2011
we plan to pay quarterly dividends of nine cents for
each of the first three quarters compared with eight
cents in respect of the equivalent quarters of 2010.
A new leadership team
We enter 2011 with a new leadership team, but only
in the sense of changed roles. Everyone has worked
together over many years and there is immense
experience to draw on both from within HSBC and
from earlier careers at peer organisations. Stuart
Gulliver is leading the management team as Group
Chief Executive. His clear objective is to deliver