HSBC 2011 Annual Report Download - page 55

53
Overview Operating & Financial Review Corporate Governance Financial Statements Shareholder Information
• On a reported basis, the decline in Other reflected the
non-recurrence of gains resulting from the sale of
Eversholt Rail Group and HSBC Private Equity (Asia)
Ltd in 2010. On an underlying basis, the reduction
was driven by higher allocated funding costs, mainly
in Europe, reflecting debt issuances during the year.
• Principal Investments reported lower revenues as the
deterioration in market confidence resulted in fewer
disposal opportunities and lower gains on sale.
Strategic imperatives
Reinforce client coverage and client-led solutions
• Investment in selective recruitment across our client
coverage groups is key to delivering our strategy.
Since June 2011, we have announced a number of key
appointments to lead our global coverage teams and
relocated a Co-Head of Global Banking to Asia to
maintain our focus on growth markets.
• We also established the Corporate Treasury Solutions
Group, which brought together our fixed income,
currency, commodities, debt financing and risk
management capabilities in Europe, Middle East and
North Africa. This enabled our client-facing teams to
provide integrated, cross-product solutions to our
corporate clients.
• We continued to leverage our unique geographical
franchise and global connectivity through our
multinational proposition. Cross-border desks
established in 2010 in Rest of Asia-Pacific, Latin
America and the Middle East and North Africa to
capitalise on growing international trade flows in
‘South-South’ trade corridors generated strong growth
in revenues from these markets in 2011.
Enhance core product strengths and selectively develop
new capabilities
• We continued to invest in e-commerce platforms to
enhance our product offerings in foreign exchange.
The first phase of our new e-FX platform is complete
and it is live internally in Hong Kong, Dubai, London,
Toronto and New York. Get Rate, which provides
customers with live dealable exchange rates, is now
available in 11 countries through various channels.
These developments have contributed to a 43%
increase in electronic volumes and a 16% rise in
foreign exchange revenues in 2011.
• Prime Services, which offers a fully integrated set of
services including custody, financing solutions and
reporting to alternative fund managers, is now live in
Europe and Asia and a significant number of hedge
fund managers are in the process of on-boarding.
• We also upgraded our equity execution and research
platforms in 2011 in response to client demand,
focusing on selected European countries and faster
growing markets where we have a natural advantage.
Our Equity Capital Markets team achieved top 10
league table positions in six out of nine target
countries, as well as significant market share
improvement in Asia and other key locations. We also
strengthened our Equity Research team which,
together with targeted client interaction, enabled us to
move into the top 10 of equity research houses for the
first time.
Collaborate with other global businesses to deliver
incremental revenues
• In order to further enhance our collaboration with
CMB, we appointed heads of Coverage and
Distribution to coordinate the specialist CMB sales
teams and dedicated execution desks within GB&M.
Revenues from the sale of GB&M products to CMB
customers, which are shared between the two global
businesses, grew by more than US$500m, primarily
from foreign exchange and interest rate management
products. In addition, we secured lead roles in a
number of event deals with CMB clients in 2011,
utilising our expertise in equity and debt capital
markets, leveraged and acquisition finance and
advisory.
• We extended the Wealth Solutions Group model from
Europe, Middle East and North Africa into Asia and
the US to increase the sales of GB&M’s wealth-
related products, including foreign exchange,
structured products and securities execution, through
RBWM channels. We also developed new products
aligned to customer needs, including Protected World
Selection funds and mortgage protection products in
the UK, which have led to growth in revenues from
our RBWM distribution network.
Strategic re-engineering to deliver sustainable cost
savings
• We continued to reshape our business with the aim of
lowering the future cost base of our operations. We
undertook an organisational effectiveness review,
which resulted in a reduction in staff numbers as we
aligned our client coverage model and implemented
productivity measures.
• We focused on generating efficiency gains from the
better use of technology and continued to rationalise
and standardise our operational and trading platforms
across asset classes and markets. This will enable
ongoing investment in people and infrastructure to
support our strategic priorities while minimising cost
growth.