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HSBC BANK PLC
Strategic Report: Business Review (continued)
19
Significant cost items by business segment
RBWM
CMB
GB&M
GPB
Other
Total
£m
£m
£m
£m
£m
£m
2014
UK customer redress programmes
602
85
90
–
–
777
Restructuring and other related costs
15
8
14
–
35
72
Madoff related litigation costs
–
–
(172)
–
–
(172)
Settlements and
provisions in conncection with foreign
exchange investigations
–
–
746
–
–
746
Year ended 31 December
617
93
678
–
35
1,423
2013
UK customer redress programmes
610
91
84
2
–
787
Restructuring and other related costs
41
18
6
1
30
96
Madoff related litigation costs
–
–
193
–
–
193
Operational losses (dissolved company)
–
(10)
–
–
–
(10)
Gain on change in delivering ill-health benefits
(123)
(104)
(53)
–
–
(280)
Year ended 31 December
528
(5)
230
3
30
786
Net impact on profit before tax by business segment
RBWM
CMB
GB&M
GPB
Other
Total
£m
£m
£m
£m
£m
£m
2014
Reported profit before tax
213
1,592
(19)
115
52
1,953
Less significant revenue items
(492)
(15)
(140)
(26)
17
(656)
Add significant cost items
617
93
678
–
35
1,423
Adjusted profit before tax year ended 31 December
1,322
1,700
799
141
70
4,032
Net impact on reported profit and loss
1,109
108
818
26
18
2,079
2013
Reported profit before tax
1,177
1,333
1,023
140
(379)
3,294
Less significant revenue items
33
–
4
–
(167)
(130)
Add significant cost items
528
(5)
230
3
30
786
Adjusted profit before tax year ended 31 December
1,672
1,328
1,249
143
(182)
4,210
Net impact on reported profit and loss
495
(5)
226
3
197
916
Retail Banking and Wealth Management
2014
2013
£m
£m
Net interest income
3,158
3,569
Net fee income
1,356
1,502
Trading income
(149)
147
Other income
(157)
(147)
Net operating income before
impairments and provisions
4,208
5,071
Loan impairment charges
and other credit risk provisions
(162)
(223)
Net operating income
4,046
4,848
Total operating expense
(3,834)
(3,673)
Operating profit
212
1,175
Share of profit in associates and joint
ventures
1
2
Profit before tax
213
1,177
Profit before tax – by country
2014
2013
£m
£m
United Kingdom
381
995
France
(113)
182
Germany
17
19
Turkey
(94)
(47)
Malta
16
22
Other
6
6
Profit before tax
213
1,177
Review of performance
Profit before tax (£m)
RBWM reported a profit before tax of £213 million, £964
million or 82 per cent lower than 2013.
On an adjusted basis, RBWM profit before tax was
£1,322 million compared to £1,672 million in 2013,
primarily due to a reduction in UK revenues.
Business highlights
In the UK RBWM approved £11.4 billion of new
mortgage lending to over 118,000 customers, including
£3.5 billion to over 27,500 first time buyers. Drawn down
mortgage balances, however, remained broadly
unchanged. The loan-to-value (‘LTV’) ratio on new
lending was 60 per cent compared with an average of
43.7 per cent for the total mortgage portfolio. In 2014,
213
1,177
1,109 1,322
495 1,672
2014
2013
Adjusted Profit
Reported
Significant items