HSBC 2004 Annual Report Download - page 4

HSBC HOLDINGS PLC
Financial Highlights (continued)
2
Capital and performance ratios (annualised)
2004
%
2003
%
Capital ratios
Tier 1 capital ................................................................................................................................... 8.9 8.9
Total capital .................................................................................................................................... 12.0 12.0
Performance ratios (excluding goodwill amortisation)
Return on average invested capital7 ................................................................................................ 15.2 13.7
Return on average net tangible equity8,9 .......................................................................................... 25.4 24.7
Post-tax return on average tangible assets9 ...................................................................................... 1.31 1.21
Post-tax return on average risk-weighted assets9 ............................................................................. 2.23 2.07
Performance ratios (as reported)
Return on average shareholders’ funds ........................................................................................... 14.4 13.0
Post-tax return on average total assets ............................................................................................ 1.12 1.01
Post-tax return on average risk-weighted assets .............................................................................. 1.96 1.78
Credit coverage ratios
Provisions for bad and doubtful debts as a percentage of operating profits before goodwill
amortisation and provisions ........................................................................................................ 25.7 30.5
Provisions for bad and doubtful debts as a percentage of average gross customer advances:
– in aggregate .................................................................................................................................. 1.04 1.25
– Consumer Finance10 ..................................................................................................................... 4.26 5.21
– other HSBC .................................................................................................................................. 0.19 0.38
Total provisions outstanding as a percentage of non-performing loans at year end:
– in aggregate .................................................................................................................................. 95.5 91.0
– Consumer Finance10 ..................................................................................................................... 102.1 110.5
– other HSBC .................................................................................................................................. 92.5 82.1
Efficiency and revenue mix ratios
Cost:income ratio (excluding goodwill amortisation)11 .................................................................. 51.1 51.3
– constant currency basis ................................................................................................................ 51.1 51.8
As a percentage of total operating income:
– net interest income ....................................................................................................................... 61.3 62.3
– other operating income ................................................................................................................ 38.7 37.7
– net fees and commissions ............................................................................................................ 25.9 25.3
– dealing profits .............................................................................................................................. 5.1 5.3
Constant currency
Constant currency comparatives in respect of 2003 and 2002, used in the 2004 and 2003 commentaries respectively,
are computed by retranslating into US dollars:
• the profit and loss accounts for 2003 and 2002 of non-US dollar branches, subsidiary undertakings, joint
ventures and associates at the average rates of exchange for 2004 and 2003 respectively; and
• the balance sheets at 31 December 2003 and 2002 for non-US dollar branches, subsidiary undertakings, joint
ventures and associates at the rates of exchange ruling at 31 December 2004 and 2003 respectively.
No adjustment is made to the exchange rates used to translate foreign currency denominated assets and liabilities
into the functional currency of any HSBC branches, subsidiary undertakings, joint ventures and associates.
2004 compared with 2003 2003 compared with 2002
As
reported
Constant
currency
As
reported
Constant
currency
%% %%
Operating income and cost growth
Net interest income ....................................................... 21 17 66 58
Fees and commissions (net) .......................................... 26 17 33 24
Dealing profits .............................................................. 18 12 66 58
Total operating income ................................................. 23 18 54 46
Administrative expenses (excluding goodwill
amortisation) ............................................................. 23 17 41 32
For the above footnotes, see ‘Footnotes to Financial Highlights’ on page 4.