HSBC 2006 Annual Report Download - page 296

HSBC HOLDINGS PLC
Financial Statements (continued)
294
Consolidated income statement for the year ended 31 December 2006
2006 2005 2004
Notes US$m US$m US$m
Interest income .................................................................................... 75,879 60,094 50,471
Interest expense ................................................................................... (41,393) (28,760) (19,372)
Net interest income .............................................................................. 34,486 31,334 31,099
Fee income ........................................................................................... 21,080 17,486 15,902
Fee expense .......................................................................................... (3,898) (3,030) (2,954)
Net fee income ..................................................................................... 17,182 14,456 12,948
Trading income excluding net interest income ................................... 5,619 3,656 2,786
Net interest income on trading activities ............................................. 2,603 2,208 –
Net trading income .............................................................................. 8,222 5,864 2,786
Net income from financial instruments designated at fair value ........ 3 657 1,034 –
Net investment income on assets backing policyholders’ liabilities .. – – 1,012
Gains less losses from financial investments ...................................... 969 692 540
Dividend income .................................................................................. 340 155 622
Net earned insurance premiums .......................................................... 4 5,668 5,436 5,368
Other operating income ....................................................................... 2,546 2,733 1,613
Total operating income ..................................................................... 70,070 61,704 55,988
Net insurance claims incurred and movement in policyholders’
liabilities ......................................................................................... 5 (4,704) (4,067) (4,635)
Net operating income before loan impairment charges and
other credit risk provisions .......................................................... 65,366 57,637 51,353
Loan impairment charges and other credit risk provisions ................. (10,573) (7,801) (6,191)
Net operating income ........................................................................ 6 54,793 49,836 45,162
Employee compensation and benefits ................................................. 7 (18,500) (16,145) (14,523)
General and administrative expenses .................................................. 8 (12,823) (11,183) (9,739)
Depreciation and impairment of property, plant and equipment ........ 23 (1,514) (1,632) (1,731)
Amortisation and impairment of intangible assets............................... (716) (554) (494)
Total operating expenses ................................................................... (33,553) (29,514) (26,487)
Operating profit ................................................................................. 21,240 20,322 18,675
Share of profit in associates and joint ventures ................................... 20 846 644 268
Profit before tax ................................................................................. 22,086 20,966 18,943
Tax expense ......................................................................................... 10 (5,215) (5,093) (4,685)
Profit for the year .............................................................................. 16,871 15,873 14,258
Profit attributable to shareholders of the parent company .................. 15,789 15,081 12,918
Profit attributable to minority interests ............................................... 1,082 792 1,340
US$ US$ US$
Basic earnings per ordinary share ....................................................... 12 1.40 1.36 1.18
Diluted earnings per ordinary share .................................................... 12 1.39 1.35 1.17
Dividends per ordinary share .............................................................. 11 0.76 0.69 0.63
The accompanying notes on pages 301 to 434, the audited sections of the ‘Report of the Directors: The Management of Risk’ on pages 165
to 247, and the ‘Critical accounting policies’ on pages 111 to 115 form an integral part of these financial statements.