HSBC 2007 Annual Report Download - page 4

HSBC HOLDINGS PLC
Financial Highlights (continued)
Ratios / 5-year comparison
2
Capital and performance ratios
2007 2006
% %
Capital ratios
Tier 1 capital ...................................................................................................................................... 9.3 9.4
Total capital ....................................................................................................................................... 13.6 13.5
Performance ratios
Return on average invested capital1 ................................................................................................... 15.3 14.9
Return on average total shareholders’ equity2 ................................................................................... 15.9 15.7
Post-tax return on average total assets .............................................................................................. 0.97 1.00
Post-tax return on average risk-weighted assets ............................................................................... 1.95 1.93
Credit coverage ratios
Loan impairment charges as a percentage of total operating income ............................................... 19.61 15.05
Loan impairment charges as a percentage of average gross customer advances .............................. 1.97 1.39
Total impairment allowances outstanding as a percentage of impaired loans at the year-end ......... 104.9 98.5
Efficiency and revenue mix ratios
Cost efficiency ratio3 ......................................................................................................................... 49.4 51.3
As a percentage of total operating income:
– net interest income ..................................................................................................................... 43.1 49.2
– net fee income ............................................................................................................................ 25.1 24.5
– net trading income ...................................................................................................................... 11.2 11.7
Financial ratio
Average total shareholders’ equity to average total assets ............................................................... 5.69 5.97
Share information at the year-end
2007 2006
US$0.50 ordinary shares in issue (million) ....................................................................................... 11,829 11,572
Market capitalisation (billion) ........................................................................................................... US$198 US$212
Closing market price per ordinary share:
– London ........................................................................................................................................ £8.42 £9.31
– Hong Kong ................................................................................................................................. HK$131.70 HK$142.40
Closing market price per American Depositary Share4 ..................................................................... US$83.71 US$91.65
Over 1 year Over 3 years Over 5 years
HSBC total shareholder return to 31 December 20075 ................................... 95.6 111.3 158.8
Benchmarks:
– FTSE 1006 ................................................................................................ 107.4 148.4 194.6
– MSCI World7 ............................................................................................ 108.1 140.8 182.0
For footnotes, see page 4.
The consolidated financial statements of HSBC and the separate financial statements of HSBC Holdings have been prepared in accordance
with International Financial Reporting Standards (‘IFRSs’) as endorsed by the European Union (‘EU’). EU-endorsed IFRSs may differ
from IFRSs as published by the International Accounting Standards Board (‘IASB’) if, at any point in time, new or amended IFRSs have
not been endorsed by the EU. At 31 December 2007, there were no unendorsed standards effective for the year ended 31 December 2007
affecting these consolidated and separate financial statements, and there was no difference between IFRSs endorsed by the EU and IFRSs
issued by the IASB in terms of their application to HSBC. Accordingly, HSBC’s financial statements for the year ended 31 December 2007
are prepared in accordance with IFRSs as issued by the IASB.
Information for 2003 has been prepared under previous HSBC policies in accordance with UK Generally Accepted Accounting
Principles (‘UK GAAP’), which are not comparable with IFRSs.
HSBC uses the US dollar as its presentation currency because the US dollar and currencies linked to it form the major currency bloc
in which HSBC transacts its business. Unless otherwise stated, the information presented in this document has been prepared in
accordance with IFRSs.
When reference to ‘underlying’ or ‘underlying basis’ is made in tables or commentaries, comparative information has been expressed
at constant currency (see page 131) and adjusted for the effects of acquisitions and disposals. A reconciliation of reported and underlying
profit before tax is presented on page 15.