HSBC 2011 Annual Report Download - page 57

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Overview Operating & Financial Review Corporate Governance Financial Statements Shareholder Information
Strategic imperatives
Expand in faster-growing markets
• Progress was made in implementing key
strategic initiatives, including developing the
faster-growing markets business through
investment in front line staff and systems. The
majority of net new money in 2011 has
originated from faster-growing markets.
Grow annuity revenue
• Product capabilities were enhanced with the
launch of renminbi-based products and further
development of our alternative investment
offerings and trust and estate planning products.
Leverage intra-Group strengths
• Intra-Group referrals contributed net new money
of US$6.3bn or 49% of total net new money.
• Referrals from GB&M for institutional private
clients grew significantly, and benefited from
the continued success of the Family Office
advisory scheme.
Invest in platform while controlling costs
• The global roll-out of the front-office systems
programme continued in order to improve
operational efficiency and client service, and
information security standards were enhanced.
Progress was made in rationalising the business,
through the use of the five filters analysis, with
the closure of operations in Russia and sale of
our operations in Japan. A restructuring exercise
is also underway in line with our targets to
improve operational effectiveness, reflected in a
4% reduction in staff numbers in the second half
of 2011.
Other
‘Other’ contains the results of certain
property transactions, unallocated
investment activities, centrally held
investment companies, movements in
fair value of own debt, central support
and functional costs with associated
recoveries, HSBC’s holding company and
financing operations.
2011 2010 2009
US$m US$m US$m
Net interest expense ........ (911) (998) (1,035)
Net trading income/
(expense) ...................... (355) (311) 279
Change in credit spread
on long-term debt ......... 4,161 (258) (6,247)
Other changes in fair
value ............................. 78 42 (196)
Net income/(expense)
from financial
instruments designated
at fair value .................. 4,239 (216) (6,443)
Other income .................. 6,172 6,185 5,176
Net operating income/
(expense)52 .................... 9,145 4,660 (2,023)
Impairment (charges)/
recoveries53 ................... – 3 (8)
Net operating income/
(expense) ...................... 9,145 4,663 (2,031)
Total operating expenses (7,492) (5,918) (4,715)
Operating profit/(loss) .. 1,653 (1,255) (6,746)
Income from associates54 9 94 26
Profit/(loss) before tax .. 1,662 (1,161) (6,720)
For footnotes, see page 95.