HSBC 2015 Annual Report Download - page 25

Movement in adjusted profit before tax compared with 2014
538
(553)
(1,606)
63
(1,558)
Revenue
LICs
Operating expenses
Share of profits in associates
and joint-ventures
Profit before tax
57,765
2015 ($m) Change ($m) (%)
(3,721)
(36,182)
2,556
20,418
1
(17)
(5)
3
(7)
Adjusted results
This table shows our adjusted results
for 2015. These are discussed in more
detail on the following pages.
Adjusted results 2015
$m
2014
$m
Net operating income before loan income charges
and other credit risk provisions (revenue) 57,765 57,227
Loan impairment charges and other credit risk provisions (‘LICs’) (3,721) (3,168)
Total operating expenses (36,182) (34,576)
Operating profit 17,862 19,483
Share of profit in associates and joint ventures 2,556 2,493
Profit before tax 20,418 21,976
Adjusted performance
Our reported results are prepared in
accordance with IFRSs as detailed
in the Financial Statements on page 347.
We also present adjusted performance
measures as we believe these help
explain our performance and these are
highlighted with the following symbol:
To arrive at adjusted performance,
we adjust for:
– the year-on-year effects of foreign
currency translation; and
– the effect of significant items that
distort year-on-year comparisons
and are excluded in order to
understand better the underlying
trends in the business.
For reconciliations of our reported
results to an adjusted basis, including
lists of significant items, see pages
66–67 and 77–78.
Adjusted profit before tax
– Our adjusted profit before tax fell
by $1.6bn or 7%.
– We grew adjusted revenue by $0.5bn
or 1%, notably in GB&M (up by $1.2bn
or 7%), CMB (up by $0.4bn or 3%) and
Principal RBWM, which is our RBWM
business excluding the US run-off
portfolio (up by $0.4bn or 2%). These
increases were partly offset in GPB
(down by $0.1bn or 6%) and Other
(down by $0.3bn).
– Our LICs were $0.6bn or 17%
higher than in 2014, primarily due
to increases in CMB ($0.5bn) and
RBWM ($0.3bn), partly offset by
a reduction in GB&M ($0.3bn).
– Our adjusted operating expenses
increased by $1.6bn or 5%. Excluding
the bank levy, operating expenses in
the second half of 2015 were broadly
in line with the first half of the year.
This was despite investment and
inflationary pressures, and partly
reflects the initial effect of our cost
saving initiatives as well as a strong
focus on cost management.
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HSBC HOLDINGS PLC
23
Financial overview