REG - HSBC Holdings PLC - HSBC Holdings plc - AGM Statements

HSBC HoldingsAnnouncement

03/05/2024 11:15

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240503:nRSC1863Na&default-theme=true

RNS Number : 1863N  HSBC Holdings PLC  03 May 2024

 

3 May 2024

 

 

HSBC HOLDINGS PLC - AGM STATEMENTS

 

 

At the Annual General Meeting of HSBC Holdings plc, held at The
InterContinental London O2, London, UK today, the following statements were
issued by Group Chairman, Mark Tucker and Group Chief Executive, Noel Quinn.

 

 

Group Chairman's Statement:

 

When we met last year, you will recall that we debated the resolutions tabled
by a small group of shareholders who proposed strategy and structural reviews
for your Bank and a restriction on your Board's ability to set the dividend.

 

Noel and I set out the clear and compelling reasons why we believed that it
was in your best interests, as well as those of our clients and customers,
that we stay the course and deliver on our current strategy.

 

I am pleased to say that the overwhelming majority of shareholders agreed with
us. That agreement was expressed very clearly when you had the opportunity to
vote.

 

A year later, you can see the value of your support for the Board's
recommendations which is clearly demonstrated by:

 

Firstly, the improved financial performance of the Group; and

 

Secondly, the increased returns that we delivered in 2023.

 

Let me expand briefly on performance and returns.

 

I'll start with our improved financial performance.

 

2023 was a very strong year for HSBC.

 

We reported record profits before tax which exceeded US$30bn for the first
time in your Bank's 159-year history.

 

Our reported return on tangible equity was 14.6% which was our best
performance in over a decade.

 

We also demonstrated good, broad-based profit generation through geographic
and business diversification.

 

This performance points to the fact that our international strategy is
working.

 

Our first quarter results which were announced earlier this week provided
further evidence that our strategy is delivering.

 

Noel will speak to the first quarter results in a moment.

 

Let me now turn to how our performance, both in 2023 and in the first quarter
of 2024, has enabled us to reward you, our loyal shareholders.

 

Our 2023 record profit performance allowed us to announce a full-year dividend
of 61 US cents per share which was our highest full-year dividend since 2008.

 

In total we returned approximately US$19bn to shareholders in respect of 2023.

 

This included the three share buy-backs announced last year totalling US$7bn.

 

On top of that we announced, during our annual results presentation in
February, an additional share buy-back of up to US$2bn which has now been
completed.

 

Earlier this week at our first quarter results we announced a further US$8.8bn
of dividends and share buy-backs.

 

This consisted of:

 

(1)  A first interim dividend for 2024 of 10 US cents per share

(2)  A special dividend of 21 US cents per share, following the completion of
the sale of our Canada business, which will be payable in June alongside the
first interim dividend.

(3)  And a new share buy-back of up to US$3bn which we will expect to
initiate shortly and aim to complete within three months.

 

Looking ahead, the dividend outlook remains strong.

 

Our dividend payout ratio target for 2024 remains 50%, excluding material
notable items and related impacts.

 

And we continue to target a mid-teens return on tangible equity in 2024.

 

We remain very focussed on, and committed to, rewarding you for the trust that
you have placed in us.

 

Despite the continuing uncertain economic environment globally, we are
confident that we can continue to deliver good performance and returns.

 

Higher interest rates in Western economies are still weighing on global growth
which HSBC's economists forecast to come in at 2.6% in 2024 and 2025.

 

Inflation data remains key to the global interest rate outlook.

 

Central banks are closely and carefully watching the data and need to be
confident that inflation will continue to head down to target on a sustainable
basis before lowering rates.

 

Our economists continue to anticipate a gradual reduction in inflation with
our global inflation forecasts at 5.8% in 2024 and 3.8% in 2025.

 

We expect the ECB and Bank of England to cut rates in June, cutting by 150bps
by year-end 2025. We expect the Fed to cut in September, cutting by 100bps by
year-end 2025.

 

However, with growth and employment numbers holding up and inflationary
pressures lingering, that relative certainty in the central banks'
decision-making process is not easy to achieve and it may not be a steady
glide path.

 

But the silver lining of stronger economic numbers, even with some recent
stubbornness in inflation, means that the economies are broadly resilient.

 

All of this is occurring in an increasingly unpredictable context:

The wars between Russia and Ukraine and between Israel and Hamas continue to
have a devastating humanitarian impact and to cause significant economic
disruption.

 

This year will also be the biggest election year on record: more than four
billion voters will go to the polls. The US, UK, India and Mexico are among
the countries holding national elections.

 

The outcomes will have implications that go beyond the national realm. They
are likely to impact international security arrangements, trade, and green
policy to name a few.

 

Through all this, our focus remains on executing our strategy, navigating the
challenges and making the most of the opportunities.

 

Before I invite Noel to share his views on your Bank's performance, I would
like to add to what I said earlier on his decision to retire from the Bank.

 

The Board and I would like to pay tribute to Noel's exceptional leadership. As
Group Chief Executive, he drove our transformation strategy, creating a
simpler, more focused business. This enabled us to deliver the improved
performance I just outlined and to create a platform for future growth and
development.

 

It has been a pleasure and privilege to work with and alongside him.

 

 

Group Chief Executive's Statement:

 

I'd like to begin by saying how grateful I am to you, and to the Board, for
all your support, guidance, friendship and partnership.

 

I am proud of what my HSBC colleagues and I have achieved together over the
past five years.

 

Over that period, we have hit some significant financial milestones - a number
of which I will talk about today.

 

We have also created a more focused business, and I believe we have built a
strong platform for the Bank's next phase of development and growth.

 

I'd also like to thank you - my fellow shareholders - for your continued
support.

 

Leading our bank for the past five years has been a privilege, as well as a
great responsibility.

 

My goal has always been to deliver the improved financial performance and
returns that we all wanted to see, and you deserve.

 

As Mark said, we were therefore pleased with the performance of the bank in
2023, and in the first quarter of 2024.

 

Our strong financial performance was reflected in the significant amount of
capital distributions that we announced for 2023.

 

At 61 cents per share, the full year dividend was well above pre-Covid levels,
whilst also still enabling us to retain a good proportion of our earnings to
invest in the business

 

As Mark said, it's also the highest full-year dividend since 2008.

 

In total, we returned around US$19bn to you, our shareholders, through
dividends and share buy-backs in respect of 2023.

 

And the trend of strong capital distribution continued in the first quarter of
this year.

 

We announced a further US$8.8bn of distributions earlier this week.

 

This included:

 

-       A first interim dividend for 2024 of 10 cents per share;

 

-       A share buy-back of up to US$3bn;

 

-       And a special dividend of 21 cents per share, as the first
priority use of the proceeds from the sale of HSBC Canada which will be
payable in June.

 

As I said, the key driver for these strong distributions was the improved
financial performance of your bank.

 

2023 was a very good year for HSBC.

 

Our reported profit before tax was above US$30bn for the first time ever.

 

Strong revenue growth across all three global businesses helped us to achieve
our best return on tangible equity in more than a decade.

 

And there was good, broad-based geographical growth, which underlines the
value of our model.

 

Our strategy is working, and there was further evidence of this at our first
quarter results.

 

We reported US$12.7bn of profit before tax for the first quarter.

 

On an annualised basis, we delivered a return on tangible equity of 26.1%, or
16.4% excluding notable items.

 

And we are on track to meet all of our 2024 guidance, including a mid-teens
return on tangible equity excluding notable items, and our commitment to limit
cost growth to around 5% on a target basis.

 

So, your bank is performing well and has strong momentum.

 

But we have also built a strong platform for future growth.

 

Given the strength of our balance sheet, we have benefited from supportive
interest rates.

 

But we have worked hard to reduce our sensitivity to interest rates.

 

And we are focused on implementing revenue growth strategies that can offset
the impact of declining interest rates.

 

Let me describe just a few.

 

The first opportunity is continued growth in our two home markets of the UK
and Hong Kong.

 

In the UK, we have good traction in Commercial Banking and in Wealth and
Personal Banking.

 

We were the number one bank for UK large corporates as well as the best bank
in the UK for SMEs, as assessed by Euromoney.

We also attracted over one million new-to-bank customers in the UK last year,
and we have had steady mortgage growth and have taken market share in
Mortgages.

 

And we are ideally positioned to capitalise on the wealth accumulation in Hong
Kong and mainland China, driven by rapid urbanisation across mainland China
and the increased use of the Connect schemes with Hong Kong, and as Hong Kong
plays a key role facilitating investment via developing trade corridors, like
those between Asia and the Middle East.

 

The second opportunity is to grow our strong international franchise.

 

We ranked number one for trade revenue globally last year, second by revenue
in our payments business, and we've been number three globally by revenue in
FX since 2021.

 

But there is a significant amount of untapped opportunity within our existing
client base, which can drive revenue growth in the face of declining interest
rates.

 

To provide some evidence of this, we grew revenue from clients who bank with
us in more than one market by 29% in 2023.

 

In recent years, we have also ramped up our investment in our Wealth and
Personal Banking international business.

 

40% of Wealth and Personal Banking revenue already comes from international
customers, and we believe we can take it much further.

 

And I'm pleased that there was a very strong performance in Wealth in the
first quarter, with revenue up by 12% on the same period last year.

 

Alongside this, we will continue to diversify our revenue geographically.

 

And by maintaining a tight cost discipline, we will invest in growth areas,
including new technology and our new global HSBC Innovation Banking
proposition, which has got off to a very good start since launching last June.

 

Before I hand back to Mark, I also want to speak about an area of our work
that is incredibly important to all of you, to the Bank and to the communities
we serve.

 

Supporting the transition to net zero is one of HSBC's four strategic pillars.

 

As one of the world's largest international banks, with a presence in the
regions and sectors where the most significant change is needed, we are well
placed to support the transition.

 

The transition is driving huge demand for finance - estimates indicate up to
US$40tn will be required globally by 2030, around 60% of which will be needed
in ASEAN and the Middle East.

 

So we operate in places where we can have a real impact.

 

As you know, we set an ambition in 2020 to become a net zero bank by 2050, and
net zero in our own operations by 2030.

 

In January, we published our first Net Zero Transition Plan.

 

It sets out, for the first time in one place, how we intend to channel the
distinctive strengths of HSBC to have a meaningful impact on emissions
reduction in the real economy.

 

We want to be clear about our approach and the changes that are underway.

 

But we also cannot do it alone.

 

Our ability to transition relies on decarbonisation in the real economy
happening at the necessary pace.

 

Our customers and the industries and markets we serve will need to transition
effectively, supported by strong government policies and regulation, and
substantially scaled investment.

 

Engagement and collaboration are therefore central to our approach.

 

As a bank, our success depends on enabling our clients to succeed.

 

That's why our goal is to work with our clients, to understand their plans to
get to net zero and to help make them a reality.

 

We don't have all the answers.

 

But our approach and transition plan will evolve over time, as we and others
learn more, science evolves and new technologies emerge at scale.

 

To conclude, I am pleased you are seeing the benefits of our strategy through
increased returns and dividends.

 

Our strategy is working.

 

And we remain focused on delivering the returns that we all want.

 

Thank you again for your continued support.

 

Media enquiries to:

Press Office                 +44 (0) 20 7991
8096                 pressoffice@hsbc.com
(mailto:pressoffice@hsbc.com)

 

Investor enquiries to:
Neil Sankoff                  +44 (0)20 7991
5072                  investorrelations@hsbc.com

 

 

Note to editors:

 

HSBC Holdings plc

HSBC Holdings plc, the parent company of HSBC, is headquartered in London.
HSBC serves customers worldwide from offices in 62 countries and territories.
With assets of US$3,001bn at 31 March 2024, HSBC is one of the world's
largest banking and financial services organisations

 

ends/all

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  AGMUOOKRSOUVRRR