BUSINESS WIRE: HSBC Continental Europe: Interim Results 2024

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PARIS --(BUSINESS WIRE)-- 31.07.2024 --

Regulatory News:

On 30 July 2024, HSBC Continental Europe’s Board of Directors approved the consolidated financial statements for the first half of 2024.

Andrew Wild, CEO of HSBC Continental Europe, said:

“We delivered a strong performance during the first half of 2024 which demonstrates the effectiveness of our strategy, leveraging on our global franchise and our international connectivity. Our ambition is to be the leading international wholesale bank in Europe servicing corporates and financial institutions, complemented by a targeted wealth and private banking offering.”

Profit before tax1 was €502m for the first half of 2024, driven by wholesale banking revenues, coupled with low credit losses and continued cost discipline.

Net operating income before change in expected credit losses and other credit impairment charges1 was €1,672m, down from €1,885m in the first half of 2023, due to lower net interest income following the sale of retail banking operations in France. Wholesale revenues in Commercial Banking and Global Banking remained strong, with growth in Global Payment Solutions and Investment Banking, partly offset by lower lending volumes. Revenues in Markets and Securities Services were down compared to the first half of 2023, with lower client activity in Global Debt Markets in the context of a challenging market environment, partly offset by higher revenues in Equities and Securities Financing.

Change in expected credit losses and other credit impairment charges1 was a charge of €18m, compared with a charge of €16m in the first half of 2023. The cost of risk2, at 7bps, remained low but was driven by provision releases that are not expected to re-occur in the second half of 2024.

Operating expenses1 were €1,152m, compared to €1,126m in the first half of 2023. Higher infrastructure and technology costs and the acquisition of HSBC Private Bank (Luxembourg) S.A. were partly offset by lower contributions to the Single Resolution Fund.

Profit after tax for the period was €370m, down from €1,944m in the first half of 2023 which included the reversal of the impairment previously recognised in relation to the sale of retail banking operations in France of €1.9bn pre-tax3.

The consolidated balance sheet of HSBC Continental Europe showed total assets of €280bn at 30 June 2024, compared to €283bn at 31 December 2023.

At 30 June 2024, HSBC Continental Europe reported an average liquidity coverage ratio (LCR)4 of 156% and a net stable funding ratio (NSFR)5 of 136%. The bank’s fully loaded common equity tier 1 (CET1) ratio was 15.1% and the fully loaded total capital ratio was 19.8%. The fully loaded leverage ratio was 4.3%. The solvency ratio of the Insurance subsidiary was 287%6.

Appendix

Interim accounts were subject to a limited review by the statutory auditors.

Summary consolidated income statement

€m

Half year to 30 June 2024

Half year to 30 June 2023

Continuing operations

 

 

Net interest income

941

1,173

Net fee income

594

585

Net income from financial instruments held for trading or managed on a fair value basis

114

61

Other operating income/(expense)

23

66

Net operating income before change in expected credit losses and other credit impairment charges

1,672

1,885

Change in expected credit losses and other credit impairment charges

(18)

(16)

Total operating expenses

(1,152)

(1,126)

Profit/(loss) before tax

502

743

Tax expense

(132)

(187)

Profit/(loss) after tax in respect of continuing operations

370

556

Profit/(loss) after tax in respect of discontinued operations

1,388

Profit/(loss) after tax for the period

370

1,944

Profit/(loss) attributable to shareholders of the parent company

350

1,933

Profit/(loss) attributable to non-controlling interests

20

11

Profit/(loss) for the period by global business

 

Continuing Operations

 

 

Wealth and Personal Banking

Commercial Banking

Markets and Securities Services

Global Banking

Global Banking and Markets Other

Corporate Centre

 

Total

 

 

 

 

 

 

 

 

 

€m

Half year to 30 June 2024

Net operating income before change in expected credit losses and other credit impairment charges

290

693

400

392

7

(110)

 

1,672

o/w net interest income/(expense)

202

494

113

203

13

(84)

 

941

Change in expected credit losses and other credit impairment charges

5

(30)

10

1

(4)

 

(18)

Total operating expenses

(204)

(319)

(361)

(214)

(11)

(43)

 

(1,152)

Profit/(loss) before tax

91

344

39

188

(3)

(157)

 

502

 

 

Half year to 30 June 2023

Net operating income before change in expected credit losses and other credit impairment charges

313

712

433

369

8

50

 

1,885

o/w net interest income/(expense)

280

530

105

211

6

41

 

1,173

Change in expected credit losses and other credit impairment charges

8

22

1

(48)

1

 

(16)

Total operating expenses

(185)

(290)

(394)

(189)

(17)

(51)

 

(1,126)

Profit/(loss) before tax

136

444

40

132

(8)

(1)

 

743

 

Business disposal – Retail banking operations in France

On 1 January 2024, HSBC Continental Europe completed the sale of its retail banking operations in France to CCF, a subsidiary of Promontoria MMB SAS (‘My Money Group’). The sale also included HSBC Continental Europe’s 100% ownership interest in HSBC SFH (France) and its 3% ownership interest in Crédit Logement.

Upon being classified as held for sale in 2023, retail banking operations in France met the criteria of discontinued operations classification and presentation under IFRS 5. Accordingly, the profit/(loss) of the discontinued operations as of June 2023 amounting to €1.4bn has been reported separately in the income statement, including the reversal of pre-tax IFRS 5 loss of €1.9bn.

HSBC Continental Europe

Headquartered in Paris, HSBC Continental Europe is an indirectly held subsidiary of HSBC Holdings plc. HSBC Continental Europe principally comprises, in addition to its banking, insurance and asset management activities based in France, the business activities of 10 European branches (in Belgium, Czech Republic, Germany, Ireland, Italy, Luxembourg, Netherlands, Poland, Spain and Sweden) and two bank subsidiaries in Continental Europe (in Luxembourg and Malta). HSBC Continental Europe’s mission is to serve both customers in Continental Europe for their needs worldwide and customers in other Group countries for their needs in Continental Europe.

HSBC Holdings plc

HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. HSBC serves customers worldwide from offices in 60 countries and territories. With assets of US$2,975bn at 30 June 2024, HSBC is one of the world’s largest banking and financial services organisations.

Disclaimer

This press release contains certain forward-looking statements with respect to the financial condition, results of operations and business of the entity. Statements that are not historical facts, including statements about the entity’s beliefs and expectations, are forward-looking statements. Words such as ‘expects’, ‘anticipates’, ‘intends’, ‘plans’, ‘believes’, ‘seeks’, ‘estimates’, ‘potential’ and ‘reasonably possible’, variations of these words and similar expressions are intended to identify forward-looking statements. These statements are based on current plans, estimates and projections, and therefore undue reliance should not be placed on them. Forward-looking statements speak only as of the date they are made. HSBC Continental Europe makes no commitment to revise or update any forward-looking statements to reflect events or circumstances occurring or existing after the date of any forward-looking statement. Forward-looking statements involve inherent risks and uncertainties. Readers are cautioned that a number of factors could cause actual results to differ, in some instances materially, from those anticipated or implied in any forward-looking statements.

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1 In respect of continuing operations. Retail banking operations in France met the criteria of discontinued operations classification under IFRS 5 in 2023. Accordingly, the profit/(loss) of the discontinued operations as of June 2023 has been reported separately.
2 Annualised cost of risk divided by customer loans outstanding at the end of the period.
3 As the sale no longer met the criteria for the operations to be classified as held for sale in the first half of 2023. The impairment was recognised again in the second half of 2023 ahead of the completion of the sale on 1 January 2024.
4 Computed in respect of the EU Delegated act.
5 Computed in respect of CRR II (Regulation EU 2019/876).
6 LCR, NSFR and the solvency ratio of the Insurance subsidiary are unaudited.

Raphaële-Marie Hirsch
raphaele.marie.hirsch@hsbc.fr

+33 (0) 7 64 57 35 55