SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
month of April
HSBC Holdings plc
Floor, 8 Canada Square, London E14 5HQ, England
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F).
20-F X Form 40-F
by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934).
"Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-
HSBC HOLDINGS PLC - AGM STATEMENTS
At the Annual General Meeting of HSBC Holdings plc, held at the
International Convention Centre, Birmingham, UK today, the
following speeches were given by Group Chairman, Mark Tucker; Group
Chief Executive, John Flint; and Chair of the Group Remuneration
Committee, Pauline van der Meer Mohr.
Group Chairman, Mark Tucker, said:
Ladies and gentlemen, good morning and a warm welcome to the 2019
Annual General Meeting for HSBC Holdings plc.
I am particularly pleased to see that so many shareholders have
joined us here in Birmingham.
HSBC's ties with Birmingham date back 183 years to when the
Birmingham and Midland Banking Company first opened its doors for
Between 1836 and 1898 the Midland Bank held AGMs at a number of
different venues across the city.
These included a purpose-built head office which opened in
The building still stands on New Street and it remains a local
landmark; it now houses the Apple Store.
In 2018, we reached a significant new milestone with the opening of
HSBC UK, our ring-fenced bank here in the city.
HSBC is pleased to reaffirm its commitment to Birmingham by holding
this meeting here today.
Turning to the formal business of the meeting, I will ask John
Flint to provide his perspective on 2018 in a few minutes but let
me first provide some reflections of my own.
Our 2018 results demonstrated both the underlying health of the
business and the potential of the strategy John announced in June
Despite a particularly challenging external environment in the
fourth quarter of 2018, all of our Global Businesses delivered
increased profits in 2018 and higher returns on tangible equity
Overall the Group delivered higher reported and adjusted profit
This allowed the Board to approve a fourth interim dividend of
US$0.21 bringing the total dividend for 2018 to
I completely understand how important the dividend is to our
shareholders so let me reiterate our policy to sustain the dividend
at its current level for the foreseeable future.
I would also like to remind you that by declaring interim
dividends, which has been our practice for a number of years, we
can ensure you benefit from that dividend sooner than would be the
case if we had to seek approval at general meetings.
With regard to the Board, there have been a number of changes since
our last meeting.
I would like to welcome José Antonio Meade who joined the
Board as an independent non-executive Director on 1
Pepe brings a wealth of experience gained across a number of key
policy areas and his background and knowledge of Latin America will
be of great assistance and value to HSBC.
I would also like to welcome Ewen Stevenson following his
appointment as Group Chief Financial Officer replacing Iain
Ewen brings extensive international experience and a strong and
proven track-record as a chief financial officer.
I would also like to thank Jon Symonds for agreeing to become
Deputy Group Chairman.
Finally, we have announced that Jonathan Evans will retire and will
therefore not be seeking re-election today.
I am very grateful to both Iain and Jonathan for their important
and valuable contributions to HSBC - Iain as Group Finance Director
and Jonathan latterly as chair of the Financial System
Following Jonathan's retirement, the number of directors on the
Board will reduce from 17 a year ago to 14 today.
This means that subject to the election and re-election of
Directors today, your Board will comprise a non-executive Chairman,
three executive Directors and 10 independent non-executive
Our focus remains on creating clearer and stronger lines of
accountability and authority, and sharpening the Board's oversight
of performance and progress against the new strategy.
Looking at the current environment, the global economy is much less
predictable now than it was a year ago.
Global growth is slowing, largely as a result of weakness in Europe
although the economic outlook is also softer in the US and in
The system of global trade remains subject to political pressure
and differences between China and the US are likely to continue to
inform sentiment through the rest of 2019.
We hope that the ongoing dialogue between Washington and Beijing
has a positive outcome.
In the meantime, we are focused on helping our customers to
navigate the present uncertainties and make the most of the
opportunities that unquestionably exist.
Some of these opportunities stem from initiatives underway to lower
barriers to trade.
The Comprehensive and Progressive Agreement for Trans-Pacific
Partnership, the EU's landmark bilateral agreements with Japan and
Singapore, and the potential US-Mexico-Canada agreement provide
important counterweights that could give impetus to international
trade in the year ahead.
They also underline that support for the values of openness and
co-operation which have been present throughout the very long
history of commerce across the world remains in place.
The structural and financial reforms underway across Asia will
continue to support economic development in that
The National People's Congress last month outlined a series of
further steps that China will take to liberalise its financial
And while forming part of China's response to changing external
conditions, they are also part of the much longer process of
gradual reform and opening up that has transformed the Chinese
economy and created opportunities for domestic and international
customers and investors.
The US economy and the influence of the Federal Reserve remain
central to global sentiment.
We expect policymakers to adopt a more cautious stance through the
rest of 2019.
Finally, many of our UK customers are understandably cautious about
the immediate future given the uncertainty surrounding Brexit,
uncertainty which seems likely to continue for some
We continue to monitor events closely and plan accordingly across
our European operations to ensure that the service we provide to
our customers is not affected.
While there are undoubtedly more risks to global economic growth
than this time last year, we remain alert and continue to model and
anticipate a wide range of scenarios as part of our risk
Our strong balance sheet, revenue base and footprint equip us to
evaluate these risks, allocate resources appropriately and, most
importantly, enable us to help our customers navigate their own
Enabling our people to do their jobs to the best of their ability
is an essential part of our capacity to support our
John will explain how helping our people to fulfil their potential
is one of management's strategic priorities.
This is also a priority for the Board and for me personally,
because it is so important to our present and future
John and his management team have the Board's full support in
working to realise this ambition.
Before I hand over to John, let me make three points about the
formal business ahead of us.
First, we are using a new approach to voting at today's
In a change from our usual process, voting on all resolutions set
out in the 2019 Notice of Meeting will be opened after the opening
speeches and before we start taking your questions.
What this means is that you may cast your votes whenever suits you
during the hour or so of Q&A.
Voting will then be closed after we have taken your questions and I
will announce the headline results based on the total number of
votes cast before the meeting and here in person today before we
Some of you will be familiar with this approach, which has been
used at other FTSE100 company AGMs.
I will explain the voting process in more detail before I open the
Second, resolution 3 concerns the new Directors' remuneration
At the 2016 AGM, shareholders overwhelmingly approved our
remuneration policy which has been in force since that time but
which expires today at the end of its three-year term.
Accordingly, as set out in the Directors' remuneration report on
pages 172 to 205 of the Annual Report and Accounts, the Group
Remuneration Committee is recommending your approval of a new
Directors' remuneration policy.
After John's opening remarks, the Chair of the Group Remuneration
Committee, Pauline van der Meer Mohr will set out the key points of
the policy and developments since the policy was
Third, resolution 17 concerns the 'State Deduction' from the
pensions paid to former Midland Bank employees.
While we appreciate the Midland Clawback Campaign Group for their
constructive engagement with Ian Stuart, Chief Executive of HSBC
UK, we cannot support this resolution and we recommend that
shareholders vote against it.
We understand this issue is very important, and that many of the
people involved devoted substantial portions of their working lives
to Midland Bank and then HSBC.
We have given it a significant amount of time and consideration and
have listened carefully to the points raised by the Campaign Group
as well as those made by MPs on behalf of their
But we must be fair and equitable to all remaining 140,000 members
of the UK pension scheme, more than half of whom are defined
contribution members, and not just to those final salary members
who would benefit if the State Deduction ceased.
Before we decided not to support the resolution, we carefully
reviewed our position and took advice from external legal counsel
after which the Board concluded that this resolution is not in the
best interests of all shareholders.
We have therefore recommended that shareholders vote against
We have set out our reasoning very clearly in Appendix 4 on page 36
of the Notice of Meeting.
I would like to end by thanking the Board, John and each of the
235,000 people who work for HSBC.
In my first full year as Group Chairman, I have been enormously
impressed by the work ethic, commitment, dedication and talent of
I am very grateful to each of them for the excellent work that they
do in service of the bank, our customers and each
Our challenge and shared purpose is to build on that good work
through the rest of 2019 and beyond.
I have every confidence we can do so.
Group Chief Executive, John Flint, said:
Let me add my thanks to you for joining us here in
As Mark said, Birmingham has played an important role in HSBC's
We also believe it can be just as significant to HSBC's
Last year, we opened the new headquarters for HSBC UK, our
ring-fenced bank, in Birmingham
We are confident that Birmingham can help HSBC to grow, and that we
in turn can help Birmingham to write the next chapter of its
As Mark signalled, HSBC delivered a good set of results in
We grew revenue in our four global businesses, which in turn helped
deliver reported profit before tax of US$19.9bn, up 16% on the
Adjusted profit before tax was US$21.7bn, an increase of
Return on tangible equity was 8.6%, up significantly on the 6.8%
delivered in the prior year.
This is a good first step towards achieving our overall return on
tangible equity target of over 11% by 2020.
Adjusted jaws was negative for 2018, which means that costs grew at
a faster rate than revenue.
Adjusted costs were broadly as we expected for the full year, but
adjusted revenue fell short due to market weakness in the fourth
Positive jaws remains an important discipline, and we remain
committed to achieving this target in 2019.
Our common equity tier one ratio of 14% was lower than at the same
point in 2017, due mainly to adverse foreign exchange movements and
the impact of increased lending.
We returned a total of US$2bn to shareholders through share
buy-backs in 2018, reflecting our desire to neutralise the impact
of scrip dividends over the medium term.
We remain committed to this policy and to maintaining a broadly
stable share count over the medium term, subject to regulatory
The eight strategic priorities that I announced last June were
important factors in our 2018 results.
While our plan targets clear financial outcomes, it has our
customers at its centre.
We want to bring more of HSBC to more people and to serve them in
the best possible way.
I am encouraged by our progress so far.
We are growing customer numbers and capturing market share in our
scale markets and from our international network.
International client revenue was up 7% on the prior year, and we
made a strong start in accelerating growth from our Asian
Overall adjusted revenue in Asia was up by 11% on the prior year -
with double-digit growth in Hong Kong, mainland China and the Pearl
We have improved our capital efficiency, and although our US
business is short of where we want it to be, it is moving in the
Our investment in technology is making our business simpler, safer,
and easier for our customers to use.
We are already seeing results, with around 45% of retail customers
now using our digital channels, which also account for more than
30% of sales.
In Commercial Banking, we have halved the time it takes to onboard
And here in the UK, we launched our Connected Money app to enable
customers to view balances and transactions from all of their UK
bank accounts, including those with other providers, in one
We also established our UK ring-fenced bank and grew our UK
customer base in 2018.
Finally we are committed to creating stronger, healthier
relationships with all of our stakeholders.
Earlier this week we published our latest ESG update - the fourth
we have produced - showing both the progress we have made, and the
areas where we need to do better.
How we support all 235,000 people who work for HSBC is one area
where I am proud of the work we are doing, but eager to do
In my first year in this role, I started a conversation throughout
the bank about how we help our people be the best version of
This is part of a broader ambition to create what we call the
healthiest human system in our industry.
The early signs are positive.
In 2018, 66% of our employees said they would recommend HSBC as a
great place to work, up from 64% the previous year.
While this demonstrates an improvement in a relatively short space
of time, it also shows that there is still further room for
This work will continue throughout 2019 and beyond.
And if we are successful - and I am confident that we will be -
then we should materially improve all aspects of HSBC's
performance, including delivering our strategy and financial
So we have taken the first steps in getting HSBC back to
But as Mark explained, the economic outlook has softened since our
June 2018 strategy update, and even since the third quarter of
Let me build on what Mark said by adding three points.
First, the increased uncertainty and risk in the global economy
today relates mainly to the UK economy, continuing global trade
tensions and the future path of interest rates.
This is yet to translate into higher credit losses, but that could
change if the global economy deteriorates.
Second, we remain committed to the targets that we outlined in June
We will be proactive in managing costs and investment to meet any
risks to revenue growth, but we will not take short-term decisions
that harm the long-term interests of the business.
We also have a business that is diversified, resilient and
well-placed to navigate the risks inherent in today's
Third, the long-term drivers of revenue growth remain
The reforms that Mark mentioned will, in our view, ensure continued
robust growth in China.
The Greater Bay Area has become the centrepiece of China's economic
development and integration programme.
The region has a combined population of around 70 million people
and a combined GDP of US$1.5tn, which is expected to triple in size
Our work to build a scalable business in the Pearl River Delta
means we are well positioned to make a significant contribution to
As barriers to trade increase in some parts of the world, they are
falling rapidly in others, most notably Asia.
And we're at the heart of financing the low-carbon transition,
which will be one of the biggest drivers of global investment this
So HSBC is in a good position.
The strategy is working, I'm encouraged by our progress and I'm
confident for the year ahead.
We remain focused on growing returns, meeting our return on
tangible equity target by 2020 and creating value for you, our
Chair of the Group Remuneration Committee, Pauline van der Meer
I would like to begin by thanking shareholders on behalf of
the Committee for the constructive dialogue I have had with
many of you over the last 12 months.
Your willingness to engage and provide feedback has been of
considerable value in helping us formulate the new remuneration
policy, which we believe meets both your requirements and
We are asking you to approve two remuneration-related resolutions
Resolution 2 covers the 2018 Directors' remuneration report setting
out the actual remuneration awarded to Directors, as detailed on
pages 184 to 205 of the Annual Report and Accounts.
The approval and implementation of our current policy has received
strong support from shareholders in prior years. I would like to
thank shareholders for that and hope that you see fit to support
how it was implemented for 2018.
Resolution 3 covers the new Directors' remuneration policy for the
next three years, as set out on pages 175 to 184 of the Annual
I would like to set out some of the highlights of the new policy,
and also touch on the recent announcement regarding the pension
allowance paid to the executive directors. This represents a
development on the information included in the Annual Report and
The Committee undertook an extensive review of the policy with
three key objectives in mind: the new policy should be simple and
transparent; it should maintain a strong alignment between
executive rewards and the interests of our stakeholders with a
focus on long-term performance; and it should be competitive to
ensure we can retain and attract talent.
We need to be mindful of the fact that we are Europe's largest
bank, and that our obligation as a Committee is to be cognisant of
what we pay our executives within the global talent
As our current policy structure meets these objectives and received
strong shareholder support, we have only proposed minor changes to
The changes include using a simplified long-term incentive
scorecard, with fewer measures and a substantial proportion of the
scorecard weighted towards our headline financial measures, such as
return on tangible equity.
The governance simplification initiatives led by Mark, with the
support of the Board, have inevitably resulted in an increase in
the time commitment required by the remaining
Those initiatives, along with the support provided by the Board for
HSBC's ambitious agenda, means the expected time commitment for a
director serving on two committees is now 75 days, for Committee
Chairs is now 100 days, and for the Risk Committee Chair is now 150
We are therefore proposing an increase in fees for our
non-executive Directors to reflect this significant additional
commitment. The last increase was in January 2017 and overall the
total cost in 2019 will be broadly in line with 2018.
As you will be aware, we have also been monitoring recent
developments in respect of the pension allowances paid to executive
Directors, since our consultation with shareholders last year and
the finalisation of the Directors' Remuneration
Although the further detailed guidance from the Investment
Association on executive Director pension contribution levels was
only published in January this year, we have to acknowledge that
sentiment on this specific issue has shifted
Given all of this, and having listened carefully to our
stakeholders, the Committee has now clarified that for any new
executive Director, the cash in lieu of pension allowance will
reduce from 30 per cent to 10 per cent of base salary.
While the pension allowance paid to current executive Directors is
governed by contractual arrangements, the three executive Directors
have also listened and reflected, and feel it is appropriate that
their allowance is reduced to 10 per cent of salary, with effect
from 1 April 2019.
The Committee has acted quickly on a complex issue after listening
to feedback from shareholders and advisory bodies, and I hope you
will agree that this is the right thing for the business, for our
employees and for our shareholders.
I would, therefore, encourage you to approve both these resolutions
and would be happy to take your questions when the Chairman
Media enquiries to:
Tel: +44 (0)20 7992 0516
Investor enquiries to:
Tel: +44 (0)20 7991 6590
Note to editors:
HSBC Holdings plc
HSBC Holdings plc, the parent company of the HSBC Group, is
headquartered in London. The Group serves customers worldwide
across 66 countries and territories in Europe, Asia, North and
Latin America, and the Middle East and North Africa. With assets of
US$2,558bn at 31
December 2018, HSBC is one of the world's largest banking and
financial services organisations.
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Ben J S Mathews
Group Company Secretary
12 April 2019