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
Annual General Meeting of HSBC Holdings plc, held at the Queen
Elizabeth II Conference Centre, London today, the following
speeches were given by Group Chairman, Douglas Flint; Group Chief
Executive, Stuart Gulliver; and Chairman of the Group Remuneration
Committee, Sam Laidlaw.
Group Chairman, Douglas Flint, said:
start with the matter with which we opened last year's
met here last year, the share price was around 472p which we
acknowledged was not satisfactory - today it is around 641p an
increase of about 36%. Total shareholder return rises to 47.5% when
we take into account dividends received since we last met. Some of
this growth is of course due to the decline in the value of
sterling and our UK-based shareholders benefit from the high
proportion of our earnings that are generated in US dollar and US
dollar linked currencies - but the improvement is certainly not all
due to currency effects - in Hong Kong dollars total shareholder
return since last year's meeting is 31%, lower but still a strong
improvement from this time last year.
we do not intend to rest on our laurels - there is further value to
unlock and if we are successful in doing so, this should be
reflected in the share price, to the benefit of all shareholders -
including the executive directors and senior executives who are
largely paid in deferred shares.
Gulliver will in his report comment on the actions taken during the
last year to improve performance and which have unlocked the value
now recognised in the share price. More important, he will
highlight the actions being taken to build on HSBC's distinctive
competitive strengths and capabilities to create long-term
sustainable value for shareholders. It is the sustainability of
earnings that supports our capacity to return capital to
shareholders by way of dividend and we are very conscious of the
importance of dividends to our shareholders. In 2016 HSBC was the
third largest dividend payer amongst global banks and the second
largest dividend payer in the FTSE100. In the last six years since
Stuart and I held our respective roles total dividends paid to
shareholders have amounted to approximately US$55bn.
objective is clearly to build on this strong history and as Stuart
said in his statement accompanying the Annual Report and Accounts
for 2016, our current intention is to sustain the annual dividend
at the current level for the foreseeable future, based on our
assessment of the long-term earnings capacity of the Group and
reflecting current uncertainties.
right to be both cautious about the future at the same time as
strengthening our capacity, capabilities and resilience to be able
to respond to both opportunities and challenges. We are doing both.
2016 will be long remembered for its significant and largely
unexpected economic and political events. These foreshadowed
changes to the established geopolitical and economic relationships
that have defined interactions within developed economies and
between them and the rest of the world. The uncertainties created
by such changes temporarily influenced investment activity and
contributed to volatile financial market conditions. Against this
background, HSBC's performance in 2016 was broadly satisfactory and
Stuart will take you through this in his remarks.
first few months of 2017 have underscored the scale of geopolitical
uncertainties the world economy is currently facing, in addition to
the recurring uncertainties and challenges experienced through
normal economic cycles. These challenges are also arising at a time
of significant changes in our industry including technological
transformation, continuing regulatory change, ongoing public policy
debate around the shape and structure of our industry's business
models and challenge from new entrants including from sectors not
traditionally involved in financial services. Additionally we are
investing to address heightened risks from cyber crime, expanded
expectations around our industry's role in combatting financial
crime and terrorist financing and growing conflicts between ease of
access, financial stability and privacy. And here, in the UK, one
of our two home markets, over the next two years, we face the
additional challenges of ring-fencing our personal and commercial
operations into a new stand-alone bank and addressing the changes
faced by our customers and ourselves as the UK negotiates new
trading and market access arrangements with the EU upon the UK's
departure from that union.
would be wrong however to focus only on the risks and
uncertainties; in many ways these challenges play to the strength
of your Group as it will take considerable resources, financial,
operational and management to deal with all of the above
successfully. We are well prepared. In recent years the Group has
improved its productivity, embraced technological change and
invested heavily in recruitment and training, including to
reinforce standards of business conduct and financial crime
responsibilities. We have reinforced our strong capital position
and are highly liquid.
underlying drivers of future growth remain intact and play to
HSBC's strengths - urbanisation in emerging markets, growth in
infrastructure financing, including China's Belt and Road
initiative, financing the lower carbon future involving the 'green
bond' market in which HSBC is a leading participant, further
internationalisation of the renminbi as China's share of global
trade and investment flows expands and addressing the retirement
needs of ageing populations. HSBC is well positioned to benefit
from all these macro trends having invested in the networks and
capabilities necessary to be highly competitive.
the micro level strategic actions taken by management are now
bearing fruit. Let me highlight three by way of
focus on the trade and investment corridors where HSBC has strong
market positioning have generated solid market share gains and
broader product penetration, particularly in servicing outbound
China investment flows. This is recognised in the many leading
industry awards attained by HSBC last year. I hope that the
animated film you saw at the beginning of the AGM also brought this
to life for you.
investment in technology and process redesign is now not only
delivering greater cost efficiency but enabling us to serve
customers better. This year, customers will see the progressive
launch of applications that will materially improve their digital
experience, enhance their online security and bring greater
personalisation of product offerings.
Group has reshaped its business models to meet current regulatory
and public policy mandates, dedicated management action has been
successful in replacing substantially all of the revenues given up
through continuing run-off of legacy portfolios, reducing our
trading books and applying risk mitigation in areas exposed to
higher threat of financial crime. HSBC is undoubtedly safer today
from the threat of financial crime because of the investments we
have been making in our Global Standards programme. The Board
remains fully committed to building on this progress and is
encouraging management to explore how to harness the enhanced
capabilities now evident through use of shared utilities and
regulatory matters it is worth drawing shareholders' attention to
as one of the most significant international universal banks, a
consistent global regulatory framework matters a great deal. Some
10 years post the global financial crisis with so much progress
achieved, a failure to finalise the regulatory framework and so
risk fragmentation of the global accord would be a severe setback
both to financial stability and to the efficient allocation of
capital in the global economy. That is why we have added our voice
to industry bodies urging an early global agreement on unresolved
issues, followed by an extended period of regulatory stability to
allow familiarity and experience to be gained from what has been
put in place.
it is worth pointing out the tangible benefits that accrue to
shareholders from better regulation and working with our lead
regulators to demonstrate the resilience delivered by an enhanced
capital position combined with a comprehensive resolution strategy.
These factors contributed to our ability to return capital to
shareholders by way of share buyback last year and again in the
first part of 2017.
should say a few words on Brexit. Since we finalised the Annual
Report and Accounts, the UK has now triggered its formal exit
notice with its position clearly set out in a letter from the Prime
Minister. And last week's announcement of an early General Election
in the UK adds to the number of important elections taking place in
scale of the challenge of negotiating across the entire economic
landscape, as well as addressing the legislative and other public
policy adjustments that will be required, has become clearer. It is
however very early in the process with no substantive negotiations
having taken place. There is however a widely held recognition,
shared by the UK Government, that an implementation phase is needed
between the current position and the one that is ultimately
negotiated; we strongly endorse this view.
the referendum result we have focused on helping clients understand
the implications for their businesses of leaving the EU and
addressing the personal concerns of many of our staff based in the
UK who are domiciled in an EU member state. We have also been
responding to UK Government outreach seeking guidance on which
elements of the current EU-based legal and regulatory arrangements
it should focus on to preserve the essential role that financial
markets based in the UK play in supporting European trade and
investment activity. For our own part, we have broadly all the
licences and infrastructure needed to continue to support our
clients once the UK leaves the EU. This largely derives from our
position in France where we are the sixth largest bank with a full
range of capabilities. Current contingency planning suggests we may
need to relocate some 1,000 roles from London to Paris
progressively over the next two years, depending on how
negotiations develop. This is as we have reported consistently
since the question arose. Our clear preference is to retain as much
activity in the UK as we can, but clearly this is dependent on the
outcome of the negotiations.
we reported to you with our full year results for last year,
economic projections have continued to improve. The two interest
rate rises from the US Federal Reserve are positive given our
liquid balance sheet. The US and China continue to drive global
growth and so it was encouraging that the recent Mar-a-Lago summit
between President Xi Jinping and President Trump ostensibly
concluded without a hitch. The announcement of a framework for a
new comprehensive dialogue, while vague, reduces the risks of a
trade war. Plenty of political, geopolitical and policy
uncertainties persist nonetheless, but for now there is no denying
that the data globally have been better than expected.
Protectionist risks remain but seem more muted.
good is that we enter 2017 with the restructuring of the Group
essentially completed, and with a strong capital position and a
conservative balance sheet. We are gaining market share in areas of
importance to HSBC as others scale back and our offerings become
more competitive. Much of the heavy investment in reshaping the
Group to improve productivity, embrace technological change and
reinforce global standards of business conduct has been
ever, it is the tireless efforts of our 235,000 colleagues who have
delivered this change at the same time as striving to meet
customers' expectations of them. On behalf of all shareholders I
want to take this opportunity to recognise publicly their
dedication and commitment.
say a little about the agenda before us. There is no business out
of the ordinary but I might take this opportunity to highlight two
we have added a resolution this year regarding political donations.
This is essentially a technical and protective matter and we are
unusual amongst UK corporates in not seeking this approval
routinely. HSBC has a long-standing policy not to make any
political donations or to incur political expenditure within the
ordinary meaning of those words. We have no intention of altering
this policy. However, the legal definitions of political donations
and political expenditure are very wide and could be construed as
covering activities that are an accepted part of engaging with our
stakeholders. As a result, we have concluded that it would be
prudent to seek your approval to allow us to incur expenditure,
within limits and for a one year period, that could be interpreted
as political in nature. To be clear, the authorities sought are not
designed to influence public support for any political party, or
political outcome; they are simply to ensure that the Group does
not inadvertently breach the UK Companies Act.
as regards the Board, since we met last year we welcomed David Nish
and Jackson Tai to the Board. David most recently served as Chief
Executive of Standard Life and brings to the Board a great depth of
experience in finance and governance matters. Jack brings a rare
combination of hands-on banking expertise, top level governance
experience and a deep knowledge of Asia and China. Full CVs were
included in the Notice of Meeting.
conclusion of this meeting we shall be saying goodbye our two
longest serving directors, Rachel Lomax, our senior independent
Director, and Sam Laidlaw. Both have been fantastic servants of the
Group and I shall say more about them when we come to the part of
the agenda dealing with re-election of directors.
announced last week that Paul Walsh had resigned from the Board
with immediate effect. As a result, Resolution 3 (r), which
concerned his re-election to the Board, has now been withdrawn from
the AGM agenda.
the conclusion of this year's AGM, subject to their re-election,
your Board will comprise a full-time Chairman, three executive
Directors and 13 independent non-executive Directors, 12 of whom
have been appointed in the last five years.
this will be my last AGM as Group Chairman. The process to identify
my successor, which was referred to in the Notice of Meeting to
last year's AGM, was successfully concluded with an announcement
released on 12 March this year. This followed an exhaustive search
and due diligence process which culminated in the appointment of
Mark Tucker to succeed me in this role. This appointment of the
first independent non-executive Group Chairman for HSBC marks an
important point in our history and we are delighted to have secured
Tucker's career has been spent largely in Asia, first with
Prudential plc of the UK and currently with AIA Group Limited, the
world's largest independent publicly-listed pan-Asian life
insurance group, where Mark is Group Chief Executive and President.
As a non-executive director, Mr Tucker has served on the Court of
The Bank of England and currently serves on the Board of Goldman
Sachs. Mark joins HSBC on 1 September this year and takes over from
me at the beginning of October.
say what a privilege it has been to have served on the Board of
this fantastic institution for close to 22 years, the last six and
a half as Group Chairman. I have also had the opportunity to work
with the best executive colleagues anyone in our industry could
have wished for and a Board that has been hugely supportive to me.
I am hugely appreciative to them all and in particular to Stuart
who has been a pleasure to work with. I am confident Mark will lead
HSBC to new heights and I will be doing all I can in the interim
period to make the transition as smooth as possible.
turn now to Stuart to deliver his report on last year's performance
and his priorities for the coming year.
Group Chief Executive, Stuart Gulliver, said:
and gentlemen, fellow shareholders, good morning and thank you for
the seventh Annual General Meeting at which Douglas and I have
updated you on our bank's performance.
I do that today, I want to sincerely thank Douglas for his
enjoyed working alongside Douglas. He has been a great help to me,
providing immeasurable support as we have implemented our long-term
also been instrumental in helping the global banking industry put
in place the right post-crisis regulatory framework.
behalf of the management team, I would like to wish Douglas well in
whatever he chooses to do following his retirement from
was a good year for HSBC.
implementation of our strategic actions is well advanced and our
global, universal business model performed well in challenging
profit before tax fell, but this reflected a number of one-off
items and accounting adjustments during the period.
profits - the true measure of how our business performed - were
broadly unchanged year-on-year, following solid performances by our
performances enabled us to capture market share in strategic areas
and build a platform for future growth.
delivered positive adjusted jaws, which means that revenue grew at
a faster rate than costs.
excellent value for shareholders continues to be one of the
management team's top priorities.
last year's AGM, total shareholder return is 47.5%.
common equity tier one ratio of 13.6% underlined our ability to
maintain the dividend in 2016, and we remain confident that we can
continue to maintain it for the foreseeable future.
sale of our business in Brazil generated a net capital gain of
strong capital position and stable earnings enabled us to retire
some of the equity we no longer required to support the Brazil
business by completing the first share buy-back in our
announced a second buy-back at our year-end results which has also
now been completed, bringing the total value of shares repurchased
since last August to US$3.5bn.
value we create for shareholders also extends to the contribution
we make to the communities we serve.
2016, HSBC donated over US$137m to charitable programmes and our
employees volunteered 255,000 hours in community activities during
the working day.
continue to conduct our business intent on maintaining strong
relationships with customers, employees and wider
remains a well-funded business with strong capital generation, a
diversified balance sheet and an excellent record of delivering
value for shareholders.
this continues was central to the strategic actions that we set out
at the Investor Update in June 2015.
a little over two thirds of the way through this two and a half
year programme, and the large majority of actions remain on
going to exceed our risk-weighted asset and cost-saving
Mexico business is being turned around quickly and
establishment of the UK ring-fence bank remains on track. Both the
Chair and Chief Executive positions have been filled, following the
announcements of Dame Clara Furse as Chair, and Ian Stuart as Chief
migration of roles from London to Birmingham is over a third
complete, with the remainder on track to be in place by the time
the bank launches in 2018.
better protected from financial crime because of our investment in
our Global Standards programme, and our commitment in this area
continue to invest for growth in Asia.
unrivalled opportunities in Asia continue to be underpinned by the
economic strength and potential of its markets.
the next decade, Asia's combined GDP growth will outpace the rest
of the world.
demonstrates its importance not just to the HSBC of today, but the
HSBC of tomorrow too.
expansion in the Pearl River Delta - announced in 2015 - recognised
the enormous potential that this particular area
weeks ago, The Economist published a special report on the PRD,
underlining its critical importance as the engine room of the
accounting for less than 1% of China's size and 5% of its
population, the PRD already generates more than 10% of China's GDP
and a quarter of its exports.
strategic investment and reform are driving innovation and raising
China's economy up the value chain.
newly announced Greater Bay Area of Hong Kong, Macau and Guangdong
will rapidly accelerate the development of the 'Silicon Delta',
increasing the pace of technological, structural and economic
integration throughout the region.
integration is vital not just to the economic development of the
region, but also to building new financial links between China and
the outside world.
further opening a gateway for overseas investment to meet Chinese
creativity, increasing cross-border financial flows and boosting
the supply of finance to the innovation economy.
ideally placed to support this process.
than 45% of client revenue across the Group comes from businesses
and individuals with an international presence.
international network continued to drive revenue growth in our
transaction banking product lines.
Liquidity and Cash Management revenue increased by 6% year-on-year,
and Global Trade and Receivables Finance captured further market
share in strategic markets.
continue to be the leading bank for renminbi products and
speech, Douglas talked about the changing geopolitical landscape
and the uncertainties which HSBC faces, in common with all other
to reiterate that while rising protectionism and shrinking global
trade would appear to pose challenges for the world's largest trade
finance bank, we are in an extremely strong position to capitalise
on the significant regional opportunities this will
globalisation continues to retreat, as currently seems likely, we
expect the world to evolve into big trading blocs with less global
trade, but vastly increased inter and intra-regional
areas where barriers are falling fastest are the same regions where
HSBC is strongest.
forging ahead with a range of initiatives to promote intra-regional
trade and economic co-operation.
Regional Comprehensive Economic Partnership covers 16 nations
representing nearly half of the world's population and nearly a
third of its GDP. It is estimated that the agreement could bring
annual gains of US$600bn to participants.
ASEAN single market alone could boost GDP by an additional 5% by
Belt and Road initiative is creating a network of trade and
financial connections stretching across Asia into the Middle East,
sub-Saharan Africa and Europe.
network covers 38 of the 64 countries along the Belt and Road
well as being ideally positioned to help clients capture these
opportunities, we will play a vital role in making it a
it's important that we do, not just because of the commercial
benefits for HSBC, but because of the wider benefits from Asia
advancing economic globalisation in the world's
opportunities extend well beyond Asia too.
European Union is the world's largest single market, and the
combined economies of the Gulf Co-operation Council could create
the sixth largest market in the world by 2030.
while the future of NAFTA is yet to be determined, we believe that
there will still be a multilateral free trade agreement between the
United States, Mexico and Canada.
HSBC's ability to capture regional growth through our international
network will continue to be a significant point of strength for the
international network is our main differentiator, we are also more
than ever seeing the advantage of being a global, universal
business model enables us to anticipate and adapt to the social,
economic and technological trends that are changing our operating
environment and our customers' expectations.
build on Douglas' remarks by mentioning three
the adoption of rapidly evolving digital technologies by our
customers is arguably the most transformative force within our
global network enables us to respond to digital trends across 70
markets, applying the technologies that make banking faster, easier
and safer for customers.
investing US$2.3bn in digital transformation across the Group
between 2015 and 2017.
now the biggest financial services user of biometrics globally, and
we continue to roll out voice recognition and fingerprint
technology across our network.
also enhanced our online and mobile banking platforms in several
markets, including the UK and Hong Kong.
have established a number of innovation labs around the world
dedicated to the application of artificial intelligence, data
management and improvements in cybersecurity.
with our Fintech partnerships, these will help us to use technology
to deliver better banking for customers.
major injections of capital are required to finance the transition
to a low-carbon economy.
have a responsibility to help direct this flow of capital from
global enterprises and investors to the areas of greatest
working with clients and investors to help them allocate and direct
finance towards low-carbon activities.
have established a Sustainable Financing Unit to coordinate this
work across different business lines and territories.
supports the expansion of the disclosure of non-financial
information by organisations.
particular, we have been among the most prominent international
voices calling for better disclosure of climate-related
today publishing our first environmental, social and governance
a good record in many areas, and in others we still have further to
go to meet the targets we have set ourselves, and that our
shareholders and others expect us to deliver.
provide further, regular updates in the future, and we will
continue to listen to your views as we do so.
at a time when international politics threatens to increase rather
than decrease the cost of international trade, we are investing in
ways to make trade finance faster, cheaper, simpler and more secure
for our customers.
includes working with a global coalition of partners to make the
promise of blockchain technology a reality, and creating new ways
to finance the growing services trade.
changes we've made since 2011 have equipped HSBC to manage the
complexity of today's business environment.
global, universal business model is helping us to unlock revenue
growth in a low-growth world.
international network is enabling us to uncover opportunities that
no other bank could find.
with the steps we are taking, they will see HSBC firmly recognised
as the world's leading and most respected international
will also enable us to repay the trust you have placed in
you for your continued support of HSBC.
Chairman of the Group Remuneration Committee, Sam Laidlaw,
2 covers the 2016 Directors' Remuneration Report, which is set out
on pages 153 to 172 of the 2016 Annual Report and Accounts. I hope
you will appreciate the Committee's attempts to shorten the report
this year and make it easier to read, whilst still ensuring it
satisfies regulatory and reporting requirements both here in the UK
and in Hong Kong.
was the first year in which we implemented the new remuneration
policy, which was overwhelmingly approved by shareholders with 96%
support at last year's Annual General Meeting, and I would like to
thank you for that support.
year's report shows how we implemented the new policy.
like to highlight some of the Report's key features.
in determining the size of the 2016 Group variable pay pool, the
Committee took into consideration the Group's financial
performance, as well as ensuring that the impact of fines,
penalties, customer redress costs and our progress in embedding
Global Standards were appropriately incorporated. Taking all this
into account, the total value of the pool for 2016 paid to over
200,000 employees was US$3bn, which was US$427m lower than in 2015
- a reduction of more than 12%.
in line with the new policy and in response to shareholder
feedback, we have reduced cash in lieu of pension from 50% to 30%
of base salary for all executive Directors including the Group
Chairman. This has resulted in a 7% reduction in their fixed pay,
including allowances. We also decided not to increase fixed pay for
executive Directors for 2017.
the Committee reviewed and interrogated evidence that demonstrated
to its satisfaction that the management team broadly achieved the
objectives set for them in their annual incentive scorecards. As
Stuart reported earlier, although profits were down on a reported
basis they were broadly unchanged on an adjusted basis.
Importantly, strong progress was made in the delivery of a number
of the strategic actions during the year, including the reduction
of risk-weighted assets, the realisation of US$2.2bn of annualised
cost savings and the turnaround of the business in Mexico.
Ultimately all of this is reflected in value for shareholders.
Total shareholder return in 2016 was 32%.
remuneration outcome for our executive Directors is not simply
formula driven. The Committee has discretion, and exercised it to
reduce the 2016 Global Standards assessments for all executive
Directors down to 65%, in view of feedback from the Monitor and
other notable events.
the new remuneration policy replaced the old Group Performance
Share Plan with a new Long-Term Incentive Plan, again taking into
account shareholder feedback on design. Awards under this plan are
subject to a three year forward-looking performance period and a
seven year deferral period.
policy resulted in a significant decrease in the published single
figure of remuneration for all executive Directors in 2016.
However, part of this reflects the different basis of recognising
long-term awards. For comparison purposes, if the Long-Term
Incentive Plan awards made last month vest in March 2020 at the
target level of performance, Stuart's total compensation for 2016
will have increased by just under 5% compared with 2015 although
under the new scheme close to 40% will be deferred to 2020 and
having completed my nine years, I am today standing down as a
non-executive Director and as Chairman of the Remuneration
Committee. I would like to thank you for your dialogue and support
since I became a member of the Committee in 2008 and its Chairman
two years ago.
delighted that Pauline van der Meer Mohr has agreed to succeed me
as Chair. She has already been a member of the Committee for over a
year and her background and experience make her very well placed to
take on its chairmanship. I am sure she will benefit from the same
constructive engagement with shareholders that I have.
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Note to editors:
HSBC Holdings plc
Holdings plc, the parent company of the HSBC Group, is
headquartered in London. The Group serves customers worldwide from
around 4,000 offices in 70 countries and territories in Europe,
Asia, North and Latin America, and the Middle East and North
Africa. With assets of US$2,375bn at 31 December 2016, HSBC is one
of the world's largest banking and financial services
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
28 April 2017