FORM 6-K
 
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
 
For the month of October 2020

Commission File Number: 001-14930

HSBC Holdings plc
 
42nd Floor, 8 Canada Square, London E14 5HQ, England
 
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F).
 
Form 20-F   X             Form 40-F ......
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):   ______
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):   ______


 
This Report on Form 6-K with respect to our quarterly results for the three-month and nine month period ended September 30, 2020 is hereby incorporated by reference in the following HSBC Holdings plc registration statements: Registration Statements on Form F-3 (Nos. 333-92024, 333-135007, 333-158065, 333-180288, 333-202420, 333-223191) and Registration Statement on Form F-4 (No. 333-126531).

Neither our website referred to herein, nor any of the information contained on our website, is incorporated by reference in the Form
6-K.                                                                                          




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27 OCTOBER 2020
HSBC HOLDINGS PLC
3Q20 EARNINGS RELEASE
Noel Quinn, Group Chief Executive, said:
“These were promising results against a backdrop of the continuing impacts of Covid-19 on the global economy. I'm pleased with the significantly lower credit losses in the quarter, and we are moving at pace to adapt our business model to a protracted low interest rate environment. We are accelerating the transformation of the Group, moving our focus from interest-rate sensitive business lines towards fee-generating businesses, and further reducing our operating costs. We also intend to increase our rate of investment in Asia, particularly in wealth, the Greater Bay Area, south Asia, trade finance and sustainable finance.
The Group’s capital and liquidity ratios strengthened further in the quarter despite the challenging economic conditions. A decision on whether to pay a dividend for the 2020 financial year will depend on economic conditions in early 2021, and be subject to regulatory consultation. We will seek to pay a conservative dividend if circumstances allow.”
Financial performance (vs. 3Q19)
Reported profit after tax down 46% to $2.0bn and reported profit before tax down 36% to $3.1bn, mainly from lower revenue. Results in 3Q20 included our share of an impairment of goodwill by our associate, The Saudi British Bank ('SABB'), of $0.5bn. Adjusted profit before tax down 21% to $4.3bn.
Our operations in Asia continued to perform resiliently with reported profit before tax in 3Q20 of $3.2bn, despite interest rate headwinds.
Reported revenue down 11% to $11.9bn, reflecting the impact of interest rate reductions on our deposit franchises across all global businesses, partly offset by favourable market impacts in life insurance manufacturing. Reported revenue was also partly offset by a favourable movement in credit and funding valuation adjustments and higher revenue in Global Markets.
Net interest margin ('NIM') of 1.20%, down 36 basis points ('bps') from 3Q19. NIM was down 13bps from 2Q20, reflecting the continuing impact of interest rate reductions due to the Covid-19 outbreak.
Reported expected credit losses and other credit impairment charges (‘ECL’) down $0.1bn to $0.8bn. The 3Q20 charge reflected a stabilisation of the forward economic outlook from 2Q20, while wholesale stage 3 charges were in part offset by increased releases related to historical default cases.
Reported operating expenses down 1% and adjusted operating expenses down 3%, despite continued investment, due to the impact of our cost-saving initiatives, reduced discretionary expenditure and a lower performance-related pay accrual.
Common equity tier 1 capital (‘CET1’) ratio of 15.6%, up 0.6% from 15.0% at 2Q20, reflecting a decrease in RWAs (on a constant currency basis), capital generation through profits and foreign currency translation differences.
Financial performance (vs. 9M19)
Reported profit after tax down 62% to $5.2bn and reported profit before tax down 57% to $7.4bn from higher ECL and lower revenue, partly offset by a fall in operating expenses. Reported results included a $1.3bn impairment of software intangibles and the non-recurrence of an $828m dilution gain in 9M19. Adjusted profit before tax down 44% to $9.9bn.
Reported revenue down 9% to $38.7bn, primarily due to the progressive impact of interest rate reductions across our global businesses, in part offset by higher revenue in Global Markets. Adjusted revenue down 6% to $38.5bn.
Reported ECL up $5.6bn to $7.6bn, mainly due to the impact of the Covid-19 outbreak and the forward economic outlook. Allowance for ECL on loans and advances to customers up from $8.7bn at 31 December 2019 to $13.7bn at 30 September 2020.
Reported operating expenses down 3% and adjusted operating expenses down 4%, as a reduction in the performance-related pay accrual and lower discretionary expenditure more than offset the impact of continued investment.
Outlook
Geopolitical risk, particularly relating to trade and other tensions between the US and China, remains heightened. There also remains uncertainty regarding the UK's withdrawal from the European Union ('EU'). Trade talks between the UK and the EU are ongoing and there remains a possibility that there may not be a trade deal agreed by the end of 2020.
We expect lower global interest rates to continue to put pressure on net interest income. Based on current interest rates, we expect further net interest income headwinds in 4Q20, with some stabilisation as we move into 2021.
Our ECL charge for 2020 is currently trending towards the lower end of the $8bn to $13bn range. This latest guidance, which continues to be subject to a high degree of uncertainty due to Covid-19 and geopolitical tensions, assumes that the likelihood of further significant deterioration in the current economic outlook is low, and that stage 3 impairments from now until the end of 2020 are broadly in line with the average quarterly charge for the year to date.
We expect to reduce the Group's 2022 annual cost base beyond our original $31bn target, through exceeding our $4.5bn gross cost savings target. We expect to incur more than $6bn in ‘cost to achieve’ expenditure to generate these saves.
We expect to exceed our $100bn gross risk-weighted asset ('RWA') reduction target by the end of 2022. This is expected to allow more resources to be allocated to areas of competitive advantage, higher returns and growth.
We intend to provide a more detailed and updated transformation plan at our 2020 full-year results, as we finalise our work on costs, capital and RWA deployment. We also intend to provide an update on our medium-term financial targets.
Based on our results for 2020 and our forecasts for 2021, the Board will consider whether to pay a conservative dividend for 2020. Any such dividend would be dependent on the economic outlook in early 2021, and be subject to regulatory consultation. A final determination is expected to be made and communicated in February 2021 with our 2020 full-year results. We also expect to communicate our revised policy for dividends for 2021 and beyond at the same time.








Earnings Release – 3Q20
Key financial metrics
Nine months endedQuarter ended
30 Sep30 Sep30 Sep30 Jun30 Sep
Footnotes20202019202020202019
Reported results
Reported revenue ($m)38,672 42,727 11,927 13,059 13,355 
Reported profit before tax ($m)7,392 17,244 3,074 1,089 4,837 
Reported profit after tax ($m)5,164 13,732 2,039 617 3,795 
Profit attributable to the ordinary shareholders of the parent company ($m)3,336 11,478 1,359 192 2,971 
Cost efficiency ratio (%)63.5 59.2 67.4 66.4 61.0 
Basic earnings per share ($)0.17 0.570.07 0.01 0.15 
Diluted earnings per share ($)0.16 0.570.07 0.01 0.15 
Net interest margin (%)1.351.59 1.20 1.33 1.56 
Alternative performance measures
Adjusted revenue ($m)38,54241,162 12,065 13,433 13,347 
Adjusted profit before tax ($m)9,93917,693 4,304 2,596 5,418 
Adjusted cost efficiency ratio (%)58.056.7 61.4 55.4 57.0 
Expected credit losses and other credit impairment charges (‘ECL’) (annualised) as % of average gross loans and advances to customers (%)0.96 0.25 0.30 1.49 0.32 
Return on average ordinary shareholders' equity (annualised) (%)2.7 9.2 3.2 0.5 7.0 
Return on average tangible equity (annualised) (%)13.5 9.5 2.9 3.5 6.4 
At
30 Sep30 Jun31 Dec
Footnotes202020202019
Balance sheet
Total assets ($m)2,955,935 2,922,798 2,715,152 
Net loans and advances to customers ($m)1,041,340 1,018,681 1,036,743 
Customer accounts ($m)1,568,714 1,532,380 1,439,115 
Average interest-earning assets, year to date ($m)2,070,703 2,034,939 1,922,822 
Loans and advances to customers as % of customer accounts (%)66.4 66.5 72.0 
Total shareholders’ equity ($m)191,904 187,036 183,955 
Tangible ordinary shareholders’ equity ($m)152,260147,879144,144
Net asset value per ordinary share at period end ($)2,38.418.17 8.00 
Tangible net asset value per ordinary share at period end ($)37.557.34 7.13 
Capital, leverage and liquidity
Common equity tier 1 capital ratio (%)415.6 15.0 14.7 
Risk-weighted assets ($m)4857,024 854,552 843,395 
Total capital ratio (%)421.2 20.7 20.4 
Leverage ratio (%)45.4 5.3 5.3 
High-quality liquid assets (liquidity value) ($bn)654 654 601 
Liquidity coverage ratio (%)147 148 150 
Share count
Period end basic number of $0.50 ordinary shares outstanding (millions)20,17320,162 20,206 
Period end basic number of $0.50 ordinary shares outstanding and dilutive potential ordinary shares (millions)20,22720,19820,280
Average basic number of $0.50 ordinary shares outstanding (millions)520,164 20,162 20,158 
Dividend per ordinary share (in respect of the period) ($)5 — 0.30 
1    Annualised profit attributable to ordinary shareholders, excluding impairment of goodwill and other intangible assets and changes in present value of in-force insurance contracts (‘PVIF’) (net of tax), divided by average ordinary shareholders’ equity excluding goodwill, PVIF and other intangible assets (net of deferred tax).
2    The definition of net asset value per ordinary share is total shareholders' equity less non-cumulative preference shares and capital securities, divided by the number of ordinary shares in issue excluding shares the company has purchased and are held in treasury.
3    Excludes impact of $0.10 per share dividend in 1Q19, following a June 2019 change in accounting practice on the recognition of interim dividends, from the date of declaration to the date of payment.
4    Unless otherwise stated, regulatory capital ratios and requirements are calculated in accordance with the transitional arrangements of the Capital Requirements Regulation in force in the EU at the time, including the regulatory transitional arrangements for IFRS 9 ‘Financial Instruments’ in article 473a. The capital ratios and requirements are reported in accordance with the revised Capital Requirements Regulation and Directive (‘CRR II’), as implemented. Leverage ratios are calculated using the end point definition of capital and the IFRS 9 regulatory transitional arrangements.
5    For these metrics, 31 December 2019 is calculated on a full-year basis.
2
HSBC Holdings plc Earnings Release 3Q20


Contents
Page
Page
HighlightsCredit risk
Key financial metricsCapital adequacy
Business highlightsLeverage
Approach to risk managementRisk-weighted assets
Geopolitical and macroeconomic risksSummary information – global businesses
Adjusted performanceReconciliation of reported and adjusted risk-weighted assets
Financial performanceSummary information – geographical regions
Cautionary statement regarding forward-looking statementsDividend on preference shares
Summary consolidated income statementTerms and abbreviations
Summary consolidated balance sheet
HSBC Holdings plc will be conducting a trading update conference call with analysts and investors today to coincide with the publication of its Earnings Release. The call will take place at 07.30am GMT. Details of how to participate in the call and the live audio webcast can be found at www.hsbc.com/investors.
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
64 countries and territories in its geographical regions: Europe, Asia, North America, Latin America, and Middle East and North Africa. With assets of $2,956bn at 30 September 2020, HSBC is one of the world’s largest banking and financial services organisations.
Business highlights
On 18 February, the Group announced a substantial transformation programme designed to ensure HBSC is fit for the future, with plans to reshape underperforming businesses, simplify the organisation and reduce costs. During the third quarter, we continued to make progress with this programme, including further reducing RWAs in our Global Banking and Markets ('GBM') business. In addition, we continued to increase investments in technology to improve the customer experience and efficiency, including a new digital multi-currency wallet, launched in Singapore for our Global Liquidity and Cash Management customers. Also, we launched VisionGo in Hong Kong, a digital community platform for small businesses and entrepreneurs, which has already attracted over 8,000 members.
However, given the significant changes in the operating environment, we intend to accelerate the transformation of the Group. We expect to reduce the Group's 2022 annual cost base beyond our original $31bn target, while sustaining investment in our focus areas. We also expect to exceed our target to reduce RWAs by $100bn in low-returning areas. This is expected to allow more resources to be allocated to areas of competitive advantage, higher returns and growth. We are finalising our work on costs, capital and RWA deployment and intend to provide a more detailed and updated transformation plan with our full-year results in February 2021.
We are continuing with the strategic review of our retail banking operations in France and we will provide an update on our plans at or before our 2020 full-year results.
In the US, the management team is making good progress in executing the current business plan at pace. RWAs in our US business at 3Q20 were 8% lower than at 3Q19. In addition, full-time equivalent staff ('FTE') were 9% lower than at 31 December 2019 and 80 US retail branches have been successfully closed and consolidated. However, given the current economic climate, we are pursuing options to accelerate the transformation of this business and intend to provide an update at our 2020 full-year results.
Approach to risk management
We have in place a comprehensive risk management framework. We operate our own wide-ranging stress testing programme, as well as regulatory driven stress tests, to assess risk impacts of severe, adverse, but plausible events at legal entity, regional and overall Group levels. This stress testing programme is a key part of our capital and liquidity risk management and planning. Stress testing provides management with key insights into the potential impacts of, and mitigants to, severely adverse events on the Group, and provides information to regulators on the Group's financial stability. Given the nature of the Covid-19 crisis, additional mitigating actions may be required.
At 30 September 2020, our CET1 ratio was 15.6%, compared with 14.7% at 31 December 2019, and our liquidity coverage ratio ('LCR') was 147%. Our capital, funding and liquidity positions are expected to help us to continue supporting our customers throughout the current geopolitical and macroeconomic uncertainty.
Geopolitical and macroeconomic risks
The Group’s results and outlook continue to be impacted by developments in the external risk environment, including the items referred to below, which detail the key developments in the third quarter of 2020. For further information on the risks that the Group faces, see pages 76 to 83 of the Annual Report and Accounts 2019 and pages 50 to 54 of the Interim Report 2020.
Geopolitical risk to our operations and portfolios
US-China tensions remain heightened. In June 2020, the National People's Congress of China enacted the Hong Kong national security law. In response, among other steps, the US President signed into law the Hong Kong Autonomy Act, and issued Executive Order 13936, providing authority to impose sanctions against entities and individuals determined to have undermined Hong Kong’s autonomy.
The Hong Kong Autonomy Act also provides authority to impose secondary sanctions against non-US financial institutions determined to have knowingly conducted a significant transaction for any individual or entity subject to primary sanctions under the act.
HSBC Holdings plc Earnings Release 3Q20
3


Earnings Release – 3Q20
On 7 August, the US Department of Treasury imposed sanctions on 11 individuals under Executive Order 13946. Following this, on 14 October 2020, the US State Department released the list of ‘Foreign Persons Materially Contributing to the Failure of the PRC To Meet Its Obligations Under the Joint Declaration and Basic Law’ as required under the Hong Kong Autonomy Act, which largely overlapped with the list of persons already designated under Executive Order 13936. Further individuals or entities could be identified under Executive Order 13936 and/or the Hong Kong Autonomy Act. We are reviewing the operational impact of these developments. Pursuant to the Hong Kong Autonomy Act, within 30 to 60 days following the publication of the 14 October list, the US State Department is expected to publish a second report listing any non-US financial institutions that have knowingly conducted a significant transaction for any individual or entity named in the 14 October report. This report is the basis for the potential imposition of secondary sanctions. In addition, the forthcoming US presidential election is creating further geopolitical uncertainty.
Investor and business sentiment in some sectors in Hong Kong remains dampened and ongoing tensions could result in an increasingly fragmented trade and regulatory environment. The retail and leisure sectors also remain particularly affected by a decrease in tourism, resulting from both ongoing tensions and the Covid-19 pandemic. However, the financial services sector in Hong Kong has remained strong and has benefited from stable liquidity conditions.
The financial impact to the Group of geopolitical risks in Asia is heightened due to the strategic importance of the region, and Hong Kong in particular, in terms of profitability and prospects for growth. We continue to monitor the situation.
Risks related to Covid-19
After an initial decrease in levels of Covid-19 in the third quarter in many regions, further waves of infections are now emerging. While governments in some countries and territories have continued to ease the broad restrictions that had been imposed to limit the spread of Covid-19, social distancing and tight border restrictions remain commonplace, and are limiting the extent and pace of economic recovery.
The Covid-19 outbreak has led to a significant weakening in GDP in many of our markets, although regions and sectors have rebounded to differing levels from their previous low points. Economic consensus forecasts have stabilised in recent months and monthly changes to the forecasts have become smaller, while notably the consensus forecast for UK GDP for 2020 deteriorated in September 2020. However, the economic consensus forecasts for key markets continue to predict a 'V-shaped' recovery in 2021, albeit there is wide dispersion in forecast expectations.
While the longer-term effects of the outbreak on businesses are uncertain, we believe HSBC's financial position allows us to continue to help support our customers. The management of capital and liquidity remains a key focus area and is being continually monitored both at Group and entity levels.
The nature and scale of the Covid-19 crisis has necessitated strong responses from governments, central banks and regulators, and the outbreak has also resulted in changes in the behaviours of our retail and wholesale customers. These factors have impacted the performance of our expected credit loss models, requiring enhanced monitoring of model outputs and use of compensating controls, specifically model adjustments based on the credit expert judgement of senior risk managers. In addition, we have built up our operational capacity rapidly in response to government and central bank support measures aimed at combating the impacts of the Covid-19 outbreak, and have been responding to complex conduct considerations and heightened risk of fraud related to these programmes.
UK withdrawal from the European Union
The UK left the EU on 31 January 2020 and entered a transition period until 31 December 2020. During the transition period, the UK continues to be bound by EU laws and regulations. Beyond that date, there is no certainty on what the future relationship between the UK and the EU will be. Trade talks are ongoing and there remains a possibility that there may not be a trade deal agreed by 31 December 2020. This possible outcome is only partly reflected in our probability-weighted ECL at 3Q20 and, therefore, there is a risk of additional ECL charges, particularly in the UK in 4Q20, if the UK and the EU fail to reach a trade agreement.
Our global presence and diversified customer base is expected to help mitigate the direct impacts on our financial position in a scenario where the transition period ends without a UK-EU trade agreement being in place. Our existing footprint in the EU, and in particular our French subsidiary, provides a strong foundation for us to build upon, which will be retained regardless of the outcome of our strategic review of our retail banking operations in France. As part of our stress testing programme, a number of internal macroeconomic and event-driven scenarios were assessed to support our planning for, and evaluation of, the impact of the UK’s withdrawal from the EU without a trade agreement. These stress scenarios incorporate risks associated with the UK withdrawal from the EU and the impact of the Covid-19 outbreak. As part of this analysis, HSBC Bank plc, our non-ring-fenced bank in Europe, and HSBC UK Bank plc, our ring-fenced bank in Europe, have also considered a range of internal strategic management actions to further support our ability to withstand potential shocks. However, the prospect of exiting the transition period without a trade agreement is likely to increase market volatility and economic risk, particularly in the UK, which could adversely impact our profitability and prospects for growth in this market.
Market environment
Central banks have reduced interest rates in most financial markets due to the adverse impact on the timelines and the path for economic recovery from the Covid-19 outbreak, which has in turn increased the likelihood of negative interest rates. This raises a number of risks and concerns, such as the readiness of our systems and processes to accommodate zero or negative rates, the resulting impacts on customers, regulatory constraints and the financial implications given the significant impact that prolonged low interest rates are likely to have on our net interest income. For some products, we have floored deposit rates at zero or made decisions not to charge negative rates. This, alongside loans repriced at lower rates, will result in our commercial margins being compressed, which is expected to be reflected in our profitability. The pricing of this risk will need to be carefully considered. These factors may challenge the long-term profitability of the banking sector, including HSBC, and will be considered as part of the Group’s transformation programme.
4
HSBC Holdings plc Earnings Release 3Q20
    


Implications on our financial performance
The above factors continue to cause disruption to economic activity globally and there could be further adverse impacts on our income due to lower lending and transaction volumes, and lower wealth and insurance manufacturing revenue due to equity market volatility. Lower interest rates globally will negatively impact net interest income and increase the cost of guarantees for insurance manufacturing. There could also be adverse impacts on other assets, such as our investment in Bank of Communications Co., Limited ('BoCom'), given the difference between the fair value and the carrying value of that investment. The excess of the value-in-use of BoCom and its carrying value has reduced over the period, increasing the risk of impairment in the future.
There may also be material balance sheet impacts. These may include downward customer credit rating migration, which could negatively impact our RWAs and capital position, and potential liquidity impacts due, among other factors, to increased customer drawdowns, notwithstanding the significant initiatives that governments and central banks have put in place to support the economy following the Covid-19 outbreak.
Adjusted performance
Adjusted performance is computed by adjusting reported results for the effects of foreign currency translation differences and significant items, which both distort period-on-period comparisons.
We consider adjusted performance to provide useful information for investors by aligning internal and external reporting, identifying and quantifying items management believes to be significant, and providing insight into how management assesses period-on-period performance.
Foreign currency translation differences
Foreign currency translation differences reflect the movements of the US dollar against most major currencies. We exclude them to derive constant currency data, allowing us to assess balance sheet and income statement performance on a like-for-like basis and understand better the underlying trends in the business.
Foreign currency translation differences
Foreign currency translation differences for 9M20 and 3Q20 are computed by retranslating into US dollars for non-US dollar branches, subsidiaries, joint ventures and associates:
the income statements for 9M19 at the average rate of exchange for 9M20;
the income statements for quarterly periods at the average rates of exchange for 3Q20; and
the closing prior period balance sheets at the prevailing rates of exchange at 30 September 2020.
No adjustment has been made to the exchange rates used to translate foreign currency-denominated assets and liabilities into the functional currencies of any HSBC branches, subsidiaries, joint ventures or associates. The constant currency data of HSBC’s Argentinian subsidiaries have not been adjusted further for the impacts of hyperinflation. When reference is made to foreign currency translation differences in tables or commentaries, comparative data reported in the functional currencies of HSBC’s operations have been translated at the appropriate exchange rates applied in the current period on the basis described above.
Significant items
‘Significant items’ refers collectively to the items that management and investors would ordinarily identify and consider separately to improve the understanding of the underlying trends in the business.
The tables on pages 31 to 41 detail the effects of significant items on each of our global business segments and geographical regions during 9M20, 9M19, 3Q20, 2Q20 and 3Q19.
Adjusted performance – foreign currency translation of significant items
The foreign currency translation differences related to significant items are presented as a separate component of significant items. This is considered a more meaningful presentation as it allows better comparison of period-on-period movements in performance.
Global business performance
The Group Chief Executive, supported by the rest of the Group Executive Committee (‘GEC’) (previously the Group Management Board), is considered to be the Chief Operating Decision Maker (‘CODM’) for the purposes of identifying the Group‘s reportable segments.
The Group Chief Executive and the rest of the GEC review operating activity on a number of bases, including by global business and geographical region. Global businesses are our reportable segments under IFRS 8 ‘Operating Segments’. Global business results are assessed by the CODM on the basis of adjusted performance, which removes the effects of significant items and currency translation from reported results. We therefore present these results on an adjusted basis as required by IFRSs. A reconciliation of the Group’s adjusted results to the Group’s reported results is presented below.
Effective from 2Q20, we made the following realignments within our internal reporting to the GEC and CODM:
We simplified our matrix organisational structure by combining Global Private Banking and Retail Banking and Wealth Management to form Wealth and Personal Banking ('WPB').
We reallocated our reporting of Balance Sheet Management, hyperinflation accounting in Argentina and Holdings net interest expense from Corporate Centre to the global business.
Comparative data have been re-presented accordingly. Supplementary reconciliations of adjusted to reported results by global business are presented on pages 31 to 36 for information purposes.
Management view of adjusted revenue
Our global business segment commentary includes tables that provide breakdowns of adjusted revenue by major product. These reflect the basis on which revenue performance of the businesses is assessed and managed.
HSBC Holdings plc Earnings Release 3Q20
5


Earnings Release – 3Q20
Reconciliation of reported and adjusted results
Nine months endedQuarter ended
30 Sep30 Sep30 Sep30 Jun30 Sep
20202019202020202019
Footnotes$m$m$m$m$m
Revenue
Reported138,672 42,727 11,927 13,059 13,355 
Currency translation(605)279 76 
Significant items(130)(960)138 95 (84)
– customer redress programmes 22 118 48 (26)118 
– disposals, acquisitions and investment in new businesses 8 (823) 
– fair value movements on financial instruments2(310)(260)(11)58 (210)
– restructuring and other related costs3150 — 101 58 — 
– currency translation of significant items
Adjusted38,542 41,162 12,065 13,433 13,347 
Change in expected credit losses and other credit impairment charges
Reported (7,643)(2,023)(785)(3,832)(883)
Currency translation92 (118)40 
Adjusted(7,643)(1,931)(785)(3,950)(843)
Operating expenses
Reported(24,568)(25,296)(8,041)(8,675)(8,147)
Currency translation376 (226)(78)
Significant items2,215 1,578 630 1,461 620 
– costs of structural reform4 126  — 35 
– customer redress programmes53 1,098 3 49 488 
– impairment of goodwill and other intangibles1,082 — 57 1,025 — 
– restructuring and other related costs51,072 427 567 335 140 
– settlements and provisions in connection with legal and regulatory matters8 (66)3 (64)
– currency translation of significant items(7)48 21 
Adjusted(22,353)(23,342)(7,411)(7,440)(7,605)
Share of profit in associates and joint ventures
Reported 931 1,836 (27)537 512 
Currency translation(32)16 
Significant items462 — 462 — — 
– impairment of goodwill6462 — 462 — — 
– currency translation of significant items— — — 
Adjusted1,393 1,804 435 553 519 
Profit before tax
Reported 7,392 17,244 3,074 1,089 4,837 
Currency translation(169)(49)45 
Significant items2,547 618 1,230 1,556 536 
– revenue(130)(960)138 95 (84)
– operating expenses2,215 1,578 630 1,461 620 
– share in profit of associates and joint ventures462 — 462 — — 
Adjusted 9,939 17,693 4,304 2,596 5,418 
Loans and advances to customers (net)
Reported 1,041,340 1,017,833 1,041,340 1,018,681 1,017,833 
Currency translation24,480 23,303 24,480 
Adjusted1,041,340 1,042,313 1,041,340 1,041,984 1,042,313 
Customer accounts
Reported 1,568,714 1,373,741 1,568,714 1,532,380 1,373,741 
Currency translation31,188 32,692 31,188 
Adjusted1,568,714 1,404,929 1,568,714 1,565,072 1,404,929 
1    Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.
2    Includes fair value movements on non-qualifying hedges and debt valuation adjustments on derivatives.
3 Comprises losses associated with the RWA reduction commitments we made at our business update in February 2020.
4    Comprises costs associated with preparations for the UK’s exit from the European Union.
5    Includes impairment of software intangible assets of $173m (of the total software intangible asset impairment of $1,320m) and impairment of tangible assets of $124m.
6    During the year, The Saudi British Bank ('SABB'), an associate of HSBC, impaired the goodwill that arose following the merger with Alawwal bank in 2019. HSBC's post-tax share of the goodwill impairment was $462m.

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HSBC Holdings plc Earnings Release 3Q20
    


Financial performance
Distribution of results by global business
Nine months ended
Quarter ended
30 Sep30 Sep30 Sep30 Jun30 Sep
20202019202020202019
$m$m$m$m$m
Adjusted profit/(loss) before tax
Wealth and Personal Banking3,121 6,798 1,426 994 1,973 
Commercial Banking1,360 5,540 1,176 (502)1,631 
Global Banking and Markets3,780 3,960 1,232 1,684 1,223 
Corporate Centre1,678 1,395 470 420 591 
Total9,939 17,693 4,304 2,596 5,418 
Distribution of results by geographical region
Nine months ended
Quarter ended
30 Sep30 Sep30 Sep30 Jun30 Sep
20202019202020202019
$m$m$m$m$m
Reported profit/(loss) before tax
Europe(2,976)(944)84 (2,549)(424)
Asia10,556 14,431 3,187 3,629 4,651 
Middle East and North Africa(326)2,041 (300)(70)305 
North America16 1,045 (7)134 299 
Latin America122 671 110 (55)
Total7,392 17,244 3,074 1,089 4,837 
Adjusted profit/(loss) before tax
Europe(1,561)295 398 (1,294)84 
Asia10,568 14,509 3,215 3,742 4,695 
Middle East and North Africa200 1,226 186 (30)303 
North America588 1,101 375 222 319 
Latin America144 562 130 (44)17 
Total
9,939 17,693 4,304 2,596 5,418 
Tables showing adjusted profit before tax by global business and region are presented to support the commentary on adjusted performance on the following pages.
The tables on pages 31 to 41 reconcile reported to adjusted results for each of our global business segments and geographical regions.
Group
3Q20 compared with 3Q19 – reported results
Movement in reported profit before tax compared with 3Q19
Quarter ended
30 Sep30 SepVariance
202020193Q20 vs. 3Q19
$m$m$m%
Revenue11,927 13,355 (1,428)(11)
ECL(785)(883)98 11 
Operating expenses(8,041)(8,147)106 1 
Share of profit from associates and JVs(27)512 (539)(105)
Profit before tax3,074 4,837 (1,763)(36)
Tax expense(1,035)(1,042)7 1 
Profit after tax2,039 3,795 (1,756)(46)

Reported profit
Reported profit after tax of $2.0bn was $1.8bn or 46% lower than in 3Q19.
Reported profit before tax of $3.1bn was $1.8bn or 36% lower, primarily reflecting a reduction in reported revenue. Reported revenue fell mainly from the impact of lower interest rates on our deposit franchises, and lower share of profit from our associate SABB, reflecting our share of an impairment of the goodwill it recognised on the completion of the merger with Alawwal bank in 2019. These factors were in part offset by lower reported operating expenses and a reduction in reported ECL.
Reported profit before tax also included favourable market impacts in life insurance manufacturing in WPB of $126m (3Q19: $225m adverse), favourable credit and funding valuation adjustments in GBM of $32m (3Q19: $160m adverse), and adverse fair value movements on our long-term debt and associated swaps in Corporate Centre of $32m (3Q19: $76m favourable).
Reported revenue
Reported revenue of $11.9bn was $1.4bn or 11% lower than in 3Q19. The reduction primarily reflected lower net interest income as a result of the progressive impact of lower interest rates across our major markets, notably affecting our deposit franchises in WPB and in Global Liquidity and Cash Management ('GLCM') in Commercial Banking ('CMB') and GBM. While we grew average interest-earning assets compared with 3Q19, interest-bearing liabilities also increased. As a result, in conjunction with the rate environment, there
HSBC Holdings plc Earnings Release 3Q20
7


Earnings Release – 3Q20
continued to be downward pressure on NIM, which we expect to continue in future quarters. The reduction in net interest income was partly offset by favourable market impacts in life insurance manufacturing, compared with adverse movements in 3Q19, following a continued recovery of global equity prices after the large reductions in 1Q20.
In addition, revenue increased in GBM, despite lower revenue in GLCM. This was mainly due to a favourable movement in credit and funding valuation adjustments and higher revenue in Global Markets.
There was a net adverse movement in significant items of $0.2bn, which was partly offset by favourable foreign currency translation differences of $0.1bn. The movement in significant items primarily related to fair value movements on financial instruments of $0.2bn. In addition, 3Q20 included restructuring and other related costs of $0.1bn associated with disposal losses related to the RWA reduction commitments we made at our business update in February 2020. We expect to incur additional disposal losses in future quarters as we progress with these reductions.
Reported ECL
Reported ECL were $0.8bn in 3Q20, $0.1bn lower compared with 3Q19. The charge in 3Q20 reflected the significant build up of stage 1 and stage 2 allowances in both 1Q20 and 2Q20 to reflect the worsening forward economic outlook due to the Covid-19 outbreak. In 3Q20, that outlook stabilised, which resulted in stage 1 and stage 2 allowances being broadly unchanged and a significantly lower ECL charge compared with 2Q20. In addition, the stage 3 charge in 3Q20, which primarily related to a small number of wholesale exposures, was partly offset by an increase in releases related to historical defaulted wholesale exposures.
The estimated impact of the Covid-19 outbreak has been incorporated in the ECL through additional scenario analysis, which considered differing severity and duration assumptions relating to the global pandemic. These included probability-weighted shocks to annual GDP and consequential impacts on unemployment and other economic variables, with differing economic recovery assumptions. Given the severity of the macroeconomic projections and the complexities of various government measures, which have never been modelled, additional judgemental adjustments have been made to our provisions.
For further details on the calculation of ECL, including the measurement uncertainties and significant judgements applied to such calculations, the impact of alternative/additional scenarios and post model-adjustments, see page 22.
Reported operating expenses
Reported operating expenses of $8.0bn were $0.1bn or 1% lower than in 3Q19 despite the impact of inflation and continued investment in business growth, including investments in our digital capabilities. This reflected reductions from our cost-saving initiatives, a reduction in discretionary expenditure and a lower performance-related pay accrual.
Significant items were broadly in line with 3Q19. This included:
a $0.5bn fall in customer redress programme costs, primarily related to the mis-selling of PPI.
This was broadly offset by:
higher restructuring and other related costs of $0.4bn, including a $0.1bn charge related to the impairment of tangible assets in France and the US; and
a 3Q20 charge related to the impairment of intangibles of $0.1bn, which included the impairment of software intangibles in the US.
Foreign currency translation differences had an adverse impact of $0.1bn.
Reported share of profit from associates and JVs
Reported share of profit from associates and joint ventures was a net loss of $27m in 3Q20, primarily as we recognised our share of SABB's impairment of the goodwill it recognised on the completion of its merger with Alawwal bank in 2019. This compared with net income of $512m in 3Q19.
Group
3Q20 compared with 3Q19 – adjusted results
Movement in adjusted profit before tax compared with 3Q19
Quarter ended
30 Sep30 SepVariance
202020193Q20 vs. 3Q19
$m$m$m%
Revenue12,065 13,347 (1,282)(10)
ECL(785)(843)58 7 
Operating expenses(7,411)(7,605)194 3 
Share of profit from associates and JVs435 519 (84)(16)
Profit before tax4,304 5,418 (1,114)(21)
Adjusted profit
Adjusted profit before tax of $4.3bn was $1.1bn or 21% lower than in 3Q19, primarily reflecting a decline in adjusted revenue due to interest rate reductions, which affected all global businesses and particularly our deposit franchises. This was partly offset by lower adjusted operating expenses and a reduction in adjusted ECL.
Adjusted revenue
Adjusted revenue of $12.1bn was $1.3bn or 10% lower than in 3Q19, reflecting reductions in WPB and CMB, partly offset by an increase in GBM.
The reduction in revenue was primarily in net interest income due to the impact of the interest rate reductions during the first half of the year, mainly affecting our deposit franchises within WPB and in GLCM in CMB and GBM. This was partly offset by net favourable movements in market impacts in life insurance manufacturing in WPB of $333m due to the continued recovery in global equity prices following the reductions in 1Q20. In GBM, Global Markets revenue also increased, reflecting increased market volatility in our FICC business, and we recorded favourable movements in credit and funding valuation adjustments of $199m.
8
HSBC Holdings plc Earnings Release 3Q20
    


Adjusted ECL
Adjusted ECL were $0.8bn in 3Q20, $0.1bn lower than in 3Q19. The charge in the quarter primarily reflected the significant build up of stage 1 and stage 2 allowances in both 1Q20 and 2Q20 to reflect the worsening forward economic outlook due to the Covid-19 outbreak. In 3Q20, that outlook stabilised, which resulted in stage 1 and stage 2 allowances being broadly unchanged and a significantly lower ECL charge compared with 2Q20. In addition, the stage 3 charge in 3Q20, which primarily related to a small number of wholesale exposures across various sectors, was partly offset by an increase in releases related to historical defaulted wholesale exposures.
Adjusted operating expenses
Adjusted operating expenses of $7.4bn were $0.2bn or 3% lower than in 3Q19, notwithstanding the impact of inflation and continued investment in our digital capabilities. This reflected reductions from our cost-saving initiatives, lower discretionary expenditure and a lower performance-related pay accrual.
Adjusted share of profit from associates and JVs
Adjusted share of profit from associates and joint ventures of $0.4bn decreased by $0.1bn or 16%, primarily from a reduction in share of profit from BoCom.
Group
9M20 compared with 9M19 – reported results
Movement in reported profit before tax compared with 9M19
Nine months ended
30 Sep30 SepVariance
202020199M20 vs. 9M19
$m$m$m%
Revenue38,672 42,727 (4,055)(9)
ECL(7,643)(2,023)(5,620)>(200)
Operating expenses(24,568)(25,296)728 3 
Share of profit from associates and JVs931 1,836 (905)(49)
Profit before tax7,392 17,244 (9,852)(57)
Tax expense(2,228)(3,512)1,284 37 
Profit after tax5,164 13,732 (8,568)(62)
Reported profit
Reported profit after tax of $5.2bn was $8.6bn or 62% lower than in 9M19.
Reported profit before tax of $7.4bn was $9.9bn or 57% lower than in 9M19, due to a rise in reported ECL, primarily reflecting the impact of the Covid-19 outbreak on the economic outlook, and lower reported revenue, mainly due to the impact of interest rate reductions. Lower revenue also included the non-recurrence of an $828m dilution gain in 9M19 recognised on the completion of the merger of our associate SABB with Alawwal bank in Saudi Arabia. In 9M20, we incurred our share of an impairment of goodwill by SABB of $462m, which contributed to a reduction in reported share of profit from associates. These factors were in part mitigated by lower reported operating expenses.
Results in 9M20 included the impact of certain volatile items, notably adverse movements in market impacts in life insurance manufacturing in WPB of $218m (9M19: $72m adverse) and adverse credit and funding valuation adjustments in GBM of $322m (9M19: $147m adverse). Results also included favourable movements on our long-term debt and associated swaps in Corporate Centre of $163m (9M19: $219m favourable). Additionally in 9M19, results included disposal gains in WPB and CMB of $157m.
Reported operating expenses in 9M20 included a $1.3bn impairment of capitalised software, with $1.0bn included as a significant item within 'impairment of goodwill and other intangibles', and $0.2bn included within 'restructuring and other related costs'. This primarily related to businesses within HSBC Bank plc, and to a lesser extent our businesses in the US, reflecting underperformance and a deterioration in the future forecasts of these businesses, substantially relating to prior periods in HSBC Bank plc.
Reported revenue
Reported revenue of $38.7bn was $4.1bn or 9% lower than in 9M19, reflecting the progressive impact of 1Q20 interest rate reductions on net interest income across our global businesses, most notably in Retail Banking in WPB and GLCM in CMB and GBM. In addition, the reduction reflected the effects of a sharp fall in equity markets and a widening of credit spreads towards the end of 1Q20. There has been a partial recovery in equity markets and a narrowing of credit spreads in subsequent quarters. However, this has resulted in adverse market impacts in life insurance manufacturing in WPB, and adverse valuation movements in GBM compared with 9M19.
These factors were partly offset by growth in Global Markets revenue throughout the first nine months, as increased market volatility supported an improved FICC performance across Foreign Exchange, Rates and Credit.
Lower reported revenue included net adverse movements in significant items of $0.8bn primarily from the non-recurrence of a $0.8bn dilution gain in 9M19, as mentioned above. Significant items in 9M20 included restructuring and other related costs of $0.2bn associated with disposal losses related to the RWA reduction commitments we made at our business update in February. Foreign currency translation differences resulted in a further adverse movement of $0.6bn compared with 9M19.
Reported ECL
Reported ECL of $7.6bn were $5.6bn higher than in 9M19, with increases across all global businesses, primarily from charges relating to the global impact of the Covid-19 outbreak on the forward economic outlook.
The ECL charge in 9M20 reflected a significant increase in stage 1 and stage 2 allowances, notably in the first half of the year, to reflect the deterioration in the forward economic outlook globally as a result of the Covid-19 outbreak. Economic conditions subsequently stabilised, and as a result stage 1 and stage 2 allowances were broadly unchanged in 3Q20. Stage 3 charges in 9M20 increased compared with 9M19, with the rise largely related to wholesale exposures, including a significant stage 3 charge related to a CMB client in Singapore in 1Q20. Notably, stage 3 charges in 3Q20 were in part offset by an increase in releases related to historical defaulted wholesale exposures.
HSBC Holdings plc Earnings Release 3Q20
9


Earnings Release – 3Q20
Reported operating expenses
Reported operating expenses of $24.6bn were $0.7bn or 3% lower than in 9M19, primarily reflecting a lower performance-related pay accrual and a reduction in discretionary expenditure, while we continued to invest in technology. In addition, the reduction included favourable foreign currency translation differences of $0.4bn. This was partly offset by a net adverse movement in significant items of $0.6bn, which included:
a $1.1bn impairment of goodwill and other intangibles in 9M20, primarily capitalised software related to the businesses within HSBC Bank plc, and to a lesser extent our businesses in the US. It reflected underperformance and a deterioration in the future forecasts of these businesses, substantially relating to prior periods in HSBC Bank plc; and
restructuring and other related costs of $1.1bn in 9M20, of which $0.4bn related to severance, $0.2bn related to an impairment of software intangibles and $0.1bn related to the impairment of tangible assets in France and the US. This compared with restructuring and other related costs of $0.4bn in 9M19. We expect to incur ‘costs to achieve’ expenditure of $1.6bn for the 2020 full year.
This was partly offset by:
customer redress programme costs of $0.1bn in 9M20, compared with $1.1bn in 9M19.
Reported share of profit from associates and JVs
Reported income from associates and joint ventures of $0.9bn decreased by $0.9bn or 49%, primarily reflecting our share of SABB's impairment of the goodwill it recognised on the completion of its merger with Alawwal bank in 2019. The remaining reduction reflected a lower share of profit recognised from our associates due to the impact of the Covid-19 outbreak and the lower interest rate environment.
Group
9M20 compared with 9M19 – adjusted results
Movement in adjusted profit before tax compared with 9M19
Nine months ended
30 Sep30 SepVariance
202020199M20 vs. 9M19
$m$m$m%
Revenue38,542 41,162 (2,620)(6)
ECL(7,643)(1,931)(5,712)>(200)
Operating expenses(22,353)(23,342)989 4 
Share of profit from associates and JVs1,393 1,804 (411)(23)
Profit before tax9,939 17,693 (7,754)(44)
Adjusted profit
Adjusted profit before tax of $9.9bn was $7.8bn or 44% lower than in 9M19, primarily from a rise in adjusted ECL and a fall in adjusted revenue. Adjusted ECL increased by $5.7bn, mainly from charges relating to the global impact of the Covid-19 outbreak on the forward economic outlook in the first half of 2020. Adjusted revenue decreased by $2.6bn or 6%, primarily from the progressive impact of interest rate reductions in all our global businesses, notably in our deposit franchises, partly offset by higher revenue from Global Markets. Adjusted operating expenses decreased by $1.0bn or 4% as we lowered the performance-related pay accrual and reduced discretionary expenditure while continuing to invest in our businesses.
Adjusted revenue
Adjusted revenue of $38.5bn was $2.6bn or 6% lower than in 9M19, reflecting falls in WPB (down $2.4bn) and CMB (down $1.3bn), partly offset by higher revenue in GBM (up $0.7bn) and Corporate Centre (up $0.4bn).
The reduction in adjusted revenue reflected the progressive impact of lower interest rates in many of the key markets in which we operate. This had an adverse impact on revenue in Retail Banking within WPB, and in GLCM within CMB and GBM, although we grew deposit balances across these businesses compared with 30 September 2019. In addition, the fall in revenue reflected the effects of a sharp fall in equity markets and a widening of credit spreads towards the end of 1Q20. There has been a partial recovery in equity markets and a narrowing of credit spreads in subsequent quarters. However, this resulted in an adverse movement in market impacts in life insurance manufacturing in WPB of $0.2bn. It also resulted in an adverse movement in credit and funding valuation adjustments of $0.2bn and a $0.2bn reduction in revenue in Principal Investments in GBM.
These reductions were partly offset by higher revenue in Global Markets as market volatility remained elevated. Revenue also rose in Corporate Centre.
Revenue relating to Balance Sheet Management (‘BSM’), HSBC Holdings net interest expense and Argentina hyperinflation was $0.5bn higher, primarily due to disposal gains in BSM. This revenue is allocated to our global businesses.
Adjusted ECL
Adjusted ECL, which removes the period-on-period effects of foreign currency translation differences, were $7.6bn, an increase of $5.7bn from 9M19. This increase occurred in WPB (up $1.6bn), CMB (up $3.0bn) and GBM (up $1.1bn) and mainly reflected charges related to the global impact of the Covid-19 outbreak and the forward economic outlook in all of our global businesses.
The ECL charge in 9M20 reflected a significant increase in stage 1 and stage 2 allowances, notably in the first half of the year, to reflect the deterioration in the forward economic outlook globally as a result of the Covid-19 outbreak. Economic conditions subsequently stabilised and as a result, stage 1 and stage 2 allowances were broadly unchanged in 3Q20. Stage 3 charges in 9M20 increased compared with 9M19, with the rise largely related to wholesale exposures, including a significant stage 3 charge related to a CMB client in Singapore in 1Q20. Notably, the stage 3 charge in 3Q20 was in part offset by an increase in releases related to historical defaulted wholesale exposures.
Adjusted ECL (annualised) as a percentage of average gross loans and advances to customers was 0.96%, compared with 0.25% in 9M19.

10
HSBC Holdings plc Earnings Release 3Q20
    


Adjusted operating expenses
Adjusted operating expenses of $22.4bn were $1.0bn or 4% lower than in 9M19, as we continued to review and reprioritise costs and investments to help mitigate revenue headwinds. The decrease primarily reflected a $0.7bn reduction in performance-related pay accrual and lower discretionary expenditure, including marketing (down $0.3bn) and travel costs (down $0.2bn). In addition, our cost-saving initiatives resulted in a reduction of $0.7bn, of which $0.6bn related to our cost-to-achieve programme. These decreases were partly offset by an increase of $0.3bn in investments in technology to enhance our digital and automation capabilities to improve how we serve our customers.
The number of employees expressed in full-time equivalent staff (‘FTE’) at 30 September 2020 was 230,317, a decrease of 5,034 compared with 31 December 2019. The number of contractors at 30 September 2020 was 6,131, a decrease of 1,280 from 31 December 2019.
Adjusted share of profit from associates and JVs
Adjusted share of profit from associates of $1.4bn fell $0.4bn or 23%, compared with 9M19, primarily reflecting the impact of the Covid-19 outbreak and the lower interest rate environment on the share of profit we recognised from our associates.
Wealth and Personal Banking – adjusted results
Management view of adjusted revenue
Nine months endedQuarter ended
30 Sep30 SepVariance30 Sep30 Jun30 Sep
202020199M20 vs. 9M19202020202019
Footnotes$m$m$m%$m$m$m
Retail Banking9,895 11,639 (1,744)(15)2,999 3,133 3,990 
– net interest income8,987 10,394 (1,407)(14)2,686 2,882 3,585 
– non-interest income908 1,245 (337)(27)313 251 405 
Wealth Management5,765 6,491 (726)(11)2,160 2,214 1,983 
– investment distribution 2,473 2,541 (68)(3)872 726 844 
– life insurance manufacturing1,188 1,780 (592)(33)601 800 408 
– Global Private Banking1,339 1,410 (71)(5)418 420 485 
net interest income514 668 (154)(23)142 163 227 
non-interest income825 742 83 11 276 257 258 
– asset management765 760 5 1 269 268 246 
Other1356 574 (218)(38)93 148 171 
Balance Sheet Management, Holdings interest expense and Argentina hyperinflation676 388 288 74 189 248 86 
Net operating income216,692 19,092 (2,400)(13)5,441 5,743 6,230 
RoTE excluding significant items and UK bank levy (annualised) (%)7.617.9 
1    ‘Other’ includes the distribution and manufacturing (where applicable) of retail and credit protection insurance, disposal gains and other
non-product specific income.
2    ‘Net operating income’ means net operating income before change in expected credit losses and other credit impairment charges (also referred to as ‘revenue’).
9M20 compared with 9M19
Adjusted profit before tax of $3.1bn was $3.7bn or 54% lower than in 9M19. This reflected a fall in adjusted revenue and an increase in adjusted ECL from the impact of the Covid-19 outbreak. The reduction in revenue was mainly as a result of the fall in interest rates, which adversely affected deposit margins. There was lower revenue in life insurance manufacturing, which included negative market impacts due to a fall in equity markets in 1Q20, although these losses partly reversed in 2Q20 and 3Q20 as equity markets recovered.
Adjusted revenue of $16.7bn was $2.4bn or 13% lower, and included the non-recurrence of 9M19 disposal gains in Argentina and Mexico of $133m.
In Retail Banking, revenue of $9.9bn was down $1.7bn or 15%.
Net interest income was $1.4bn lower due to narrower margins as global interest rates fell as a result of the Covid-19 outbreak. This reduction was partly offset by deposit balance growth of $57bn or 9%, particularly in Hong Kong and the UK, and higher mortgage lending, mainly in the UK.
Non-interest income fell by $0.3bn from lower fee income earned on unsecured lending products.
In Wealth Management, revenue of $5.8bn was down $0.7bn or 11%.
In life insurance manufacturing, revenue fell by $0.6bn or 33%, which included an adverse movement in market impacts of $159m (an adverse movement of $218m in 9M20 compared with an adverse movement of $59m in 9M19). The value of new business written fell by $0.4bn or 37% due to a reduction in volumes resulting from the Covid-19 outbreak, in part mitigated by continued actions to support customers by improving our digital channels.
In investment distribution, revenue was $0.1bn or 3% lower, reflecting adverse market conditions in Hong Kong, which resulted in lower mutual fund sales. This was partly offset by higher brokerage fees from increased transaction volumes.
In Global Private Banking, revenue was $0.1bn or 5% lower, as net interest income fell as a result of the fall in global interest rates, although investment revenue increased, reflecting market volatility and higher fees from advisory and discretionary mandates.
Adjusted ECL of $2.5bn were $1.6bn higher than in 9M19, reflecting the global impact of the Covid-19 outbreak on the forward economic outlook, mainly recorded in the first half of 2020. The increase also included higher charges, notably in the UK, Asia and the US against unsecured lending, driven by moderate credit deterioration.
Adjusted operating expenses of $11.0bn were $0.4bn or 3% lower, as a decrease in performance-related pay accrual and reduced discretionary expenditure more than offset the impact of inflation and our continued investment in digital and wealth initiatives.
HSBC Holdings plc Earnings Release 3Q20
11


Earnings Release – 3Q20
3Q20 compared with 3Q19
Adjusted profit before tax of $1.4bn was $0.5bn or 28% lower than in 3Q19. This reflected a $0.8bn or 13% fall in adjusted revenue due to the impact of lower interest rates in Retail Banking and Global Private Banking, partly offset by a favourable movement in market impacts in life insurance manufacturing. The fall in revenue was partly offset by a $0.2bn or 4% reduction in adjusted operating expenses, reflecting a lower performance-related pay accrual and reduced discretionary expenditure, as well as a $0.1bn reduction in adjusted ECL.
Commercial Banking – adjusted results
Management view of adjusted revenue
Nine months endedQuarter ended
30 Sep30 SepVariance30 Sep30 Jun30 Sep
202020199M20 vs. 9M19202020202019
Footnotes$m$m$m%$m$m$m
Global Trade and Receivables Finance 1,321 1,388 (67)(5)429 432 467 
Credit and Lending 4,183 4,072 111 3 1,442 1,394 1,387 
Global Liquidity and Cash Management3,283 4,497 (1,214)(27)936 1,034 1,510 
Markets products, Insurance and Investments, and Other11,231 1,515 (284)(19)341 421 460 
Balance Sheet Management, Holdings interest expense and Argentina hyperinflation147 (26)173 >20017 62 (24)
Net operating income210,165 11,446 (1,281)(11)3,165 3,343 3,800 
RoTE excluding significant items and UK bank levy (annualised) (%)1.1 14.0 
1    Includes revenue from Foreign Exchange, insurance manufacturing and distribution, interest rate management and Global Banking products.
2    ‘Net operating income’ means net operating income before change in expected credit losses and other credit impairment charges (also referred to as ‘revenue’).
9M20 compared with 9M19
Adjusted profit before tax of $1.4bn was $4.2bn or 75% lower than in 9M19. Adjusted ECL were higher, reflecting the impact of the Covid-19 outbreak, and adjusted revenue fell, which was primarily due to the impact of lower interest rates.
Adjusted revenue of $10.2bn was $1.3bn or 11% lower.
In GLCM, revenue decreased by $1.2bn or 27% due to the impact of the lower global interest rate environment, mainly in Hong Kong and the UK. This was partly offset by a 15% increase in average deposit balances, across all regions, particularly in the UK and the US.
In Global Trade and Receivables Finance ('GTRF'), revenue decreased by $67m or 5% from lower fees and lending balances, notably in Hong Kong and the UK, reflecting a reduction in global trade volumes as a result of the Covid-19 outbreak. This was partly offset by wider margins in Asia and Latin America.
In ‘Other’ products, revenue was $0.3bn lower, reflecting the impact of lower interest rates on income earned on capital held in the business, as well as lower revenue from Insurance, Investments and Markets products. In addition, 9M19 included a disposal gain of $24m in Latin America.
This was partly offset:
In Credit and Lending, revenue increased by $0.1bn or 3%, reflecting growth in average balances driven by the uptake of government-backed lending schemes.
Adjusted ECL of $3.9bn were $3.0bn higher than in 9M19. The increase reflected the global impact of the Covid-19 outbreak on the forward economic outlook, mainly in the UK and Asia. There were charges against specific customers in 9M20, particularly in the oil and gas and wholesale trade sectors, including a significant charge related to a corporate exposure in Singapore in 1Q20.
Adjusted operating expenses of $4.9bn were $0.1bn or 2% lower, reflecting a reduction in performance-related pay accrual and as we maintained control of discretionary expenditure, while we continued to invest in digital and transaction banking capabilities to improve customer experience.
In 2020, we delivered around $10bn of RWA reductions as part of our transformation programme. This partly mitigated growth of $13bn due to asset quality deterioration.
3Q20 compared with 3Q19
Adjusted profit before tax of $1.2bn was $0.5bn or 28% lower than in 3Q19, primarily reflecting the impact of lower interest rates, notably on revenue in GLCM, which fell by $0.6bn. These decreases were partly offset by a reduction in adjusted operating expenses of $0.1bn, as we controlled discretionary expenditure while continuing to invest, and from a reduction of $47m in our adjusted ECL charge.
12
HSBC Holdings plc Earnings Release 3Q20
    


Global Banking and Markets – adjusted results
Management view of adjusted revenue
Nine months endedQuarter ended
30 Sep30 SepVariance30 Sep30 Jun30 Sep
202020199M20 vs. 9M19202020202019
Footnotes$m$m$m%$m$m$m
Global Markets5,859 4,468 1,391 31 1,588 2,177 1,373 
– FICC5,209 3,655 1,554 43 1,296 2,107 1,163 
Foreign Exchange2,683 1,995 688 34 766 803 720 
Rates1,583 1,175 408 35 232 685 311 
Credit943 485 458 94 298 619 132 
– Equities 650 813 (163)(20)292 70 210 
Securities Services11,353 1,502 (149)(10)409 444 516 
Global Banking12,897 2,877 20 1 953 1,024 990 
Global Liquidity and Cash Management1,552 2,047 (495)(24)457 494 690 
Global Trade and Receivables Finance584 601 (17)(3)192 204 202 
Principal Investments40 215 (175)(81)52 226 94 
Credit and funding valuation adjustments(322)(153)(169)(110)32 (9)(167)
Other2(453)(532)79 15 (153)(145)(201)
Balance Sheet Management, Holdings interest expense and Argentina hyperinflation282 79 203 >20084 108 18 
Net operating income311,792 11,104 688 6 3,614 4,523 3,515 
RoTE excluding significant items and UK bank levy (annualised) (%)6.910.0 
1    From 1 June 2020, revenue from Issuer Services, previously reported in Securities Services, was reported within Global Banking. This resulted in $55m additional revenue being recorded in Global Banking for 9M20 (3Q20: $40m). Comparatives have not been restated.
2    ‘Other’ in GBM includes allocated funding costs. Additionally, within the management view of total operating income, notional tax credits are allocated to the businesses to reflect the economic benefit generated by certain activities that are not reflected within operating income, such as notional credits on income earned from tax-exempt investments where the economic benefit of the activity is reflected in tax expense. In order to reflect the total operating income on an IFRS basis, the offset to these tax credits is included within ‘Other’.
3    ‘Net operating income’ means net operating income before change in expected credit losses and other credit impairment charges (also referred to as ‘revenue’).
9M20 compared with 9M19
Adjusted profit before tax of $3.8bn was $0.2bn lower than in 9M19, mainly due to higher adjusted ECL, which reflected the global impact of the Covid-19 outbreak and included charges relating to specific exposures. The rise in adjusted ECL was partly offset by higher adjusted revenue and from lower adjusted operating expenses.
Adjusted revenue of $11.8bn increased by $0.7bn compared with 9M19, which included adverse movements in credit and funding valuation adjustments of $0.2bn. We grew adjusted revenue while reducing adjusted RWAs by $29bn, compared with 30 September 2019.
In Global Markets, revenue increased by $1.4bn or 31%, as higher volatility levels supported an improved FICC performance, particularly in Credit, in both primary and secondary markets, and in Foreign Exchange. Rates also had a strong performance due to increased trading activity in government bonds.
In Global Banking, revenue of $2.9bn remained broadly unchanged. Revenue in capital markets increased and corporate lending net interest income rose due to higher average balances. These were offset by lower real estate and structured finance fee income as well as losses on legacy corporate restructuring positions.
These were partly offset by:
In GLCM, revenue decreased $0.5bn or 24% due to the impact of lower global interest rates, although average balances grew, notably in the US, the UK and Asia.
In Principal Investments, revenue fell by $0.2bn, reflecting revaluation losses incurred in 1Q20 as a result of the Covid-19 outbreak, mainly in Europe, which partly reversed in the remainder of the period.
In Securities Services, revenue fell by $0.1bn or 10%, due to lower interest rates, notably in Asia and Europe, although fees increased.
In GTRF, revenue decreased by $17m or 3%, reflecting lower fees in Europe, partly offset by higher net interest income in Asia.
Adjusted ECL were $1.2bn, up $1.1bn compared with 9M19 from charges relating to the global impact of the Covid-19 outbreak on the forward economic outlook, and as charges against a small number of clients in 9M20 were higher than those recorded in 9M19.
Adjusted operating expenses of $6.8bn were $0.2bn or 3% lower, primarily from a lower performance-related pay accrual, which more than offset growth in regulatory programme costs and investments in technology.
In 9M20, RWAs fell by $8bn. We delivered around $30bn of RWA reductions as part of our transformation programme. This mitigated growth in RWAs from asset quality deterioration, increased activity on client facilities and elevated market volatility as a result of the Covid-19 outbreak, as well as from regulatory changes.
3Q20 compared with 3Q19
Adjusted profit before tax of $1.2bn was unchanged compared with 3Q19.
Adjusted revenue was $0.1bn or 3% higher, reflecting a $0.2bn or 16% increase in Global Markets, as ongoing market volatility resulted in an improved performance in FICC, and from favourable movements in credit and funding valuation adjustments of $0.2bn. This increase was partly offset by the impact of lower global interest rates, leading to a reduction of $0.2bn in GLCM and $0.1bn in Securities Services. The increase in adjusted revenue was largely offset by higher adjusted ECL, which rose by $80m to $100m, from higher charges against specific customers and provisions relating to the Covid-19 outbreak, although adjusted operating expenses remained broadly unchanged.
HSBC Holdings plc Earnings Release 3Q20
13


Earnings Release – 3Q20
Corporate Centre – adjusted results
Management view of adjusted revenue
Nine months endedQuarter ended
30 Sep30 SepVariance30 Sep30 Jun30 Sep
202020199M20 vs. 9M19202020202019
Footnotes$m$m$m%$m$m$m
Central Treasury1169 226 (57)(25)(32)(64)88 
Legacy portfolios(20)(124)104 84 28 43 (41)
Other2(256)(582)326 56 (151)(155)(245)
Net operating income3(107)(480)373 78 (155)(176)(198)
RoTE excluding significant items and UK bank levy (annualised) (%)4.61.3 
1    Central Treasury includes favourable valuation differences on issued long-term debt and associated swaps of $163m (9M19: gains of $219m; 3Q20: losses of $32m; 2Q20: losses of $64m; 3Q19: gains of $76m).
2     In 2Q20, we began allocating the revenue from BSM, Holdings net interest expense and Argentina hyperinflation out to the global businesses, to align them better with their revenue and expense. The total BSM revenue component of this allocation for 9M20 was $2,206m (9M19: $1,660m; 3Q20: $671m; 2Q20: $783m; 3Q19: $551m).
3     ‘Net operating income’ means net operating income before change in expected credit losses and other credit impairment charges (also referred to as ‘revenue’).
9M20 compared with 9M19
Adjusted profit before tax of $1.7bn was $0.3bn higher than in 9M19, and mainly comprised our share of profit in associates and joint ventures, which decreased by $0.4bn due to the impact of falling interest rates and the Covid-19 outbreak. This reduction was more than offset by higher adjusted revenue and lower adjusted operating expenses.
Adjusted revenue increased by $0.4bn, mainly in 'Other' income, which increased by $0.3bn due to a net favourable movement of intersegment eliminations that have no impact on Group results. In addition, certain funding costs that were retained in Corporate Centre during 2019 have been allocated to global businesses with effect from 1 January 2020. Revenue in our legacy portfolios rose by $0.1bn due to the non-recurrence of portfolio losses in 9M19. These factors were partly offset by lower favourable fair value movements of $56m relating to the economic hedging of interest rate and exchange rate risk on our long-term debt with associated swaps.
Adjusted operating expenses, which are stated after recovery of costs from our global businesses, decreased by $0.3bn due to lower discretionary expenditure.
3Q20 compared with 3Q19
Adjusted profit before tax of $0.5bn was $0.1bn lower than in 3Q19. This was primarily due to a reduction in share of profit from BoCom, reflecting the impact of the Covid-19 outbreak. In addition, operating expenses increased by $0.1bn. These factors were partly offset by higher revenue, which included favourable valuation movements in legacy credit in 3Q20, compared with adverse movements in 3Q19.
Balance sheet – 30 September 2020 compared with 30 June 2020
At 30 September 2020, our total assets of $3.0tn were $33bn higher on a reported basis, and included the favourable effects of foreign currency translation differences. On a constant currency basis, our total assets were $37bn lower.
This reduction in total assets, on a constant currency basis, reflected lower derivative asset balances, notably from adverse revaluation movements as market volatility fell compared with 30 June 2020. The reduction also included a decline in financial assets as we decreased our holdings of treasury bills and debt securities. These were partly offset by a rise in cash and balances at central banks as we maintained our liquidity to support customers.
Loans and advances to customers as a percentage of customer accounts were 66.4%, a decrease of 0.2% compared with 30 June 2020.
Loans and advances to customers
Reported loans and advances to customers of $1.0tn were $23bn higher, which included favourable effects of foreign currency translation differences of $23bn. On a constant currency basis, customer lending balances were broadly in line with 2Q20.
Customer lending increased in WPB by $19bn to $460bn. This was mainly due to an increase in term lending in Hong Kong (up $11bn), as customers borrowed to fund investments in initial public offerings, as well as from higher mortgage balances, mainly in the UK (up $5bn), as activity in the housing market rose after lockdown restrictions were eased. In CMB, lending of $344bn was $8bn lower, mainly from a reduction in term lending in the US, Asia and Europe. In GBM, lending of $237bn fell by $11bn, mainly from lower term lending in Asia and the US, partly offset by higher overdraft balances in the UK.
Customer accounts
Customer accounts of $1.6tn increased by $36bn on a reported basis, including favourable foreign currency translation differences of $33bn. On a constant currency basis, customer accounts were broadly in line with 2Q20 across all of our global businesses. This reflected customers continuing to hold consolidated funds. There has been a movement of funds from term accounts to call accounts as customers show a preference for liquidity while interest rates are low.
Risk-weighted assets – 30 September 2020 compared with 30 June 2020
Risk-weighted assets (‘RWAs’) totalled $857.0bn at 30 September 2020, a $2.4bn increase compared with 2Q20. Excluding foreign currency translation differences, RWAs decreased by $11.8bn.
A $10.8bn decrease in RWAs due to asset size movements reflected lending reduction of $14.2bn in GBM and CMB, including the effect of management initiatives, and a fall in market risk RWAs of $5.3bn. The reduction was partly offset by an $8.9bn increase in WPB, mostly in short-term lending in Hong Kong.
A $4.3bn reduction in RWAs due to changes in methodology and policy was primarily due to GBM and CMB initiatives in Asia and Europe. Changes in asset quality increased RWAs by $3.0bn, which included the impact of credit migration of $7.3bn, mostly in CMB and GBM, largely offset by decreases due to changes in portfolio mix.
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HSBC Holdings plc Earnings Release 3Q20
    


Net interest margin
Nine months endedQuarter ended
30 Sep30 Sep30 Sep 30 Jun30 Sep
20202019202020202019
Footnotes$m$m$m$m$m
Net interest income20,959 22,808 6,450 6,897 7,568 
Average interest-earning assets2,070,703 1,915,149 2,141,454 2,078,178 1,919,955 
%%%%%
Gross interest yield12.09 2.89 1.76 2.01 2.83 
Less: cost of funds1(0.89)(1.53)(0.68)(0.81)(1.49)
Net interest spread21.20 1.36 1.08 1.20 1.34 
Net interest margin31.35 1.59 1.20 1.33 1.56 
1    Gross interest yield is the average annualised interest rate earned on average interest-earning assets (‘AIEA’). Cost of funds is the average annualised interest cost as a percentage of average interest-bearing liabilities.
2    Net interest spread is the difference between the average annualised interest rate earned on AIEA, net of amortised premiums and loan fees, and the average annualised interest rate payable on average interest-bearing funds.
3    Net interest margin is net interest income expressed as an annualised percentage of AIEA.
Net interest margin ('NIM') of 1.35% was 24 basis points (‘bps’) lower compared with 9M19, as the reduction in the yield on AIEA of 80bps was partly offset by the fall in funding cost of average interest-bearing liabilities of 64bps. The decrease in NIM in 9M20 included the favourable impact of significant items and the adverse effects of foreign currency translation differences. Excluding these, NIM fell by 23bps.
NIM for 3Q20 was 1.20%, down 36bps compared with the previous year, and down 13bps compared with the previous quarter, predominantly driven by the impact of lower market interest rates.
Return on Equity and Return on Tangible Equity
We provide Return on Tangible Equity (‘RoTE’) in addition to Return on Equity (‘RoE’) as a way of assessing our performance which is closely aligned to our capital position.
RoTE is computed by adjusting reported ‘profit attributable to the ordinary shareholders of the parent company’ for the post-tax movements in the present value of in-force long-term insurance business (‘PVIF’) and adjusting the reported equity for goodwill, intangibles and PVIF, net of deferred tax. The adjustment to reported results and reported equity excludes amounts attributable to other equity instrument holders and non-controlling interests.
For our global businesses, we provide RoTE excluding significant items and the UK bank levy which is more closely aligned to the basis on which the global business performance is assessed by the Chief Operating Decision Maker (further information on the basis of preparation for our global businesses is provided on page 263 of the Annual Report and Accounts 2019).
RoTE excluding significant items and UK bank levy is computed by adjusting ‘profit attributable to the ordinary shareholders, excluding PVIF’ for significant items (net of tax) and the bank levy, and adjusting the ‘average tangible equity’ for the change in fair value on our long-term debt attributable to credit spread through other comprehensive income (‘fair value of own debt’), and debt valuation adjustments (‘DVA’).
The following table details the adjustments made to the reported results and equity:
Return on Equity and Return on Tangible Equity
Nine months endedQuarter ended
30 Sep30 Sep30 Sep30 Jun30 Sep
20202019202020202019
$m$m$m$m$m
Profit
Profit attributable to the ordinary shareholders of the parent company3,336 11,478 1,359 192 2,971 
Impairment of goodwill and other intangible assets (net of tax)1,156 — 2 1,154 — 
Increase in PVIF (net of tax)(562)(1,290)(252)(56)(652)
Profit attributable to the ordinary shareholders, excluding goodwill, other intangible assets impairment and PVIF3,930 10,188 1,109 1,290 2,319 
Significant items (net of tax) and bank levy1,505 608 
Profit attributable to the ordinary shareholders, excluding goodwill impairment, PVIF, significant items and UK bank levy5,435 10,796 
Equity
Average ordinary shareholders’ equity165,934 165,954 167,151 166,084 167,347 
Effect of goodwill, PVIF and other intangibles (net of deferred tax)(17,234)(23,191)(17,081)(17,136)(23,688)
Average tangible equity148,700 142,763 150,070 148,948 143,659 
Fair value of own debt, DVA and other adjustments(260)529 
Average tangible equity excluding fair value of own debt, DVA and other adjustments148,440 143,292 
%%%%%
Ratio
Return on average ordinary shareholder’s equity (annualised)2.7 9.2 3.2 0.5 7.0 
Return on tangible equity (annualised)3.5 9.5 2.9 3.5 6.4 
Return on tangible equity excluding significant items and UK bank levy (annualised)4.910.1

HSBC Holdings plc Earnings Release 3Q20
15


Earnings Release – 3Q20
Return on Tangible Equity by global business
Nine months ended 30 Sep 2020
Wealth
and Personal
Banking
Commercial
Banking
Global
Banking and
Markets
Corporate
Centre
Total
$m$m$m$m$m
Profit before tax2,696 1,284 2,912 500 7,392 
Tax expense(492)(527)(1,093)(116)(2,228)
Profit after tax2,204 757 1,819 384 5,164 
Less attributable to: preference shareholders, other equity holders, non-controlling interests(543)(492)(498)(295)(1,828)
Profit attributable to ordinary shareholders of the parent company1,661 265 1,321 89 3,336 
Increase in PVIF (net of tax)(544)(16) (2)(562)
Significant items (net of tax) and UK bank levy346 64 818 1,040 2,268 
Balance Sheet Management allocation and other adjustments15 (8)(12)398 393 
Profit attributable to ordinary shareholders, excluding PVIF, significant items and UK bank levy1,478 305 2,127 1,525 5,435 
Average tangible shareholders’ equity excluding fair value of own debt, DVA and other adjustments25,998 37,519 41,114 43,809 148,440 
RoTE excluding significant items and UK bank levy (annualised) (%)7.6 1.1 6.9 4.6 4.9 
Nine months ended 30 Sep 2019
Profit before tax5,607 5,531 3,832 2,274 17,244 
Tax expense(766)(1,030)(392)(1,324)(3,512)
Profit after tax4,841 4,501 3,440 950 13,732 
Less attributable to: preference shareholders, other equity holders, non-controlling interests(885)(660)(592)(117)(2,254)
Profit attributable to ordinary shareholders of the parent company3,956 3,841 2,848 833 11,478 
Increase in PVIF (net of tax)(1,236)(46)— (8)(1,290)
Significant items (net of tax) and UK bank levy858 45 158 (613)448 
Balance Sheet Management allocation and other adjustments(3)— 161 160 
Profit attributable to ordinary shareholders, excluding PVIF, significant items and bank levy3,575 3,842 3,006 373 10,796 
Average tangible shareholders’ equity excluding fair value of own debt, DVA and other adjustments26,714 36,691 40,226 39,661 143,292 
RoTE excluding significant items and UK bank levy (annualised) (%)17.9 14.0 10.0 1.3 10.1 
Notes
•    Income statement comparisons, unless stated otherwise, are between the nine-month period ended 30 September 2020 and the nine-month period ended 30 September 2019. Balance sheet comparisons, unless otherwise stated, are between balances at 30 September 2020 and the corresponding balances at 30 June 2020.
•    The financial information on which this Earnings Release is based, and the data set out in the appendix to this statement, are unaudited and have been prepared in accordance with our significant accounting policies as described on pages 240 to 251 of our Annual Report and Accounts 2019.
•    On 31 March 2020, HSBC announced that, in response to a request from the Bank of England through the UK's Prudential Regulation Authority (‘PRA’), the Board had cancelled the fourth interim dividend of $0.21 per ordinary share, which was scheduled to be paid on 14 April 2020. The Board also announced that until the end of 2020 HSBC will make no quarterly or interim dividend payments or accruals in respect of ordinary shares. As previously disclosed on 18 February 2020 in the Annual Report and Accounts 2019, we also plan to suspend share buy-backs in respect of ordinary shares in 2020 and 2021.
•    Based on our results for 2020 and our forecasts for 2021, the Board will consider whether to pay a conservative dividend for 2020. Any such dividend would be dependent on the economic outlook in early 2021, and be subject to regulatory consultation. A final determination is expected to be made and communicated in February 2021 with our 2020 full-year results. We also expect to communicate our revised policy for dividends for 2021 and beyond at the same time.
Cautionary statement regarding forward-looking statements
This Earnings Release 3Q20 contains certain forward-looking statements with respect to HSBC’s: financial condition; results of operations and business, including the strategic priorities; 2020 financial, investment and capital targets; and ESG targets/commitments described herein.
Statements that are not historical facts, including statements about HSBC’s beliefs and expectations, are forward-looking statements. Words such as ‘expects’, ‘targets’, ‘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, information, data, 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 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 statements.
Written and/or oral forward-looking statements may also be made in the periodic reports to the US Securities and Exchange Commission, summary financial statements to shareholders, proxy statements, offering circulars and prospectuses, press releases and other written materials, and in oral statements made by HSBC’s Directors, officers or employees to third parties, including financial analysts.
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 statement. These include, but are not limited to:
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HSBC Holdings plc Earnings Release 3Q20