HSBC (HSBC) 26 Apr 222022 Q1 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the Investor and Analysts Conference Call for HSBC Holdings Plc's Earnings Release for the First Quarter 2022.

For your information, this conference is being recorded. At this time, I will hand the call over to your host, Mr. Ewen Stevenson, Group Chief Financial Officer.

Thanks and good morning in London and good afternoon in Hong Kong. for quarter today joining for our results. first Thanks presentation open up run quickly questions. then the through I'll for and At our growth back discipline. to and full-year a rates double-digit out results, rising returns, Noel and strong tight revenue and driven volumes I by cost set path

strategy on there is get to Our track.

and quarter growth every of these with our building first $XX reflected The and volume in underlying region. billion in were of strong rate business our growth now lending lending of businesses, global up reflected All being our net of rises blocks results, benefit across most margin. interest is in

adjusting have Our our strengthened with our in track quarter discipline and results X% positive up with highest XXXX. versus was quarter income range since seven implications on quarter, since further net good interest and in XXXX for NIM interest to in this this We more rates macro point quarter, the net X% second the maintained firmly of deliver for within to conditions costs target line remained we implied year, net margin a cost challenged further interest quarterly growth this in first and returns flat and year, last of full-year Despite basis margin XXXX keeping XXXX. at costs double-digit down X% our points with XXXX. policy consensus

our Tier turnaround last right a buyback normalized we first this COVID next credit billion quarter with year's profits Kong weak net last by this backs quarter, later with and back reflected following capital and ratio, Annual results third of on early week. more reported to completed we XX.X% level losses expect weaker were year. a quarter together now Wealth in first Core markets our $X to down restrictions a expected quarter driven target buyback, $X combination billion announced in General On our While from a a We've before tax of Meeting a mainly for range. that we're towards XX.X% May within XX% X launch Hong

higher growth With in capacity attractive distributions. should net interest the and strengthen benefit to expected returns our this and fund outlook now XXXX, of income

trade levels slide, Banking, Banking East. underlying momentum In income Commercial across most and versus well In back insurance next X% good in billion to performed Commercial seeing the and reflecting the the our impact of franchise $X and strength. underpin we're growth And our lending fees We openings. the equivalent quarter our sales. restrictions the business franchise On $X balances in and branch of all Personal of credit Commercial also to Mainland billion. pre-pandemic the Middle Banking. Kong we up of up personal bank the Hong growth good Hong up performances $X billion were seventh areas U.K. our business Banking, China continues fourth mortgage strong lending banking. that's of to despite in And with border were parts quarter or with competitive saw XX%, straight of regions Wealth new Ring-fence closure the in increased in strong COVID Kong including focus fee on profitable

seven real already first the a seen further made have You And in further which to progress will with working buildings we estate our implement. in footprint, closed announcements, we're our now sustainability hard reducing quarter.

now XXXX. the XX% is of footprint since down Our end

branch Mainland In Hong On Hong in recent and light Kong the to slide, revenue. the our material increasing place on quarter restrictions years China and business markets. made in to next in in underpinned we this. closures update by digital to COVID But impacted see provided sales over been the support that markets Kong, soft in shift of an good the investment have activity in we clearly continue sales we've the both

pre-pandemic volumes, which capability border. sales of insurance, of levels remote closure sales benefited Mainland despite the and particularly the Our China delivered the branch continued closures

we've cycle now Kong with the short Omicron, to reopen. of is globally, Hong seen As starting

last Commercial Our and Mainland by we on X% operating were again we COVID are expect a as quarter, solid $X restrictions with to another grew more the billion, a to up had the on our branches normally impact despite or begin year's as activity result. week, of of and standout. normalize lending In client own China, strong first team Revenues Banking last performances, XX% widely. performance

adjusted interest was touched down most both at the of balance this on XX% on to rises non-net XX%, $X up market was rate Wealth. the Turning of billion But income in reflecting due and and mainly net effects impacts sheet to I've insurance income interest restrictions Asia COVID X, growth. already, Slide quarter,

of $X.XX, FX. tangible down and $X.XX fair value than Our net by asset profit share with value movements was per generation impact offset the more

Banking good revenue slide, Wealth impacts. good Banking rate GLCM was all down balance and sheet down Kong weaker and interest reflecting with revenue a the Personal from trade Wealth our performers, XX% by restrictions. across reflecting was was higher on revenues Hong market of standout products growth. income a while markets this insurance performance, balances to X% were revenue GLCM up up however Banking up and quarter higher X% was spread rises XX%, by and quarter COVID revenues of rates balanced driven to and first both the next benefiting fee continued on trade had continued year main growth. with Commercial impact due the the weaker and growth. Turning bulk in Personal This offset We X%, last

$XXX points volumes, investments, volumes. the in rates Banking. On interest strengthened with net and have different us and and from down business and year was mainly that's and was giving up rates policy lower down in Slide retrieving in points, On basis GLCM our since performance was interest full-year million on This X% driven Personal fourth gains XX% for Banking mix seven rates first FX, year's margin consensus principal up XXX XXXX XXXX from peers Markets by this up the to X% was with positive greater further net higher Commercial and Markets Global was in and X, interest particularly confidence results XXXX. revaluation versus basis in income mainly Banking last the quarter. Services implications further higher underpinned rates, up double-digit and were returns by Wealth revenue quarter. Implied XX%, net income strong Global Banking last even revenues reflecting quarter Securities X%, $X While first good billion, against up revenues many was

provision million average X.X%, next and of comprising additional was cautious $XXX China exposures, approach estate. in are We've million a provisions, reserves on most The remaining of net of credit increased On $XXX of to slide largely losses in a charge total the by quarter. guidance real COVID-XX million, some driven our of released basis book reported additional to performance, the forward $XXX the management $XXX reflecting a loan our economic of given million This million we've offset some million around commercial points remains at central relating $XXX the quality a credit Stage economic of expected $XXX charge loans million uncertainty. of XX ECLs around good, includes percentage stable the X as and overall loans. $XXX Russia ECL loans quarter, relating

We towards for continue basis to XX expect points loans ECLs of the to normalize average year.

the X, and driven first X% performance lower to by control, accrual to were on Slide pay costs period last Turning operating continued quarter last relative cost first year, adjusted quarter. down the year's same related

to this run with years XXXX this compared continuing program despite achieve cost achieve We've in XXXX year which are track we to to within further We've complete when spend X% the higher keeping expected to cost cost fourth cost remain now spend in billion other during in three with our ends year stable to we a underlying the in of to this of BAU range. $XXX quarters, to of XXXX. savings $X.X achieve further spend rate we to invest committed on the the while billion over first cost savings year, of cost We on combined year. reiterate, in quarter a the to reducing of remain this expect billion achieve year, cost low $X to million $X of will at around track previous quarter our to of billion the in the and from least To this $X.X have total to a to continue costs quarter, around made [ph] a end growth growth cost end As costs. X% with achieve billion $X.X of program savings achieve three million. of remained technology, $XXX program

basis full-year capitalization and benefits another billion core accrual and Turning core our to $X by XXX the the to for software flagged of basis at results. And XX X range. basis XX.X% XX fourth on regulatory points additional XX.X% Together, the points. X XX% unwind We back the points quarter, within in the the our Slide around Tier these of ratio ratio buyback dividend was reduced on quarter. impact announced accounted capital Tier to target and our changes XX, being down

reflected around reserve in collect In billion FX after other as addition, movements our XX regulatory Tier assets growth up weighted due changes in core on tax were and billion to lending and ongoing by sell on quarter, largely the designated saves steepening curves points, $X.X reflected risk $XX and and income comprehensive which yield basis hold of fourth to offset or were was the RWAs the financial negative Reported X. assets movements. partly of

saves achieve of saves on $XXX Our billion. this new firmly cumulative to least at We're year-end. ambition now $XXX are our cumulative of RWA RWA billion track by

Just manage falling points French as billion next XX.X% business, following XX% impact we our which range X expect $X our We've I of intention an our to to and XX% said AGM May core our our billion early around to buyback during in buyback in a $X announced full-year XX.X% quarters. basis now coming as Tier launch over range of expect to time. at October But this contribute this within year, below of the from XX we is the week. we target our to to results, later retail the us completed expect sale reminder later

due XXXX. we're range market bottom value further As announce to target now and to see our the we're in the of the unlikely buybacks fair continuing during expected growth losses, at of that good impact we're to now business,

However buybacks forward. management remain capital integral of an our part toolkit going

So of remained rates, rising growth, quarter, we and despite very back double-digit a focused we've need achieve to returns good discipline. To operating cost in this on volume to conditions this, XXXX. getting tougher see conclude, set to

by underpinned All growth volumes grew lending business these underlying most of these results, billion. of attributes were parts there in of $XX in our

Our net points interest second declined costs margin interest by rose XXXX and quarterly our since for net highest of basis margin the seven quarter X%.

credit the capacity full-year Wealth growth benefit XXXX despite find rates strengthened the revenues and the So double-digit please since if impacting open and our Increasing our environment, confidence delivering of distributions. expected With in losses fundamentals quarter, we could have in this and our that, only up of macro questions. returns rising attractive results. to Martin, for

Instructions]. [Operator Stevenson. Mr. you Thank

now first today. of comes Dickerson take We ahead. line This Joseph will go our Please of from question Jeffries. the

Hi, good morning.

Joe. Hi,

for my taking Hi, thank question. you

Just a quick one.

the on given. this of non-interest how is mean much looking QX backward I frankly Just income,

the start lot the cetera. guess, in from things we your Hong commentary are starting you to it sounds revenue" a of got You've commentary from pick like some some, et Kong. I are much. what a like looking able like Can well, of sales recoup your see to seems backward your it to over "lost most things guess And do and impacts, quite up the But rebound will. quarters. like commentary they if markets I you on please? of very Thank and would just will your income non-interest this that, separate is I coming market

Yes, Joseph. Thanks.

it's think mix. I a

QX there markets not extent be performance obviously insurance the us business for our Kong back. volumes we think depend market on adjustment Yes, negative same items we do in some business there'll brokerage normally we'll almost down market we we're we anticipating in but expect of QX. that certainly is lost second We equity saw Hong don't the And that brokerage, normalize equity So recoup Obviously, in quarter, that QX. were that but XX% the flow like line the on are strongest will the impacts. flow wouldn't. of quarter. that the in quarter, to

should look sales, like recoup you think the XX%, quarters. in is at which we If there'll a do think part coming Kong in mix. Hong something down mutual I that be were I funds of around

a I see just you'll some our strongest is think of last. I yes, is QX, remember that QX. quarter Yes, recovery -- decent think would in I overall, So QX And happened QX, it's what QX, in normally.

to made. seasonalize have you my that just I've So comments

Thanks very much.

you. Thank

This Aman We of will from Please question. line Barclays. comes now your ahead. take next Rakkar go of

morning, Good Ewen.

Good morning.

revenue, I revenue income questions growth One if the retained net you this interest of you're may. Two flagging further that kind on outlook. mid for note aspiration up year. single-digit But

was when it clear second Is around wanted exactly XXXX? you're non-interest of just growth impact there what revenue Kong activity in extent an because assumption simply So single-digit income. to this about mid making you on be thinking of what to China? The And and was about reopening FX. kind offset in Hong the in

billion FX meaningful $X.X in revenue very at pointing based And It probably a they're revenues billion. I I March well was is on from think If XXXX revenue for factor lower to know is for HSBC. costs revenues I around offset there of pretty XX XXXX $X to is billion. rates, weaker by the FX here? that to on FX average guide. the particularly this based spot and struggles touch look Consensus March. in is about your even rebase XX around the revenue single-digit FX a headwind million probably mid I something for typically model if updated was And your consensus

does Is Thank sounds additional there right that that? So that to mean, I to add you'd math color any you. you? about

Yes.

income of The quarter impact we'll by excess will sort which net growth, Yes, is around well, which first of see income think slower across of a income net FX will So, billion net interest me. non-interest your interest the despite growth offset we of single-digits. FX. But that the a that, about will non do billion, particularly to an look, impacts split, in Asia X.X FX non-interest everything the impact. think income Yes, I've seen given mid the income. estimate estimate feels in for there I year. your we've of interest forecast and remainder be yes, hold. comfortably that guess, impact Yes, net yes, do on roughly that I impact X.X reasonable like bit said interest the Actually,

So all probably yes, going own your that's forecast. on say we're to

And very that's Thank you great. much.

you. Thank

of of Please Your next question today Sinha comes go JPMorgan. line from Raul ahead.

bit NIM one, interesting NIM Maybe Slide thanks focusing is the the very trajectory. go U.K. you sticking just showing taking And And nicely And else improved Whereas Good clearly, my helpful quite for morning. up a very much as is along. again here XX, on questions. the first significantly bank little breakdown. a we quarter-on-quarter. actually on everything very is what the

that rates? there in and question it. about the to repricing obviously points is, U.S. LIBOR, HIBOR up U.K. impacting terms should is underneath how of you're basis I interest my think So move is about And that think the guess seeing, in explain the related are gap trajectory? between to should it's about specific then Hong anything the How NII seeing now? lagging And you Kong XX HIBOR movement? we we in

another RWAs. can Just follow-up I on if question,

credit the You've the this you. obviously had of a just the do think migration, again about ways I asset the what quarter. from positive was year? rest of you moving wondering, lot parts, Thank for quality

rises. already come about, first rate of side, really talked being nothing to quarter. deposit thing call sort I all is the relation few the the the market. the rate you're sort main XX% there's NIM pressure, two of to mortgage and as think through you features in of trajectory for yes know, And the continuing rises the U.K., U.K. below seeing But benefit in in asset on On asset that as out we've

own policy get seems think So with basis basis HIBOR it's we point the yes, If for in yes, rise that of I XX income we as current coming month at see expect. will continue react. continue our XXX net Hong remainder another material In fed June. yes, HIBOR year that -- growth forecasts to interest very and as think the HSBC, rate perhaps to Kong, in rises difficult funds we see point consensus, XX very to through, in be over U.K. consensus how the the in next to rise we rates doesn't

full-year yes, So dollar asked I at we have HIBOR me, if month have could six results, of lag sort you'd would between U.S. rates. said embedded and

more see that to front much loaded. of dollar the Given we're rises shape end being rate U.S. likely now

I to think that quarter. it's hard gapping more see one than

FX. year, you've things think from material the there's out movements risk on call remainder Yes, obviously I for terms reg call of in here yes, got to assets out. of the don't any to So weighted

to obviously we most that we've the made. the I seen, of got the activity You've quarters. see in was factor we've and so will smaller French the expected through impact But, few retail a of more trajectory, the be bank much it QX now including coming a acquisitions M&A definitely think, that the normalized that exit to quarter

Thank you, Just loss? regulatory medium-term the guide inflation about you've thinking a how about remaining? on have but that's I is out really much of regulatory in more on do last second that RWA medium-term quarter, changes. helpful. view follow-up, And changes, called for a If of X% out

we of it that XX of January will first out we're to may net introduction a say, I time of the the would to mean, at I next it. small of we the I see -- benefit model, adjusted Basel, then thinking unless would roll XXXX think moment point. But the our that a Even net years, be to point, a impact through we're And as January Pfizer the be, few at be that as in Yes, at We're will by of us. over think bulk one further guess, I think, think XX, for I we us. through negative we currently business yes, where positive I we certainly maybe. floors most forward the which actually model forward, you output be

helpful. you. Thank that's And really

comes today from the Jason question next of of Our Napier line UBS.

open. Your line is now

Good morning, Ewen.

Hi, Jason.

for Two income. my you please, both net taking on Thank questions. interest

of growth of getting moves. to take give interest and $XX And points basis year, is $XX just we sort over volume into run The then first is in the XXXX. income. X% sort curve it billion. billion yield XXX you of of about of billion if Consensus kind $XX net the I'm

FX, what that we've got our then think about I you're sort the a is there XX% far opinions saying about deposit in guess Is volumes I points as but should know we forward kind concerned? And got I structurally plus the year next second wrong basis walk XXX using of all on of max. question. with a into anything as

outdated on reflecting Well, No. NIM I and forecast, over the but talking average like I think happened Yes, probably think couple last what's and rises I I in yes, rate we've following then, think, don't of material very Jason, which months. April, March model in the don't our results Since about consensus. is was coming reflected seen in February. full-year late consensus through

commenting ahead currently forecasts internal numbers. set interest materially XXXX in without for net they of on are income So as your consensus

a And then perspective. you. one second one, useful Thank Sure. more your the from perhaps

course, myself if the a is using Just I've today, doing tell of deposit the square I bonds. terms I never billion FVOCI that that. of you've of the own. a the deposits more substantially And even of been less to and gearing even capable that period. isn't loans number, of sort If wonder just in you bond way one But mechanics only of why match billion billion XX% quite why another. went $X a its in X in are able find unwind you I'll the than got tailwind XXX rate And that. that on return to held the trillion relates a

it its you that something wrong happened fundamental I'm that Given getting what's there billion. $X rates Is can to spot? about

tail. a tail bond Yes, I'm sure not is your bond

that interest We I think net interest our losses portfolio that about that the is to, have XX% exposure about through of so, value just we've hedge way taken bond and the income we on. rate referring it that Yes I we're exposure. with gross fair think which net overall market the a is us of show incremental next $X provide not five sensitivity unwind see the sensitivity, rate interest interest We billion, the you $X doesn't XX% over the that the rate gross benefit rate we and quarters. sensitivity. and other net that of portfolio. the billion interest Yes,

if So or closer place, and portfolio billion hedging that billion yes, that have something. $X.X probably to is we $X in didn't

coming that has Jason. of the see the see you that we've interest given I won't that or that we've unhedged whether fair know We'll that income, sensitivity So helps for. net portfolio we that The of market value higher created portfolio. seen hinders losses. your in rates through benefit benefit of interest rate XX% the understanding, don't higher the in

helpful, you. very thank That's

why that's $X year billion in reversal your billion, $X So to $X $X one $X that. gets billion, uplift That Ewen. New helps, billion of billion is Year, to

it. got Thank you. Okay,

the from Tian comes ahead. today question next of Citigroup. Please go line of Your Yafei

you, Thank have questions. two I

Good morning.

good Hi, morning.

one first capital side the quarter business, around very is The of market resilient market because of volatility. the

of at to a you modeling of the capital the OCI, is quarters, we're the seeing? quarter? impact bit you. at the have April side better color, to from that get the coming wanted we quite are coming that revenue you markets a a potential And thinking down how rates bit, second look Slide OCI lot understanding least is to FIC the then about the wanted few where for XX, but volatility to just flavor with impact and be come Just give how of higher through Thank going should a secondly

April. Markets the far so and surprised really in that things. out Banking There's I call outlook, nothing Global guess I few to and mean, on a so Yes, us

tracking, very the plans moment. to according at much So underlying

markets resilient robust but month-to-date. to part, of slowdown other any and U.S. the like in Global us. it's We are some pretty exposed asked markets in our whether to the haven't for been East less pipeline material to the franchise IPO seen our on M&A we markets we that and been are pretty I Middle Banking, look have know probably has going outperforming continues don't and exposed

The we And so back note environment, are a FX line of better that the GLCM, Securities outperform FX sort items on this revenue our would which rates OCI. more will lines if Banking I of lines an Services, investment that franchise again of volatility, I other thing rate with in which peers. help and any interest benefit GTRF there think we're lot should Global compare weakness Markets higher some would of our traditional do with in is the sensitive, saw environment of cushion was the you banking market should continuing franchise. to operate in On levels they

I an think month-to-date take call additional portfolio, run adjustment only in Treasury through $X fair take thing the obviously the -- you billion to pretax out on the OCI if you losses, of if about April. which there's is the would value

think to we that it? or additional billion about do there anything be $X would Sorry,

fair a It rates depends the do as of lower, here some forward the and sensitivity, XX by reverse very the very move, true didn't take remainder basis XX dollars, But about just points if a would please much will also interest over But If if dollars a of to give being the sense about down. on that adjust curve were losses yes be broad that and points basis they dollars. of from value quarter. adds billion across loss it they rates billion it higher approximately of and move, the you billion up they additional fair and about of a every would curve in come sensitivity. of i.e. value basic this

enough the you I on depending interest today. will relative rates So think quarter give to where are over model that to

should that rates onwards, we Got from there'll how point that last, is any stabilize and that guess it, say curve I many be so benefits interest will that once if does quarters be account let's from thinking at the to income into returns rates we that fund interest you certain treasury just have about provided? net or should take level higher stabilize that

No, effectively, those the margin there'll one-off wherever and you'll Yes through the come then loss interest income at net net and of latent point. be gain benefit that stabilized no rates see or time. over interest and

Got you much. it. so Thank

Our line Keenan next ahead. comes Please of Omar Suisse. the of Credit today question go from

Thank everybody. morning for the you Good much very taking questions.

earlier expectations moved for rates full-year. commented, market the policy was As since have up

So one think in and the about thinking rate interest out appreciate sensitivity on close X.X% things that's how If year Can just about year Fed terms peaked perhaps X.X%. were I and ask we think of in given margins? -- the about at I the of XXXX, funds been five. the you're net for to about quite terms NIMs

tend you're world related how close are term, a more if can where that basis I think Has through you sheet X.XX% I of think ask good a check to in XX changed the question on they to for in were that thinking for about in wouldn't to mean balance right a achievable over the of and anything policy guidances terms just is terms are point would rate, comfortable cycle that the year. that not medium that target X%. just structure be to rates again or the

So from there negative higher the you. guess understand might crux rates question the above to is the I of where higher X%? that try positive the come are to inflection substantially then rates offset Thank if

balance firstly XXXX bigger. the changed is materially so sheet mean mean Yes, I I what's since

So up average interest materially. earning assets have gone

by on if higher we return levels. NIM income a previous we should interest basis, volume be to net rate earning So

in rates the some are I higher actually is, than particularly markets thing market other implied The XXXX. think

So see we strong certainly recovery a to expect back very in NIM.

larger. the levels back NIM As and that gets to had previously you higher model balance currencies it through, of in in it some you you than markets different sheet maybe is

additional double fixed moment the we think the by fixed saves. On inflation increases our than few rates inflation. I through mean more things And impacts to do is, yes currently to year increases to the the need rates year, cost we've costs the put growth what decades a currently very remember, of at Yes, higher higher X% much in in you range managing they ECLs, there's that we we're committed go cycle. what were reflects if commit firstly continue this of keeping looked to cost curves reflects to that of the offset that pay so this on start forward costs at year, pay than and within XXXX negative we're terms or before, from seeing higher and this rate flat higher higher next century year, a lows range I materially the of are or the we're starting think that being impact end of seeing inflation. rate On X% in up we're rates,

go think to So implied. would than what further do currently see we up we materially they have

So a XX reminder, we to not XX. as during the XX points just said cycle, basis

comfortable to guidance. continue with We that be

Thank you much. very

next from of Our of Tom Numis. Rayner today the line question comes

is line now Your open.

forward morning, us the Could detail you sort six this to talk impact curve, sort might based to and of you're in in ratio, now sensitivity the flagging guess bit I in impacts higher the impact on capital maybe consensus four these the Good that that ratio. the of benefits not reverse the Ewen. quarters through how negative have factored on is but your forecast on my may because capital concern to of of you OCI the over already a movements disclosures next factored you interest and more rates that expect

line, equity somehow through if NIM might ratio is you could there X consensus of a Tier that maybe out sort consensus us danger, please. talk versus that of be So

quarter, the in near-term, the XX rises, expect that net I same quarters April. you implied pretax be today, back interest a on to the had said the seen hedged. core we the same in strengthened benefits we've Tier effect next us rises would it five the should net get is We XX rate chunk you through about fair sort higher yes we've as the so point don't losses, I that losses then on April interest deductions X the got income rate that I If fair unwind X the basis for quarters. Yes, unwind multiplicative we've the through interest basis recoup year. how as roughly, are about adjust capital, the is therefore Tier Yes, and income the just had XX% Core the impact latest reflected deductions will But come over higher and Core we in therefore points. of core the Tier there not what further value meaningful following about not from BoComm, Singapore. get consensus that on X X it's back rolling seen on also, yes declines, fair book of also that in repeat the or impact about as Jason, to with April take see you'll together will under you the of impairment into think April, the a in basis not through another if so we a that has talked it's are saying in translates 'XX movements, earlier and result for on it's value of dollar now based coming forward, Tier of rates of just numbers, billion the sometime for at acquisition look to points, first see the numbers, think there's consensus. based a March, curves, what impact of increases that's income rate as Tier are another will rates movement place. And as we've to of of in losses that our sort those on with five on and net they you ahead materially through Yes, Core point X OCI threshold in value there in we've XX that's threshold of I higher internal we AXA reduction Yes, our think was

do causes So there'll much much higher timing that on mismatch be and second we distribution on further capacity a that capital. say capital, mismatch But of that half much income, buybacks should will this now interest in timing of XXXX to reverse in is the higher be the net think it year. It's unlikely which today us higher that beyond. we returns,

as net movements income have movements, putting to Net-net future you of well. rate interest though, on through if based that those we capital okay. fair? rate Yes, implications the consider are Is

Yes, reflected reflected, reflected rises the so I those capital didn't, think of rate income it benefit it impact on fair today, if interest hadn't I of it looked over hadn't losses hasn't the at equally, interest value consensus net the on time.

Yes, one, ECL quick okay. on Could QX I numbers. just a ask very just second, just

can for economic I similar that to reflect China in with issues those So of time, was a you that Russia the at guess there's won't expect taking you well, But of at provisions so guess QX expect should it's of for things taken think year? the here moment really rate this in going charge sort which just think change the I there lots assumptions. obviously as be CRE everything there, expect, underlying these look provisions of and and and you've uncertainty maybe parts in about moving as this we forward, more and are we noise charge a you run sort I

Russia, we've spent a Russia good so time we've estimate been of I of through. do we've we that well see million estimate lot on for would we We Yes, $XXX charge come exposure, taken will losses pretty for Russia is say, obviously good of think a today. to able can what think where a

we've or have Russia get position what would dramatic Russian to outcomes, today. something our So in on to change relation different to the to or war, our Ukraine subsidiary announced

of statement, I One been going got get that we squeeze commercial weak. beginning last conditions at But of -- the year estate the market. of required of was a a the real say China estate end from the big estate a did same say big yes, or anticipating the that it factors two On credit year, relation China China down yes, charge substantially. I that real you've China sector, that so yes, tightening in a has back out will billion mix quarter. started in guidance see that default X full-year in small call from took commercial we liquidity commercial Stage to continue a this But million very given contained real of the the not to fluid $XXX that within it into that names markets there's for it's of created X this time number wouldn't unwound provisions be material would we to on. $X.X been now the million provisions. the materially But we're at make a saw remaining be estate, real we've X, Yes, would and it the be the Yes, situation not commercial policy number. $XXX to part unwind go the is has underlying And QX. was eased

of towards is this So points we basis XX QX that ECL XX statement yes, basis was that points. year. trend provisions to expect

Yes, kind of good.

a Okay, lot. that's it for me. Thanks

Our today next from of line the Ed comes Firth question KBW. of

open. is line Your now

good Yes, morning, Ewen.

Ed. Hi,

Yes. into if you the the Hi. I is really? costs if charge? know, roll to the the two to achieve it to all pick I money, I what year. you're next rest the But expectation saying the obviously -- that. year. questions get the past, then below on rate, expectation One the you've haven't cost And have in back running you spent annualized forward the about was of in I both up You're guess well

a we additional the thinking the look about banks we second we year? wondering of it why that that over as in the Why year cetera. mean, of about that about and point that a the scenario? particularly feel expecting doing it payments, digital that's course not markedly it what flat et to should the over other your flat Is this I can bring for And they cetera, who I And I'm the cost? bit? back from past? terms that just you And cost -- X% difference therefore Or investment, question. you're next if rest quite do of -- you as is so? I stuffs et guess be be So sort this that the investing should the guidance, is different then need year. I global were at number is, And in of the you now that mean, of doing? are way you are is talking first sort look is

the Okay, first into of shouldn't think drifting so the program one, XXXX. you on

a of board the expires have this year. at approved We end that program

the now don't the spend between if billion, end will remaining year, We I of and $X.X think and the it. is lose we it we

our that spend is next up into zero incremental because year. to can to We it think growth drive the thinking to fast we is savings. in X% is money. intention sensible factored that keeping spend And money cost our to confidence So

So $X.X remainder will to for billion we very yes, the year. that close our current intention of run is that spending the

see I results the on exactly don't you we comment assume cost in program. where same the Yes, it if making say, cost second through So next I've interim coming quarter, should Yes, program, maybe run just into thanks. flow get the about I'm the half. the to

is the year. Yes, that about that cost I clear a billion achieving on the about flat detailed we we've delivering for we've no year, to market. look, I got cost comment of can't here next to need to other banks. announced think incremental very, what's an So targets look, top plans But committed on down very very to I the in for this savings find relation dollars. say would is

on moment. We that are at hard the working

can out of this developed identifying work number of well given the expect is of have and we've that streams for that We at we that areas by solutions of relative time the that a to we future strip that cost. results to And the years previous beginning time year. not gap to unusual interim August. get of guidance incremental at We're across cost sort

broadly I 'XX. from now that XXXX had recent through 'XX, yes, transformed And kept 'XX you flat been has costs terms so we cost overall trajectory would cost say management we've can over -- that So where here see the years. the onwards, 'XX, of in 'XX

Yes.

inflationary think cost you a rather a the you're actually and much just plan? savings, improving your given I Okay. were obviously environment, than -- holding if in that's

no, Yes, year range why got next we've with understand that. that. a we that's And degree consistent a for of

much. so Thanks Great.

BNP from Paribas. today Guy of of line comes Stebbings next Our question

open. now is line Your

Guy. Hi,

of questions Most been Ewen. and my Morning, morning. answered. asked Hi,

I it on some a you equity very capital the recognize on simply partial longer-term just dividends capsules future able to I welcome and was stuff? helpful to the X.X reflection in output some actually But quantify the how itself. broadly, a sort hit of course in of a particularly something that in low similar of the And positive might or sort Basel worry commentary a color and drop we if odd the Should welcome reversal come a was a the percentage on very from treatment? for it or And talking could magnitude? deductions move Any [indiscernible]. for are Thanks. threshold be of base So is additional much QX? couple we moving receive expected expand be residual suppose are through? helpful? And on then of be days the net now to about our single-digit pre

is Tier investments is from continued and X comes ratio, the which value the much in the comments we've some all back million and Tier the this about a higher I it $XXX growth due threshold loss because we Yes, a saying being losses, in for drive there's value take which lower buyback. of deductions, $XXX which is we've cycle of dollar would increase into the and billion of impacts as the so therefore seen mitigate is dividend returns, we're off that accrual billion improvement the result from a should the been treatment in we've the fair intangibles, core think threshold quarter. today, Tier share core X $X.X help lower it software of X and of got terms about about which AXA, the to million then core of And about million. Bocom, $XXX

the Sorry second question?

X.X almost comments Basel the question just was you gave? that So second

partly, of almost we of entirely we introduction fact impacts in so benefit we've in think reform, said, including by Yes, driven yes, -- but this most the as a the see front, that from from taken modest quarter. Basel we'll the up modest XXXX,

sell need to much give think a with the side. which to of years, is we'll over of next us on the you and for the couple only cleaner trajectory side impact do both thing I see pay to M&A you'll RWA So attention buy color

you. Okay, thank

next Manus the from Our Costello Autonomous. comes of Please today of go ahead. line question

Your line now open. is

morning. Good

Manus. Hi,

haven't We've situation, were? way I China. FX and aren't quite wanted the signals really now. because U.S. disappeared confident are lockdowns got some the But premium what China the that just more is the I macro why out moment? yield I ask color you much. your wondered give coming remain tempered the enthusiasm the you there in Or about of macro misread volatile, has could seem please, to negative to worried developing outlook if about on us more comments at you whether is the to

we Yes, the In things. likelihood mean mean, probably as Kong, to an are Hong observation we'll that in being it material recovery will few I firstly, that quarters, in I as they what happens Hong are dominant together. driver think The confident Kong on seeing I strong and think biggest earnings. itself the far you lockdown a just despite combination that importantly, in lifted And as Kong that that were HIBOR see a in coming or small. movements Yes, of market the were in restrictions a us. we're reflects get we is a reopening about know, of Mainland, a more combination mean China, China. China Greater bank impact the we Hong real

market bank share. have biggest X.X% we have We less in a than foreign China,

XX%, was If by far we loan underlying the which book you excess look in year, grew GDP of last growth.

are correlated to were lender, growth. a to economic Hong if underlying we grow loan big is the as as we And not ability Kong. our in So book

some we to somewhat insulated yes, So extent. are

think to I that would actually nothing good continuing to to for what's plans venture, the business. very that slow insurance us traction with again, we're see relation business. in Pinnacle, happening our that And life see down in cause

with China. connected and We also revenue have a lot of trade

in with are And perversely, trade us, trade a means supply in we've in supply balances disruption lines, people franchise bigger it run if a lines. as seen our overall to going with there's somewhat disruption

in much micro. number Hong Kong. China, market of track a Yes, got much U.K., not macro we're like a you've perfect. in which it's a again, very or different book, the So more it's things in in We our

through point flat did mean NII Can arise we larger? makes hikes in? on material quick you the that sense. and might to very hit expecting just HIBOR mortgage Thank that benefits And caps in Does the you Hong At quickly quickly the because come rate quicker? I are and than more rate Okay, sooner be? therefore how ask you. and what caps that that that's that sooner a kick well, If now previously? coming follow-up Kong commented more as NII hikes just

Investor team think on Yes, Manus, Relations basis I'll I'll but starts follow-up, it team get where NII our get I an is to Relations follow-up. to our And Investor impact XXX it's have growth. points to around

much. Okay. very Thank you

Thank last you. today question of our from We'll Goldman the Martin Sachs. Leitgeb go Please take line ahead. now of

Your line is open.

Thank you and Ewen. good morning,

Martin. Hey,

taking rate two the good Bank question. from for through seems a increase if smaller U.K. that if the quarter the Thank trade the see to how some and is business To have coming stronger XXX. you of that these the certain increased Say risk which like you. wondering weight? hedges and how XX of basis Thank extent meaningfully is was structural get you U.K.? capital NIM on in the just And the rate benefits in part you the HSBC that Does the U.K. Would on share capital what comparatively high leverage fence And up on any like on quite NIM. a rating big to asset shows rate link in low opportunity and further so to just ratio on finance the questions comes following points quarter in a facing sensitivity hikes a is hedging the comparatively to part in impact the the sensitivity better share I of more does delay my thinking it [ph] high because through your P&L? phasing had able actually be plc I've the first by the quickly. of wondering businesses, please. One could U.K. impact changes. obviously you a was on And you you of engage REBO reporting on just lines? hedging I rate the sense follow-up that

that I Martin, into one, you we're unique second that entities, relatively need balance the single of sheet. and don't down complex legal we a have very that's think on look a Yes, to because the individual question drive sort

total within you balance single balance assets average their about If are at where sheet plus the XX% us, our look single probably I of of think sheet. more a is peer balance XX% for than don't a sheet

lower So we're banks. think changed last entities leverage lower But U.K. of fundamentally On we those capital NIM, hedged the legal some I strategy much are think over an our entity-by-entity stress don't I to impact discussion. other to two in constraints, constraints any one anything's as quarters. constraints, than

short assets. have, think I also dated liquidity We of higher liquid levels and

rate interest on So I sensitivity sensitivity. rate their interest but more commenting peers, have probably do we think than without

bank ring-fence saw rate in seeing interest of full-year, most growth Sterling not you disclosures So is bank, income in net as in only currency. yes, exposure And that very we the should the therefore sensitivity. to what in terms non-ringfence we're also to our our rises interest but do Sterling sensitive has rate corresponding think material

Very clear. much. Thank very you

are you further this at Back Ewen. questions more time. There to no

forward look you thank discussion well Okay, with interim in Appreciated the results. you to up catching and for everyone joining.

follow-up you our help. Investor If team to here have do Relations any immediate is

joining. you all for So thank

concludes the gentlemen. Holdings quarter That for call XXXX. release first Plc's the ladies and Thank you, earnings HSBC for the

disconnect. now may You