21 February 2023

HSBC HOLDINGS PLC
2022 RESULTS – HIGHLIGHTS
Noel Quinn, Group Chief Executive, said:“2022 was another good year for HSBC. We completed the first phase of our transformation and our international connectivity is now
underpinned by good, broad-based profit generation around the world. This contributed to a strong overall financial performance. We are on
track to deliver higher returns in 2023 and have built a platform for further value creation. With the delivery of higher returns, we will haveincreased distribution capacity, and we will also consider a special dividend once the sale of HSBC Canada is completed.”

2022 financial performance (vs 2021)• Reported profit before tax fell by $1.4bn to $17.5bn, including an impairment on the planned sale of our retail banking operations in Franceof $2.4bn. Adjusted profit before tax increased by $3.4bn to $24.0bn. Reported profit after tax increased by $2.0bn to $16.7bn,
including a $2.2bn credit arising from the recognition of a deferred tax asset.
• Reported revenue increased by 4% to $51.7bn, driven by strong growth in net interest income, with increases in all of our global
businesses, and higher revenue from Global Foreign Exchange in Global Banking and Markets (‘GBM’). This was in part offset by a $3.1bn
adverse impact of foreign currency translation differences, the impairment on the planned sale of our retail banking operations in France andadverse movements in market impacts in insurance manufacturing in Wealth and Personal Banking (‘WPB‘). In addition, fee income fell inboth WPB and GBM. Adjusted revenue increased by 18% to $55.3bn.
• Net interest margin (‘NIM’) of 1.48% increased by 28 basis points (‘bps’), reflecting interest rate rises.
• Reported expected credit losses and other credit impairment charges (‘ECL’) were $3.6bn, including allowances to reflect increased
economic uncertainty, inflation, rising interest rates and supply chain risks, as well as the ongoing developments in mainland China‘scommercial real estate sector. These factors were in part offset by the release of most of our remaining Covid-19-related reserves. This
compared with releases of $0.9bn in 2021. ECL charges were 36bps of average gross loans and advances to customers.
• Reported operating expenses decreased by $1.3bn or 4% to $33.3bn, reflecting the favourable impact of foreign currency translationdifferences of $2.2bn and ongoing cost discipline, which were in part offset by higher restructuring and other related costs, increased
investment in technology and inflation. Adjusted operating expenses increased by $0.4bn or 1.2% to $30.5bn, including a $0.2bn adverse
impact from retranslating the 2022 results of hyperinflationary economies at constant currency.
• Customer lending balances fell by $121bn on a reported basis. On an adjusted basis, lending balances fell by $66bn, reflecting an$81bn reclassification of loans, primarily relating to the planned sale of our retail banking operations in France and the planned sale of ourbanking business in Canada, to assets held for sale. Growth in mortgage balances in the UK and Hong Kong mitigated a reduction in term
lending in Commercial Banking (‘CMB’) in Hong Kong.
• Common equity tier 1 (‘CET1’) capital ratio of 14.2% reduced by 1.6 percentage points, primarily driven by a decrease of a 0.8
percentage point from new regulatory requirements, a reduction of a 0.7 percentage point from the fall in the fair value through othercomprehensive income (‘FVOCI’) and a 0.3 percentage point fall from the impairment following the reclassification of our retail banking
operations in France to held for sale. Capital generation was mostly offset by an increase in risk-weighted assets (‘RWAs’) net of foreignexchange translation movements.
• The Board has approved a second interim dividend of $0.23 per share, making a total for 2022 of $0.32 per share.

4Q22 financial performance (vs 4Q21)•

Reported profit before tax up $2.5bn to $5.2bn, reflecting strong reported revenue growth and lower reported operating expenses, while
reported ECL increased. Adjusted profit before tax up 92% to $6.8bn. Reported profit after tax up $2.9bn to $4.9bn.

•

Reported revenue up 24% to $14.9bn, due to strong growth in net interest income and an increase in revenue from Markets and Securities
Services (‘MSS’), partly offset by the adverse impact of foreign currency translation differences. Adjusted revenue up 38% to $15.4bn.

•

Reported ECL were $1.4bn in 4Q22 and included stage 3 charges relating to exposures in the mainland China commercial real estate
sector, as well as corporate exposures in the UK. This compared with charges of $0.5bn in 4Q21.

•

Reported operating expenses down 6% to $8.9bn due to the favourable impact of foreign currency translation differences and ongoingcost discipline, which more than offset increases in technology investment and performance-related pay. Adjusted operating expenses up
2% to $7.8bn.

Outlook• The impact of our growth and transformation programmes, as well as higher global interest rates, give us confidence in achieving our
return on average tangible equity (‘RoTE‘) target of at least 12% for 2023 onwards.
• Our revenue outlook remains positive. Based on the current market consensus for global central bank rates, we expect net interest incomeof at least $36bn in 2023 (on an IFRS 4 basis and retranslated for foreign exchange movements). We intend to update our net interest
income guidance at or before our first quarter results to incorporate the expected impact of IFRS 17 ‘Insurance Contracts’.
• While we continue to use a range of 30bps to 40bps of average loans for planning our ECL charge over the medium to long term, given
current macroeconomic headwinds, we expect ECL charges to be around 40bps in 2023 (including lending balances transferred to held forsale). We note recent favourable policy developments in mainland China’s commercial real estate sector and continue to monitor events
closely.
• We retain our focus on cost discipline and will target 2023 adjusted cost growth of approximately 3% on an IFRS 4 basis. This includes
up to $300m of severance costs in 2023, which we expect to generate further efficiencies into 2024. There may also be an incremental
adverse impact from retranslating the 2022 results of hyperinflationary economies at constant currency.
HSBC Holdings plc 2022 Results1• We expect to manage the CET1 ratio within our medium-term target range of 14% to 14.5%. We intend to continue to manage capitalefficiently, returning excess capital to shareholders where appropriate.
• Given our current returns trajectory, we are establishing a dividend payout ratio of 50% for 2023 and 2024, excluding material significant
items, with consideration of buy-backs brought forward to our first quarter results in May 2023, subject to appropriate capital levels. We also
intend to revert to paying quarterly dividends from the first quarter of 2023.
• Subject to the completion of the sale of our banking business in Canada, the Board’s intention is to consider the payment of a special
dividend of $0.21 per share as a priority use of the proceeds generated by completion of the transaction. A decision in relation to any
potential dividend would be made following the completion of the transaction, currently expected in late 2023, with payment following inearly 2024. Further details in relation to record date and other relevant information will be published at that time. Any remaining additional
surplus capital is expected to be allocated towards opportunities for organic growth and investment alongside potential share buy-backs,
which would be in addition to any existing share buy-back programme.

2

HSBC Holdings plc 2022 Results

Key financial metrics
Reported results
Reported profit before tax ($m)
Reported profit after tax ($m)
Cost efficiency ratio (%)
Net interest margin (%)
Basic earnings per share ($)
Diluted earnings per share ($)
Dividend per ordinary share (in respect of the period) ($)
Dividend payout ratio (%)1
Alternative performance measures
Adjusted profit before tax ($m)
Adjusted cost efficiency ratio (%)
Expected credit losses and other credit impairment charges (‘ECL’) as % of average gross loans and advances tocustomers (%)
Expected credit losses and other credit impairment charges (‘ECL’) as % of average gross loans and advances tocustomers, including held for sale (%)2
Return on average ordinary shareholders’ equity (%)
Return on average tangible equity (%)
Balance sheet
Total assets ($m)
Net loans and advances to customers ($m)
Customer accounts ($m)
Average interest-earning assets ($m)
Loans and advances to customers as % of customer accounts (%)
Total shareholders’ equity ($m)
Tangible ordinary shareholders’ equity ($m)
Net asset value per ordinary share at period end ($)
Tangible net asset value per ordinary share at period end ($)
Capital, leverage and liquidity
Common equity tier 1 capital ratio (%)3
Risk-weighted assets ($m)3,4
Total capital ratio (%)3,4
Leverage ratio (%)3,4
High-quality liquid assets (liquidity value) ($bn)4,5
Liquidity coverage ratio (%)4,5
Net stable funding ratio (%)4,5
Share count
Period end basic number of $0.50 ordinary shares outstanding (millions)
Period end basic number of $0.50 ordinary shares outstanding and dilutive potential ordinary shares (millions)Average basic number of $0.50 ordinary shares outstanding (millions)

For the year ended
2022
2021

2020

17,528
16,670
64.4
1.48
0.75
0.74
0.32
44

18,906
14,693
69.9
1.20
0.62
0.62
0.25
40

8,777
6,099
68.3
1.32
0.19
0.19
0.15
79

24,01055.0

20,60364.0

11,69562.3

0.36(0.08)

0.87

0.35(0.08)

0.87

8.7
9.9

7.1
8.3

2.3
3.1

At 31 December
2022
2021

2020

2,966,530
924,854
1,570,303
2,203,639
58.9
187,484
149,355
8.50
7.57

2,957,939
1,045,814
1,710,574
2,209,513
61.1
198,250
158,193
8.76
7.88

2,984,164
1,037,987
1,642,780
2,092,900
63.2
196,443
156,423
8.62
7.75

14.2
839,720
19.3
5.8
647
132
136

15.8
838,263
21.2
5.2
688
139

15.9
857,520
21.5
5.5
678
139

N/A

N/A

19,73919,876
19,84920,073
20,18920,197

20,184
20,272
20,169For reconciliations of our reported results to an adjusted basis, including lists of significant items, see page 109 of the Annual Report andAccounts 2022. Definitions and calculations of other alternative performance measures are included in our ‘Reconciliation of alternative
performance measures’ on page 128 of the Annual Report and Accounts 2022.
1 Dividend per share, in respect of the period, as a percentage of earnings per share adjusted for certain items (recognition of certain deferred tax
assets: $0.11 reduction in EPS; planned sales of the retail banking operations in France and banking business in Canada: $0.09 increase in EPS). No
items were adjusted in 2021 or 2020.
2 Includes average gross loans and advances to customers reported within ‘assets held for sale’.
3 Unless otherwise stated, regulatory capital ratios and requirements are based on the transitional arrangements of the Capital Requirements Regulation
in force at the time. These include the regulatory transitional arrangements for IFRS 9 ‘Financial Instruments’, which are explained further on page 208of the Annual Report and Accounts 2022. Leverage ratios are reported based on the disclosure rules in force at that time, and include claims on central
banks. Current period leverage metrics exclude central bank claims in accordance with the UK leverage rules that were implemented on 1 January
2022. References to EU regulations and directives (including technical standards) should, as applicable, be read as references to the UK’s version ofsuch regulation or directive, as onshored into UK law under the European Union (Withdrawal) Act 2018, and as may be subsequently amended under
UK law.
4 Regulatory numbers and ratios are as presented at the date of reporting. Small changes may exist between these numbers and ratios and thosesubsequently submitted in regulatory filings. Where differences are significant, we will restate in subsequent periods.
5 The liquidity coverage ratio is based on the average value of the preceding 12 months. The net stable funding ratio is based on the average value offour preceding quarters. December 2021 LCR has been restated for consistency. We have not restated the prior periods for NSFR as no comparatives
are available.

HSBC Holdings plc 2022 Results

3

Highlights
Year ended 31 Dec
2022
2021
$m
$m
Reported
Revenue1
ECL
Operating expenses
Share of profit in associates and joint ventures
Profit before tax
Adjusted2
Revenue1,3
ECL
Operating expenses
Share of profit in associates and joint ventures
Profit before tax
Significant items affecting adjusted performance
Revenue
Customer redress programmes
Disposals, acquisitions and investment in new businesses3
Fair value movements on financial instruments4
Restructuring and other related costs5
Operating expenses
Customer redress programmes
Disposals, acquisitions and investment in new businesses
Impairment of goodwill and other intangibles
Restructuring and other related costs

51,727(3,592)(33,330)
2,723
17,52849,552928(34,620)
3,046
18,90655,345(3,592)(30,466)
2,723
24,01047,020754(30,104)
2,933
20,6038(2,799)
(579)
(248)

11
—
(242)
(307)

31
(18)
4
(2,881)

(49)
—
(587)
(1,836)

1 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.
2 Adjusted performance is computed by adjusting reported results for the year-on-year effects of foreign currency translation differences and significant
items which distort year-on-year comparisons.
3 Includes losses from classifying businesses as held for sale as part of a broader restructuring of our European business, of which $2.4bn relates to theplanned sale of the retail banking operations in France.
4 Includes fair value movements on non-qualifying hedges and debit valuation adjustments on derivatives.
5 Comprises gains and losses relating to the business update in February 2020, including losses associated with the RWA reduction programme.

4

HSBC Holdings plc 2022 Results

Statement by Mark E Tucker, Group Chairman
At the start of 2022, the ongoing impact of Covid-19 was the most dominant factor within the external environment. While further outbreaks in
Hong Kong and mainland China significantly impacted economic growth, the Russia-Ukraine war and rising inflation and interest rates had aneven greater impact on the global economy in 2022. They are also likely to continue to have a greater economic impact than the pandemic in
2023, as we are already seeing with a cost of living crisis affecting many of our customers and colleagues.

Strong financial performance and higher capital distributions
We supported our customers through the challenges that they faced at the same time as executing our strategic plan. The first phase of ourtransformation is now complete. The work that we have done has enabled us to emerge from the pandemic a stronger bank, better aligned tothe international needs of our customers.
The reshaping of our portfolio continued with the announcement of the planned sale of our banking business in Canada. We continued todevelop our Wealth capabilities, especially in Asia, and this strategy gained traction in 2022. Our increased investment in technology has
improved the customer experience and made our processes more efficient. Meanwhile, we continued to support our clients to transition to net
zero, and also took further important steps towards our ambition of aligning our financed emissions to net zero by 2050. Given the urgency of
today’s global energy crisis, it is now even more important that we continue to actively engage our clients on how they intend to prepare theirbusinesses for a low-carbon future.
In 2022, reported profit before tax was $17.5bn, a decrease of $1.4bn compared with 2021 due to the $2.4bn impairment on the planned sale of
our French retail banking operations. Adjusted profit before tax was $24.0bn, an increase of $3.4bn on last year. All of our businesses grewprofits in 2022, and we maintained our strong capital, funding and liquidity positions.
As we signalled at our interim results, we are committed to ensuring our shareholders share the benefits of our improved performance. The
Board approved a second interim dividend for 2022 of $0.23 per share, bringing the full year dividend for 2022 to $0.32 per share. We areestablishing a dividend payout ratio of 50% of reported earnings per share for 2023 and 2024, excluding material significant items, and we aim
to restore the dividend to pre-Covid-19 levels as soon as possible. We also intend to return to paying quarterly dividends from the start of 2023.
Subject to completion of the planned sale of our banking business in Canada, the Board’s intention is to consider the payment of a special
dividend of $0.21 per share as a priority use of the proceeds generated. A decision in relation to any potential dividend would be made following
the completion of the transaction, currently expected in late 2023, with payment following in early 2024. Any remaining additional surplus capitalis expected to be allocated towards opportunities for organic growth and investment alongside share buy-backs, which would be in addition toany existing share buy-back programme.

Board operations
In 2022, the Board met in person in London, Hong Kong, New York and Riyadh – on each occasion also undertaking a wide range ofengagements with clients, colleagues, government officials and regulators. The importance of engaging with our teams was also underlined by
the appointment of José (Pepe) Meade as Board member with specific responsibility for employee liaison. At the same time as holding some inperson meetings, the continued use of virtual meetings enabled us to retain the benefits of greater efficiency and reduced costs.
At the 2022 Annual General Meeting, Irene Lee and Pauline van der Meer Mohr stepped down from the Board. I am enormously grateful tothem for their important and valuable contributions to the Board, the committees and the subsidiary entities on which they have served. Irene
remains an independent non-executive Director of The Hongkong and Shanghai Banking Corporation Limited and independent non-executive
chair of Hang Seng Bank Limited. Geraldine Buckingham joined the Board as an independent non-executive Director on 1 May.
Following Ewen Stevenson’s departure, Georges Elhedery became Group Chief Financial Officer and joined the Board on 1 January 2023. On
behalf of the Board, I would like to again thank Ewen for all that he has done for the bank. His leadership, financial expertise and operational
rigour have been invaluable to HSBC, and he leaves with our very best wishes.
We also recently announced some changes to the Board. Kalpana Morparia will join the Board as an independent non-executive Director on 1
March. Jack Tai will retire from the Board at the conclusion of the 2023 AGM, and will be succeeded as Chair of the Group Risk Committee by
Jamie Forese. Jack has made a significant and important contribution during his time on the Board, particularly in the strengthening of risk andconduct governance and oversight through a period of major change. We wish him very well in his future endeavours.
Noel and I were delighted to meet face-to-face with our loyal Hong Kong shareholders at our Informal Shareholders Meeting in August. We havealways greatly valued their feedback and engagement, and this meeting was as well attended as ever. We were pleased to discuss how ourbusiness has performed, our continued support of Hong Kong, and our commitment to growing shareholder value. We look forward tocontinuing these discussions in person in 2023.

Our strategy is working
There were reports over the course of last year about ideas for alternative structures for HSBC. The Board has been fully engaged in examining
these alternatives in depth, with the benefit of independent third-party financial and legal advice. It has been, and remains, our judgement thatalternative structural options would not deliver increased value for shareholders. Rather, they would have a material negative impact on value.
For 157 years, we have followed trade and investment flows to support our customers as they fulfil their financial ambitions. We have used ourexperience, expertise and relationships to help our customers to navigate the world.
Today, we remain steadfastly focused on our core purpose of ‘opening up a world of opportunity’. Our model is particularly relevant to
individuals and companies of all sizes whose financial ambitions span multiple countries and regions. Very few, if any, other banks can rival ourability to connect capital, ideas and people through a global network that facilitates the international access and collaboration required tosucceed in today’s world.
Our performance in 2022 demonstrates that our current strategy is working and improving returns. We are also confident that it will deliver good
returns for our shareholders over the coming years. The Board and management team are fully focused on delivering it.

An uneven macroeconomic outlook
We will need to maintain this focus against an uneven macroeconomic outlook. The pandemic, high inflation and interest rates, and the RussiaUkraine war all have implications for the global economy, including volatility in markets, supply chain disruption, pressure on small and mediumsized business and squeezes on the cost of living. Different economies also now face different challenges and have different opportunities in
2023.

HSBC Holdings plc 2022 Results

5China’s reopening and package of measures to stabilise the property market should provide a significant boost for its economy and the global
economy, albeit with some near-term volatility. Our economists forecast China’s GDP will grow 5% in 2023. The reopening of the border meansthat Hong Kong, and the entire Greater Bay Area, are likely to be major beneficiaries, and I expect to see a strong recovery.
More broadly, Asia as a whole has proven resilient and there is the prospect of a strong rebound later in the year. Virtually all economies in theregion have now recovered the output losses incurred during the pandemic and are above 2019 levels.
The Middle East economies enjoyed a strong 2022, and we expect this momentum to continue in 2023 on the back of the important reforms
underway to transform, diversify and grow the region’s economies. We see strong and growing demand to connect clients in the Middle Eastwith Asia’s economies, and vice versa.
In contrast, Europe, including the UK, face challenges from higher energy prices fuelling inflation and necessitating higher interest rates, driven
in part by the Russia-Ukraine war. All of these factors are contributing to a cost of living crisis and more economic uncertainty. We expect thatany recession, if there is one at all, will be relatively shallow.
The US economy is proving resilient and a hard landing appears unlikely. Some economists believe that inflation may now have peaked in theUS, and there is consensus that the US will avoid recession. I expect the US to make an important contribution to global GDP growth in 2023.
Overall, I am optimistic about the global economy in the second half of 2023, but there is still a high level of uncertainty due to the RussiaUkraine war and recessionary fears may yet dominate much of the year ahead.

Navigating geopolitics remains challenging
The geopolitical environment remains challenging for our clients to navigate. There is sadly no end in sight to the Russia-Ukraine war. However,the West’s relationship with China appears to be relatively stable. The renewed, constructive dialogue between President Xi and President
Biden at the G20 in November was clearly important. While further US sanctions are expected this year, capital flows between China and theWest increased during the pandemic, even with reciprocal tariffs in place. China is also taking an active approach to diplomatic engagement with
European nations, including the UK. China’s reopening will also allow for the resumption of face-to-face visits, which will support greater
dialogue between China and important partners such as Germany, France and the UK. We also naturally continue to engage with governments
around the world.
One of the key trends of the past three years has been supply chain disruption, due largely to a combination of geopolitics, pandemic and warrelated factors. Businesses are seeking to build greater resilience into their supply chains, reduce their dependence on sole suppliers or regions,and take the opportunity to digitise. I expect these trends all to continue throughout 2023. HSBC’s global network means we are well placed toadapt to regional diversification that takes place within supply chains.

Thank you to my colleagues
Finally, my colleagues have once again shown great dedication, energy and care in serving our customers and working together over the past
year. They have exemplified our purpose of ‘opening up a world of opportunity’ and our core values. While we want to achieve even more in
2023 and beyond, I am very proud of what they achieved in 2022 – and I am extremely grateful to each of them.
Mark E Tucker
Group Chairman
21 February 2023

6

HSBC Holdings plc 2022 Results

Review by Noel Quinn, Group Chief Executive
We have completed the first phase of our transformation. Our international connectivity is now underpinned by good, broad-based profit
generation around the world. Our focus is now on continuing to grow our core business, while also capitalising on the new sources of value
creation that we have built.
When we embarked on our transformation programme in February 2020, our aim was to address the fundamental issues that had contributed toa decade of low returns. It was clear to me that too much of our capital was being used inefficiently, too many of our businesses were lossmaking and sub-scale, and too many of our clients were low returning and purely domestic in nature. Over the last three years, while responding
to the challenges of the pandemic, we have structurally repositioned our businesses and operating model to achieve higher returns.
The most significant changes to our portfolio have been the exit and wind-down of non-strategic assets and clients in the Americas and Europe,and the investment in technology and in organic and inorganic growth in Asia, especially in Wealth and Personal Banking. We have completed
the sale of our US mass market retail business, and announced the planned exit of our French retail banking operations and the planned sale ofour banking business in Canada. We have also announced exits in other smaller businesses, including Greece and Russia. A key factor inassessing the strategic value of our businesses has been whether they capitalise on the distinct advantages that we have, especially thosederived from our global network.
Our work to increase capital efficiency resulted in cumulative risk-weighted asset savings of $128bn by the end of 2022, in excess of our original
target as we accelerated restructuring in the US and Europe. This enabled us to reallocate capital towards Asia and the Middle East.
Finally, we have transformed our cost base and restored tight cost discipline across the organisation. Our cost to achieve programme concluded
at the end of 2022, but it enabled us to take multiple layers of inefficiency out of the business and embed changes that we expect to provide
flow-through benefits for years to come.

Building a good platform for future growth
At the same time, we have invested in new sources of value creation that provide a good platform for future growth. Developing our capabilities
in Wealth, particularly in Asia, has been a strategic priority as we have sought to diversify our revenues. We have done this organically throughthe build-out of our Pinnacle business in mainland China, and inorganically through the purchases of AXA Singapore and L&T Investment
Management in India, by increasing our stake to 90% in HSBC Qianhai Securities, and by taking full ownership of our HSBC Life China insurance
business. The traction that we are gaining in Wealth is reflected by the $80bn of net new invested assets that we attracted in 2022, $59bn ofwhich were in Asia.
Our core purpose is ‘opening up a world of opportunity’ and that, in essence, is what we do by helping our personal and corporate customers tomove money between countries and do business across borders. This is still the best way for us to create value, and what makes us a world
leading bank for international and mid-market customers. We are the number one trade finance bank, and trade revenue was up 13% in 2022,
surpassing the good level of growth in the previous year. Trade also increased in all regions.
We are also one of the leading global foreign exchange houses and a leading payments company globally, with over $600tn of payments
processed in 2022. Our global connectivity has made international our fastest-growing revenue segment in Wealth and Personal Banking.
Products like Global Money and our Wealth platforms are specifically designed to meet the international needs of our retail and wealthcustomers. These customers also provide around double the average revenue of domestic-only customers.
The difference compared with three years ago is that our international connectivity is now underpinned by good broad-based profit generation
around the world. Already the leading bank in Hong Kong, we gained market share last year in key products including customer deposits,
insurance and trade finance. We are also the leading foreign bank in mainland China by revenue and are pleased to have received seven main
licence approvals since 2020. Our business in India delivered $0.9bn of profit before tax last year and facilitated the equivalent of around 9% ofIndia’s exports. In the Middle East, we delivered $1.8bn of profits and were the number one bank in capital markets league tables. HSBC UK
delivered $5bn of profits and was the number one bank for trade finance, while our non-ring-fenced bank in Europe delivered $2.1bn of profits
and around 35% of its client business was booked outside the region. Our US business has now had nine consecutive quarters of profitability
after its turnaround, while our business in Mexico delivered a return on tangible equity of 18%.
The cost savings that we have made have been reinvested in technology, which has in turn enabled us to change the way we operate as abusiness. Technology spending was 19% higher in 2022 than in 2019. Much of this investment has been used to rebuild and upgrade platforms,
which we have then rolled out globally. Our upgraded mobile banking app is available in 24 markets and has around 13 million active users,
while our upgraded digital trade finance platform has been rolled out in the UK and Hong Kong, ensuring that market-leading businesses are well
positioned for the next 10 years. In 2022, we launched HSBC Orion, our new proprietary tokenisation platform using blockchain technology forbond issuances. We’re also partnering with fintechs around the world to use their capabilities in our products. Finally, we are investing in greater
automation, which we expect to reap the benefits from for years to come.
Empowering our people has underpinned everything that we have achieved over the past three years – and it will underpin the next phase of
our strategy too. Reducing management layers has helped to increase our speed and agility. In our last staff survey, the number of colleagues
who report that work processes allow them to work efficiently was 6 percentage points above the sector benchmark. Confidence within theorganisation has also increased. 77% of colleagues told us they are confident about our future, which is 3 percentage points up on 2021. We
have continued to make steady progress against our medium-term targets on gender and ethnicity representation, while the number of hours
that colleagues spent learning about digital and data, and sustainability also increased by 13% last year, underlining the importance of these
critical future skills.
The transition to net zero will offer increasingly significant commercial opportunities in the future. We have continued to make good progress
towards our ambition of providing and facilitating $750bn to $1tn of sustainable financing and investment by 2030. At the end of 2022, thecumulative total for sustainable financing and investment since 2020 had reached more than $210bn. We published an updated energy policy,
which commits us to no longer provide new finance or advisory services for the specific purpose of projects pertaining to new oil and gas fields
and related infrastructure whose primary use is in conjunction with new fields. As per our policy, we will continue to provide finance to maintainsupplies of oil and gas in line with declining current and future global demand, while accelerating our activities in support of clean energy. We
have also set interim 2030 targets for on-balance sheet financed emissions for eight sectors. These include six sectors for which we havereported 2019 and 2020 emissions. We recognise that methodologies and data for measuring emissions will continue to evolve, and our own
disclosures will therefore continue to develop as a result. In 2023, we will publish our first bank-wide climate transition plan.

HSBC Holdings plc 2022 Results

7

Strong overall financial performance in 2022
The progress that we have made transforming HSBC and investing in growth has helped to drive an improved financial performance in 2022. A
strong net interest income performance reflected higher global interest rates, but there was also good underlying growth across the business in
key areas, particularly those linked to our international network.
Overall, the Group delivered $17.5bn of reported profit before tax, which was $1.4bn lower than in 2021. This was due to a net expected credit
loss charge of $3.6bn compared with a net release of $0.9bn last year, as well as the impairment of $2.4bn relating to the planned sale of ourretail banking operations in France. Adjusted profit before tax was $24bn, up $3.4bn.
Adjusted revenue was 18% higher than the same period last year, as net interest income grew strongly in all of our global businesses. There
was also a strong performance in Global Foreign Exchange. Our reported return on tangible equity for 2022 was 9.9%. Excluding significant
items, we delivered a return on tangible equity of 11.6%.
There was a good performance across our global businesses. In Commercial Banking, adjusted profit before tax was up by 24% to $7.7bn,
driven by revenue increases across all products and in all regions, most notably Asia and the UK. Within this, Global Payments Solutions revenue
grew by 104% on the back of higher interest rates, while trade revenue was up 14% with growth in all regions.
Global Banking and Markets delivered adjusted profit before tax of $5.4bn, up 8% compared with 2021. Global Payments Solutions was again
the main driver, with 119% growth in net interest income from higher interest rates, and a strong performance in Global Foreign Exchange. In
Wealth and Personal Banking, adjusted profit before tax of $8.5bn was 27% higher than 2021. Net interest income growth drove a good
performance in Personal Banking, while there was also balance sheet growth in the UK, Asia outside Hong Kong, and Mexico.
We restricted adjusted cost growth to 1% in 2022 as a result of the significant cost-saving actions that we have taken. This represents a goodoutcome given the high inflation environment. After good capital generation in the fourth quarter, our CET1 ratio at the end of 2022 was 14.2%
and back within our target range of 14% to 14.5%. We are able to pay a second interim dividend of $0.23 per share, bringing the total 2022
dividend to $0.32 per share.

Improved returns and substantial distribution capacity
We are firmly on track to achieve our target of a return on tangible equity of at least 12% from 2023 onwards. We have built up a good level of
expected credit loss provisions, and we also expect the headwinds associated with macroeconomic uncertainty and the ongoing challenges
within the China commercial real estate sector to subside, enabling expected credit losses to start to normalise.
There will be no easing off at all on costs. Our cost to achieve programme has now ended, but we will continue to seek and find opportunities
to create efficiencies that will deliver sustainable cost savings in future years. We are now considering up to $300m of additional costs forseverance in 2023. These costs will need to be reported in our costs line. Taking this into account, we will aim for approximately 3% cost
growth in 2023. Tight cost discipline will remain a priority for the whole Group.
As a result of the improving quality of our returns, we are establishing a dividend payout ratio of 50% of reported earnings per share for 2023
and 2024, excluding material significant items. We will aim to restore the dividend to pre-Covid-19 levels as soon as possible. We also intend torevert to paying quarterly dividends from the start of 2023. Given the capital generation at the end of 2022, we will bring forward theconsideration of buy-backs to the announcement of our results for the first quarter of 2023.
Finally, subject to the completion of the sale of our banking business in Canada, I am pleased that the Board will consider payment of a special
dividend of $0.21 per share in early 2024 as a priority use of the surplus capital generated by the transaction. We understand the importance ofdividends to our shareholders and expect them to benefit from improved capital distributions ahead.

My colleagues are getting it done
I would like to end by thanking my colleagues around the world. Over the last three years, they have managed a period of substantial change,embraced the opportunities that our transformation has presented and gone the extra mile to support our customers – all while living through a
global pandemic. More recently, there have also been the Russia-Ukraine war, the real-life financial strains caused by high inflation and thedevastating earthquakes in Türkiye for them to deal with. We have only made the progress that we have because of their efforts. They are
exemplifying our value of getting it done, and I am proud to lead them.
Overall, 2022 was another good year for HSBC. We completed the first phase of our transformation and our international connectivity is now
underpinned by good, broad-based profit generation around the world. This contributed to a strong overall financial performance. We are on
track to deliver higher returns in 2023 and have built a platform for further value creation. With the delivery of higher returns, we will haveincreased distribution capacity, and we will also consider a special dividend once the sale of HSBC Canada is completed.
Noel Quinn
Group Chief Executive
21 February 2023

8

HSBC Holdings plc 2022 Results

Financial summaryYear ended 31 December
2022
2021
$m
$m
For the year
Profit before tax
Profit attributable to:– ordinary shareholders of the parent company
Dividends paid on ordinary shares

17,52818,906

14,822
5,330

12,6074,480

At 31 December
2022$m
Total shareholders’ equity
Total regulatory capital
Customer accounts
Total assets
Risk-weighted assets

187,484
162,423
1,570,303
2,966,530
839,720

198,250
177,786
1,710,574
2,957,939
838,263

$

$

0.75
0.32
0.27
8.50
7.57

0.62
0.25
0.22
8.76
7.88

20,294
19,73919,876

20,632
20,073
20,189Per ordinary share
Basic earnings per share
Dividend per ordinary share (in respect of the period)
Dividends per ordinary share (paid in the period)
Net asset value per ordinary share at period end1
Tangible net asset value per ordinary share at period end2
Share information
Number of $0.50 ordinary shares in issue (millions)
Basic number of $0.50 ordinary shares outstanding (millions)
Basic number of $0.50 ordinary shares outstanding and dilutive potential ordinary shares (millions)

2021
$m

1 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 own shares held by the company, including those purchased and held in treasury.
2 The definition of tangible net asset value per ordinary share is total ordinary shareholders’ equity excluding goodwill, PVIF and other intangible assets(net of deferred tax), divided by the number of basic ordinary shares in issue, excluding own shares held by the company, including those purchased
and held in treasury.

Distribution of results by global business
Adjusted profit before tax
Year ended 31 Dec
2022$m
Wealth and Personal Banking
Commercial Banking
Global Banking and Markets
Corporate Centre
Profit before tax

8,533
7,716
5,445
2,316
24,010

2021
$m

%
35.5
32.1
22.7
9.7
100.0

6,721
6,210
5,045
2,627
20,603

%
32.6
30.1
24.5
12.8
100.0

Distribution of results by geographical region
Reported profit/(loss) before tax
Year ended 31 Dec
2022$m
EuropeAsia
Middle East and North Africa
North America
Latin America
Profit before tax(415)
13,724
1,700
1,666
853
17,528

%
(2.4)
78.3
9.7
9.5
4.9
100.0

2021
$m
3,779
12,249
1,423
1,374
81
18,906HSBC Holdings plc 2022 Results

%
20.0
64.8
7.5
7.3
0.4
100.0

9

HSBC adjusted profit before tax and balance sheet data
2022
Wealth andGlobalPersonal Commercial Banking andBanking
Banking
Markets$m$m$m
Net operating income/(expense) before change in expected credit losses andother credit impairment charges1– external– inter-segmentof which: net interest income/(expense)
Change in expected credit losses and other credit impairment recoveries
Net operating income/(expense)
Total operating expenses
Operating profit/(loss)
Share of profit/(loss) in associates and joint ventures
Adjusted profit before tax
Share of HSBC’s adjusted profit before tax
Adjusted cost efficiency ratio
Adjusted balance sheet data
Loans and advances to customers (net)
Interests in associates and joint ventures
Total external assets
Customer accounts
Adjusted risk-weighted assets2

Corporate
Centre

Total

$m

$m

24,367

16,215

15,359(596)

55,34521,753
2,614
18,137(1,137)
23,230(14,726)
8,504
29
8,533

16,715(500)
11,867(1,858)14,357(6,642)
7,715
1
7,716

19,598(4,239)5,303(587)
14,772(9,325)
5,447
(2)
5,445

(2,721)
2,125(2,706)
(10)
(606)
227
(379)
2,695
2,316

55,345—32,601(3,592)51,753(30,466)
21,2872,723
24,010

%

%

%

%

%

35.5
60.4

32.1
41.0

22.7
60.7

9.7
38.1

100.0
55.0

$m

$m

$m

$m

$m

423,553508
889,450
779,310
182,850

308,09415
606,698
458,714334,763

192,852108
1,321,076
331,844
233,582355
28,623
149,306
435
88,525924,854
29,254
2,966,530
1,570,303
839,7202021
Net operating income/(expense) before change in expected credit losses andother credit impairment charges1– external– inter-segmentof which: net interest income/(expense)
Change in expected credit losses and other credit impairment (charges)/recoveries
Net operating income/(expense)
Total operating expenses
Operating profit/(loss)
Share of profit in associates and joint ventures
Adjusted profit before tax
Share of HSBC’s adjusted profit before tax
Adjusted cost efficiency ratio
Adjusted balance sheet data
Loans and advances to customers (net)
Interests in associates and joint ventures
Total external assets
Customer accounts
Adjusted risk-weighted assets2

20,963

12,53813,982(463)

47,02020,725238
13,45812,423
115
8,308

15,590(1,608)3,844(1,718)
1,255
(716)

47,020—24,894

213

225

313

3

754

21,176(14,489)
6,687
34
6,721

12,763(6,554)
6,209
1
6,210

14,295(9,250)
5,045
—
5,045

(460)
189
(271)
2,898
2,627

47,774(30,104)
17,6702,933
20,603

%

%

%

%

%

32.6
69.1

30.1
52.3

24.5
66.2

12.8
40.8

100.0
64.0

$m

$m

$m

$m

$m

461,047489
888,028
819,319
170,089

330,68312
586,392
480,201
313,272

198,779
116
1,157,327
322,435
226,938

688
27,469174,073592
89,280991,197
28,0862,805,820
1,622,547
799,579

1 Net operating income/(expense) before change in expected credit losses and other credit impairment charges, also referred to as revenue.
2 Adjusted risk-weighted assets are calculated using reported risk-weighted assets adjusted for the effects of currency translation differences andsignificant items.

10

HSBC Holdings plc 2022 Results

Consolidated income statement
for the year ended 31 December
Net interest income– interest income1,2– interest expense3
Net fee income– fee income– fee expense
Net income from financial instruments held for trading or managed on a fair value basis
Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value
through profit or loss
Changes in fair value of designated debt and related derivatives4
Changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss
Gains less losses from financial investments
Net insurance premium income
Impairment loss relating to the planned sale of our retail banking operations in France5
Other operating income/(loss)6
Total operating income
Net insurance claims and benefits paid and movement in liabilities to policyholders
Net operating income before change in expected credit losses and other credit impairment charges
Change in expected credit losses and other credit impairment charges
Net operating income
Employee compensation and benefits
General and administrative expenses
Depreciation and impairment of property, plant and equipment and right-of-use assets7
Amortisation and impairment of intangible assets
Goodwill impairment
Total operating expenses
Operating profit
Share of profit in associates and joint ventures
Profit before tax
Tax expense
Profit for the year
Attributable to:– ordinary shareholders of the parent company– preference shareholders of the parent company– other equity holders– non-controlling interests
Profit for the year
Basic earnings per ordinary share
Diluted earnings per ordinary share

2022
$m

2021
$m

32,61055,059(22,449)
11,451
15,213(3,762)
10,46926,48936,188(9,699)13,097
16,788(3,691)
7,744(3,394)

4,053

(77)
226
(3)
12,825(2,378)(133)
61,596(9,869)51,727(3,592)
48,135(18,366)(11,091)(2,157)(1,716)—(33,330)
14,805
2,723
17,528(858)
16,670

(182)
798
569
10,870—502
63,940(14,388)
49,552928
50,480(18,742)(11,592)(2,261)(1,438)(587)(34,620)
15,8603,046
18,906(4,213)
14,693

14,822—
1,213
635
16,67012,607
7
1,303
776
14,693

$

$

0.75
0.74

0.62
0.62

1 Interest income includes $48,134m (2021: $30,916m) of interest recognised on financial assets measured at amortised cost and $6,386m (2021:$4,337m) of interest recognised on financial assets measured at fair value through other comprehensive income.
2 Interest income is calculated using the effective interest method and comprises interest recognised on financial assets measured at either amortised
cost or fair value through other comprehensive income.
3 Interest expense includes $20,798m (2021: $8,227m) of interest on financial instruments, excluding interest on financial liabilities held for trading ordesignated or otherwise mandatorily measured at fair value.
4 The debt instruments, issued for funding purposes, are designated under the fair value option to reduce an accounting mismatch.
5 Includes impairment of goodwill of $425m.
6 Other operating income includes a loss on net monetary positions of $678m (2021: $224m) as a result of applying IAS 29 ‘Financial Reporting inHyperinflationary Economies’.
7 Includes depreciation of the right-of-use assets of $723m (2021: $878m).

HSBC Holdings plc 2022 Results

11Consolidated statement of comprehensive income
for the year ended 31 December
Profit for the year
Other comprehensive income/(expense)
Items that will be reclassified subsequently to profit or loss when specific conditions are met:
Debt instruments at fair value through other comprehensive income– fair value (losses)– fair value gains transferred to the income statement on disposal– expected credit (recoveries)/losses recognised in the income statement– income taxes
Cash flow hedges– fair value gains/(losses)– fair value (gains) reclassified to the income statement– income taxes
Share of other comprehensive income/(expense) of associates and joint ventures– share for the year
Exchange differences
Items that will not be reclassified subsequently to profit or loss:
Fair value gains on property revaluation
Remeasurement of defined benefit asset/liability– before income taxes– income taxes
Changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in own credit risk
– before income taxes– income taxes
Equity instruments designated at fair value through other comprehensive income– fair value gains/(losses)– income taxes
Effects of hyperinflation
Other comprehensive income/(expense) for the year, net of tax
Total comprehensive income/(expense) for the year
Attributable to:– ordinary shareholders of the parent company– preference shareholders of the parent company– other equity holders– non-controlling interests
Total comprehensive income/(expense) for the year

12

HSBC Holdings plc 2022 Results

2022
$m

2021
$m

16,67014,693(5,468)(7,261)
(20)
67
1,746
(3,655)(4,207)
(758)
1,310
(367)
(367)
(9,931)(2,139)(2,270)
(464)
(49)
644
(664)
595
(1,514)255
103
103(2,393)280(1,031)(1,723)
692
1,922
2,573
(651)
107
107
—
842
(17,301)
(631)

—
(274)
(107)
(167)
531
512
19
(446)
(443)
(3)
315
(4,967)9,726(2,393)
—
1,213
549
(631)

7,765
7
1,303
651
9,726

Consolidated balance sheet
At
31 Dec2022$m
AssetsCash and balances at central banks
Items in the course of collection from other banks
Hong Kong Government certificates of indebtedness
Trading assets
Financial assets designated and otherwise mandatorily measured at fair value through profit or loss
Derivatives
Loans and advances to banks
Loans and advances to customers
Reverse repurchase agreements – non-trading
Financial investments
Assets held for sale1
Prepayments, accrued income and other assets
Current tax assets
Interests in associates and joint ventures
Goodwill and intangible assets
Deferred tax assets
Total assets
Liabilities and equity
Liabilities
Hong Kong currency notes in circulation
Deposits by banks
Customer accounts
Repurchase agreements – non-trading
Items in the course of transmission to other banks
Trading liabilities
Financial liabilities designated at fair value
Derivatives
Debt securities in issue
Liabilities of disposal groups held for sale1
Accruals, deferred income and other liabilities
Current tax liabilities
Liabilities under insurance contracts
Provisions
Deferred tax liabilities
Subordinated liabilities
Total liabilities
EquityCalled up share capital
Share premium account
Other equity instruments
Other reserves
Retained earnings
Total shareholders’ equity
Non-controlling interests
Total equity
Total liabilities and equity

31 Dec2021$m

327,002
7,297
43,787218,093
45,063
284,146
104,882
924,854
253,754425,564
115,919
156,866
1,230
29,254
21,321
7,498
2,966,530

403,018
4,136
42,578248,842
49,804
196,882
83,136
1,045,814
241,648446,274
3,411
136,571970
29,60920,622
4,624
2,957,939

43,78766,722
1,570,303
127,747
7,864
72,353
127,327
285,764
78,149114,597
133,240
1,135
114,844
1,958
2,422
22,2902,770,502

42,578101,152
1,710,574
126,670
5,214
84,904
145,502
191,064
78,557
9,005
114,773698
112,745
2,566
4,673
20,4872,751,162

10,147
14,664
19,746(9,141)
152,068
187,484
8,544
196,028
2,966,530

10,316
14,602
22,4146,460
144,458
198,250
8,527
206,777
2,957,939

1 ‘Assets held for sale’ in 2021, including $2.4bn of loans and advances to customers in relation to our exit of mass market retail banking business in theUS, were reported within ‘Prepayments, accrued income and other assets’ in the Annual Report and Accounts 2021. Similarly, $8.8bn of customer
accounts classified as ‘Liabilities of disposal groups’ were previously presented within ‘Accruals, deferred income and other liabilities’.

HSBC Holdings plc 2022 Results

13Consolidated statement of cash flows
for the year ended 31 December
Profit before tax
Adjustments for non-cash items:
Depreciation, amortisation and impairment
Net loss/(gain) from investing activities
Share of profits in associates and joint ventures
Loss on disposal of subsidiaries, businesses, associates and joint ventures
Change in expected credit losses gross of recoveries and other credit impairment charges
Provisions including pensions
Share-based payment expense
Other non-cash items included in profit before tax
Elimination of exchange differences1
Changes in operating assets and liabilities
Change in net trading securities and derivatives
Change in loans and advances to banks and customers
Change in reverse repurchase agreements – non-trading
Change in financial assets designated and otherwise mandatorily measured at fair value
Change in other assets
Change in deposits by banks and customer accounts
Change in repurchase agreements – non-trading
Change in debt securities in issue
Change in financial liabilities designated at fair value
Change in other liabilities
Dividends received from associates
Contributions paid to defined benefit plans
Tax paid
Net cash from operating activities
Purchase of financial investments
Proceeds from the sale and maturity of financial investments
Net cash flows from the purchase and sale of property, plant and equipment
Net cash flows from purchase/(disposal) of customer and loan portfolios
Net investment in intangible assets
Net cash flow from acquisition and disposal of subsidiaries, businesses, associates and joint ventures
Net cash from investing activities
Issue of ordinary share capital and other equity instruments
Cancellation of shares
Net purchases of own shares for market-making and investment purposes
Net cash flow from change in stake of subsidiaries
Redemption of preference shares and other equity instruments
Subordinated loan capital issued
Subordinated loan capital repaid2
Dividends paid to shareholders of the parent company and non-controlling interests
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 Jan
Exchange differences in respect of cash and cash equivalents
Cash and cash equivalents at 31 Dec3
Cash and cash equivalents comprise:– cash and balances at central banks– items in the course of collection from other banks– loans and advances to banks of one month or less– reverse repurchase agreements with banks of one month or less– treasury bills, other bills and certificates of deposit less than three months– cash collateral and net settlement accounts– cash and cash equivalents held for sale4– less: items in the course of transmission to other banks
Cash and cash equivalents at 31 Dec3

2022
$m

2021
$m

17,52818,9063,873
11(2,723)
2,639
3,907
635
400
(1,084)
49,1274,286(647)(3,046)
—
(519)
1,063
467
510
18,937

20,181
31,799(23,405)
8,344(10,771)(91,194)
4,344
12,518(13,647)
15,978944(194)(2,776)26,434(520,600)
495,049(1,285)(3,530)(3,125)(989)(34,480)—(2,285)(91)(197)(2,266)
7,300(1,777)(6,970)(6,286)(14,332)
574,032(38,029)
521,671(9,226)(11,014)552(4,254)
19,89995,703
14,769(16,936)(11,425)(10,935)
808(509)(3,077)104,312(493,042)
521,190(1,086)
3,059(2,479)(106)
27,536
1,996(707)(1,386)—(3,450)—(864)(6,383)(10,794)
121,054468,323(15,345)574,032

327,002
7,297
72,29568,682
26,727
19,445
8,087(7,864)
521,671403,018
4,136
55,70576,65828,488
11,241—(5,214)574,032

1 Adjustment to bring changes between opening and closing balance sheet amounts to average rates. This is not done on a line-by-line basis, as details
cannot be determined without unreasonable expense.
2 Subordinated liabilities changes during the year are attributable to repayments of $(1.8)bn (2021: $(0.9)bn) of securities. Non-cash changes during theyear included foreign exchange gains/(losses) of $(1.1)bn (2021: $(0.3)bn) and fair value gains/(losses) of $(3.1)bn (2021: $(1.0)bn).
3 At 31 December 2022, $59.3bn (2021: $33.6bn) was not available for use by HSBC, due to a range of restrictions, including currency exchange andother restrictions, of which $22.1bn (2021: $15.4bn) related to mandatory deposits at central banks.
4 Includes $6.5bn of cash and balances at central banks (excluding the expected cash contribution as part of the planned sale of our retail banking
operations in France. For further details, see Note 23 in the Annual Report and Accounts 2022); $1.3bn of reverse repurchase agreements with banksof one month or less and $0.2bn of loans and advances to banks of one month or less.

14

HSBC Holdings plc 2022 Results

Consolidated statement of changes in equity
for the year ended 31 December
Other reserves
Called up
sharecapitalandshare
premium

Other
equityinstruRetained
ments earnings3,4

Financialassetsat
FVOCI
reserve

Cashflow
Foreign
hedging exchange
reserve
reserve

Mergerand otherreserves4,5

Total
shareNonholders’ controlling
equityinterests

Total
equity

$m

$m

$m

$m

$m

$m

$m

$m

$m

$m

At 1 Jan 2022
Profit for the year
Other comprehensive income(net of tax)
– debt instruments at fair value
through other comprehensive
income– equity instruments
designated at fair value
through other comprehensive
income– cash flow hedges– changes in fair value offinancial liabilities designatedat fair value upon initialrecognition arising fromchanges in own credit risk

24,918—22,414—144,458
16,035

(634)
—

(197)
—

(22,769)—

30,060—198,250
16,035

8,527
635

206,777
16,670

—

—

1,368

(5,325)(3,613)(9,819)174(17,215)(86)(17,301)———(5,417)———(5,417)(51)(5,468)

—

—

—

92

—

—

—

92

15

107

—

—

—

—

(3,613)——(3,613)(42)(3,655)

—

—

1,922

—

—

—

—

1,922

—

1,922

– property revaluation– remeasurement of defined
benefit asset/liability– share of othercomprehensive income ofassociates and joint ventures– effects of hyperinflation– exchange differences
Total comprehensive income
for the year
Shares issued under employee
remuneration and share plans
Dividends to shareholders
Redemption of securities2
Transfers6
Cost of share-based payment
arrangements
Cancellation of shares7
Other movements
At 31 Dec 2022

—

—

—

—

—

—

174

174

106

280

—

—

(1,029)

—

—

—

—

(1,029)(2)(1,031)

—

—

(367)

—

—

—

—

(367)

—

(367)

—
—

—
—

842
—

—
—

—
—

—
(9,819)——842(9,819)

—
(112)

842
(9,931)——

17,403(5,325)(3,613)(9,819)174(1,180)

549

(631)

67

—

(67)

—

—

—

—

—

—

—

—
—
—

—
(2,668)—(6,544)402(2,499)

—
—
—

—
—
—

—
—
—

—
—
2,499

(6,544)(2,266)
—

(426)
—
—

(6,970)(2,266)
—

—

—

400

—

—

—

—

400

—

400

(174)
—
24,811——
19,746(1,000)(485)
152,068—
3(5,956)—2(3,808)——(32,588)

174
304
33,211(1,000)(176)
187,484

—
(106)
8,544

(1,000)(282)
196,028

HSBC Holdings plc 2022 Results

15

Consolidated statement of changes in equity (continued)
for the year ended 31 December
Other reserves
Called up
sharecapitaland share
premium
At 1 Jan 2021
Profit for the year
Other comprehensive income(net of tax)
– debt instruments at fair value
through other comprehensive
income– equity instruments
designated at fair value
through other comprehensive
income– cash flow hedges– changes in fair value offinancial liabilities designatedat fair value upon initialrecognition arising fromchanges in own credit risk
– remeasurement of defined
benefit asset/liability– share of othercomprehensive income ofassociates and joint ventures– effects of hyperinflation– exchange differences
Total comprehensive income
for the year
Shares issued under employee
remuneration and share plans
Capital securities issued1
Dividends to shareholders
Redemption of securities2
Transfers6
Cost of share-based payment
arrangements
Cancellation of shares7
Other movements
At 31 Dec 2021

Other
equityinstruments

Retainedearnings3,4

Financialassets at Cash flow
FVOCI
hedging
reserve
reserve

Foreignexchangereserve

Mergerand otherreserves4,5

Total
shareholders’equityNoncontrollinginterests

Total
equity

$m

$m

$m

$m

$m

$m

$m

$m

$m

$m

24,624—

22,414—

140,572
13,917

1,816
—

457
—

(20,375)—

26,935—

196,443
13,917

8,552
776

204,995
14,693——661(2,455)(654)(2,394)—(4,842)(125)(4,967)———(2,105)———(2,105)(34)(2,139)

—
—

—
—

—
—

(350)
—

(654)

—
—

—
—

(350)
(654)

(96)
(10)

(446)
(664)

—

—

531

—

—

—

—

531

—

531

—

—

(288)

—

—

—

—

(288)

14

(274)

—

—

103

—

—

—

—

103

—

103

—
—

—
—

315
—

—
—

—
—

—
(2,394)——315(2,394)—1315(2,393)——

14,578(2,455)(654)(2,394)

—

9,075

651

9,726

354

—

(336)

—

—

—

—

18

—

18

—
—
—
—

2,000
—
(2,000)—(4)(5,790)—(3,065)

—
—
—
—

—
—
—
—

—
—
—
—

—
—
—
3,065

1,996
(5,790)(2,000)
—

—
(593)
—
—

1,996
(6,383)(2,000)
—

—

—

467

—

—

—

—

467

—

467

(60)
—
24,918——22,414(2,004)40
144,458

—
5
(634)

—
—
(197)

—
—
(22,769)60—
30,060(2,004)
45
198,250

—
(83)
8,527

(2,004)(38)
206,777

1 In 2021, HSBC Holdings issued $2,000m of additional tier 1 instruments on which there were $4m of external issue costs.
2 During 2022, HSBC Holdings redeemed €1,500m 5.250% perpetual subordinated contingent convertible capital securities and SGD1,000m 5.875%
perpetual subordinated contingent convertible capital securities. For further details, see Note 32 in the Annual Report and Accounts 2022. In 2021,
HSBC Holdings redeemed $2,000m 6.875% perpetual subordinated contingent convertible capital securities.
3 At 31 December 2022, retained earnings included 554,452,437 treasury shares (2021: 558,397,704). These include treasury shares held within
HSBC’s insurance business’s retirement funds for the benefit of policyholders or beneficiaries within employee trusts for the settlement of shares
expected to be delivered under employee share schemes or bonus plans, and the market-making activities in Markets and Securities Services.
4 Cumulative goodwill amounting to $5,138m has been charged against reserves in respect of acquisitions of subsidiaries prior to 1 January 1998,
including $3,469m charged against the merger reserve arising on the acquisition of HSBC Bank plc. The balance of $1,669m has been charged against
retained earnings.
5 Statutory share premium relief under section 131 of the Companies Act 1985 was taken in respect of the acquisition of HSBC Bank plc in 1992, HSBC
Continental Europe in 2000 and HSBC Finance Corporation in 2003, and the shares issued were recorded at their nominal value only. In HSBC’s
consolidated financial statements, the fair value differences of $8,290m in respect of HSBC Continental Europe and $12,768m in respect of HSBC
Finance Corporation were recognised in the merger reserve. The merger reserve created on the acquisition of HSBC Finance Corporation
subsequently became attached to HSBC Overseas Holdings (UK) Limited, following a number of intra-Group reorganisations. During 2009, pursuant tosection 131 of the Companies Act 1985, statutory share premium relief was taken in respect of the rights issue and $15,796m was recognised in themerger reserve.
6 Permitted transfers from the merger reserve to retained earnings were made when the investment in HSBC Overseas Holdings (UK) Limited waspreviously impaired. During 2022 and 2021, part-reversals of these impairments resulted in transfers from retained earnings back to the merger
reserve of $2,499m and $3,065m respectively.
7 For further details, see Note 32 in the Annual Report and Accounts 2022. In October 2021, HSBC announced a share buy-back of up to $2.0bn, which
was completed in April 2022. Additionally, HSBC announced a share buy-back of up to $1.0bn in February 2022, which concluded on 28 July 2022.

16

HSBC Holdings plc 2022 Results

1Basis of preparation and significant accounting policies

The basis of preparation and summary of significant accounting policies applicable to the consolidated financial statements of HSBC and theseparate financial statements of HSBC Holdings can be found in Note 1, or the relevant Note, in the Financial Statements in the Annual Reportand Accounts 2022.

(a) Compliance with International Financial Reporting Standards
The consolidated financial statements of HSBC and the separate financial statements of HSBC Holdings comply with UK-adopted international
accounting standards and with the requirements of the Companies Act 2006, and have also applied international financial reporting standards
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. These financial statements are also prepared inaccordance with International Financial Reporting Standards (‘IFRSs’) as issued by the International Accounting Standards Board (‘IASB’),
including interpretations issued by the IFRS Interpretations Committee, as there are no applicable differences from IFRSs as issued by the IASB
for the periods presented. There were no unendorsed standards effective for the year ended 31 December 2022 affecting these consolidated
and separate financial statements.

Standards adopted during the year ended 31 December 2022
There were no new accounting standards or interpretations that had a significant effect on HSBC in 2022. Accounting policies have been
consistently applied.

(b) Differences between IFRSs and Hong Kong Financial Reporting Standards
There are no significant differences between IFRSs and Hong Kong Financial Reporting Standards in terms of their application to HSBC, andconsequently there would be no significant differences had the financial statements been prepared in accordance with Hong Kong Financial
Reporting Standards. The ‘Notes on the financial statements’, taken together with the ‘Report of the Directors’, include the aggregate of all
disclosures necessary to satisfy IFRSs and Hong Kong reporting requirements.

(c) Going concern
The financial statements are prepared on a going concern basis, as the Directors are satisfied that the Group and parent company have theresources to continue in business for the foreseeable future. In making this assessment, the Directors have considered a wide range of
information relating to present and future conditions, including future projections of profitability, cash flows, capital requirements and capital
resources. These considerations include stressed scenarios that reflect the uncertainty in structural changes from the Covid-19 pandemic, theRussia-Ukraine war, disrupted supply chains globally, slower Chinese economic activity, climate change and other top and emerging risks, aswell as from the related impacts on profitability, capital and liquidity.

2

Tax

Tax expense

Current tax1
– for this year
– adjustments in respect of prior years
Deferred tax– origination and reversal of temporary differences– effect of changes in tax rates– adjustments in respect of prior years
Year ended 31 Dec2

2022
$m

2021
$m

2,991
3,271
(280)
(2,133)(2,236)
(293)
396
858

3,250
3,182
68
963
874
132
(43)
4,213

1 Current tax included Hong Kong profits tax of $604m (2021: $813m). The Hong Kong tax rate applying to the profits of subsidiaries assessable in Hong
Kong was 16.5% (2021: 16.5%).
2 In addition to amounts recorded in the income statement, a tax credit of $145m (2021: charge of $7m) was recorded directly to equity.

HSBC Holdings plc 2022 Results

17Tax reconciliation
The tax charged to the income statement differs from the tax charge that would apply if all profits had been taxed at the UK corporation tax rate
as follows:2022$mProfit before tax
Tax expense
Taxation at UK corporation tax rate of 19.00%
Impact of differently taxed overseas profits in overseas locations
UK banking surcharge
Items increasing tax charge in 2022:– local taxes and overseas withholding taxes– other permanent disallowables– impacts of hyperinflation– adjustments in respect of prior period liabilities– tax impact of planned sale of French retail banking business– bank levy
– movements in provisions for uncertain tax positions– non-deductible goodwill write-down– impact of differences between French tax basis and IFRSs
Items reducing tax charge in 2022:– movements in unrecognised UK deferred tax– non-taxable income and gains– effect of profits in associates and joint ventures– non-UK movements in unrecognised deferred tax– impact of changes in tax rates– deductions for AT1 coupon payments
Year ended 31 December 2022

%

2021
$m

%

18,906

17,528
3,329
374
283

19.0
2.1
1.6

3,592
280
332

19.0
1.5
1.8

550
202
171
116
115
59
27
3
—

3.1
1.2
1.0
0.7
0.7
0.3
0.2
—
—

360
236
68
25
(434)
93
15
178
434

1.9
1.2
0.4
0.1
(2.3)
0.5
0.1
0.9
2.3

(2,191)
(825)
(504)
(312)
(293)
(246)
858

(12.5)
(4.7)
(2.9)
(1.8)
(1.7)
(1.4)
4.9

294
(641)
(414)
(67)
132
(270)
4,213

1.6
(3.4)
(2.2)
(0.4)
0.7
(1.4)
22.3

The Group’s profits are taxed at different rates depending on the country or territory in which the profits arise. The key applicable tax rates for2022 include Hong Kong (16.5%), the US (21%) and the UK (19%). If the Group’s profits were taxed at the statutory rates of the countries inwhich the profits arose, then the tax rate for the year would have been 22.7% (2021: 22.3%).
The effective tax rate for the year of 4.9% was lower than in the previous year (2021: 22.3%). The effective tax rate for the year reduced by
14.3% as a result of the recognition of previously unrecognised losses in the UK of $2.2bn and France of $0.3bn, in light of improved forecast
profitability.
During 2022, legislation was enacted to reduce the rate of the UK banking surcharge from 8% to 3% from 1 April 2023, decreasing the Group’s
2022 tax charge by $173m due to the remeasurement of deferred tax balances. The main rate of UK corporation tax will increase from 19% to
25% from 1 April 2023.
Accounting for taxes involves some estimation because tax law is uncertain and its application requires a degree of judgement, whichauthorities may dispute. Liabilities are recognised based on best estimates of the probable outcome, taking into account external advice whereappropriate. Exposures relating to legacy tax cases were reassessed during 2022, resulting in a charge of $27m to the income statement. We
do not expect significant liabilities to arise in excess of the amounts provided. HSBC only recognises current and deferred tax assets where
recovery is probable.

18

HSBC Holdings plc 2022 ResultsMovement of deferred tax assets and liabilities
Loan Unused tax
impairment losses andprovisions tax credits

Financialassets at Insurance
FVOCI business

Cash flow Retirement
hedges obligations

Other

Total

$m

$m

$m

$m

$m

$m

$m

$m

AssetsLiabilities
At 1 Jan 2022
Income statement
Other comprehensive income
Foreign exchange and other adjustments
At 31 Dec 2022
Assets1
Liabilities1

1,162
—
1,162
6
—
7
1,175
1,175
—

2,001
—
2,001
2,425
—
(36)
4,390
4,390
—

84
(254)
(170)
—
1,679
(79)
1,430
1,430
—

—
(1,640)(1,640)170—
35(1,435)—(1,435)

176
(22)
154
—
1,159
(42)
1,271
1,271
—

109
(2,928)(2,819)217
692
237(1,673)—(1,673)

1,690
(427)
1,263
(685)
(642)
(18)
(82)
1,571
(1,653)

5,222(5,271)
(49)
2,133
2,888
104
5,076
9,837
(4,761)

AssetsLiabilities
At 1 Jan 2021
Income statement
Other comprehensive income
Foreign exchange and other adjustments
At 31 Dec 2021
Assets1
Liabilities1

1,242
—
1,242
(89)
(5)
14
1,162
1,162
—

1,821
—
1,821
161
33
(14)
2,001
2,001
—

99
(896)
(797)
—
634
(7)
(170)
84
(254)

—
(1,622)(1,622)(43)—
25(1,640)—(1,640)

25
(70)
(45)
—
212
(13)
154
176
(22)

—
(2,306)(2,306)
(336)
(205)
28
(2,819)109(2,928)

2,850
(973)
1,877
(656)
115
(73)
1,263
1,690
(427)

6,037
(5,867)
170
(963)
784
(40)
(49)
5,222
(5,271)

1 After netting off balances within countries, the balances as disclosed in the accounts are as follows: deferred tax assets of $7,498m (2021: $4,624m)
and deferred tax liabilities of $2,422m (2021: $4,673m).

In applying judgement in recognising deferred tax assets, management has assessed all available information, including future business profit
projections and the track record of meeting forecasts. Management’s assessment of the likely availability of future taxable profits against which
to recover deferred tax assets is based on the most recent financial forecasts approved by management, which cover a five-year period and are
extrapolated where necessary, and takes into consideration the reversal of existing taxable temporary differences and past businessperformance. When forecasts are extrapolated beyond five years, a number of different scenarios are considered, reflecting difference
downward risk adjustments, in order to assess the sensitivity of our recognition and measurement conclusions in the context of such longerterm forecasts.
The Group’s deferred tax asset of $7.5bn (2021: $4.6bn) included $3.9bn (2021: $0.8bn) of deferred tax assets relating to the UK, $3.3bn (2021:$2.6bn) of deferred tax assets relating to the US and a net deferred asset of $0.7bn (2021: $0.0bn) in France.
The net UK deferred tax asset of $3.9bn excluded a $1.8bn deferred tax liability arising on the UK pension scheme surplus, the reversal of which
is not taken into account when estimating future taxable profits. The UK deferred tax assets are supported by forecasts of taxable profit, also
taking into consideration the history of profitability in the relevant businesses. The majority of the deferred tax asset relates to tax attributes
which do not expire and are forecast to be recovered within five years and as such are less sensitive to changes in long-term profit forecasts.
The net UK deferred tax asset includes $2.2bn of previously unrecognised losses that were recognised in the UK in the period in light ofimproved forecast profitability in the UK group. Sensitivity regarding the recognition and measurement of that deferred tax asset relates toongoing experience outcome of UK profitability versus forecast, taking into account the non-expiring nature of the underlying attributes.
The net US deferred tax asset of $3.3bn included $1.3bn related to US tax losses, of which $1.1bn expire in 10 to 15 years. Management
expects the US deferred tax asset to be substantially recovered within 14 years, with the majority recovered in the first eight years.
The net deferred tax asset in France of $0.7bn included $0.7bn related to tax losses, which are expected to be substantially recovered within 9
to 18 years. Following recognition of $0.3bn of previously unrecognised deferred tax asset on losses, deferred tax is now recognised in full in
respect of France.

Unrecognised deferred tax
The amount of gross temporary differences, unused tax losses and tax credits for which no deferred tax asset is recognised in the balance
sheet was $9.2bn (2021: $16.9bn). This amount included unused UK tax losses of $3.5bn (2021: $10.5bn), which arose prior to 1 April 2017 andcan only be recovered against future taxable profits of HSBC Holdings. No deferred tax was recognised on these losses due to the absence ofconvincing evidence regarding the availability of sufficient future taxable profits against which to recover them. Deferred tax asset recognition isreassessed at each balance sheet date based on the available evidence. Of the total amounts unrecognised, $3.6bn (2021: $10.9bn) had no
expiry date, $1.2bn (2021: $0.7bn) was scheduled to expire within 10 years and the remaining balance is expected to expire after ten years.
Deferred tax is not recognised in respect of the Group’s investments in subsidiaries and branches where HSBC is able to control the timing ofremittance or other realisation and where remittance or realisation is not probable in the foreseeable future. The aggregate temporary
differences relating to unrecognised deferred tax liabilities arising on investments in subsidiaries and branches is $11.7bn (2021: $12.7bn) andthe corresponding unrecognised deferred tax liability was $0.7bn (2021: $0.8bn).

HSBC Holdings plc 2022 Results

19

3

Dividends

Dividends to shareholders of the parent company
2021

2022

Dividends paid on ordinary shares
In respect of previous year:– fourth interim dividend / interim dividend
In respect of current year:– first interim dividend
Total
Total dividends on preference shares classified as equity (paidquarterly)1
Total coupons on capital securities classified as equity
Dividends to shareholders

Per
share
$

Total

$m

Settledin scrip$m$m

Settledin scrip
$m

0.18

3,576

—

0.15

3,059

—

0.09
0.27

1,754
5,330

—
—

0.07
0.22

1,421
4,480

—
—

Per
share
$

Total

—

—
1,214
6,544

4.99

7
1,303
5,790

1 HSBC Holdings called $1,450m 6.20% non-cumulative US dollar preference shares on 10 December 2020. The security was redeemed and cancelledon 13 January 2021.

On 4 January 2023, HSBC paid a coupon on its €1,250m subordinated capital securities, representing a total distribution of €30m ($31m). No
liability was recorded in the balance sheet at 31 December 2022 in respect of this coupon payment.
The distributable reserves of HSBC Holdings at 31 December 2022 were $35.2bn, compared with $32.2bn at 31 December 2021. The increase
was primarily driven by profits generated of $12.4bn and a foreign exchange gain on the redemption of additional tier 1 securities of $0.4bn,
offset by ordinary dividend payments and additional tier 1 coupon distributions of $6.5bn, other reserves movements of $2.3bn and $1bn related
to our share buy-back programme.

Second interim dividend for 2022
After the end of the year, the Directors approved a second interim dividend in respect of the financial year ended 31 December 2022 of $0.23
per ordinary share, a distribution of approximately $4,593m. The second interim dividend for 2022 will be payable on 27 April 2023 to holders on
the Principal Register in the UK, the Hong Kong Overseas Branch Register or the Bermuda Overseas Branch Register on 3 March 2023. No
liability was recorded in the financial statements in respect of the second interim dividend for 2022.
The second interim dividend will be payable in US dollars, or in pounds sterling or Hong Kong dollars at the forward exchange rates quoted by
HSBC Bank plc in London at or about 11.00am on 17 April 2023, or a combination of these currencies. Particulars of these arrangements will besent to shareholders on or about 24 March 2023 and changes to currency elections must be received by 13 April 2023. The ordinary shares in
London, Hong Kong and Bermuda, and American Depositary Shares (‘ADSs’) in New York will be quoted ex-dividend on 2 March 2023.
The second interim dividend will be payable on ADSs, each of which represents five ordinary shares, on 27 April 2023 to holders of record on
3 March 2023. The second interim dividend of $1.15 per ADS will be payable by the depositary in US dollars. Alternatively, the cash dividend
may be invested in additional ADSs by participants in the dividend reinvestment plan operated by the depositary, elections must be received by
6 April 2023.
Any person who has acquired ordinary shares registered on the Principal Register in the UK, the Hong Kong Overseas Branch Register or the
Bermuda Overseas Branch Register but who has not lodged the share transfer with the Principal Registrar in the UK, Hong Kong or Bermuda
Overseas Branch Registrar should do so before 4.00pm local time on 3 March 2023 in order to receive the second interim dividend for 2022.
Ordinary shares may not be removed from or transferred to the Principal Register in the UK, the Hong Kong Overseas Branch Register or the
Bermuda Overseas Branch Register on 3 March 2023. Any person wishing to remove ordinary shares to or from each register must do sobefore 4.00pm local time on 2 March 2023.
Transfers of ADSs must be lodged with the depositary by 11.00am on 3 March 2023 in order to receive the second interim dividend. ADS
holders who receive a cash dividend will be charged a fee, which will be deducted by the depositary, of $0.005 per ADS per cash dividend.

20

HSBC Holdings plc 2022 Results

4

Earnings per share

Basic earnings per ordinary share is calculated by dividing the profit attributable to ordinary shareholders of the parent company by the weighted
average number of ordinary shares outstanding, excluding own shares held. Diluted earnings per ordinary share is calculated by dividing thebasic earnings, which require no adjustment for the effects of dilutive potential ordinary shares, by the weighted average number of ordinary
shares outstanding, excluding own shares held, plus the weighted average number of ordinary shares that would be issued on conversion ofdilutive potential ordinary shares.
Profit attributable to the ordinary shareholders of the parent company

Profit attributable to shareholders of the parent company
Dividend payable on preference shares classified as equity
Coupon payable on capital securities classified as equity
Year ended 31 Dec

2022
$m

2021
$m

16,035—(1,213)
14,822

13,917(7)(1,303)
12,607Per share

Basic and diluted earnings per share

Basic1
Effect of dilutive potential ordinary shares
Diluted1

Profit2022
Number ofshares

Per share

Profit2021
Number ofshares$m(millions)$$m(millions)$

14,822

19,849137
19,9860.75

12,6070.62

0.74

12,607

20,197105
20,302

14,8220.62

1 Weighted average number of ordinary shares outstanding (basic) or assuming dilution (diluted).

The number of anti-dilutive employee share options excluded from the weighted average number of dilutive potential ordinary shares is 9.4m
(2021: 8.6m).

5Adjusted balance sheet reconciliation
At

Loans and advances to customers (net)
Interests in associates and joint ventures
Total external assets
Customer accounts

31 Dec 2021

31 Dec 2022
Reported
andAdjusted$m

Adjusted$mCurrencytranslation$m

Reported$m924,854
29,254
2,966,530
1,570,303

991,197
28,0862,805,820
1,622,547

54,617
1,523
152,119
88,027

1,045,814
29,6092,957,939
1,710,574

HSBC Holdings plc 2022 Results21

6Reconciliation of reported and adjusted items
Year ended

Revenue1
Reported
Currency translation
Significant items– customer redress programmes– disposals, acquisitions and investment in new businesses2– fair value movements on financial instruments3– restructuring and other related costs4– currency translation on significant items
Adjusted
ECL
Reported
Currency translation
Adjusted
Operating expenses
Reported
Currency translation
Significant items– customer redress programmes– disposals, acquisitions and investment in new businesses– impairment of goodwill and other intangibles– restructuring and other related costs– currency translation on significant items
Adjusted
Share of profit in associates and joint ventures
Reported
Currency translation
Adjusted
Profit before tax
Reported
Currency translation
Significant items– revenue– operating expenses
Adjusted

2022
$m

2021
$m

51,72749,552(3,074)
542
(11)

3,618
(8)
2,799
579
248
55,345(3,592)(3,592)(33,330)
2,864
(31)
18
(4)
2,881
(30,466)

2,723
2,723

17,528
6,482
3,618
2,864
24,010242
307
447,020

928
(174)
754

(34,620)
2,181
2,335
49
—
587
1,836
(137)
(30,104)

3,046
(113)
2,933

18,906(1,180)
2,877
542
2,335
20,603

1 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.
2 Includes losses from classifying businesses as held for sale as part of a broader restructuring of our European business, of which $2.4bn relates to theplanned sale of our retail banking operations in France.
3 Includes fair value movements on non-qualifying hedges and debit valuation adjustments on derivatives.
4 Comprises gains and losses relating to the business update in February 2020, including losses associated with the RWA reduction programme.

22

HSBC Holdings plc 2022 Results

7Contingent liabilities, contractual commitments and guarantees

Guarantees and other contingent liabilities:– financial guarantees– performance and other guarantees– other contingent liabilities
At 31 Dec
Commitments1:– documentary credits and short-term trade-related transactions– forward asset purchases and forward deposits placed– standby facilities, credit lines and other commitments to lend
At 31 Dec

2022
$m

2021
$m

18,78388,240676
107,699

27,79585,534
858
114,187

8,241
50,852
768,761
827,8548,827
47,184759,463815,474

1 Includes $618,788m of commitments at 31 December 2022 (31 December 2021: $627,637m), to which the impairment requirements in IFRS 9 areapplied where HSBC has become party to an irrevocable commitment.

The preceding table discloses the nominal principal amounts of off-balance sheet liabilities and commitments for the Group, which represent the
maximum amounts at risk should the contracts be fully drawn upon and clients default. As a significant portion of guarantees and commitments
are expected to expire without being drawn upon, the total of the nominal principal amounts is not indicative of future liquidity requirements.
The expected credit loss provision relating to guarantees and commitments under IFRS 9 is disclosed in Note 28 of the Annual Report andAccounts 2022.
The majority of the guarantees have a term of less than one year, while guarantees with terms of more than one year are subject to HSBC’s
annual credit review process.
Contingent liabilities arising from legal proceedings, regulatory and other matters against Group companies are excluded from this note but are
disclosed in Notes 28 and 35 of the Annual Report and Accounts 2022.

Financial Services Compensation Scheme
The Financial Services Compensation Scheme (‘FSCS’) provides compensation, up to certain limits, to eligible customers of financial services
firms that are unable, or likely to be unable, to pay claims against them. The FSCS may impose a further levy on the group to the extent theindustry levies imposed to date are not sufficient to cover the compensation due to customers in any future possible collapse. The ultimate
FSCS levy to the industry as a result of a collapse cannot be estimated reliably. It is dependent on various uncertain factors including thepotential recovery of assets by the FSCS, changes in the level of protected products (including deposits and investments) and the population of
FSCS members at the time. In December 2022, the FCA announced that it expects to review various elements of the scheme to ensure
consumers are appropriately and proportionately protected, with costs distributed across industry levy payers in a fair and sustainable way, witha view to deliver the majority of changes by the end of the 2023/24 financial year.

Associates
HSBC’s share of associates’ contingent liabilities, contractual commitments and guarantees amounted to $64.8bn at 31 December 2022 (2021:$63.5bn). No matters arose where HSBC was severally liable.

8

Legal proceedings and regulatory matters

HSBC is party to legal proceedings and regulatory matters in a number of jurisdictions arising out of its normal business operations. Apart fromthe matters described below, HSBC considers that none of these matters are material. The recognition of provisions is determined inaccordance with the accounting policies set out in Note 1 of our Annual Report and Accounts 2022. While the outcomes of legal proceedings
and regulatory matters are inherently uncertain, management believes that, based on the information available to it, appropriate provisions havebeen made in respect of these matters as at 31 December 2022 (see Note 28 of our Annual Report and Accounts 2022). Where an individual
provision is material, the fact that a provision has been made is stated and quantified, except to the extent that doing so would be seriously
prejudicial. Any provision recognised does not constitute an admission of wrongdoing or legal liability. It is not practicable to provide anaggregate estimate of potential liability for our legal proceedings and regulatory matters as a class of contingent liabilities.

Bernard L. Madoff Investment Securities LLC
Various non-US HSBC companies provided custodial, administration and similar services to a number of funds incorporated outside the US
whose assets were invested with Bernard L. Madoff Investment Securities LLC (‘Madoff Securities’). Based on information provided by Madoff
Securities as at 30 November 2008, the purported aggregate value of these funds was $8.4bn, including fictitious profits reported by Madoff.
Based on information available to HSBC, the funds’ actual transfers to Madoff Securities minus their actual withdrawals from Madoff Securities
during the time HSBC serviced the funds are estimated to have totalled approximately $4bn. Various HSBC companies have been named as
defendants in lawsuits arising out of Madoff Securities’ fraud.
US litigation: The Madoff Securities Trustee has brought lawsuits against various HSBC companies and others, seeking recovery of transfersfrom Madoff Securities to HSBC in an amount not specified, and these lawsuits remain pending in the US Bankruptcy Court for the Southern
District of New York (the ‘US Bankruptcy Court’).
Certain Fairfield entities (together, ‘Fairfield’) (in liquidation since July 2009) have brought a lawsuit in the US against fund shareholders,
including HSBC companies that acted as nominees for clients, seeking restitution of redemption payments. In August 2022, the US District
Court for the Southern District of New York (the ‘New York District Court’) affirmed earlier decisions by the US Bankruptcy Court that dismissed
the majority of the liquidators’ claims (against most of the HSBC companies). In September 2022, the remaining defendants before the US
Bankruptcy Court sought leave to appeal and the liquidators filed appeals to the US Court of Appeals for the Second Circuit, which are currently
pending. Meanwhile, proceedings before the US Bankruptcy Court with respect to the remaining claims are ongoing.
HSBC Holdings plc 2022 Results23

UK litigation: The Madoff Securities Trustee has filed a claim against various HSBC companies in the High Court of England and Wales,seeking recovery of transfers from Madoff Securities to HSBC. The claim has not yet been served and the amount claimed has not been
specified.
Cayman Islands litigation: In February 2013, Primeo Fund (‘Primeo’) (in liquidation since April 2009) brought an action against HSBC Securities
Services Luxembourg (‘HSSL’) and Bank of Bermuda (Cayman) Limited (now known as HSBC Cayman Limited), alleging breach of contract andbreach of fiduciary duty and claiming monetary damages. Following dismissal of Primeo’s action by the lower and appellate courts in the
Cayman Islands, in 2019, Primeo appealed to the UK Privy Council. During 2021, the UK Privy Council held two separate hearings in connection
with Primeo’s appeal. Judgment was given against HSBC in respect of the first hearing and judgment is pending in respect of the second
hearing.
Luxembourg litigation: In April 2009, Herald Fund SPC (‘Herald’) (in liquidation since July 2013) brought an action against HSSL before theLuxembourg District Court, seeking restitution of cash and securities that Herald purportedly lost because of Madoff Securities’ fraud, or money
damages. The Luxembourg District Court dismissed Herald’s securities restitution claim, but reserved Herald’s cash restitution and money
damages claims. Herald has appealed this judgment to the Luxembourg Court of Appeal, where the matter is pending. In late 2018, Herald
brought additional claims against HSSL and HSBC Bank plc before the Luxembourg District Court, seeking further restitution and damages.
In October 2009, Alpha Prime Fund Limited (‘Alpha Prime’) brought an action against HSSL before the Luxembourg District Court, seeking therestitution of securities, or the cash equivalent, or money damages. In December 2018, Alpha Prime brought additional claims seeking damages
against various HSBC companies. These matters are currently pending before the Luxembourg District Court.
In December 2014, Senator Fund SPC (‘Senator’) brought an action against HSSL before the Luxembourg District Court, seeking restitution of
securities, or the cash equivalent, or money damages. In April 2015, Senator commenced a separate action against the Luxembourg branch of
HSBC Bank plc asserting identical claims. In December 2018, Senator brought additional claims against HSSL and HSBC Bank plc Luxembourg
branch, seeking restitution of Senator’s securities or money damages. These matters are currently pending before the Luxembourg District
Court.
There are many factors that may affect the range of possible outcomes, and any resulting financial impact, of the various Madoff-related
proceedings described above, including but not limited to the multiple jurisdictions in which the proceedings have been brought. Based upon theinformation currently available, management’s estimate of the possible aggregate damages that might arise as a result of all claims in thevarious Madoff-related proceedings is around $600m, excluding costs and interest. Due to uncertainties and limitations of this estimate, any
possible damages that might ultimately arise could differ significantly from this amount.

Anti-money laundering and sanctions-related matters
In December 2012, HSBC Holdings entered into a number of agreements, including an undertaking with the UK Financial Services Authority(replaced with a Direction issued by the UK Financial Conduct Authority (‘FCA’) in 2013 and again in 2020) as well as a cease-and-desist orderwith the US Federal Reserve Board (‘FRB’), both of which contained certain forward-looking anti-money laundering (‘AML’) and sanctions-related
obligations. For several years thereafter, HSBC retained a Skilled Person under section 166 of the Financial Services and Markets Act and an
Independent Consultant under the FRB cease-and-desist order to produce periodic assessments of the Group’s AML and sanctions complianceprogramme. The Skilled Person completed its engagement in the second quarter of 2021, and the FCA determined that no further Skilled
Person work is required. Separately, the Independent Consultant’s engagement is now complete and, in August 2022, the FRB terminated its
cease-and-desist order.
Since November 2014, a number of lawsuits have been filed in federal courts in the US against various HSBC companies and others on behalfof plaintiffs who are, or are related to, victims of terrorist attacks in the Middle East. In each case, it is alleged that the defendants aided andabetted the unlawful conduct of various sanctioned parties in violation of the US Anti-Terrorism Act. Nine actions remain pending in federal
courts and HSBC’s motions to dismiss have been granted in five of these cases. In September 2022 and January 2023, respectively, theappellate courts affirmed the dismissals of two of the cases, and the plaintiffs’ requests for review of these decisions by the full appellate courts
have been denied. The dismissals in the other cases are subject to appeal. The four remaining actions are at an early stage.
Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of the pending matters, including thetiming or any possible impact on HSBC, which could be significant.

London interbank offered rates, European interbank offered rates and other benchmark
interest rate investigations and litigation
Euro interest rate derivatives: In December 2016, the European Commission (‘EC’) issued a decision finding that HSBC, among other banks,
engaged in anti-competitive practices in connection with the pricing of euro interest rate derivatives, and the EC imposed a fine on HSBC basedon a one-month infringement in 2007. The fine was annulled in 2019 and a lower fine was imposed in 2021. In January 2023, the European
Court of Justice dismissed an appeal by HSBC and upheld the EC’s findings on HSBC’s liability. A separate appeal by HSBC concerning theamount of the fine remains pending before the General Court of the European Union.
US dollar Libor: Beginning in 2011, HSBC and other panel banks have been named as defendants in a number of private lawsuits filed in the
US with respect to the setting of US dollar Libor. The complaints assert claims under various US federal and state laws, including antitrust andracketeering laws and the Commodity Exchange Act (‘US CEA’). The lawsuits include individual and putative class actions, most of which havebeen transferred and/or consolidated for pre-trial purposes before the New York District Court. HSBC has reached class settlements with fivegroups of plaintiffs, and the court has approved these settlements. HSBC has also resolved several of the individual actions, although a numberof other US dollar Libor-related actions remain pending.
Singapore interbank offered rate (‘Sibor’) and Singapore swap offer rate (‘SOR’): In 2016, The Hongkong and Shanghai Banking
Corporation Limited and other panel banks were named as defendants in a putative class action filed in the New York District Court on behalf ofpersons who transacted in products related to the Sibor and SOR benchmark rates. The complaint alleged, among other things, misconduct
related to these benchmark rates in violation of US antitrust, commodities and racketeering laws, and state law.
In October 2021, The Hongkong and Shanghai Banking Corporation Limited reached a settlement-in-principle with the plaintiffs to resolve thisaction, the agreement for which was executed in May 2022. The court granted final approval of the settlement in November 2022.
Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of the pending matters, including thetiming or any possible impact on HSBC, which could be significant.

24

HSBC Holdings plc 2022 Results

Foreign exchange-related investigations and litigation
In December 2016, Brazil’s Administrative Council of Economic Defense initiated an investigation into the onshore foreign exchange market andidentified a number of banks, including HSBC, as subjects of its investigation, which remains ongoing.
In June 2020, the Competition Commission of South Africa, having initially referred a complaint for proceedings before the South African
Competition Tribunal in February 2017, filed a revised complaint against 28 financial institutions, including HSBC Bank plc and HSBC Bank USA
N.A. (‘HSBC Bank USA’), for alleged anti-competitive behaviour in the South African foreign exchange market. In December 2021, a hearing on
HSBC Bank plc’s and HSBC Bank USA’s applications to dismiss the revised complaint took place before the South African Competition Tribunal,
where a decision remains pending.
Beginning in 2013, various HSBC companies and other banks have been named as defendants in a number of putative class actions filed in, ortransferred to, the New York District Court arising from allegations that the defendants conspired to manipulate foreign exchange rates. HSBC
has reached class settlements with two groups of plaintiffs, including direct and indirect purchasers of foreign exchange products, and the court
has granted final approval of these settlements. A putative class action by a group of retail customers of foreign exchange products remains
pending.
In 2018, complaints alleging foreign exchange-related misconduct were filed in the New York District Court and the High Court of England andWales against HSBC and other defendants by certain plaintiffs that opted out of the direct purchaser class action settlement in the US. In
December 2022, HSBC reached a settlement-in-principle with the plaintiffs to resolve these matters. The settlement remains subject to thenegotiation of definitive documentation. Additionally, in January 2023, HSBC reached a settlement-in-principle with plaintiffs in Israel to resolve aclass action lawsuit filed in the local courts alleging foreign exchange-related misconduct. The settlement remains subject to the negotiation ofdefinitive documentation and court approval. Lawsuits alleging foreign exchange-related misconduct remain pending against HSBC and otherbanks in courts in Brazil. It is possible that additional civil actions will be initiated against HSBC in relation to its historical foreign exchange
activities.
There are many factors that may affect the range of outcomes, and the resulting financial impact, of these matters, which could be significant.

Precious metals fix-related litigation
Gold: Beginning in December 2015, numerous putative class actions were filed in the Ontario and Quebec Superior Courts of Justice against
various HSBC companies and other financial institutions. The plaintiffs allege that, among other things, from January 2004 to March 2014, thedefendants conspired to manipulate the price of gold and gold derivatives in violation of the Canadian Competition Act and common law. These
actions are ongoing.
Silver: Beginning in July 2014, numerous putative class actions were filed in federal district courts in New York, naming HSBC and othermembers of The London Silver Market Fixing Limited as defendants. The complaints, which were consolidated in the New York District Court,
allege that, from January 2007 to December 2013, the defendants conspired to manipulate the price of silver and silver derivatives for theircollective benefit in violation of US antitrust laws, the US CEA and New York state law. In February 2022, following the conclusion of pre-classcertification discovery, the defendants filed a motion seeking to dismiss the plaintiffs’ antitrust claims, which remains pending.
In April 2016, two putative class actions were filed in the Ontario and Quebec Superior Courts of Justice against various HSBC companies andother financial institutions. The plaintiffs in both actions allege that, from January 1999 to August 2014, the defendants conspired to manipulate
the price of silver and silver derivatives in violation of the Canadian Competition Act and common law. These actions are ongoing.
Platinum and palladium: Between late 2014 and early 2015, numerous putative class actions were filed in the New York District Court, naming
HSBC and other members of The London Platinum and Palladium Fixing Company Limited as defendants. The complaints allege that, fromJanuary 2008 to November 2014, the defendants conspired to manipulate the price of platinum group metals and related financial products fortheir collective benefit in violation of US antitrust laws and the US CEA. In March 2020, the court granted the defendants‘ motion to dismiss theplaintiffs’ third amended complaint but granted the plaintiffs leave to re-plead certain claims. The plaintiffs have filed an appeal.
Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of these matters, including the timing or
any possible impact on HSBC, which could be significant.

Film finance litigation
In June 2020, two separate investor groups issued claims against HSBC UK Bank plc (as successor to HSBC Private Bank (UK) Limited (‘PBGB‘))
in the High Court of England and Wales in connection with PBGB’s role in the development of Eclipse film finance schemes. These actions are
ongoing.
In April 2021, HSBC UK Bank plc (as successor to PBGB) was served with a claim issued in the High Court of England and Wales in connection
with PBGB’s role in the development of the Zeus film finance schemes. In October 2022, this claim was discontinued.
Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of the pending matters, including thetiming or any possible impact on HSBC, which could be significant.

Other regulatory investigations, reviews and litigation
HSBC Holdings and/or certain of its affiliates are subject to a number of other investigations and reviews by various regulators and competitionand law enforcement authorities, as well as litigation, in connection with various matters relating to the firm’s businesses and operations,
including:• investigations by tax administration, regulatory and law enforcement authorities in Argentina, India and elsewhere in connection withallegations of tax evasion or tax fraud, money laundering and unlawful cross-border banking solicitation;•

an investigation by the US Commodity Futures Trading Commission (‘CFTC‘) regarding interest rate swap transactions related to bondissuances, among other things. HSBC has reached a settlement-in-principle with the CFTC’s Division of Enforcement to resolve thisinvestigation. The settlement is subject to final approval by the CFTC;•

investigations by the CFTC and US Securities and Exchange Commission (‘SEC‘) concerning compliance with records preservation
requirements relating to the use of unapproved electronic messaging platforms for business communications. HSBC has reachedsettlements-in-principle with the CFTC’s and SEC’s Divisions of Enforcement to resolve these investigations. The settlements are subject tothe negotiation of definitive documentation and final approval by the CFTC and SEC;

• an investigation by the PRA in connection with depositor protection arrangements in the UK;• an investigation by the FCA in connection with collections and recoveries operations in the UK;
HSBC Holdings plc 2022 Results25• an investigation by the UK Competition and Markets Authority into potentially anti-competitive arrangements involving historical trading
activities relating to certain UK-based fixed income products and related financial instruments;• a putative class action brought in the New York District Court relating to the Mexican government bond market;• two group actions pending in the US courts and a claim issued in the High Court of England and Wales in connection with HSBC Bank plc’srole as a correspondent bank to Stanford International Bank Ltd from 2003 to 2009; and• litigation brought against various HSBC companies in the US courts relating to residential mortgage-backed securities, based primarily on (a)claims brought against HSBC Bank USA in connection with its role as trustee on behalf of various securitisation trusts; and (b) claims against
several HSBC companies seeking that the defendants repurchase various mortgage loans.
There are many factors that may affect the range of outcomes, and the resulting financial impact, of these matters, which could be significant.

9

Events after the balance sheet date

A second interim dividend for 2022 of $0.23 per ordinary share (a distribution of approximately $4,593m) was approved by the Directors after
31 December 2022. HSBC Holdings called $2,350m 6.250% perpetual subordinated contingent convertible securities on 30 January 2023. The
security is expected to be redeemed and be cancelled on 23 March 2023. HSBC Holdings also exercised the call option on AUD350m and
AUD650m MREL on 13 January 2023 callable on 16 February 2023. The redemption took place on 16 February 2023. These accounts wereapproved by the Board of Directors on 21 February 2023 and authorised for issue.

10 Capital structure
Capital ratios
At 31 Dec
2022
%

2021
%

Transitional basis
Common equity tier 1 ratio
Tier 1 ratio
Total capital ratio

14.2
16.6
19.3

15.8
18.6
21.2

End point basis
Common equity tier 1 ratio
Tier 1 ratio
Total capital ratio

14.2
16.6
18.7

15.8
18.5
20.0

At 31 Dec
2022
$m

2021
$m

Total regulatory capital and risk-weighted assets

Transitional basis
Common equity tier 1 capital
Additional tier 1 capital
Tier 2 capital
Total regulatory capital
Risk-weighted assets

119,291
19,77623,356
162,423
839,720

132,565
23,727
21,494
177,786
838,263

End point basis
Common equity tier 1 capital
Additional tier 1 capital
Tier 2 capital
Total regulatory capital
Risk-weighted assets

119,291
19,77618,091
157,158
839,720

132,565
22,421
12,475
167,461
838,263

Leverage ratio1
At 31 Dec
2022
$bn
Tier 1 capital
Total leverage ratio exposure
Leverage ratio

139.1
2,417.2

2021
$bn
155.0
2,962.7

%

%

5.8

5.2

1 The CRR II regulatory transitional arrangements for IFRS 9 are applied in the leverage ratio calculation. This calculation is in line with the UK leveragerules that were implemented on 1 January 2022, and excludes central bank claims. Comparatives for 2021 are reported based on the disclosure rules
in force at that time, and include claims on central banks.

26

HSBC Holdings plc 2022 Results

11 Statutory accounts
The information in this news release does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006 (‘theAct’). The statutory accounts for the year ended 31 December 2022 will be delivered to the Registrar of Companies in England and Wales inaccordance with section 441 of the Act. The auditor has reported on those accounts. Its report was unqualified and did not contain a statement
under section 498(2) or (3) of the Act.

12 Dealings in HSBC Holdings plc listed securities
The Group has policies and procedures that, except where permitted by statute and regulation, prohibit specified transactions in respect of its
securities listed on The Stock Exchange of Hong Kong Limited. Except for dealings as intermediaries or as trustees by subsidiaries of HSBC
Holdings, and purchases by HSBC Holdings under the share buy-back programme, neither HSBC Holdings nor any of its subsidiaries haspurchased, sold or redeemed any of its securities listed on The Stock Exchange of Hong Kong Limited during the year ended 31 December
2022.

13 Interim dividends for 2023
For the financial year 2022, we achieved a dividend payout ratio within our 2022 target range of between 40% and 55% of reported earnings per
ordinary share (‘EPS’). As previously communicated, given our current returns trajectory, we are establishing a dividend payout ratio of 50% ofreported earnings per share for 2023 and 2024, excluding material significant items (including the planned sale of our retail banking operations inFrance and the planned sale of our banking business in Canada). The Group intends to revert to paying quarterly dividends from the first quarterof 2023. The dividend policy has the flexibility to adjust EPS for material significant items such as goodwill or intangibles impairments and may
be supplemented from time to time by buy-backs or special dividends, should the Group find itself in an excess capital position absent
compelling investment opportunities to deploy that excess.
Dividends are approved in US dollars and, at the election of the shareholder, paid in cash in one of, or in a combination of, US dollars, pounds
sterling and Hong Kong dollars.

14 Earnings releases and interim results
First and third quarter results for 2023 will be released on 2 May 2023 and 30 October 2023, respectively. The interim results for the six months
to 30 June 2023 will be issued on 1 August 2023.

15 Corporate governance codes
HSBC is subject to corporate governance requirements in both the UK and Hong Kong. During 2022, save to the extent referred to in the next
paragraph, HSBC complied with the provisions and requirements of both the UK and Hong Kong Corporate Governance Codes.
Dame Carolyn Fairbairn was appointed as Chair to the Group Remuneration Committee on 29 April 2022 and has been a member of suchcommittee since September 2021. In approving Dame Carolyn Fairbairn's appointment, the Board considered the UK Corporate Governance
Code expectation that the Chair has served at least 12 months as a member on the committee before assuming the position of Chair. Before
her appointment she had served on the Group Remuneration Committee for eight months. However, given her previous experience as both amember and chair of the remuneration committees of other UK listed companies, the Board approved the appointment of Dame Carolyn
Fairbairn as Chair.
Under the Hong Kong Code, the audit committee should be responsible for the oversight of all risk management and internal control systems.
HSBC’s Group Risk Committee is responsible for oversight of internal control, other than internal control over financial reporting, and risk
management systems. This is permitted under the UK Corporate Governance Code.
HSBC Holdings has codified obligations for transactions in Group securities in accordance with the requirements of the UK Market Abuse
Regulation and the rules governing the listing of securities on HKEx, save that the HKEx has granted waivers from strict compliance with therules that take into account accepted practices in the UK, particularly in respect of employee share plans. During the year, all Directors were
reminded of their obligations in respect of transacting in HSBC Group securities. Following specific enquiry all Directors have confirmed thatthey have complied with their obligations.
The Group Audit Committee has reviewed the annual results for 2022.
The Directors of HSBC Holdings plc as at the date of this announcement comprise:Mark Tucker*, Noel Quinn, Geraldine Buckingham†, Rachel Duan†, Georges Elhedery, Carolyn Julie Fairbairn†, James Antony Forese†, Steven
Guggenheimer†, José Antonio Meade Kuribreña†, Eileen K Murray†, David Nish†, and Jackson Tai†.
* Non-executive Group Chairman†

Independent non-executive Director

HSBC Holdings plc 2022 Results27

16 Cautionary statement regarding forward-looking statements
This news release may contain projections, estimates, forecasts, targets, opinions, prospects, results, returns and forward-looking statementswith respect to the financial condition, results of operations, capital position, strategy and business of the Group which can be identified by theuse of forward-looking terminology such as ‘may’, ‘will’, ‘should’, ‘expect’, ‘anticipate’, ‘project’, ‘estimate’, ‘seek’, ‘intend’, ‘target’, ‘plan’,‘believe’, ‘potential’ or ‘reasonably possible’, or the negatives thereof or other variations thereon or comparable terminology (together, ‘forwardlooking statements’), including the strategic priorities and any financial, investment and capital targets and any ESG targets, commitments andambitions described herein.
Any such forward-looking statements are not a reliable indicator of future performance, as they may involve significant stated or implied
assumptions and subjective judgements which may or may not prove to be correct. There can be no assurance that any of the matters set out
in forward-looking statements are attainable, will actually occur or will be realised or are complete or accurate. The assumptions and judgements
may prove to be incorrect and involve known and unknown risks, uncertainties, contingencies and other important factors, many of which areoutside the control of the Group.
Actual achievements, results, performance or other future events or conditions may differ materially from those stated, implied and/or reflectedin any forward-looking statements due to a variety of risks, uncertainties and other factors (including without limitation those which are referable
to general market or economic conditions, regulatory changes, geopolitical tensions such as the Russia-Ukraine war, the impact of the Covid-19
pandemic or as a result of data limitations and changes in applicable methodologies in relation to ESG related matters).
Any such forward-looking statements are based on the beliefs, expectations and opinions of the Group at the date the statements are made,and the Group does not assume, and hereby disclaims, any obligation or duty to update, revise or supplement them if circumstances ormanagement’s beliefs, expectations or opinions should change. For these reasons, recipients should not place reliance on, and are cautioned
about relying on, any forward-looking statements. No representations or warranties, expressed or implied, are given by or on behalf of the Groupas to the achievement or reasonableness of any projections, estimates, forecasts, targets, commitments, ambitions, prospects or returns
contained herein.
Additional detailed information concerning important factors, including but not limited to ESG related factors, that could cause actual results todiffer materially from this news release is available in our Annual Report and Accounts for the fiscal year ended 31 December 2022 which we
expect to file with the SEC on Form 20-F on or around 22 February 2023.

17 Use of alternative performance measures
This news release contains non-IFRS measures used by management internally that constitute alternative performance measures underEuropean Securities and Markets Authority guidance and non-GAAP financial measures defined in and presented in accordance with SEC rules
and regulations (‘alternative performance measures’). The primary alternative performance measures we use are presented on an ‘adjusted
performance’ basis which is computed by adjusting reported results for the period-on-period effects of foreign currency translation differences
and significant items which distort period-on-period comparisons. Significant items refers collectively to the items that management andinvestors would ordinarily identify and consider separately to improve the understanding of the underlying trends in the business.
Reconciliations between alternative performance measures and the most directly comparable measures under IFRS are provided in our 2022
Form 20-F, when filed, which will be available at www.hsbc.com.

18 Certain defined terms
Unless the context requires otherwise, ‘HSBC Holdings’ means HSBC Holdings plc and ‘HSBC’, the ‘Group’, ‘we’, ‘us’ and ‘our’ refer to HSBC
Holdings together with its subsidiaries. Within this document the Hong Kong Special Administrative Region of the People’s Republic of China isreferred to as ‘Hong Kong’. When used in the terms ‘shareholders’ equity’ and ‘total shareholders’ equity’, ‘shareholders’ means holders of
HSBC Holdings ordinary shares and those preference shares and capital securities issued by HSBC Holdings classified as equity. The
abbreviations ‘$m’, ‘$bn’ and ‘$tn’ represent millions, billions (thousands of millions) and trillions of US dollars, respectively.

19 For further information contact:
Media Relations
UK – Gillian James
Telephone: +44 (0)7584 404 238
Email: pressoffice@hsbc.com

Investor Relations
UK – Richard O’Connor
Telephone: +44 (0) 20 7991 6590
Email: investorrelations@hsbc.com

UK – Kirsten Smart
Telephone: +44 (0)7725 733 311
Email: pressoffice@hsbc.com

Hong Kong – Mark Phin
Telephone: +852 2822 4908
Email: investorrelations@hsbc.com.hk

Hong Kong – Aman Ullah
Telephone: +852 3941 1120
Email: aspmediarelations@hsbc.com.hk

20 Registered Office and Group Head Office
8 Canada Square
London E14 5HQ
United Kingdom
Web: www.hsbc.com
Incorporated in England with limited liability. Registered number 617987

28

HSBC Holdings plc 2022 Results

HSBC Holdings plc
8 Canada Square
London E14 5HQ
United Kingdom
Telephone: 44 020 7991 8888
www.hsbc.com
Incorporated in England with limited liability
Registered number 617987