1 AUGUST 2023

HSBC HOLDINGS PLC
2023 INTERIM RESULTS – HIGHLIGHTS
Noel Quinn, Group Chief Executive, said:“We have delivered a strong first half performance and are confident of achieving our revised mid-teens return on tangible equity target in 2023 and2024. There was good broad-based profit generation around the world, higher revenue in our global businesses driven by strong net interest
income, and continued tight cost control. I am also pleased that we can reward our shareholders with a second interim dividend of $0.10 per shareand a second share buy-back in 2023 of up to $2bn, with substantial further distribution capacity still expected ahead.
There is still much work to do, especially given the many challenges in the global economy, but I am confident about the future as we move further
into the next phase of our strategy and focus on opportunities to drive value creation, diversify our revenue and retain tight cost control.”Financial performance (1H23 vs 1H22)– Profit before tax rose by $12.9bn to $21.7bn. This included a $2.1bn reversal of an impairment relating to the planned sale of our retailbanking operations in France and a provisional gain of $1.5bn on the acquisition of Silicon Valley Bank UK Limited (‘SVB UK‘). On a constantcurrency basis, profit before tax increased by $13.3bn to $21.7bn. Reported profit after tax increased by $9.1bn to $18.1bn.
– Revenue increased by $12.3bn to $36.9bn. The increase was driven by higher net interest income in all of our global businesses due tointerest rate rises. It also included the impacts related to the planned sale in France and the acquisition in the UK. On a constant currency
basis, revenue rose by $13.2bn to $36.9bn.
– Net interest margin (‘NIM’) of 1.70% increased by 46 basis points (‘bps‘).
– Expected credit losses and other credit impairment charges (‘ECL‘) of $1.3bn reflected a more stable outlook in most markets, although
inflationary pressures remain. The 1H23 charge included $0.3bn relating to the commercial real estate sector in mainland China and charges in
Commercial Banking (‘CMB’) in the UK. The 1H22 charge of $1.1bn reflected heightened economic uncertainty, mainly due to the RussiaUkraine war and inflationary pressures, and also included $0.3bn relating to the commercial real estate sector in mainland China, partly offset byreleases of Covid-19-related allowances.
– Operating expenses of $15.5bn were $0.7bn or 4% lower than in 1H22, primarily due to lower restructuring and other related costs following
the completion of our cost-saving programme at the end of 2022 and from a $0.2bn impact from a reversal of historical asset impairments. Thiswas partly offset by higher technology costs, an increase in performance-related pay, severance of $0.2bn in 1H23 and the effects of rising
inflation. Target basis operating expenses rose by 4.3%.
– Customer lending balances increased by $36bn since 31 December 2022. On a constant currency basis, lending balances grew by$23bn, mainly due to the reclassification of balances associated with our retail banking operations in France from held for sale during the period,
and $7bn of additional balances following our acquisition of SVB UK during 1Q23. These were partly offset by the reclassification of ourbusiness in Oman as held for sale, which resulted in a $3bn reduction. Excluding these factors, customer lending fell, reflecting weakercustomer demand for wholesale lending, notably in Hong Kong and Europe.
– Customer accounts increased by $25bn since 31 December 2022. On a constant currency basis, customer accounts increased by $3bn,
mainly due to the reclassification of balances associated with our retail banking operations in France from held for sale during the period. In
addition, our acquisition of SVB UK resulted in growth of $7bn, and in 1H23, we reclassified our business in Oman as held for sale, resulting in a
$5bn reduction. Excluding these factors, deposits fell, reflecting reductions in Wealth and Personal Banking (‘WPB‘) and CMB in HSBC UK, as
well as in Global Banking and Markets (‘GBM‘).
– Annualised return on average tangible equity (‘RoTE’) of 22.4% compared with 10.6% in 1H22. Excluding the annualised impacts related tothe planned sale in France and the acquisition in the UK, annualised RoTE was 18.5%.
– Common equity tier 1 (‘CET1’) capital ratio of 14.7% increased by 0.5 percentage points compared with 4Q22, which was driven bycapital generation net of the dividend accrual, and included an approximately 0.3 percentage point impact from the reversal of an impairment on
the planned sale of our retail banking operations in France and the provisional gain on the acquisition of SVB UK. This was partly offset byincreased risk-weighted assets (‘RWAs’) and the impact of the share buy-back announced with our 1Q23 results in May 2023.
– The Board has approved a second interim dividend of $0.10 per share. We also intend to initiate a further share buy-back of up to $2bn,
which we expect to commence shortly and complete within three months.

Financial performance (2Q23 vs 2Q22)– Reported profit before tax increased by $4.1bn to $8.8bn.
– Revenue rose by $4.5bn to $16.7bn, with growth across all of our global businesses, primarily reflecting interest rate rises. There were good
performances in insurance in WPB and in Debt Capital Markets in GBM, which offset reductions in Global Foreign Exchange and Equities.
– NIM of 1.72% increased by 3bps, compared with 1Q23.
– ECL of $0.9bn increased by $0.5bn. ECL in 2Q23 included $0.3bn of charges in the commercial real estate sector in mainland China, and$0.3bn in the UK, mainly in CMB.
– Operating expenses of $7.9bn fell by $0.1bn. This was driven by lower restructuring and other related costs following the completion of ourcost-saving programme at the end of 2022 and the reversal of historical asset impairments. This reduction was partly offset by $0.2bn of
severance costs incurred in 2Q23, as well as higher technology spend, an increase in our performance-related pay accrual and the effects ofrising inflation.
– Customer lending decreased by $9bn compared with 31 March 2023, which included a reduction of $3bn related to a reclassification of ourbusiness in Oman to held for sale. The remaining reduction was mainly in GBM in HSBC Bank plc, reflecting client deleveraging and weaker
demand as interest rates rose.
– Customer accounts decreased by $18bn compared with 31 March 2023, which included a reduction of $5bn related to the reclassification of
our business in Oman to held for sale. The remaining reduction was in GBM in Europe, as corporate customers used deposits to pay down theirloans, and in HSBC UK, reflecting higher cost of living and competitive pressures.

Outlook for 2023
– Our strategy has enabled us to further strengthen our balance sheet, providing us with a good platform for growth in the current interest rate
cycle, while maintaining cost discipline. This has given us the confidence to revise our returns guidance for 2023 and 2024. Based on the current
path implied by the market for global policy rates, we are now targeting a RoTE in the mid-teens for 2023 and 2024, which excludes theimpact of material acquisitions and disposals.
– Given the current market consensus for global central bank rates, we have raised our 2023 full-year guidance for net interest income toabove $35bn. While the interest rate outlook remains positive, we expect continued migration to term deposits as short-term interest rates
rise.
– We continue to expect ECL charges of around 40bps of average gross loans in 2023 (including lending balances transferred to held forsale). There remains a degree of uncertainty in the forward economic outlook, particularly in the UK, and we are monitoring risks related to our
exposures in mainland China’s commercial real estate sector. Over the medium to long term, we continue to use a range of 30bps to 40bps of
average loans for planning our ECL charges.
– We remain highly focused on maintaining cost discipline. We continue to target operating expense growth of approximately 3% for 2023,
excluding the impact of foreign currency translation differences, notable items and the impact of retranslating the 2022 results ofhyperinflationary economies at constant currency. Our target also excludes the impact of our acquisition of SVB UK, and the related investmentsinternationally, which are expected to add approximately 1% to the Group‘s operating expenses. In 2Q23, we incurred severance costs of$0.2bn, with the benefits expected to be realised towards the end of 2023 and into 2024.
– We intend to manage the CET1 ratio within our medium term target range of 14% to 14.5%, and we aim to manage this range down in
the long term. In addition, our dividend payout ratio is 50% for 2023 and 2024, excluding material notable items. We have announced asecond interim dividend of $0.10 per share and intend to initiate a further share buy-back of up to $2bn, which we expect to commence shortly
and complete within three months. Further buy-backs for 2023 and beyond will be subject to appropriate capital levels.

2

HSBC Holdings plc 2023 Interim Results

Key financial metrics
Half-year to
30 Jun30 Jun2023
2022
Reported results
Profit before tax ($m)
Profit after tax ($m)
Cost efficiency ratio (%)
Net interest margin (%)
Basic earnings per share ($)
Diluted earnings per share ($)
Dividend per ordinary share (in respect of the period) ($)
Alternative performance measures
Constant currency profit before tax ($m)
Constant currency cost efficiency ratio (%)
Expected credit losses and other credit impairment charges (annualised) as % of average gross loans and advances to customers (%)
Expected credit losses and other credit impairment charges (‘ECL’) (annualised) as % of average gross loans and advances tocustomers, including held for sale (%)
Basic earnings per share excluding material notable items ($)1
Return on average ordinary shareholders’ equity (annualised) (%)
Return on average tangible equity (annualised) (%)
Return on average tangible equity excluding strategic transactions (annualised) (%)2
Target basis operating expenses ($m)3

Balance sheet
Total assets ($m)
Net loans and advances to customers ($m)
Customer accounts ($m)
Average interest-earning assets, year to date ($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 (%)4,5
Risk-weighted assets ($m)4,5
Total capital ratio (%)4,5
Leverage ratio (%)4,5
High-quality liquid assets (liquidity value, average) ($bn)5,6
Liquidity coverage ratio (average) (%)5,6
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)21,657
18,071
41.9
1.70
0.86
0.86
0.20

8,780
8,931
65.7
1.24
0.40
0.40
0.09

21,657
41.9
0.28

8,404
65.7
0.21

0.26

0.21

0.70
20.8
22.4
18.5
15,319

0.29
9.9
10.6
10.6
14,683At
30 Jun2023

31 Dec2022

3,041,476
959,558
1,595,769
2,162,662
60.1
184,170
153,234
8.44
7.84

2,949,286
923,561
1,570,303
2,143,754
58.8
177,833
146,927
8.01
7.44

14.7
859,545
19.8
5.8
631
132

14.2
839,720
19.3
5.8
647
132

19,534
19,67919,693

19,73919,876
19,849For reconciliations of our reported results to a constant currency basis, including lists of notable items, see page 39 of the Interim Report 2023.
Definitions and calculations of other alternative performance measures are included in our ‘Reconciliation of alternative performance measures’ on
page 57 of the Interim Report 2023.
1 At 2Q23, earnings per share included the impact of the provisional gain recognised in respect of the acquisition of SVB UK of $0.08 (2Q22: nil); thereversal of the impairment loss related to the planned sale of our retail banking operations in France of $0.08 (2Q22: nil); and the agreed sale of ourbanking business in Canada of $nil (2Q22: $nil). Additionally, the earnings per share at 2Q22 included the impact of the recognition of certain tax assets of$0.11.
2 Excludes impacts of the reversal of the impairment loss of $1.6bn (net of tax) relating to the planned sale of our retail banking operations in France, which
is no longer classified as held for sale, and the provisional gain of $1.5bn recognised in respect of the acquisition of SVB UK, both recognised in 1Q23.
3 Excluding the impact of retranslating prior year costs of hyperinflationary economies at constant currency.
4 Unless otherwise stated, regulatory capital ratios and requirements are based on the transitional arrangements of the Capital Requirements Regulation inforce at the time. At 30 June 2023, the IFRS 9 add-back to CET1 capital was immaterial. References to EU regulations and directives (including technicalstandards) should, as applicable, be read as references to the UK‘s version of such regulation or directive, as onshored into UK law under the European
Union (Withdrawal) Act 2018, and as may be subsequently amended under UK law.
5 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.
6 The liquidity coverage ratio is based on the average month-end value over the preceding 12 months.

HSBC Holdings plc 2023 Interim Results

3

Highlights
Half-year to
30 Jun30 Jun
2023
2022
$m
$m
Reported
Revenue1,2,3
Change in expected credit losses and other credit impairment charges
Operating expenses
Share of profit in associates and joint ventures
Profit before tax
Tax (charge)/credit
Profit after tax
Constant currency4
Revenue1,2,3
Change in expected credit losses and other credit impairment charges
Operating expenses
Share of profit in associates and joint ventures
Profit before tax
Tax (charge)/credit
Profit after tax
Notable items
Revenue
Disposals, acquisitions and related costs2,3
Fair value movements on financial instruments5
Restructuring and other related costs6
Operating expenses
Disposals, acquisitions and related costs
Restructuring and other related costs7
Tax
Tax (charge)/credit on notable items
Recognition of losses
Uncertain tax positions

36,876(1,345)(15,457)
1,583
21,657(3,586)
18,071

24,545(1,087)(16,127)
1,449
8,780
151
8,931

36,876(1,345)(15,457)
1,583
21,657(3,586)
18,071

23,647(1,074)(15,532)
1,363
8,404
227
8,631

3,321
15
—

(288)
(371)
68

(118)
47

—
(1,040)

(500)
—
427

242
2,082
(317)

1 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.
2 Includes the reversal of $2.1bn impairment loss relating to the planned sale of our retail banking operations in France, which is no longer classified as held
for sale.
3 Includes the provisional gain of $1.5bn recognised in respect of the acquisition of SVB UK in 1Q23.
4 Constant currency performance is computed by adjusting reported results of comparative periods for the effects of foreign currency translationdifferences, which distort period-on-period comparisons.
5 Fair value movements on non-qualifying hedges in HSBC Holdings.
6 Comprises gains and losses relating to the business update in February 2020, including losses associated with the RWA reduction programme.
7 In 2Q23, we recognised $47m of reversals relating to restructuring provisions recognised during 2022.

4

HSBC Holdings plc 2023 Interim Results

Review by Noel Quinn, Group Chief Executive
By the time we completed the first phase of our strategy at the end of 2022, the changes we had made were delivering an improved financial
performance. Six months into 2023, our financial performance has continued to improve, aided by the interest rate environment. As we movefurther into the next phase of our strategy focused on value creation, I am optimistic about our ability to continue to deliver strong returns for ourinvestors.
Our purpose of ‘opening up a world of opportunity’ underpins everything we do for our customers, colleagues and the communities we serve. In
the first half of 2023, we continued to deliver on that promise by launching new products and services, and developing our capabilities to meet theinternational needs of our diverse customer base. From the new international proposition for Wealth and Personal Banking customers launched in
March and the continued development of our Global Money and Global Wallet products, to the digitisation of international account opening and theglobally connected HSBC Innovation Banking business launched in June, there are many examples of how my colleagues are truly living our
purpose.
Many of these achievements contributed to our strong first-half performance, as we saw continued good revenue growth across all our global
businesses, supported by higher interest rates. We delivered a strong annualised return on tangible equity of 22.4%, including the reversal of an
impairment relating to the planned sale of our retail banking operations in France and a provisional gain on the acquisition of SVB UK, both of whichwere reported in the first quarter. Excluding them, we achieved an annualised return on tangible equity of 18.5%. Our strategy is working. The
Board, my colleagues and our shareholders are all focused on the shared objectives of supporting our customers, driving stronger performance andcreating more value for our investors.
The biggest challenge we all face remains the uncertainty within the external environment. High inflation remains a significant concern for many of
our customers. Even though headline inflation rates are now falling in most countries, they remain persistently high in some markets. In the UK, wehave seen limited signs of stress in the mortgage book, although we are acutely aware of the day-to-day financial challenges that some of ourcustomers face. With more mortgage customers due to roll off fixed-term deals in the next six months, and further rate rises expected, tougher
times are ahead. We will continue to communicate regularly with our customers, listen to their concerns, seek to offer them help should they wantit and ensure they are aware of the range of products available to them.
Across the global economy, growth remains uneven. China’s reopening at the start of the year lifted both its economy and the prospects for global
GDP growth in 2023, although weaker recent data underlines that its recovery may be slower than previously expected. Other parts of Asia, such
as India and the ASEAN region, are growing robustly, as is the Middle East.
From transformation to value creation
At the end of 2022, we completed the first phase of our strategy. As a result of the work done to transform HSBC, including to reposition our
portfolio, create broad-based profit generation, maintain strong cost discipline and introduce a sustainable dividend, we built a strong platform for
growth. This work helped to put HSBC on track to achieve a return on tangible equity of 12%+ in 2023.
In the first half of 2023, our strategic approach has changed from transformation to value creation. While there have been – and will continue to be– opportunities to further simplify HSBC, we have shifted our focus to driving growth, while maintaining strong returns.
First, we have further leveraged our international connectivity. Our ability to connect the world’s major trading and investment blocs has always
been, and remains, our greatest strength. In the first-half, our wholesale cross-border client business increased by around 50%, with growth acrossall regions, due mainly to rising interest rates. In Wealth and Personal Banking, we now have 6.3 million international customers, which is up 8% on
the same period last year. There was also strong revenue growth in global transaction banking, which was up by 63%. Within global transaction
banking, there were good performances in Foreign Exchange and in Global Payments Solutions, due to higher rates. Trade was slightly down in linewith global trade volumes, although HSBC was recently named ‘Best Bank for Trade Finance’ by Euromoney for the second year in a row, while
also being named ‘Best Bank in Asia’.
Second, we made further progress towards the redeployment of capital from less strategic or low-connectivity businesses into high-growthinternational opportunities. We are pleased to have agreed revised terms for the sale of our French retail banking operations, which we now expect
to complete in early 2024. The sale of our banking operations in Canada also remains on track to complete in early 2024. We have also completed
the disposal of our Greek business, and announced the planned exit of Russia, a change to the nature of our presence in Oman, and the wind-downof Wealth and Personal Banking in New Zealand.
At the same time, we are investing in growth in a strategic and targeted way. We have invested further in our Wealth business in Asia. We now
have a total of 1,400 digitally enabled wealth planners in our Pinnacle business in mainland China, while we launched Global Private Banking in India
in July. In June, following our acquisition of SVB UK, we also launched a new strengthened, globally connected proposition – HSBC Innovation
Banking. Through it, we are building similar businesses to the former SVB UK in the US, Hong Kong and Israel, and using our international networkand balance sheet strength to offer new opportunities to expand globally to our clients in the technology and life sciences sectors.
Third, we are working to diversify our revenue. A key strategic priority has been to grow fee income by investing in our Wealth business, especiallyin Asia. We saw the continuing benefit of this in the first-half as we grew net new invested assets by $34bn, of which $27bn were in Asia. Fee
income in Commercial Banking, which is another priority area, was also up in the first-half by 6%, while collaboration revenue from referrals
between our global businesses also increased by 5%.
Fourth, we have maintained tight cost discipline. Costs of $15.5bn in the first-half were $0.7bn or 4% lower than the same period last year,
primarily due to lower restructuring costs following the end of our cost-saving programme at the end of 2022. On the basis of our target to limit
cost growth to around 3% in 2023, operating expenses increased by 4% in the first-half, including the expected severance costs booked in thesecond quarter. We remain committed to disciplined cost management.
Fifth, we have reinvested cost savings in technology. Spending on technology increased by 12.8% in the first-half, and now accounts for almost aquarter of total operating expenses. Delivering faster services, reducing friction and offering more competitive products has been critical to
improving the customer experience. For example, we have now migrated over 26,000 business customers in Hong Kong and the UK to our next
generation digital trade platform, which is enabling us to future-proof a market-leading business.
Investing in technology is also key to enhancing our capabilities and building the bank of the future. We now have a range of ‘test and learn’ usecases for generative AI across HSBC, and are in the process of scaling those up. Last month, HSBC became the first bank to join BT’s andToshiba’s quantum-secured metro network employing quantum technology for secure transmission of data, which will enable us to evaluate how
best to use this technology against future cyber threats. We are also pleased to be working with the Hong Kong Monetary Authority on two pilots
to test the e-HKD in a new payments ecosystem and to trial tokenised deposits.

HSBC Holdings plc 2023 Interim Results

5

Finally, we continued to build on our position as an enabler of the net zero transition by supporting our customers’ transition plans. In the first-half,
we provided and facilitated $45bn of sustainable finance and investments, which consisted of capital markets financing and lending to clients as we
continued to work closely with them on their transitions. This included a number of key deals in Asia and the Middle East. We have also continued
to help unlock new climate solutions, including through our Climate Tech Venture Capital strategy. HSBC was named ‘Best Bank for Sustainable
Finance in Asia’ by Euromoney for the sixth consecutive year.
Translating into strong financial performance
Our strong first-half featured good broad-based profit generation around the world. There was also higher revenue in our global businesses driven
by strong net interest income, supported by continued tight cost control. We achieved an annualised return on tangible equity of 22.4%, or 18.5%
excluding the two material notable items reported with our first quarter results.
Profit before tax for the first half of 2023 was $21.7bn, which was an increase of $12.9bn on the first half of 2022. This included a $2.1bn reversalof an impairment relating to the planned sale of our retail banking operations in France and a provisional gain of $1.5bn on the acquisition of SVB
UK. Profit after tax increased by $9.1bn to $18.1bn.
Revenue increased by $12.3bn to $36.9bn, driven mainly by higher net interest income in all three global businesses due to interest rate rises. It
also included gains related to the two aforementioned transactions in the first quarter.
Expected credit losses and other credit impairment charges were $1.3bn, which was a $0.3bn increase on the first half of 2022.
Our CET1 ratio at the end of the first-half was 14.7%. We have announced a second interim dividend of $0.10 per share, further to the $0.10 per
share dividend already paid in respect of the first quarter. We are also announcing a second share buy-back of up to $2bn. We continue to expect tohave substantial distribution capacity going forward.
Our strong performance in the first half of 2023 and our continued strategic progress mean that we now expect to achieve a return on tangible
equity in the mid-teens for 2023 and 2024.
Thank you to my colleagues
Over the last six months, I had the opportunity to spend time with colleagues in France, Hong Kong, mainland China, Mexico, Saudi Arabia, theUnited Arab Emirates and the UK. I have been constantly impressed by their commitment, dedication and tireless efforts to support our customers– all of which are evident in our many achievements. I am especially grateful to those colleagues who have faced serious challenges so far thisyear, including the earthquakes in Türkiye in February and, of course, the ongoing cost of living crisis in many markets.
Overall, we have delivered a strong first-half performance and are confident of delivering our revised return on tangible equity target for 2023 and2024. I am also pleased that we can reward our shareholders with strong capital returns, with substantial further distribution capacity still expectedahead.
There is still much work to do, especially given the many challenges in the global economy, but I am confident about our future as we move further
into the next phase of our strategy and focus on opportunities to drive value creation, diversify our revenue and retain tight cost control.

Noel Quinn
Group Chief Executive
1 August 2023

6

HSBC Holdings plc 2023 Interim Results

Financial summary
Half-year to
30 Jun30 Jun
2023
2022
$m
$m
For the period
Profit before tax
Profit attributable to:– ordinary shareholders of the parent company
Dividends on ordinary shares1
At the period end
Total shareholders’ equity
Total regulatory capital
Customer accounts
Total assets
Risk-weighted assets
Per ordinary share
Basic earnings
Dividend per ordinary share (paid in the period)1
Net asset value2

21,657

8,780

16,966
6,591

7,966
3,576

184,170
170,021
1,595,769
3,041,476
859,545
$
0.86
0.33
8.44

178,975
158,519
1,651,301
2,970,481
851,743
$
0.40
0.18
7.94

1 The $0.33 dividend paid during the period consisted of a second interim dividend of $0.23 per ordinary share in respect of the financial year ended
31 December 2022 paid in April 2023 and a first interim dividend of $0.10 per ordinary share in respect of the financial year ending 31 December 2023.
2 The definition of net asset value per ordinary share is total shareholders equity, less non-cumulative preference shares and capital securities, divided by
the number of ordinary shares in issue, excluding own shares held by the company, including those purchased and held in treasury.

Distribution of results by global business
Constant currency profit before tax
Half-year to
30 Jun 2023
$m
Wealth and Personal Banking
Commercial Banking1
Global Banking and Markets1
Corporate Centre
Profit before tax

8,592
7,939
3,580
1,546
21,657

%
39.7
36.7
16.5
7.1
100.0

30 Jun 2022
$m
2,487
3,432
2,692
(207)
8,404

%
29.6
40.8
32.0
(2.4)
100.0

1 In the first quarter of 2023, following an internal review to assess which global businesses were best suited to serve our customers’ respective needs, a
portfolio of our customers within our entities in Latin America was transferred from GBM to CMB for reporting purposes. Comparative data have been represented accordingly.

Distribution of results by legal entity
Reported profit/(loss) before tax
Half-year to
30 Jun 2023$m
HSBC UK Bank plc
HSBC Bank plc
The Hongkong and Shanghai Banking Corporation Limited
HSBC Bank Middle East Limited
HSBC North America Holdings Inc.
HSBC Bank Canada
Grupo Financiero HSBC, S.A. de C.V.
Other trading entities1– of which: other Middle East entities (including Oman, Türkiye, Egypt and Saudi Arabia)– of which: Saudi Awwal Bank
Holding companies, shared service centres and intra-Group eliminations
Profit before tax

4,791
3,498
10,917
673
701
475
436
1,282
420
272
(1,116)
21,657

%
22.1
16.2
50.4
3.1
3.2
2.2
2.0
5.9
1.9
1.3
(5.1)
100.0

30 Jun 2022
$m
2,270
252
5,734
378
424
385
239
532
264
117
(1,434)
8,780

%
25.9
2.9
65.3
4.3
4.8
4.4
2.7
6.1
3.0
1.3
(16.4)
100.0

1 Other trading entities includes the results of entities located in Oman, Türkiye, Egypt and Saudi Arabia (including our share of the results of Saudi Awwal
Bank) which do not consolidate into HSBC Bank Middle East Limited. Supplementary analysis is provided on page 56 in the Interim Report 2023 for a
fuller picture of the MENAT regional performance.

HSBC Holdings plc 2023 Interim Results

7

HSBC constant currency profit before tax and balance sheet data
Half-year to 30 Jun 2023
Global
Wealth andBanking
Personal Commercial
andCorporate
Banking
Banking4
Markets4
Centre$m
Net operating income/(expense) before change in expected credit losses and othercredit impairment charges2– external– inter-segment– of which: net interest income/(expense)5
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
Constant currency profit before tax
Share of HSBC’s constant currency profit before tax
Constant currency cost efficiency ratio
Constant currency balance sheet data
Loans and advances to customers (net)
Interests in associates and joint ventures
Total external assets
Customer accounts
Constant currency risk-weighted assets3

$m

$m

Total

$m

$m

16,20012,216

8,501

(41)

36,876

12,416
3,784
10,299(502)
15,698(7,141)
8,557
35
8,592
%
39.7
44.1

12,897
(681)
8,375
(704)
11,512(3,572)
7,940
(1)
7,939
%
36.7
29.2

13,939(5,438)
3,546
(136)
8,365
(4,785)
3,580
—
3,580
%
16.5
56.3

(2,376)
2,335(3,956)
(3)
(44)
41
(3)
1,549
1,546
%
7.1
100.0

36,876—
18,264(1,345)35,531(15,457)
20,074
1,583
21,657
%
100.0
41.9

$m

$m

$m

$m

$m

463,836555
900,370809,864
186,564

319,24624
654,474
472,146
353,805

176,182107
1,342,110
313,126
227,024

294
28,860144,522
633
92,152

959,558
29,546
3,041,476
1,595,769
859,545

Half-year to 30 Jun 20221
Net operating income before change in expected credit losses and other credit
impairment charges2– external– inter-segment– of which: net interest income/(expense)5
Change in expected credit losses and other credit impairment charges
Net operating income/(expense)
Total operating expenses
Operating profit/(loss)
Share of profit in associates and joint ventures
Constant currency profit/(loss) before tax
Share of HSBC’s constant currency profit before tax
Constant currency cost efficiency ratio
Constant currency balance sheet data
Loans and advances to customers (net)
Interests in associates and joint ventures
Total external assets
Customer accounts
Constant currency risk-weighted assets3

10,058

7,055

7,459

(925)

23,647

9,665
393
6,493
(584)
9,474
(6,995)
2,479
8
2,487
%
29.6
69.5

7,199
(144)
4,817
(278)
6,777
(3,345)
3,432
—
3,432
%
40.8
47.4

8,357
(898)
2,009
(210)
7,249
(4,557)
2,692
—
2,692
%
32.0
61.1

(1,574)
649
(473)
(2)
(927)
(635)
(1,562)
1,355
(207)
%
(2.4)
(68.6)

23,647—
12,846(1,074)
22,573(15,532)
7,041
1,363
8,404
%
100.0
65.7

$m

$m

$m

$m

$m

482,962487
884,333
846,974
187,357

354,27331
628,040
491,115
347,619

200,082104
1,330,747
332,473
232,158557
27,468167,390589
82,424

1,037,874
28,0903,010,510
1,671,151
849,558

1 From 1 January 2023, we adopted IFRS 17 ‘Insurance Contracts’, which replaced IFRS 4 ‘Insurance Contracts’. Comparative data have been restatedaccordingly.
2 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.
3 Constant currency risk-weighted assets are calculated using reported risk-weighted assets adjusted for the effects of currency translation differences.
4 In the first quarter of 2023, following an internal review to assess which global businesses were best suited to serve our customers’ respective needs, a
portfolio of our customers within our entities in Latin America was transferred from GBM to CMB for reporting purposes. Comparative data have been represented accordingly.
5 Net interest expense recognised in the Corporate Centre includes $3.8bn (1H22: $0.4bn) of interest expense in relation to the internal cost to fund trading
and fair value net assets; and the funding cost of foreign exchange swaps in our Markets Treasury function. During 2Q23 we implemented a consistentreporting approach across the 14 most material entities that contribute to our trading and fair value net assets, which resulted in an increase to the 1H23
associated funding costs reported through the intersegment elimination in Corporate Centre of approximately $0.4bn, recognised in 2Q23.

8

HSBC Holdings plc 2023 Interim Results

Consolidated income statement
Half-year to1
30 Jun30 Jun
2023
2022
$m
$m
Net interest income– interest income– interest expense
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 throughprofit or loss
Insurance finance income/(expense)
Insurance service result– insurance revenue– insurance service expense
Gain on acquisitions2
Reversal of impairment loss relating to the planned sale of our retail banking operations in France3
Other operating income
Net operating income before change in expected credit losses and other credit impairment charges4
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 assets
Amortisation and impairment of intangible assets
Total operating expenses
Operating profit
Share of profit in associates and joint ventures
Profit before tax
Tax (charge)/credit
Profit for the period
Attributable to:– ordinary shareholders of the parent company– other equity holders– non-controlling interests
Profit for the period
Basic earnings per ordinary share
Diluted earnings per ordinary share

18,264
46,955(28,691)
6,085
7,947
(1,862)
8,112

13,385
19,788(6,403)
6,228
7,913(1,685)
4,856

4,304

(11,849)(4,234)
524
1,104
(580)
1,507
2,130
184
36,876(1,345)35,531(8,954)(4,912)(782)(809)(15,457)
20,074
1,583
21,657(3,586)
18,071

11,773
370
980
(610)
—
—
(218)
24,545(1,087)23,458(8,896)(5,337)(1,072)(822)(16,127)
7,331
1,449
8,780
151
8,931

16,966542
563
18,071
$
0.86
0.86

7,966
626
339
8,931
$
0.40
0.40

1 From 1 January 2023, we adopted IFRS 17 ‘Insurance Contracts’, which replaced IFRS 4 ‘Insurance Contracts’. Comparative data have been restatedaccordingly.
2 Provisional gain of $1.5bn recognised in respect of the acquisition of SVB UK.
3 Reversal of the $2.1bn impairment loss relating to the planned sale of our retail banking operations in France, which is no longer classified as held forsale.
4 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

HSBC Holdings plc 2023 Interim Results

9Consolidated statement of comprehensive income
Half-year to1
30 Jun30 Jun
2022
2023
$m
$m
Profit for the period
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 gains/(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 losses– fair value (gains)/losses reclassified to the income statement– income taxes and other movements
Share of other comprehensive income/(expense) of associates and joint ventures– share for the period
Net finance income/(expense) from insurance contracts2– before income taxes– income taxes
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
Effects of hyperinflation
Other comprehensive expense for the period, net of tax
Total comprehensive income/(expense) for the period
Attributable to:– ordinary shareholders of the parent company– other equity holders– non-controlling interests
Total comprehensive income/(expense) for the period

18,071

8,931

549
804
(63)
(3)
(189)
(1,062)(1,700)
227
411
101
101
(101)
(136)
35
(347)

(6,246)(8,120)
(52)
17
1,909
(2,063)(1,646)(1,127)
710
(142)
(142)
1,360
1,833
(473)
(8,382)

1
(112)
(105)
(7)
(653)
(867)
214
7
7
578
(1,039)17,032

—
95
(132)
227
2,263
3,030
(767)
158
158
428
(12,529)(3,598)15,986542
504
17,032(4,405)626
181(3,598)

1 From 1 January 2023, we adopted IFRS 17 ‘Insurance Contracts’, which replaced IFRS 4 ‘Insurance Contracts’. Comparative data have been restatedaccordingly.
2 Net finance income/(expense) from insurance contracts in other comprehensive income is the amount that offsets the effective interest rate andexpected credit losses on supporting assets that have been designated at fair value through other comprehensive income. In the first half of 2023,
movements in net finance income/(expense) from insurance contracts of $(101)m (1H22: $1,360m was booked, and offsetting fair value through othercomprehensive income (‘OCI‘) movements on supporting assets of $108m was recorded (1H22: (1,439)m).

10

HSBC Holdings plc 2023 Interim Results

Consolidated balance sheet
At1
30 Jun2023$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 sale
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 saleAccruals, deferred income and other liabilities
Current tax liabilities
Insurance contract liabilities
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 Dec2022$m

307,733
10,64942,407
255,387
104,303
272,595
100,921959,558
258,056
407,933
95,480175,473
1,262
29,546
11,9258,248
3,041,476

327,002
7,297
43,787218,093
100,101
284,159
104,475
923,561
253,754364,726
115,919
156,149
1,230
29,254
11,4198,360
2,949,286

42,407
68,7091,595,769
170,110
10,776
81,228
139,618
269,560
85,471
87,241
155,275
1,921
115,756
1,722
976
23,286
2,849,825

43,78766,722
1,570,303
127,747
7,864
72,353
127,321285,762
78,149114,597
134,3131,135
108,816
1,958
972
22,2902,764,089

10,073
14,737
19,392(9,935)
149,903
184,170
7,481
191,651
3,041,476

10,147
14,664
19,746(9,133)
142,409
177,833
7,364
185,1972,949,286

1 From 1 January 2023, we adopted IFRS 17 ‘Insurance Contracts’, which replaced IFRS 4 ‘Insurance Contracts’. Comparative data have been restatedaccordingly.

HSBC Holdings plc 2023 Interim Results

11Consolidated statement of changes in equity
Other reserves
Calledup sharecapitalandshare
premium$m

Otherequityinstru- Retained
ments earnings

Financial
Cash
Mergerassets atflow
Foreignand Insurance
FVOCI hedging exchange
otherfinancereserve reserve
reserve reserves
reserve1

Total
shareNonholders’ controlling
equityinterests

Total
equity

$m

$m

$m

$m

$m

$m

$m

$m

$m

$m

At 1 Jan 2023
Profit for the period
Other comprehensive income(net of tax)
– debt instruments at fair value
through othercomprehensive income– equity instruments
designated at fair value
through othercomprehensive income– cash flow hedges– changes in fair value offinancial liabilities designatedat fair value upon initialrecognition arising fromchanges in own credit risk

24,811—

19,746—

142,40917,508(7,038)—(3,808)—(32,575)—

33,209—1,079—

177,833
17,5087,364
563

185,197
18,071

—

—

(92)

560

(1,077)

(271)

1

(101)

(980)

(59)

(1,039)

—

—

—

546

—

—

—

—

546

3

549

—

—

—

14

—

—

—

—

14

(7)

7

—

—

—

—

(1,077)———(1,077)15(1,062)

—

—

(654)

—

—

—

—

—

(654)

1

(653)

– property revaluation– remeasurement of defined
benefit asset/liability– share of othercomprehensive income ofassociates and joint ventures– effects of hyperinflation– insurance finance income/(expense) recognised in othercomprehensive income– exchange differences
Total comprehensive income
for the period
Shares issued under employee
remuneration and share plans
Capital securities issued2
Dividends to shareholders
Redemption of securities3
Cost of share-based payment
arrangements
Share buy-back4
Cancellation of shares
Other movements5
At 30 Jun 2023

—

—

—

—

—

—

1

—

1

—

1

—

—

(117)

—

—

—

—

—

(117)

5

(112)

12

—

—

101

—

—

—

—

—

101

—

101

—

—

578

—

—

—

—

—

578

—

578

—

—

—

—

—

—

—

(101)

(101)

—

(101)

—

—

—

—

—

(271)

—

—

(271)

(76)

(347)

—

—

17,416560(1,077)

(271)

1

(101)

16,528504

17,032

78

—

(78)

—

—

—

—

—

—

—

—

—
—
—

1,996
—
(2,350)—(7,133)
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

1,996
(7,133)(2,350)

—
(375)
—

1,996
(7,508)(2,350)

—

—

228

—

—

—

—

—

228

—

228

—
(79)
—
24,810———19,392(2,007)—(932)
149,903——6(6,472)———(4,885)———(32,846)—79
1
33,290———978(2,007)—(925)
184,170

—
—
(12)
7,481

(2,007)—(937)
191,651

HSBC Holdings plc 2023 Interim Results

Consolidated statement of changes in equity (continued)
Other reserves
Called up
sharecapitaland share
premium
At 31 Dec 2021 (IFRS 4)
Impact on transition to IFRS 176
At 1 Jan 2022
Profit for the period
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– insurance finance income/(expense) recognised in othercomprehensive income– exchange differences
Total comprehensive income
for the period
Shares issued under employee
remuneration and share plans
Dividends to shareholders
Redemption of securities3
Cost of share-based payment
arrangements
Share buy-back4
Cancellation of shares
Other movements
At 30 Jun 2022

Other
equityinstruments

Retainedearnings

Financialassets at
FVOCI
reserveCashflowhedging
reserve

MergerForeignandexchangeotherreserve reserves

Insurance
financereserve1

Total
shareholders’equityNoncontrollinginterests

Total
equity

$m

$m

$m

$m

$m

$m

$m

$m

$m

$m

$m

24,918—24,918—22,414—
22,414—144,458(9,222)
135,236
8,592

(634)
683
49
—

(197)
—
(197)
—

(22,769)—(22,769)—

30,060—30,060
—

—
(696)
(696)
—

198,250(9,235)
189,015
8,592

8,527
(1,224)
7,303
339

206,777(10,459)
196,318
8,931

—

—

2,647

(6,062)(2,035)(8,282)—

1,360(12,372)(157)(12,529)———(6,183)

—

—

—

—

(6,183)(63)(6,246)

—

—

—

121

—

—

—

—

121

37

158

—

—

—

—

(2,035)———(2,035)(28)(2,063)

—

—

2,263

—

—

—

—

—

2,263

—

2,263

—

—

98

—

—

—

—

—

98

(3)

95

—

—

(142)

—

—

—

—

—

(142)

—

(142)

—

—

428

—

—

—

—

—

428

—

428

—

—

—

—

—

—

—

1,360

1,360

—

1,360

—

—

—

—

—

(8,282)——(8,282)(100)(8,382)——

11,240(6,062)(2,035)(8,282)—

1,360(3,779)181(3,598)

65

—

(65)

—

—

—

—

—

—

—

—

—
—

—
(723)

(4,202)
—

—
—

—
—

—
—

—
—

—
—

(4,202)
(723)

(295)
—

(4,497)
(723)

—

—

177

—

—

—

—

—

177

—

177

—
(133)
—
24,850———21,691(1,000)—(525)
140,860——2(6,011)———(2,232)———(31,051)—
133
11
30,204———664(1,000)—(512)
178,975

—
—
(60)
7,130

(1,000)—(572)
186,105

HSBC Holdings plc 2023 Interim Results

13Consolidated statement of changes in equity (continued)
Other reserves
Called up
sharecapitaland share
premium

Other
equityinstru- Retained
ments earnings

Financialassets at
FVOCI
reserve

Cash
Mergerflow
Foreignand Insurance
hedging exchange
otherfinancereserve
reserve reserves reserve1

Total
shareNonholders’ controlling
equityinterests

Total
equity

$m

$m

$m

$m

$m

$m

$m

$m

$m

$m

$m

At 1 Jul 2022
Profit for the period
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

24,850—21,691—

140,860
6,967(6,011)—(2,232)—(31,051)—

30,204—664—

178,975
6,967

7,130
351

186,105
7,318

—

—

(1,244)(1,027)(1,578)(1,524)174

415(4,784)71(4,713)

—

—

—

(998)

—

—

—

—

(998)

12

(986)

– property revaluation– remeasurement of defined
benefit asset/liability– share of othercomprehensive income ofassociates and joint ventures– effects of hyperinflation– insurance finance income/(expense) recognised in othercomprehensive income– exchange differences
Total comprehensive income
for the period
Shares issued under employee
remuneration and share plans
Dividends to shareholders
Redemption of securities3
Cost of share-based payment
arrangements
Transfers7
Cancellation of shares4
Other movements
At 31 Dec 2022

—

—

—

(29)

—

—

—

—

(29)

(22)

(51)

—

—

—

—

(1,578)———(1,578)(14)(1,592)

—

—

(341)

—

—

—

—

—

(341)

—

(341)

—

—

—

—

—

—

174

—

174

106

280

—

—

(1,127)

—

—

—

—

—

(1,127)

1(1,126)

—

—

(225)

—

—

—

—

—

(225)

—

(225)

—

—

449

—

—

—

—

—

449

—

449

—

—

—

—

—

—

—

415

415

—

415

—

—

—

—

—

(1,524)——(1,524)(12)(1,536)

—

—

5,723

(1,027)(1,578)(1,524)

174

415

2,183

423

2,606

2

—

(2)

—

—

—

—

—

—

—

—

—
—

—
(1,945)(2,342)
402

—
—

—
—

—
—

—
—

—
—

(2,342)(1,543)(131)—(2,473)(1,543)

—

—

223

—

—

—

—

—

223

—

223

—
(41)
—
24,811———
19,746(2,499)—44
142,409———(7,038)——2(3,808)———(32,575)

2,499
41
291
33,209

—
—
—
1,079

—
—
337
177,833

—
—
(57)
7,364

—
—
280
185,197

1 The insurance finance reserve reflects the unwinding of the discount rate on insurance liabilities for which the OCI option has been elected for our
insurance business in France. It is recorded after excluding the amount that offsets the effective interest rate and expected credit losses on supporting
assets that have been designated at fair value through other comprehensive income.
2 During 2023, HSBC Holdings issued $2,000m of contingent convertible securities on which there were $4m of external issue costs.
3 During 2023, HSBC Holdings redeemed $2,350m contingent convertible securities. In 2022, HSBC Holdings redeemed €1,500m 5.250% and SGD1,000m
5.875% contingent convertible securities.
4 In February 2022 HSBC announced a share buy-back of up to $1.0bn, which concluded in July 2022. Additionally, in May 2023, HSBC Holdings announced
a share buy-back of up to $2.0bn.
5 Includes a payment of $749m (1H22: $435m) to the HSBC Holdings Employee Benefit Trust 2001 (No. 2) to purchase shares in order to settle liabilities onGroup share plans.
6 The impact of IFRS 17 on previously reported total equity was $(10,585)m at 30 June 2022 and $(10,831)m at 31 December 2022.
7 Permitted transfers from the merger reserve to retained earnings were made when the investment in HSBC Overseas Holdings (UK) Limited waspreviously impaired. In 2022, part-reversals of these impairments resulted in transfers from retained earnings back to the merger reserve of $2,499m.

14HSBC Holdings plc 2023 Interim Results

Consolidated statement of cash flows
Half-year to1
30 Jun30 Jun
2022
2023
$m
$m
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(Gain)/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 differences2
Change in operating assets
Change in operating 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 deposits and loan portfolios
Net investment in intangible assets
Net cash flow on (acquisition)/disposal of subsidiaries, businesses, associates and joint ventures3
Net cash from investing activities
Issue of ordinary share capital and other equity instruments
Cancellation of shares
Net sales/(purchases) of own shares for market-making and investment purposes
Net cash flow from change in stakes of subsidiaries
Redemption of preference shares and other equity instruments
Subordinated loan capital issued
Subordinated loan capital repaid
Dividends paid to shareholders of the parent company and non-controlling interests
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Exchange differences in respect of cash and cash equivalents
Cash and cash equivalents at the end of the period

21,657

8,780

1,591
(41)
(1,583)(3,604)
1,482
148
228
(1,661)(6,558)(52,745)
72,836124(87)(1,664)30,123(298,182)
263,838(329)—(1,123)
1,228(34,568)
1,996(1,273)(823)—(2,350)2,744(1,044)(7,508)(8,258)(12,703)521,671
8,565
517,533

1,894
173(1,449)
(71)
1,242
201
177
82
48,921
19,713(35,752)
60(102)(1,264)42,605(265,427)
247,517(589)(3,756)(1,240)(525)(24,020)—(1,840)
(443)
(197)
(723)
2,659
(11)
(4,497)(5,052)
13,533574,032(40,243)547,322

Interest received was $46,817m (1H22: $20,957m), interest paid was $29,222m (1H22: $7,146m) and dividends received (excluding dividends
received from associates, which are presented separately above) were $751m (1H22: $800m).
1 From 1 January 2023, we adopted IFRS 17 ‘Insurance Contracts’, which replaced IFRS 4 ‘Insurance Contracts’. Comparative data have been restatedaccordingly.
2 Adjustments 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.
3 The ‘Net cash flow on (acquisition)/disposal of subsidiaries, businesses, associates and joint ventures’ includes $1.2bn of net cash inflow on acquisition of
Silicon Valley Bank UK Limited in March 2023.
4 Includes $7.5bn (1H22: $1.7bn) of cash and cash equivalents classified as held for sale.

HSBC Holdings plc 2023 Interim Results

15

1

Basis of preparation and significant accounting policies(a)Compliance with International Financial Reporting Standards

Our interim condensed consolidated financial statements have been prepared on the basis of the policies set out in the 2022 annual financial
statements, except for those relating to IFRS 17 ‘Insurance Contracts’ and amendments to IAS 12 ‘Income Taxes’. They have also been preparedin accordance with IAS 34 ‘Interim Financial Reporting’ as adopted by the UK, IAS 34 ‘Interim Financial Reporting’ as issued by the International
Accounting Standards Board (‘IASB’), IAS 34 ‘Interim Financial Reporting’ as adopted by the EU, and the Disclosure Guidance and Transparency
Rules sourcebook of the UK’s Financial Conduct Authority. Therefore, they include an explanation of events and transactions that are significant toan understanding of the changes in HSBC’s financial position and performance since the end of 2022.
These financial statements should be read in conjunction with the Annual Report and Accounts 2022, which was prepared in accordance with UKadopted international accounting standards in conformity with the requirements of the Companies Act 2006 and international financial reporting
standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. These financial statements were also prepared inaccordance with International Financial Reporting Standards (‘IFRSs’) as issued by the IASB, including interpretations issued by the IFRSInterpretations Committee. These financial statements should be read in conjunction with the information about the application of IFRS 17‘Insurance Contracts’ as set out below and the new policies for insurance contracts as described on pages 7 to 9 of our Report on Transition to
IFRS 17 ‘Insurance Contracts’ issued on 2 May 2023.
At 30 June 2023, there were no IFRSs effective for the half-year to 30 June 2023 affecting these financial statements that were not approved for
adoption in the UK by the UK Endorsement Board. With the exception of amendments to IAS 12 ‘International Tax Reform – Pillar Two Model
Rules’, which is expected to be endorsed by the EU in the second half of 2023, there was no difference between IFRSs adopted by the UK, IFRSs
as adopted by the EU, and IFRSs issued by the IASB in terms of their application to HSBC.

Standards applied during the half-year to 30 June 2023
IFRS 17 ‘Insurance Contracts’
On 1 January 2023, the Group adopted the requirements of IFRS 17 ‘Insurance Contracts’ retrospectively with comparatives restated from thetransition date, 1 January 2022. At transition, the Group’s total equity reduced by $10,459m.
On adoption of IFRS 17, balances based on IFRS 4, including the present value of in-force long-term insurance business (‘PVIF’) asset in relation to
the upfront recognition of future profits of in-force insurance contracts, were derecognised. Insurance contract liabilities have been remeasured
under IFRS 17 based on groups of insurance contracts, which include the fulfilment cash flows comprising the best estimate of the present valueof the future cash flows (for example premiums and payouts for claims, benefits, and expenses), together with a risk adjustment for non-financial
risk, as well as the contractual service margin (‘CSM’). The CSM represents the unearned profits that will be released and systematicallyrecognised in insurance revenue as services are provided over the expected coverage period.
In addition, the Group has made use of the option under the standard to re-designate certain eligible financial assets held to support insurance
contract liabilities, which were predominantly measured at amortised cost, as financial assets measured at fair value through profit or loss, withcomparatives restated from the transition date.

16

HSBC Holdings plc 2023 Interim Results

The key differences between IFRS 4 and IFRS 17 are summarised in the following table:

IFRS 4IFRS 17

Balance sheet– Insurance contract liabilities for non-linked life insurance– Insurance contract liabilities are measured for groups ofcontracts are calculated by local actuarial principles. Liabilities
insurance contracts at current value, comprising the fulfilment
under unit-linked life insurance contracts are at least
cash flows and the CSM.
equivalent to the surrender or transfer value, by reference to– The fulfilment cash flows comprise the best estimate of thethe value of the relevant underlying funds or indices. Grouping
present value of the future cash flows, together with a risk
requirements follow local regulations.
adjustment for non-financial risk.
– An intangible asset for the PVIF is recognised, representing– The CSM represents the unearned profit.
the upfront recognition of future profits associated with inforce insurance contracts.

Profit emergence/
recognition– The value of new business is reported as revenue on Day 1 as – The CSM is systematically recognised in revenue as services
an increase in PVIF.
are provided over the expected coverage period of the groupof contracts (i.e. no Day 1 profit).
– The impact of the majority of assumption changes isrecognised immediately in the income statement.
– Contracts are measured using the general measurement
model (‘GMM’) or the variable fee approach (‘VFA’) model for– Variances between actual and expected cash flows are
insurance contracts with direct participation features uponrecognised in the period they arise.
meeting the eligibility criteria. Under the VFA model, theGroup’s share of the investment experience and assumptionchanges are absorbed by the CSM and released over time toprofit or loss. For contracts measured under GMM, theGroup’s share of the investment volatility is recorded in profit
or loss as it arises.
– Losses from onerous contracts are recognised in the income
statement immediately.
– PVIF is calculated based on long-term investment return– Under the market consistent approach, expected futureassumptions based on assets held. It therefore includes
investment spreads are not included in the investment returninvestment margins expected to be earned in future.
assumption. Instead, the discount rate includes an illiquidity
premium that reflects the nature of the associated insurance
contract liabilities.

Investment returnassumptions(discount rate)

Expenses– Total expenses to acquire and maintain the contract over its
lifetime are included in the PVIF calculation.
– Expenses are recognised across operating expenses and fee
expense as incurred and the allowances for those costs
released from the PVIF simultaneously.

– Projected lifetime expenses that are directly attributable costs
are included in the insurance contract liabilities andrecognised in the insurance service result.
– Non-attributable costs are reported in operating expenses.

There were no other new standards or amendments to standards that had an effect on these interim condensed financial statements.

(b) Use of estimates and judgements
Management believes that the critical accounting estimates and judgements applicable to the Group are those that relate to impairment ofamortised cost and FVOCI debt financial assets, the valuation of financial instruments, deferred tax assets, provisions, interests in associates,
impairment of goodwill and non-financial assets, post-employment benefit plans, and non-current assets and disposal groups held for sale.
There were no material changes in the current period to any of the critical accounting estimates and judgements disclosed in 2022, which arestated on pages 99 and 337 to 347 of the Annual Report and Accounts 2022.

(c) Composition of the Group
There were no material changes in the composition of the Group in the half-year to 30 June 2023. For further details of future business acquisitions
and disposals, see Note 15 ‘Assets held for sale, liabilities of disposal groups held for sale and business acquisitions’ in the Interim Report 2023.

(d) 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, as well as considering potential impacts from other top and emerging risks, and the related impact on
profitability, capital and liquidity.

(e) Accounting policies
The accounting policies that we applied for these interim condensed consolidated financial statements are consistent with those described on
pages 335 to 348 of the Annual Report and Accounts 2022, as are the methods of computation, with the exception of those relating to IFRS 17 andamendments to IAS 12 as described above.

HSBC Holdings plc 2023 Interim Results

17

2

Dividends

On 1 August 2023, the Directors approved a second interim dividend for 2023 of $0.10 per ordinary share in respect of the financial year ending
31 December 2023. This distribution amounts to approximately $1.974bn and will be payable on 21 September 2023. No liability is recognised in
the financial statements in respect of these dividends.
Dividends paid to shareholders of HSBC Holdings plc
Half-year to
30 Jun 2023
30 Jun 2022
Per share
Total
Per share
Total
$
$m
$
$m
Dividends paid on ordinary shares
In respect of previous year:– second interim dividend
In respect of current year:– first interim dividend
Total
Total coupons on capital securities classified as equity
Dividends to shareholders

0.23

4,590

0.18

3,576

0.10
0.33

2,001
6,591
542
7,133

—
0.18

—
3,576
626
4,202

Second interim dividend for 2023
On 1 August 2023, the Directors approved a second interim dividend in respect of the financial year ending 31 December 2023 of $0.10 per
ordinary share, a distribution of approximately $1.974bn. The dividend will be payable on 21 September 2023 to holders on the Principal Register in
the UK, the Hong Kong Overseas Branch Register or the Bermuda Overseas Branch Register on 11 August 2023.
The 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 11 September 2023. Particulars of these arrangements will be sent to shareholders on or about 18 August 2023
and changes to currency elections must be received by 7 September 2023. The ordinary shares in London, Hong Kong and Bermuda, and American
Depositary Shares (‘ADSs’) in New York will be quoted ex-dividend on 10 August 2023.
The dividend will be payable on ADSs, each of which represents five ordinary shares, on 21 September 2023 to holders of record on
11 August 2023. The dividend of $0.50 per ADS will be payable by the depositary in US dollars. Alternatively, the cash dividend may be invested inadditional ADSs by participants in the dividend reinvestment plan operated by the depositary. Elections must be received by 1 September 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 Overseas Branch
Registrar or Bermuda Overseas Branch Registrar should do so before 4.00pm local time on 11 August 2023 in order to receive the dividend.
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 11 August 2023. Any person wishing to remove ordinary shares to or from each register must do so before
4.00pm local time on 10 August 2023.
Transfer of ADSs must be lodged with the depositary by 11.00am on 11 August 2023 in order to receive the dividend. ADS holders who receive acash dividend will be charged a fee, which will be deducted by the depositary, of $0.005 per ADS per cash dividend.

Dividend on preference share
A quarterly dividend of £0.01 per Series A sterling preference share is payable on 15 March, 15 June, 15 September and 15 December 2023 for thequarter then ended at the sole and absolute discretion of the Board of HSBC Holdings plc. Accordingly, the Board of HSBC Holdings plc has
approved a quarterly dividend to be payable on 15 September 2023 to holders of record on 31 August 2023.

3

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 the basic
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 of dilutive
potential ordinary shares.
Basic and diluted earnings per shareHalf-year to1
30 Jun 2023
NumberProfitof shares$m(millions)
Basic2
Effect of dilutive potential ordinary shares
Diluted2

16,966
16,966

19,693
136
19,829Amountper share
$
0.86
—
0.86

30 Jun 2022
Number Amount per
Profitof shares
share$m(millions)
$
7,966
7,966

19,954131
20,085

1 From 1 January 2023, we adopted IFRS 17 ‘Insurance Contracts’, which replaced IFRS 4 ‘Insurance Contracts’. Comparative data have been restatedaccordingly.
2 Weighted average number of ordinary shares outstanding (basic) or assuming dilution (diluted).

18

HSBC Holdings plc 2023 Interim Results

0.40
0.40

4

Constant currency balance sheet reconciliationAt
30 Jun 2023
Reported andconstant
currency$m

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

959,558
29,546
3,041,476
1,595,769

At 30 June 20221

At 31 Dec 20221

Constant
currency

Currencytranslation

Reported

Constant
currency

Currencytranslation

$m

$m

$m

$m

$m

$m

1,037,874
28,0903,010,510
1,671,151

10,853(1,356)40,02919,8501,027,021
29,4462,970,481
1,651,301

936,613
28,384
2,995,590
1,592,396

13,052(870)
46,30422,093

923,561
29,254
2,949,286
1,570,303

Reported

1 From 1 January 2023, we adopted IFRS 17 ‘Insurance Contracts’, which replaced IFRS 4 ‘Insurance Contracts’. Comparative data have been restatedaccordingly.

51

Reported and constant currency results

Half-year to2
30 Jun30 Jun
2023
2022
$m
$m
Revenue3
Reported
Currency translation
Constant currency
Change in expected credit losses and other credit impairment charges
Reported
Currency translation
Constant currency
Operating expenses
Reported
Currency translation
Constant currency
Share of profit in associates and joint ventures
Reported
Currency translation
Constant currency
Profit before tax
Reported
Currency translation
Constant currency
Profit after tax
Reported
Currency translation
Constant currency

36,87636,876(1,345)(1,345)(15,457)(15,457)
1,583
1,583
21,65721,657
18,071
18,071

24,545(898)
23,647(1,087)13(1,074)(16,127)595(15,532)
1,449
(86)
1,363
8,780
(376)
8,404
8,931
(300)
8,631

1 In the current period constant currency results are equal to reported as there is no currency translation.
2 From 1 January 2023, we adopted IFRS 17 ‘Insurance Contracts’, which replaced IFRS 4 ‘Insurance Contracts’. Comparative data have been restatedaccordingly.
3 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

HSBC Holdings plc 2023 Interim Results

19Notable items
Half-year to
30 Jun30 Jun
2023
2022
$m
$m
Revenue
Disposals, acquisitions and related costs1,2
Fair value movements on financial instruments3
Restructuring and other related costs4
Operating expenses
Disposals, acquisitions and related costs
Restructuring and other related costs5
Tax
Tax (charge)/credit on notable items
Recognition of losses
Uncertain tax positions

3,321
15
—

(288)
(371)
68

(118)
47

—
(1,040)

(500)
—
427

242
2,082
(317)

1 Includes the reversal of $2.1bn impairment loss relating to the planned sale of our retail banking operations in France, which is no longer classified as held
for sale.
2 Includes the provisional gain of $1.5bn recognised in respect of the acquisition of SVB UK.
3 Fair value movements on non-qualifying hedges in HSBC Holdings.
4 Comprises gains and losses relating to the business update in February 2020, including losses associated with the RWA reduction programme.
5 In 2Q23 we recognised $47m of reversals relating to restructuring provisions recognised during 2022.

6

Contingent liabilities, contractual commitments and guarantees

Guarantees and other contingent liabilities:– financial guarantees– performance and other guarantees– other contingent liabilities
At the end of the period
Commitments:1– 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 the end of the periodAt
30 Jun2023$m

31 Dec2022$m

18,88289,758590
109,230

18,78388,240676
107,699

7,698
72,340793,256873,2948,241
50,852
768,761
827,854

1 Includes $649,526m of commitments at 30 June 2023 (31 December 2022: $618,788m), to which the impairment requirements in IFRS 9 are applied
where HSBC has become party to an irrevocable commitment.

Contingent liabilities arising from legal proceedings and regulatory and other matters against Group companies are excluded from this note but are
disclosed in Note 7 below and Notes 11 and 13 of the Interim Report 2023.

7

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 from thematters described below, HSBC considers that none of these matters are material. The recognition of provisions is determined in accordance withthe accounting policies set out in Note 1 of the 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 have been made in respect ofthese matters as at 30 June 2023 (see Note 11 of the Interim Report 2023). 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 constitutean admission of wrongdoing or legal liability. It is not practicable to provide an aggregate estimate of potential liability for our legal proceedings andregulatory 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 thetime HSBC serviced the funds are estimated to have totalled approximately $4bn. Various HSBC companies have been named as defendants inlawsuits arising out of Madoff Securities’ fraud.
US litigation: The Madoff Securities Trustee has brought lawsuits against various HSBC companies and others, seeking recovery of transfers from
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’).

20

HSBC Holdings plc 2023 Interim Results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 theSouthern District of New York 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 theliquidators 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.
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 the various
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
Since November 2014, a number of lawsuits have been filed in federal courts in the US against various HSBC companies and others on behalf ofplaintiffs who are, or are related to, victims of terrorist attacks in the Middle East. In each case, it is alleged that the defendants aided and abetted
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, the appellate courts
affirmed the dismissals of two of the cases, and the plaintiffs are seeking review of these decisions by the US Supreme Court. 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 these matters, including the timing or any
possible impact on HSBC, which could be significant.

Interbank offered rates investigation 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 based ona 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 ofJustice dismissed an appeal by HSBC and upheld the EC’s findings on HSBC’s liability. A separate appeal by HSBC concerning the amount of thefine 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 federal
and state courts 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 and racketeering laws and the Commodity Exchange Act (‘US CEA’). The lawsuits include individual and putative class actions,most of which have been transferred and/or consolidated for pre-trial purposes before the US District Court for the Southern District of New York.
HSBC has reached class settlements with five groups of plaintiffs, and the court has approved these settlements. HSBC has also resolved severalof the individual actions, although a number of other US dollar Libor-related actions remain pending.
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.

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 March 2023, HSBC Bank plc’s and
HSBC Bank USA’s applications to dismiss the revised complaint were denied and, in April 2023, HSBC Bank plc and HSBC Bank USA appealed thedecision to the South African Competition Appeal Court.
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 US District Court for the Southern District of New York 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 foreignexchange products, and the court has granted final approval of these settlements. A putative class action by a group of retail customers of foreignexchange products remains pending.
HSBC Holdings plc 2023 Interim Results21

In 2018, complaints alleging foreign exchange-related misconduct were filed in the US District Court for the Southern District of New York and theHigh Court of England and Wales against HSBC and other defendants by certain plaintiffs that opted out of the direct purchaser class action
settlement in the US. HSBC has reached a settlement with the plaintiffs to resolve these claims. These matters are now closed. In January 2023,
HSBC reached a settlement-in-principle with plaintiffs in Israel to resolve a class action filed in the local courts alleging foreign exchange-related
misconduct. The settlement remains subject to the negotiation of definitive documentation and court approval. Lawsuits alleging foreign exchangerelated misconduct remain pending against HSBC and other banks in courts in Brazil. It is possible that additional civil actions will be initiatedagainst 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 the pending matters, which could besignificant.

Precious metals fix-related litigation
Gold: Since 2015, numerous putative class actions have been 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, the defendants
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: HSBC and other members of The London Silver Market Fixing Limited are defending a class action pending in the US District Court for theSouthern District of New York alleging that, from January 2007 to December 2013, the defendants conspired to manipulate the price of silver andsilver derivatives for their collective benefit in violation of US antitrust laws, the US CEA and New York state law. In May 2023, the court granted
the defendants’ motion to dismiss. The plaintiffs have appealed the dismissal, and this appeal 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 theprice of silver and silver derivatives in violation of the Canadian Competition Act and common law. These actions are ongoing.
Platinum and palladium: HSBC and other members of The London Platinum and Palladium Fixing Company Limited are defending a class action
pending in the US District Court for the Southern District of New York alleging that, from January 2008 to November 2014, the defendants
conspired to manipulate the price of platinum group metals and related financial products for their collective benefit in violation of US antitrust laws
and the US CEA. In February 2023, the court reversed an earlier dismissal of the plaintiffs’ third amended complaint, and this matter is proceeding.
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.

Gilts trading investigation and litigation
Since 2018, the UK Competition and Markets Authority (‘CMA’) has been investigating HSBC and four other banks for suspected anti-competitive
conduct in relation to the historical trading of gilts and related derivatives. In May 2023, the CMA announced its case against HSBC Bank plc and
HSBC Holdings, and both HSBC companies are contesting the CMA’s allegations.
In June 2023, HSBC Bank plc and HSBC Securities (USA) Inc., among other banks, were named as defendants in a putative class action filed in the
US District Court for the Southern District of New York by plaintiffs alleging anti-competitive conduct in the gilts market. This matter is at an earlystage. It is possible that additional civil actions will be initiated against HSBC in relation to its historical gilts trading activities.
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.

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 competition andlaw enforcement authorities, as well as litigation, in connection with various matters relating to the firm’s businesses and operations, including:– 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;– investigations by prosecuting authorities in Germany and France in connection with the dividend withholding tax treatment of certain trading
activities;– 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 with the CFTC to resolve this investigation, and this matter is now closed;– investigations by the CFTC and the 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 reached settlementswith the CFTC and SEC to resolve these investigations, and these matters are now closed;– investigations by tax administration, regulatory and law enforcement authorities in various countries in connection with allegations of tax evasionor tax fraud, money laundering and unlawful cross-border banking solicitation;– a lawsuit brought in the US District Court for the Northern District of California, by First-Citizens Bank & Trust Company (‘First Citizens’) against
various HSBC companies and seven HSBC US employees who had previously worked for Silicon Valley Bank (‘SVB’) alleging, among otherthings, that HSBC conspired with the individual defendants to solicit employees from First Citizens and that the individual defendants took
confidential information belonging to SVB and/or First Citizens;– litigation brought against various HSBC companies in New York State court 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 to have the defendants repurchase various mortgage loans;– a putative class action brought in the US District Court for the Southern District of New York relating to the Mexican government bond market;– claims issued by two separate investor groups against HSBC UK Bank plc (as successor to HSBC Private Bank (UK) Limited (‘PBGB’)) in theHigh Court of England and Wales in connection with PBGB’s role in the development of Eclipse film finance schemes; and– two group actions pending in federal courts in the US and a claim issued in the High Court of England and Wales in connection with HSBC Bank
plc’s role as a correspondent bank to Stanford International Bank Ltd from 2003 to 2009. HSBC Bank plc has reached settlements with theplaintiffs in the US and UK to resolve these claims. The US settlement is subject to court approval and the UK settlement has concluded.
22

HSBC Holdings plc 2023 Interim Results

There are many factors that may affect the range of outcomes, and the resulting financial impact, of the pending matters, which could besignificant.

8

Events after the balance sheet date

On 28 July 2023 HSBC Continental Europe completed the sale of its branch operations in Greece to Pancreta Bank SA. A loss of $0.1bn, including
goodwill impairment was recognised upon reclassification to held for sale in accordance with IFRS 5 in the second quarter of 2022.
A second interim dividend for 2023 of $0.10 per ordinary share in respect of the financial year ending 31 December 2023 was approved by the
Directors on 1 August 2023, as described in Note 2. On 1 August 2023, HSBC Holdings announced a share buy-back programme to purchase its
ordinary shares up to a maximum consideration of $2.0bn, which is expected to commence shortly and complete within three months.

9

Capital structure

Capital ratios
At
30 Jun2023%
Transitional basis
Common equity tier 1 ratio
Tier 1 ratio
Total capital ratio
End point basis
Common equity tier 1 ratio
Tier 1 ratio
Total capital ratio

31 Dec
2022
%

14.7
17.0
19.8

14.2
16.6
19.3

14.7
17.0
19.3

14.2
16.6
18.7

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

At
30 Jun2023$m

31 Dec2022$m

126,418
19,382
24,221
170,021859,545

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

126,418
19,382
20,091
165,891
859,545

119,291
19,77618,091
157,158
839,720At
30 Jun2023$bn

31 Dec2022$bn

Leverage ratio1

Tier 1 capital (leverage)
Total leverage ratio exposure
Leverage ratio

145.8
2,497.9
%
5.8

139.1
2,417.2%
5.8

1 Leverage ratio calculation is in line with the PRA’s UK leverage rules. This includes IFRS 9 transitional arrangement and excludes central bank claims. At
30 June 2023, the IFRS 9 add-back to CET1 capital and the related tax charge were immaterial.

Unless otherwise stated, all figures are calculated using the EU‘s regulatory transitional arrangements for IFRS 9 ‘Financial Instruments’ in article
473a of the Capital Requirements Regulation.

HSBC Holdings plc 2023 Interim Results

23

10 Statutory accounts
The information in this media release is unaudited and does not constitute statutory accounts within the meaning of section 434 of the Companies
Act 2006. The statutory accounts of HSBC Holdings plc for the year ended 31 December 2022 have been delivered to the Registrar of Companies
in England and Wales in accordance with section 447 of the Companies Act 2006. The Group’s auditor, PricewaterhouseCoopers LLP (‘PwC’) has
reported on those accounts. Its report was unqualified, did not include a reference to any matters to which PwC drew attention by way ofemphasis without qualifying its report and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
The information in this media release does not constitute the unaudited interim condensed financial statements which are contained in the Interim
Report 2023. The Interim Report 2023 was approved by the Board of Directors on 1 August 2023. The unaudited interim condensed financial
statements included in the Interim Report 2023 have been reviewed by the Group’s auditor, PwC, in accordance with International Standard on
Review Engagements (UK) 2410, ‘Review of Interim Financial Information Performed by the Independent Auditor of the Entity’ issued by the
Financial Reporting Council for use in the United Kingdom. The full report of its review, which was unmodified, is included in the Interim Report2023.

11 Dealings in HSBC Holdings listed securities
HSBC has policies and procedures that, except where permitted by statute and regulation, prohibit it undertaking specified transactions in respectof its securities listed on The Stock Exchange of Hong Kong Limited (‘HKEx’). Except for dealings as intermediaries or as trustees by subsidiaries of
HSBC Holdings, or in relation to the HSBC Holdings ordinary share buy-back, neither HSBC Holdings nor any of its subsidiaries has purchased, soldor redeemed any of its securities listed on HKEx during the half-year ended 30 June 2023.

12 Earnings release and final results
An earnings release for the three-month period ending 30 September 2023 is expected to be issued on 30 October 2023. The results for the year to
31 December 2023 are expected to be announced on 21 February 2024.

13 Corporate governance
We are subject to corporate governance requirements in both the UK and Hong Kong. Throughout the six months ended 30 June 2023, wecomplied with the applicable provisions of the UK Corporate Governance Code, and also the requirements of the Hong Kong Corporate GovernanceCode. The UK Corporate Governance Code is available at www.frc.org.uk and the Hong Kong Corporate Governance Code is available atwww.hkex.com.hk.
Under the Hong Kong Code, the Group Audit Committee should be responsible for the oversight of all risk management and internal control
systems, unless expressly addressed by a separate risk committee. Our Group Risk Committee is responsible for oversight of internal control,
other than internal financial controls, and risk management systems.
The Board has codified obligations for transactions in Group securities in accordance with the requirements of the Market Abuse Regulation andthe rules governing the listing of securities on the HKEx, save that the HKEx has granted waivers from strict compliance with the rules that take
into account accepted practices in the UK, particularly in respect of employee share plans.
Following specific enquiries all Directors have confirmed that they have complied with their obligations in respect of transacting in Group securities
throughout the period.
There have been no material changes to the information disclosed in the Annual Report and Accounts 2022 in respect of the remuneration of
employees, remuneration policies, bonus and share option plans and training schemes. Details of the number of employees are provided on page
33 of the Interim Report 2023.
The Board of Directors of HSBC Holdings plc as at the date of this announcement comprises:
Mark Tucker*, Geraldine Buckingham†, Rachel Duan†, Georges Elhedery, Carolyn Julie Fairbairn†, James Anthony Forese†, Steven Guggenheimer†,
José Antonio Meade Kuribreña†, Kalpana Morparia†, Eileen K Murray†, David Nish† and Noel Quinn.
* Non-executive Group Chairman† Independent non-executive Director

14 Interim Report 2023
The Interim Report 2023 will be made available to shareholders on or about 18 August 2023. Copies of the Interim Report 2023 and this news
release may be obtained from Global Communications, HSBC Holdings plc, 8 Canada Square, London E14 5HQ, United Kingdom; from
Communications (Asia), The Hongkong and Shanghai Banking Corporation Limited, 1 Queen’s Road Central, Hong Kong; or from US
Communications, HSBC Bank USA, N.A., 1 West 39th Street, 9th Floor, New York, NY 10018, USA. The Interim Report 2023 and this news release
may also be downloaded from the HSBC website, www.hsbc.com.
A Chinese translation of the Interim Report 2023 is available upon request from Computershare Hong Kong Investor Services Limited, Rooms
1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
The Interim Report 2023 will be available on The Stock Exchange of Hong Kong Limited’s website www.hkex.com.hk.

24

HSBC Holdings plc 2023 Interim Results

15 Cautionary statement regarding forward-looking statements
This news release may contain projections, estimates, forecasts, targets, commitments, ambitions, opinions, prospects, results, returns andforward-looking statements with respect to the financial condition, results of operations, capital position, strategy and business of the Group which
can be identified by the use of forward-looking terminology such as ‘may’, ‘will’, ‘should’, ‘expect’, ‘anticipate’, ‘project’, ‘estimate’, ‘seek’, ‘intend’,‘target’ or ‘believe’ or the negatives thereof or other variations thereon or comparable terminology (together, ‘forward-looking statements‘),
including the strategic priorities and any financial, investment and capital targets and ESG targets/commitments 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 inforward-looking statements are attainable, will actually occur or will be realised or are complete or accurate. The assumptions and judgments may
prove to be incorrect and involve known and unknown risks, uncertainties, contingencies and other important factors, many of which are outside
the control of the Group. Actual achievements, results, performance or other future events or conditions may differ materially from those stated,
implied and/or reflected in 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, increased volatility in interest rates and inflation levels andother macroeconomic risks, geopolitical tensions such as the Russia-Ukraine war 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 or management’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 Group as to the achievement
or reasonableness of any projections, estimates, forecasts, targets, 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 2022 for the fiscal year ended 31 December 2022 filed with
the Securities and Exchange Commission (the ‘SEC’) on Form 20-F on 22 February 2023, our 1Q 2023 Earnings Release furnished to the SEC on
Form 6-K on 2 May 2023, and our Interim Report 2023 for the six months ended 30 June 2023 which we expect to furnish to the SEC on Form 6-K
on or around 1 August 2023.

16 Use of alternative performance measures
This news release contains non-IFRS measures used by management internally that constitute alternative performance measures under European
Securities and Markets Authority guidance and non-GAAP financial measures defined in and presented in accordance with US Securities andExchange Commission rules and regulations (‘alternative performance measures’). The primary alternative performance measures we use arepresented on a ‘constant currency’ basis which is computed by adjusting reported results for the effects of foreign currency translation differences,which distort period-on-period comparisons. We consider constant currency performance to provide useful information for investors by aligninginternal and external reporting, and reflecting how management assesses period-on-period performance. We separately disclose ‘notable items’,
which are components of our income statement that management would consider as outside the normal course of business and generally nonrecurring in nature. Reconciliations between alternative performance measures and the most directly comparable measures under IFRS areprovided in our Interim Report 2023, which is available at www.hsbc.com.

17 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 ‘$m’and ‘$bn’ represent millions and billions (thousands of millions) of US dollars, respectively.

18 Investor Relations / Media Relations contacts
For further information contact:

Investor Relations

Media Relations

UK – Richard O‘Connor

UK – Gillian James

Telephone: +44 (0)20 7991 6590

Telephone: +44 (07584 404 238

Email: investorrelations@hsbc.com

Email: pressoffice@hsbc.com

Hong Kong – Yafei Tian

UK – Kirsten Smart

Telephone: +852 2899 8909

Telephone: +44 (0)7725 733 311

Email: investorrelations@hsbc.com.hk

Email: pressoffice@hsbc.com
Hong Kong – Aman Ullah
Telephone: +852 3491 1120
Email: aspmediarelations@hsbc.com.hk

HSBC Holdings plc 2023 Interim Results

25

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