1 August 2022

HSBC HOLDINGS PLC
2022 INTERIM RESULTS – HIGHLIGHTS
Noel Quinn, Group Chief Executive, said:“Our first-half performance reflects the continued impact of our strategy, with gathering revenue momentum and tight cost control. The
progress that we’ve made growing and transforming HSBC means we are in a strong position as we enter the current rates cycle. We areconfident of achieving a return on tangible equity of at least 12% from 2023 onwards, which would represent our best returns in a decade.
As a result, we are providing more specific dividend payout ratio guidance of around 50% for 2023 and 2024. We understand and appreciate
the importance of dividends to all of our shareholders. We will aim to restore the dividend to pre-Covid-19 levels as soon as possible. We
also intend to revert to quarterly dividends in 2023.”

Financial performance (1H22 vs 1H21)• Reported profit after tax increased by $0.8bn to $9.2bn. This included a $1.8bn gain on the recognition of a deferred tax asset
from historical losses, as a result of improved profit forecasts for the UK tax group, which has accelerated the expected utilisation ofthese losses. Reported profit before tax decreased by $1.7bn to $9.2bn, reflecting a net charge for expected credit losses andother credit impairment charges (‘ECL’), compared with a net release in 1H21. Adjusted profit before tax fell by $0.9bn to $10.7bn.
• Reported revenue decreased marginally to $25.2bn, primarily due to foreign currency translation impacts and 1H22 losses onplanned business disposals. Adjusted revenue increased by 4% to $25.7bn, driven by higher net interest income, reflecting interest
rate rises and balance sheet growth, and strong growth in revenue from Global Foreign Exchange in Global Banking and Markets(‘GBM’). This was partly offset by unfavourable market impacts in insurance manufacturing in Wealth and Personal Banking (‘WPB’).
• Reported ECL were a net charge of $1.1bn, reflecting stage 3 charges of $0.8bn, as well as additional allowances to reflect
heightened economic uncertainty and inflation, in part offset by the release of most of our remaining Covid-19 reserves. This comparedwith a $0.7bn net release in 1H21.
• Reported operating expenses decreased by 4%, primarily due to foreign currency translation impacts. The reduction also reflected
the impact of our cost-saving initiatives and a lower performance-related pay accrual, which partly offset increased investment andinflationary impacts. Adjusted operating expenses decreased by 1%.
• Return on average tangible equity (‘RoTE‘) (annualised) of 9.9% increased by 0.5 percentage points compared with 1H21,
including a 2.3 percentage point annualised impact of the deferred tax asset gain.
• Common equity tier 1 (‘CET1’) ratio of 13.6% decreased by 2.2 percentage points from 31 December 2021. This reflected a
reduction in CET1 capital of $16.8bn, which included a $4.8bn valuation loss in equity from financial instruments as yield curves
steepened, and a $13.4bn increase in risk-weighted assets (‘RWAs’) primarily from 1Q22 regulatory changes. The reduction also included
the share buy-back of up to $1bn announced at our full-year 2021 results.
• The Board has approved an interim dividend for 1H22 of $0.09 per ordinary share, to be paid in cash.

Financial performance (2Q22 vs 2Q21)• Reported profit after tax of $5.8bn, including a $1.8bn deferred tax gain. Reported profit before tax was stable at $5.0bn. Net
ECL charges compared with 2Q21 net ECL releases, with this impact broadly offset by a reduction in operating expenses and revenue
growth. Adjusted profit before tax increased by 13% to $6.0bn.
• Reported revenue increased by 2% to $12.8bn, primarily reflecting interest rate rises, partly offset by an adverse movement inmarket impacts in insurance manufacturing in WPB, foreign currency translation impacts and losses on planned business disposals.
Adjusted revenue increased by 12% to $13.1bn.
• Net interest margin (‘NIM’) of 1.35% rose by 9 basis points (‘bps’) from 1Q22.
• Reported operating expenses were 5% lower, due to foreign currency translation impacts. The impact of our cost-saving initiatives
and continued cost discipline mitigated increased investment and inflation. Adjusted operating expenses were stable at $7.5bn.
• The increase in adjusted revenue of 12% while maintaining stable adjusted operating expenses resulted in adjusted jaws of 12%.
• Customer lending was $27bn lower in 2Q22, on a reported basis, due to foreign currency translation impacts. Adjusted
customer lending increased by $14bn with growth across all regions.

Outlook for 2022
• The revenue outlook remains positive. Based on the current market consensus for global central bank rates and our continued mid-singledigit percentage lending growth expectations for 2022, we would expect net interest income of at least $31bn for 2022 and at
least $37bn for 20231 (based on average June rates of foreign exchange).
• We continue to expect our ECL charges to normalise towards 30bps of average loans in 2022, recognising the possible risk offurther deterioration in the consensus economic outlook.
• We remain confident in our ability to deliver 2022 adjusted operating expenses in line with 2021, despite inflationary pressures. We now
aim to deliver 2023 adjusted cost growth of around 2%, compared with 20221, and intend to maintain strict cost discipline
thereafter.
• With profit generation and continued RWA actions, we aim to manage back to within our 14% to 14.5% CET1 target range
during the first half of 2023. While further share buy-backs remain unlikely in 2022, for future years we expect to return toshareholders excess capital over and above what is required for executing the strategy. The forecast loss on the disposal of our French
retail operations is expected to impact our CET1 ratio by approximately 30bps in the second half of 2022.
• The impact of our growth and transformation programmes over the last two years has given us the confidence to update our returns
guidance. Subject to the current path implied by the market for global policy rates, we are now targeting a RoTE of at least 12%
from 2023 onwards, noting continued macroeconomic uncertainty.
• Given the current returns trajectory, we expect a dividend payout ratio of around 50% for 2023 and 2024. We also intend torevert to paying quarterly dividends in 2023, although we expect the quarterly dividend for the first three quarters to initially be reinstated
at a lower level than the historical quarterly dividend of $0.10 per share paid up to the end of 2019.
1 Based on current accounting standards. The implementation of IFRS 17 on 1 January 2023 will result in certain insurance costs being presented as adeduction to reported revenue with a resultant reduction in reported operating expenses

Key financial metrics
Half-year to
30 Jun30 Jun31 Dec

2022

2021

2021

Reported revenue ($m)
Reported profit before tax ($m)

25,236
9,176

25,551
10,83924,001
8,067

Reported profit after tax ($m)
Profit attributable to the ordinary shareholders of the parent company ($m)

9,215
8,289

8,422
7,276

6,271
5,331

Cost efficiency ratio (%)
Net interest margin (%)1

65.1
1.30

66.9
1.21

73.1
1.20

Basic earnings per share ($)
Diluted earnings per share ($)

0.42
0.41

0.36
0.36

0.26
0.26

Alternative performance measures
Adjusted revenue ($m)

25,69024,734

23,577

Adjusted profit before tax ($m)

10,673

11,538

9,681

Adjusted cost efficiency ratio (%)

59.9

62.7

65.5

Expected credit losses and other credit impairment charges (‘ECL’) (annualised) as % of average gross loans andadvances to customers (%)

0.21(0.14)(0.03)

Return on average ordinary shareholders’ equity (annualised) (%)1

9.7

8.4

7.1

Return on average tangible equity (annualised) (%)1,2

9.9

9.4

8.3

30 Jun30 Jun31 Dec

2022

2021

2021

2,985,420
1,028,356
1,651,301
2,233,321
62.3
188,382
148,308
8.41
7.48

2,976,005
1,059,511
1,669,091
2,188,991
63.5
198,218
157,9858.69
7.81

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

13.6
851,743
18.6
5.5
656.6
134

15.6
862,292
21.0
5.3
659.3
134

15.8
838,263
21.2
5.2
717.0
138

19,81919,94919,9540.09

20,223
20,315
20,2110.07

20,073
20,18920,1830.18

Reported results

At

Balance sheet
Total assets ($m)
Net loans and advances to customers ($m)
Customer accounts ($m)
Average interest-earning assets ($m)
Loans and advances to customers as % of customer accounts (%)
Total shareholders’ equity ($m)
Tangible ordinary shareholders’ equity ($m)
Net asset value per ordinary share at period end ($)
Tangible net asset value per ordinary share at period end ($)
Capital, leverage and liquidity
Common equity tier 1 capital ratio (%)3,4
Risk-weighted assets ($m)3,4
Total capital ratio (%)3,4
Leverage ratio (%)3,4
High-quality liquid assets (liquidity value) ($bn)4
Liquidity coverage ratio (%)4
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 $0.50 ordinary shares outstanding (millions)
Dividend per ordinary share (in respect of the period) ($)

For reconciliations of our reported results to an adjusted basis, including lists of significant items, see page 37 of the Interim Report 2022.
Definitions and calculation of other alternative performance measures are included in our ‘Reconciliation of alternative performancemeasures’ on page 56 of the Interim Report 2022.
1 For these metrics, half-year to 31 December 2021 is calculated on a full-year basis and not a 2H21 basis.
2 Profit attributable to ordinary shareholders, excluding impairment of goodwill and other intangible assets and changes in present value of in-force
insurance contracts (‘PVIF’) (net of tax), divided by average ordinary shareholders’ equity excluding goodwill, PVIF and other intangible assets (net ofdeferred tax).
3 Unless otherwise stated, regulatory capital ratios and requirements are based on the transitional arrangements of the Capital Requirements
Regulation in force at the time. These include the regulatory transitional arrangements for IFRS 9 ‘Financial Instruments’, which are explained further
on page 94 of the Interim Report 2022. The leverage ratio is calculated using the end point definition of capital and the IFRS 9 regulatory transitionalarrangements, in line with the UK leverage rules that were implemented on 1 January 2022, and excludes central bank claims. Comparatives for2021 are reported based on the disclosure rules in force at that time, and include claims on central banks. References to EU regulations anddirectives (including technical standards) should, as applicable, be read as references to the UK’s version of such regulation and/or directive, as
onshored into UK law under the European Union (Withdrawal) Act 2018, and subsequently amended under UK law.
4 Regulatory numbers and ratios are as presented at the date of reporting. Small changes may exist between these numbers and ratios and thosesubsequently submitted in regulatory filings. Where differences are significant, we will restate comparatives.

2

HSBC Holdings plc 2022 Interim Results

Highlights
Half-year to
30 Jun30 Jun

2022

2021

$m

$m

Reported
Revenue1

25,23625,551

Change in expected credit losses and other credit impairment charges
Operating expenses(1,090)(16,419)719(17,087)

Share of profit in associates and joint ventures
Profit before tax

1,449
9,176

1,656
10,839Tax (expense)/credit
Profit after tax

39
9,215

(2,417)
8,422

Adjusted2
Revenue1,3

25,69024,734

Change in expected credit losses and other credit impairment charges(1,090)675

Operating expenses(15,376)(15,520)

Share of profit in associates and joint ventures
Profit before tax

1,449
10,673

1,649
11,538Tax (expense)/credit
Profit after tax(1,962)8,711(2,455)
9,083

(14)
(288)
(220)
68

18
—
(194)
(70)

6
(9)
(1,040)

(17)
—
(848)

(236)
(1,765)(153)—

Significant items affecting adjusted performance
Revenue
Customer redress programmes
Disposals, acquisitions and investment in new businesses3
Fair value movements on financial instruments4
Restructuring and other related costs5
Operating expenses
Customer redress programmes
Impairment of goodwill and other intangibles
Restructuring and other related costs
Tax expense/(credit)
Tax charge/(credit) on significant items
Recognition of losses on HSBC Holdings

1 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.
2 Adjusted performance is computed by adjusting reported results for the period-on-period effects of foreign currency translation differences andsignificant items which distort period-on-period comparisons.
3 Includes losses from classifying businesses as held-for-sale as part of a broader restructuring of our European business.
4 Includes fair value movements on non-qualifying hedges and debt valuation adjustments on derivatives.
5 Comprises losses associated with the RWA reduction commitments and gains we made at our business update in February 2020.

HSBC Holdings plc 2022 Interim Results

3

Review by Noel Quinn, Group Chief Executive
We are now two and a half years into our transformation programme to make HSBC fit for the future. We still have more work to do in thesecond half of this year – but we are now much better positioned to meet the needs of our international customers and to deliver higher
returns for our shareholders.
The key to delivering our ambitions, now and in the future, is to grow and transform HSBC at the same time. That was the focus of thetransformation programme we announced in February 2020, and of the updated strategy we launched in February 2021. The progress wehave made in both regards gives us a strong starting point as we enter the current interest rate cycle.
Our transformation agenda has been based around three things: reshaping our portfolio, increasing our capital efficiency and tightly
managing our costs. In 2021, we accelerated this agenda in response to Covid-19, under four strategic pillars: focus on our strengths,
digitise at scale, energise for growth, and lead the transition to net zero.
In reshaping our portfolio, we have exited – or are exiting – non-strategic businesses in the West and reallocated capital towards areas ofgrowth in Asia and the Middle East. In the first half of 2022, we completed our acquisition of AXA Singapore, increased our stake in HSBC
Qianhai Securities to 90%, took full ownership of our HSBC Life China insurance business, and agreed to sell our businesses in Greece andRussia, subject to regulatory approvals.
In terms of capital efficiency, our risk-weighted asset reduction programme had reached $104bn by the end of 2021, against a target of$110bn by the end of 2022. We have now reached a cumulative total of $114bn of risk-weighted asset savings, and the acceleration of
restructuring across our US and Europe businesses means we are on track to reach at least $120bn of savings by the end of this year.
We continue to invest in areas of strength. Our investment to boost our Asia wealth product and platform capabilities helped us to attract
strong levels of net new invested assets, and to grow the value of new business in our insurance franchise in Asia by 41% on last year’s
first-half. We achieved both of these despite the temporary closure of parts of our branch network due to Covid-19 restrictions in Hong
Kong.
Finally, we have continued to manage our cost base with discipline. Our sustained investment to digitise HSBC at scale has helped make us
a more agile and efficient organisation. Our hybrid working model has enabled us to reduce our office real estate footprint by around a third
since the start of 2020. At the same time, rising customer demand for digital products and services has enabled us to keep reducing andadapting our branch network in response to changing customer behaviour.
Our cost reduction programmes remain on track. We have more to do before December – particularly to further simplify the organisation –but I remain committed to achieving stable adjusted costs in 2022 compared with last year, despite rising inflation.

International
As a result of this work, HSBC is now a more international business, focused on serving international customers alongside our strong
domestic franchises in Hong Kong and the UK. Serving customers across borders is what we do best. It is how we can best help them togrow, and, we believe, the fastest way to accelerate returns for our shareholders.
HSBC has been internationally focused since it was founded 157 years ago to support trade between East and West. When we refreshedour purpose 18 months ago, we spoke to tens of thousands of our customers, colleagues and other stakeholders as we considered who weare and what we do. Our refreshed purpose – ‘opening up a world of opportunity’ – underlined that our internationalism remains the mostdefining characteristic of our identity.
Our strength as a well connected, global institution is the main reason our wholesale clients choose to bank with us and we are determinedto capitalise on the advantages our network gives us. As part of this, we are exiting domestic wholesale client relationships where returns
are sub-standard in order to focus on meeting the needs of international customers. We have repositioned our US and Europe businesses inthe same vein, completing the sale of our US domestic mass market retail business in the first half of the year, and remaining on track tocomplete the sale of our French retail business in 2023.
This strategy is serving our customers and investors well. Even as trade flows have changed and supply chains have shifted post-pandemic,
we have maintained our leadership in global trade because our global network means we can go wherever trade goes. We built on thisfurther in the first-half, growing trade balances by $5bn or 6% in a challenging global environment. We were also named ‘Best Bank for
Trade Finance’ by Euromoney in July.
In a low interest-rate environment, our international network was also a key factor in the good returns generated by our other leading
franchises. More than three quarters of our wholesale client revenue is connected to our international network, and just under half of ourwholesale client business is cross-border. Our ability to connect clients in the West with high-returning opportunities in the East remains a
key differentiator.
In Commercial Banking, adjusted revenue grew by 14% compared with last year’s first-half, with international business a strong contributor.
In particular, we saw adjusted revenue growth of 20% in Global Trade and Receivables Finance, and of 42% in Global Liquidity and CashManagement.
In Global Banking and Markets, adjusted revenue was up 4% on the same period last year, due in part to a good performance in transaction
banking. In addition, the volume of client business booked in Asia and the Middle East from clients managed in Europe and the Americas
grew by 8% on last year’s first-half, underlining the importance of our ability to connect global clients and investors to those regions.
In Wealth and Personal Banking, we grew the number of customers classed as international by 5%, compared with last year’s first-half.
These include customers we bank in more than one market, and customers who come from a country or territory other than the market inwhich they now bank. According to our analysis, the average international customer generates around double the revenue of the average
domestic customer. This is both our fastest growing customer segment, and our most commercially attractive.

Financial performance
Our first-half performance reflected much of the progress we have made since 2020, with good organic growth across the business andtight cost control. In addition, increased net interest income reflected rising global interest rates, with further policy rate rises anticipatedover the coming months.
Overall, the Group delivered $9.2bn of reported profit before tax and $10.7bn of adjusted profit before tax in the first half of the year.
Although this was lower than in the first half of 2021, it reflected a more normalised level of expected credit losses compared with theCovid-19 releases made last year, as well as the macroeconomic impact of the Russia-Ukraine war.
4

HSBC Holdings plc 2022 Interim Results

All our regions were profitable in the first-half. This included a strong performance from HSBC UK, which delivered adjusted profits of$2.5bn, up 15% on the first half of last year. Our Asia business delivered adjusted profits of $6.3bn, despite the impact of Covid-19 in someof our biggest markets.
Adjusted revenue was up 4%, including growth of 15% in net interest income compared with last year’s first-half. Market impacts meant
wealth revenue was lower compared with the same period last year, although our insurance business performed well. In Commercial
Banking, adjusted trade revenue was up 20% on the prior year. Lending balances were up in all businesses in the first-half, underlining thatconversion of our business pipelines remains strong.
Adjusted operating expenses fell by 1%, mainly as a result of our cost-saving initiatives and a lower performance-related pay accrual. We
achieved this in spite of growing inflationary pressures and rising investments in technology and our Asia Wealth business.
Our CET1 ratio at the end of the first-half was 13.6%, down from 15.8% at the end of 2021. This reflected losses on financial instruments
held as hedges to our exposure to interest rate movements, and an increase in RWAs due to regulatory changes and foreign exchange
movements. We expect to be back within our 14% to 14.5% CET1 target range in the first half of 2023.
We have announced an interim dividend of $0.09 per share, up $0.02 per share on the first half of 2021. We have also now completed boththe $2bn buy-back programme we announced in 2021, and the further $1bn buy-back we announced at our annual results in February.

Outlook
The revenue outlook has improved further since our full-year 2021 results, despite the uncertain macroeconomic environment.
In February, based on the implied market consensus policy rates at the time, we expected to deliver a return on tangible equity of at least
10% for 2023. We expect to make further progress with our growth and transformation plans in the second half of 2022, and believe we canrestrict cost growth to around 2% in 2023, despite inflationary pressures. Subject to the path currently being implied by the market for policy
rates, we are now confident of achieving a return on tangible equity of at least 12% from 2023 onwards.
As a result of this higher returns trajectory, we are also able to provide more specific guidance around dividends. We now expect to deliver
an improved payout ratio of around 50% for 2023 and 2024, subject to achieving our performance targets. We also intend to revert topaying quarterly dividends from the start of 2023. We remain committed to enabling our shareholders to benefit from the growing returns
that our strategy is delivering.

Transition to net zero
The transition to net zero is a core part of our strategy, both now and for the long term. Given our scale and footprint, we know we have amajor role to play in enabling the transition to a net zero global economy. I am unequivocal about my own personal commitment to thisagenda, and that commitment is shared by the Board and the senior management team. The urgent need to transition the global economy
to net zero is going to change the industrial landscape completely. The overwhelming majority of our clients understand this, and are
actively planning and undertaking their own transitions. It stands to reason that financing the new business models and climate
technologies they need presents a huge commercial opportunity for HSBC.
I am pleased that we have continued to make good progress towards our ambition of providing and facilitating between $750bn and $1tn ofsustainable finance and investment by 2030. By the end of June, our cumulative total for sustainable finance and investment since 2019 was
more than $170.8bn. Earlier this year, we published interim targets for on-balance sheet financed emissions in the oil and gas, and power
and utilities sectors. We also committed to publish our first bank-wide climate transition plan in 2023, to phase down fossil fuel financing inline with science-based targets, and to review and update our financing and investment policies critical to net zero. These concrete actions
can have a significant impact in reducing global emissions and will help ensure that HSBC remains a global climate leader.

Our people
Everything we have achieved over the last six months – and everything we want to achieve over the next six months and beyond – rests on
the hard work, commitment and tireless efforts of my colleagues around the world.
I am especially grateful to my colleagues for managing considerable uncertainty and disruption in the first half of the year, particularly thosein Hong Kong and mainland China, who have managed the impact of Covid-19 restrictions on our customers and communities; in Sri Lanka,
who have continued to deliver for our customers during the current economic and political crisis; and in Poland and eastern Europe, whohave been volunteering to help those directly impacted by the Russia-Ukraine war.
I am grateful too for the support that my colleagues have offered to customers impacted by the ongoing cost of living crisis gripping manyof the world’s major economies. These are testing times for many of those who bank with us and we are committed to helping support
them through this difficult period.
My colleagues represent the very best of HSBC, and I am proud of all they have done – and are doing – to support our customers,
communities and each other.

Noel Quinn
Group Chief Executive
1 August 2022

HSBC Holdings plc 2022 Interim Results

5

Financial summary
Half-year to

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

30 Jun30 Jun31 Dec

2022
$m

2021
$m

2021
$m

9,176

10,839

8,067

8,289
3,576

7,276
3,059

5,331
1,421

188,382
158,519
1,651,301
2,985,420
851,743

198,218
181,122
1,669,091
2,976,005
862,292

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

$

$

$

0.42
0.18
8.41

0.36
0.15
8.69

0.26
0.07
8.76

1 Second interim dividend of $0.18 per ordinary share in respect of the financial year ending 31 December 2021, paid in April 2022.
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
Adjusted profit before tax
Half-year to
30 Jun 2022

Wealth and Personal Banking
Commercial Banking
Global Banking and Markets
Corporate Centre
Profit before tax

30 Jun 2021

31 Dec 2021

$m

%

$m

%

$m

%

2,946
3,578
2,879
1,270
10,673

27.6
33.5
27.0
11.9
100.0

3,751
3,211
3,199
1,377
11,538

32.5
27.8
27.8
11.9
100.0

3,104
3,241
1,967
1,369
9,681

32.1
33.5
20.3
14.1
100.0

Distribution of results by geographical region
Reported profit/(loss) before tax
Half-year to
30 Jun 2021

30 Jun 2022

EuropeAsia
Middle East and North Africa
North America
Latin America
Profit before tax

6

HSBC Holdings plc 2022 Interim Results

31 Dec 2021

$m

%

$m

%

$m

%

883
6,300
748
858
387
9,176

9.6
68.7
8.2
9.4
4.1
100.0

1,968
6,936
723
805
407
10,839

18.2
64.0
6.7
7.4
3.7
100.0

1,811
5,313
700
569
(326)
8,067

22.4
65.9
8.7
7.0
(4.0)
100.0

HSBC adjusted profit before tax and balance sheet data
Half-year to 30 Jun 2022
Wealth andPersonal
Banking

Commercial
BankingGlobalBanking andMarkets

Corporate
Centre

Total

$m

$m

$m

$m

$m

Net operating income/(expense) before change in expected credit losses andother credit impairment charges1

10,922

7,217

7,841

(290)

25,690– external

10,569

7,281

8,867

(1,027)

25,690– inter-segmentof which: net interest income/(expense)

353
7,658

(64)
5,007

(1,026)
2,296

737
(496)

—
14,465

Change in expected credit losses and other credit impairment (charges)/recoveries
Net operating income/(expense)(573)
10,349

(288)
6,929

(227)
7,614

(2)
(292)

(1,090)24,600Total operating expenses
Operating profit/(loss)(7,411)
2,938(3,351)
3,578(4,735)
2,879

121
(171)

(15,376)
9,224

Share of profit in associates and joint ventures
Adjusted profit before tax

8
2,946

—
3,578

—
2,879

1,441
1,270

1,449
10,673

%

%

%

%

%

Share of HSBC’s adjusted profit before tax

27.6

33.5

27.0

11.9

100.0

Adjusted cost efficiency ratio
Adjusted balance sheet data

67.9

46.4

60.4

41.7

59.9

$m

$m

$m

$m

$m

Loans and advances to customers (net)
Interests in associates and joint ventures

475,464484

348,25314

204,097
121

542
28,827

1,028,356
29,446

Total external assets
Customer accounts
Adjusted risk-weighted assets2

882,490
836,026
186,154

619,490479,680
341,935

1,318,425
335,033
241,077

165,015562
82,5772,985,420
1,651,301
851,743

Half-year to 30 Jun 2021

Net operating income before change in expected credit losses and other credit
impairment charges1

10,980

6,353

7,518

(117)

24,734– external– inter-segmentof which: net interest income/(expense)
Change in expected credit losses and other credit impairment (charges)/recoveries
Net operating income/(expense)
Total operating expenses
Operating profit/(loss)
Share of profit in associates and joint ventures
Adjusted profit before tax

10,782
198
6,807
38
11,018(7,277)
3,741
10
3,751

6,326
27
4,172
228
6,581
(3,371)
3,210
1
3,211

8,305
(787)
1,937
405
7,923
(4,724)
3,199
—
3,199

(679)
562
(374)
4
(113)
(148)
(261)
1,638
1,377

24,734—
12,542675
25,409(15,520)
9,889
1,649
11,538

Share of HSBC’s adjusted profit before tax
Adjusted cost efficiency ratio
Adjusted balance sheet data
Loans and advances to customers (net)
Interests in associates and joint ventures
Total external assets
Customer accounts
Adjusted risk-weighted assets2

%

%

%

%

%

32.5
66.3

27.8
53.1

27.7
62.9

12.0
(126.5)

100.0
62.7

$m

$m

$m

$m

$m

458,573467
859,383
793,277
175,621329,87315
581,741455,006
311,126

205,044
121
1,164,916
316,865
244,007

1,065
27,315
184,436794
88,192994,555
27,9182,790,476
1,565,942
818,946

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

HSBC Holdings plc 2022 Interim Results

7

HSBC adjusted profit before tax and balance sheet data (continued)
Half-year to 31 Dec 2021
Wealth andPersonal
Banking

Commercial
BankingGlobalBanking andMarkets

Corporate
Centre

Total

$m

$m

$m

$m

$m

Net operating income/(expense) before change in expected credit losses and othercredit impairment charges1

10,439

6,556

6,878

(296)

23,577– external– inter-segment

10,354
85

6,460
96

7,676
(798)

(913)
617

23,577—of which: net interest income/(expense)
Change in expected credit losses and other credit impairment (charges)/recoveries

6,955
215

4,387
40

2,032
(80)

(353)
(1)

13,021174

Net operating income/(expense)
Total operating expenses

10,654(7,574)

6,596(3,355)

6,798(4,831)(297)
313

23,751(15,447)

Operating profit/(loss)
Share of profit in associates and joint ventures

3,080
24

3,241
—

1,967
—

16
1,353

8,304
1,377

Adjusted profit before tax

3,104

3,241

1,967

1,369

9,681

%

%

%

%

%

32.1
72.6

33.5
51.2

20.3
70.2

14.1
105.7

100.0
65.5

Share of HSBC’s adjusted profit before tax
Adjusted cost efficiency ratio
Adjusted balance sheet data
Loans and advances to customers (net)

$m

$m

$m

$m

$m

462,452

332,710

198,854686

994,702

Interests in associates and joint ventures
Total external assets

490
889,34913
589,834

119
1,157,478

27,938
175,688

28,5602,812,349

Customer accounts
Adjusted risk-weighted assets2

820,564
171,022481,781
316,443

324,239
228,263590
89,543

1,627,174
805,271

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

8

HSBC Holdings plc 2022 Interim Results

Consolidated income statement
Half-year to
30 Jun30 Jun31 Dec

2022

2021

2021

$m

$m

$m

Net interest income– interest income

14,451
20,855

13,09817,96013,391
18,228– interest expense
Net fee income(6,404)
6,064(4,862)
6,674(4,837)
6,423– fee income– fee expense

7,949(1,885)

8,458(1,784)8,330(1,907)

Net income from financial instruments held for trading or managed on a fair value basis

4,921

4,184

3,560

Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured atfair value through profit or loss

(3,051)

2,795

1,258

Change in fair value of designated debt and related derivatives
Changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss

(158)
68

(67)
548

(115)
250

Gains less losses from financial investments
Net insurance premium income

21
7,646

433
5,663

136
5,207

Other operating income
Total operating income

723
30,685

155
33,483347
30,457

Net insurance claims and benefits paid and movement in liabilities to policyholders
Net operating income before change in expected credit losses and other credit impairment charges(5,449)25,236(7,932)25,551(6,456)24,001

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
Goodwill impairment
Total operating expenses
Operating profit
Share of profit in associates and joint ventures
Profit before tax
Tax credit/(charge)
Profit for the period
Attributable to:– ordinary shareholders of the parent company– preference shareholders of the parent company– other equity holders– non-controlling interests
Profit for the period(1,090)24,146(9,071)(5,445)(1,075)(828)—(16,419)
7,727
1,449
9,176
39
9,215

719
26,270(9,610)(5,675)(1,160)(642)—(17,087)
9,183
1,656
10,839(2,417)8,422

209
24,210(9,132)(5,917)(1,101)(796)(587)(17,533)
6,677
1,390
8,067
(1,796)
6,271

8,289
—
626
300
9,215

7,276
7
666
473
8,422

5,331
—
637
303
6,271

Basic earnings per ordinary share
Diluted earnings per ordinary share

$

$

$

0.42
0.41

0.36
0.36

0.26
0.26

HSBC Holdings plc 2022 Interim Results

9Consolidated statement of comprehensive income
Half-year to
30 Jun30 Jun31 Dec

2022

2021

2021

$m

$m

$m

9,215

8,422

6,271

Items that will be reclassified subsequently to profit or loss when specific conditions are met:
Debt instruments at fair value through other comprehensive income(4,907)(1,368)(771)– fair value losses– fair value gains transferred to the income statement on disposal(6,328)(53)(1,392)
(375)

(878)
(89)

– expected credit recoveries/(losses) recognised in the income statement– income taxes

20
1,454

(26)
425

(23)
219

Cash flow hedges– fair value gains/(losses)(2,063)(1,646)

(238)
877

(426)
(282)

– fair value gains reclassified to the income statement

Profit for the period
Other comprehensive income/(expense)(1,127)(1,195)(319)– income taxes and other movements

710

80

175

Share of other comprehensive income/(expense) of associates and joint ventures– share for the period

(141)
(141)

104
104

(1)
(1)

(8,521)(449)(1,944)Remeasurement of defined benefit asset/(liability)– before income taxes

95
(132)

(747)
(775)

473
668

– income taxes

227

28

(195)

2,263

155

376

3,030
(767)
158
158
—
417
(12,699)(3,484)

(2)
157
(348)
(345)
(3)
166
(2,725)
5,697

514
(138)
(98)
(98)
—
149
(2,242)
4,029(4,246)—626
136(3,484)

4,612
7
666
412
5,697

3,153
—
637
239
4,029

Exchange differences
Items that will not be reclassified subsequently to profit or loss:

Changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in
own credit risk
– before income taxes– income taxes
Equity instruments designated at fair value through other comprehensive income– fair value gains/(losses)– income taxes
Effects of hyperinflation
Other comprehensive income/(expense) for the period, net of tax
Total comprehensive (expense)/income for the period
Attributable to:– ordinary shareholders of the parent company– preference shareholders of the parent company– other equity holders– non-controlling interests
Total comprehensive (expense)/income for the period

10

HSBC Holdings plc 2022 Interim Results

Consolidated balance sheet
At
30 Jun31 Dec

2022

2021

$m

$m

AssetsCash and balances at central banks

363,608

403,018

Items in the course of collection from other banks
Hong Kong Government certificates of indebtedness

8,073
43,866

4,136
42,578

Trading assets
Financial assets designated and otherwise mandatorily measured at fair value through profit or loss

217,350
45,873248,842
49,804

Derivatives
Loans and advances to banks

262,923
96,429196,882
83,136

1,028,356
244,451

1,045,814
241,648

Financial investments

430,796446,274

Prepayments, accrued income and other assets

185,823

139,982

Current tax assets
Interests in associates and joint ventures

1,151
29,446970
29,609Goodwill and intangible assets
Deferred tax assets

21,625
5,650

20,622
4,624

2,985,420

2,957,939

43,866105,275
1,651,301
129,707
9,673
80,569126,006
251,469
87,944
163,600
685
113,130
1,900
2,894
20,711
2,788,730

42,578101,152
1,710,574
126,670
5,214
84,904
145,502
191,064
78,557
123,778698
112,745
2,566
4,673
20,4872,751,162

10,188
14,662
21,691(8,576)
150,417
188,382
8,308
196,6902,985,420

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

Loans and advances to customers
Reverse repurchase agreements – non-trading

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
Accruals, deferred income and other liabilities
Current tax liabilities
Liabilities under insurance contracts
Provisions
Deferred tax liabilities
Subordinated liabilities
Total liabilities
EquityCalled up share capital
Share premium account
Other equity instruments
Other reserves
Retained earnings
Total shareholders’ equity
Non-controlling interests
Total equity
Total liabilities and equity

HSBC Holdings plc 2022 Interim Results

11Consolidated statement of cash flows
Half-year to
30 Jun30 Jun31 Dec

2022

2021

2021

$m

$m

$m

Profit before tax
Adjustments for non-cash items:

9,176

10,8398,067

Depreciation, amortisation and impairment
Net (gain)/loss from investing activities

1,903
174

1,802
(485)

2,484
(162)

Share of profits in associates and joint ventures
Gain on acquisition of subsidiary(1,449)(71)(1,656)—(1,390)—Change in expected credit losses gross of recoveries and other credit impairment charges
Provisions including pensions

1,246
208

(484)
301

(35)
762

Share-based payment expense
Other non-cash items included in profit before tax

177
(866)

254
205

213
305

Change in operating assets

15,987(3,811)(232)

Change in operating liabilities(27,501)

49,01522,161Elimination of exchange differences1
Dividends received from associates

49,417
60

5,212
10

13,725798

Contributions paid to defined benefit plans
Tax paid(102)(1,264)

(342)
(997)

(167)
(2,080)Net cash from operating activities
Purchase of financial investments

47,095(271,382)

59,863(263,198)

44,449(229,844)

Proceeds from the sale and maturity of financial investments
Net cash flows from the purchase and sale of property, plant and equipment
Net cash flows from (purchase)/disposal of customer and loan portfolios
Net investment in intangible assets
Net cash flow on (acquisition)/disposal of subsidiaries, businesses, associates and joint ventures
Net cash from investing activities
Issue of ordinary share capital and other equity instruments
Cancellation of shares
Net sales/(purchases) of own shares for market-making and investment purposes
Purchase of non-controlling interest in subsidiary
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

248,983(590)(3,756)(1,240)(525)(28,510)—(1,840)
(443)
(197)
(723)
2,659
(11)
(4,497)(5,052)
13,533574,032(40,243)547,322

298,596(375)
1,063(1,011)(84)
34,9911,996—
1—(3,450)—(852)(4,121)(6,426)88,428468,323(4,818)551,933

222,594(711)
1,996(1,468)(22)(7,455)—(707)(1,387)———(12)(2,262)(4,368)32,626551,933(10,527)574,032

Interest received was $22,011m (1H21: $19,761m; 2H21: $20,414m), interest paid was $7,146m (1H21: $6,552m; 2H21: $6,143m) anddividends received (excluding dividends received from associates, which are presented separately above) were $800m (1H21: $801m; 2H21:$1,097m).
1 Adjustments to bring changes between opening and closing balance sheet amounts to average rates. This is not done on a line-by-line basis, asdetails cannot be determined without unreasonable expense.

12

HSBC Holdings plc 2022 Interim Results

Consolidated statement of changes in equity
Other reserves
Called up
sharecapitaland share
premium

Other
equityinstruments

Retainedearnings

Financialassets at
FVOCI
reserveCashflowhedging
reserve

Foreignexchangereserve

Mergerandotherreserves

Total
shareholders’equityNoncontrollinginterests

Total
equity

$m

$m

$m

$m

$m

$m

$m

$m

$m

$m

24,91822,414144,458

(634)

(197)

(22,769)

30,060198,250

8,527

206,777

Profit for the period
Other comprehensive income (net of tax)

—
—

—
—

8,915
2,637

—
(4,723)—(2,035)—(8,414)——

8,915(12,535)

300
(164)

9,215
(12,699)– debt instruments at fair value through othercomprehensive income

—

—

—

(4,844)———(4,844)(63)(4,907)– equity instruments designated at fair value
through other comprehensive income

—

—

—

121

—

—

—

121

37

158

– cash flow hedges

—

—

—

—

(2,035)——(2,035)(28)(2,063)– changes in fair value of financial liabilities
designated at fair value upon initialrecognition arising from changes in own
credit risk

—

—

2,263

—

—

—

—

2,263

—

2,263

– remeasurement of defined benefit asset/
liability

—

—

98

—

—

—

—

98

(3)

95

– share of other comprehensive income ofassociates and joint ventures

—

—

(141)

—

—

—

—

(141)

—

(141)

– effects of hyperinflation– exchange differences

—
—

—
—

417
—

—
—

—
—

—
(8,414)——417(8,414)

—
(107)

417
(8,521)

Total comprehensive income for theperiod——11,552(4,723)(2,035)(8,414)—(3,620)136(3,484)

Shares issued under employee remunerationand share plans

65

—

(65)

—

—

—

—

—

—

—

Dividends to shareholders
Redemption of securities
Cost of share-based payment arrangements
Cancellation of shares4
Other movements
At 30 Jun 2022

—
—
—
(133)
—
24,850

—
(723)
—
—
—
21,691(4,202)—177(1,000)(503)
150,417————3(5,354)—————(2,232)—————(31,183)

—
—
—
133
—
30,193(4,202)(723)
177(1,000)(500)
188,382

(295)
—
—
—
(60)
8,308

(4,497)(723)
177(1,000)(560)
196,690

At 1 Jan 2021
Profit for the period
Other comprehensive income (net of tax)

24,624——

22,414——

140,572
7,949
(337)

1,816
—
(1,629)

457
—
(234)

(20,375)—(464)

26,935——

196,443
7,949(2,664)

8,552
473
(61)

204,995
8,422(2,725)– debt instruments at fair value through othercomprehensive income

—

—

—

(1,351)———(1,351)(17)(1,368)– equity instruments designated at fair value
through other comprehensive income

—

—

—

(278)

—

—

—

(278)

(70)

(348)

– cash flow hedges

—

—

—

—

(234)

—

—

(234)

(4)

(238)

– changes in fair value of financial liabilities
designated at fair value upon initialrecognition arising from changes in own
credit risk

—

—

155

—

—

—

—

155

—

155

– remeasurement of defined benefit asset/
liability

—

—

(762)

—

—

—

—

(762)

15

(747)

– share of other comprehensive income ofassociates and joint ventures

—

—

104

—

—

—

—

104

—

104

– effects of hyperinflation– exchange differences
Total comprehensive income for the period

—
—
—

—
—
—

166
—
7,612

—
—
(1,629)

—
—
(234)

—
(464)
(464)

—
—
—

166
(464)
5,285

—
15
412

166
(449)
5,697

Shares issued under employee remunerationand share plans
Capital securities issued1

352

—

(335)

—

—

—

—

17

—

17

—
—
—
—
—
24,9762,000—(2,000)——22,414(4)(3,732)—
254(48)
144,319

—
—
—
—
3
190

—
—
—
—
—
223

—
—
—
—
—
(20,839)—————
26,935

1,996(3,732)(2,000)254(45)
198,218

—
(389)
—
—
(29)
8,546

1,996
(4,121)(2,000)254(74)
206,764

At 1 Jan 2022

Dividends to shareholders
Redemption of securities2
Cost of share-based payment arrangements
Other movements
At 30 Jun 2021

HSBC Holdings plc 2022 Interim Results

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

Other
equityinstruments

Retainedearnings

Financialassets at
FVOCI
reserveCashflowhedging
reserve

Foreign
Mergerexchange and otherreserve reserves

Total
shareholders’equityNoncontrollinginterests

Total
equity

$m

$m

$m

$m

$m

$m

$m

$m

$m

$m

24,976

22,414

144,319190

223(20,839)

26,935

198,218

8,546

206,764

Profit for the period

—

—

5,968

—

—

—

—

5,968

303

6,271

Other comprehensive income(net of tax)

—

—

998

(826)

(420)

(1,930)—(2,178)(64)(2,242)– debt instruments at fair value through othercomprehensive income

—

—

—

(754)

—

—

—

(754)

(17)

(771)

– equity instruments designated at fair value
through other comprehensive income

—

—

—

(72)

—

—

—

(72)

(26)

(98)

—

—

—

—

(420)

—

—

(420)

(6)

(426)

At 1 Jul 2021

– cash flow hedges– changes in fair value of financial liabilities
designated at fair value upon initialrecognition arising from changes in own
credit risk

—

—

376

—

—

—

—

376

—

376

– remeasurement of defined benefit asset/
liability

—

—

474

—

—

—

—

474

(1)

473

– share of other comprehensive income ofassociates and joint ventures

—

—

(1)

—

—

—

—

(1)

—

(1)

– effects of hyperinflation– exchange differences
Total comprehensive income for the period

—
—
—

—
—
—

149
—
6,966

—
—
(826)

—
—
(420)

—
(1,930)(1,930)———149(1,930)
3,790

—
(14)
239

149
(1,944)
4,029

Shares issued under employee remunerationand share plans

2

—

(1)

—

—

—

—

1

—

1

Dividends to shareholders
Transfers3
Cost of share-based payment arrangements
Cancellation of shares
Other movements
At 31 Dec 2021

—
—
—
(60)
—
24,918—————22,414(2,058)(3,065)213(2,004)
88
144,458

—
—
—
—
2
(634)

—
—
—
—
—
(197)

—
—
—
—
—
(22,769)

—
3,065
—
60
—
30,060(2,058)—213(2,004)
90
198,250

(204)
—
—
—
(54)
8,527

(2,262)—213(2,004)
36
206,777

1 In 2021, HSBC Holdings issued $2,000m of additional tier 1 instruments on which there were $4m of external issue costs.
2 During 2021, HSBC Holdings redeemed $2,000m 6.875% perpetual subordinated contingent convertible securities.
3 Permitted transfers from the merger reserve to retained earnings were made when the investment in HSBC Overseas Holdings (UK) Limited waspreviously impaired.
4 HSBC announced a share buy-back of $2.0bn in 2021 which was completed in April 2022. Additionally, HSBC announced a share buy-back of up to$1.0bn in February 2022, which concluded on 28 July 2022. At 30 June 2022, 264,942,444 ordinary shares had been purchased and cancelled,
representing a nominal value of $133m, which has been transferred from share capital to capital redemption reserve within merger and otherreserves.

14

HSBC Holdings plc 2022 Interim Results

1Basis 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 2021 annual financial
statements and in 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 andtransactions that are significant to an understanding of the changes in HSBC’s financial position and performance since the end of 2021.
These financial statements should be read in conjunction with the Annual Report and Accounts 2021, which were prepared in accordancewith UK-adopted 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 in accordance with International Financial Reporting Standards (‘IFRSs’) as issued by the IASB, includinginterpretations issued by the IFRS Interpretations Committee.
At 30 June 2022, there were no unendorsed standards effective for the half-year to 30 June 2022 affecting these financial statements, andthere was no difference between IFRSs adopted by the UK, IFRSs as adopted by the EU, and IFRSs issued by the IASB in terms of theirapplication to HSBC.

Standards applied during the half-year to 30 June 2022
There were no 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 our critical accounting estimates and judgements are those that relate to impairment of amortised cost andFVOCI debt financial assets, the valuation of financial instruments, deferred tax assets, provisions, interests in associates, impairment of
goodwill and non-financial assets, and post-employment benefit plans. Management’s judgement with respect to the recognition of adeferred tax asset on the historical tax losses of HSBC Holdings changed during the period and a deferred tax asset of $1.8bn wasrecognised at 1H22. Management’s view is that improved profit forecasts for the UK, which reflect higher market interest rates andexpectations of future increases, as well as the results for 1H22, represent convincing evidence that sufficient future taxable profits will beavailable to support recognition of the deferred tax asset. The improved forecasts reduced the expected recovery period of these tax losses,
reducing the estimation uncertainty such that recognition of a deferred tax asset was considered appropriate.
Apart from the above deferred tax matter and estimates relating to ECL impairment, there were no material changes in the current period toany of the other critical accounting estimates and judgements disclosed in 2021, which are stated on pages 90 and 319 of the Annual Reportand Accounts 2021.

(c)Composition of the Group

There were no material changes in the composition of the Group in the half-year to 30 June 2022. For further details of future businessacquisitions and disposals, see Note 8 ‘Business acquisitions and disposals’.

(d)Future accounting developments

IFRS 17 ‘Insurance Contracts’ was issued in May 2017, with amendments to the standard issued in June 2020 and December 2021. It has
been adopted in its entirety for use in the UK. IFRS 17 has been adopted by the EU subject to certain optional exemptions, except for the
December 2021 requirements which are pending adoption.
The standard sets out the requirements that an entity should apply in accounting for insurance contracts it issues and reinsurance contracts
it holds. Following the amendments, IFRS 17 will be effective from 1 January 2023. The Group is in the process of implementing IFRS 17.
Industry practice and interpretation of the standard are still developing. Therefore, the likely impact of its implementation remains uncertain.
However, compared with the Group’s current accounting policy for insurance, there will be no present value of in-force long-term insurance
business (‘PVIF’) asset recognised. Instead, the estimated future profit will be included in the measurement of the insurance contract liability
as the contractual service margin and gradually recognised in revenue as services are provided over the duration of the insurance contract.

(e)

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 andcapital 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.

(f)Accounting policies

The accounting policies that we applied for these interim condensed consolidated financial statements are consistent with those describedon pages 318 to 328 of the Annual Report and Accounts 2021, as are the methods of computation.

HSBC Holdings plc 2022 Interim Results

15

2

Dividends

On 1 August 2022, the Directors approved an interim dividend for the 2022 half-year of $0.09 per ordinary share in respect of the financial
year ending 31 December 2022. This distribution amounts to approximately $1,800m and will be payable on 29 September 2022. 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 2022
Per share

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

30 Jun 2021

Settled in
Total
scrip

31 Dec 2021

Per share

Total

Settled inscrip

Per share

Total

Settled in
scrip

$

$m

$m

$

$m

$m

$

$m

$m

—
0.18

—
3,576

—
—

0.15
—

3,059
—

—
—

—
—

—
—

—
—

—
0.18

—
3,576

—
—

—
0.15

—
3,059

—
—

0.07
0.07

1,421
1,421

—
—

—

—
626
4,202

4.99

7
666
3,732

—

—
637
2,058

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

Interim dividend for the 2022 half-year
On 1 August 2022, the Directors approved an interim dividend for the 2022 half-year of $0.09 per ordinary share in respect of the financial
year ending 31 December 2022. The dividend will be payable on 29 September 2022 to holders on the Principal Register in the UK, the Hong
Kong Overseas Branch Register or the Bermuda Overseas Branch Register on 19 August 2022.
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 19 September 2022, or a combination of these currencies. Particulars of these arrangements will besent to shareholders on or about 26 August 2022 and changes to currency elections must be received by 15 September 2022. The ordinary
shares in London, Hong Kong and Bermuda, and American Depositary Shares (‘ADSs’) in New York will be quoted ex-dividend on 18 August2022. As announced on 23 February 2021, the Group has decided to discontinue the scrip dividend option.
The dividend will be payable on ADSs, each of which represents five ordinary shares, on 29 September 2022 to holders of record on
19 August 2022. The dividend of $0.45 per ADS will be payable by the depositary in US dollars. Alternatively, the cash dividend may beinvested in additional ADSs by participants in the dividend reinvestment plan operated by the depositary. Elections must be received by 9
September 2022.
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 19 August 2022 in order to receive thedividend.
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 19 August 2022. Any person wishing to remove ordinary shares to or from each register must do sobefore 4.00pm local time on 18 August 2022.
Transfer of ADSs must be lodged with the depositary by 11.00 am on 19 August 2022 in order to receive the dividend. ADS holders who
receive a cash dividend will be charged a fee, which will be deducted by the depositary, of $0.005 per ADS per cash dividend.

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 2022
for the quarter 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 2022 to holders of record on 31 August 2022.

16

HSBC Holdings plc 2022 Interim Results

3

Earnings per share

Basic earnings per ordinary share is calculated by dividing the profit attributable to ordinary shareholders of the parent company by theweighted 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.
Profit attributable to ordinary shareholders of the parent company
Half-year to
30 Jun2022

30 Jun31 Dec

$m

2021
$m

2021
$m

Profit attributable to shareholders of the parent company

8,915

7,949

5,968

Dividend payable on preference shares classified as equity
Coupon payable on capital securities classified as equity

—
(626)

(7)
(666)

—
(637)

Profit attributable to ordinary shareholders of the parent company

8,289

7,276

5,331

Basic and diluted earnings per shareHalf-year to
30 Jun 2022

Basic1
Effect of dilutive potential ordinary shares
Diluted1

30 Jun 2021

Profit$m(millions)$$m(millions)$$m(millions)

$

8,289

19,954130
20,084

0.42

7,276

0.36

5,331

7,276

0.36

5,331

20,183103
20,2860.26

0.41

20,211
97
20,3088,289

Amountper share

31 Dec 2021

Numberof shares

ProfitNumber Amount perof shares
share

ProfitNumber Amount perof shares
share

0.26

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

4

Adjusted balance sheet reconciliationAt
30 Jun 2022

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

31 Dec 2021

Reported and adjusted

Adjusted

Currency translation

$m

$m

$m

Reported$m

1,028,356
29,4462,985,420
1,651,301

994,70228,5602,812,349
1,627,174

51,112
1,049
145,590
83,4001,045,814
29,6092,957,939
1,710,574

HSBC Holdings plc 2022 Interim Results

175Reconciliation of reported and adjusted items

Revenue1
Reported

30 JunHalf-year to
30 Jun31 Dec

2022
$m

2021
$m

2021
$m

25,23625,551

24,001

Currency translation
Significant items

454(1,069)
252

(711)
287

– customer redress programmes– disposals, acquisitions and investment in new businesses2

14
288

(18)
—

7
—

– fair value movements on financial instruments3– restructuring and other related costs4

220
(68)

194
70

48
237

– currency translation on significant items
Adjusted

25,6906
24,734(5)
23,577

ECL
Reported(1,090)719

209

Currency translation
Adjusted(1,090)

(44)
675

(35)
174

Operating expenses
Reported(16,419)(17,087)(17,533)

749
818
17
—
848
(47)
(15,520)

510
1,576
32
587
988
(31)
(15,447)

1,656
(7)
1,649

1,390
(13)
1,377

10,839
(371)
1,070
252
818
11,538(2,417)
109
(147)
(153)
—
6
9,083

8,067
(249)
1,863
287
1,576
9,681
(1,796)
53
(167)
(173)
—
6
7,771

Currency translation
Significant items– customer redress programmes– impairment of goodwill and other intangibles– restructuring and other related costs– currency translation on significant items
Adjusted
Share of profit in associates and joint ventures
Reported
Currency translation
Adjusted
Profit before tax
Reported
Currency translation
Significant items– revenue– operating expenses
Adjusted profit before tax
Reported tax (charge)/ credit
Currency translation
Tax significant items– tax charge/(credit) on significant items– recognition of losses on HSBC Holdings– currency translation on significant items
Adjusted profit after tax

1
2
3
4

1,043
(6)
9
1,040
(15,376)
1,449
1,449
9,176
1,497
454
1,043
10,67339(2,001)(236)(1,765)
8,711

Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.
Includes losses from classifying businesses as held-for-sale as part of a broader restructuring of our European business.
Includes fair value movements on non-qualifying hedges and debt valuation adjustments on derivatives.
Comprises gains and losses relating to the business update in February 2020, including losses associated with the RWA reduction commitments.

6

Contingent liabilities, contractual commitments and guarantees
At

Guarantees and 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 period

30 Jun31 Dec

2022

2021

$m

$m

17,586
84,103
816
102,505

27,79585,534
858
114,187

9,972
76,144740,313
826,429

8,827
47,184759,463815,474

1 Includes $633,091m of commitments at 30 June 2022 (31 December 2021: $627,637m), to which the impairment requirements in IFRS 9 are applied
where HSBC has become party to an irrevocable commitment.

18

HSBC Holdings plc 2022 Interim Results

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 2022.

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. Apartfrom the matters described below, HSBC considers that none of these matters are material. The recognition of provisions is determined inaccordance with the accounting policies set out in Note 1 of the Annual Report and Accounts 2021. 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 of these matters as at 30 June 2022 (see Note 11) of the Interim Report 2022. Where an individual provision ismaterial, the fact that a provision has been made is stated and quantified, except to the extent that doing so would be seriously prejudicial.
Any provision recognised does not constitute an admission of wrongdoing or legal liability. It is not practicable to provide an aggregate
estimate of potential liability for our legal proceedings and regulatory matters as a class of contingent liabilities.

Bernard L. Madoff Investment Securities LLC
Various non-US HSBC companies provided custodial, administration and similar services to a number of funds incorporated outside the US
whose assets were invested with Bernard L. Madoff Investment Securities LLC (‘Madoff Securities’). Based on information provided by
Madoff Securities as at 30 November 2008, the purported aggregate value of these funds was $8.4bn, including fictitious profits reported by
Madoff. Based on information available to HSBC, the funds’ actual transfers to Madoff Securities minus their actual withdrawals from
Madoff Securities during the time HSBC serviced the funds are estimated to have totalled approximately $4bn. Various HSBC companies
have been named as defendants in lawsuits arising out of Madoff Securities’ fraud.
US litigation: The Madoff Securities Trustee has brought lawsuits against various HSBC companies and others in the US Bankruptcy Court
for the Southern District of New York (the ‘US Bankruptcy Court’), seeking recovery of transfers from Madoff Securities to HSBC in an
amount not yet pleaded or determined. Following an initial dismissal of certain claims, which was later reversed on appeal, the cases wereremanded to the US Bankruptcy Court, where they are now pending.
Fairfield Sentry Limited, Fairfield Sigma Limited and Fairfield Lambda Limited (together, ‘Fairfield’) (in liquidation since July 2009) havebrought a lawsuit in the US against fund shareholders, including HSBC companies that acted as nominees for clients, seeking restitution ofredemption payments. In December 2018, the US Bankruptcy Court dismissed certain claims by the Fairfield liquidators and granted a
motion by the liquidators to file amended complaints. In May 2019, the liquidators appealed certain issues from the US Bankruptcy Court to
the US District Court for the Southern District of New York (the ’New York District Court’), and these appeals remain pending.
In January 2020, the Fairfield liquidators filed amended complaints on the claims remaining in the US Bankruptcy Court. In December 2020,
the US Bankruptcy Court dismissed the majority of those claims. In March 2021, the liquidators and defendants appealed the US Bankruptcy
Court’s decision to the New York District Court, and these appeals are currently pending. In May 2022, the liquidators voluntarily dismissed
their claims against HSBC Bank USA N.A. (‘HSBC Bank USA’) in the US Bankruptcy Court. Meanwhile, proceedings before the US
Bankruptcy Court with respect to the remaining claims and other HSBC companies that were not dismissed 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 in an amount not yet pleaded or determined. The deadline for service of theclaim has been extended to September 2022 for UK-based defendants and November 2022 for all other defendants.
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 ofcontract and breach of fiduciary duty and claiming damages and equitable compensation. The trial concluded in February 2017 and, inAugust 2017, the court dismissed all claims against the defendants. In September 2017, Primeo appealed to the Court of Appeal of the
Cayman Islands and, in June 2019, the Court of Appeal of the Cayman Islands dismissed Primeo’s appeal. In August 2019, Primeo filed anotice of appeal to the UK Privy Council. Two hearings before the UK Privy Council took place during 2021. 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
the Luxembourg District Court, seeking restitution of cash and securities that Herald purportedly lost because of Madoff Securities’ fraud, ormoney damages. The Luxembourg District Court dismissed Herald’s securities restitution claim, but reserved Herald’s cash restitution andmoney 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 anddamages.
In October 2009, Alpha Prime Fund Limited (‘Alpha Prime’) brought an action against HSSL before the Luxembourg District Court, seeking
the restitution of securities, or the cash equivalent, or money damages. In December 2018, Alpha Prime brought additional claims before theLuxembourg District Court 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 restitutionof 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 before the Luxembourg District Court. In December 2018, Senator brought additional
claims against HSSL and HSBC Bank plc Luxembourg branch before the Luxembourg District Court, seeking restitution of Senator’ssecurities 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. Basedupon the information 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 thisestimate, any possible damages that might ultimately arise could differ significantly from this amount.

HSBC Holdings plc 2022 Interim Results

19Anti-money laundering and sanctions-related matters
In December 2012, HSBC Holdings entered into a number of agreements, including an undertaking with the UK Financial Services Authority(replaced with a Direction issued by the UK Financial Conduct Authority (‘FCA’) in 2013 and again in 2020) as well as a cease-and-desist
order with the US Federal Reserve Board (‘FRB’), both of which contained certain forward-looking anti-money laundering (‘AML’) andsanctions-related obligations. For several years thereafter, HSBC retained a Skilled Person under section 166 of the Financial Services andMarkets Act and an Independent Consultant under the FRB cease-and-desist order to produce periodic assessments of the Group’s AML andsanctions compliance programme. The Skilled Person completed its engagement in the second quarter of 2021, and the FCA determinedthat no further Skilled Person work is required. Separately, the Independent Consultant has completed its latest review pursuant to the FRB
cease-and-desist order, which remains in place. The roles of each of the FCA Skilled Person and the FRB Independent Consultant are
discussed on page 209 of the Annual Report and Accounts 2021.
Since November 2014, a number of lawsuits have been filed in federal courts in the US against various HSBC companies and others onbehalf of plaintiffs who are, or are related to, victims of terrorist attacks in the Middle East. In each case, it is alleged that the defendants
aided and abetted the unlawful conduct of various sanctioned parties in violation of the US Anti-Terrorism Act. Currently, nine actions
remain pending in federal courts in New York or the District of Columbia. The courts have granted HSBC’s motions to dismiss in five of
these cases; appeals remain pending in two cases, and the remaining three dismissals are also 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.

London interbank offered rates, European interbank offered rates and other benchmark interest rate
investigations and litigation
Euro interest rate derivatives: In December 2016, the European Commission (‘EC’) issued a decision finding that HSBC, among otherbanks, engaged in anti-competitive practices in connection with the pricing of euro interest rate derivatives in early 2007. The EC imposed afine on HSBC based on a one-month infringement. In September 2019, the General Court of the European Union (the ‘General Court’) issued
a decision largely upholding the EC’s findings on liability but annulling the fine. HSBC and the EC both appealed the General Court’s decision
to the European Court of Justice (the ‘Court of Justice’). In June 2021, the EC adopted a new fining decision for an amount that was 5% lessthan the previously annulled fine, and subsequently withdrew its appeal to the Court of Justice. HSBC has appealed the EC’s June 2021
fining decision to the General Court, and its appeal to the Court of Justice on liability also remains pending.
US dollar Libor: Beginning in 2011, HSBC and other panel banks have been named as defendants in a number of private lawsuits filed in
the US with respect to the setting of US dollar Libor. The complaints assert claims under various US laws, including US antitrust andracketeering laws, the US Commodity Exchange Act (‘US CEA’) and state law. The lawsuits include individual and putative class actions,most of which have been transferred and/or consolidated for pre-trial purposes before the New York District Court. HSBC has reached classsettlements with five groups of plaintiffs, and the court has approved these settlements. HSBC has also resolved several of the individual
actions, although a number of other US dollar Libor-related actions remain pending against HSBC in the New York District Court.
Singapore interbank offered rate (‘Sibor’) and Singapore swap offer rate (‘SOR’): In 2016, HSBC and other panel banks werenamed as defendants in a putative class action filed in the New York District Court on behalf of persons who transacted in products related
to the Sibor and SOR benchmark rates. The complaint alleges, among other things, misconduct related to these benchmark rates in violationof US antitrust, commodities and racketeering laws, and state law.
In October 2021, The Hongkong and Shanghai Banking Corporation Limited reached a settlement in principle with the plaintiffs to resolve
this action, the agreement for which was executed in May 2022. The settlement received preliminary court approval in June 2022, and thefinal approval hearing is scheduled for November 2022.
There are many factors that may affect the range of outcomes, and the resulting financial impact, of these matters, which could besignificant.

Foreign exchange-related investigations and litigation
In December 2021, the EC issued a settlement decision finding that a number of banks, including HSBC, had engaged in anti-competitive
practices in an online chatroom between 2011 and 2012 in the foreign exchange spot market. The EC imposed a €174.3m fine on HSBC inconnection with this matter, which has been paid.
In December 2016, Brazil’s Administrative Council of Economic Defense initiated an investigation into the onshore foreign exchange market
and identified a number of banks, including HSBC, as subjects of its investigation.
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, for alleged anti-competitive behaviour in the South African foreign exchange market. In December 2021, a hearing on HSBC Bank plc’sand HSBC Bank USA’s applications to dismiss the revised complaint took place before the South African Competition Tribunal, where adecision remains pending.
Beginning in 2013, various HSBC companies and other banks have been named as defendants in a number of putative class actions filed in,or transferred to, the New York District Court arising from allegations that the defendants conspired to manipulate foreign exchange rates.
HSBC has reached class settlements with two groups of plaintiffs, including direct and indirect purchasers of foreign exchange products,
and the court has granted final approval of these settlements. A putative class action by a group of retail customers of foreign exchange
products remains pending.
In November and December 2018, complaints alleging foreign exchange-related misconduct were filed in the New York District Court andthe High Court of England and Wales against HSBC and other defendants by certain plaintiffs that opted out of the direct purchaser classaction settlement in the US. The High Court claim has since been transferred to the Competition Appeals Tribunal and these matters remain
pending. Additionally, lawsuits alleging foreign exchange-related misconduct remain pending against HSBC and other banks in courts in
Brazil and Israel. It is possible that additional civil actions will be initiated against HSBC in relation to its historical foreign exchange
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.

20

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

Film finance litigation
In July and November 2015, two actions were brought by individuals against HSBC Private Bank (UK) Limited (‘PBGB’) in the High Court ofEngland and Wales seeking damages on various alleged grounds, including breach of duty to the claimants, in connection with their
participation in certain Ingenious film finance schemes. In December 2018 and June 2019, two further actions were brought against PBGB
in the High Court of England and Wales by multiple claimants in connection with lending provided by PBGB to third parties in respect ofcertain Ingenious film finance schemes in which the claimants participated. In January 2022, the parties reached an agreement to resolvethese disputes and, in February 2022, the actions against HSBC UK Bank plc (as successor to PBGB) were discontinued.
In June 2020, two separate claims were issued against HSBC UK Bank plc (as successor to PBGB) in the High Court of England and Walesby two separate groups of investors in Eclipse film finance schemes in connection with PBGB’s role in the development of such schemes.
These actions are ongoing.
In April 2021, HSBC UK Bank plc (as successor to PBGB) was served with a claim issued in the High Court of England and Wales inconnection with PBGB’s role in the development of the Zeus film finance schemes. This action is at an early stage.
There are many factors that may affect the range of outcomes, and the resulting financial impact, of these matters, which could besignificant.

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 andcompetition and law enforcement authorities, as well as litigation, in connection with various matters relating to the firm’s businesses andoperations, including:• investigations by tax administration, regulatory and law enforcement authorities in Argentina, India and elsewhere in connection withallegations of tax evasion or tax fraud, money laundering and unlawful cross-border banking solicitation;• an investigation by the US Commodity Futures Trading Commission regarding interest rate swap transactions related to bond issuances,among other things;• investigations by US regulators concerning compliance with records preservation requirements relating to the use of unapproved
electronic messaging platforms for business communications;• 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;• an investigation by the UK Competition and Markets Authority into potentially anti-competitive arrangements involving historical trading
activities relating to certain UK-based fixed income products and related financial instruments;• a putative class action brought in the New York District Court relating to the Mexican government bond market;• two group actions pending in the US courts and a claim issued in the High Court of England and Wales in connection with HSBC Bank
plc’s role as a correspondent bank to Stanford International Bank Ltd from 2003 to 2009; and• litigation brought against various HSBC companies in the US courts relating to residential mortgage-backed securities, based primarily on(a) claims brought against HSBC Bank USA in connection with its role as trustee on behalf of various securitisation trusts; and (b) claims
against several HSBC companies seeking that the defendants repurchase various mortgage loans.
There are many factors that may affect the range of outcomes, and the resulting financial impact, of these matters, which could besignificant.

HSBC Holdings plc 2022 Interim Results

21

8

Business acquisitions and disposals

Business acquisitions
The following recently announced acquisitions form part of our strategy to become a market leader in Asian wealth management:• On 23 December 2021, HSBC Asset Management (India) Private Ltd, a subsidiary of the Group, entered into an agreement with
L&T Finance Holdings Limited to fully acquire L&T Investment Management Limited for $0.4bn. Completion is expected to occur during
4Q22. L&T Investment Management Limited is a wholly-owned subsidiary of L&T Finance Holdings Limited and the investment managerof the L&T Mutual Fund, with assets under management of $8.9bn at 31 May 2022 and over 2.4 million active folios.
• On 28 January 2022, HSBC Insurance (Asia-Pacific) Holdings Limited, a subsidiary of the Group, notified the shareholders ofCanara HSBC Life Insurance Company Limited (‘Canara HSBC’) of its intention to increase its shareholding in Canara HSBC up to 49%.
HSBC currently has a 26% shareholding, which is accounted for as an associate. Any increase in shareholding is subject to agreementwith other shareholders in Canara HSBC, as well as internal and regulatory approvals. Established in 2008, Canara HSBC is a life
insurance company based in India.
• On 11 February 2022, HSBC Insurance (Asia-Pacific) Holdings Limited completed the acquisition of 100% of AXA Insurance Pte Limited(AXA Singapore) for $0.5bn. A provisional gain on acquisition of $0.1bn was recorded, reflecting the excess of the fair value of net assets
acquired (gross assets of $4.5bn and gross liabilities of $3.9bn) over the acquisition price.
• On 6 April 2022, The Hongkong and Shanghai Banking Corporation Limited, a subsidiary of the Group, announced it had increased its
shareholding in HSBC Qianhai Securities Limited, a partially-owned subsidiary, from 51% to 90%.
• On 23 June 2022, HSBC Insurance (Asia) Limited, a subsidiary of the Group, acquired the remaining 50% equity interest in HSBC Life
Insurance Company Limited. Headquartered in Shanghai, HSBC Life Insurance Company Limited offers a comprehensive range of
insurance solutions covering annuity, whole life, critical illness and unit-linked insurance products.

Business disposals
In 2021 and 2022, we accelerated the pace of execution on our strategic ambition to be the preferred international financial partner for ourclients with the announcements of the planned sales of our retail banking businesses in France and branch operations in Greece, as well as
the exit of domestic mass market retail banking in the US. The planned sales in France and Greece are expected to complete in 2023 and the
US exit has since completed.

US retail banking businessOn 26 May 2021, we announced our intention to exit our US mass market retail banking business, including our Personal and Advancepropositions, as well as retail business banking, and rebranding approximately 20 to 25 of our retail branches into international wealthcentres to serve our Premier and Jade customers. In conjunction with the execution of this strategy, HSBC Bank USA, N.A. entered into
definitive sale agreements with Citizens Bank and Cathay Bank to sell 90 of our retail branches along with substantially all residential
mortgage, unsecured and retail business banking loans and all deposits in our branch network not associated with our Premier, Jade andPrivate Banking customers. As a result of entering into these sale agreements, assets and liabilities related to the agreements weretransferred to held for sale during the second quarter of 2021.
In February 2022, we completed the sale of the branch disposal group and recognised a net gain on sale of approximately $0.1bn, which is
subject to customary closing adjustments. Included in the sale were $2.1bn of loans and advances to customers and $6.9bn of customer
accounts. Certain assets under management associated with our mass market retail banking operations were also transferred. The
remaining branches not sold or rebranded have been closed.

Planned sale of the retail banking business in France
HSBC Continental Europe signed a framework agreement with Promontoria MMB SAS (‘My Money Group’) and its subsidiary Banque desCaraïbes SA, regarding the planned sale of HSBC Continental Europe’s retail banking business in France.
The sale, which is subject to regulatory approvals and the satisfaction of other relevant conditions, includes: HSBC Continental Europe’s
French retail banking business; the Crédit Commercial de France (‘CCF’) brand; and HSBC Continental Europe’s 100% ownership interest in
HSBC SFH (France) and its 3% ownership interest in Crédit Logement. The disposal group is currently expected to be classified as held forsale in 2H22 and the sale would generate an estimated loss before tax including related transaction costs for the Group of $2.1bn, together
with an additional $0.5bn impairment of goodwill.
At 30 June 2022, a deferred tax liability of $0.4bn was recognised as a consequence of the temporary difference in tax and accounting
treatment in respect of the provision for loss on disposal, which was deductible in the French tax return in 2021 but will be accounted forwhen the disposal group is classified as held for sale in accordance with IFRS 5, at which time the deferred tax liability will reverse. The vast
majority of the estimated loss for the write-down of the disposal group to fair value less costs to sell will also be recognised when it isclassified as held for sale. Subsequently, the disposal group classified as held for sale will be remeasured at the lower of carrying amountand fair value less costs to sell at each reporting period. Any remaining gain or loss not previously recognised will be recognised at closing,which is currently anticipated to be in 2023.
At 30 June 2022, the disposal group included total assets of $25.6bn.

Planned sale of the retail banking business in Greece
On 24 May 2022, HSBC Continental Europe signed a sale and purchase agreement for the sale of its branch operations in Greece toPancreta Bank SA. Completion of the transaction is subject to regulatory approval and is currently expected to occur in the first half of 2023.
At 30 June 2022, the disposal group included $0.4bn of loans and advances to customers and $2.3bn of customer accounts which met thecriteria to be classified as held for sale. In 2Q22, we recognised a loss of $0.1bn, including goodwill impairment, upon reclassification asheld for sale in accordance with IFRS 5.

Planned sale of the business in Russia
Following a strategic review of our business in Russia, HSBC Europe BV (a wholly-owned subsidiary of HSBC Bank plc) has entered into anagreement to sell its wholly-owned subsidiary HSBC Bank (RR) (Limited Liability Company), subject to regulatory approvals.

22

HSBC Holdings plc 2022 Interim Results

9

Events after the balance sheet date

In its assessment of events after the balance sheet date, HSBC has considered and concluded that no material events have occurred
resulting in adjustments to the financial statements.
An interim dividend for the 2022 half-year in respect of the financial year ending 31 December 2022 was approved by the Directors on
1 August 2022, as described in Note 2.

10

Capital structure

Capital ratios
At
30 Jun31 Dec

2022

2021

%

%

Transitional basis
Common equity tier 1 ratio

13.6

15.8

Tier 1 ratio
Total capital ratio

16.1
18.6

18.6
21.2

End point basis
Common equity tier 1 ratio

13.6

15.8

Tier 1 ratio
Total capital ratio

16.1
17.7

18.5
20.0

Total regulatory capital and risk-weighted assets
At

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

30 Jun31 Dec

2022

2021

$m

$m

115,780
21,73421,005
158,519
851,743

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

115,780
21,734
13,049150,563851,743

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

Leverage ratio1
At

Tier 1 capital
Total leverage ratio exposure
Leverage ratio

1

30 Jun31 Dec

2022

2021

$bn

$bn

137.5
2,484.2

155.0
2,962.7

%

%

5.5

5.2

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

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

HSBC Holdings plc 2022 Interim Results

23

11

Statutory accounts

The information in this media release does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.
The statutory accounts for the year ended 31 December 2021 have been delivered to the Registrar of Companies in England and Wales inaccordance with section 447 of the Companies Act 2006. The Group’s auditors, PricewaterhouseCoopers LLP (‘PwC’), has reported on thoseaccounts. Its report was unqualified, did not include a reference to any matters to which PwC drew attention by way of emphasis 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 theInterim Report 2022. The Interim Report 2022 was approved by the Board of Directors on 1 August 2022. The unaudited interim condensed
financial statements have been reviewed by the Group’s auditor, PwC, in accordance with the guidance contained in the International
Standard on Review Engagements (UK and Ireland) 2410: Review of Interim Financial Information Performed by the Independent Auditor of
the Entity issued by the Auditing Practices Board. The full report of its review, which was unmodified, is included in the Interim Report 2022.

12

Dealings in HSBC Holdings plc listed securities

HSBC has policies and procedures that, except where permitted by statute and regulation, prohibit it undertaking specified transactions in
respect of its securities listed on The Stock Exchange of Hong Kong Limited (‘HKEx’). Except for dealings as intermediaries or as trustees bysubsidiaries of HSBC Holdings, or in relation to the HSBC Holdings ordinary share buy-back, neither HSBC Holdings nor any of its
subsidiaries has purchased, sold or redeemed any of its securities listed on HKEx during the half-year ended 30 June 2022.

13

Earnings release and final results

An earnings release for the three-month period ending 30 September 2022 is expected to be issued on 25 October 2022. The results for theyear to 31 December 2022 are expected to be announced on 21 February 2023.

14

Corporate governance

We are subject to corporate governance requirements in both the UK and Hong Kong. Throughout the six months ended 30 June 2022, wecomplied with the applicable provisions of the UK Corporate Governance Code, save to the extent referred to in the next paragraph, and also
the requirements of the Hong Kong Corporate Governance Code. The UK Corporate Governance Code is available at www.frc.org.uk and theHong Kong Corporate Governance Code is available at www.hkex.com.hk.
Dame Carolyn Fairbairn was appointed as Chair to the Group Remuneration Committee on 29 April 2022. In approving Dame Carolyn
Fairbairn‘s appointment, the Board considered the UK Corporate Governance Code expectation that the Chair has served at least 12 months
as a member on the committee before assuming the position of Chair. Given her previous experience as both a member and chair of the
remuneration committees of other UK listed companies, the Board approved the appointment of Dame Carolyn Fairbairn as Chair.
Under the Hong Kong Code, the 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 Regulationand the rules governing the listing of securities on the HKEx, save that the HKEx has granted waivers from strict compliance with the rulesthat 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 Groupsecurities throughout the period.
There have been no material changes to the information disclosed in the Annual Report and Accounts 2021 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 2022.
The Board of Directors of HSBC Holdings plc as at the date of this announcement comprises:
Mark Tucker*, Geraldine Joyce Buckingham†, Rachel Duan†, Carolyn Julie Fairbairn† James Anthony Forese†, Steven Guggenheimer†, José
Antonio Meade Kuribreña†, Eileen K Murray†, David Nish†, Noel Quinn, Ewen Stevenson and Jackson Tai†.
* Non-executive Group Chairman† Independent non-executive Director

15Interim Report 2022

The Interim Report 2022 will be made available to shareholders on or about 26 August 2022. Copies of the Interim Report 2022 and thisnews 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 2022 and this news
release may also be downloaded from the HSBC website, www.hsbc.com.
A Chinese translation of the Interim Report 2022 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 2022 will be available on The Stock Exchange of Hong Kong Limited’s website www.hkex.com.hk.

24

HSBC Holdings plc 2022 Interim Results

16

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, ‘forwardlooking 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 in forward-looking statements are attainable, will actually occur or will be realised or are complete or accurate. The assumptions andjudgments may prove to be incorrect and involve known and unknown risks, uncertainties, contingencies and other important factors, manyof 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 otherfactors (including without limitation those which are referable to general market or economic conditions, regulatory changes, geopoliticaltensions such as the Russia-Ukraine war, the impact of the Covid-19 pandemic or as a result of data limitations and changes in applicable
methodologies in relation to ESG related matters).
Any such forward-looking statements are based on the beliefs, expectations and opinions of the Group at the date the statements are made,and the Group does not assume, and hereby disclaims, any obligation or duty to update, revise or supplement them if circumstances ormanagement’s beliefs, expectations or opinions should change. For these reasons, recipients should not place reliance on, and are
cautioned about relying on, any forward-looking statements. No representations or warranties, expressed or implied, are given by or on
behalf of the Group as to the achievement or reasonableness of any projections, estimates, forecasts, targets, prospects or returns contained
herein.
Additional detailed information concerning important factors that could cause actual results to differ materially from this news release isavailable in our Annual Report and Accounts 2021 for the fiscal year ended 31 December 2021 filed with the Securities and Exchange
Commission (the ‘SEC’) on Form 20-F on 23 February 2022, our 1Q 2022 Earnings Release furnished to the SEC on Form 6-K on 26 April
2022, and our Interim Report 2022 for the six months ended 30 June 2022 which we expect to furnish to the SEC on Form 6-K on or around
1 August 2022.

17

Use of alternative performance measures

This news release contains non-IFRS measures used by management internally that constitute alternative performance measures underEuropean Securities and Markets Authority guidance and non-GAAP financial measures defined in and presented in accordance with SEC
rules and regulations (‘alternative performance measures’). The primary alternative performance measures we use are presented on an‘adjusted performance’ basis which is computed by adjusting reported results for the period-on-period effects of foreign currency translationdifferences and significant items which distort period-on-period comparisons. Significant items are those items which management andinvestors would ordinarily identify and consider separately when assessing performance in order to better understand the underlying trends
in the business. Reconciliations between alternative performance measures and the most directly comparable measures under IFRS areprovided in our 2021 Form 20-F,which is available at www.hsbc.com.

18

Certain defined terms

Unless the context requires otherwise, ‘HSBC Holdings’ means HSBC Holdings plc and ‘HSBC’, the ‘Group’, ‘we’, ‘us’ and ‘our’ refer to
HSBC Holdings together with its subsidiaries. Within this document the Hong Kong Special Administrative Region of the People’s Republicof China is referred 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.

19

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 (0)20 7992 0516

Email: investorrelations@hsbc.com

Email: pressoffice@hsbc.com

Hong Kong – Mark Phin

UK – Heidi Ashley

Telephone: +852 2822 4908

Telephone: +44 (0)20 7992 2045

Email: investorrelations@hsbc.com.hk

Email: pressoffice@hsbc.com
Hong Kong – Jessica Lee
Telephone: +852 2822 1268
Email: aspmediarelations@hsbc.com.hk

HSBC Holdings plc 2022 Interim Results

25

20

Registered Office and Group Head Office

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

26

HSBC Holdings plc 2022 Interim Results

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