Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 155

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 155
---
2024, we revised the adjustments made to our adjusted RoTE measure. Prior to this, we adjusted RoTE for the impact of strategic transactions and the impairment of our investment in Bank of Communications Co., Limited (‘BoCom‘), whereas from 1 January 2024 we have excluded all notable items. This was intended to improve alignment with the treatment of notable items in our other income statement disclosures. The calculation for RoTE excluding notable items, adjusts the ‘profit attributable to the ordinary shareholders, excluding goodwill and other intangible assets impairment‘ for the post-tax impact of notable items. It also adjusts the ‘average tangible equity‘ for the post-tax impact of notable items in each period, which remain as adjusting items for all relevant periods within that calendar year. For a reconciliation from return on equity (‘RoE’) to RoTE excluding notable items, see page 131 . We do not reconcile our forward RoTE guidance to the equivalent reported measure. Banking net interest income Banking net interest income (‘banking NII’) adjusts our NII, primarily for the impact of funding trading and fair value activities reported in interest expense. It represents the Group’s banking revenue that is directly impacted by changes in interest rates. We use this measure to determine the deployment of our surplus funding, and to help optimise our structural hedging and risk management actions. For more information on banking NII, see page 89 . Target basis operating expenses Target basis operating expenses is computed by excluding the direct cost impact of our France retail banking operations and Canada banking business disposals from the 2023 baseline. It is measured on a constant currency basis and excludes notable items and the impact of retranslating the prior year results of hyperinflationary economies at constant currency, which we consider to be outside of our control. We consider target basis operating expenses to provide useful information to investors by quantifying and excluding the notable items that management considered when setting and assessing cost- related targets. For a reconciliation from reported operating expenses to target basis operating expenses, see page 133 . In 2024, we targeted operating expenses growth on a target basis of approximately 5% compared with 2023. This target reflected our business plan for 2024, which included an increase in staff compensation, higher spend and investment in technology for growth and efficiency, in part mitigated by cost savings from actions taken during 2023. We are targeting growth in target basis operating expenses of approximately 3% in 2025 compared with 2024. Our target basis