FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16
of
the Securities Exchange Act of 1934
For the month of July, 2008
HSBC Holdings plc
42nd Floor, 8 Canada Square, London E14 5HQ, England
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F).
Form 20-F X Form 40-F ......
(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934).
Yes....... No X
(If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ..............).
28 July 2008
GRUPO FINANCIERO HSBC, S.A. DE C.V.
FIRST HALF 2008 FINANCIAL RESULTS - HIGHLIGHTS
Net income for the first half of 2008 was MXN2,854 million, up 13.6 per cent compared with MXN2,512 million for the same period in 2007.
Total operating income (excluding loan impairment charges) for the first half of 2008 was MXN18,684 million, up MXN2,328 million or 14.2 per cent compared with MXN16,356 million for the same period in 2007*.
Net operating income for the first half of 2008 was MXN1,435 million, down MXN810 million compared to the same period of 2007.
Net loans and advances to customers were MXN183.8 billion at 30 June 2008, up MXN9.1 billion, or 5.2 per cent, compared with MXN174.7 billion recorded at 30 June 2007.
Total customer demand and time deposits were MXN261.6 billion at 30 June 2008, up MXN30.2 billion or 13.0 per cent, compared with MXN231.4 billion at 30 June 2007.
The cost efficiency ratio was 58.1 per cent in the first half of 2008, compared to 60.5 per cent for the same period of 2007*.
Return on equity was 15.1 per cent in the first half of 2008, compared with 14.5 per cent for the same period in 2007.
HSBC Mexico S.A. (the bank) is Grupo Financiero HSBC, S.A. de C.V.'s (HSBC) primary subsidiary company and is subject to supervision by the Mexican Banking and Securities Commission. The bank is required to file periodic financial information on a quarterly basis (in this case for the quarter ended June 30 2008) and this information is publicly available. Given that this information is available in the public domain, Grupo Financiero HSBC, S.A. de C.V. has elected to file this release.
Results are prepared in accordance with Mexican GAAP (Generally Accepted Accounting Principles). With effect from January 1, 2008, in accordance with Financial Information Standard B-10, "Effects of Inflation", the effects of inflation in financial statements cannot be recognized. This is due to the change from an inflationary to a non-inflationary economic environment. The comparative figures of the financial statements of periods prior to 2008 are expressed in monetary units with purchasing power at December 31, 2007.
Grupo Financiero HSBC, S.A. de C.V. is a 99.99 per cent directly owned subsidiary of HSBC Holdings plc (HSBC Group).
* For comparative purposes, the monetary position result has been excluded from 2007 figures.
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Grupo Financiero HSBC, S.A. de C.V. |
Overview |
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|
|
Overview
The net income of Grupo Financiero HSBC, S.A. de C.V. was MXN2,854 million in the first half of 2008, up MXN342 million compared with the net income for the same period in 2007.
In an environment characterized by economic deceleration, inflationary pressures and greater market volatility, the bank's results reflect selective growth of assets and expense control, as well as a flexible pricing strategy for products. Credit quality, particularly of credit card and revolving credit portfolios, has deteriorated in the first half of 2008 and, consequently, income was affected by the significant increase in loan impairment charges. The performance of our subsidiaries, particularly HSBC Seguros, added to the results, with a contribution of 18.5 per cent of total net income.
Net interest income increased by MXN2,085 million in the six months to 30 June 2008 to MXN12,529 million, which represents growth of 20.0 per cent compared to the same period in 2007*. This increase was driven by growth in the consumer loan portfolio, particularly in credit cards and the commercial portfolio, which contributed MXN1,323 million and MXN633 million respectively.
Net fee income was MXN5,822 million in the first half of 2008, an increase of 13.9 per cent over the same period in 2007. Increased fee income from credit cards, trade services, membership programs, ATMs, payments and cash management, investment funds and card acquiring contributed significantly to the growth in the period.
Trading income was MXN333 million in the first half of 2008, MXN467 million or 58.4 per cent lower compared to the same period in 2007. The increase in longer-term interest rates observed in the last two months affected the mark to market of the bond positions, resulting in lower income.
In this period, particular emphasis has been placed on the expense control policy. Administrative expenses increased in the first half of 2008 by MXN960 million, compared to the same period in 2007, reflecting a combination of selective investment, with improvements in productivity and more efficient expense control. Part of the increase is attributable to higher promotion expenses for the Tu Cuenta packaged product, the on-going strengthening of the technological infrastructure and loan recovery service costs. Staff expenses rose in line with our business growth investment strategy. The cost efficiency ratio* improved by 2.4 percentage points to 58.1 per cent, with revenue growth of 14.2 per cent exceeding expense growth of 9.7 per cent.
Other income increased MXN1,296 million to MXN2,189 million in the first half of 2008. This growth is primarily due to extraordinary income of MXN1,045 million received during the first half of 2008 from the sale of VISA Inc. stock, as a result of the company's global Initial Public Offering ("IPO"), and MXN114 million following the sale of HSBC's shares in the Mexican Stock Exchange ("BMV") to the exchange prior to BMV's IPO.
Loan impairment charges increased by MXN2,463 million in the first half of 2008 compared with the same period in 2007. This increase is due to greater requirements for impairment charges as a result of portfolio growth and increased credit card reserves, in line with the expansion of the credit card portfolio, as well as higher delinquency in this portfolio and loans to individuals and small businesses. This increase in loan impairment charges is consistent with market trends and also reflects the cost of HSBC's strategy to grow organically in areas in which the bank had previously been under represented. HSBC's allowance for loan losses as a percentage of impaired loans was 124.2 per cent at 30 June 2008, compared to 146.2 per cent for the same period in 2007.
Regular reviews of the credit quality of new business are undertaken to ensure close control of customer acquisition channels, including external referring agencies. Adjustments have also been made to the credit underwriting models to improve the portfolio credit quality. At the same time, we continue to strengthen our collection capabilities.
Loans to government entities have decreased by MXN6,791 million compared to the same period in 2007 as a result of several repayments made by government entities.
The Bank's capital ratio at June 30 2008 was 13.5 per cent.
Business highlights
Personal Financial Services reported stable growth in consumer loans, mainly through leveraging its customer relationship management capabilities. In the first half of 2008, our credit card portfolio continued to increase as a result of the implementation of the bank's strategy to grow organically, delivering a rising market share, from 9.0 to 10.8 per cent compared to the same period last year1. Personal and payroll loans were other areas that contributed to the growth in the consumer portfolio, showing an increase of 20.5 per cent in the first half of 2008 compared to the same period in 2007.
Deposit growth has been strong during the first half of 2008, increasing 9.8 per cent compared to the same period in 2007. Time deposits increased 13.8 per cent compared to the same period in 2007, and comprise 53.5 per cent of total deposits. Net interest income related to deposits has increased 7.5 per cent compared to the same period in 2007.
Higher consumer loan volumes, particularly credit cards, also contributed to an increase in net interest income.
Commercial Banking in Mexico saw an increase in lending balances of 15.7 per cent compared to the first half of 2007, due mainly to strong growth in factoring businesses, trade services, real estate projects and the State and Municipal sectors.
The favorable performance of the commercial portfolio is combined with greater growth in the deposit base, with an annual increase of 17.2 per cent compared with the same period in 2007.
Driven by the HSBC Group's broad geographic presence and enhanced product capabilities our trade services market share increased by 2.7 percentage points compared to the same period in 2007, to reach 17.7 per cent2. The strong performance of our factoring services business has been augmented by improving processes and products designed to meet our customers' needs, such as the Export Factoring product.
Global Banking and Markets is committed to carry on developing efficient financial solutions for Mexican clients by building on the Group's experienced global network. During the period, Global Banking and Markets launched Custodial Services, as part of the range of products offered to Mexican clients in order to increase its penetration in the corporate market in Mexico.
Global Banking focused its activities in Debt Capital Markets and Project Finance deals with its Global Clients, achieving increases of 36.4 per cent and 294.7 per cent respectively, compared to the same period in 2007. The most significant deals during the first half of 2008 were related to debt capital markets, syndicated finance, trade services, loans, derivatives and foreign exchange transactions. As result of its increased penetration in the market, HSBC Mexico achieved second place in the June 2008 Debt Capital Markets League Tables.
Foreign exchange gains increased 14.6 per cent in the first six months to 30 June 2008 compared to same period of 2007, benefiting from the volatility experienced in the markets and the strong foreign exchange flows generated by the branch network.
About HSBC
Grupo Financiero HSBC, S.A. de C.V. is Mexico's fourth largest banking and financial services institution with 1,332 branches, 5,875 ATMs, approximately 9.1 million customer accounts and more than 22,800 employees. For more information, consult our website at www.hsbc.com.mx.
Grupo Financiero HSBC, S.A. de C.V. is a 99.99 per cent directly owned subsidiary of HSBC Holdings plc. Headquartered in London, UK, the HSBC Group serves over 128 million customers worldwide through 10,000 properties in 83 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With assets of US$2,354 billion at 31 December 2007, HSBC is one of the world's largest banking and financial services organisations. With listings on the London, Hong Kong, New York, Paris and Bermuda stock exchanges, shares in HSBC Holdings plc are held by about 200,000 shareholders in over 100 countries and territories. HSBC is marketed worldwide as 'the world's local bank''.
1 Source: HSBC analysis, based on Mexican Banks Association (ABM) figures as of May 2008 for the six largest banks.
2 Source: HSBC analysis, based on Mexican Banking and Securities Commission Statistical Bulletin, figures at March 2007.
For further information contact:
|
London |
|
|
Richard Lindsay |
Danielle Neben |
|
Group Media Relations |
Investor Relations |
|
Telephone: +44 (0)20 7991 1555 |
Telephone: +44 (0)20 7992 1938 |
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|
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Mexico City |
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|
Roy Caple |
Yordana Aparicio |
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Public Affairs |
Investor Relations |
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Telephone: +52 (55) 5721 6060 |
Telephone: +52 (55) 5721 5192 |
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Grupo Financiero HSBC, S.A. de C.V.
|
Co
nsolidated Balance Sheet
|
|
|
|
|
Figures in MXN millions
|
GROUP
|
|
BANK
|
|
||||
|
|
30 June 2008
|
|
30 June 2007
|
|
30 June 2008
|
|
30 June 2007
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and deposits in banks
|
51,596
|
|
51,394
|
|
51,596
|
|
51,394
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in securities
|
82,415
|
|
63,264
|
|
81,730
|
|
62,158
|
|
|
Trading securities
|
50,311
|
|
29,745
|
|
50,209
|
|
28,639
|
|
|
Available-for-sale securities
|
28,080
|
|
29,388
|
|
27,497
|
|
29,388
|
|
|
Held to maturity securities
|
4,024
|
|
4,131
|
|
4,024
|
|
4,131
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities and derivative operations
|
16,260
|
|
86
|
|
16,252
|
|
81
|
|
|
Repurchase agreements
|
42
|
|
86
|
|
34
|
|
81
|
|
|
Derivative transactions
|
16,218
|
|
-
|
|
16,218
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Performing loans
|
|
|
|
|
|
|
|
|
|
Commercial loans
|
72,561
|
|
68,263
|
|
72,561
|
|
68,263
|
|
|
Loans to financial intermediaries
|
14,596
|
|
7,238
|
|
14,596
|
|
7,238
|
|
|
Consumer loans
|
47,872
|
|
43,403
|
|
47,872
|
|
43,403
|
|
|
Mortgage loans
|
19,490
|
|
20,249
|
|
19,490
|
|
20,249
|
|
|
Loans to government entities
|
31,428
|
|
38,219
|
|
31,428
|
|
38,219
|
|
|
Total performing loans
|
185,947
|
|
177,372
|
|
185,947
|
|
177,372
|
|
|
Impaired loans
|
|
|
|
|
|
|
|
|
|
Commercial loans
|
2,246
|
|
1,870
|
|
2,246
|
|
1,870
|
|
|
Consumer loans
|
5,432
|
|
2,583
|
|
5,432
|
|
2,583
|
|
|
Mortgage loans
|
1,370
|
|
1,357
|
|
1,370
|
|
1,357
|
|
|
Total impaired loans
|
9,048
|
|
5,810
|
|
9,048
|
|
5,810
|
|
|
Gross loans and advances to customers
|
194,995
|
|
183,182
|
|
194,995
|
|
183,182
|
|
|
Allowance for loan losses
|
(11,238
|
)
|
(8,492
|
)
|
(11,238
|
)
|
(8,492
|
)
|
|
Net loans and advances to customers
|
183,757
|
|
174,690
|
|
183,757
|
|
174,690
|
|
|
Other accounts receivable
|
30,421
|
|
25,755
|
|
30,313
|
|
25,604
|
|
|
Foreclosed assets
|
80
|
|
67
|
|
80
|
|
67
|
|
|
Property, furniture and equipment, net
|
6,419
|
|
6,209
|
|
6,407
|
|
6,196
|
|
|
Long-term investments in equity securities
|
3,263
|
|
3,168
|
|
121
|
|
148
|
|
|
Deferred taxes
|
1,8
05
|
|
202
|
|
1,810
|
|
155
|
|
|
Goodwill
|
2,749
|
|
2,749
|
|
-
|
|
-
|
|
|
Other assets, deferred charges and intangibles
|
2,087
|
|
1,001
|
|
2,057
|
|
967
|
|
|
Total assets
|
380,8
52
|
|
328,585
|
|
374,123
|
|
321,460
|
|
|
Grupo Financiero HSBC, S.A. de C.V.
|
Co
nsolidated Balance Sheet
|
|
(continued)
|
|
|
Figures in MXN millions
|
GROUP
|
|
BANK
|
|
||||
|
|
30 June 2008
|
|
30 June 2007
|
|
30 June 2008
|
|
30 June 2007
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Deposits
|
265,849
|
|
235,786
|
|
266,019
|
|
237,456
|
|
|
Demand deposits
|
127,004
|
|
128,483
|
|
127,174
|
|
130,152
|
|
|
Time deposits
|
134,591
|
|
102,925
|
|
134,591
|
|
102,925
|
|
|
Bonds
|
4,254
|
|
4,378
|
|
4,254
|
|
4,379
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank deposits and other liabilities
|
9,529
|
|
10,114
|
|
9,529
|
|
10,114
|
|
|
On demand
|
1,031
|
|
464
|
|
1,031
|
|
464
|
|
|
Short-term
|
5,996
|
|
6,320
|
|
5,996
|
|
6,320
|
|
|
Long-term
|
2,502
|
|
3,330
|
|
2,502
|
|
3,330
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities and derivative transactions
|
15,70
5
|
|
13,626
|
|
15,697
|
|
13,62
1
|
|
|
Repurchase agreements
|
5
3
|
|
57
|
|
45
|
|
5
2
|
|
|
Securities deliverable under loan
t
ransactions
|
-
|
|
13,538
|
|
-
|
|
13,538
|
|
|
Derivative transactions
|
15,652
|
|
31
|
|
15,652
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|
Other accounts payable
|
49,98
0
|
|
30,840
|
|
49,744
|
|
30,65
8
|
|
|
Income tax and employee profit
sharing payable
|
1,595
|
|
1,320
|
|
1,540
|
|
1,274
|
|
|
Sundry creditors and other accounts
p
ayable
|
48,38
5
|
|
29,520
|
|
48,204
|
|
29,38
4
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated debentures outstanding
|
2,201
|
|
2,279
|
|
2,201
|
|
2,279
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred credits
|
480
|
|
220
|
|
480
|
|
220
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
343,744
|
|
292,865
|
|
343,670
|
|
294,348
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paid in capital
|
21,466
|
|
21,466
|
|
15,883
|
|
13,533
|
|
|
Capital stock
|
8,210
|
|
8,210
|
|
4,272
|
|
4,079
|
|
|
Additional paid in capital
|
13,256
|
|
13,256
|
|
11,611
|
|
9,454
|
|
|
|
|
|
|
|
|
|
|
|
|
Other reserves
|
15,6
38
|
|
14,233
|
|
14,568
|
|
13,559
|
|
|
Capital reserves
|
1,442
|
|
1,162
|
|
12,797
|
|
14,077
|
|
|
Retained earnings
|
11,679
|
|
18,827
|
|
-
|
|
-
|
|
|
Result from the Mark-to-Market of
available-for-sale securities
|
(
201
|
)
|
-
|
|
(296
|
)
|
(88
|
)
|
|
Cumulative effect of restatement
|
-
|
|
(3,989
|
)
|
-
|
|
(3,593
|
)
|
|
Gains on non-monetary asset
v
aluation
|
-
|
|
(4,279
|
)
|
-
|
|
1,185
|
|
|
Adjustment in the employee pension
|
(136
|
)
|
-
|
|
(136
|
)
|
-
|
|
|
Net income
|
2,854
|
|
2,512
|
|
2,203
|
|
1,978
|
|
|
Minority interest in capital
|
4
|
|
21
|
|
2
|
|
20
|
|
|
Total equity
|
37,1
08
|
|
35,720
|
|
30,453
|
|
27,112
|
|
|
Total liabilities and equity
|
380,8
52
|
|
328,585
|
|
374,123
|
|
321,460
|
|
|
Grupo Financiero HSBC, S.A. de C.V.
|
Co
nsolidated Balance Sheet
|
|
(continued)
|
|
|
Figures in MXN millions
|
GROUP
|
|
||
|
|
30 June 2008
|
|
30 June 2007
|
|
|
Memorandum accounts
|
|
|
|
|
|
|
|
|
|
|
|
Transactions on behalf of third parties
|
58,094
|
|
101,007
|
|
|
|
|
|
|
|
|
Customer current accounts
|
11
|
|
(132
|
))
|
|
Customer bank
|
1
|
|
3
|
|
|
Settlement of customer securities and documents
|
10
|
|
(135
|
)
|
|
Customer securities
|
27,325
|
|
73,523
|
|
|
Customer securities in custody
|
27,316
|
|
73,517
|
|
|
Pledged customers securities and documents
|
9
|
|
6
|
|
|
Transactions on behalf of customers
|
2,593
|
|
2,400
|
|
|
Customer repurchase transactions
|
2,593
|
|
2,400
|
|
|
Other transactions on behalf of customers
|
28,165
|
|
25,216
|
|
|
Investment on behalf of customers, net
|
28,165
|
|
25,216
|
|
|
Other memorandum accounts
|
631,701
|
|
399,732
|
|
|
Investment of the SAR funds
|
-
|
|
3,645
|
|
|
Integrated loan portfolio
|
204,111
|
|
191,910
|
|
|
Other memorandum accounts
|
427,590
|
|
204,177
|
|
|
|
|
|
|
|
|
Transactions for the group's own accounts
|
1,809,234
|
|
1,459,479
|
|
|
|
|
|
|
|
|
Accounts for the group's own registry
|
1,809,245
|
|
1,459,450
|
|
|
Guarantees granted
|
34
|
|
49
|
|
|
Irrevocable lines of credit granted
|
9,081
|
|
8,679
|
|
|
Goods in trust or mandate
|
188,624
|
|
123,723
|
|
|
Goods in custody or under administration
|
305,140
|
|
57,030
|
|
|
Amounts committed in transactions with
Fobaproa
|
143
|
|
152
|
|
|
Amounts contracted in derivative operations
|
1,306,093
|
|
1,265,622
|
|
|
Securities in custody
|
-
|
|
4,062
|
|
|
Other contingent obligations
|
130
|
|
13
3
|
|
|
|
|
|
|
|
|
Repurchase/resale agreements
|
|
|
|
|
|
Securities receivable under repos
|
35,008
|
|
43,263
|
|
|
(less) Repurchase agreements
|
35,027
|
|
43,282
|
|
|
|
(19)
|
)
|
(19)
|
)
|
|
|
|
|
|
|
|
Reverse repurchase agreements
|
12,595
|
|
7,498
|
|
|
(less) Securities deliverable under repos
|
12,587
|
|
7,450
|
|
|
|
8
|
|
48
|
|
|
Grupo Financiero HSBC, S.A. de C.V.
|
Co
nsolidated Balance Sheet
|
|
(continued)
|
|
|
Figures in MXN millions
|
BANK
|
|
||
|
|
30 June 2008
|
|
30 June 2007
|
|
|
Memorandum accounts
|
|
|
|
|
|
|
|
|
|
|
|
Guarantees granted
|
34
|
|
49
|
|
|
Other contingent obligations
|
130
|
|
134
|
|
|
Irrevocable lines of credit granted
|
9,081
|
|
8,679
|
|
|
Goods in trust or mandate
|
188,624
|
|
123,723
|
|
|
Goods in custody or under administration
|
301,195
|
|
57,030
|
|
|
Third party investment banking operations, net
|
28,165
|
|
25,216
|
|
|
Amounts committed in transactions with Fobaproa
|
143
|
|
152
|
|
|
Amounts contracted in derivative operations
|
1,306,093
|
|
1,265,623
|
|
|
Investments of retirement savings system funds
|
-
|
|
3,645
|
|
|
Integrated loan portfolio
|
204,111
|
|
191,910
|
|
|
Other control accounts
|
427,589
|
|
190,636
|
|
|
|
2,465,165
|
|
1,866,797
|
|
|
|
|
|
|
|
|
Securities receivable under repos
|
32,423
|
|
40,867
|
|
|
(less) Repurchase agreements
|
(32,434)
|
)
|
(40,882)
|
)
|
|
|
(11)
|
)
|
(15)
|
|
|
|
|
|
|
|
|
Reverse repurchase agreements
|
10,002
|
|
5,098
|
|
|
(less) Securities deliverable under repos
|
(10,002)
|
)
|
(5,054)
|
)
|
|
|
-
|
|
44
|
|
|
|
|
|
|
|
|
Securities deliverable under loan transactions
|
-
|
|
13,538
|
|
|
|
-
|
|
13,538
|
|
|
Grupo Financiero HSBC, S.A. de C.V.
|
Co
nsolidated I
ncome Statement
|
|
|
|
|
Figures in MXN millions
|
GROUP
|
|
BANK
|
|
|||||
|
|
30 June 2008
|
|
30 June 2007
|
|
30 June 2008
|
|
30 June 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
18,903
|
|
15,614
|
|
18,880
|
|
15,523
|
|
|
|
Interest expense
|
(6,374
|
)
|
(5,170
|
)
|
(6,375
|
)
|
(5,139
|
)
|
|
|
Monetary position (margin), net
|
-
|
|
(285
|
)
|
-
|
|
(261
|
)
|
|
|
Net interest income
|
12,529
|
|
10,159
|
|
12,505
|
|
10,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan impairment charges
|
(6,392
|
)
|
(3,929
|
)
|
(6,392
|
)
|
(3,929
|
)
|
|
|
Risk-adjusted net interest income
|
6,137
|
|
6,230
|
|
6,113
|
|
6,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees and commissions receivable
|
6,396
|
|
5,678
|
|
5,968
|
|
5,289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees payable
|
(574
|
)
|
(566
|
)
|
(557
|
)
|
(559
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading income
|
333
|
|
800
|
|
328
|
|
796
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating income
|
12,292
|
|
12,142
|
|
11,852
|
|
11,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative and
personnel
expenses
|
(10,857)
|
|
(9,897)
|
|
(10,457)
|
|
(9,615)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income
|
1,435
|
|
2,245
|
|
1,395
|
|
2,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
2,
520
|
|
1,460
|
|
2,549
|
|
1,502
|
|
|
|
Other expenses
|
(331
|
)
|
(567
|
)
|
(478
|
)
|
(566
|
)
|
|
|
Net income before taxes
|
3,
624
|
|
3,138
|
|
3,466
|
|
3,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax and employee profit sharing tax
|
(2,336
|
)
|
(1,636
|
)
|
(2,285
|
)
|
(1,607
|
)
|
|
|
Deferred income tax
|
991
|
|
532
|
|
990
|
|
537
|
|
|
|
Net income before subsidiaries
|
2,2
79
|
|
2,034
|
|
2,171
|
|
1,971
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Undistributed income from subsidiaries
|
576
|
|
477
|
|
33
|
|
6
|
|
|
|
Income from ongoing operations
|
2,855
|
|
2,511
|
|
2,204
|
|
1,977
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority interest
|
(1
|
)
|
1
|
|
(1
|
)
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
2,854
|
|
2,512
|
|
2,203
|
|
1,978
|
|
|
|
Grupo Financiero HSBC, S.A. de C.V.
|
Statement of Changes in Shareholders' Equity
|
|
|
|
|
Figures in MXN
millions
|
Capital contributed
|
Capital reserves
|
Retained earnings
|
Result from v
aluation of available-for-sale
securities
|
Deficit in
restatement of stock- holders' equit
y
|
Adjustment in the employees pension
|
Net income
|
Minority interest
|
Total equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances at 31
December 2007
|
21,466
|
1,162
|
18, 827
|
-
|
(8,544)
|
-
|
5,615
|
2
|
38,528
|
|
|
|
|
|
|
|
|
|
|
|
|
Movements inherent to the shareholders'
decision
|
|
|
|
|
|
|
|
|
|
|
Capitalisation of
retained earnings
|
-
|
280
|
5,335
|
-
|
-
|
-
|
(5,615)
|
-
|
-
|
|
Cash dividend
|
-
|
-
|
(4,350)
|
-
|
-
|
-
|
-
|
-
|
(4,350)
|
|
Other movements
|
-
|
-
|
(8,228)
|
-
|
8,228
|
-
|
-
|
-
|
-
|
|
Total
|
-
|
280
|
(7,243)
|
-
|
8,228
|
-
|
(5,615)
|
-
|
(4,350)
|
|
|
|
|
|
|
|
|
|
|
|
|
Movements for the recognition of the comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
-
|
-
|
-
|
-
|
-
|
-
|
2,854
|
-
|
2,854
|
|
Other movements
|
-
|
-
|
95
|
(
201
)
|
316
|
(136)
|
-
|
-
|
74
|
|
Minority interest
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2
|
2
|
|
Total
|
-
|
-
|
95
|
(
201
)
|
316
|
(136)
|
2,854
|
2
|
2,9
30
|
|
Balances
at
30 June 2008 |
21,466
|
1,442
|
11,679
|
(
201
)
|
-
|
(136)
|
2,854
|
4
|
37,1
08
|
|
Grupo Financiero HSBC, S.A. de C.V.
|
Statement of Change in Shareholders' Equity
|
|
(continued)
|
|
|
Figures in MXN
millions
|
Capital contributed
|
Capital reserves
|
Retained earnings
|
Result from valuation of available-for-sale
securities
|
Deficit in restatement of stock-
holders' equity
|
Adjustment in the employees pension
|
Net income
|
Minority interest
|
Total equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances
at
31 December
2007
|
15,883
|
14,077
|
-
|
(217)
|
(2,421)
|
(136)
|
4,656
|
1
|
31,843
|
|
|
|
|
|
|
|
|
|
|
|
|
Movements inherent to
the shareholders'
decision
|
|
|
|
|
|
|
|
|
|
|
Constitution of reserves
|
-
|
4,656
|
(4,656)
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Transfer of result of
p
rior years
|
-
|
-
|
4,656
|
-
|
-
|
-
|
(4,656)
|
-
|
-
|
|
Cash dividend
|
-
|
(3,500)
|
-
|
-
|
-
|
-
|
-
|
-
|
(3,500
)
|
|
Total
|
-
|
1,156
|
-
|
-
|
-
|
-
|
(4,656)
|
-
|
(3,500)
|
|
|
|
|
|
|
|
|
|
|
|
|
Movements for the
recognition of the
comprehensive incom
e
|
|
|
|
|
|
|
|
|
|
|
Net income
|
-
|
-
|
-
|
-
|
-
|
-
|
2,203
|
-
|
2,203
|
|
Result from
valuation of available-
for-sale securities
|
-
|
24
|
-
|
(117)
|
-
|
-
|
-
|
-
|
(93)
|
|
Cumulative effect of
restatement
|
-
|
(2,460)
|
-
|
38
|
2,421
|
-
|
-
|
-
|
(
1)
|
|
Minority interest
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1
|
1
|
|
Total
|
-
|
(2,436)
|
-
|
(79)
|
2,421
|
-
|
2,203
|
1
|
2,110
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances
at
30 June 2008 |
15,883
|
12,797
|
-
|
(296)
|
-
|
(136)
|
2,203
|
2
|
30,453
|
|
Grupo Financiero HSBC, S.A. de C.V.
|
Consolidated Statement of Changes in Financial Posit
ion
|
|
|
|
|
Figures in MXN millions
|
|
|
|
|
|
|
30 June 2008
|
|
30 June 2007
|
|
|
Operating activities:
|
|
|
|
|
|
Net income
|
2,854
|
|
2,512
|
|
|
Items included in operations not requiring (providing)
funds:
|
|
|
|
|
|
Result from mark-to-market valuations
|
(365
|
)
|
(93
|
)
|
|
Allowances for loan losses
|
6,392
|
|
3,929
|
|
|
Depreciation and amortisation
|
532
|
|
526
|
|
|
Deferred taxes
|
(991
|
)
|
(532
|
)
|
|
Minority interest
|
1
|
|
(1
|
)
|
|
Undistributed income from subsidiaries, net
|
(
576
|
)
|
(477
|
)
|
|
Others
|
7
|
|
17
|
|
|
Total operating items not requiring funds
|
7,
854
|
|
5,881
|
|
|
|
|
|
|
|
|
Changes in items related to operations:
|
|
|
|
|
|
(
Decrease
) / increase
in deposits
|
(1,108
|
)
|
8,408
|
|
|
Increase in loan portfolio
|
(667
|
)
|
(17,842
|
)
|
|
Increase
/ (decrease)
in securities and derivative transactions, net
|
(769
|
)
|
7,224
|
|
|
Increase in financial instruments
|
(6,021
|
)
|
(3,903
|
)
|
|
In
crease
/ (decrease)
in bank deposits and other liabilities
|
1,921
|
|
(3,341
|
)
|
|
Funds provided by operating activities
|
1,
210
|
|
(3,573
|
)
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
Subordinated debentures outstanding
|
(7
|
)
|
(11
|
)
|
|
Cash dividend
|
(4,350
|
)
|
-
|
|
|
Increase
in other payable accounts
|
23,663
|
|
13,386
|
|
|
Funds provided in financing activities
|
19,306
|
|
13,375
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
Decrease
/ (increase)
in property, furniture and equipment, net
|
579
|
|
(716
|
)
|
|
Decrease
/ (increase)
in deferred charges or credits, net
|
1
86
|
|
(46
|
)
|
|
Increase in foreclosed assets
|
(5
|
)
|
(28
|
)
|
|
Increase in other receivable accounts
|
(18,545
|
)
|
(14,793
|
)
|
|
Funds used in investing activities
|
(17,
785
|
)
|
(15,583
|
)
|
|
Increase
/ (decrease)
in cash and equivalents
|
2,731
|
|
(5,781
|
)
|
|
Cash and equivalents at beginning of period
|
48,865
|
|
57,175
|
|
|
Cash and equivalents at end of period
|
51,596
|
|
51,394
|
|
|
Grupo Financiero HSBC, S.A. de C.V.
|
Consolidated Statement of Changes in Financial Posit
ion
|
|
(continued)
|
|
|
Figures in MXN millions
|
31 June 2008
|
|
30 June 2007
|
|
|
Operating activities:
|
|
|
|
|
|
Net income
|
2,203
|
|
1,978
|
|
|
Items included in operations not requiring (providing)
funds:
|
|
|
|
|
|
Result from mark-to-market valuations
|
(365
|
)
|
(93
|
)
|
|
Allowances for loan losses
|
6,392
|
|
3,929
|
|
|
Depreciation and amortisation
|
530
|
|
524
|
|
|
Deferred taxes
|
(990
|
)
|
(537
|
)
|
|
Undistributed income from subsidiaries, net
|
(33
|
)
|
(6
|
)
|
|
Value loss estimation for foreclosed assets
|
7
|
|
17
|
|
|
Minority interest
|
1
|
|
(1
|
)
|
|
Total operating items not requiring funds
|
7,745
|
|
5,811
|
|
|
|
|
|
|
|
|
Changes in items related to operations:
|
|
|
|
|
|
(
Decrease
) / increase
in deposits
|
(1,006
|
)
|
8,429
|
|
|
Increase in loan portfolio
|
(667
|
)
|
(17,842
|
)
|
|
(
Increase
) / decrease
in securities and derivative transactions, net
|
(211
|
)
|
7,327
|
|
|
Increase in financial instruments
|
(6,380
|
)
|
(4,377
|
)
|
|
Increase
/ (decrease)
in bank deposits and other liabilities
|
1,921
|
|
(3,341
|
)
|
|
Funds provided by
operating activities
|
1,402
|
|
(3,993
|
)
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
Subordinated debentures outstanding
|
(7
|
)
|
(11
|
)
|
|
Cash Dividend
|
(3,476
|
)
|
-
|
|
|
In
crease in other payable accounts
|
23,581
|
|
13,384
|
|
|
Contributions or reimbursements of capital contributed
|
-
|
|
-
|
|
|
Funds provided by financing activities
|
20,098
|
|
13,373
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
Increase in property, furniture and equipment, net
|
(389
|
)
|
(335
|
)
|
|
De
crease
/ (increase)
in deferred charges or credits, net
|
147
|
|
(47
|
)
|
|
Increase in foreclosed assets
|
(6
|
)
|
(29
|
)
|
|
Increase in other receivable accounts
|
(18,520
|
)
|
(14,749
|
)
|
|
Funds used in investing activities
|
(18,768
|
)
|
(15,1
60
|
)
|
|
In
crease
/ (decrease)
in cash and equivalents
|
2,732
|
|
(5,780
|
)
|
|
Cash and equivalents
at beginning of period
|
48,864
|
|
57,174
|
|
|
Cash and equivalents
at end of period
|
51,596
|
|
51,394
|
|
|
|
|
|
|
|
|
Grupo Financiero HSBC, S.A. de C.V.
|
Differences between Mexican GAAP and International Financial
Reporting Standards (IFRS
)
|
|
|
|
|
|
|
|
|
|
|
|
30 June
|
|
|
|
Figures in MXN millions
|
2008
|
|
|
|
|
|
|
|
|
Grupo Financiero HSBC - Net Income Under Mexican GAAP
|
2,854
|
|
|
|
|
|
|
|
|
Differences arising on the valuation of pensions and post
retirement healthcare benefits
|
42
|
|
|
|
Differences arising on acquisition costs relating to
long-term investment contracts
|
(20
|
)
|
|
|
Differences arising from the deferral of fees received and
paid on the origination of loans
|
60
|
|
|
|
Differences arising from the recognition and provisioning
for loan impairments
|
161
|
|
|
|
Differences arising from purchase accounting adjustments
*
|
(12
|
)
|
|
|
Differences arising from the recognition of the present
value in-force of long-term
insurance contracts
|
19
|
|
|
|
Other differences in accounting principles
|
12
|
|
|
|
HSBC México net income under IFRS
|
3,116
|
|
|
|
US dollar equivalent (millions)
|
293
|
|
|
|
Add back tax expense
|
949
|
|
|
|
HSBC México profit before tax under IFRS
|
4,065
|
|
|
|
US dollar equivalent (millions)
|
383
|
|
|
|
Exchange rate used for conversion
|
10.6
|
|
* Net of tax at 28 per cent.
Summary of key differences between Grupo Financiero's results as reported under Mexican GAAP and IFRS
Retirement benefits
Mexican GAAP
Obligations are recognised in the Income Statement of each year based on actuarial computations of the present value of those obligations using the projected unit credit method and real interest rates.
Unrecognised past service costs are amortised on an estimated service life of the employees.
IFRS
Obligations are recognised in the Income Statement of each year based on actuarial computations of the present value of those obligations using the projected unit credit method.
Actuarial gains and losses are recognised in stockholders equity as they arise.
Unrecognised past service cost are recognised in the Income Statement as
they arise.
Acquisition costs of long-term investment contracts
Mexican GAAP
All costs related to the acquisition of long-term investment contracts are expensed as they are incurred.
IFRS
Incremental costs relating to the acquisition of long-term investment contracts are deferred and amortised over the expected life of the contract.
Fees paid and received on origination of loans
Mexican GAAP
All fees received on loan origination are deferred and amortised over the life of the loan. However, this policy was introduced 1 January 2007, all fees having previously been recognised up front.
IFRS
Fees and expenses received or paid on origination of a loan that are directly attributable to the origination of that loan are accounted for under the effective interest rate method over the expected life of the loan. This policy has been in effect since 1 January 2005.
Loan impairment charges
Mexican GAAP
Loan impairment charges are calculated following the rules issued by the Mexican Ministry of Finance and the National Banking and Securities Commission. Such rules establish authorised methodologies for determining the amount of provision for each type of loan.
IFRS
Loan loss provisions for collectively assessed loans are determined based on a roll-rate methodology reflecting history of losses for each category of loan, past due payments and collateral values. For individually assessed loans, loan loss provisions are calculated based on the discounted cash flow value of the collateral.
Purchase accounting adjustments
These arise from valuations made by HSBC on acquiring Grupo Financiero Bital in November 2002 on various assets and liabilities that differed from the valuation in the local Mexican GAAP books.
Recognition of present value of in-force long-term life insurance contracts
Mexican GAAP
The present value of future earnings is not recognised. Premiums are accounted for on a received basis and reserves are calculated in accordance with guidance as set out by the Insurance Regulator (Comisión Nacional de Seguros y Fianzas).
IFRS
A value is placed on insurance contracts that are classified as long-term insurance business and are in-force at the balance sheet date. The present value of in-force long-term insurance business is determined by discounting future earnings expected to emerge from business currently in force using appropriate assumptions in assessing factors such as recent experience and general economic conditions.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
HSBC Holdings plc
By:
Name: P A Stafford
Title: Assistant Group Secretary
Date: July 28, 2008