HSBC 2003 Annual Report Download - page 46

HSBC HOLDINGS PLC
Financial Review (continued)
44
Analysis of fees and commissions receivable and payable
Year ended 31 December
2003 2002 2001
Total Household1Rest of HSBC
US$m US$m US$m US$m US$m
Account services ............................................... 2,317 138 2,179 1,715 1,620
Credit facilities .................................................. 966 –966 752 628
Remittances ....................................................... 288 – 288 268 246
Cards ................................................................. 2,976 1,495 1,481 1,242 1,116
Imports/exports .................................................. 609 – 609 556 524
Underwriting ..................................................... 175 – 175 173 135
Insurance ........................................................... 961 35 926 775 668
Mortgage servicing rights .................................. 75 – 75 77 78
Trust income ...................................................... 145 – 145 125 114
Broking income ................................................. 873 – 873 773 928
Global custody ................................................... 338 – 338 296 308
Maintenance income on operating leases ........... 171 – 171 160 165
Funds under management .................................. 1,096 – 1,096 1,026 965
Unit trusts .......................................................... 358 – 358 284 481
Corporate finance .............................................. 189 – 189 122 115
Other ................................................................. 1,023 6 1,017 901 665
Total fees and commissions receivable ........... 12,560 1,674 10,886 9,245 8,756
Less: fees payable .............................................. (2,166
)
(458
)
(1,708
)
(1,421
)
(1,286
)
Net fees and commissions ................................ 10,394 1,216 9,178 7,824 7,470
1Since the date of acquisition.
Year ended 31 December 2003 compared with
year ended 31 December 2002
Other operating income of US$15,474 million, was
US$4,339 million, or 39 per cent, higher than in
2002. Of this increase, Household contributed
US$1,878 million and HSBC Mexico contributed
US$599 million. On an underlying basis, and at
constant exchange rates, growth in other operating
income was 9 per cent, principally as a result of
higher dealing profits throughout HSBC’s
operations.
The acquisitions of Household and HSBC
Mexico reduced the proportion of fee revenues
exposed to stock market fluctuations by bringing into
the Group significant levels of account service fees
(HSBC Mexico) and credit card fee income
(Household). Fees from credit cards now constitute
close to 24 per cent of total fees receivable compared
with 13 per cent in 2002.
Fees and commission income, excluding
Household and HSBC Mexico and at constant
exchange rates, increased by 4 per cent compared
with 2002. In Europe, fee income increased by
US$664 million, or 15 per cent, of which HFC Bank
contributed US$49 million. Excluding this
acquisition and at constant exchange rates, fee
income increased by 2 per cent, mainly from growth
in sales of creditor protection insurance, cards
transactions and loan fees. Within the UK, personal
loan protection premiums grew by 19 per cent,
reflecting growth in mortgages and personal loans.
However, this was partly offset by a decline in sales
of investment and pension products, mainly
reflecting uncertainty in the equity markets.
In North America, excluding US$1,167 million
and US$453 million relating to Household and
HSBC Mexico respectively, fee income was
marginally higher than in 2002. Growth in income
from securities advisory services, deposit-related
service charges and card fees was partly offset by
lower earnings from mortgage servicing.
In Hong Kong, fee income increased by
US$119 million, primarily due to higher revenues
from wealth management services. There was strong
growth in fees from sales of unit trusts and capital-
guaranteed funds, which increased by US$1.6 billion
in 2003. HSBC expanded its range of structured
deposit products, further benefiting fee income.
Revenues from securities and stockbroking also
increased in line with a buoyant stock market in the
second half of the year and increased market share.
In addition, the insurance business generated strong
results reflecting growth in new individual life
business written.