HSBC 2004 Annual Report Download - page 106

HSBC HOLDINGS PLC
Financial Review (continued)
104
business to broader wealth advisory service, with a
resulting shift from net interest income to fees and
commissions. Despite this, net interest income was
3 per cent higher than 2002, reflecting an improved
funding environment in 2003.
An increase in net fees and commissions and
other income of US$52 million, or 37 per cent,
mainly reflected the benefit from increased
investment activity by clients and a greater emphasis
on fee-based non-discretionary advisory and
structured products. In addition, WTAS (HSBC’s tax
advisory service for high net-worth clients), in its
first full year of operation, contributed to this
increase.
The inclusion of WTAS was the principal
contributor to the US$48 million increase in
operating expenses, before goodwill amortisation.
Cost savings from the alignment of international and
domestic client servicing units offset higher staff and
restructuring costs. Excluding this operating
expenses were essentially flat year-on-year.