HSBC 2005 Annual Report Download - page 191

HSBC HOLDINGS PLC
Report of the Directors
189
Results and dividends for 2005
HSBC reported profit before tax of
US$20,966 million. Profit attributable to
shareholders of HSBC Holdings, transferred to
retained earnings, was US$15,081 million, a 16.8 per
cent return on average total shareholders’ equity.
First, second and third interim dividends for
2005, each of US$0.14 per ordinary share, were paid
on 6 July 2005, 5 October 2005 and 19 January 2006
respectively. Note 11 on the Financial Statements
gives more information on the dividends declared in
2005. On 6 March 2006, the Directors declared a
fourth interim dividend for 2005 of US$0.31 per
ordinary share in lieu of a final dividend, which will
be payable to ordinary shareholders on 11 May 2006
in cash in US dollars, or in sterling or Hong Kong
dollars at exchange rates to be determined on 2 May
2006, with a scrip dividend alternative. As the fourth
interim dividend for 2005 was declared after the
balance sheet date it has not been included as a
creditor at 31 December 2005. The reserves
available for distribution at 31 December 2005 are
US$10,643 million.
A first dividend of US$14.294444 per 6.20 per
cent non-cumulative US dollar preference share,
Series A (‘Series A dollar preference share’),
equivalent to a dividend of US$0.357361 per
Series A American Depositary Shares (‘Series A
ADS’), each of which represents one-fortieth of a
Series A dollar preference share, was paid on
15 December 2005.
Further information about the results is given in
the consolidated income statement on page 236.
Principal activities and business
review
Through its subsidiaries and associates, HSBC
provides a comprehensive range of banking and
related financial services. HSBC operates through
long-established businesses and has an international
network in 76 countries and territories in Europe, the
Asia-Pacific region, the Americas, the Middle East
and Africa. Taken together, the five largest
customers of HSBC do not account for more than
one per cent of HSBC’s income.
The principal acquisitions and disposals made
during the year were:
In June 2005, US$430 million was invested in
the initial public offering of Bank of
Communications Co. Limited, maintaining the
Group’s investment at 19.9 per cent.
In August 2005, a further 9.91 per cent of Ping
An Insurance (Group) Company of China Ltd. was
acquired for US$1,039 million, bringing the Group's
aggregate holding to 19.9 per cent.
In December 2005, Metris Companies Inc. was
acquired for US$1,595 million.
In October 2005, the Group’s interest in
Framlington Group Limited was sold for
US$156 million.
A review of the development of the business of
HSBC undertakings during the year and an
indication of likely future developments are given in
the ‘Description of Business’ on pages 7 to 19.
Share capital and reserves
The following events in relation to the share capital
of HSBC Holdings occurred during the year:
Ordinary shares of US$0.50 each
Scrip dividends
1. 14,944,042 ordinary shares were issued at par
on 20 January 2005 to shareholders who elected
to receive new shares in lieu of the 2004 third
interim dividend. The market value per share
used to calculate shareholders’ entitlements to
new shares was US$16.9969, being the
US dollar equivalent of £8.934.
2. 27,142,444 ordinary shares were issued at par
on 4 May 2005 to shareholders who elected to
receive new shares in lieu of the 2004 fourth
interim dividend. The market value per share
used to calculate shareholders’ entitlements to
new shares was US$15.8923, being the US
dollar equivalent of £8.371.
3. 42,694,641 ordinary shares were issued at par
on 6 July 2005 to shareholders who elected to
receive new shares in lieu of the 2005 first
interim dividend. The market value per share
used to calculate shareholders’ entitlements to
new shares was US$15.8448, being the
US dollar equivalent of £8.656.
4. 19,180,779 ordinary shares were issued at par
on 5 October 2005 to shareholders who elected
to receive new shares in lieu of the 2005 second
interim dividend. The market value per share
used to calculate shareholders’ entitlements to
new shares was US$16.2305, being the
US dollar equivalent of £9.032.
All-Employee share plans
5. 29,692,885 ordinary shares were issued at prices
ranging from £5.3496 to £8.442 per share in