HSBC 2007 Annual Report Download - page 18

HSBC HOLDINGS PLC
Report of the Directors: Business Review (continued)
Customer groups > Summary / Business highlights
16
Customer groups and global
businesses
Summary
HSBC manages its business through two customer
groups, Personal Financial Services and Commercial
Banking, and two global businesses, Global Banking
and Markets (previously Corporate, Investment
Banking and Markets), and Private Banking.
Personal Financial Services incorporates the Group’s
consumer finance businesses, reflecting their
increasing integration within mainstream financial
services around the world. The largest of these is
HSBC Finance Corporation (‘HSBC Finance’), one
of the leading consumer finance companies in the
US.
Profit before tax
Year ended 31 December
2007 2006 2005
US$m % US$m % US$m %
Personal Financial Services ..................... 5,900 24.4 9,457 42.8 9,904 47.2
Commercial Banking ............................... 7,145 29.5 5,997 27.2 4,961 23.7
Global Banking and Markets ................... 6,121 25.3 5,806 26.3 5,163 24.6
Private Banking ....................................... 1,511 6.2 1,214 5.5 912 4.4
Other1 ....................................................... 3,535 14.6 (388) (1.8) 26 0.1
24,212 100.0 22,086 100.0 20,966 100.0
1 ‘Other’ includes gains arising from dilution of interests in associates of US$1,092 million (2006 and 2005: nil) and fair value gains of
US$2,893 million (2006: US$81 million expense; 2005: US$406 million income) on HSBC’s own debt designated at fair value. The
remainder of the Group’s gain on own debt is included in Global Banking and Markets.
Total assets
At 31 December
2007 2006
US$m % US$m %
Personal Financial Services .......................................................................... 588,473 25.0 546,568 29.4
Commercial Banking .................................................................................... 261,893 11.1 213,450 11.5
Global Banking and Markets ........................................................................ 1,375,240 58.4 994,436 53.4
Private Banking ............................................................................................ 88,510 3.8 73,026 3.9
Other ............................................................................................................. 40,150 1.7 33,278 1.8
2,354,266 100.0 1,860,758 100.0
Basis of preparation
The results are presented in accordance with the
accounting policies used in the preparation of
HSBC’s consolidated financial statements. HSBC’s
operations are closely integrated and, accordingly,
the presentation of customer group data includes
internal allocations of certain items of income and
expense. These allocations include the costs of
certain support services and head office functions, to
the extent that these can be meaningfully attributed
to operational business lines. While such allocations
have been made on a systematic and consistent basis,
they necessarily involve a degree of subjectivity.
Where relevant, income and expense amounts
presented include the results of inter-segment
funding as well as inter-company and inter-business
line transactions. All such transactions are
undertaken on arm’s length terms.