HSBC 2008 Annual Report Download - page 335

333
Consolidated income statement for the year ended 31 December 2008
2008 2007 2006
Notes US$m US$m US$m
Interest income .................................................................................... 91,301 92,359 75,879
Interest expense ................................................................................... (48,738) (54,564) (41,393)
Net interest income .............................................................................. 42,563 37,795 34,486
Fee income ........................................................................................... 24,764 26,337 21,080
Fee expense .......................................................................................... (4,740) (4,335) (3,898)
Net fee income ..................................................................................... 20,024 22,002 17,182
Trading income excluding net interest income ................................... 847 4,458 5,619
Net interest income on trading activities ............................................. 5,713 5,376 2,603
Net trading income .............................................................................. 6,560 9,834 8,222
Changes in fair value of long-term debt issued and
related derivatives ........................................................................... 6,679 2,812 (35)
Net income/(expense) from other financial instruments designated
at fair value ..................................................................................... (2,827) 1,271 692
Net income from financial instruments designated at fair value ........ 3 3,852 4,083 657
Gains less losses from financial investments ...................................... 197 1,956 969
Gains arising from dilution of interests in associates ......................... 4 –1,092 –
Dividend income .................................................................................. 272 324 340
Net earned insurance premiums .......................................................... 5 10,850 9,076 5,668
Gains on disposal of French regional banks ....................................... 2,445 – –
Other operating income ....................................................................... 1,808 1,439 2,546
Total operating income ..................................................................... 88,571 87,601 70,070
Net insurance claims incurred and movement in liabilities to
policyholders .................................................................................. 6 (6,889) (8,608) (4,704)
Net operating income before loan impairment charges and
other credit risk provisions .......................................................... 81,682 78,993 65,366
Loan impairment charges and other credit risk provisions ................. 7 (24,937) (17,242) (10,573)
Net operating income ........................................................................ 7 56,745 61,751 54,793
Employee compensation and benefits ................................................. 8 (20,792) (21,334) (18,500)
General and administrative expenses .................................................. (15,260) (15,294) (12,823)
Depreciation and impairment of property, plant and equipment ........ 23 (1,750) (1,714) (1,514)
Goodwill impairment ........................................................................... 22 (10,564) – –
Amortisation and impairment of intangible assets .............................. 22 (733) (700) (716)
Total operating expenses ................................................................... (49,099) (39,042) (33,553)
Operating profit ................................................................................. 7,646 22,709 21,240
Share of profit in associates and joint ventures ................................... 21 1,661 1,503 846
Profit before tax ................................................................................. 9,307 24,212 22,086
Tax expense ......................................................................................... 11 (2,809) (3,757) (5,215)
Profit for the year .............................................................................. 6,498 20,455 16,871
Profit attributable to shareholders of the parent company .................. 5,728 19,133 15,789
Profit attributable to minority interests ............................................... 770 1,322 1,082
US$ US$ US$
Basic earnings per ordinary share ....................................................... 13 0.47 1.65 1.40
Diluted earnings per ordinary share .................................................... 13 0.47 1.63 1.39
Dividends per ordinary share .............................................................. 12 0.93 0.87 0.76
The accompanying notes on pages 340
to 447, the audited sections of the ‘Report of the Directors: Risk’ on pages 188 to 280, ‘Critical
accounting policies’ on pages 61 to 66 and ‘Impact of Market Turmoil’ on pages 144 to 187 form an integral part of these financial
statements.