HSBC 2009 Annual Report Download - page 83

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resulting in cost savings across the other
customer groups in North America. These
expenses were previously incurred directly by
customer groups, and are now substantially
recovered from them through a recharge
mechanism with the revenue reported in other
operating income. Costs at HSBC’s Group
Service Centres rose by 10 per cent as the
number of migrated activities increased in line
with the Group’s Global Resourcing model.
Reconciliation of reported and underlying profit/(loss) before tax
2009 compared with 2008
Other
2008
as
reported
US$m
2008
adjust-
ments10
US$m
Currency
translation11
US$m
2008
at 2009
exchange
rates12
US$m
2009
adjust-
ments10
US$m
Under-
lying
change
US$m
2009
as
reported
US$m
Re-
ported
change13
%
Under-
lying
change13
%
Net interest expense ......... (956) – 12 (944) – (91) (1,035) (8) (10)
Net fee income ................. 53 – (3) 50 –
75 125 136 150
Changes in fair value ....... 6,570 (6,570) – – (6,533) – (6,533) (199)
Gains on disposal of
French regional banks . 2,445 (2,445) – – – – – (100)
Other income15 ................. 4,183 (95) (13) 4,075 – 1,345 5,420 30 33
Net operating income/
(expense)16 .................. 12,295 (9,110) (4) 3,181 (6,533) 1,329 (2,023) (116) 42
Loan impairment charges
and other credit risk
provisions .................... (5) – (1) (6) – (2) (8) (60) (33)
Net operating income/
(expense) ..................... 12,290 (9,110) (5) 3,175 (6,533) 1,327 (2,031) (117) 42
Operating expenses .......... (4,174) – 70 (4,104) – (611) (4,715) (13) (15)
Operating profit/(loss).... 8,116 (9,110) 65 (929) (6,533) 716 (6,746) (183) 77
Income from associates ... 41 – (1) 40 – (14) 26 (37) (35)
Profit/(loss) before tax.... 8,157 (9,110) 64 (889) (6,533) 702 (6,720) (182) 79
2008 compared with 2007
Other
2007
as
reported
US$m
2007
adjustments
and dilution
gains10
US$m
Currency
translation11
US$m
2007
at 2008
exchange
rates17
US$m
2008
adjustments10
US$m
Under-
lying
change
US$m
2008
as
reported
US$m
Re-
ported
change13
%
Under-
lying
change13
%
Net interest expense ......... (542) – (38) (580) (6) (370) (956) (76) (64)
Net fee income/
(expense) ..................... (228) – 49 (179) –
232 53 123 130
Changes in fair value ....... 3,055 (3,055) – – 6,570 – 6,570 115
Gains on disposal of
French regional banks . – – – – 2,445 – 2,445
Other income15 ................. 4,673 (1,116) 36 3,593 95 495 4,183 (10) 14
Net operating income16 .... 6,958 (4,171) 47 2,834 9,104 357 12,295 77 13
Loan impairment charges
and other credit risk
provisions .................... (11) 24 1 14 – (19) (5) 55 (136)
Net operating income ...... 6,947 (4,147) 48 2,848 9,104 338 12,290 77 12
Operating expenses .......... (3,562) – (15) (3,577) 6 (603) (4,174) (17) (17)
Operating profit ............... 3,385 (4,147) 33 (729) 9,110 (265) 8,116 140 (36)
Income from associates ... 150 (12) 11 149 – (108) 41 (73) (72)
Profit before tax ............... 3,535 (4,159) 44 (580) 9,110 (373) 8,157 131 (64)
For footnotes, see page 149.