HSBC 2009 Annual Report Download - page 90

HSBC HOLDINGS PLC
Report of the Directors: Operating and Financial Review (continued)
Geographical regions > Europe > 2009
88
Profit before tax
2009 2008 2007
Europe US$m US$m US$m
Net interest income .......................................................................................... 12,268 9,696 7,746
Net fee income ................................................................................................. 6,267 7,492 8,431
Net trading income .......................................................................................... 5,459 5,357 6,943
Changes in fair value of long-term debt issued and related derivatives ......... (2,746) 2,939 1,059
Net income/(expense) from other financial instruments designated
at fair value ................................................................................................. 1,321 (1,826) 167
Net income/(expense) from financial instruments designated at fair value ... (1,425) 1,113 1,226
Gains less losses from financial investments .................................................. 50 418 1,326
Dividend income .............................................................................................. 29 130 171
Net earned insurance premiums ...................................................................... 4,223 5,299 4,010
Gains on disposal of French regional banks ................................................... – 2,445 –
Other operating income ................................................................................... 2,262 2,096 1,193
Total operating income ................................................................................. 29,133 34,046 31,046
Net insurance claims incurred and movement in liabilities
to policyholders .......................................................................................... (5,589) (3,367) (3,479)
Net operating income before loan impairment charges and other
credit risk provisions ................................................................................ 23,544 30,679 27,567
Loan impairment charges and other credit risk provisions ............................. (5,568) (3,754) (2,542)
Net operating income .................................................................................... 17,976 26,925 25,025
Total operating expenses ................................................................................. (13,988) (16,072) (16,525)
Operating profit ............................................................................................. 3,988 10,853 8,500
Share of profit in associates and joint ventures ............................................... 21 16 95
Profit before tax ............................................................................................. 4,009 10,869 8,595
% % %
Share of HSBC’s profit before tax .................................................................. 56.7 116.7 35.5
Cost efficiency ratio ........................................................................................ 59.4 52.4 59.9
Year-end staff numbers (full-time equivalent) ................................................ 76,703 82,093 82,166
Balance sheet data41
At 31 December
2009 2008 2007
US$m US$m US$m
Loans and advances to customers (net) ........................................................... 439,481 426,191 452,275
Loans and advances to banks (net) .................................................................. 65,521 61,949 104,527
Trading assets, financial assets designated at fair value and
financial investments49 ............................................................................... 450,727
433,885 445,258
Total assets ...................................................................................................... 1,268,600 1,392,049 1,256,220
Deposits by banks ............................................................................................ 89,893 80,847 87,491
Customer accounts ........................................................................................... 495,019 502,476 504,954
For footnotes, see page 149.
All commentaries on Europe are on an underlying basis unless stated otherwise.
2009 compared with 2008
Economic briefing
The UK economy suffered a sharp contraction
during the course of 2009, although evidence from
the final months of the year suggested that some
growth had resumed. Gross Domestic Product
(‘GDP’) fell by 5 per cent in 2009 – the sharpest
contraction in over 60 years – after a 0.5 per cent
increase in 2008. Weakness affected most sectors
of the economy, and the unemployment rate hit a
13-year high of 7.9 per cent in July 2009, although
some stabilisation of labour market conditions was
apparent towards the end of the year. Consumer
Price Index (‘CPI’) inflation reached a five-year
low of 1.1 per cent in September 2009 before
moving towards the Bank of England’s 2 per cent
target by the end of the year. Nominal house prices