HSBC 2012 Annual Report Download - page 26

HSBC HOLDINGS PLC
Report of the Directors: Overview (continued)
KPIs // Financial summary > Use of non-GAAP financial measures
24
Growing HSBC – continuing to position ourselves for growth Strategy
Risk-adjusted revenue growth
(2012: underlying growth 13%)
Dividends per ordinary
share growth
37
11
(30)
(8)
'08 '09 '10 '11 '12
(0.2)
6
14
(47)
(29)
10
'08 '09 '10 '11 '12
Measure: (percentage) increase in reported net operating income
after loan impairment and other credit risk charges since last year.
Measure: (percentage) increase in dividends per share since last
year, based on dividends paid in respect of the year to which the
dividend relates.
Target: to deliver consistent growth in risk adjusted revenues. Target: to deliver sustained dividend per share growth.
Outcome: reported risk-adjusted revenue was broadly in line with
2011. On an underlying basis, there was an increase due to
revenue growth, notably in GB&M and CMB, and lower loan
impairment charges, notably in North America.
Outcome: dividends per share increased by 10%.
Key Performance Indicators
Customer recommendation Brand value
3rd place
US$22.9bn
1st place
US$27.6bn
3rd place
US$27.4bn
1st place
US$28.5bn
2010 2011 2012 2013
3rd place
US$22.9bn
1st place
US$27.6bn
3rd place
US$27.4bn
1st place
US$28.5bn
2010 2011 2012 2013
Measure: we measure our customer satisfaction through an
independent market research survey of retail banking customers
in selected countries, using a specific customer recommendation
index (‘CRI’) to score performance. We benchmark our
performance against key competitors in each market and set
targets relative to our peer group of banks.
Target: the Group target is for 75% of all the markets (based on
their weighted revenue) to meet their CRI targets.
Outcome: RBWM failed to make its target of 75% as a
consequence of reputational issues in certain of our major
developed markets that adversely affected customers’ perception
of the bank in the third quarter of 2012. We saw a good recovery
in the fourth quarter but, taking the overall averaged annual
position into account, we only met our target in 38% of our
weighted revenue. 55% of the weighted revenue target was
within two points (from a 100-point scale).
For CMB, we changed our measures in 2012 for customer
satisfaction to reflect the strategic focus of the business.
Previously, we only surveyed small business customers in a
limited number of markets and measured customer
recommendation. For 2012, we introduced a new measure of our
performance through a ‘client engagement’ survey conducted for
us by a third party. This provides a more complete perspective
for our performance across all our CMB segments and will give
us a competitive benchmark in 13 of our top markets. In 2012,
therefore, we set benchmarks but not targets. We will set targets
for 2013 and report results in the future.
Measure: in 2011, we moved our brand measure to the Brand
Finance valuation method as reported in The Banker Magazine.
This is our second year of using this benchmark. The Brand
Finance methodology gives us a more complete measure of the
strength of the brand and its impact across all business lines and
customer groups. It is a wholly independent measure and is
publicly reported.
Target: a top three position in the banking peer group.
Outcome: The HSBC brand moved from first to third in the
Brand Finance ranking and suffered a substantial reduction in
value. We achieved our target of a top three position but, in
consultation with the Brand Finance organisation, we have
seen reputational issues cited as a major factor in our reduced
performance in 2012.
Key Performance Indicators
For footnotes, see page 120.