HSBC 2015 Annual Report Download - page 24

Reported results
This table shows our reported results for
the last three years. The results for 2015
are described below.
Reported profit before tax
Reported profit before tax was $18.9bn,
up by $0.2bn or 1% from 2014. This
was driven by a favourable movement in
significant items of $2.6bn partly offset
by $0.9bn of adverse effects of foreign
currency translation between the years.
The favourable movement in significant
items included lower fines, settlements,
UK customer redress and associated
provisions (down by $1.3bn in total)
and a gain on the partial disposal of
Industrial Bank ($1.4bn).
Excluding the effects of significant
items and currency translation, profit
before tax was down by 7% from
2014. We describe the drivers of
our performance under ‘Adjusted
performance’ on page 23.
Reported revenue
Revenue of $59.8bn was $1.4bn
or 2% lower than in 2014. Revenue
benefited from a favourable movement
in significant items but this was more
than offset by the adverse effect of
currency translation of $4.8bn between
the years.
Significant items affecting revenue
in 2015 included:
– a $1.4bn gain on the partial sale of
our shareholding in Industrial Bank;
– lower provisions and charges relating
to the ongoing review of compliance
with the Consumer Credit Act in the
UK ($0.6bn lower than in 2014); and
– an increase in favourable movements
on our own debt designated at fair
value from changes in credit spreads
of $0.6bn.
Reported LICs
Loan impairment charges and other credit
risk provisions (‘LICs’) of $3.7bn were
$0.1bn or 3% lower than in 2014,
reflecting the favourable impact of
currency translation between the years.
Reported operating expenses
Operating expenses of $39.8bn were
$1.5bn or 4% lower than in 2014.
This reduction primarily reflected the
favourable effect of currency translation
of $3.3bn between the years.
Financial overview
The total of significant items was broadly
in line with 2014, although there were
notable movements as follows:
– lower provisions and charges relating
to UK customer redress ($0.7bn
lower than in 2014); and
– the non-recurrence of a charge
of $0.6bn in 2014 relating to a
settlement with the US Federal
Housing Finance Agency; broadly
offset by
– settlements and provisions in
connection with legal matters
($0.5bn higher than in 2014); and
– costs-to-achieve relating to business
transformation of $0.9bn in 2015
(for further details, see page 58).
Reported income from associates
Income from associates of $2.6bn
was in line with 2014.
Reported results 2015
$m
2014
$m
2013
$m
Net interest income 32,531 34,705 35,539
Net fee income 14,705 15,957 16,434
Net trading income 8,723 6,760 8,690
Other income 3,841 3,826 3,982
Net operating income before loan impairment
charges and other credit risk provisions (revenue) 59,800 61,248 64,645
Loan impairment charges and other credit risk provisions
(‘LICs’) (3,721) (3,851) (5,849)
Net operating income 56,079 5 7, 3 97 58,796
Total operating expenses (39,768) (41,249) (38,556)
Operating profit 16,311 16,14 8 20,240
Share of profit in associates and joint ventures 2,556 2,532 2,325
Profit before tax 18,867 18,680 22,565
HSBC HOLDINGS PLC
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Strategic Report