HSBC 2015 Annual Report Download - page 8

Group Chairman’s
Statement
We enter 2016 with a clear strategy and with
a plan for its implementation already well
under way. Our diversified business model
and balance sheet strength form the foundation
for our future progress, and position HSBC
well to deal with today’s challenging economic
and financial conditions.
2015 was marked by some seismic shifts in global
economic conditions, most notably the continuation
of a sharp decline in commodity and oil prices,
in part attributable to growing concerns over China’s
slowing economic growth. As a consequence,
monetary policy remained accommodative
throughout the major developed economies and
key currency interest rates remained at historically
low levels. Fiscal priorities continued to focus on
controlling spending, an emphasis replicated in the
private sector as weak revenue growth persisted
in many industries.
Against this backdrop, the Group’s financial
performance in 2015 was broadly satisfactory,
with reported profit before tax rising 1% to
$18.9bn. On the adjusted basis used to measure
management and business performance, profit
before tax of $20.4bn was 7% lower than
that achieved in 2014, driven by higher costs
and credit charges.
Earnings per share of $0.65 compared with $0.69
in 2014. Sound management of capital, accelerated
run-off of legacy books and shrinking the balance
sheet in areas that can no longer support the
expanded capital requirements now in force,
contributed to the common equity tier 1 ratio
increasing by 0.8 percentage points to 11.9%.
This capital released from managing the asset
base, together with that generated from operations,
allowed the Board to approve a fourth interim
dividend in respect of 2015 of $0.21 per ordinary
share. This took dividends per ordinary share in
respect of the year to $0.51, $0.01 higher than
2014. Total dividends in respect of 2015 amounted
to $10.0bn, $0.4bn higher than in respect of 2014.
In approving the dividend increase, the Board noted
that prospective dividend growth remained
dependent upon the long-term overall profitability
of the Group and delivering further release of less
efficiently deployed capital. Actions to address
these points are core elements of the Investor
Update provided last June.
Strategic Report
HSBC HOLDINGS PLC
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