HSBC 2004 Annual Report Download - page 57

55
Private Banking
Profit excluding goodwill amortisation Business highlights
Year ended 31 December
2004 2003 2002
US$m US$m US$m
Net interest income ............ 718 574 549
Dividend income .................. 532
Net fees and commissions .... 962 822 623
Dealing profits ..................... 257 209 137
Other income ....................... 17 50 102
Other operating income ........ 1,241 1,084 864
Operating income ............... 1,959 1,658 1,413
Operating expenses excluding
goodwill amortisation1 ..... (1,325) (1,149) (987)
Operating profit before
provisions1....................... 634 509 426
Provisions for bad and
doubtful debts .................. 9(2) (5)
Provisions for contingent
liabilities and commitments 4(2) (21)
Amounts written off fixed
asset investments ............. (2) (3) (22)
Operating profit1 ................ 645 502 378
Share of operating loss in joint
ventures2 .......................... ––(1)
Share of operating loss in
associates2......................... –– (10)
Gains on disposal of
investments and tangible
fixed assets ...................... 48 61 46
Profit on ordinary activities
before tax3 ....................... 693 563 413
By geographical region:
Europe .................................. 432 339 236
Hong Kong ........................... 135 127 107
Rest of Asia-Pacific ............. 59 36 25
North America ..................... 66 63 57
South America ..................... 1(2) (12)
Profit on ordinary activities
before tax3........................ 693 563 413
%%%
Share of HSBC’ s pre-tax
profits3 ............................. 3.6 3.9 3.8
Cost:income ratio1 ................ 67.6 69.3 69.9
US$m US$m US$m
Selected balance sheet data7
Loans and advances to
customers (net) ................ 24,463 18,109 14,115
Total assets8 .......................... 56,466 54,510 48,346
Customer accounts ............... 57,780 50,951 49,012
Goodwill amortisation:
1excluded from (1) above ... 309 282 264
2excluded from (2) above ... –––
3excluded from (3) above ... 309 282 264
For other footnotes, see page 59.
General
• Pre-tax profit excluding goodwill amortisation grew
by 23 per cent compared with last year. At constant
exchange rates and excluding acquisitions, profits
increased by 21 per cent, supported by strong growth
in funds under management.
• At constant exchange rates and excluding the effect
of the transfer of a corporate trust business to
Corporate, Investment Banking and Markets in Hong
Kong, funds under management increased by 24 per
cent to US$178.2 billion, including US$13.1 billion
of net new money, and US$17.1 billion of funds in
Bank of Bermuda.
• The acquisition of Bank of Bermuda brought
considerable product and service strength to existing
trust capabilities, and HSBC now ranks among the
largest international private trust banks in the world.
• HSBC grew its onshore Private Banking operations,
with the addition of Bank of Bermuda’ s onshore
Bermudan business, and the launch of onshore
private banking in Mexico in November, and
Malaysia in May. Operations in Europe, Asia, and
North America were strengthened through front
office recruitment during the year.
• The HSBC Private Bank brand was launched
globally, supported by a major marketing campaign,
bringing a single identity to HSBC’ s core operation.
Integration of the four French private banks was
completed, and Bank of Bermuda’ s private client
businesses in Hong Kong, Luxembourg and Jersey
were fully integrated.
• HSBC won a number of awards in the Euromoney
second annual private banking survey, including ‘1st
private bank for trust services globally’ , and ‘1st for
Islamic banking in Switzerland, the UK, and
Western Europe’ .
• Work was undertaken to strengthen links between
Private Banking and the wider Group. A structure
was put in place to facilitate global links and cross-
selling activities with HSBC’ s Commercial Banking
businesses. A cross-referral process was established
with Personal Financial Services and, for certain
products, with Corporate, Investment Banking and
Markets.