HSBC 2012 Annual Report Download - page 30

HSBC HOLDINGS PLC
Report of the Directors: Operating and Financial Review (continued)
Financial summary > Use of non-GAAP financial measures / Consolidated income statement
28
The following table reconciles our reported
revenue, loan impairment charges, operating
expenses and profit before tax for 2012 and 2011
to an underlying basis. Throughout this Annual
Report and Accounts, we reconcile other reported
results to underlying results when doing so results in
a more useful discussion of operating performance.
Equivalent tables are provided for each of our global
businesses and geographical segments in the
Form 20-F filed with the Securities and Exchange
Commission (‘SEC’), which is available on
www.hsbc.com.
Reconciliation of reported and underlying items
2012 2011
Change25
US$m US$m %
Revenue21
Reported revenue ............................................................................................................... 68,330 72,280 (5)
Currency translation adjustment24 ..................................................................................... (2,033)
Own credit spread26 ........................................................................................................... 5,215 (3,933)
Acquisitions, disposals and dilutions ........................................................................................ (10,048) (6,976)
Underlying revenue ........................................................................................................... 63,497 59,338 7
Loan impairment charges and other credit risk provisions (‘LIC’s)
Reported LICs .................................................................................................................... (8,311) (12,127) 31
Currency translation adjustment24 ..................................................................................... 277
Acquisitions, disposals and dilutions ........................................................................................ 338 1,619
Underlying LICs ................................................................................................................ (7,973) (10,231) 22
Operating expenses
Reported operating expenses ............................................................................................. (42,927) (41,545) (3)
Currency translation adjustment24 ..................................................................................... 1,273
Acquisitions, disposals and dilutions ........................................................................................ 1,004 2,666
Underlying operating expenses ................................................................................................. (41,923) (37,606) (11)
Underlying cost efficiency ratio ........................................................................................ 66.0% 63.4%
Profit before tax
Reported profit before tax ................................................................................................. 20,649 21,872 (6)
Currency translation adjustment24 ..................................................................................... (428)
Own credit spread26 ........................................................................................................... 5,215 (3,933)
Acquisitions, disposals and dilutions ........................................................................................ (9,479) (3,650)
Underlying profit before tax .............................................................................................. 16,385 13,861 18
By global business28
Retail Banking and Wealth Management ....................................................................... 4,001 871 359
Commercial Banking ...................................................................................................... 7,941 7,691 3
Global Banking and Markets .......................................................................................... 8,371 6,735 24
Global Private Banking .................................................................................................. 954 945 1
Other ............................................................................................................................... (4,882) (2,381) (105)
Underlying profit before tax .............................................................................................. 16,385 13,861 18
By geographical region28
Europe ............................................................................................................................. 699 1,629 (57)
Hong Kong ...................................................................................................................... 7,162 5,761 24
Rest of Asia-Pacific ........................................................................................................ 6,403 6,249 2
Middle East and North Africa ........................................................................................ 1,380 1,417 (3)
North America ................................................................................................................ (1,499) (3,076) 51
Latin America ................................................................................................................. 2,240 1,881 19
Underlying profit before tax .............................................................................................. 16,385 13,861 18
For footnotes, see page 120.