HSBC 2012 Annual Report Download - page 60

HSBC HOLDINGS PLC
Report of the Directors: Operating and Financial Review (continued)
Global businesses > Summary
58
Global businesses
Summary .......................................................................... 58
Products and services ....................................................... 60
Retail Banking and Wealth Management ........................ 62
Commercial Banking ....................................................... 65
Global Banking and Markets ........................................... 68
Global Private Banking ................................................... 72
Other ................................................................................ 74
Analysis by global business ............................................. 76
Disposals, held for sale and run-off portfolios ................ 78
Summary
HSBC reviews operating activity on a number of
bases, including by geographical region and by
global business.
The commentaries below present global
businesses followed by geographical regions
(page 79). Performance is discussed in this order
because certain strategic themes, business initiatives
and trends affect more than one geographical region.
All commentaries are on a constant currency basis
(page 25) unless stated otherwise.
Basis of preparation
The results of global businesses are presented in accordance
with the accounting policies used in the preparation of HSBC’s
consolidated financial statements. Our operations are closely
integrated and, accordingly, the presentation of global business
data includes internal allocations of certain items of income
and expense. These allocations include the costs of certain
support services and global functions, to the extent that these
can be meaningfully attributed to operational business lines.
While such allocations have been made on a systematic and
consistent basis, they necessarily involve some subjectivity.
Where relevant, income and expense amounts presented
include the results of inter-segment funding as well as inter-
company and inter-business line transactions. All such
transactions are undertaken on arm’s length terms.
The expense of the UK bank levy is included in the
Europe geographical region as HSBC regards the levy as a
cost of being headquartered in the UK. For the purposes of the
segmentation by global business, the cost of the levy is
included in ‘Other’.
The fines and penalties paid as part of the settlement of
investigations into past inadequate compliance with anti-
money laundering and sanctions laws of US$1.9bn are
included in the North America (US$1.5bn) and Europe
(US$0.4bn) geographical regions, and in ‘Other’ for the
purposes of the segmentation by global business.
Profit/(loss) before tax
2012 2011 2010
US$m % US$m % US$m %
Retail Banking and Wealth Management ................ 9,575 46.4 4,270 19.6 3,839 20.2
Commercial Banking ............................................... 8,535 41.3 7,947 36.3 6,090 32.0
Global Banking and Markets ................................... 8,520 41.3 7,049 32.2 9,215 48.4
Global Private Banking ........................................... 1,009 4.9 944 4.3 1,054 5.5
Other73 ...................................................................... (6,990) (33.9) 1,662 7.6 (1,161) (6.1)
20,649 100.0 21,872 100.0 19,037 100.0
Total assets74
At 31 December
2012 2011
US$m % US$m %
Retail Banking and Wealth Management ............................................................... 536,244 19.9 540,548 21.2
Commercial Banking .............................................................................................. 363,659 13.5 334,966 13.1
Global Banking and Markets .................................................................................. 1,942,470 72.1 1,877,627 73.5
Global Private Banking .......................................................................................... 118,440 4.4 119,839 4.7
Other ....................................................................................................................... 201,741 7.5 180,126 7.0
Intra-HSBC items ................................................................................................... (470,016) (17.4) (497,527) (19.5)
2,692,538 100.0 2,555,579 100.0
For footnotes, see page 120.