HSBC 2012 Annual Report Download - page 66

HSBC HOLDINGS PLC
Report of the Directors: Operating and Financial Review (continued)
Global businesses > RBWM / CMB
64
• Sales of our long-term fund products, including
our managed solutions, continued to grow. We
launched the HSBC Asia Focused Income Fund
in May which grew to US$1bn by the end of
2012. World Selection and Premier Investment
Management Services for retail customers
continued to grow, with total net sales
amounting to US$2bn during the year, resulting
in a 20% increase to US$19bn in FuM related
to these portfolios.
• HSBC Global Asset Management’s investment
performance was strong in 2012, with over
70% of its Equity, Multi-Asset and Fixed
Income funds by value ranking above median.
As a result, 71% of eligible funds were in the
top two quartiles over the three-year period to
31 December 2012.
• We made significant investments to reinforce
the wealth risk management framework,
introducing enhanced risk profiling and strategic
financial planning tools to enable more effective
control of compliance and regulatory risks.
• As part of the drive to enhance customer
experience, we started the global roll-out of a
new Wealth Dashboard, which allows customers
easy access and analysis of personal holdings
and enables ongoing comparison with reference
portfolios. Additionally, in a number of markets
we introduced a global insurance point-of-sale
system which offers customers a faster, more
integrated service.
Leveraging global expertise in retail banking
• We continued to enhance our digital banking
capabilities with the launch of the first mobile
payment solution in Hong Kong enabling
contactless credit card transactions through Visa
payWave terminals, the first deployment of a
global application platform in the US, and the
roll-out of mortgage digital sales tools in the
UK, India, UAE and Malaysia.
• Our business re-engineering programme is
driving cost reduction and efficiency
improvements through standardisation. We
used our global scale to improve cost controls
and progressively standardised the design
of our Contact Centres. In addition, we are
successfully deploying enhanced analytical
capabilities to improve customer experience.
Portfolio management to drive superior returns
• Good progress was made in portfolio
management activities with 17 disposals or
closures announced in 2012 and a further four in
2013, following the 13 announced in 2011, and
12 transactions completed in 2012. During
2012, we completed the sale or closure of our
retail businesses in Thailand, Honduras, El
Salvador and Costa Rica, disposed of the Card
and Retail Services business and upstate New
York branches in the US and the full service
retail brokerage business in Canada and
recorded an investment loss on a subsidiary.
Additionally, we announced the sale of our retail
banking operations in Colombia, Peru, Uruguay,
Paraguay and Pakistan and the closure of the
consumer finance business in Canada. In
December 2012 we disposed of our associate,
Ping An, with our remaining shareholding
classified as a financial investment, and also
completed the sale of our shares in Global
Payments Asia-Pacific Ltd. Following
completion of all the announced transactions we
will have refocused our business to 20 home and
priority markets (representing 98% of 2012
profit before tax) and a limited number of
network and small markets.
• We are exiting the general insurance
manufacturing business and focusing on life
insurance manufacturing where we have scale.
In 2012, we completed the sale of our general
insurance businesses in Hong Kong, Singapore,
Argentina and Ireland, announced the sale of
our insurance manufacturing businesses in the
US and Taiwan and reached an agreement to sell
a portfolio of general insurance assets and
liabilities in Mexico.
• In October 2012, we completed the acquisition
of the onshore retail banking business of Lloyds
Banking Group in the UAE, following the
merger in the second quarter of our Omani
operations with OIB.
• We remained focused on managing the run-off
of balances in our CML portfolio, with year-end
lending balances, including loans held for sale,
declining by 14% from December 2011 to
US$43bn. In the third quarter of 2012, we
reclassified US$3.7bn of non-real estate
personal loan balances, net of impairment
allowances, from our consumer finance
portfolio to ‘Assets held for sale’ as we actively
marketed the portfolio. We also identified real
estate secured loan balances which we plan to
actively market in multiple transactions over the
next two years.