HSBC 2015 Annual Report Download - page 55

HSBC HOLDINGS PLC
53
Strategic Report Financial Review Corporate Governance Financial Statements Shareholder Information
Interest expense on other interest-bearing liabilities
increased due to the reclassification of our operations in
Brazil. In Brazil, excluding currency translation, interest
expense rose, primarily on debt securities in issue and also
on customer accounts driven by successive increases in
central bank rates. Other interest expense also increased in
North America, as 2014 benefited from the release of
accrued interest associated with uncertain tax positions.
Net fee income
2015
$m
2014
$m
2013
$m
Account services 2,745 3,407 3,581
Funds under management 2,570 2,658 2,673
Cards 2,281 2,460 2,455
Credit facilities 1,919 1,890 1,907
Broking income 1,441 1,371 1,388
Unit trusts 1,007 1,005 891
Imports/exports 971 1,115 1,157
Remittances 772 833 849
Underwriting 762 872 866
Global custody 721 726 698
Insurance agency commission 519 516 551
Other 2,308 2,692 2,957
Fee income 18,016 19,545 19,973
Less: fee expense (3,311) (3,588) (3,539)
Year ended 31 December 14,705 15,957 16,434
Reported net fee income fell by $1.3bn compared with 2014,
primarily reflecting the adverse effects of currency translation
between the years of $1.2bn, notably in Europe and Latin
America, as tabulated below.
Significant items and currency translation
2015 2014
$m $m
Significant items
Acquisitions, disposals and dilutions
–
10
Currency translation 1,204
Year ended 31 December
–
1,214
On an adjusted basis, net fee income decreased by $38m.
This reflected a reduction in Europe, primarily within
RBWM and GB&M, largely offset by increases in Asia
in RBWM and North America in GB&M.
Account services fee income fell significantly by $348m,
mainly in the UK in RBWM where lower overdraft fees
reflected re-pricing and fewer overdrawn balances
following the introduction in November 2014 of a text-alert
service for customers. Account services fees also fell in
Switzerland due to the continuing repositioning of our GPB
business.
Import and export fees fell too (by $79m), mainly in Asia
reflecting a reduction in trade activity. In addition, our
underwriting fee income fell by $65m, mainly in Hong Kong
in GB&M, where there was reduced activity in equity
capital markets, although this was partly offset by higher
debt issuances in the US.
By contrast, our credit facilities fee income grew strongly
(by $190m) in North America and, to a lesser extent, in
Asia, reflecting continued growth in average lending
balances, although balances were broadly unchanged in
Asia in the second half of the year.
Our fee income from broking and unit trusts also grew (up
by $182m), mainly in Hong Kong, driven by higher sales
of equities and mutual funds in RBWM. This was from
increased stock market turnover, in part facilitated by the
Shanghai-Hong Kong Stock Connect platform and greater
investor appetite following improvements in Asian equity
markets in the first half of the year, however there was
weaker investor sentiment in the second half of the year.
Fees from funds under management increased by $157m.
In our Global Asset Management business, this was notably
in France and the US due to volume growth from fixed
income products. In addition, fee income from funds under
management also increased in Germany from growth in
Securities Services in GB&M, and in Hong Kong from
increased funds under management in GPB.
Fee expenses were marginally higher by $101m due to a
rise in brokerage fees, notably in Germany.