{"doc_id": "13ecfb7052e475b5c20a4b5382b5e558", "text": "6-K 1 a8462d.htm HSBC HOLDINGS 2023 RESULTS a8462d FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of February HSBC Holdings plc 42nd\nFloor, 8 Canada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or Form 40-F). Form\n20-F X Form 40-F 21 February 2024 HSBC HOLDINGS PLC 2023 RESULTS - HIGHLIGHTS Noel Quinn, Group Chief Executive, said: \"Our record profit performance in 2023 enabled us to reward our\nshareholders with our highest full-year dividend since 2008, three\nshare buy-backs last year totalling $7bn,\nand a further share buy-back of up to $2bn. This reflected four\nyears of hard work and the strength of our balance sheet in a\nhigher interest rate environment. We have a strong platform for growth with the opportunities that\nexist within our two home markets and across our international\nwholesale, market-leading transaction banking, and wealth\nmanagement businesses. We are focused on capturing these growth\nopportunities, improving our earnings sustainability and targeting\nmid-teens returns in 2024.\" 2023 financial performance (vs 2022) - Profit\nbefore tax rose\nby $13.3bn to $30.3bn, primarily\nreflecting revenue growth. This included a favourable\nyear-on-year impact of $2.5bn relating to the sale of our retail\nbanking operations in France, which completed on 1 January 2024,\nand a $1.6bn provisional gain recognised on the acquisition of\nSilicon Valley Bank UK Limited ('SVB UK') in 2023. These were\npartly offset by the recognition of an impairment charge in 2023 of\n$3.0bn relating to the investment in our associate, Bank of\nCommunications Co., Limited ('BoCom'), which followed the\nreassessment of our accounting\nvalue-in-use. On a constant\ncurrency basis, profit before tax increased by $13.8bn\nto $30.3bn.\nProfit after tax increased by $8.3bn to\n$24.6bn. - Revenue\nrose by $15.4bn or 30% to $66.1bn, including growth in net interest\nincome ('NII') of $5.4bn, with\nrises in all of our global businesses due to the higher interest\nrate environment. Non-interest\nincome increased by $10.0bn, reflecting\na rise in trading and fair value income of $6.4bn, mainly in Global\nBanking and Markets. The associated funding costs reported in NII\ngrew by $6.2bn. The increase also included the impact of the\nstrategic transactions referred to above, partly offset by disposal\nlosses of $1.0bn relating to repositioning and risk management\nactivities in our hold-to-collect-and-sell\nportfolio. - Net\ninterest margin ('NIM') of 1.66% increased by 24 basis\npoints ('bps'), reflecting higher interest\nrates. - Expected\ncredit losses and other credit impairment charges ('ECL') were\n$3.4bn, a\nreduction of $0.1bn. The net charge in 2023 primarily\ncomprised stage 3 charges, notably related to mainland China\ncommercial real estate sector exposures. It also reflected\ncontinued economic uncertainty, rising interest rates and\ninflationary pressures. ECL were 33bps\nof average gross loans, including a 3bps reduction\ndue to the inclusion of loans and advances classified as held for\nsale. - Operating\nexpenses fell by $0.6bn or 2% to $32.1bn, mainly\ndue to the non-recurrence of restructuring and other related costs\nfollowing the completion of our cost to achieve programme at the\nend of 2022. This more than offset higher technology costs,\ninflationary pressures and an increase in performance-related pay.\nWe also incurred a higher UK bank levy and a charge relating to the\nFederal Deposit Insurance Corporation ('FDIC') special assessment\nin the US. Target basis\noperating expenses rose by 6%. This is measured on a\nconstant currency basis, excluding notable items and the impact of\nthe acquisition of SVB UK and related investments internationally.\nIt also excludes the impact of retranslating the prior year results\nof hyperinflationary economies at constant\ncurrency. - Customer\nlending balances rose by $15bn on a reported basis, but fell\nby $3bn on a constant currency basis. Growth\nincluded a $7.8bn reclassification of secured loans in France from\nheld for sale, an addition of $8bn from the acquisition of SVB UK,\nand higher mortgage balances in HSBC UK and Hong Kong. These\nincreases were more than offset by a reduction in wholesale term\nlending, notably in Asia, and from business divestments in Oman and\nNew Zealand. - Customer\naccounts rose by $41bn on a reported basis, and $13bn on a constant\ncurrency basis, primarily\nin Wealth and Personal Banking, reflecting growth in Asia, partly\noffset by reductions in HSBC UK, reflecting cost of living\npressures and the competitive environment, despite an increase\nof $6bn from the acquisition of SVB UK. There was also a reduction\ndue to the sale of our business in Oman. - Common\nequity tier 1 ('CET1') capital ratio of 14.8% rose by 0.6\npercentage points, as\ncapital generation was partly offset by dividends and share\nbuy-backs. - The\nBoard has approved a fourth interim\ndividend of $0.31 per share, resulting in a total for 2023 of $0.61\nper share. We also intend to initiate\na share buy-back\nof up to $2.0bn, which we expect to complete\nby our first quarter 2024 results announcement. 4Q23 financial performance (vs 4Q22) - Reported\nprofit before tax down $4.1bn to $1.0bn. The\nreduction included the recognition of an impairment charge in 4Q23\nof $3.0bn relating to the investment in our associate BoCom, and\nthe impact of a 4Q23 impairment relating to the sale of our retail\nbanking operations in France of $2.0bn as we reclassified these\noperations as held for sale. On a constant\ncurrency basis, profit before tax\ndown $4.0bn to $1.0bn. Reported profit after tax\ndown $4.4bn to $0.2bn. - Reported\nrevenue down 11% to $13.0bn, due\nthe impact of 4Q23 impairment relating to the sale of our retail\nbanking operations in France, as mentioned above, disposal losses\nrelating to repositioning and risk management activities in our\nhold-to-collect and sell portfolio and the impact of\nhyperinflationary accounting in Argentina. These factors were in\npart offset by revenue growth in Global Payments Solutions, Capital\nMarkets and Advisory and Markets and Securities Services\n('MSS'). - Reported\nECL down $0.4bn to $1.0bn. The\ncharge in 4Q23 included $0.2bn of charges relating to exposures in\nthe mainland China commercial real estate\nsector. - Reported\noperating expenses\ndown 2% to $8.6bn, as\nlower restructuring expenses following the completion of our\ncost-saving programme at the end of 2022, more than offset growth\nfrom a higher UK bank levy, the FDIC special assessment in the US,\nthe impact of rising inflation and higher performance-related\npay. Outlook - We\ncontinue to target a return on average tangible equity ('RoTE') in\nthe mid-teens for 2024, excluding\nthe impact of notable items (see page 25 of\nour Annual Report\nand Accounts 2023 for information on our RoTE\ntarget for 2024). Our guidance reflects our current outlook for the\nglobal macroeconomic environment, including customer and financial\nmarkets activity. - Based\nupon our current forecasts, we expect banking NII of at least $41bn\nfor 2024. This\nguidance reflects our current modelling of a number of market\ndependent factors, including market-implied interest rates (as of\nmid-February 2024), as well as customer behaviour and activity\nlevels, which we would also expect to impact our non-interest\nincome. We do not reconcile our forward guidance on banking NII to\nreported NII. - While\nour outlook for loan growth remains cautious for the first half of\n2024, we continue to\nexpect year-on-year customer lending percentage growth in the\nmid-single digits over the medium to long\nterm. - Given\ncontinued uncertainty in the forward economic outlook, we\nexpect ECL charges as\na percentage of average gross loans to be around 40bps in\n2024 (including customer lending\nbalances transferred to held for sale). We continue to expect our\nECL charges to normalise towards a range of 30bps to 40bps of\naverage loans over the medium to long term. - We\nretain a Group-wide focus on cost discipline. We are targeting cost\ngrowth of approximately 5% for 2024 compared with 2023, on a target\nbasis. This\ntarget reflects our current business plan for 2024, and includes an\nincrease in staff compensation, higher technology spend and\ninvestment for growth and efficiency, in part mitigated by cost\nsavings from actions taken during 2023. - Our\ncost target basis for 2024 excludes the impact of the disposal of\nour retail banking business in France and the planned disposal of\nour banking business in Canada from the 2023 baseline. Our cost\ntarget basis is measured on a constant currency basis and excludes\nnotable items and the impact of retranslating the prior year\nresults of hyperinflationary economies at constant\ncurrency. We\ndo not reconcile our forward guidance on target basis costs to\nreported operating expenses. - We\nintend to continue to manage the CET1 capital ratio within our\nmedium-term target range of 14% to 14.5%. - Our\ndividend payout ratio target remains at 50% for\n2024 ,\nexcluding material notable items and related impacts. We have\nannounced a further share buy-back of up to $2.0bn. Further\nbuy-backs remain subject to appropriate capital\nlevels. Key financial metrics For the year ended Reported results 2023 2022 1 2021 Profit before tax ($m) 30,348 17,058 18,906 Profit after tax ($m) 24,559 16,249 14,693 Cost efficiency ratio (%) 48.5 64.6 69.9 Net interest margin (%) 1.66 1.42 1.20 Basic earnings per share ($) 1.15 0.72 0.62 Diluted earnings per share ($) 1.14 0.72 0.62 Dividend per ordinary share (in respect of the period)\n($) 0.61 0.32 0.25 Dividend\npayout ratio (%) 2 50 44 40 Alternative performance measures Constant\ncurrency profit before tax ($m) 30,348 16,541 17,400 Constant\ncurrency cost efficiency ratio (%) 48.5 64.8 70.0 Expected credit losses and other credit impairment charges ('ECL')\nas % of average gross loans and advances to customers\n(%) 0.36 0.36 (0.07) Expected\ncredit losses and other credit impairment charges ('ECL') as % of\naverage gross loans and advances to customers, including held for\nsale (%) 0.33 0.35 (0.07) Basic earnings per share excluding material notable items and\nrelated impacts ($) 1.22 N/A N/A Return on average ordinary shareholders' equity (%) 13.6 9.0 7.1 Return on average tangible equity (%) 14.6 10.0 8.3 Return\non average tangible equity excluding strategic transactions and\nimpairment of BoCom (%) 15.6 11.3 N/A Target\nbasis operating expenses ($m) 31,614 29,811 N/A At 31 December Balance sheet 2023 2022 1 2021 Total assets ($m) 3,038,677 2,949,286 2,957,939 Net loans and advances to customers ($m) 938,535 923,561 1,045,814 Customer accounts ($m) 1,611,647 1,570,303 1,710,574 Average interest-earning assets ($m) 2,161,746 2,143,758 2,209,513 Loans and advances to customers as % of customer accounts\n(%) 58.2 58.8 61.1 Total shareholders' equity ($m) 185,329 177,833 198,250 Tangible ordinary shareholders' equity ($m) 155,710 146,927 158,193 Net asset value per ordinary share at period end ($) 8.82 8.01 8.76 Tangible net asset value per ordinary share at period end\n($) 8.19 7.44 7.88 Capital, leverage and liquidity Common\nequity tier 1 capital ratio (%) 3 14.8 14.2 15.8 Risk-weighted\nassets ($m) 3,4 854,114 839,720 838,263 Total\ncapital ratio (%) 3,4 20.0 19.3 21.2 Leverage\nratio (%) 3,4 5.6 5.8 5.2 High-quality\nliquid assets (liquidity value) ($m) 4,5 647,505 647,046 688,209 Liquidity\ncoverage ratio (%) 4,5 136 132 139 Net\nstable funding ratio (%) 4,5 133 136 N/A Share count Period end basic number of $0.50 ordinary shares outstanding\n(millions) 19,006 19,739 20,073 Period end basic number of $0.50 ordinary shares outstanding and\ndilutive potential ordinary shares (millions) 19,135 19,876 20,189 Average basic number of $0.50 ordinary shares outstanding\n(millions) 19,478 19,849 20,197 For reconciliation and analysis of our reported results on a\nconstant currency basis, including lists of notable items, see\npage 111 of the Annual Report and Accounts\n2023 . Definitions and\ncalculations of other alternative performance measures are included\nin 'Reconciliation of alternative performance measures' on\npage 130 of the Annual Report and Accounts\n2023. 1   From 1 January 2023, we adopted IFRS 17 'Insurance\nContracts', which replaced IFRS 4 'Insurance Contracts'.\nComparative data for the financial year ended 31 December 2022 have\nbeen restated accordingly. Comparative data for the year ended 31\nDecember 2021 are prepared on an IFRS 4 basis. 2   In 2023, our dividend payout ratio was adjusted for\nmaterial notable items and related impacts, including all\nassociated income statement impacts relating to those items. In\n2022, our dividend payout ratio was adjusted for the loss on\nclassification to held for sale of our retail banking business in\nFrance, items relating to the planned sale of our banking business\nin Canada, and the recognition of certain deferred tax assets. No\nitems were adjusted for in 2021. 3   Unless otherwise stated, regulatory capital ratios\nand requirements are based on the transitional arrangements of the\nCapital Requirements Regulation in force at the time. References to\nEU regulations and directives (including technical standards)\nshould, as applicable, be read as references to the UK's version of\nsuch regulation or directive, as onshored into UK law under the\nEuropean Union (Withdrawal) Act 2018, and as may be subsequently\namended under UK law. 4   Regulatory numbers and ratios are as presented at the\ndate of reporting. Small changes may exist between these numbers\nand ratios and those subsequently submitted in regulatory filings.\nWhere differences are significant, we may restate in subsequent\nperiods. 5   The liquidity coverage ratio is based on the average\nvalue of the preceding 12 months. The net stable funding ratio is\nbased on the average value of four preceding quarters. Highlights Year ended 31 Dec 2023 2022¹ $m $m Reported Revenue 2,3,4,5 66,058 50,620 Change in expected credit losses and other credit impairment\ncharges (3,447) (3,584) Operating expenses (32,070) (32,701) Share\nof profit in associates and joint ventures less\nimpairment 9 (193) 2,723 Profit before tax 30,348 17,058 Tax\ncharge (5,789) (809) Profit after tax 24,559 16,249 Constant currency 6 Revenue 2,3,4,5 66,058 49,871 Change in expected credit losses and other credit impairment\ncharges (3,447) (3,630) Operating expenses (32,070) (32,302) Share\nof profit in associates and joint ventures less\nimpairment 9 (193) 2,602 Profit before tax 30,348 16,541 Tax\ncharge (5,789) (649) Profit after tax 24,559 15,892 Notable items Revenue Disposals,\nacquisitions and related costs 3,4,5 1,298 (2,737) Fair\nvalue movements on financial instruments 7 14 (618) Restructuring\nand other related costs 8 - (247) Disposal losses on Markets Treasury repositioning (977) - Operating expenses Disposals, acquisitions and investment in new\nbusinesses (321) (18) Restructuring\nand other related costs 9 136 (2,882) Impairment of interest in associate 10 (3,000) - Tax Tax\ncredit on notable items 207 1,026 Recognition of losses - 2,333 Uncertain tax positions 427 (142) 1     From 1 January 2023, we adopted IFRS 17\n'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'.\nComparative data for the year ended 31 December 2022 have been\nrestated accordingly. 2   Net operating income before change in expected\ncredit losses and other credit impairment charges, also referred to\nas revenue. 3   Includes losses from classifying businesses as held\nfor sale as part of a broader restructuring of our European\nbusiness which includes the impact of the sale of our retail\nbanking operations in France. 4   Includes fair value movements on the foreign exchange\nhedging of the expected proceeds from the planned sale of our\nbanking business in Canada. 5   Includes the provisional gain of $1.6bn recognised in\nrespect of the acquisition of SVB UK in 1Q23. 6   Constant currency performance is computed by\nadjusting reported results of comparative periods for the effects\nof foreign currency translation differences, which distort\nperiod-on-period comparisons. 7   Fair value movements on non-qualifying hedges in HSBC\nHoldings. 8   Comprises gains and losses relating to the business\nupdate in February 2020, including losses associated with the RWA\nreduction programme. 9   Amounts in 2023 relate to reversals of restructuring\nprovisions recognised during 2022. 10  Relates to an impairment loss of $3.0bn recognised in\nrespect of the Group's investment in BoCom. See Note 18 on\npage 391 of our Annual\nReport and Accounts 2023. Statement by Mark E Tucker, Group Chairman The global economy performed better than expected in 2023, but\ngrowth remained sluggish and the economic environment was\nchallenging for many of our customers. Although inflation fell\nglobally, core inflation levels and interest rates remained\nelevated. There was also significant variability in growth from\nmarket to market and increased volatility within the banking\nsector. Our core purpose of 'opening up a world of opportunity'\nunderlines our focus on helping our customers and clients to\nnavigate this complexity and access growth, wherever it\nis. Many of our customers and colleagues are living through very\ndifficult times. Higher interest rates have had a significant\nimpact on businesses and households, and we will remain conscious\nof this with interest rates expected to begin to fall back in 2024.\nThe wars between Russia and Ukraine, and now between Israel and\nHamas, are absolutely devastating. Our thoughts are with all those\nimpacted, including our colleagues in those parts of the world, and\ntheir families and friends. Their resilience, professionalism and\ncare for one another during these most testing of times has been,\nand is, exceptional. Progress and performance Turning to our performance, I want to again pay tribute to my\ncolleagues. The record profit performance that we delivered in 2023\nwas supported by the impact of interest rates on our strong balance\nsheet, but it was also testament to the tireless efforts of our\npeople around the world. I would like to thank them sincerely for\ntheir hard work, dedication and commitment to serving our\ncustomers. In 2023, reported profit before tax was $30.3bn, which was an\nincrease of $13.3bn compared with 2022. This was due mainly to\nhigher revenue and a number of notable items. Our three global\nbusinesses delivered good revenue growth, and we ended the year\nwith strong capital, funding and liquidity positions. We remain committed to sharing the benefits of our improved\nperformance with our shareholders. The Board approved a fourth\nquarterly dividend of $0.31 per share, bringing the total dividend\nfor 2023 to $0.61 per share. Furthermore, in 2023 we announced\nthree share buy-backs worth a total of $7bn and, today, have\nannounced a further share buy-back of up to $2bn. The planned sale of our banking operations in Canada received final\napproval from the Canadian government at the end of last year.\nSubject to completion of the transaction, which is expected in the\nfirst quarter of 2024, the Board will consider a special dividend\nof $0.21 per share, to be paid in the first half of 2024, as a\npriority use of the proceeds. With this anticipated transaction and the completion of the sale of\nour retail banking business in France last month, our focus has\nmoved to investing for growth, while maintaining efficiency. Two\nexamples of growth opportunities last year were the agreed\nacquisition of Citi's retail wealth business in mainland China,\nwhich will help accelerate our Wealth strategy, and the acquisition\nof SVB UK, following the difficulties experienced by its US parent\nentity. Acquiring SVB UK was opportunistic, but the deal made\nexcellent strategic sense for HSBC, and it also helped to protect\nclients, safeguard jobs and maintain financial\nstability. Technology and sustainability are two of the trends transforming\nbanking and the world around us. The opportunities from generative\nAI are among the most transformative within my working life. We are\nactively exploring a number of use cases, while also working to\nmanage the associated risks. Meanwhile the global climate challenge is becoming increasingly\nacute. Our presence in many of the sectors and markets where the\nneed to reduce emissions is the greatest provides us with an\nopportunity to work with our clients to help address it. This is\nset out in our first net zero transition plan. The Board discussed\nand contributed to the net zero transition plan in depth. We\nbelieve that it is a realistic and ambitious assessment of the\nlong-term journey ahead, as we continue to work with our clients on\ntheir transitions to a low-carbon future. It is clear there will be\nmany uncertainties and dependencies, and that our approach will\nneed to continue to evolve with the real world around\nus. Board operations Our work on sustainability was one of the many topics discussed\nwith our shareholders at our 2023 Annual General Meeting ('AGM') in\nMay. Ahead of that, Noel and I were pleased to meet with Hong Kong\nshareholders at our Informal Shareholders' Meeting. At both\nmeetings, we also discussed the resolutions that were requisitioned\nby shareholders on the Group's strategy and dividend policy.\nShareholders expressed strong support for the Group's current\nstrategy by voting overwhelmingly with the Board and against these\nresolutions at the AGM. This enabled the Board, my colleagues and\nour shareholders to focus on our shared objectives of serving our\ncustomers, driving stronger performance, and creating more value\nfor our investors. In 2023, the Board held meetings in London, Birmingham, Hong Kong,\nParis, New York, Mumbai and Delhi. We also returned to Beijing and\nShanghai last month. On each occasion, the Board engaged with\nclients, colleagues, government officials and regulators - with\nthese discussions underlining that HSBC continues to have a key\nrole connecting the world's trade and finance hubs. There were a number of changes to the composition of the Board last\nyear. At the 2023 AGM, we said farewell to Jackson Tai, who made an\nimportant, extensive and lasting contribution to the success of\nHSBC during his time as a non-executive Director. His leadership in\nstrengthening risk and conduct governance and oversight was\nparticularly critical through a period of significant change. We\nalso announced in December that David Nish intends to retire from\nthe Board at the 2024 AGM. David has made an invaluable\ncontribution to the Board over the past eight years, particularly\nin recent years as Chair of the Group Audit Committee and as Senior\nIndependent Director. I would like to thank him warmly for his\nconsistent counsel and guidance. I am pleased that Kalpana Morparia, Ann Godbehere, Brendan Nelson\nand Swee Lian Teo joined the Board during 2023. Each of them brings\nexperience and expertise that is an asset to the Board.\nSpecifically, Ann's extensive public-listed company board\nexperience means that she is ideally placed to take over as Senior\nIndependent Director, while Brendan's UK and international\nfinancial expertise and significant experience as audit chair at\nUK-listed companies will be particularly valuable as he takes over\nleadership of the Group Audit Committee. Macroeconomic outlook Looking ahead, 2024 is likely to be another eventful year. The\nslowing of inflation in the second half of 2023 means that monetary\ntightening now appears to be coming to an end. However, current\ninflation levels in many economies remain above their targets. As\ncentral banks continue to try to bridge this gap, voters head to\nthe polls in a significant number of countries across the globe.\nThe timing and outcomes of these elections will impact the decision\nmaking of governments and have geopolitical, as well as fiscal,\nimplications. We will monitor the results closely, and take a\nlong-term view of strategy, purpose and capital allocation, while\ncognisant of any short-term challenges. Among these potential challenges are the increased uncertainties\ndue to wars in Europe and the Middle East, and disruption to global\ntrade and supply chains caused by these and attacks on shipping in\nthe Red Sea. However, we remain cautiously optimistic about\neconomic prospects for 2024. We expect growth to slow in the first\nhalf of the year and recover thereafter. We also expect the\nvariable economic growth that has characterised recent years to\ncontinue. The economies of south and south-east Asia carry good economic\nmomentum into 2024. India and Vietnam are currently among the\nfastest-growing economies in the world, benefiting from competitive\nlabour costs, supportive policies and changing supply chains.\nChinese companies are among those increasingly looking towards\nthese and other markets, as China's economic  transformation\ntowards high-quality growth and domestic consumption\ncontinues. China's recovery after reopening was bumpier than expected, but its\neconomy grew in line with its annual target of around 5% in 2023.\nWe expect this to be maintained in 2024, with recently announced\npolicy measures to support the property sector and local government\ndebt gradually flowing through to the wider economy. Hong Kong's\ngrowth has moved along at a slower but healthy pace and is likely\nto remain in line with pre-pandemic levels. As Asia continues to grow, a significant opportunity is emerging to\nconnect it to another high-growth region. The Middle East region\nperformed very well economically in 2023 and the outlook remains\nstrong for 2024, notwithstanding the risks arising from conflicts\nin the region. As countries like Saudi Arabia and the UAE continue\nto diversify their economies, new opportunities are created to\nconnect them to Asia, and Asia to them. The US economy grew more quickly than expected in 2023 in the face\nof higher interest rates. Growth is likely to be lower in 2024,\nalthough it should remain higher than in Europe where growth\nremains subdued. The UK economy, which entered a technical\nrecession at the end of 2023, has nonetheless been resilient.\nHeadline inflation should fall in the first half of the year, with\ncore inflation following by the end of 2024. This will of course\ndetermine the pace of interest rate cuts. I would like to end by reiterating my thanks to my colleagues for\nall that they have done, and all that they continue to do, for\nHSBC. Their tireless efforts are reflected by our improved\nfinancial performance and increased returns for shareholders in\n2023 - and I look forward to them securing the foundations for our\nfuture success. Mark E Tucker Group Chairman 21 February 2024 Review by Noel Quinn, Group Chief Executive 2023 was a very good year for HSBC. I would like to start by paying\ntribute to my colleagues for all that they did last year, and in\nthe preceding three years. As I have said before, they have fully\nembraced our core purpose of 'opening up a world of opportunity' in\nall they do - from helping clients and customers to expand to new\nmarkets or move overseas, to digitising our business and helping\nour people to be their best, to our ongoing work on the transition\nto net zero. Our performance last year was great credit to them. We delivered\nstrong revenue growth across all three global businesses, supported\nby higher interest rates, which enabled us to deliver our best\nreturn on average tangible equity in more than a decade. As well as\nimproving financial performance, our strategy is increasing\nshareholder returns. I am pleased that we have rewarded our\nshareholders for their loyalty with the highest full-year dividend\nper share since 2008, as well as three share buy-backs in 2023\ntotalling $7bn. In total, we returned $19bn to shareholders by way\nof dividend and share buy-backs in respect of 2023. In addition, we\nhave today announced a further share buy-back of up to\n$2bn. As we move into 2024, I am confident that there are opportunities\nahead for us and our clients that can help us to sustain our good\nperformance going into the next phase of the interest rate\ncycle. The environment does, however, remain challenging. The wars in\nEurope and the Middle East are beyond comprehension on a human\nlevel, and my thoughts remain with all those impacted. Both\nconflicts also still have the potential to escalate further. That\nwould first and foremost deepen the humanitarian crisis, but also\nlikely lead to another wave of market and economic turmoil.\nInterest rates are expected to fall this year, which we believe\nshould in turn help to increase economic activity. The outlook\ncurrently remains uncertain, however, and many of our customers\nremain concerned about their finances. In the midst of these\nchallenges, we will stay focused on what we are here to do - which\nis to serve our customers and clients, and help them with any\nfinancial difficulties they face. Financial performance Our results are a testament to the way we stayed focused in 2023.\nReported profit before tax was $30.3bn, which was $13.3bn higher\nthan in 2022. This included a number of notable items, including a\nfavourable year-on-year impact of $2.5bn relating to the sale of\nour retail banking operations in France and a $1.6bn provisional\ngain on the acquisition of SVB UK. These were offset by a valuation\nadjustment of $3.0bn relating to our investment in BoCom, which\nfollowed the reassessment of our accounting value-in-use in line\nwith recent market developments in mainland China. This adjustment\nhas no material impact on our capital, capital ratio and\ndistribution capacity, and therefore no impact on our share\nbuy-backs or dividends. We remain confident in the resilience of\nthe Chinese economy, and the growth opportunities in mainland China\nover the medium to long term. Reported revenue grew by 30% or $15.4bn, driven by an increase in\nnet interest income of $5.4bn from all three global businesses.\nNon-interest income increased by $10bn, reflecting increased\ntrading and fair value income of $6.4bn, mainly in Global Banking\nand Markets, and the favourable year-on-year impact from the\nimpairment relating to the sale of our retail banking operations in\nFrance and provisional gain on the acquisition of SVB\nUK. In 2023, we delivered a return on average tangible equity of 14.6%,\nor 15.6% excluding strategic transactions and the impairment on our\ninvestment in BoCom. Our three global businesses performed well. In Commercial Banking,\nprofit before tax was up by 76% to $13.3bn on a constant currency\nbasis, driven by revenue increases across all our main legal\nentities. Within this, Global Payments Solutions revenue increased\nby 78% or $5.4bn on a constant currency basis, driven by higher\nmargins reflecting higher interest rates and repricing. Fee income\nincreased by 4% due to growth in transaction banking and higher\nvolumes in cards and international payments, while our trade\nbusiness performed well relative to the market and we increased our\nmarket share. Global Banking and Markets delivered profit before tax of $5.9bn,\nup 26% compared with 2022, on a constant currency basis. Revenue\ngrew by 10% on a constant currency basis, due to higher net\ninterest income in Global Payments Solutions and Securities\nServices. In Wealth and Personal Banking, profit before tax of\n$11.5bn was $6.1bn higher than in 2022, on a constant currency\nbasis. Revenue was up by 31% or $6.4bn on a constant currency\nbasis, reflecting growth in Personal Banking and in Wealth, as well\nas the positive year-on-year impact relating to the sale of our\nFrench retail banking business. Within this, Wealth revenue of\n$7.5bn was up 8% or $0.6bn on a constant currency basis, with good\ngrowth in private banking and asset management. Reported costs for 2023 were down by 2% compared with the previous\nyear, as lower restructuring costs offset higher technology\nspending, inflation, higher performance-related pay and levies. On\na target basis, costs increased by 6%, which was 1% higher than\npreviously guided due to levies including a charge relating to the\nFDIC special assessment levy in the US. Our reported\ncost-efficiency ratio improved to 48.5% from 64.6% in 2022,\nsupported by higher net interest income. Our 2023 reported ECL charge of $3.4bn was $0.1bn lower than in\n2022. This primarily comprised stage 3 net charges, notably related\nto mainland China commercial real estate sector exposures, and\nreflected the continued uncertainty within the global economy.\nAfter good capital generation in 2023, we ended the year with a\nCET1 ratio of 14.8%. We are able to pay a fourth interim dividend\nof $0.31 per share, bringing the total 2023 dividend to $0.61 per\nshare, which is the highest since 2008. From transform to sustain and grow Looking forward, supportive interest rates and good underlying\nbusiness growth have given us strong momentum. We continue to\ntarget a mid-teens return on average tangible equity. We are also,\nhowever, mindful of the interest rate cycle and the subsequent\nimpact on net interest income. In 2023, we increased the size and\nduration of our structural hedges to reduce the sensitivity of\nbanking net interest income to interest rate movements and help\nstabilise future earnings. We also see a number of growth\nopportunities within our strategy that play to our\nstrengths. The first is to further grow our international businesses, which\nremains our biggest differentiator and growth opportunity.\nInternational expansion remains a core strategy for corporates and\ninstitutions seeking to develop and expand, especially the\nmid-market corporates that HSBC is very well-positioned to serve.\nRather than de-globalising, we are seeing the world re-globalise,\nas supply chains change and intra-regional trade flows increase.\nOur international network and presence in markets that are\nbenefiting like the ASEAN region and Mexico help us to capitalise\non these trends. As a result, our market-leading trade franchise\nfacilitated more than $850bn of trade in 2023, while we are the\nsecond biggest payments company by revenue and we processed around\n$500tn of payments electronically in 2023. This helped to grow\nwholesale multi-jurisdictional client revenue from customers who\nbank with us in more than one market, by 29% in 2023. With\nmulti-jurisdictional corporate customers in Commercial Banking\ngenerating around five times as much client revenue as an average\ndomestic customer, we continue to focus on growing this further,\nespecially in the mid-market segment where we have a competitive\nadvantage and there is still potential to further extend our market\nleadership. The second is to diversify our revenue. Building our wealth\nbusiness to meet the rising demand for wealth management services,\nespecially in Asia, has been a strategic priority. Last year, we\nattracted net new invested assets of $84bn, following $80bn in 2022\nand $64bn in 2021, underlining the traction that we have gained.\nOur agreement to acquire Citi's retail wealth management portfolio\nin mainland China helps accelerate our plans. Another trend is the\nincreasing demand for seamless, integrated, cross-border banking\nservices, which innovation is helping us to deliver. We now have\n1.3 million Global Money customers, up from 550,000 in 2022, and\ngrew revenue from Wealth and Personal Banking international\ncustomers by 41% last year, from $7.2bn to $10.2bn. Critically,\nthere was a 43% increase in new-to-bank international customers\ncompared with 2022, driven by the new international proposition\nthat we launched and continue to develop. As in wholesale, these\ninternational customers generate higher revenue, bringing in around\nthree times as much as average domestic-only\ncustomers. The third is continued growth in our two home markets. Our business\nis built on two very deep pools of liquidity in Hong Kong and the\nUK, which underpin our exceptional balance sheet strength and,\ntherefore, all that we do as a business. Hong Kong and the UK are\nboth also very profitable, well-connected markets. We are well\npositioned to capitalise on our positions as the number one bank in\nHong Kong and a leading bank in the UK. Hong Kong's connectivity,\nboth globally and to mainland China, are helping us to grow our\nfranchise. We have increased our market share in trade in Hong Kong\nby 6.6 percentage points over the last three years, according to\nHKMA data. Meanwhile new-to-bank customers in Hong Kong increased\nby 36% over the same period as we have capitalised on the return of\nvisitors from mainland China. In the UK, we have good traction in\nCommercial Banking and continue to grow market share in Wealth and\nPersonal Banking. We are the leading bank for UK large corporates,\nwith more than 70% market penetration last year, according to\nCoalition Greenwich. Euromoney also named us as the best bank in\nthe UK for small and medium-sized enterprises, as digitisation\nhelped to grow new-to-bank clients through Kinetic. We also\nincreased our market share of UK mortgage stock, from 7.4% in 2020\nto 8% in 2023, according to Bank of England data. As economic\nconditions improve and we continue to invest, we are confident in\nour ability to grow further in these critical markets. We have also continued to diversify our profit generation\ngeographically across multiple markets. The positions that we have\nas a leading foreign bank in mainland China, India, Singapore, the\nUAE, Saudi Arabia and Mexico - all of which are also well connected\nto our international network - mean we are well placed to capture\nopportunities in these fast-growing economies. This was again\nevident as they all grew reported profits significantly in 2023,\nwith mainland China (excluding associates), India, and Singapore\neach contributing in excess of $1bn of profits to the\nGroup. It is critical that we maintain tight cost discipline. This was\nchallenging in 2023 in a high inflation environment, and will\nlikely remain so in 2024. At the same time, we need to invest in\ngrowth, so we remain very focused on maintaining tight underlying\ncosts. The sale of our French retail banking operations completed\non 1 January 2024, and the planned sale of our banking business in\nCanada remains due to complete in the first quarter of 2024. A\nnumber of smaller exits remain underway as we continue to look at\nopportunities to reshape our portfolio. At the same time, our\nacquisition of SVB UK enabled us to create a bigger, new\nproposition in HSBC Innovation Banking, which combines deep sector\nspecialisms with our balance sheet strength and global reach,\nensuring we continue our long history of supporting\nentrepreneurs. Driving cost savings enables us to invest in technology, which is\nthe fourth opportunity. The digitisation of our business continues\nto improve customer experience and increase efficiency. Using AI to\nhelp price complex structural options in our Foreign Exchange\nbusiness has cut execution times down from hours to minutes. We\nhave also identified hundreds of opportunities to leverage\ngenerative AI, and will focus our efforts on use cases with\ntangible benefits for the Group and our customers. Innovation also creates new avenues for growth. We recently\nlaunched Zing, which is our open market mobile platform focused on\ncross-border payments, initially available in the UK. It offers\nsimilar capabilities as Global Money does to our international\nWealth and Personal Banking customers, but is targeted at non-HSBC\ncustomers and allows us to drive growth beyond our traditional\ncustomer footprint. Underpinning all of this is our work to build a stronger\nperformance culture, improve colleague experience and prepare our\nworkforce for the future. This is important because achieving our\nambitions depends on our 220,000 colleagues feeling motivated and\nbelieving in our strategy. In our most recent staff survey, I was\npleased that the number of colleagues seeing the positive impact of\nour strategy in 2023 was up 11 percentage points on 2020, which is\nalso above the financial services sector benchmark. Finally, helping to finance the substantial investment needs of our\ncustomers in the transition to net zero is a growing commercial\nopportunity, as well as a necessity to mitigate rising financial\nand wider societal risks. Our first net zero transition plan shows\nhow we intend to finance and support the transition to net zero and\ncollaborate globally to help enable change at scale. It also sets\nout our roadmap for implementing net zero, which we will do by\nsupporting our customers, embedding net zero into the way we\noperate and partnering for systemic change. We understand that our\napproach - including our own transition plan - will need to evolve\nover time to keep pace with both the evolving science and real\neconomy decarbonisation across the sectors and geographies we\nserve. Thank you On a personal note, one of the most enjoyable parts of 2023 for me\nwas spending time with many of my colleagues around the world.\nReconnecting with them, and seeing first-hand their passion for\nserving our customers, pride in HSBC and ambitions for the future,\nwas energising and inspiring. Leading HSBC is a privilege, and my\ncolleagues are the main reason why. 2023 was a very good year for HSBC. We now have an opportunity to\nensure that it becomes part of a longer-term trend of ongoing good\nperformance and to secure the foundations for future success. I am\nconfident that we have the opportunities, the platform and the team\nto enable us to get it done. Noel Quinn Group Chief Executive 21 February 2024 Financial summary Year ended 31 December 2023 2022¹ $m $m For the year Profit before tax 30,348 17,058 Profit attributable to: -  ordinary shareholders of the parent company 22,432 14,346 Dividends\non ordinary shares 10,492 5,330 At 31 December 2023 2022 $m $m Total shareholders' equity 185,329 177,833 Total regulatory capital 171,204 162,423 Customer accounts 1,611,647 1,570,303 Total assets 3,038,677 2,949,286 Risk-weighted assets 854,114 839,720 Per ordinary share $ $ Basic earnings per share 1.15 0.72 Dividend per ordinary share (in respect of the period) 0.61 0.32 Dividends per ordinary share (paid in the period) 0.53 0.27 Net\nasset value per ordinary share at period end 2 8.82 8.01 Tangible\nnet asset value per ordinary share at period end 3 8.19 7.44 Share information Number of $0.50 ordinary shares in issue (millions) 19,263 20,294 Basic number of $0.50 ordinary shares outstanding\n(millions) 19,006 19,739 Basic number of $0.50 ordinary shares outstanding and dilutive\npotential ordinary shares (millions) 19,135 19,876 1 From\n1 January 2023, we adopted IFRS 17 'Insurance Contracts', which\nreplaced IFRS 4 'Insurance Contracts'. Comparative data for the\nyear ended 31 December 2022 have been restated\naccordingly. 2 The\ndefinition of net asset value per ordinary share is total\nshareholders' equity, less non-cumulative preference shares and\ncapital securities, divided by the number of ordinary shares in\nissue, excluding own shares held by the company, including those\npurchased and held in treasury. 3 The\ndefinition of tangible net asset value per ordinary share is total\nordinary shareholders' equity excluding goodwill and other\nintangible assets (net of deferred tax), divided by the number of\nbasic ordinary shares in issue, excluding own shares held by the\ncompany, including those purchased and held in\ntreasury. Distribution of results by global business Constant currency profit/(loss) before tax Year ended 31 Dec 2023 2022 1 $m % $m % Wealth and Personal Banking 11,544 38.0 5,480 33.1 Commercial\nBanking 2 13,280 43.8 7,527 45.6 Global\nBanking and Markets 2 5,924 19.5 4,689 28.3 Corporate Centre (400) (1.3) (1,155) (7.0) Profit before tax 30,348 100.0 16,541 100.0 1     From 1 January 2023, we adopted IFRS 17\n'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'.\nComparative data for the year ended 31 December 2022 have been\nrestated accordingly. 2   In the first quarter of 2023, following an internal\nreview to assess which global businesses were best suited to serve\nour customers' respective needs, a portfolio of our customers\nwithin our entities in Latin America was transferred from GBM to\nCMB for reporting purposes. Comparative data have been re-presented\naccordingly. Distribution of results by legal entity Reported profit/(loss) before tax Year ended 31 Dec 2023 2022 1 $m % $m % HSBC UK\nBank plc 8,270 27.2 4,487 26.3 HSBC\nBank plc 2,639 8.7 (1,395) (8.2) The\nHongkong and Shanghai Banking Corporation Limited 16,167 53.3 12,899 75.6 HSBC\nBank Middle East Limited 1,239 4.1 728 4.3 HSBC\nNorth America Holdings Inc. 518 1.7 705 4.1 HSBC\nBank Canada 871 2.9 832 4.9 Grupo\nFinanciero HSBC, S.A. de C.V. 805 2.6 583 3.4 Other\ntrading entities 2 2,359 7.8 1,432 8.4 -  of which: other Middle East entities (including Oman,\nTürkiye, Egypt and Saudi Arabia) 748 2.5 655 3.8 -  of which: Saudi Awwal Bank 538 1.8 342 2.0 Holding companies, shared service centres and intra-Group\neliminations (2,520) (8.3) (3,213) (18.8) Profit before tax 30,348 100.0 17,058 100.0 1     From 1 January 2023, we adopted IFRS 17\n'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'.\nComparative data for the year ended 31 December 2022 have been\nrestated accordingly. 2   Other trading entities includes the results of\nentities located in Oman, Türkiye, Egypt and Saudi Arabia\n(including our share of the results of Saudi Awwal Bank) which do\nnot consolidate into HSBC Bank Middle East Limited. Supplementary\nanalysis is provided on page 130 in\nthe Annual\nReport and Accounts 2023 for a fuller\npicture of the MENAT regional performance. HSBC\nconstant currency profit before tax and balance sheet\ndata 2023 Wealth and Personal Banking Commercial Banking 3 Global Banking and Markets 3 Corporate Centre Total $m $m $m $m $m Net operating income/(expense) before change in expected credit\nlosses and other credit impairment charges 2 27,275 22,867 16,115 (199) 66,058 -  external 19,107 24,209 28,021 (5,279) 66,058 -  inter-segment 8,168 (1,342) (11,906) 5,080 - of which: net interest income/(expense) 5 20,492 17,147 7,141 (8,984) 35,796 Change\nin expected credit losses and other credit impairment\ncharges (1,058) (2,062) (326) (1) (3,447) Net operating income/(expense) 26,217 20,805 15,789 (200) 62,611 Total operating expenses (14,738) (7,524) (9,865) 57 (32,070) Operating profit/(loss) 11,479 13,281 5,924 (143) 30,541 Share\nof profit in associates and joint ventures less\nimpairment 6 65 (1) - (257) (193) Constant currency profit/(loss) before tax 11,544 13,280 5,924 (400) 30,348 % % % % % Share\nof HSBC's constant currency profit before tax 38.0 43.8 19.5 (1.3) 100.0 Constant\ncurrency cost efficiency ratio 54.0 32.9 61.2 28.6 48.5 Constant currency balance sheet data $m $m $m $m $m Loans and advances to customers (net) 454,878 309,422 173,966 269 938,535 Interests in associates and joint ventures 551 28 111 26,654 27,344 Total external assets 937,079 632,406 1,331,395 137,797 3,038,677 Customer accounts 804,863 475,666 330,522 596 1,611,647 Constant\ncurrency risk-weighted assets 4 192,938 354,541 218,488 88,147 854,114 2022 1 Net\noperating income/(expense) before change in expected credit losses\nand other credit impairment charges 2 20,884 16,283 14,602 (1,898) 49,871 -  external 18,299 16,973 18,744 (4,145) 49,871 -  inter-segment 2,585 (690) (4,142) 2,247 - of which: net interest income/(expense) 5 15,971 11,763 4,696 (2,668) 29,762 Change in expected credit losses and other credit impairment\ncharges (1,186) (1,862) (573) (9) (3,630) Net operating income/(expense) 19,698 14,421 14,029 (1,907) 46,241 Total operating expenses (14,248) (6,894) (9,338) (1,822) (32,302) Operating profit/(loss) 5,450 7,527 4,691 (3,729) 13,939 Share of profit in associates and joint ventures 30 - (2) 2,574 2,602 Constant\ncurrency profit/(loss) before tax 5,480 7,527 4,689 (1,155) 16,541 % % % % % Share\nof HSBC's constant currency profit before tax 33.1 45.6 28.3 (7.0) 100.0 Constant\ncurrency cost efficiency ratio 68.2 42.3 64.0 (96.0) 64.8 Constant\ncurrency balance sheet data $m $m $m $m $m Loans and advances to customers (net) 434,122 316,863 190,202 361 941,548 Interests in associates and joint ventures 514 33 93 28,143 28,783 Total external assets 893,867 620,193 1,341,575 152,049 3,007,684 Customer\naccounts 793,310 472,424 332,303 458 1,598,495 Constant\ncurrency risk-weighted assets 4 184,519 344,217 225,836 88,496 843,068 1 From\n1 January 2023, we adopted IFRS 17 'Insurance Contracts', which\nreplaced IFRS 4 'Insurance Contracts'. Comparative data for the\nfinancial year ended 31 December 2022 have been restated\naccordingly. 2 Net\noperating income/(expense) before change in expected credit losses\nand other credit impairment charges, also referred to as\nrevenue. 3 In\nthe first quarter of 2023, following an internal review to assess\nwhich global businesses were best suited to serve our customers'\nrespective needs, a portfolio of our customers within our entities\nin Latin America was transferred from GBM to CMB for reporting\npurposes. Comparative data have been re-presented\naccordingly. 4 Constant\ncurrency risk-weighted assets are calculated using reported\nrisk-weighted assets adjusted for the effects of currency\ntranslation differences. 5 Net\ninterest expense recognised in the Corporate Centre includes $8.7bn\n(2022: $2.5bn) of interest expense in relation to the internal cost\nto fund trading and fair value net assets; and the funding cost of\nforeign exchange swaps in our Markets Treasury function. In the\nsecond quarter of 2023, we implemented a consistent reporting\napproach across the most material entities that contribute to our\ntrading and fair value net assets, which resulted in an increase to\nthe associated funding costs reported through the intersegment\nelimination in Corporate Centre. 6 Includes\nan impairment loss of $3.0bn recognised in respect of the Group's\ninvestment in BoCom. See Note 18 on page 391 of\nthe Annual\nReport and Accounts 2023. Consolidated\nincome statement for the year ended 31 December 2023 2023 2022 1 $m $m Net interest income 35,796 30,377 - \ninterest income 2,3 100,868 52,826 - \ninterest expense 4 (65,072) (22,449) Net fee income 11,845 11,770 -  fee income 15,616 15,124 -  fee expense (3,771) (3,354) Net income from financial instruments held for trading or managed\non a fair value basis 16,661 10,278 Net income/(expense) from assets and liabilities of insurance\nbusinesses, including related derivatives, measured at fair value\nthrough profit or loss 7,887 (13,831) Insurance\nfinance (expense)/income (7,809) 13,799 Insurance service result 1,078 809 - \ninsurance revenue 2,259 1,977 -  insurance service expense (1,181) (1,168) Gain on\nacquisition 5 1,591 - (Impairment)/reversal\nof impairment relating to the sale of our retail banking operations\nin France 6 150 (2,316) Other\noperating (expense)/income 7 (1,141) (266) Net operating income before change in expected credit losses and\nother credit impairment charges 8 66,058 50,620 Change in expected credit losses and other credit impairment\ncharges (3,447) (3,584) Net operating income 62,611 47,036 Employee compensation and benefits (18,220) (18,003) General and administrative expenses (10,383) (10,848) Depreciation\nand impairment of property, plant and equipment and right-of-use\nassets 9 (1,640) (2,149) Amortisation and impairment of intangible assets (1,827) (1,701) Total operating expenses (32,070) (32,701) Operating profit 30,541 14,335 Share\nof profit in associates and joint ventures 2,807 2,723 Impairment\nof interest in associate (3,000) - Profit before tax 30,348 17,058 Tax expense (5,789) (809) Profit for the year 24,559 16,249 Attributable to: -  ordinary shareholders of the parent company 22,432 14,346 -  other equity holders 1,101 1,213 -  non-controlling interests 1,026 690 Profit for the year 24,559 16,249 $ $ Basic earnings per ordinary share 1.15 0.72 Diluted earnings per ordinary share 1.14 0.72 1     From 1 January 2023, we adopted IFRS 17\n'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'.\nComparative data for the financial year ended 31 December 2022 have\nbeen restated accordingly. 2   Interest income includes $88,657m (2022:\n$45,994m) of interest recognised on financial assets measured at\namortised cost and $12,134m (2022: $6,293m) of interest recognised\non financial assets measured at fair value through other\ncomprehensive income. 3     Interest income is calculated using the\neffective interest method and comprises mainly interest recognised\non financial assets measured at either amortised cost or fair value\nthrough other comprehensive income. 4     Interest expense includes $62,095m (2022:\n$20,798m) of interest on financial instruments, excluding interest\non debt instruments issued by HSBC for funding purposes that are\ndesignated under the fair value option to reduce an accounting\nmismatch and on derivatives managed in conjunction with those debt\ninstruments included in interest expense. 5   Provisional gain recognised in respect of the\nacquisition of SVB UK. 6   In the fourth quarter of 2023, an impairment loss of\n$2.0bn was\nrecognised relating to the sale of our retail banking\noperations in France. This largely offset the $2.1bn\nrecognised in the first quarter of 2023 on the reversal of the held\nfor sale classification at that time. In 2023, a total\nnet $0.1bn of credit was recognised in other operating income,\nreflecting the net asset value disposed under the final terms of\nsale. The $0.4bn impairment of goodwill recognised in the third\nquarter in 2022 has not been reversed. 7   Other operating (expense)/income includes a loss on\nnet monetary positions of $1,667m (2022: $678m) as a result of\napplying IAS 29 'Financial Reporting in Hyperinflationary\nEconomies' and the disposal losses on capitalised Markets\nTreasury repositioning of $977m in 2023. 8     Net operating income before change in\nexpected credit losses and other credit impairment charges also\nreferred to as revenue. 9   Includes depreciation of the right-of-use assets of\n$663m (2022: $717m). Consolidated\nstatement of comprehensive income for the year ended 31 December 2023 2023 2022¹ $m $m Profit for the year 24,559 16,249 Other comprehensive income/(expense) Items that will be reclassified subsequently to profit or loss when\nspecific conditions are met: Debt instruments at fair value through other comprehensive\nincome 2,599 (7,232) -  fair value gains/(losses) 2,381 (9,618) - \nfair value losses/(gains) transferred to the income statement on\ndisposal 905 (18) - \nexpected credit (recoveries)/losses recognised in the income\nstatement 59 56 -  income taxes (746) 2,348 Cash flow hedges 2,953 (3,655) -  fair value gains/(losses) 2,534 (4,207) -  fair value (gains)/losses reclassified to the income\nstatement 1,463 (758) -  income taxes (1,044) 1,310 Share of other comprehensive income/(expense) of associates and\njoint ventures 47 (367) -  share for the year 47 (367) Net\nfinance income/(expenses) from insurance contracts (364) 1,775 -  before income taxes (491) 2,393 -  income taxes 127 (618) Exchange differences (204) (9,918) Items that will not be reclassified subsequently to profit or\nloss: Fair value gains on property revaluation 1 280 Remeasurement\nof defined benefit liability (314) (1,031) -  before income taxes (413) (1,723) -  income taxes 99 692 Changes\nin fair value of financial liabilities designated at fair value\nupon initial recognition arising from changes in own credit\nrisk (1,219) 1,922 - \nbefore income taxes (1,617) 2,573 - \nincome taxes 398 (651) Equity instruments designated at fair value through other\ncomprehensive income (120) 107 -  fair value gains/(losses) (120) 107 Effects of hyperinflation 1,604 877 Other comprehensive income/(expense) for the year, net of\ntax 4,983 (17,242) Total comprehensive income/(expense) for the year 29,542 (993) Attributable to: -  ordinary shareholders of the parent company 27,397 (2,810) -  other equity holders 1,101 1,213 -  non-controlling interests 1,044 604 Total comprehensive income/(expense) for the year 29,542 (993) 1   From 1 January 2023, we adopted IFRS 17 'Insurance\nContracts', which replaced IFRS 4 'Insurance Contracts'.\nComparative data for the financial year ended 31 December 2022 have\nbeen restated accordingly. Consolidated\nbalance sheet at 31 December 2023 At 1 31 Dec 31 Dec 2023 2022 $m $m Assets Cash and balances at central banks 285,868 327,002 Items in the course of collection from other banks 6,342 7,297 Hong Kong Government certificates of indebtedness 42,024 43,787 Trading assets 289,159 218,093 Financial assets designated and otherwise mandatorily measured at\nfair value through profit or loss 110,643 100,101 Derivatives 229,714 284,159 Loans and advances to banks 112,902 104,475 Loans and advances to customers 938,535 923,561 Reverse repurchase agreements - non-trading 252,217 253,754 Financial investments 442,763 364,726 Assets\nheld for sale 114,134 115,919 Prepayments, accrued income and other assets 165,255 156,149 Current tax assets 1,536 1,230 Interests in associates and joint ventures 27,344 29,254 Goodwill and intangible assets 12,487 11,419 Deferred tax assets 7,754 8,360 Total assets 3,038,677 2,949,286 Liabilities Hong Kong currency notes in circulation 42,024 43,787 Deposits by banks 73,163 66,722 Customer accounts 1,611,647 1,570,303 Repurchase agreements - non-trading 172,100 127,747 Items in the course of transmission to other banks 7,295 7,864 Trading liabilities 73,150 72,353 Financial liabilities designated at fair value 141,426 127,321 Derivatives 234,772 285,762 Debt securities in issue 93,917 78,149 Liabilities\nof disposal groups held for sale 108,406 114,597 Accruals, deferred income and other liabilities 136,606 134,313 Current tax liabilities 2,777 1,135 Insurance\ncontract liabilities 120,851 108,816 Provisions 1,741 1,958 Deferred tax liabilities 1,238 972 Subordinated liabilities 24,954 22,290 Total liabilities 2,846,067 2,764,089 Equity Called up share capital 9,631 10,147 Share premium account 14,738 14,664 Other equity instruments 17,719 19,746 Other reserves (8,907) (9,133) Retained earnings 152,148 142,409 Total shareholders' equity 185,329 177,833 Non-controlling interests 7,281 7,364 Total equity 192,610 185,197 Total liabilities and equity 3,038,677 2,949,286 1     From 1 January 2023, we adopted IFRS 17\n'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'.\nComparative data for the year ended 31 December 2022 have been\nrestated accordingly. Consolidated\nstatement of changes in equity for the year ended 31 December 2023 Other reserves Called up share capital and share premium Other equity instru-ments Financial assets at FVOCI reserve Cash flow hedging reserve Foreign exchange reserve Merger and other reserves 1,2 Insurance finance reserve 3 Retained earnings 1,4 Total share- holders' equity Non- controlling interests Total equity $m $m $m $m $m $m $m $m $m $m $m At 1 Jan 2023 24,811 19,746 (7,038) (3,808) (32,575) 33,209 1,079 142,409 177,833 7,364 185,197 Profit for the year - - - - - - - 23,533 23,533 1,026 24,559 Other comprehensive income (net of tax) - - 2,402 3,030 (211) 1 (371) 114 4,965 18 4,983 -  debt instruments at fair value through other comprehensive\nincome - - 2,574 - - - - - 2,574 25 2,599 -  equity instruments designated at fair value through other\ncomprehensive income - - (93) - - - - - (93) (27) (120) -  cash flow hedges - - - 2,919 - - - - 2,919 34 2,953 -  changes in fair value of financial liabilities designated\nat fair value upon initial recognition arising from changes in own\ncredit risk - - - - - - - (1,220) (1,220) 1 (1,219) -  property revaluation - - - - - 1 - - 1 - 1 -  remeasurement of defined benefit\nasset/liability - - - - - - - (317) (317) 3 (314) -  share of other comprehensive income of associates and joint\nventures - - - - - - - 47 47 - 47 -  effects of hyperinflation - - - - - - - 1,604 1,604 - 1,604 -  insurance finance income/(expense) recognised in other\ncomprehensive income - - - - - - (364) - (364) - (364) -  exchange differences - - (79) 111 (211) - (7) - (186) (18) (204) Total comprehensive income for the year - - 2,402 3,030 (211) 1 (371) 23,647 28,498 1,044 29,542 Shares issued under employee remuneration and\nshare plans 79 - - - - - - (79) - - - Capital\nsecurities issued 5 - 1,996 - - - - - - 1,996 - 1,996 Dividends to shareholders - - - - - - - (11,593) (11,593) (603) (12,196) Redemption\nof securities 6 - (4,023) - - - - - 20 (4,003) - (4,003) Transfers 7 - - - - - (5,130) - 5,130 - - - Cost of share-based payment arrangements - - - - - - - 482 482 - 482 Share\nbuy-back 8 - - - - - - - (7,025) (7,025) - (7,025) Cancellation\nof shares (521) - - - - 521 - - - - - Other movements - - 1,129 (255) (967) - 77 (843) (859) (524) (1,383) At 31 Dec 2023 24,369 17,719 (3,507) (1,033) (33,753) 28,601 785 152,148 185,329 7,281 192,610 Consolidated statement of changes in equity\n(continued) for the year ended 31 December 2022 Other reserves Called up share capital and share premium Other equity instru-ments Financial assets at FVOCI reserve Cash flow hedging reserve Foreign exchange reserve Merger and\nother reserves 1,2 Insurance finance reserve 3 Retainedearnings 1,4 Total share- holders' equity Non- controlling interests Total equity $m $m $m $m $m $m $m $m $m $m $m At 31 Dec 2021 (IFRS 4) 24,918 22,414 (634) (197) (22,769) 30,060 - 144,458 198,250 8,527 206,777 Impact\non transition to IFRS 17 9 - - 683 - - - (696) (9,222) (9,235) (1,224) (10,459) At 1 Jan 2022 24,918 22,414 49 (197) (22,769) 30,060 (696) 135,236 189,015 7,303 196,318 Profit for the year - - - - - - - 15,559 15,559 690 16,249 Other comprehensive income (net of tax) - - (7,089) (3,613) (9,806) 174 1,775 1,403 (17,156) (86) (17,242) -  debt instruments at fair value through other comprehensive\nincome - - (7,181) - - - - - (7,181) (51) (7,232) - equity\ninstruments designated at fair value through other comprehensive\nincome - - 92 - - - - - 92 15 107 -  cash flow hedges - - - (3,613) - - - - (3,613) (42) (3,655) -  changes in fair value of financial liabilities designated\nat fair value upon initial recognition arising from changes in own\ncredit risk - - - - - - - 1,922 1,922 - 1,922 -  property revaluation - - - - - 174 - - 174 106 280 -  remeasurement of defined benefit\nasset/liability - - - - - - - (1,029) (1,029) (2) (1,031) -  share of other comprehensive income of associates and joint\nventures - - - - - - (367) (367) - (367) -  effects of hyperinflation - - - - - - - 877 877 - 877 -  insurance finance income/(expense) recognised in other\ncomprehensive income - - - - - - 1,775 - 1,775 - 1,775 -  exchange differences - - - - (9,806) - - - (9,806) (112) (9,918) Total comprehensive income for the year - - (7,089) (3,613) (9,806) 174 1,775 16,962 (1,597) 604 (993) Shares issued under employee remuneration and\nshare plans 67 - - - - - - (67) - - - Dividends to shareholders - - - - - - - (6,544) (6,544) (426) (6,970) Redemption\nof securities - (2,668) - - - - - 402 (2,266) - (2,266) Transfers - - - - - 2,499 - (2,499) - - - Cost of share-based payment arrangements - - - - - - - 400 400 - 400 Share\nbuy-back - - - - - - - (1,000) (1,000) - (1,000) Cancellation\nof shares (174) - - - - 174 - - - - - Other movements - - 2 2 - 302 - (481) (175) (117) (292) At 31 Dec 2022 24,811 19,746 (7,038) (3,808) (32,575) 33,209 1,079 142,409 177,833 7,364 185,197 1     Cumulative goodwill amounting to $5,138m\nwas charged against reserves in respect of acquisitions of\nsubsidiaries prior to 1 January 1998, including $3,469m charged\nagainst the merger reserve arising on the acquisition of HSBC Bank\nplc. The balance of $1,669m was charged against retained\nearnings. 2     Statutory share premium relief under\nsection 131 of the Companies Act 1985 was taken in respect of the\nacquisition of HSBC Bank plc in 1992, HSBC Continental Europe\nin 2000 and HSBC Finance Corporation in 2003, and the shares issued\nwere recorded at their nominal value only. In HSBC's consolidated\nfinancial statements, the fair value differences of $8,290m in\nrespect of HSBC Continental Europe and $12,768m in respect of HSBC\nFinance Corporation were recognised in the merger reserve. The\nmerger reserve created on the acquisition of HSBC Finance\nCorporation subsequently became attached to HSBC Overseas Holdings\n(UK) Limited, following a number of intra-Group reorganisations.\nDuring 2009, pursuant to section 131 of the Companies Act 1985,\nstatutory share premium relief was taken in respect of the rights\nissue and $15,796m was recognised in the merger\nreserve. 3     The insurance finance reserve reflects\nthe impact of the adoption of the other comprehensive income option\nfor our insurance business in France. Underlying assets supporting\nthese contracts are measured at fair value through other\ncomprehensive income. Under this option, only the amount that\nmatches income or expenses recognised in profit or loss on\nunderlying items is included in finance income or expenses,\nresulting in the elimination of income statement accounting\nmismatches. The remaining amount of finance income or expenses for\nthese insurance contracts is recognised in other comprehensive\nincome ('OCI'). 4     At 31 December 2023, retained earnings\nincluded 256,289,431 treasury shares (2022: 554,452,437). These\ninclude treasury shares held within HSBC's insurance business's\nretirement funds for the benefit of policyholders or beneficiaries\nwithin employee trusts for the settlement of shares expected to be\ndelivered under employee share schemes or bonus plans, and the\nmarket-making activities in Markets and Securities\nServices. 5     In March 2023, HSBC Holdings issued\n$2,000m 8.000% contingent convertible securities on which there\nwere $4m of\nexternal issue costs. 6     In March 2023, HSBC Holdings redeemed\n$2,350m 6.250% contingent convertible securities. In September\n2023, HSBC Holdings further redeemed €1,000m 6.000% and\nSGD750m 5.000% contingent convertible securities. 7     At 31 December 2023, an impairment of\n$5,512m of HSBC Overseas Holdings (UK) Limited was recognised,\nresulting in a permitted transfer of $5,130m from the merger\nreserve to retained earnings and a realisation of $382m\nshared-based payment reserve within retained\nearnings. 8     In May 2023, HSBC Holdings announced a\nshare buy-back of up to $2.0bn, which was completed in July 2023.\nIn August 2023, HSBC Holdings announced another share buy-back of\nup to $2.0bn, which was completed in October 2023. In October 2023,\nHSBC Holdings further announced a share buy-back of up to $3.0bn,\nwhich was completed in February 2024. 9     The impact of IFRS 17 on previously\nreported total equity was $(10,831)m at 31 December\n2022. Consolidated\nstatement of cash flows for the year ended 31 December 2023 2023 2022 1 $m $m Profit before tax 30,348 17,058 Adjustments for non-cash items: Depreciation, amortisation and impairment 3,466 3,850 Net loss/(gain) from investing activities 1,213 11 Share\nof profit in associates and joint ventures (2,807) (2,723) Impairment\nof interest in associate 3,000 - (Gain)/loss\non acquisition/disposal of subsidiaries, businesses, associates and\njoint ventures (1,775) 2,554 Change\nin expected credit losses gross of recoveries and other credit\nimpairment charges 3,717 3,898 Provisions\nincluding pensions 266 638 Share-based\npayment expense 482 400 Other\nnon-cash items included in profit before tax (4,299) (774) Elimination\nof exchange differences 2 (10,678) 48,718 Changes in operating assets and liabilities Change\nin net trading securities and derivatives (63,247) 20,166 Change\nin loans and advances to banks and customers (14,145) 31,649 Change\nin reverse repurchase agreements - non-trading (2,095) (23,405) Change in financial assets designated and otherwise mandatorily\nmeasured at fair value (9,994) 14,164 Change\nin other assets 3 (10,254) (12,858) Change\nin deposits by banks and customer accounts 45,021 (91,194) Change\nin repurchase agreements - non-trading 43,366 4,344 Change\nin debt securities in issue 11,945 12,518 Change\nin financial liabilities designated at fair value 10,097 (13,654) Change\nin other liabilities 8,742 6,021 Dividends\nreceived from associates 1,067 944 Contributions\npaid to defined benefit plans (208) (194) Tax\npaid (4,117) (2,776) Net cash from operating activities 39,111 19,355 Purchase\nof financial investments 3 (563,561) (511,097) Proceeds\nfrom the sale and maturity of financial investments 3 504,174 492,624 Net\ncash flows from the purchase and sale of property, plant and\nequipment (1,145) (1,284) Net\ncash flows from disposal of loan portfolio and customer\naccounts 623 (3,530) Net\ninvestment in intangible assets (2,550) (3,125) Net\ncash flow from (acquisition)/disposal of subsidiaries, businesses,\nassociates and joint ventures 4 (453) (989) Net cash from investing activities (62,912) (27,401) Issue\nof ordinary share capital and other equity instruments 1,996 - Cancellation\nof shares (5,812) (2,285) Net\nsales/(purchases) of own shares for market-making and investment\npurposes (614) (91) Net cash flow from change in stake of subsidiaries (19) (197) Redemption\nof preference shares and other equity instruments (4,003) (2,266) Subordinated\nloan capital issued 5,237 7,300 Subordinated\nloan capital repaid 5 (2,147) (1,777) Dividends\npaid to shareholders of the parent company and non-controlling\ninterests (12,196) (6,970) Net cash from financing activities (17,558) (6,286) Net increase/(decrease) in cash and cash equivalents (41,359) (14,332) Cash and cash equivalents at 1 Jan 521,671 574,032 Exchange\ndifferences in respect of cash and cash equivalents 10,621 (38,029) Cash and cash equivalents at 31 Dec 6 490,933 521,671 Cash and cash equivalents comprise: -  cash and balances at central banks 285,868 327,002 -  items in the course of collection from other\nbanks 6,342 7,297 -  loans and advances to banks of one month or\nless 76,620 72,295 -  reverse repurchase agreements with banks of one month or\nless 64,341 68,682 -  treasury bills, other bills and certificates of deposit\nless than three months 33,303 26,727 -  cash collateral and net settlement accounts 15,819 19,445 - \ncash and cash equivalents held for sale 7 15,935 8,087 -  less: items in the course of transmission to other\nbanks (7,295) (7,864) Cash and cash equivalents at 31 Dec 6 490,933 521,671 Interest received was $98,910m (2022: $55,664m),\ninterest paid was $65,980m (2022: $22,856m) and\ndividends received (excluding dividends received from associates,\nwhich are presented separately above)\nwere $1,869m (2022: $1,638m). 1     From 1 January 2023, we adopted IFRS 17\n'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'.\nComparative data for the financial year ended 31 December 2022 have\nbeen restated accordingly. 2   Adjustment to bring changes between opening and\nclosing balance sheet amounts to average rates. This is not done on\na line-by-line basis, as details cannot be determined without\nunreasonable expense. 3     Post adoption of IFRS 17 'Insurance\nContracts', certain assets have been reclassified from 'Investing\nactivities' to 'Operating activities'. The comparative data have\nnot been re-presented. 4   The 'Net cash flow on (acquisition)/disposal of\nsubsidiaries, businesses, associates and joint ventures' includes\n$1.2bn of net cash inflows from the acquisition of Silicon Valley\nBank UK Limited in March 2023. 5   Subordinated liabilities changes during the year\nare attributable to repayments of $(2.1)bn (2022: $(1.8)bn) of\nsecurities. Non-cash changes during the year included foreign\nexchange gains/(losses) of $0.6bn (2022:\n$(1.1)bn) and fair value gains/(losses) of $0.8bn\n(2022: $(3.1)bn). 6   At 31 December\n2023, $61.8bn (2022: $59.3bn) was not available for\nuse by HSBC due to a range of restrictions, including currency\nexchange and other restrictions. 7   Includes $5.6bn (2022: $6.5bn) of cash and\nbalances at central banks, $0.2bn (2022: $1.3bn) of reverse\nrepurchase agreements with banks of one month or less, $10.5bn\n(2022: $0.2bn) of loans and advances to banks of one month or\nless and items in the course of transmission to other banks\n$(0.4)bn (2022: $(0.2)bn). 1 Basis\nof preparation and material accounting policies The basis of preparation and summary of material accounting\npolicies applicable to the consolidated financial statements of\nHSBC and the separate financial statements of HSBC Holdings can be\nfound in Note 1, or the relevant Note, in the Financial Statements\nin the Annual Report and Accounts\n2023 . (a)   Compliance with International Financial Reporting\nStandards The consolidated financial statements of HSBC and the separate\nfinancial statements of HSBC Holdings comply with UK-adopted\ninternational accounting standards and with the requirements of the\nCompanies Act 2006, and have also applied international financial\nreporting standards adopted pursuant to Regulation (EC) No\n1606/2002 as it applies in the European Union. These financial\nstatements are also prepared in accordance with International\nFinancial Reporting Standards as issued by the International\nAccounting Standards Board ('IFRS Accounting Standards'), including\ninterpretations issued by the IFRS Interpretations Committee, as\nthere are no applicable differences from IFRS Accounting Standards\nfor the periods presented. There were no unendorsed standards\neffective for the year ended 31 December 2023 affecting\nthese consolidated and separate financial\nstatements. Standards adopted during the year ended 31\nDecember 2023 IFRS 17 'Insurance Contracts' On 1 January 2023, the Group adopted the requirements of IFRS 17\n'Insurance Contracts' retrospectively with comparatives restated\nfrom the transition date, 1 January 2022. At transition, the\nGroup's total equity reduced by $10,459m. On adoption of IFRS 17, balances based on IFRS 4, including the\npresent value of in-force long-term insurance business ('PVIF')\nasset in relation to the upfront recognition of future profits of\nin-force insurance contracts, were derecognised. Insurance contract\nliabilities have been remeasured under IFRS 17 based on groups\nof insurance contracts, which include the fulfilment cash flows\ncomprising the best estimate of the present value of the future\ncash flows (for example premiums and payouts for claims, benefits\nand expenses), together with a risk adjustment for non-financial\nrisk, as well as the contractual service margin ('CSM'). The CSM\nrepresents the unearned profits that will be released and\nsystematically recognised in insurance revenue as services are\nprovided over the expected coverage period. In addition, the Group has made use of the option under the\nstandard to re-designate certain eligible financial assets held to\nsupport insurance contract liabilities, which were predominantly\nmeasured at amortised cost, as financial assets measured at fair\nvalue through profit or loss, with comparatives restated from the\ntransition date. The effects of adoption of IFRS 17 are set out in\nNote 38 of the Annual Report and Accounts\n2023 with a description of\nthe policy in Note 1.2(j) of the Annual Report and Accounts\n2023 . (b)   Differences between IFRS Accounting Standards and\nHong Kong Financial Reporting Standards There are no significant differences between IFRS Accounting\nStandards and Hong Kong Financial Reporting Standards in terms of\ntheir application to HSBC, and consequently there would be no\nsignificant differences had the financial statements been prepared\nin accordance with Hong Kong Financial Reporting Standards. The\n'Notes on the financial statements', taken together with the\n'Report of the Directors' in the Annual Report and Accounts\n2023 , include the aggregate of\nall disclosures necessary to satisfy IFRS Accounting Standards and\nHong Kong Financial Reporting Standards. (c)   Going concern The financial statements are prepared on a going concern basis, as\nthe Directors are satisfied that the Group and parent company have\nthe resources to continue in business for the foreseeable future.\nIn making this assessment, the Directors have considered a wide\nrange of information relating to present and future conditions,\nincluding future projections of profitability, liquidity, capital\nrequirements and capital resources. These considerations include stressed scenarios that reflect the\nuncertainty in the macroeconomic environment following rising\ninflation, slower Chinese economic activity, and disrupted supply\nchains as a result of the ongoing Russia-Ukraine and Israel-Hamas\nwars. They also included other top and emerging risks, including\nclimate change, as well as the related impacts on profitability,\ncapital and liquidity. 2 Tax Tax expense 2023 2022 $m $m Current\ntax 1 5,718 2,984 -  for this year 5,737 3,264 -  adjustments in respect of prior years (19) (280) Deferred tax 71 (2,175) -  origination and reversal of temporary\ndifferences 19 (2,278) -  effect of changes in tax rates 17 (293) -  adjustments in respect of prior years 35 396 Year ended 31 Dec 2 5,789 809 1   Current tax included Hong Kong profits tax of $1,328m\n(2022: $604m). The Hong Kong tax rate applying to the profits of\nsubsidiaries assessable in Hong Kong was 16.5% (2022:\n16.5%). 2   In addition to amounts recorded in the income\nstatement, a tax credit of $41m (2022:\ncredit of $145m) was recorded directly to\nequity. Tax reconciliation The tax charged to the income statement differs from the tax charge\nthat would apply if all profits had been taxed at the UK\ncorporation tax rate as follows: 2023 2022 $m % $m % Profit before tax 30,348 17,058 Tax expense Taxation\nat UK corporation tax rate of 23.5% (2022: 19.0%) 7,132 23.5 3,241 19.0 Impact of differently taxed overseas profits in overseas\nlocations (612) (2.0) 459 2.7 UK banking surcharge 350 1.2 283 1.7 Items increasing tax charge in 2023: - \nimpairment of interest in associate 705 2.3 - - - \nlocal taxes and overseas withholding taxes 419 1.4 346 2.0 -  impacts of hyperinflation 348 1.1 171 1.0 - \nother permanent disallowables 227 0.7 363 2.1 - \nbank levy 112 0.4 59 0.3 - \nimpact of changes in tax rates 17 0.1 (293) (1.7) - \nadjustments in respect of prior period 16 0.1 116 0.7 - \ntax impact of sale of French retail banking business - - 115 0.7 Items reducing tax charge in 2023: -  non-taxable income and gains (1,189) (3.9) (825) (4.8) -  effect of profits in associates and joint\nventures (571) (1.9) (504) (3.1) -  movements in provisions for uncertain tax\npositions (472) (1.6) 27 0.2 - \naccounting gain on acquisition of SVB UK (442) (1.5) - - -  deductions for AT1 coupon payments (229) (0.7) (246) (1.4) -  movements in unrecognised deferred tax (22) (0.1) (2,503) (14.7) Year ended 31 December 5,789 19.1 809 4.7 The Group's profits are taxed at different rates depending on the\ncountry or territory in which the profits arise. The key applicable\ntax rates for 2023 include Hong Kong (16.5%), the US (21%) and the\nUK (23.5%). If the Group's profits were taxed at the statutory\nrates of the countries in which the profits arose, then the tax\nrate for the year would have been 22.6% (2022: 23.3%). The effective tax rate for the year of 19.1% was higher than in the\nprevious year (2022: 4.7%). The effective tax rate for the year was\nincreased by 2.3% by the non-taxable impairment of the Group's\ninterest in BoCom, reduced by 1.6% by the release of provisions for\nuncertain tax positions and reduced by 1.5% by the non-taxable\naccounting gain on the acquisition of SVB UK. The effective\ntax rate for 2022 was reduced by 14.7% as a result of the\nrecognition of previously unrecognised losses in the UK of $2.2bn\nand France of $0.3bn, in light of improved forecast\nprofitability. On 20 June 2023, legislation was substantively enacted in the UK to\nintroduce the 'Pillar Two' global minimum tax model rules of the\nOECD's Inclusive Framework on Base Erosion and Profit Shifting\n('BEPS') and a UK qualified domestic minimum top-up tax, with\neffect from 1 January 2024. Under these rules, a top-up tax\nliability arises where the effective tax rate of the Group's\noperations in a jurisdiction, calculated using principles set out\nin the Pillar Two legislation, is below 15%. Any resulting tax is\npayable by HSBC Holdings plc, being the Group's ultimate parent, to\nHMRC. In response to the OECD's Pillar Two global minimum tax\nrules, many national governments have announced their intention to\nintroduce domestic minimum tax rules that are closely aligned to\nthe OECD's Pillar Two model rules. Where such qualifying domestic\nminimum tax rules are introduced, they may be expected to have the\neffect of increasing local tax liabilities to\nthe 15%minimum\nrate, eliminating the top-up tax liability payable in the UK by\nHSBC Holdings plc in such cases. Based on the Group's forecasts,\ntop-up tax liabilities are expected to arise in approximately 10\njurisdictions as a result of low or 0% statutory tax rates, in\nparticular in respect of the Group's banking operations in Bermuda\nand the Channel Islands. Additionally, the application of local tax\nlaws in Hong Kong and mainland China, particularly with regard to\nthe non-taxation of dividend income and income on government bonds,\nhas typically resulted in effective tax rates of below 15%. This is\nexpected to create future top-up tax liabilities in these\njurisdictions, which have statutory tax rates\nof16.5% and 25%, respectively. The application of the\nPillar Two global minimum tax rules and the introduction of new\ndomestic minimum tax regimes are currently forecast to increase the\nGroup's annual effective tax rate by around 0.5 and 1.0 percentage\npoints. Accounting for taxes involves some estimation because tax law is\nuncertain and its application requires a degree of judgement, which\nauthorities may dispute. Liabilities are recognised based on best\nestimates of the probable outcome, taking into account external\nadvice where appropriate. Exposures relating to legacy tax cases\nwere reassessed during 2023, resulting in a credit of $472m to the\nincome statement. We do not expect significant liabilities to arise\nin excess of the amounts provided. HSBC only recognises current and\ndeferred tax assets where recovery is probable. Movement of deferred tax assets and liabilities Loan impairment provisions Unused tax losses and tax credits Financial assets at FVOCI Cash flow hedges Retirement obligations Other Total $m $m $m $m $m $m $m Assets 1,062 4,397 850 1,271 - 3,048 10,628 Liabilities - - - - (1,673) (1,567) (3,240) At 1 Jan 2023 1,062 4,397 850 1,271 (1,673) 1,481 7,388 Income statement (39) 102 541 1 (114) (562) (71) Other comprehensive income - - (598) (974) 99 399 (1,074) Foreign exchange and other adjustments 135 45 83 121 (126) 15 273 At 31 Dec 2023 1,158 4,544 876 419 (1,814) 1,333 6,516 Assets 1 1,158 4,544 876 419 - 2,933 9,930 Liabilities 1 - - - - (1,814) (1,600) (3,414) Assets 2 1,151 2,001 382 154 - 1,744 5,432 Liabilities 2 - - - - (2,819) (475) (3,294) At 1\nJan 2022 1,151 2,001 382 154 (2,819) 1,269 2,138 Income statement 7 2,425 (1,127) 1 217 652 2,175 Other comprehensive income - - 2,281 1,159 692 (1,260) 2,872 Foreign exchange and other adjustments (96) (29) (686) (43) 237 820 203 At 31\nDec 2022 1,062 4,397 850 1,271 (1,673) 1,481 7,388 Assets 1 1,062 4,397 850 1,271 - 3,048 10,628 Liabilities 1 - - - - (1,673) (1,567) (3,240) 1     After netting off balances within\ncountries, the balances as disclosed in the accounts are as\nfollows: deferred tax assets of $7,754m (2022: $8,360m) and\ndeferred tax liabilities of $1,238m (2022: $972m). 2     From 1 January 2023, we adopted IFRS 17\n'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'.\nWe have restated 2022 comparative data. In applying judgement in recognising deferred tax assets,\nmanagement has assessed all relevant information, including future\nbusiness profit projections and the track record of meeting\nforecasts. Management's assessment of the likely availability of\nfuture taxable profits against which to recover deferred tax assets\nis based on the most recent financial forecasts approved by\nmanagement, which cover a five-year period and are extrapolated\nwhere necessary, and takes into consideration the reversal of\nexisting taxable temporary differences and past business\nperformance. When forecasts are extrapolated beyond five years, a\nnumber of different scenarios are considered, reflecting different\ndownward risk adjustments, in order to assess the sensitivity of\nour recognition and measurement conclusions in the context of such\nlonger-term forecasts. The Group's net deferred tax asset of $6.5bn (2022: $7.4bn)\nincluded $3.3bn (2022: $4.0bn) of deferred tax assets relating to\nthe UK, $3.1bn (2022: $3.3bn) of deferred tax assets\nrelating to the US and a net deferred asset of $0.9bn (2022:\n$1.0bn) in France. The UK deferred tax asset of $3.3bn excluded a $1.9bn deferred tax\nliability arising on the UK pension scheme surplus, the reversal of\nwhich is not taken into account when estimating future taxable\nprofits. The UK deferred tax assets are supported by forecasts of\ntaxable profit, also taking into consideration the history of\nprofitability in the relevant businesses. The majority of the\ndeferred tax asset relates to tax attributes which do not expire\nand are forecast to be recovered within four years and as such are\nless sensitive to changes in long-term profit\nforecasts. The net US deferred tax asset of $3.1bn included $1.3bn related to\nUS tax losses, of which $1.0bn expire in 10 to 15 years. Management\nexpects the US deferred tax asset to be substantially recovered\nwithin 14 years, with the majority recovered in the first nine\nyears. The net deferred tax asset in France of $0.9bn included $0.7bn\nrelated to tax losses, which are expected to be substantially\nrecovered within 12 years. Unrecognised deferred tax The amount of gross temporary differences, unused tax losses and\ntax credits for which no deferred tax asset is recognised in the\nbalance sheet was $10.4bn (2022: $9.2bn). This amount included\nunused US state tax losses of $4.0bn (2022: $4.1bn) which are\nforecast to expire before they are recovered and unused UK tax\nlosses of $4.5bn (2022: $3.5bn), which arose prior to 1 April 2017\nand can only be recovered against future taxable profits of HSBC\nHoldings. No deferred tax was recognised on these losses due to the\nabsence of convincing evidence regarding the availability of\nsufficient future taxable profits against which to recover them.\nDeferred tax asset recognition is reassessed at each balance sheet\ndate based on the available evidence. Of the total amounts\nunrecognised, $5.1bn (2022: $3.6bn) had no expiry date, $0.5bn\n(2022: $1.2bn) was scheduled to expire within 10 years and the\nremaining balance is expected to expire after 10\nyears. Deferred tax is not recognised in respect of the Group's\ninvestments in subsidiaries and branches where HSBC is able to\ncontrol the timing of remittance or other realisation and where\nremittance or realisation is not probable in the foreseeable\nfuture. The aggregate temporary differences relating to\nunrecognised deferred tax liabilities arising on investments in\nsubsidiaries and branches was $14.4bn (2022: $11.7bn) and the\ncorresponding unrecognised deferred tax liability was $0.7bn (2022:\n$0.7bn). 3 Dividends Dividends to shareholders of the parent company 2023 2022 Per share Total Per share Total $ $m $ $m Dividends paid on ordinary shares In respect of previous year: - \nsecond interim dividend 0.23 4,589 0.18 3,576 In respect of current year: -  first interim dividend 0.10 2,001 0.09 1,754 - \nsecond interim dividend 0.10 1,956 - - - \nthird interim dividend 0.10 1,946 - - Total 0.53 10,492 0.27 5,330 Total coupons on capital securities classified as\nequity 1,101 1,214 Dividends to shareholders 11,593 6,544 On 4 January 2024, HSBC paid a coupon on its €1,250m\nsubordinated capital securities, representing a total distribution\nof €30m ($33m). No liability was recorded in the balance\nsheet at 31 December 2023 in respect of this coupon\npayment. The distributable reserves of HSBC Holdings at 31 December 2023\nwere $30.9bn, a $4.3bn decrease since 2022, primarily driven by\n$18.6bn in ordinary dividend, additional tier 1 coupon and share\nbuy-back payments, offset by profits generated and other reserve\nmovements of $14.3bn. Distributable reserves are sensitive to\nimpairments of investments in subsidiaries to the extent they are\nnot offset by the realisation of related reserves. The impairment\nof BoCom in 2023 did not impact distributable reserves, as its\nintermediate parent and direct subsidiary of HSBC Holdings, HSBC\nAsia Holdings Limited, was not impaired. Fourth interim dividend for 2023 On 21 February 2024, the Directors approved a fourth interim\ndividend in respect of the financial year ended 31 December 2023 of\n$0.31 per ordinary share, a distribution of approximately\n$5,913m. The fourth interim dividend for 2023 will be payable\non 25 April 2024 to holders on the Principal Register in the UK,\nthe Hong Kong Overseas Branch Register or the Bermuda Overseas\nBranch Register on 8 March 2024. No liability was\nrecorded in the financial statements in respect of the fourth\ninterim dividend for 2023. The dividend will be payable in US dollars, or in pounds sterling\nor Hong Kong dollars at the forward exchange rates quoted by HSBC\nBank plc in London at or about 11.00am on 15 April 2024. The\nordinary shares in London, Hong Kong and Bermuda, and American\nDepositary Shares ('ADSs') in New York will be quoted ex-dividend\non 7 March 2024. The default currency on the Principal Register in the UK is pounds\nsterling, and dividends can also be paid in Hong Kong dollars or US\ndollars, or a combination of these currencies. International\nshareholders can register to join the Global Dividend Service to\nreceive dividends in their local currencies. Please register and\nread the terms and conditions at www.investorcentre.co.uk. UK\nshareholders can also register their sterling bank mandates at\nwww.investorcentre.co.uk. The default currency on the Hong Kong Overseas Branch Register is\nHong Kong dollars, and dividends can also be paid in US dollars or\npounds sterling, or a combination of these currencies. Shareholders\ncan arrange for direct credit of Hong Kong dollar cash dividends\ninto their bank account, or arrange to send US dollar or pounds\nsterling cheques to the credit of their bank account. Shareholders\ncan register for these services at www.investorcentre.com/hk.\nShareholders can also download a dividend currency election form\nfrom www.hsbc.com/dividends, www.investorcentre.com/hk, or\nwww.hkexnews.hk. The default currency on the Bermuda Overseas Branch Register is US\ndollars, and dividends can also be paid in Hong Kong dollars or\npounds sterling, or a combination of these currencies. Shareholders\ncan change their dividend currency election by contacting the\nBermuda investor relations team. Shareholders can download a\ndividend currency election form from\nwww.hsbc.com/dividends. Changes to currency elections must be received by 11 April 2024 to\nbe effective for this dividend. The dividend will be payable on ADSs, each of which represents five\nordinary shares, on 25 April 2024 to holders of record on\n8 March 2024. The dividend of $1.55 per ADS will be payable by\nthe depositary in US dollars. Alternatively, the cash dividend may\nbe invested in additional ADSs by participants in the dividend\nreinvestment plan operated by the depositary, elections must be\nreceived by 4 April 2024. Any person who has acquired ordinary shares registered on the\nPrincipal Register in the UK, the Hong Kong Overseas Branch\nRegister or the Bermuda Overseas Branch Register but who has not\nlodged the share transfer with the Principal Registrar in the UK,\nHong Kong or Bermuda Overseas Branch Registrar should do so before\n4.00pm local time on 8 March 2024 in order to receive the\ndividend. Ordinary shares may not be removed from or transferred to the\nPrincipal Register in the UK, the Hong Kong Overseas Branch\nRegister or the Bermuda Overseas Branch Register on 8 March 2024.\nAny person wishing to remove ordinary shares to or from each\nregister must do so before 4.00pm local time on 7 March\n2024. Transfers of ADSs must be lodged with the depositary by 11.00am on\n8 March 2024 in order to receive the dividend. ADS holders who\nreceive a cash dividend will be charged a fee, which will be\ndeducted by the depositary, of $0.005 per ADS per cash\ndividend. 4 Earnings\nper share Basic earnings per ordinary share is calculated by dividing the\nprofit attributable to ordinary shareholders of the parent company\nby the weighted average number of ordinary shares outstanding,\nexcluding own shares held. Diluted earnings per ordinary share is\ncalculated by dividing the basic earnings, which require no\nadjustment for the effects of dilutive potential ordinary shares,\nby the weighted average number of ordinary shares outstanding,\nexcluding own shares held, plus the weighted average number of\nordinary shares that would be issued on conversion of dilutive\npotential ordinary shares. Basic and diluted earnings per share 2023 2022¹ Profit Number of shares Per share Profit Number of shares Per share $m (millions) $ $m (millions) $ Basic 2 22,432 19,478 1.15 14,346 19,849 0.72 Effect of dilutive potential ordinary shares 122 137 Diluted 2 22,432 19,600 1.14 14,346 19,986 0.72 1   From 1 January 2023, we adopted IFRS 17 'Insurance\nContracts', which replaced IFRS 4 'Insurance Contracts'.\nComparative data for the financial year ended 31 December 2022 have\nbeen restated accordingly. 2   Weighted average number of ordinary shares\noutstanding (basic) or assuming dilution (diluted). The number of anti-dilutive employee share options excluded from\nthe weighted average number of dilutive potential ordinary shares\nwas 23 million (2022: 9.4million). 5 Constant\ncurrency balance sheet reconciliation At 31 Dec 2023 31 Dec\n2022 1 Reported and constant currency Constant currency Currency translation Reported $m $m $m $m Loans and advances to customers (net) 938,535 941,548 (17,987) 923,561 Interests in associates and joint ventures 27,344 28,783 471 29,254 Total external assets 3,038,677 3,007,684 (58,398) 2,949,286 Customer accounts 1,611,647 1,598,495 (28,192) 1,570,303 1     From 1 January 2023, we adopted IFRS 17\n'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'.\nComparative data for the financial year ended 31 December 2022 have\nbeen restated accordingly. 6 Reported and constant currency results 1 Year ended 2023 2022 2 $m $m Revenue 3 Reported 66,058 50,620 Currency translation 0 (749) Constant currency 66,058 49,871 Change in expected credit losses and other credit impairment\ncharges Reported (3,447) (3,584) Currency translation 0 (46) Constant currency (3,447) (3,630) Operating expenses Reported (32,070) (32,701) Currency translation 0 399 Constant currency (32,070) (32,302) Share of profit in associates and joint ventures less\nimpairment Reported 4 (193) 2,723 Currency translation 0 (121) Constant currency (193) 2,602 Profit before tax Reported 30,348 17,058 Currency translation 0 (517) Constant currency 30,348 16,541 1     In the current period constant currency\nresults are equal to reported as there is no currency\ntranslation. 2     From 1 January 2023, we adopted IFRS 17\n'Insurance Contracts', which replaced IFRS 4 'Insurance Contracts'.\nComparative data have been restated accordingly. 3     Net operating income before change in\nexpected credit losses and other credit impairment charges, also\nreferred to as revenue. 4   Includes an impairment loss of $3.0bn recognised in\nrespect of the Group's investment in BoCom. See Note 18 on\npage 391 of the Annual\nReport and Accounts 2023 . Notable items Year ended 2023 2022 $m $m Revenue Disposals,\nacquisitions and related costs 1,2,3 1,298 (2,737) Fair\nvalue movements on financial instruments 4 14 (618) Restructuring\nand other related costs 5 - (247) Disposal\nlosses on Markets Treasury repositioning (977) - Operating expenses Disposals,\nacquisitions and related costs (321) (18) Restructuring\nand other related costs 6 136 (2,882) Impairment of interest in associate 7 (3,000) - Tax Tax\ncredit on notable items 207 1,026 Recognition of losses - 2,333 Uncertain\ntax positions 427 (142) 1     Includes losses from classifying\nbusinesses as held for sale as part of a broader restructuring of\nour European business which includes the impact of the sale of our\nretail banking operations in France. 2     Includes fair value movements on the\nforeign exchange hedging of the expected proceeds from the planned\nsale of our banking operations in\nCanada. 3   Includes the provisional gain of $1.6bn recognised in\nrespect of the acquisition of SVB UK. 4     Fair value movements on non-qualifying\nhedges in HSBC Holdings. 5   Comprises gains and losses relating to the business\nupdate in February 2020, including losses associated with the RWA\nreduction programme. 6     Amounts in 2023 relate to reversals of\nrestructuring provisions recognised during 2022. 7   Relates to an impairment loss of $3.0bn recognised in\nrespect of the Group's investment in BoCom. See Note 18 on\npage 391 of the Annual\nReport and Accounts 2023 . 7 Contingent\nliabilities, contractual commitments and guarantees 2023 2022 $m $m Guarantees and other contingent liabilities: -  financial guarantees 17,009 18,783 -  performance and other guarantees 94,277 88,240 -  other contingent liabilities 636 676 At 31 Dec 111,922 107,699 Commitments 1 : -  documentary credits and short-term trade-related\ntransactions 7,818 8,241 -  forward asset purchases and forward deposits\nplaced 78,535 50,852 -  standby facilities, credit lines and other commitments to\nlend 810,797 768,761 At 31 Dec 897,150 827,854 1     Includes $661,015m of\ncommitments at 31 December 2023 (31 December 2022: $618,788m),\nto which the impairment requirements in IFRS 9 are applied where\nHSBC has become party to an irrevocable commitment. The preceding table discloses the nominal principal amounts of\noff-balance sheet liabilities and commitments for the Group, which\nrepresent the maximum amounts at risk should the contracts be fully\ndrawn upon and the clients default. As a significant portion of\nguarantees and commitments are expected to expire without being\ndrawn upon, the total of the nominal principal amounts is not\nindicative of future liquidity requirements. The expected credit\nloss provision relating to guarantees and commitments under IFRS 9\nis disclosed in Note 28 of the Annual Report and Accounts\n2023 . The majority of the guarantees have a term of less than one year,\nwhile guarantees with terms of more than one year are subject to\nHSBC's annual credit review process. Contingent liabilities arising from legal proceedings, regulatory\nand other matters against Group companies are excluded from this\nnote but are disclosed in Notes 28 and 36 of\nthe Annual Report\nand Accounts 2023 . Financial Services Compensation Scheme The Financial Services Compensation Scheme ('FSCS') provides\ncompensation, up to certain limits, to eligible customers of\nfinancial services firms that are unable, or likely to be unable,\nto pay claims against them. The FSCS may impose a further levy on\nthe Group to the extent the industry levies imposed to date are not\nsufficient to cover the compensation due to customers in any future\npossible collapse. The ultimate FSCS levy to the industry as a\nresult of a collapse cannot be estimated reliably. It is dependent\non various uncertain factors including the potential recovery of\nassets by the FSCS, changes in the level of protected products\n(including deposits and investments) and the population of FSCS\nmembers at the time. Associates HSBC's share of associates' contingent liabilities, contractual\ncommitments and guarantees amounted to $69.9bn at\n31 December 2023 (2022: $64.8bn). No matters arose where HSBC\nwas severally liable. 8 Legal\nproceedings and regulatory matters HSBC is party to legal proceedings and regulatory matters in a\nnumber of jurisdictions arising out of its normal business\noperations. Apart from the matters described below, HSBC considers\nthat none of these matters are material. The recognition of\nprovisions is determined in accordance with the accounting policies\nset out in Note 1 of our Annual Report and Accounts\n2023. While the outcomes\nof legal proceedings and regulatory matters are inherently\nuncertain, management believes that, based on the information\navailable to it, appropriate provisions have been made in respect\nof these matters as at 31 December 2023 (see Note 28 of\nour Annual Report and Accounts\n2023 ).  Where an\nindividual provision is material, the fact that a provision has\nbeen made is stated and quantified, except to the extent that doing\nso would be seriously prejudicial. Any provision recognised does\nnot constitute an admission of wrongdoing or legal liability. It is\nnot practicable to provide an aggregate estimate of potential\nliability for our legal proceedings and regulatory matters as a\nclass of contingent liabilities. Bernard L. Madoff Investment Securities LLC Various non-US HSBC companies provided custodial, administration\nand similar services to a number of funds incorporated outside the\nUS whose assets were invested with Bernard L. Madoff Investment\nSecurities LLC ('Madoff Securities'). Based on information provided\nby Madoff Securities as at 30 November 2008, the purported\naggregate value of these funds was $8.4bn, including\nfictitious profits reported by Madoff. Based on information\navailable to HSBC, the funds' actual transfers to Madoff Securities\nminus their actual withdrawals from Madoff Securities during the\ntime HSBC serviced the funds are estimated to have totalled\napproximately $4bn. Various HSBC companies have been named as\ndefendants in lawsuits arising out of Madoff Securities'\nfraud. US litigation: The\nMadoff Securities Trustee has brought lawsuits against various HSBC\ncompanies and others, seeking recovery of alleged transfers from\nMadoff Securities to HSBC in the amount of $543m (plus\ninterest), and these lawsuits remain pending in the US Bankruptcy\nCourt for the Southern District of New York (the 'US Bankruptcy\nCourt'). Certain Fairfield entities (together, 'Fairfield') (in liquidation)\nhave brought a lawsuit in the US against fund shareholders,\nincluding HSBC companies that acted as nominees for clients,\nseeking restitution of redemption payments in the amount\nof $382m (plus interest). Fairfield's claims against most\nof the HSBC companies have been dismissed by the US Bankruptcy\nCourt and the US District Court for the Southern District of New\nYork, but remain pending on appeal before the US Court of Appeals\nfor the Second Circuit. Fairfield's claims against HSBC Private\nBank (Suisse) SA and HSBC Securities Services Luxembourg ('HSSL')\nhave not been dismissed and their appeals are also pending before\nthe US Court of Appeals for the Second Circuit. Meanwhile,\nproceedings before the US Bankruptcy Court with respect to the\nclaims against HSBC Private Bank (Suisse) SA and HSSL are\nongoing. UK litigation: The\nMadoff Securities Trustee has filed a claim against various HSBC\ncompanies in the High Court of England and Wales, seeking recovery\nof transfers from Madoff Securities to HSBC. The claim has not yet\nbeen served and the amount claimed has not been\nspecified. Cayman Islands litigation: In\nFebruary 2013, Primeo Fund ('Primeo') (in liquidation) brought an\naction against HSSL and Bank of Bermuda (Cayman) Limited (now known\nas HSBC Cayman Limited), alleging breach of contract and breach of\nfiduciary duty and claiming damages. Following dismissal of\nPrimeo's action by the Grand Court and Court of Appeal of the\nCayman Islands, in 2019, Primeo appealed to the Judicial Committee\nof the Privy Council. In November 2023, the Privy Council issued a\njudgment upholding the dismissal of Primeo's claims. This matter is\nnow closed. Luxembourg litigation: In\n2009, Herald Fund SPC ('Herald') (in liquidation) brought an action\nagainst HSSL before the Luxembourg District Court, seeking\nrestitution of cash and securities in the amount of $2.5bn\n(plus interest), or damages in the amount of $2bn (plus\ninterest). In 2018, HSBC Bank plc was added to the claim and Herald\nincreased the amount of the alleged damages claim to $5.6bn\n(plus interest). The Luxembourg District Court has dismissed\nHerald's securities restitution claim, but reserved Herald's cash\nrestitution and damages claims. Herald has appealed this dismissal\nto the Luxembourg Court of Appeal, where the matter is\npending. Beginning in 2009, various HSBC companies have been named as\ndefendants in a number of actions brought by Alpha Prime Fund\nLimited ('Alpha Prime') in the Luxembourg District Court seeking\ndamages for alleged breach of contract and negligence in the amount\nof $1.16bn (plus interest). These matters are currently\npending before the Luxembourg District Court. Beginning in 2014, HSSL and the Luxembourg branch of HSBC Bank plc\nhave been named as defendants in a number of actions brought by\nSenator Fund SPC ('Senator') before the Luxembourg District Court\nseeking restitution of securities in the amount\nof $625m (plus interest), or damages in the amount\nof $188m (plus interest). These matters are currently\npending before the Luxembourg District Court. Based on the facts currently known, it is not practicable at this\ntime for HSBC to predict the resolution of the pending matters,\nincluding the timing or any possible impact on HSBC, which could be\nsignificant. US Anti-Terrorism Act litigation Since November 2014, a number of lawsuits have been filed in\nfederal courts in the US against various HSBC companies and others\non behalf of plaintiffs who are, or are related to, alleged victims\nof terrorist attacks in the Middle East. In each case, it is\nalleged that the defendants aided and abetted the unlawful conduct\nof various sanctioned parties in violation of the US Anti-Terrorism\nAct, or provided banking services to customers alleged to have\nconnections to terrorism financing. Seven actions, which\nseek damages for unspecified amounts, remain pending and HSBC's\nmotions to dismiss have been granted in three of these\ncases. These dismissals are subject to appeals and/or the\nplaintiffs re-pleading their claims. The four other\nactions are at an early stage. Based on the facts currently known, it is not practicable at this\ntime for HSBC to predict the resolution of these matters, including\nthe timing or any possible impact on HSBC, which could be\nsignificant. Interbank offered rates investigation and litigation Euro interest rate derivatives: In\nDecember 2016, the European Commission ('EC') issued a decision\nfinding that HSBC, among other banks, engaged in anti-competitive\npractices in connection with the pricing of euro interest rate\nderivatives, and the EC imposed a fine on HSBC based on\na one-month infringement in 2007. The fine was annulled in\n2019 and a lower fine was imposed in 2021. In January 2023, the\nEuropean Court of Justice dismissed an appeal by HSBC and upheld\nthe EC's findings on HSBC's liability. A separate appeal by HSBC\nconcerning the amount of the fine remains pending before the\nGeneral Court of the European Union. US dollar Libor: Beginning\nin 2011, HSBC and other panel banks have been named as defendants\nin a number of individual and putative class action lawsuits filed\nin federal and state courts in the US with respect to the setting\nof US dollar Libor. The complaints assert claims under various US\nfederal and state laws, including antitrust and racketeering laws\nand the Commodity Exchange Act ('US CEA'). HSBC has concluded class\nsettlements with five groups of plaintiffs, and several class\naction lawsuits brought by other groups of plaintiffs have been\nvoluntarily dismissed. A number of individual US dollar\nLibor-related actions seeking damages for unspecified amounts\nremain pending. Based on the facts currently known, it is not practicable at this\ntime for HSBC to predict the resolution of the pending matters,\nincluding the timing or any possible impact on HSBC, which could be\nsignificant. Foreign exchange-related investigations and litigation In December 2016, Brazil's Administrative Council of Economic\nDefense initiated an investigation into the onshore foreign\nexchange market and identified a number of banks, including HSBC,\nas subjects of its investigation, which remains\nongoing. Since 2017, HSBC Bank plc, among other financial institutions, has\nbeen defending a complaint filed by the Competition Commission of\nSouth Africa before the South African Competition Tribunal for\nalleged anti-competitive behaviour in the South African foreign\nexchange market. In 2020, a revised complaint was filed which also\nnamed HSBC Bank USA N.A. ('HSBC Bank USA') as a defendant. In\nJanuary 2024, the South African Competition Appeal Court dismissed\nHSBC Bank USA from the revised complaint, but denied HSBC Bank\nplc's application to dismiss. The Competition Commission has\nappealed the dismissal of HSBC Bank USA to the Constitutional Court\nof South Africa. Since 2015, various HSBC companies and other banks have been named\nas defendants in a putative class action in the US District Court\nfor the Southern District of New York filed by a group of retail\ncustomers who dealt in foreign exchange products. The plaintiffs\nallege that the defendants conspired to manipulate foreign exchange\nrates and seek damages for unspecified amounts. This action has\nbeen dismissed but remains pending on appeal. In January 2023, HSBC Bank plc and HSBC Holdings reached a\nsettlement-in-principle with plaintiffs in Israel to resolve a\nclass action filed in the local courts alleging foreign\nexchange-related misconduct. The settlement remains subject to\ncourt approval. Lawsuits alleging foreign exchange-related\nmisconduct remain pending against HSBC and other banks in courts in\nBrazil. In February 2024, HSBC Bank plc and HSBC Holdings were joined to an\nexisting claim brought in the UK Competition Appeals Tribunal\nagainst various other banks alleging historical anti-competitive\nbehaviour in the foreign exchange market and seeking damages for\nunspecified amounts. This matter is at an early stage. It is\npossible that additional civil actions will be initiated against\nHSBC in relation to its historical foreign exchange\nactivities. There are many factors that may affect the range of outcomes, and\nthe resulting financial impact, of the pending matters, which could\nbe significant. Precious metals fix-related litigation US litigation: HSBC\nand other members of The London Silver Market Fixing Limited are\ndefending a class action pending in the US District Court for the\nSouthern District of New York alleging that, from January 2007 to\nDecember 2013, the defendants conspired to manipulate the price of\nsilver and silver derivatives for their collective benefit in\nviolation of US antitrust laws, the US CEA and New York state law.\nIn May 2023, this action, which seeks damages for unspecified\namounts, was dismissed but remains pending on\nappeal. HSBC and other members of The London Platinum and Palladium Fixing\nCompany Limited are defending a class action pending in the US\nDistrict Court for the Southern District of New York alleging that,\nfrom January 2008 to November 2014, the defendants conspired to\nmanipulate the price of platinum group metals and related financial\nproducts for their collective benefit in violation of US antitrust\nlaws and the US CEA. In February 2023, the court reversed an\nearlier dismissal of the plaintiffs' third amended complaint and\nthis action, which seeks damages for unspecified amounts, is\nproceeding. Canada litigation: HSBC\nand other financial institutions are defending putative class\nactions filed in the Ontario and Quebec Superior Courts of Justice\nalleging that the defendants conspired to manipulate the price of\nsilver, gold and related derivatives in violation of the Canadian\nCompetition Act and common law. These actions each seek CA$1bn in\ndamages plus CA$250m in punitive damages. Two of the\nactions are proceeding and the others have been\nstayed. Based on the facts currently known, it is not practicable at this\ntime for HSBC to predict the resolution of these matters, including\nthe timing or any possible impact on HSBC, which could\nbe significant. Tax-related investigations Various tax administration, regulatory and law enforcement\nauthorities around the world are conducting investigations in\nconnection with allegations of tax evasion or tax fraud, money\nlaundering and unlawful cross-border banking solicitation. HSBC\ncontinues to cooperate with these investigations. In March 2023, the French National Financial Prosecutor announced\nan investigation into a number of banks, including HSBC Continental\nEurope and the Paris branch of HSBC Bank plc, in connection with\nalleged tax fraud related to the dividend withholding tax treatment\nof certain trading activities. HSBC Bank plc and HSBC Germany also\ncontinue to cooperate with investigations by the German public\nprosecutor into numerous financial institutions and their\nemployees, in connection with the dividend withholding tax\ntreatment of certain trading activities. Based on the facts currently known, it is not practicable at this\ntime for HSBC to predict the resolution of these matters, including\nthe timing or any possible impact on HSBC, which could be\nsignificant. Gilts trading investigation and litigation Since 2018, the UK Competition and Markets Authority ('CMA') has\nbeen investigating HSBC and four other banks for suspected\nanti-competitive conduct in relation to the historical trading of\ngilts and related derivatives. In May 2023, the CMA announced its\ncase against HSBC Bank plc and HSBC Holdings; both HSBC companies\nare contesting the CMA's allegations. In June 2023, HSBC Bank plc and HSBC Securities (USA) Inc., among\nother banks, were named as defendants in a putative class action\nfiled in the US District Court for the Southern District of New\nYork by plaintiffs alleging anti-competitive conduct in the gilts\nmarket and seeking damages for unspecified amounts. In September\n2023, the defendants filed a motion to dismiss which remains\npending. It is possible that additional civil actions will be\ninitiated against HSBC in relation to its historical gilts trading\nactivities. Based on the facts currently known, it is not practicable at this\ntime for HSBC to predict the resolution of these matters, including\nthe timing or any possible impact on HSBC, which could be\nsignificant. UK depositor protection arrangements investigation In January 2022, the UK Prudential Regulation Authority ('PRA')\ncommenced an investigation into HSBC Bank plc's and HSBC UK Bank\nplc's compliance with depositor protection arrangements under the\nFinancial Services Compensation Scheme in the UK. In January 2024,\nthe PRA concluded its investigation and imposed\na £57m fine on HSBC Bank plc and HSBC UK Bank plc,\nwhich has been paid, and this matter is now closed. UK collections and recoveries investigation Since 2019, the FCA has been investigating HSBC Bank plc's, HSBC UK\nBank plc's and Marks and Spencer Financial Services plc's\ncompliance with regulatory standards relating to collections and\nrecoveries operations in the UK between 2017 and 2018. HSBC\ncontinues to cooperate with this investigation. There are many factors that may affect the range of outcomes, and\nthe resulting financial impact, of this matter, which could be\nsignificant. Korean short selling investigation In December 2023, the Korean Securities and Futures Commission\nissued a decision to impose a fine on The Hongkong and Shanghai\nBanking Corporation Limited in connection with trades in breach of\nKorean short selling rules and to refer the case to the Korean\nProsecutors' Office for investigation. There are many factors that may affect the range of outcomes, and\nthe resulting financial impact, of this matter, which could be\nsignificant. Silicon Valley Bank ('SVB') litigation In May 2023, First-Citizens Bank & Trust Company ('First\nCitizens') brought a lawsuit in the US District Court for the\nNorthern District of California against various HSBC companies\nand seven US-based HSBC employees who had previously\nworked for SVB. The lawsuit seeks $1bn in damages and alleges,\namong other things, that the various HSBC companies conspired with\nthe individual defendants to solicit employees from First Citizens\nand that the individual defendants took confidential information\nbelonging to SVB and/or First Citizens. In January 2024, the court\ndenied the defendants' motion to dismiss in part and granted it in\npart, and directed the plaintiff to amend its complaint to specify\nits allegations as to each defendant. In February 2024, First\nCitizens filed its amended complaint. This action is\nongoing. Based on the facts currently known, it is not practicable at this\ntime for HSBC to predict the resolution of this matter, including\nthe timing or any possible impact on HSBC, which could be\nsignificant. Film Finance litigation In June 2020, two separate investor groups issued claims\nagainst HSBC UK Bank plc (as successor to HSBC Private Bank (UK)\nLimited ('PBGB')) in the High Court of England and Wales seeking\ndamages for unspecified amounts in connection with PBGB's role in\nthe development of Eclipse film finance schemes. These actions are\nongoing. Based on the facts currently known, it is not practicable at this\ntime for HSBC to predict the resolution of these matters, including\nthe timing or any possible impact on HSBC, which could be\nsignificant. US mortgage securitisation litigation Beginning in 2014, a number of lawsuits were filed in various state\nand federal courts in the US against HSBC Bank USA, as a trustee of\nmore than 280 mortgage securitisation trusts, seeking unspecified\ndamages for losses in collateral value allegedly sustained by the\ntrusts. HSBC Bank USA has reached settlements with a number of\nplaintiffs to resolve nearly all of these lawsuits. The remaining\ntwo actions are pending in a New York state court. HSBC Bank USA\nand certain of its affiliates continue to defend a mortgage loan\nrepurchase action seeking unspecified damages and specific\nperformance brought by the trustee of a mortgage securitisation\ntrust in New York state court. There are many factors that may affect the range of outcomes, and\nthe resulting financial impact, of the pending matters, which could\nbe significant. Mexican government bond litigation HSBC Mexico S.A. and other banks are named as defendants in a\nconsolidated putative class action pending in the US District Court\nfor the Southern District of New York alleging anti-competitive\nconduct in the Mexican government bond market between 2006 and 2017\nand seeking damages for unspecified amounts. In February 2024, the\nUS Court of Appeals for the Second Circuit reversed an earlier\ndismissal of this lawsuit and this matter is\nproceeding. Based on the facts currently known, it is not practicable at this\ntime for HSBC to predict the resolution of this matter, including\nthe timing or any possible impact on HSBC, which could be\nsignificant. Stanford litigation Since 2009, HSBC Bank plc has been named as a defendant in numerous\nclaims filed in courts in the UK and the US arising from the\ncollapse of Stanford International Bank Ltd, for which it was a\ncorrespondent bank from 2003 to 2009. In February 2023, HSBC Bank\nplc reached settlements with the plaintiffs to resolve these\nclaims. The US settlement is subject to court approval and the UK\nsettlement has concluded. Other regulatory investigations, reviews and\nlitigation HSBC Holdings and/or certain of its affiliates are also subject to\na number of other enquiries and examinations, requests for\ninformation, investigations and reviews by various regulators and\ncompetition and law enforcement authorities, as well as legal\nproceedings including litigation, arbitration and other contentious\nproceedings, in connection with various matters arising out of\ntheir ordinary course businesses and operations. At the present time, HSBC does not expect the ultimate resolution\nof any of these matters to be material to the Group's financial\nposition; however, given the uncertainties involved in legal\nproceedings and regulatory matters, there can be no assurance\nregarding the eventual outcome of a particular matter or\nmatters. 9 Impairment\nof interest in associate We maintain a 19.03% interest in BoCom. Since our investment in\n2004, BoCom has grown its business significantly to the extent that\nit has recently been designated as a global systemically important\nbank ('GSIB'). For accounting purposes, the balance sheet carrying value\nattributed to BoCom represents our share of its net assets. We\nperform quarterly impairment tests incorporating a value-in-use\ncalculation, recognising the gap between this carrying value and\nthe fair value (based on the list share price). We have previously\ndisclosed that the excess of the value-in-use calculation over its\ncarrying value has been marginal in recent years, and that\nreasonably possible changes in assumptions could generate an\nimpairment. Recent macroeconomic, policy and industry factors resulted in a\nwider range of reasonably possible value-in-use outcomes for our\nBoCom valuation. At 31 December 2023, the Group performed an\nimpairment test on the carrying value which resulted in an\nimpairment of $3.0bn, as the recoverable amount as determined by a\nvalue-in-use calculation was lower than the carrying value. Our\nvalue-in-use calculation uses both historical experience and market\nparticipant views to estimate future cash flows, relevant discount\nrates and associated capital assumptions. This impairment will have no material impact on HSBC's capital,\ncapital ratios or distribution capacity, and therefore no impact on\ndividends or share buy-backs. The insignificant impact on HSBC's\ncapital and CET1 ratio is due to the compensating release of\nregulatory capital deductions to offset the impairment\ncharge. We remain strategically committed to mainland China as demonstrated\nby our recent announcements to acquire Citi's retail wealth\nmanagement portfolio and the investments made into mainland China\nin recent years. BoCom remains a strong partner in China, and we\nremain focused on maximising the mutual value of our partnership.\nOur positive views on the medium- and long-term structural growth\nopportunities in mainland China are unchanged. For further details, see Note 18: Interests in\nassociates and joint ventures on page 391 of\nour Annual Report and Accounts\n2023 . 10 Events\nafter the balance sheet date On 1 January 2024, HSBC Continental Europe completed the sale of\nits retail banking business in France to CCF, a subsidiary of\nPromontoria MMB SAS ('My Money Group'). The sale also included HSBC\nContinental Europe's 100% ownership interest in HSBC SFH (France)\nand its 3% ownership interest in Crédit Logement. In the\nfourth quarter of 2023, a loss of $2.0bn was recognised upon\nreclassification to held for sale, in accordance with IFRS 5, which\nnet of the $2.1bn partial reversal of impairment recognised in\nthe first quarter of 2023, gave rise to a net reversal of\nimpairment recognised in the year of $0.1bn. On 30 January 2024, the PRA concluded its investigation into HSBC\nBank plc's and HSBC UK Bank plc's compliance with depositor\nprotection arrangements under the Financial Services Compensation\nScheme in the UK. The PRA imposed a fine of $73m (£57m) on\nthese entities, which was fully provided for as at 31 December\n2023, and has now been paid. On 31 January 2024, HSBC Global Asset Management Limited, through\nits indirect subsidiary HSBC Global Asset Management Singapore\nLimited, completed the acquisition of the Asia-Pacific-focused real\nestate investment manager Silkroad Property Partners Pte Ltd. HSBC\nGlobal Asset Management Limited also acquired Silkroad's affiliated\nGeneral Partner entities as part of the transaction. On 6 February 2024, HSBC Europe B.V., an indirect subsidiary of\nHSBC Holdings plc, signed an agreement to sell HSBC Bank Armenia\nCJSC, its wholly-owned subsidiary, to Ardshinbank CJSC subject to\nregulatory approvals. The transaction is expected to complete\nwithin the next 12 months. A fourth interim dividend for 2023 of $0.31 per ordinary share (a\ndistribution of approximately $5,913m)\nwas approved by the Directors after 31 December 2023. On 21\nFebruary 2024, HSBC Holdings announced a share buy-back programme\nto purchase its ordinary shares up to a maximum consideration of\n$2.0bn, which is expected to commence shortly and complete by our\nfirst quarter 2024 results announcement. HSBC Holdings called\n$2,500m 3.803% and $500m floating rate senior unsecured debt\nsecurities on 25 January 2024. These securities are expected to be\nredeemed and cancelled on 11 March 2024. These accounts were\napproved by the Board of Directors on 21 February 2024 and\nauthorised for issue. 11 Capital\nstructure Capital ratios At 31 Dec 2023 2022 % % Transitional basis Common\nequity tier 1 ratio 14.8 14.2 Tier 1 ratio 16.9 16.6 Total capital ratio 20.0 19.3 End point basis Common equity tier 1 ratio 14.8 14.2 Tier 1 ratio 16.9 16.6 Total capital ratio 19.6 18.7 Total regulatory capital and risk-weighted assets At 31 Dec 2023 2022 $m $m Transitional basis Common\nequity tier 1 capital 126,501 119,291 Additional tier 1 capital 17,662 19,776 Tier 2 capital 27,041 23,356 Total regulatory capital 171,204 162,423 Risk-weighted assets 854,114 839,720 End point basis Common equity tier 1 capital 126,501 119,291 Additional tier 1 capital 17,662 19,776 Tier 2 capital 22,894 18,091 Total regulatory capital 167,057 157,158 Risk-weighted assets 854,114 839,720 Leverage ratio 1 At 31 Dec 2023 2022 $bn $bn Tier 1 capital 144.2 139.1 Total leverage ratio exposure 2,574.8 2,417.2 % % Leverage ratio 5.6 5.8 1     Leverage ratio calculation is in line\nwith the PRA's UK leverage rules. This includes IFRS 9 transitional\narrangement and excludes central bank claims. 12 Statutory\naccounts The information in this news release does not constitute statutory\naccounts within the meaning of section 434 of the Companies\nAct 2006 ('the Act'). The statutory accounts for the year\nended 31 December 2023 will be delivered to the Registrar of\nCompanies in England and Wales in accordance with section 441\nof the Act. The auditor has reported on those accounts. Its report\nwas unqualified and did not contain a statement under section\n498(2) or (3) of the Act. 13 Dealings\nin HSBC Holdings plc listed securities The Group has policies and procedures that, except where permitted\nby statute and regulation, prohibit specified transactions in\nrespect of its securities listed on The Stock Exchange of Hong Kong\nLimited. Except for dealings as intermediaries or as trustees by\nsubsidiaries of HSBC Holdings, and purchases by HSBC Holdings under\nthe share buy-back programme, neither HSBC Holdings nor any of its\nsubsidiaries has purchased, sold or redeemed any of its securities\nlisted on The Stock Exchange of Hong Kong Limited during the\nyear ended 31 December 2023. 14 Interim\ndividends for 2024 For the financial year 2023, the Group reverted to paying quarterly\ndividends, and achieved a dividend payout ratio of 50% of reported\nearnings per ordinary share ('EPS'), in line with our published\ntarget for 2023 and 2024. EPS for this purpose excludes material\nnotable items and related impacts (including those associated with\nthe sale of our retail banking operations in France, the agreed\nsale of our banking business in Canada and our acquisition of SVB\nUK). The Board has adopted a dividend policy designed to provide\nsustainable cash dividends, while retaining the flexibility to\ninvest and grow the business in the future, supplemented by\nadditional shareholder distributions, if appropriate. Dividends are approved in US dollars and, at the election of the\nshareholder, paid in cash in one of, or in a combination of, US\ndollars, pounds sterling and Hong Kong dollars. 15 Earnings releases and interim results First and third quarter results for 2024 will be released on 30\nApril 2024 and 29 October 2024, respectively. The interim results\nfor the six months to 30 June 2024 will be issued on 31 July\n2024. 16 Corporate\ngovernance codes HSBC is subject to corporate governance requirements in both the UK\nand Hong Kong. During 2023, HSBC complied with the provisions and\nrequirements of both the UK and Hong Kong Corporate Governance\nCodes. Under the Hong Kong Code, the audit committee should be responsible\nfor the oversight of all risk management and internal control\nsystems. HSBC's Group Risk Committee is responsible for oversight\nof internal control, other than internal control over financial\nreporting, and risk management systems. This is permitted under the\nUK Corporate Governance Code. HSBC Holdings has codified obligations for transactions in Group\nsecurities in accordance with the requirements of the UK Market\nAbuse Regulation and the rules governing the listing of securities\non HKEx. The Group has been granted certain waivers by HKEx from\nstrict compliance with rules that take into account accepted\npractices in the UK, particularly in respect of employee share\nplans. During the year, all Directors were reminded of their\nobligations in respect of transacting in HSBC Group securities.\nFollowing specific enquiry all Directors have confirmed that they\nhave complied with their obligations. The Group Audit Committee has reviewed and provided assurance to\nthe HSBC Holdings Board on the publication of\nthe Annual Report and Accounts\n2023. The Directors of HSBC Holdings plc as at the date of this\nannouncement comprise: Mark Edward Tucker*, Noel Paul Quinn, Geraldine Joyce\nBuckingham † ,\nRachel Duan † ,\nGeorges Bahjat Elhedery, Dame Carolyn Julie\nFairbairn † ,\nJames Anthony Forese † ,\nAnn Frances Godbehere † ,\nSteven Craig Guggenheimer † ,\nDr José Antonio Meade Kuribreña † ,\nKalpana Jaisingh Morparia † ,\nEileen K Murray † ,\nBrendan Robert Nelson † ,\nDavid Thomas Nish † ,\nand Swee Lian Teo † . * Non-executive Group Chairman † Independent non-executive Director 17 Board\ncomposition As announced on Wednesday, 6 December 2023, and following receipt\nof regulatory approval, Brendan Nelson has succeeded David Nish as\nChair of the Group Audit Committee with effect from today's date.\nThe Company also announces that Ann Godbehere has been appointed as\na member of the Group Audit Committee with effect from today's\ndate. As detailed in 'Board and Group Executive committees and working\ngroups' on page 252 of the Annual Report and Accounts\n2023 , the Board has taken the\ndecision to establish a Group Technology Committee ('GTC'),\neffective 1 March 2024. The GTC will have responsibility for\noversight of Technology-related matters across the Group, and the\nfull terms of reference can be found on hsbc.com. The membership of\nthe GTC will be Eileen Murray (Chair), Steven Guggenheimer, Swee\nLian Teo, Kalpana Morparia and Brendan Nelson. As a result of the\nestablishment of the GTC, the Technology Governance Working Group\nwill be demised with effect from 1 March 2024. 18 Cautionary\nstatement regarding forward-looking statements This news release may contain projections, estimates, forecasts,\ntargets, commitments, ambitions, opinions, prospects, results,\nreturns and forward-looking statements with respect to the\nfinancial condition, results of operations, capital position, ESG\nrelated matters, strategy and business of the Group which can be\nidentified by the use of forward-looking terminology such as 'may',\n'will', 'should', 'expect', 'anticipate', 'project', 'estimate',\n'seek', 'intend', 'target', 'plan', 'believe', 'potential' or\n'reasonably possible', or the negatives thereof or other variations\nthereon or comparable terminology (together, 'forward-looking\nstatements'), including the strategic priorities and any financial,\ninvestment and capital targets and any ESG targets, commitments and\nambitions described herein. Any such forward-looking statements are not a reliable indicator of\nfuture performance, as they may involve significant stated or\nimplied assumptions and subjective judgements which may or may not\nprove to be correct. There can be no assurance that any of the\nmatters set out in forward-looking statements are attainable, will\nactually occur or will be realised or are complete or accurate. The\nassumptions and judgements may prove to be incorrect and involve\nknown and unknown risks, uncertainties, contingencies and other\nimportant factors, many of which are outside the control of the\nGroup. Actual achievements, results, performance or other future events or\nconditions may differ materially from those stated, implied and/or\nreflected in any forward-looking statements due to a variety of\nrisks, uncertainties and other factors (including without\nlimitation those which are referable to general market or economic\nconditions, regulatory changes, increased volatility in interest\nrates and inflation levels and other macroeconomic risks,\ngeopolitical tensions such as the Russia-Ukraine war and the\nIsrael-Hamas war and potential further escalations, specific\neconomic developments, such as the uncertain performance of the\ncommercial real estate sector in mainland China, or as a result of\ndata limitations and changes in applicable methodologies in\nrelation to ESG related matters). Any such forward-looking statements are based on the beliefs,\nexpectations and opinions of the Group at the date the statements\nare made, and the Group does not assume, and hereby disclaims, any\nobligation or duty to update, revise or supplement them if\ncircumstances or management's beliefs, expectations or opinions\nshould change. For these reasons, recipients should not place\nreliance on, and are cautioned about relying on, any\nforward-looking statements. No representations or warranties,\nexpressed or implied, are given by or on behalf of the Group as to\nthe achievement or reasonableness of any projections, estimates,\nforecasts, targets, commitments, ambitions, prospects or returns\ncontained herein. Additional detailed information concerning important factors,\nincluding but not limited to ESG related factors, that could cause\nactual results to differ materially from this news release is\navailable in our Annual Report and Accounts for the fiscal year\nended 31 December 2023 which we expect to file with the U.S.\nSecurities and Exchange Commission on Form 20-F on or around 22\nFebruary 2024. 19 Use of\nalternative performance measures This news release contains non-IFRS measures used by management\ninternally that constitute alternative performance measures under\nEuropean Securities and Markets Authority guidance and non-GAAP\nfinancial measures defined in and presented in accordance with US\nSecurities and Exchange Commission rules and regulations\n('alternative performance measures'). The primary alternative\nperformance measures we use are presented on a 'constant currency'\nbasis which is computed by adjusting reported results for the\neffects of foreign currency translation differences, which distort\nperiod-on-period comparisons. We consider constant currency\nperformance to provide useful information for investors by aligning\ninternal and external reporting, and reflecting how management\nassesses period-on-period performance. We separately disclose\n'notable items', which are components of our income statement that\nmanagement would consider as outside the normal course of business\nand generally non-recurring in nature. Reconciliations between\nalternative performance measures and the most directly comparable\nmeasures under IFRS are provided in our Annual Report and Accounts\n2023 , which is available at\nwww.hsbc.com. 20 Certain\ndefined terms Unless the context requires otherwise, 'HSBC Holdings' means HSBC\nHoldings plc and 'HSBC', the 'Group', 'we', 'us' and 'our' refer to\nHSBC Holdings together with its subsidiaries. Within this document\nthe Hong Kong Special Administrative Region of the People's\nRepublic of China is referred to as 'Hong Kong'. When used in the\nterms 'shareholders' equity' and 'total shareholders' equity',\n'shareholders' means holders of HSBC Holdings ordinary shares and\nthose preference shares and capital securities issued by HSBC\nHoldings classified as equity. The abbreviations '$m', '$bn' and\n'$tn' represent millions, billions (thousands of millions) and\ntrillions of US dollars, respectively. 21 For\nfurther information contact: Media Relations UK -\nGillian James Telephone:\n+44 (0)7584 404 238 Email:\npressoffice@hsbc.com UK -\nKirsten Smart Telephone:\n+44 (0)7725 733 311 Email:\npressoffice@hsbc.com Investor Relations UK -\nNeil Sankoff Telephone:\n+44 (0) 20 7991 5072 Email:\ninvestorrelations@hsbc.com Hong\nKong - Yafei Tian Telephone:\n+852 2899 8909 Email:\ninvestorrelations@hsbc.com.hk Hong\nKong - Aman Ullah Telephone:\n+852 3941 1120 Email:\naspmediarelations@hsbc.com.hk 22 Registered\nOffice and Group Head Office 8 Canada Square London E14 5HQ United Kingdom Web: www.hsbc.com Incorporated in England with limited liability. Registered number\n617987 Please click on the following link to view the associated data\npack: http://www.rns-pdf.londonstockexchange.com/rns/8448D_1-2024-2-21.pdf SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAileen Taylor Title:\nGroup Company Secretary and Chief Governance Officer Date:\n21 February 2024", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495424001991/a8462d.htm"}