The UK bank’s wealth revenue grew by 12% in H1 2024, partly driven by structured products in Asia. Its US sales increased 50%.

HSBC has reported stable earnings for the first half of 2024, with pre-tax profit unchanged at US$21.6 billion and net profit down two percent to US$17.7 billion year-on-year (YoY), according to the bank’s latest interim reports. 

Revenue rose by US$0.4 billion or one percent to US$37.3 billion compared with H1 2023. Operating expenses of US$16.3 billion were US$0.8 billion or five percent higher YoY, mainly due to higher technology spend and investment, inflationary pressures and an increase in the performance-related pay accrual.

Customer growth and improved wealth penetration, primarily in Asia, helped drive growth in investment distribution - Georges Elhedery, CFO

In HSBC’s wealth unit, revenue of US$4.3 billion was 12% higher YoY. Revenues for the investment distribution business, at US$1.4 billion (+13% YoY) were driven by structured products, mutual funds and bonds due to the combination of the execution of the bank’s strategy and improved market sentiment, notably in HSBC’s entities in Asia.

However, the growth was offset by a nonrecurrence of a US$2.1 billion reversal in H1 2023 of an impairment relating to the sale of the bank’s retail banking operations in France. As a result, the wealth and personal banking (WPB) division posted pre-tax profit of US$6.5 billion, a 25% decline YoY, on a constant currency basis.

For other segments, commercial banking delivered pre-tax profit of US$6.5 billion, US$1.5 billion lower than in H1 2023 on a constant currency basis. This was primarily due to the non-recurrence of a US$1.6 billion gain recognised in H1 2023 on the acquisition of SVB UK.

Global banking and markets posted a pre-tax profit of $US3.8 billion, 12% higher than in H1 2023 on a constant currency basis. This was driven by an increase in revenue of US$0.4bn or five percent, notably from strong performances in equities and securities Financing.

For the group, structured notes liabilities were up 16.6% to US$12.1 billion as of 30 June compared with six months ago, including US$7.9 billion equity-linked notes and US$2.5 billion foreign exchange (FX)-linked notes.

Growth in Wealth remained broad-based with invested assets up two percent to US$1.3 trillion, including US$6 billion of net new invested assets in Q2, according to Georges Elhedery (pictured), group CFO, speaking at the analyst and investor call on 31 July.

‘Customer growth and improved wealth penetration, primarily in Asia, helped drive growth in investment distribution,’ said the CFO, who has been appointed as group chief executive, with effect from 2 September 2024.

SRP data

SRP database registers a total of 2,158 equity-linked investments (ELIs) issued by HSBC targeting mass retail investors in Hong Kong SAR in H1 2024, a slight decrease from 2,242 for the prior-year period. In addition, there are also 4,445 dual currency deposits tracking a total of seven FX pairs.

Some 1,980 structured notes featuring snowball were issued by HSBC in Taiwan in the first , an increase from 1,416 YoY. There are additional 198 structured deposits on the bank’s paper in China, up from 160 YoY, tracking a group of 35 underlying assets led by the S&P 500 Daily Risk Control 10% ER by issuance.

Meanwhile, the UK bank traded US$3.0 billion notional of structured notes registered with the US Securities and Exchange Commission from 781 issuances in the first six months of the year, 50% higher from the prior-year period.

Click the links to download HSBC’s 2024 interim results and presentation.

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