HSBC Holdings plc (NYSE:HSBC) Q2 2024 Earnings Conference Call July 31, 2024 2:45 AM ET

Company Participants

Noel Quinn - Group Chief Executive
Georges Elhedery - Group Chief Financial Officer

Conference Call Participants

Andrew Coombs - Citigroup
Amit Goel - Mediobanca
Joseph Dickerson - Jefferies
Raul Sinha - JPMorgan
Jeremy Hugh - CICC
Aman Rakkar - Barclays
Edward Firth - KBW
Katherine Lei - JPMorgan
Gurpreet Singh Sahi - Goldman Sachs

Operator

Welcome, ladies and gentlemen to the Analyst and Investor Webinar on the 2024 Interim Results for HSBC Holdings plc. For your information, this webinar is being recorded. We are now ready to start the webinar.

So I will hand over to Noel Quinn, Group Chief Executive.

Noel Quinn

Good morning to everyone in London, and good afternoon to those joining from Hong Kong. Today is my last results announcement before Georges takes over in September. I'm delighted to be handing the stewardship of the bank over to him. Georges is an exceptional leader who understand what makes HSBC special. I'd like to thank my colleagues around the world for everything they've done over the last five years. And I wish Georges every success for the future.

I have always been immensely proud of the heritage of this bank and the strategic role it plays in the world. But when I took this job on five years ago, we didn't have the financial performance to match our standing. My aim was to change that. I believe we've done so and created a strong platform for future growth. This was evidenced by the record profit performance last year and by the strong first half performance this year, revenue of $37.3 billion was up 1%. Profit before tax of $21.6 billion was stable on the same period last year. This performance enabled continued strong capital generation.

Our return on tangible equity was 17%, excluding notable items. We've announced $4.8 billion of further capital distributions today. This takes the total capital we have distributed by way of dividends and buybacks in respect of the last 18 months to $34.4 billion. Finally, we've updated our guidance to reflect our increased confidence about the future. We're providing new guidance of a mid-teens return on tangible equity in 2025. In addition to the 2024 guidance we already had.

We're upgrading our 2024 banking NII guidance from at least $41 billion to around $43 billion. We're revising our 2024 ECL guidance to be back within our normal medium-term planning range of 30 to 40 basis points. And we're reconfirming our 2024 cost guidance of around 5% growth on a target basis. That's despite growth of 7% in the first half, which as Georges will explain, is mainly due to timing differences compared to last year. The benefits of our strategy execution over the last five years are evidence in our performance.