HSBC Holdings, plc.

Welcome, ladies and gentlemen, to the Analyst and Investor webinar on the 3Q 2024 results for HSBC Holdings PLC. For your information, this webinar is being recorded. I will now hand over to Georges Elhaderi, Group Chief Executive.

Thank you, Louise. Hello, everyone. Thank you for joining today. I'm here with John Bingham, our Group Financial Controller, who's acting as Interim Group Chief Financial Officer. We delivered another good quarter, which shows that our strategy is working and we have a strong platform for growth. I am committed to building on that. Before John takes you through the third quarter numbers, I'd like to make a few comments. We made several announcements last week. First, PAM Core will take over as group chief financial officer with effect from 1st of January. Pam is an exceptional leader who joined HSBC in 2013 as Group Head of Audit and is currently our Group Chief Risk and Compliance Officer. With almost 40 years' experience in the financial sector, she brings a global perspective to the strategic challenges and opportunities we face today. I look forward to partnering with her for the next stage of the bank's growth and development. I would also like to thank John for his outstanding support during the interim period. Second, we announced a reorganization to simplify and streamline the group. We are currently organized around three businesses in five regions. From the 1st of January, we will operate through four businesses. Hong Kong and the UK, serving personal banking and commercial banking customers in our two home markets. corporate institutional banking, and international wealth and premier banking. We will also streamline our geographic governance structures, reducing them from five regions to two, further enhancing our ability to serve our customers' needs throughout our global network. Our current group executive committee of 18 members will be replaced by a new group operating committee with 12 members. The analysis we've done so far demonstrates that the reorganization will result in net cost savings with a relatively short payback period on any upfront costs. We will share these details with you at our full year results in February as part of a wider business update. And third, turning to the external environment, I welcome the clarity provided by the UK government on its prudential rules. The PRA's second near-final policy statement and rules on the implementation of Basel 3.1 bring an end to years of uncertainty and will help the banking sector to support growth in the UK. Similarly, I am encouraged by the recent policy measures in mainland China and in Hong Kong. I am confident that the monetary stimulus announced last month and potential further fiscal and other measures will help to stabilize key sectors and strengthen mainland China's economy. Meanwhile, Hong Kong's easing of macro prudential constraints is proportionate and timely, and we expect these measures to have a positive impact on the Hong Kong economy. With that, John will take you through the Q3 numbers.

Thanks, George. In summary, we had another good quarter. Profit before tax of $8.5 billion was up $0.9 billion or 11% on the third quarter of last year on a constant currency basis. This brings our annualised return on tangible equity for the first nine months of the year to 19.3% or 16.7% excluding notable items. Revenue of $17 billion was up $1.1 billion on last year's third quarter and up $0.3 billion on the second quarter this year, underlying the good momentum within the business. We've announced today a further $4.8 billion of distributions, consisting of a third interim dividend of $0.10 per share and a new share buyback of up to $3 billion. We intend to complete this buyback during the four month period before our full year results announcement in February. Last week we also completed the share buyback announcement at the half year results in July. We've now repurchased 9% of our share count since the start of last year. As you can see on the next slide, strategic transactions, principally the disposal of Canada in the first quarter, were a small impact on the year-on-year revenue and profit growth. Excluding this impact of these transactions, profit before tax, excluding notable items, was up 13% on the third quarter of last year. Revenue of $17 billion was up $1.1 billion on the third quarter of last year, driven by a $1.6 billion increase in fee and other income. This included a $0.7 billion increase in wholesale transaction banking and wealth. The remaining $1 billion increase primarily reflected strong performance in equities and global debt markets with global banking and markets, and adverse items in the third quarter of last year that did not repeat, including $0.3 billion of Treasury disposal losses and other notable items. Banking NII of $10.6 billion was down $0.3 billion on the second quarter on a reported FX basis, primarily due to a loss arising from the early redemption of legacy securities. Excluding this, the Banking NII run rate was stable on the previous quarter. Our 2024 Banking NII guidance is unchanged at around $43 billion. Our guidance includes the impact of the $0.3 billion early redemption loss taken this quarter. It also assumes a $1 billion contribution from Argentina this year, which is what we reported in 2023. Argentina has contributed $1.2 billion to banking NII in the year to date, but the volatility created by hyperinflation accounting makes that number very difficult to forecast from quarter to quarter. Accordingly, I would encourage you to think of our guidance as being around $42 billion, excluding Argentina. Turning to fee and other income. Wholesale transaction banking was up 7% on last year's third quarter. The key driver was global foreign exchange, which grew 12%, benefiting from an increased client activity. Higher volumes also contributed to growth in both global trade solutions and global payment solutions. Wealth was up 32% on the third quarter last year. It was our third consecutive quarter of double-digit growth in wealth, as our continued investments in this business and the importance of Hong Kong as a global wealth hub have enabled us to capitalise on a favourable operating environment. There was double-digit growth in all wealth products, but life insurance was the biggest driver. About half of the growth in life insurance was from the non-repetition of a charge we took in Q3 last year. Excluding that, life insurance still grew well into double digits, mainly because a higher CSM balance drove an increase in CSM release. The CSM balance is a store of value. All else remaining equal, growth in the balance means growth in future earnings. And our CSM balance has continued to grow. In the first three quarters of this year, we've generated more than $2 billion of new business CSM. This has driven our CSM balance to $13.2 billion, a 22% increase since last year's third quarter, creating a foundation for future revenue growth. Hong Kong continued to benefit from inflows of international customers. There were 243,000 new-to-bank customers in the third quarter, versus an average of just over £170,000 per quarter in the first half. Net new invested assets were $26 billion in the quarter, $11 billion of which were in Asia. On credit, you'll recall that our second quarter had a low ECL charge due to recoveries and other items. The third quarter ECL charge was $1 billion, or 40 basis points of average loans. The wholesale ECL charge was $0.6 billion, driven by $0.4 billion in Hong Kong, of which $0.1 billion related to Hong Kong commercial real estate, whilst the personal charge was $0.4 billion. This brings our annualised ECL charge to 28 basis points of average loans for the year to date, which is broadly in line with our 30 to 40 basis point guidance for the full year. Next on costs. Costs were up 6% in the first nine months of the year on a target basis, which was 1% lower than for the first half. As we explained in the previous quarter, the phasing of performance-related pay and the additional levies from the end of last year will give us a tailwind heading into the fourth quarter. We're on track to meet our target of around 5% cost growth for 2024 on a target basis and remain committed to cost disciplines. On lending and deposits, loan balances were stable in the third quarter. Deposits were up 1% driven by a $16 billion increase in Hong Kong WPB. This reflected short-term flows between invested assets and deposits and I'd caution you against annualising that number. Term deposits were 39% of total Hong Kong deposits, unchanged since the second quarter. Next, Our CT1 ratio was 15.2%, up 20 basis points on the second quarter, as strong organic capital generation was partly offset by distributions. CT1 grew $3.1 billion during the quarter on a constant currency basis. This growth included $2.9 billion of other movements, mainly gains in the market value of securities classified as held to collect and sell, which are fair valued through other comprehensive incomes. RWA has grew by $14 billion on a constant currency basis, mainly due to broader balance sheet growth. Finally, I'd like to point out a number of upcoming events which will help you with your modelling. First, we expect the buyback we announced today to have an impact of around 0.4 percentage points on our CT1 ratio in the fourth quarter. It remains our intention to return excess capital to shareholders through a rolling series of share buybacks. Secondly, We expect to complete the sale of HSBC Argentina in the fourth quarter. As a reminder, around $5.1 billion of historical foreign exchange translation and other reserve losses will be recycled to the income statement on completion. This has already been recognised in capital and there will be no incremental impact on CT1, TNAV or distributions. These losses will also be excluded from our dividend calculations. We expect the completion of the sale to reduce RWAs by around $8 billion, equivalent to around 0.1 percentage points of CT1. Third, we intend to begin to actively market our $8 billion legacy French home loan portfolio during the fourth quarter. We expect to reclassify this portfolio as held to collect and sell in the first quarter next year, leading to a recognition of an estimated $1 billion pre-tax loss equivalent to around 0.1 percentage points of CT1. Finally, the PRA recently published near final rules on Basel 3.1. These are incrementally better than we previously expected. We continue to expect them to have an immaterial impact on our CT1 ratio upon implementation. To conclude, our guidance remains unchanged, a mid-teens return on tangible equity, excluding notable items for 2024 and 2025, banking NII of around $43 billion in 2024, ECLs for the full year within our normal medium-term planning range of 30 to 40 basis points, cost growth of around 5% for 2024 on a target basis, and mid-single-digit loan growth over the medium term. With that, Louise, Can we hand over to Q&A?