AmazonScience/document-haystack

1Strategic report22%, driven by lower average balances in 3our main legal entities in Asia and Europe, 4primarily reflecting the softer trade cycle, 5partly offset by wider margins in our legal 6entities in Latin America and the UK. In 7addition, there was a $28m or 3% increase 8in fee income. 9 – In Cr10edit and Lending, revenue decreased 11by $0.4bn or 7%, notably in our main legal 12entities in Asia and Europe, primarily due 13to margin compression. It also reflected 14lower balances due to softer demand from 15customers across these markets, and 16reduced exposures in the commercial real 17estate sector, notably in mainland China  18and the US.19 – In G20BM products, Insurance and 21Investments and Other, revenue increased 22by $1.6bn, driven by incremental revenue 23from HSBC Innovation Banking of $2.1bn, 24which included the provisional gain of 25$1.6bn on the acquisition of SVB UK. 26There was also an increase in collaboration 27revenue from GBM products of $0.1bn, 28notably in Foreign Exchange. These 29increases were partly offset by a reduction 30in Markets Treasury allocated income 31of $0.6bn, including disposal losses on 32portfolio repositioning and the adverse 33impacts of hyperinflationary accounting of 34$0.6bn. The remaining increase in revenue 35reflected higher interest on capital held in 36the business, partly offset by higher HSBC 37Holdings interest expense.38ECL were a charge of $2.1bn, compared with 39a charge of $1.9bn in 2022 on a constant 40currency basis. The increase of $0.2bn was 41mainly driven by higher stage 3 charges in 42the UK, and included provisions from HSBC 43Innovation Banking, and charges in the Middle 44East. ECL in both periods reflected charges 45relating to the commercial real estate sector 46in mainland China, although they were lower 47in 2023.48Operating expenses of $7.5bn were higher 49by $0.6bn on a constant currency basis. The 50increase reflected incremental costs in HSBC 51Innovation Banking of $0.3bn including the 52acquisition and integration of SVB UK, higher 53performance-related pay, ongoing investment 54in technology and inflationary impacts. These 55increases were in part mitigated by the impact 56of continued cost discipline and a reduction in 57restructuring and other related costs following 58the completion of our cost-saving programme 59at the end of 2022.60Financial performance 61Profit before tax of $13.3bn was $5.8bn 62or 76% higher than in 2022 on a constant 63currency basis. This was driven by an increase 64in revenue in all our main legal entities, 65primarily from a $5.3bn increase in GPS net 66interest income. It also included a provisional 67gain of $1.6bn from HSBC UK’s acquisition of 68SVB UK. These increases were partly offset 69by a rise in operating expenses as a result 70of the SVB UK acquisition and increases in 71technology costs.72Revenue of $22.9bn was $6.6bn or 40% 73higher on a constant currency basis.74 – In G75PS, revenue increased by $5.4bn, 76with growth in all main legal entities. The 77increase was driven by higher margins, 78reflecting interest rate rises and repricing 79actions, which were partly offset by lower 80average balances notably due to a market-81wide reduction in the UK. There was a 826% increase in fee income, as business 83initiatives drove growth in transaction 84banking, with higher volumes in cards and 85international payments.86 – In G87lobal Trade and Receivables Finance 88(‘GTRF’), revenue decreased by $0.1bn or 892023 2022 2021 2023 vs 202290Management view of revenue $m $m $m $m %91Global Trade and Receivables Finance 2,025 2,075 1,832 (50) (2)92Credit and Lending 5,343 5,745 5,752 (402) (7)93Global Payments Solutions 12,381 6,966 3,411 5,415 7894Markets products, Insurance and Investments and Other 1 3,118 1,497 1,704 1,621 >10095 – of w96hich: share of revenue for Markets and Securities 97Services and Banking products981,299 1,182 1,008 117 1099 – of w100hich: provisional gain on the acquisition of Silicon Valley 101Bank UK Limited1021,591 — — 1,591 >100103Net operating income2 22,867 16,283 12,699 6,584 40104 – of105 which: transaction banking 3 15,393 9,940 5,971 5,453 551061  Includes CMB’s share of revenue from the sale of Markets and Securities Services and Banking products to CMB customers. GBM’s share of revenue from the sale 107o108f these products to CMB customers is included within the corresponding lines of the GBM management view of revenue. Also includes allocated revenue from 109Markets Treasury, HSBC Holdings interest expense and hyperinflation.1102 ’Net operating income’ means net operating income before change in expected credit losses and other credit impairment charges (also referred to as ‘revenue’).1113  Tr112ansaction banking comprises Global Trade and Receivables Finance, Global Payments Solutions and CMB’s share of Global Foreign Exchange (shown within 113‘share of revenue for Markets and Securities Services and Banking products’).1142023 2022 2021115Notable items $m $m $m116Revenue117Disposals, acquisitions and related costs 1,591 — —118Restructuring and other related costs — (16) (3)119Disposal losses on Markets Treasury repositioning (316) — —120Currency translation on revenue notable items — 1 (6)121Operating expenses122Disposals, acquisitions and related costs (55) — —123Restructuring and other related costs 32 (266) (83)124Currency translation on operating expenses notable items — (5) 7125HSBC Holdings plc Annual Report and Accounts 2023 33126Global businesses