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HSBC Holdings plc
Annual Report and Accounts 2023
Opening up a world of opportunity
Our ambition is to be the preferred
international financial partner for our clients.
Our purpose, ambition and values reflect our
strategy and support our focus on execution.
Read more on our values and
strategy on pages 4 and 11.

Contents
Strategic report
1 Performance in 2023
2 Highlights
4 Who we are
6 Group Chairman’s statement
8 Group Chief Executive’s review
11 Our strategy
14 ESG overview
20 Board decision making and
engagement with stakeholders
(Section 172(1) statement)
24 Remuneration
25 Financial overview
30 Global businesses
37 Risk overview
40 Long-term viability and going
concern statement
Environmental, social and
governance (‘ESG’) review
42 Our approach to ESG
44 Environmental
75 Social
87 Governance
Financial review
100 Financial summary
111 Global businesses and legal
entities
130 Reconciliation of alternative
performance measures
Cover image: Opening up a world of
opportunity
We connect people, capital and ideas across
the world. By unlocking the true power of
our international networks, we are able to
deliver our purpose of opening up a world of
opportunity.
Risk review
136 Our approach to risk
140 Top and emerging risks
145 Our material banking risks
Corporate governance report
239 Biographies of Directors and
senior management
262 Board committees
279 Directors’ remuneration report
Financial statements
318 Independent auditors’ report
329 Financial statements
341 Notes on the financial statements
Additional information
435 Shareholder information
444 Abbreviations
This Strategic Report was approved by the
Board on 21 February 2024.
Mark E Tucker
Group Chairman
A reminder
The currency we report in is US dollars.
Our approach to ESG reporting
We embed our ESG reporting and Task
Force on Climate-related Financial
Disclosures (‘TCFD’) within our Annual
Report and Accounts. Our TCFD disclosures
are highlighted with the following symbol:

TCFD

Constant currency performance
We supplement our IFRS Accounting
Standards figures with non-IFRS Accounting
Standards measures used by management
internally that constitute alternative
performance measures under European
Securities and Markets Authority guidance
and non-GAAP financial measures defined in
and presented in accordance with US
Securities and Exchange Commission rules
and regulations. These measures are
highlighted with the following symbol:
Further explanation may be found on page 29.
IFRS 17 ‘Insurance Contracts’
From 1 January 2023, we adopted IFRS 17
‘Insurance Contracts’, which replaced IFRS 4
‘Insurance Contracts’. Comparative data
have been restated. For further details of our
adoption of IFRS 17, see page 100.
None of the websites referred to in this Annual
Report and Accounts 2023 for the year ended 31
December 2023 (including where a link is provided),
and none of the information contained on such
websites, are incorporated by reference in this
report.
HSBC Holdings plc Annual Report and Accounts 2023
Performance in 2023
HSBC is one of the world’s leading
international banks.
We have a clear strategy to deliver revenue
and profit growth, enhance customer service
and improve returns to shareholders.

Financial performance
indicators
Our financial performance indicators
demonstrate our continued focus on the
delivery of sustainable returns for our
shareholders and providing a strengthened
platform for growth. They also provide
insight into the performance that has driven
the outcomes of our financial targets.
Read more on our financial performance in 2023
on pages 2 and 27.
For an explanation of performance against our key
Group financial targets, see page 25.
For a reconciliation of our target basis operating
expenses to reported operating expenses, see page
133.
For our financial targets we define medium term
as three to four years and long term as five to six
years, commencing 1 January 2024.
Return on average tangible equity
14.6%
(2022: 10.0%)
Profit before tax
$30.3bn
(2022: $17.1bn)
Operating expenses
$32.1bn
Target basis operating expenses up 6% to
$31.6 bn
(2022: $32.7 bn)
Common equity tier 1 capital ratio
14.8%
(2022: 14.2%)
Dividend per share
$0.61
(2022 dividend per share: $0.32)

Strategic performance
indicators
Our strategy supports our ambition of being
the preferred international financial partner
for our clients.
We are committed to building a business for
the long term, developing relationships that
last.
Read more on our strategy on pages 11 to 13.
Read more on multi-jurisdictional client revenue
on page 111.
Read more on how we set and define our ESG
metrics on page 16.
Read more on our definition of sustainable finance
and investment on page 49.
We no longer report the metric ‘Asia as a
percentage of Group tangible equity’.
Net new invested assets
$84bn
Generated in 2023, of which $47bn were in
Asia.
(2022: $80bn generated, of which $59bn
were in Asia)
Wholesale multi-jurisdictional client
revenue
61%
Wholesale client revenue generated by
clients banking with us across multiple
markets.
Digitally active Commercial Banking
customers
83%
(2022: 78%)
Gender diversity
34.1%
Women in senior leadership roles.
(2022: 33.3%)
Sustainable finance and investment
$294.4 bn
Cumulative total provided and facilitated
since January 2020.
(2022: $210.7bn)
HSBC Holdings plc Annual Report and Accounts 2023 1
Highlights
Financial performance reflected net interest income growth, and we continued to make
progress against our four strategic pillars.

Financial performance (vs 2022)
– P rofit before tax rose by $13.3bn to
$30.3bn, primarily reflecting revenue
growth. This included a favourable year-on-
year impact of $2.5bn relating to the sale of
our retail banking operations in France,
which completed on 1 January 2024, and a
$1.6bn provisional gain recognised on the
acquisition of Silicon Valley Bank UK
Limited (‘SVB UK‘) in 2023. These were
partly offset by the recognition of an
impairment charge in 2023 of $3.0bn
relating to the investment in our associate,
Bank of Communications Co., Limited
(‘BoCom’), which followed the
reassessment of our accounting value-in-
use. On a constant currency basis, profit
before tax increased by $13.8bn to
$30.3bn. P rofit after tax increased by
$8.3bn to $24.6bn.
– Revenue rose by $15.4bn or 30% to
$66.1bn, including growth in net interest
income (‘NII’) of $5.4bn, with rises in all of
our global businesses due to the higher
interest rate environment. Non-interest
income increased by $10.0bn, reflecting a
rise in trading and fair value income of
$6.4bn, mainly in Global Banking and
Markets. The associated funding costs
reported in NII grew by $6.2bn. The
increase also included the impact of the
strategic transactions referred to above,
partly offset by disposal losses of $1.0bn
relating to repositioning and risk
management activities in our hold-to-
collect-and-sell portfolio.
– Net interest margin (‘NIM’) of 1.66%
increased by 24 basis points (‘bps’),
reflecting higher interest rates.
– Expected credit losses and other credit
impairment charges (‘ECL’) were $3.4bn,
a reduction of $0.1bn. The net charge in
2023 primarily comprised stage 3 charges,
notably related to mainland China
commercial real estate sector exposures. It
also reflected continued economic
uncertainty, rising interest rates and
inflationary pressures. ECL were 33 bps of
average gross loans, including a 3bps
reduction due to the inclusion of loans and
advances classified as held for sale.
– Operating expenses fell by $0.6bn or 2%
to $32.1bn, mainly due to the non-
recurrence of restructuring and other
related costs following the completion of
our cost to achieve programme at the end
of 2022. This more than offset higher
technology costs, inflationary pressures and
an increase in performance-related pay. We
also incurred a higher UK bank levy and a
charge relating to the Federal Deposit
Insurance Corporation (‘FDIC’) special
assessment in the US. Target basis
operating expenses rose by 6%. This is
measured on a constant currency basis,
excluding notable items and the impact of
the acquisition of SVB UK and related
investments internationally. It also excludes
the impact of retranslating the prior year
results of hyperinflationary economies at
constant currency.
– Customer lending balances rose by
$15bn on a reported basis, but fell by
$3bn on a constant currency basis.
Growth included a $7.8bn reclassification of
secured loans in France from held for sale,
an addition of $8bn from the acquisition of
SVB UK, and higher mortgage balances in
HSBC UK and Hong Kong. These increases
were more than offset by a reduction in
wholesale term lending, notably in Asia,
and from business divestments in Oman
and New Zealand.
– Customer accounts rose by $41bn on a
reported basis, and $13bn on a constant
currency basis, primarily in Wealth and
Personal Banking, reflecting growth in Asia,
partly offset by reductions in HSBC UK,
reflecting cost of living pressures and the
competitive environment, despite an
increase of $6bn from the acquisition of
SVB UK. There was also a reduction due to
the sale of our business in Oman.
– Common equity tier 1 (‘CET1’) capital
ratio of 14.8% rose by 0.6 percentage
points, as capital generation was partly
offset by dividends and share buy-backs.
– The Board has approved a fourth interim
dividend of $0.31 per share, resulting in
a total for 2023 of $0.61 per share. We
also intend to initiate a share buy-back of
up to $2.0bn, which we expect to
complete by our first quarter 2024 results
announcement.

Outlook
– We continue to target a return on
average tangible equity (‘RoTE’) in the
mid-teens for 2024, excluding the impact
of notable items (see page 25 for
information on our RoTE target for 2024).
Our guidance reflects our current outlook
for the global macroeconomic environment,
including customer and financial markets
activity.
– Based upon our current forecasts, we
expect banking NII of at least $41bn for
2024. This guidance reflects our current
modelling of a number of market
dependent factors, including market-implied
interest rates (as of mid-February 2024), as
well as customer behaviour and activity
levels, which we would also expect to
impact our non-interest income. We do not
reconcile our forward guidance on banking
NII to reported NII.
– While our outlook for loan growth remains
cautious for the first half of 2024, we
continue to expect year-on-year
customer lending percentage growth in
the mid-single digits over the medium to
long term.
– Given continued uncertainty in the forward
economic outlook, we expect ECL charges
as a percentage of average gross loans
to be around 40bps in 2024 (including
customer lending balances transferred to
held for sale). We continue to expect our
ECL charges to normalise towards a range
of 30bps to 40bps of average loans over
the medium to long term.
– We retain a Group-wide focus on cost
discipline. We are targeting cost growth
of approximately 5% for 2024 compared
with 2023, on a target basis. This target
reflects our current business plan for 2024,
and includes an increase in staff
compensation, higher technology spend
and investment for growth and efficiency,
in part mitigated by cost savings from
actions taken during 2023.
– Our cost target basis for 2024 excludes the
impact of the disposal of our retail banking
business in France and the planned
disposal of our banking business in Canada
from the 2023 baseline. Our cost target
basis is measured on a constant currency
basis and excludes notable items and the
impact of retranslating the prior year results
of hyperinflationary economies at constant
currency. We do not reconcile our forward
guidance on target basis costs to reported
operating expenses.
– We intend to continue to manage the
CET1 capital ratio within our medium-
term target range of 14% to 14.5%.
– Our dividend payout ratio target
remains at 50% for 2024, excluding
material notable items and related impacts.
We have announced a further share buy-
back of up to $2.0bn. Further buy-backs
remain subject to appropriate capital levels.
2 HSBC Holdings plc Annual Report and Accounts 2023

Strategic transactions
– During 2023, we continued to acquire
businesses that allow us to build scale and
enhance our capabilities. In March, we
acquired SVB UK, and subsequently
launched HSBC Innovation Banking,
which includes SVB UK and new teams in
the US, Hong Kong and Israel, as well as in
Denmark and Sweden, to deliver a globally
connected, specialised banking proposition
to support innovation businesses and their
investors.
– As part of our ambition to be a leading
wealth provider in Asia, we entered into an
agreement to acquire Citi’s retail wealth
management portfolio in mainland
China. This acquisition comprised the
assets under management and deposits,
and the associated wealth customers. We
also announced a partnership with the
fintech Tradeshift to launch a joint
venture focusing on embedded finance
solutions and financial services
applications.
– We continue to make good progress on
our strategic disposals. The planned sale
of our banking business in Canada received
government approval and is expected to
complete in the first quarter of 2024. We
completed the sale of our retail banking
operations in France on 1 January 2024, as
we reshape the organisation to focus on
our international customer base. In addition,
we announced the planned sale of our retail
business in Mauritius, and also completed
the sale of our operations in Greece, the
merger of HSBC Bank Oman with Sohar
International, and the sale of our New
Zealand retail mortgage loan portfolio.
– While we remain committed to the sale of
our business in Russia, the sale became
less certain. As a result, the business is no
longer classified as held for sale, the
previously recognised loss has been
reversed, and a broadly offsetting charge
relating to recoverability was recognised in
the fourth quarter of 2023.
– We remain committed to consider the
payment of a special dividend of $0.21
per share as a priority use of the
proceeds from the sale of our banking
business in Canada in the first half of
2024. The remaining proceeds will accrue
into CET1 capital in consideration for
organic growth and investment, and we
intend to use any excess capital to
supplement share buy-backs. Upon
completion, the sale is expected to result in
an initial increase in the CET1 ratio of
approximately 1.2 percentage points.

ESG highlights
Transition to net zero
– In January 2024, we published our first net
zero transition plan, which is an important
milestone in our journey to achieving our
net zero ambition – helping our people,
customers, investors and other
stakeholders to understand our long-
term vision, the challenges,
uncertainties and dependencies that
exist, the progress we are making and what
we plan to do in the future. The plan
includes details on our sectoral approach,
and on our implementation plan to embed
net zero across key areas of our
organisation.
– Our net zero transition plan provides an
overview of the progress we have made to
date and what we plan to do next, although
we acknowledge there is still much
more to do. It will form the basis of further
work on our journey to net zero over time,
and we expect to review and update it
periodically.
– Following the recent launch of the
Partnership for Carbon Accounting
Financials (‘PCAF’) accounting standard for
capital markets, we have now set
combined on-balance sheet financed
emissions and facilitated emissions
targets for two emissions-intensive
sectors: oil and gas, and power and
utilities, and report the combined progress
for both sectors. We recognise that data,
methodologies and standards for
measuring emissions and for target setting
will continue to evolve.
– Since 2020, we have provided and
facilitated $294.4 bn of sustainable
finance and investment, which was an
increase of $83.7 bn in the past year. Of our
sustainable finance and investment
progress to 31 December 2023, $258.3 bn
related to green and sustainable activities
and $36.1 bn related to social activities.
– Within our own operations, we have
made a 57.3% reduction in our absolute
greenhouse gas emissions from a 2019
baseline.
Build inclusion and resilience
– In 2023, 34.1% of senior leadership roles
were held by women. We have a target to
achieve 35% by 2025, which we are on
track to achieve, although we recognise
that progress in the past year has not
been as fast paced as we would like. We
also continued to work towards meeting
our ethnicity goals.
– We continue to make the banking
experience more accessible in both
physical and digital spaces. We are
working to ensure that our digital channels
are usable by everyone, regardless of
ability. We also expanded our efforts to
support customers with disabilities in our
branch spaces.
Act responsibly
– We aim to be a top-three bank for customer
satisfaction. In 2023, we were ranked as a
top three bank against our competitors
in 58% of our six key markets across
Wealth and Personal Banking and
Commercial Banking, but we still have
work to do to improve our rank position
against competitors.
– We published guides to help our buyers
and our suppliers better understand our
net zero ambitions. The guides provide
further details to support suppliers in
understanding our sustainability
expectations, as set out in our supplier
code of conduct.
– We continued to raise awareness and
develop our understanding of our salient
human rights issues. In 2023, we provided
practical guidance and training, where
relevant, to our colleagues across the
Group, on how to identify and manage
human rights risk.
HSBC Holdings plc Annual Report and Accounts 2023 3
Who we are
HSBC is one of the largest banking and financial services organisations in the world.
We aim to create long-term value for our shareholders and capture opportunity.

Our values
Our values help define who we are as an organisation, and are key to our long-term success.
We value difference
Seeking out different
perspectives
We succeed together
Collaborating across boundaries
We take responsibility
Holding ourselves accountable
and taking the long view
We get it done
Moving at pace and making
things happen

Our strategy
Our strategy supports our ambition of being the preferred international financial partner for our clients, centred
around four key areas.
Focus
– Maintain leadership in scale
markets
– Double-down on international
connectivity
– Diversify our revenue
– Maintain cost discipline and
reshape our portfolio
Digitise
– Deliver seamless customer
experiences
– Ensure resilience and security
– Embrace disruptive
technologies and partner with
innovators
– Automate and simplify at scale
Energise
– Inspire leaders to drive
performance and delivery
– Unlock our edge to enable
success
– Deliver a unique and
exceptional colleague
experience
– Prepare our workforce for the
future
Transition
– Support our customers
– Embed net zero into the way
we operate
– Partner for systemic change
– Become net zero in our own
operations and supply chain by
2030, and our financed
emissions by 2050
For further details on progress made in each of our strategic areas, see pages 11 to 13.

Our global reach
Our global businesses serve around 42 million customers worldwide through a network that covers 62 countries
and territories.
Our customers range from individual
savers and investors to some of the
world’s biggest companies,
governments and international
organisations. We aim to connect them
to opportunities and help them to
achieve their ambitions.
Assets of
$3.0 tn
Operations in
62
Countries and territories
Approximately
42m
Customers bank with us
We employ approximately
221,000
Full-time equivalent staff
For further details of our customers and approach to geographical information, see page 110.
4 HSBC Holdings plc Annual Report and Accounts 2023

Our global We serve our customers through three global businesses.
businesses
On pages 30 to 36 we provide an
overview of our performance in
2023 for each of our global
businesses, as well as our
Corporate Centre.
Wealth and Personal Banking
(’WPB’)
We help millions of our
customers look after their day-to-
day finances and manage,
protect and grow their wealth.
For further details, see page 30.
In each of our global businesses,
we focus on delivering growth in
areas where we have distinctive
capabilities and have significant
opportunities.
Commercial Banking (‘CMB’)
Our global reach and expertise
help domestic and international
businesses around the world
unlock their potential.
For further details, see page 32.
Each of the chief executive
officers of our global businesses
reports to our Group Chief
Executive, who in turn reports to
the Board of HSBC Holdings plc.
Global Banking and Markets
(’GBM’)
We provide a comprehensive
range of financial services and
products to corporates,
governments and institutions.
For further details, see page 34.
Revenue by global
business 1
Wealth and Personal
Banking
Commercial Banking
Global Banking and
Markets
1 Calculation is based on revenue of our global businesses excluding Corporate Centre. Corporate Centre had negative revenue of $199m in 2023.

Our stakeholders Building strong relationships with our stakeholders helps enable us to deliver
our strategy in line with our long-term values, and operate the business in a
sustainable way.
Our stakeholders are the people
who work for us, bank with us,
own us, regulate us, and live in
the societies we serve and the
planet we all inhabit. These
human connections are complex
and overlap.
Many of our employees are
customers and shareholders,
while our business customers are
often suppliers. We aim to serve,
creating value for our customers
and shareholders.
Our size and global reach mean
our actions can have a significant
impact. We are committed to
doing business responsibly, and
thinking for the long term. This is
key to delivering our strategy.
For further details of how we are engaging with our stakeholders, see page 15.
HSBC Holdings plc Annual Report and Accounts 2023 5
Group Chairman’s statement

Mark E Tucker Group Chairman
Against a challenging global economic and political backdrop, HSBC’s strategy has delivered improved financial performance and increased returns for shareholders

The global economy performed better
than expected in 2023, but growth
remained sluggish and the economic
environment was challenging for many
of our customers. Although inflation fell
globally, core inflation levels and
interest rates remained elevated. There
was also significant variability in growth
from market to market and increased
volatility within the banking sector. Our
core purpose of ‘opening up a world of
opportunity’ underlines our focus on
helping our customers and clients to
navigate this complexity and access
growth, wherever it is.
Many of our customers and colleagues are
living through very difficult times. Higher
interest rates have had a significant impact
on businesses and households, and we will
remain conscious of this with interest rates
expected to begin to fall back in 2024. The
wars between Russia and Ukraine, and now
between Israel and Hamas, are absolutely
devastating. Our thoughts are with all those
impacted, including our colleagues in those
parts of the world, and their families and
friends. Their resilience, professionalism and
care for one another during these most
testing of times has been, and is,
exceptional.
Progress and performance
Turning to our performance, I want to again
pay tribute to my colleagues. The record
profit performance that we delivered in 2023
was supported by the impact of interest
rates on our strong balance sheet, but it was
also testament to the tireless efforts of our
people around the world. I would like to
thank them sincerely for their hard work,
dedication and commitment to serving our
customers.
In 2023, reported profit before tax was
$30.3bn, which was an increase of $13.3bn
compared with 2022. This was due mainly to
higher revenue and a number of notable
items. Our three global businesses delivered
good revenue growth, and we ended the
year with strong capital, funding and liquidity
positions.
We remain committed to sharing the
benefits of our improved performance with
our shareholders. The Board approved a
fourth quarterly dividend of $0.31 per share,
bringing the total dividend for 2023 to $0.61
per share. Furthermore, in 2023 we
announced three share buy-backs worth a
total of $7bn and, today, have announced a
further share buy-back of up to $2bn.
The planned sale of our banking operations
in Canada received final approval from the
Canadian government at the end of last year.
Subject to completion of the transaction,
which is expected in the first quarter of 2024,
the Board will consider a special dividend of
$0.21 per share, to be paid in the first half of
2024, as a priority use of the proceeds.
With this anticipated transaction and the
completion of the sale of our retail banking
business in France last month, our focus has
moved to investing for growth, while
maintaining efficiency. Two examples of
growth opportunities last year were the
agreed acquisition of Citi’s retail wealth
business in mainland China, which will help
accelerate our Wealth strategy, and the
acquisition of SVB UK, following the
difficulties experienced by its US parent
entity. Acquiring SVB UK was opportunistic,
but the deal made excellent strategic sense
for HSBC, and it also helped to protect
clients, safeguard jobs and maintain financial
stability.
Technology and sustainability are two of the
trends transforming banking and the world
around us. The opportunities from generative
AI are among the most transformative within
my working life. We are actively exploring a
number of use cases, while also working to
manage the associated risks.
Meanwhile the global climate challenge is
becoming increasingly acute. Our presence
in many of the sectors and markets where
the need to reduce emissions is the greatest
provides us with an opportunity to work with
our clients to help address it. This is set out
in our first net zero transition plan. The Board
discussed and contributed to the net zero
transition plan in depth. We believe that it is
a realistic and ambitious assessment of the
long-term journey ahead, as we continue to
work with our clients on their transitions to a
low-carbon future. It is clear there will be
many uncertainties and dependencies, and
that our approach will need to continue to
evolve with the real world around us.
6 HSBC Holdings plc Annual Report and Accounts 2023
"Acquiring SVB UK was
opportunistic, but the
deal made excellent
strategic sense for HSBC,
and it also helped to
protect clients, safeguard
jobs and maintain
financial stability."
Board operations
Our work on sustainability was one of the
many topics discussed with our shareholders
at our 2023 Annual General Meeting (‘AGM’)
in May. Ahead of that, Noel and I were
pleased to meet with Hong Kong
shareholders at our Informal Shareholders’
Meeting. At both meetings, we also
discussed the resolutions that were
requisitioned by shareholders on the Group’s
strategy and dividend policy. Shareholders
expressed strong support for the Group’s
current strategy by voting overwhelmingly
with the Board and against these resolutions
at the AGM. This enabled the Board, my
colleagues and our shareholders to focus on
our shared objectives of serving our
customers, driving stronger performance,
and creating more value for our investors.
In 2023, the Board held meetings in London,
Birmingham, Hong Kong, Paris, New York,
Mumbai and Delhi. We also returned to
Beijing and Shanghai last month. On each
occasion, the Board engaged with clients,
colleagues, government officials and
regulators – with these discussions
underlining that HSBC continues to have a
key role connecting the world’s trade and
finance hubs.
There were a number of changes to the
composition of the Board last year. At the
2023 AGM, we said farewell to Jackson Tai,
who made an important, extensive and
lasting contribution to the success of HSBC
during his time as a non-executive Director.
His leadership in strengthening risk and
conduct governance and oversight was
particularly critical through a period of
significant change. We also announced in
December that David Nish intends to retire
from the Board at the 2024 AGM. David has
made an invaluable contribution to the Board
over the past eight years, particularly in
recent years as Chair of the Group Audit
Committee and as Senior Independent
Director. I would like to thank him warmly for
his consistent counsel and guidance.
I am pleased that Kalpana Morparia, Ann
Godbehere, Brendan Nelson and Swee Lian
Teo joined the Board during 2023. Each of
them brings experience and expertise that is
an asset to the Board. Specifically, Ann’s
extensive public-listed company board
experience means that she is ideally placed
to take over as Senior Independent Director,
while Brendan’s UK and international
financial expertise and significant experience
as audit chair at UK-listed companies will be
particularly valuable as he takes over
leadership of the Group Audit Committee.
Macroeconomic outlook
Looking ahead, 2024 is likely to be another
eventful year. The slowing of inflation in the
second half of 2023 means that monetary
tightening now appears to be coming to an
end. However, current inflation levels in
many economies remain above their targets.
As central banks continue to try to bridge
this gap, voters head to the polls in a
significant number of countries across the
globe. The timing and outcomes of these
elections will impact the decision making of
governments and have geopolitical, as well
as fiscal, implications. We will monitor the
results closely, and take a long-term view of
strategy, purpose and capital allocation,
while cognisant of any short-term
challenges.
Among these potential challenges are the
increased uncertainties due to wars in
Europe and the Middle East, and disruption
to global trade and supply chains caused by
these and attacks on shipping in the Red
Sea. However, we remain cautiously
optimistic about economic prospects for
2024. We expect growth to slow in the first
half of the year and recover thereafter. We
also expect the variable economic growth
that has characterised recent years to
continue.
The economies of south and south-east Asia
carry good economic momentum into 2024.
India and Vietnam are currently among the
fastest-growing economies in the world,
benefiting from competitive labour costs,
supportive policies and changing supply
chains. Chinese companies are among those
increasingly looking towards these and other
markets, as China’s economic
transformation towards high-quality growth
and domestic consumption continues.
China’s recovery after reopening was
bumpier than expected, but its economy
grew in line with its annual target of around
5% in 2023. We expect this to be maintained
in 2024, with recently announced policy
measures to support the property sector and
local government debt gradually flowing
through to the wider economy. Hong Kong’s
growth has moved along at a slower but
healthy pace and is likely to remain in line
with pre-pandemic levels.
As Asia continues to grow, a significant
opportunity is emerging to connect it to
another high-growth region. The Middle East
region performed very well economically in
2023 and the outlook remains strong for
2024, notwithstanding the risks arising from
conflicts in the region. As countries like
Saudi Arabia and the UAE continue to
diversify their economies, new opportunities
are created to connect them to Asia, and
Asia to them.
The US economy grew more quickly than
expected in 2023 in the face of higher
interest rates. Growth is likely to be lower in
2024, although it should remain higher than
in Europe where growth remains subdued.
The UK economy, which entered a technical
recession at the end of 2023, has
nonetheless been resilient. Headline inflation
should fall in the first half of the year, with
core inflation following by the end of 2024.
This will of course determine the pace of
interest rate cuts.
I would like to end by reiterating my thanks
to my colleagues for all that they have done,
and all that they continue to do, for HSBC.
Their tireless efforts are reflected by our
improved financial performance and
increased returns for shareholders in 2023 -
and I look forward to them securing the
foundations for our future success.
Mark E Tucker
Group Chairman
21 February 2024
HSBC Holdings plc Annual Report and Accounts 2023 7
Group Chief Executive’s review