#1HSBC UK Seminar for Investors and Analysts 16 June 2022 HSBC UK#2Important notice and forward-looking statements Important notice The information, statements and opinions set out in this presentation and accompanying discussion (this "Presentation") are for informational and reference purposes only and do not constitute a public offer for the purposes of any applicable law or an offer to sell or solicitation of any offer to purchase any securities or other financial instruments or any advice or recommendation in respect of such securities or other financial instruments. This Presentation, which does not purport to be comprehensive nor render any form of legal, tax, investment, accounting, financial or other advice, has been provided by HSBC UK Bank plc ("HSBC UK") and has not been independently verified by any person. You should consult your own advisers as to legal, tax investment, accounting, financial or other related matters concerning any investment in any securities. 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Forward-looking statements This Presentation and subsequent discussion may contain projections, estimates, forecasts, targets, opinions, commitments, ambitions, prospects, results, returns and forward-looking statements with respect to the financial condition, results of operations, capital position, strategy and business of HSBC UK (together, "forward-looking statements"), including the strategic priorities and any financial, investment and capital targets and any ESG related targets, commitments and ambitions described herein. Any such forward-looking statements are not a reliable indicator of future performance, as they may involve significant assumptions and subjective judgements which may or may not prove to be correct and there can be no assurance that any of the matters set out in forward-looking statements are attainable, will actually occur or will be realised or are complete or accurate. Forward-looking statements are statements about the future and are inherently uncertain and generally based on stated or implied assumptions. The assumptions may prove to be incorrect and involve known and unknown risks, uncertainties, contingencies and other important factors, many of which are outside the control of HSBC UK. Actual achievements, results, performance or other future events or conditions may differ materially from those stated, implied and/or reflected in any forward-looking statements due to a variety of risks, uncertainties and other factors (including without limitation those which are referable to general market conditions, regulatory changes, geopolitical tensions such as the Russia-Ukraine war, the impact of Covid-19 or as a result of data limitations and changes in applicable methodologies in relation to ESG related matters). Any such forward-looking statements are based on the beliefs, expectations and opinions of HSBC UK at the date the statements are made, and HSBC UK does not assume, and hereby disclaims, any obligation or duty to update, revise or supplement them if circumstances or management's beliefs, expectations or opinions should change. For these reasons, recipients should not place reliance on, and are cautioned about relying on, any forward-looking statements. No representations or warranties, expressed or implied, are given by or on behalf of HSBC UK as to the achievement or reasonableness of any projections, estimates, forecasts, targets, commitments, ambitions, prospects or returns contained herein. Additional detailed information concerning important factors that could cause actual results to differ materially is available in HSBC UK's Annual Report and Accounts for the fiscal year ended 31 December 2021 which is available at www.hsbc.com. Alternative Performance Measures This Presentation contains non-IFRS measures used by management internally that constitute alternative performance measures under European Securities and Markets Authority guidance and non-GAAP financial measures ("Alternative Performance Measures"). The primary Alternative Performance Measures we use are presented on an "adjusted performance" basis which is computed by adjusting reported results for the period-on-period effects of foreign currency translation differences and significant items which distort period-on-period comparisons. Significant items are those items which management and investors would ordinarily identify and consider separately when assessing performance in order to better understand the underlying trends in the business. Reconciliations between Alternative Performance Measures and the most directly comparable measures under IFRS are provided in HSBC UK's Annual Report and Accounts for the fiscal year ended 31 December 2021 which is available at www.hsbc.com. HSBC UK Bank plc is registered in England No. 9928412. Registered Office: 1 Centenary Square, Birmingham B1 1HQ, United Kingdom. HSBC UK Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Information in this Presentation was prepared as at 16 June 2022. 1#3Reported and adjusted income statement Key financial metrics Reported results Reported revenue (£m) Reported profit before tax (£m) Reported profit after tax (£m) Profit attributable to the shareholders of the parent company (£m) Return on average tangible equity (%)¹ Net interest margin (%) Expected credit losses / (releases) as % of average gross loans and advances to customers (%) Adjusted results Adjusted revenue (£m) Adjusted profit before tax (£m)¹ Cost efficiency ratio (%) Adjusted return on average tangible equity (%) 1,2 1. 2. FY21 These metrics are tracked as Key Performance Indicators of HSBC Group In the event that the current IAS 19 pension fund surplus was zero, adjusted ROTE would be 17.4% (2020: (0.1)%) 6,250 3,480 2,368 2,363 13.5 1.53 (0.51) 6,239 3,764 55.5 14.7 The remainder of the presentation unless otherwise stated, is presented on an adjusted basis Figures throughout this presentation may be subject to rounding adjustments and therefore may not sum precisely to totals given in charts, tables or commentary FY20 6,031 163 80 76 (0.1) 1.71 1.12 6,047 334 59.5 0.5 2#4Agenda Introduction to HSBC UK Commercial Banking (CMB) Wealth and Personal Banking (WPB) Chief Operating Office (COO) Risk Finance HSBC UK 05 18 29 43 52 59#5"Opening up a world of opportunity" HSBC UK www ISKEER#6Introduction to HSBC UK lan Stuart CEO, HSBC UK HSBC UK#7We are... Intro ◆ An internationally connected franchise CMB WPB ◆ Acutely aware we are operating in uncertain times COO HSBC UK: A dynamic bank focused on supporting our customers and community Risk ◆ Well positioned to capture growth opportunities in an attractive but challenging UK market Finance Accustomed to operating in a competitive environment, with an experienced team at the helm ◆ Digitising at scale and simplifying our business to meet changing customer needs ◆ Supporting our community and helping our customers transition to net zero Co 6#8Purpose Strategy Values For us, opening up a world of opportunity means helping individuals and businesses to make the most of their money Inclusion "Bringing financial health to those who have none" Helping individuals and businesses to make the most of their money Focus on our strengths Deploying our capital & liquidity and investing for the medium term across our 9 (+1) growth priorities We value difference Opening up a world of opportunity Capability "Helping customers manage their own financial health - every age, every stage" Intro Digitise at scale CMB Digitising and simplifying our bank and delivering a step- change improvement in the customer experience We succeed together Resilience WPB - Energise for growth "Preparing our customers to manage and withstand financial health shocks" COO now and into the future Embracing the future of work Building representation, respect and reputation through our Diversity and Inclusion strategy Risk We take responsibility Opportunity Finance "Helping our customers capture the financial opportunities ahead of them" Transition to net zero Supporting our customers & community to manage the challenge of climate change and playing our part in reducing our own impact We get it done 7#9We play a key societal role in the UK 1. 2. 3. Inclusion >3k people with no fixed home address supported in opening a bank account >4k Ukrainian refugees supported in opening bank accounts since March 2022 1k people with disabilities helped by the launch of Scope's new online employability platform, supported by HSBC UK Resilience >100k people supported in improving their financial health following the launch of our Financial Fitness Tool >£12bn in government loans approved across BBLS, CBILS, and CLBILS2, totalling over 258k loans. Intro CMB WPB COO Risk Finance Capability >300k young people helped to build financial capability across our programmes and support¹ Source: HSBC UK Society Report 2021. Money Heroes (156,442 children); Scouts and the Money Skills Activity Badge (38,995 children); colleague volunteering (107,000 young people aged 3-25 years) BBLS Bounce Back Loan Scheme; CBILS - Coronavirus Business Interruption Loan Scheme; CLBILS - Coronavirus Large Business Interruption Loan Scheme Source: Green Finance Institute and Bankers for Net Zero paper: Tooling up the green homes industry, published 21 September 2021 >50k young people supported through ten years of working with The Prince's Trust £2m pledged to support 30 Stormzy Scholars at the University of Cambridge over three years Opportunity £15bn SME fund to help British businesses grow 4 climate partners: National Trust, National Trust for Scotland, Imperial College London, and the University of Birmingham 29m homes estimated to need retrofitting by 2050 to reach UK goal of net zero emissions³ 8#10ما HSBC UK is a material, and growing, contributor to HSBC Group The UK is one of HSBC's home markets; through Midland Bank, we have conducted business in the UK since 1836 HSBC UK is the UK ring-fenced bank and comprises Wealth & Personal Banking, Commercial Banking, and a restricted Global Banking & Markets business, across multiple brands 1. 14.8 million active customers; strongly connected to the rest of HSBC Group, leveraging this network to support customers across key global trade corridors Strong market share positions, with good growth opportunities, across multiple brands and products FY21 market shares¹ Current Mortgages accounts 15.6% 7.5% Cards² 10.4% Commercial lending 9.7% Commercial deposits 12.9% Intro Trade finance receivables 27.4% At 31 December 2021. Current accounts market source: CACI; mortgage market source: Bank of England; credit cards market source: UK Finance; commercial lending market source: Bank of England (loans and overdraft balances as a percentage of the market); commercial deposits market source: Bank of England (shown for Global Liquidity and Cash Management deposits on an average basis); trade finance 2. 3. CMB WPB HSBC UK as % of HSBC Group HSBC UK contribution to Group Share of adjusted revenue and profit before tax, FY21 Adj. revenue Adj. PBT UK WPB as % of Global WPB UK CMB as % of Global CMB Accretive returns Reported ROTE, FY21 COO 17% HSBC UK: 13.5%³ Risk 24% 21% 28% (31% Finance Up from 15% in FY19 receivables market share based on revenue, source: UK Finance Share falls to c.7% ex-M&S In the event that the current IAS 19 pension fund surplus was zero, adjusted ROTE would be 17.4% (2020: (0.1)%) Up from 13% in FY19 43% Group: 8.3% 9#11Adjusted P&L and balance sheet, £bn Revenue 6.6 2019 Profit before tax Good performance in 2021, strong start to 2022 (ahead of 2019 run-rate in 1Q22¹) 2.3 2019 6.0 2020 0.3 2020 +3% >100% 1. On the basis of adjusted revenue and adjusted PBT 6.2 2021 3.8 2021 Costs 3.7 2019 Balance sheet Loans 183 216 2019 3.6 2020 Deposits 191 +2% 259 Intro 2020 (4)% 7 3.5 +9% 2021 196 282 CMB 2021 WPB COO Risk Finance Revenue was up 3% vs. FY20, 1022 run- rate ahead of 20191 ◆ Two years of cost discipline coming. through, with costs down 4% in FY21 Robust credit performance, with a net ECL release in FY21, given improved UK economic outlook. We expect ECL charges to normalise going forward Continued to deliver strong balance sheet growth with loans up 2% and deposits up 9% vs. FY20 (7% and 30% vs. FY19) 10#121 2 3 4 LO 5 6 7 8 9 | | | | Focus on our strengths: Driving growth across our 9 (+1) growth priorities Our 9 (+1) +1| 1. 2. Unsecured Mortgages Wealth and Retirement FX Climate first direct Future SME Bank International Intro Customer needs we seek to meet Give me easy, quick access to credit, when and how I need it Give me a hassle-free home buying experience with increased flexibility (including green) and certainty Help me understand and manage my personal balance sheet Give me the tools to manage my currency effortlessly, with minimal costs and transparent exchange rates Support me with my own transition to net zero and show me that you are doing the right thing Give me a seamless banking experience to manage finances effectively, in an increasingly digital manner Provide me with tailored, transparent, quality and low-cost banking services, via digital first, phone, or virtual channels Help me expand my business geographically and meet my retail needs seamlessly across borders CMB Medium to long-term. Medium term is defined as 3-4 years from January 2022; long term defined is 5-6 years from January 2022 Through a combination of acquisition and migration Partnerships with third parties WPB COO Risk Ambition¹ Grow balances Finance Grow mortgage market share to c. 10% Double our Wealth assets under management Launch and Scale FX propositions - Global Wallet (CMB) and Global Money (WPB) Widening our offering of ESG products and services for retail and commercial customers Double our first direct customer base by being the 'challenger of challengers' Scale Kinetic to >500k customers² Significantly expand our Inbound and Outbound revenue corridors 11#13Despite uncertainty, the UK market remains attractive Impact of rising inflation and higher cost of living Heightened geopolitical risks Recovery from Covid-19 Increasing climate risks Challenges Strengths The UK market is challenging but attractive, and we are well positioned 1 2. 3. 4. Total private wealth of £15.2tn, with 17% of households having assets >£1m¹ World education centre; 4 of the Top 10 universities in the world (17 of the Top 100)² ◆ Strong housing market demand, with >£315bn in gross mortgage lending in 20213 ♦ World's second largest exporter of services4, specialising in financial & business services5 Robust regulatory framework Source: Household total wealth in Great Britain: April 2018 to March 2020, UK ONS Source: World University Rankings, 2021, Quacquarelli Symonds Source: Mortgage lending statistics, March 2022, FCA Source: OECD Quarterly International Trade Statistics, Volume 2021 Issue 3 Intro 5. 6. 7. CMB Space to grow Trusted brands WPB HSBC UK is well positioned to capture opportunities Strong network Extensive and loyal customer base COO Risk Finance Only 7.5% share of mortgage market vs. 15.6% share of current accounts7 Business built across three strong brands: HSBC; first direct; M&S Bank. HSBC UK shortlisted for 'Brand of the Year, 2021' by The Marketing Society Source: Trade in services, The Pink Book, UK Office for National Statistics, 2021 At 31 December 2021. Source: Bank of England At 31 December 2021. Source: CACI Full scale commercial international network c.14m retail customers; c.745k SME; c.12.5k Mid-Market Enterprises and Large Corporates 12#14For us, a customer-centric culture: ◆ Brings the voice of the customer into all aspects of the business ◆ Places the customer at the heart of decision- making ◆ Demands that all colleagues understand customers' expectations ◆ Creates a mutually beneficial value exchange with its customers A truly customer-centric culture is vital to delivering against our growth priorities ◆ Delights customers, builds loyalty, and drives advocacy Intro Has a clear purpose and is given a licence to operate by its customers CMB WPB Drives advocacy COO A virtuous cycle for customers and colleagues Inspires loyalty Builds affinity Risk Customer relationships + colleague pride Adds customers Finance Delights customers 13#15Our vision Digitise at scale: Building towards our digital vision 1 ܀ ܡܢܐ Key enablers Digital-first A smart bank in your pocket; personalised, Al driven, with seamlessly integrated ecosystems Mobile-based Wealth offering, with investment normalised as part of everyday banking Simple digital experiences, with Kinetic & Digital Business Banking for SMEs and HSBCnet for larger, internationally focused, corporates Innovative wholesale client solutions, built around the commercialisation of open banking and banking as a service 2 Intro Pa Ο Ο CMB Human touch when it matters Modern physical network, with fewer, digitally-enabled branches that are centres for advice Highly trained and digitally-enabled colleagues to provide future Wealth advice Enhanced contact points, with chatbots to support simple queries and people for more complex needs Digitally-enabled relationship managers that are digitally integrated with clients and equipped with the data & analytic capabilities to provide greater insight & proactive support 3 WPB COO Risk Key customer journeys optimised and automated front-to-back Simplifying our business for our customers and colleagues Finance Frictionless journeys with necessary safeguards Simplified technology estate that is flexible and resilient Robust KYC, AML and fraud security processes embedded as seamlessly as possible 14#16Employee engagement¹ 60% 2020 Impacted by restructuring and branch closures 55% Energise for growth: Harnessing the opportunities from our new ways of working and upskilling 2021 75% Ambition Female leaders² 33.7% 2020 Intro +3.0ppts 36.7% CMB 2021 WPB 1. Employee engagement index represents the average % of respondents who would recommend HSBC UK as a great place to work 2. Senior leadership is classified as those at Band 3 and above in our global career band structure. Employees with an 'Undeclared' or 'Unknown' gender have been incorporated into the 'Male' category COO Risk Current focus areas Finance ◆ Preparing our colleagues for the future of work ◆ Targeted capability building and re-skilling to support internal mobility Establishing the leadership bench- strength and driving a performance culture Driving forward our Diversity and Inclusion strategy built around three pillars: representation, respect and reputation 15#17Key HSBC Group ambitions UK opportunities HSBC UK impact Transition to net zero: A trusted partner for our customers and community Intro Financing the transition Provided and facilitated more than £2bn of sustainable finance and investment to our commercial banking clients in 2021 CMB Announced the launch of a £500m Green SME Fund in January 2022 Provide and facilitate between $750bn to $1tn in sustainable financing and investment by 2030 Achieve net zero in our own operations and supply chain by 2030 or sooner Align financed emissions from our portfolio to customers to the Paris Agreement goal of net zero by 2050 or sooner WPB Home efficiency - estimated 29m homes must be retrofitted by 2050 to reach the UK goal of net zero emissions¹ Electric vehicles - by 2030, sale of all new petrol and diesel cars and vans to end with a minimum of 300k public chargepoints expected to be in place² 1. Source: Green Finance Institute and Bankers for Net Zero paper: Tooling up the green homes industry, published 21 September 2021 Source: HM Government: Taking charge: the electric vehicle infrastructure strategy, published 25 March 2022 2. 3. c.90% sourced from renewable projects. Remaining 10% topped up with green tariffs 4. Defined Benefit and open Defined Contribution COO ◆ Renewable energy by 2035, the UK will be powered entirely by clean electricity, subject to security of supply. Expect market financing opportunities including wind, solar, hydrogen and nuclear Driving innovation Risk 43 climate innovation ventures supported in 2021 partnering with Imperial College London and the University of Birmingham to accelerate the growth of tech start-ups, helping 150 UK start-ups over next 4 years Finance Playing our part On track for 100% of electricity purchased by HSBC in the UK to be from renewable sources by 20233 HSBC Bank (UK) Pension Scheme announced commitment to achieve net zero greenhouse gas emissions across its £36bn portfolio4 by 2050 or sooner 16#18Intro CMB 2 WPB HSBC UK is well positioned to capture opportunities in the UK COO Risk We have a vital societal role to play, particularly in supporting financial health and the transition to net zero ◆ Ambitious plans to be a trusted partner for our clients and customers during the transition to net zero 1 ◆ Committed to supporting our customers, community, and colleagues to make the most of their money Delivered a robust financial performance in 2021 HSBC UK is a material, and growing, contributor to HSBC Group Delivered significant profits, supported by ECL releases, revenue growth and strong cost management HSBC UK is well positioned to capture opportunities in the UK 3 ◆ The UK remains an attractive place to do business, despite significant macroeconomic and geopolitical uncertainty ◆ Underweight in key products and internationally connected; we are ready to capture quality growth opportunities Finance We are used to operating and managing risk in a challenging and rapidly changing external environment ◆ Robust portfolio proven to withstand a challenging external environment 4 Experienced leadership team across our HSBC UK Executive Committee and Board 17#19Commercial Banking Stuart Tait Head of CMB, HSBC UK HSBC UK#20Intro 2 CMB A profitable business that's well positioned for the future 1 Highly cost efficient; FY21 cost efficiency ratio of 43% Prudent loan book and continued RWA optimisation supports accretive returns Strong commercial franchise, highly connected with the rest of HSBC 4 WPB COO Full-service commercial bank, highly connected across geographies and businesses Comprehensive product suite meets the needs of our customers, no matter how complex Strong links with the Group connects our clients with opportunities globally, and across businesses Risk Core strength in mid-market and large corporates, with a growth pipeline from small businesses ◆ Corporates generate most of UK CMB's income; served by market-leading propositions. 3 We support the ambitions of our extensive SME customer base to grow into corporates Finance Digitising to meet the rapidly changing needs of our customers Enhancing digital capabilities to address evolving customer needs and deliver excellent digital experiences 19#21770k total active customers, from start-ups through to multinational corporates¹ ◆ 4 core segments2 plus 2 specialist teams Corporates generate >60% of overall revenue from c.2% total customers 1. 2. Broad customer base from start-ups through to multinationals Appropriate cost to serve model in SME creates capacity to acquire new clients as businesses become more sophisticated Fast growing SMEs are migrated into corporate as needs become more complex Customers supported with an extensive product suite across Credit & Lending, Cash Management, Trade Finance, and other collaboration products Portfolio Management Team Excludes dormant customers. Customer number figures at January 2022 Core segments defined as Small Business Banking (SBB), Business Banking (BB), Mid-Market Enterprises (MME) and Large Corporates (LC) Intro 3. 4. CMB Real Estate Finance 2.2k customers Global Banking4 Large Corporates >£350m turnover 2.5k clients Mid-Market Enterprises <£350m turnover 10k customers Business Banking <£10m turnover 57k customers WPB Small Business Banking <£6.5m turnover 688k customers COO I Risk Corporate SME The Portfolio Management Team is a centralised team for the management and execution of RWA optimisation Not part of the ring-fenced bank Finance FY21 segment revenue, % c.60% c.40% 20#22FY21 financial performance £m Net interest income Non interest income Revenue ECL Costs Adjusted PBT Significant items Reported PBT £bn Customer loans Customer deposits RWAS FY21 1,858 890 2,748 550 (1,174) 2,124 4 2,128 FY21 63.8 103.4 56.9 FY20 1,871 750 2,621 (1,272) (1,196) 153 (40) 113 FY20 66.9 99.4 58.4 A (1)% 19% 5% >100% 2% >100% >100% >100% A (5)% 4% 2% Intro CMB WPB COO Risk Finance Revenue up 5% vs. FY20, despite significant headwinds Non interest income growth driven by strong capital financing fees ECL net release of £0.6bn reflecting an improvement in economic conditions relative to FY20 Costs down 2%, due to lower staff costs and control on discretionary spend Lending down 5% from subdued demand for non-Covid loans and roll-off of government-backed lending, partly offset by increased Trade Finance assets (up 46%) due to the improving trading environment Deposits up 4% as customers built and retained liquidity ◆ RWAs down 2%, largely driven by improvements in asset quality. and saves from management actions 21#23Customer loans and deposits £bn Trade Finance Other lending o/w government-backed lending¹ Total customer loans Subdued loan demand across the industry; multiple growth actions underway Total deposits 1. 2. 1022 6.4 58.5 8.8 64.9 FY21 FY20 FY19 5.7 3.9 6.1 58.1 63.0 58.7 9.2 9.9 63.8 66.9 64.8 102.5 103.4 99.4 75.8 Loans grew 2% in 1022 (to pre-Covid levels), despite government loan repayments, driven by Trade Finance and non-government loan growth Trade Finance recovered in FY21, Revolving Credit Facility (RCF) balances continued to decline as customers built liquidity Loans were down 5% in FY21, a trend observed across all UK commercial banks; market share stable at 9.7%² £9.9bn of government loans in FY20 more than offset lower RCF and Trade Finance balances Intro Government loans comprising BBLS, CBILS, CLBILS and RLS At 31 December 2021. Commercial lending market source: Bank of England (loans and overdraft balances as a percentage of the market) Green SME Fund 2022 asset growth initiatives Growth Lending CMB Venture Capital Proposition WPB UK Export Finance (UKEF) COO Risk Finance £500m fund with 1% cashback offer, subject to use of proceeds evidence For SMEs with revenue <£25m, loans starting from £1k £250m pool to support high growth tech businesses For scale-ups with revenue >£10m, track record of 3 years high growth, minimum equity raise of >£30m Support to venture capital (VC) backed businesses with revenue >$20m and funding of <$50m, with strong backing from reputable VCs 9 coverage 'hubs' established in areas of larger customer concentration and VC investment Coordinate with UKEF in utilising HSBC's global footprint ◆ Support strategically important UK infrastructure project financing opportunities 22#24Outbound² UK CMB 1. 2. Top 10 outbound market¹ Subsidiary teams in over 50 markets globally to support UK clients internationally Asia is the largest outbound region for UK CMB, followed by Europe¹ Inbound³ Highly connected global franchise and the bank of choice for clients' cross border needs Other outbound market Dedicated team managing c.2k UK subsidiary client relationships The Americas, mainly the US, is the largest inbound region for UK CMB¹ Based on FY21 cross-border client business. Top 10 outbound markets: Australia, Canada, France, Germany, Hong Kong, India, mainland China, United Arab Emirates, United States and Singapore Outbound: Client business generated from an entity in a country that is different from where the client group's relationship is managed, is outbound client value of the country where the relationship is managed. Client business differs from reported revenue as it relates to certain client specific income, and excludes certain products (including CMB other), Group allocations, recoveries and other non-client related 3. Intro 4. 59% 43% International market penetration (2021)4 Increasing to 67% for corporates with turnover between £500m-£1bn 67% CMB Asia/Pac Middle East & Africa Central & Eastern Europe Latin America Japan Western Europe North America WPB 20% 13% 20% 11% 16% 18% 17% COO 29% 20% UK CMB Other banks International cross-sell of UK CMB vs. competitors (2021)4 29% 26% 26% 26% 5% 31% 36% Risk 38% Important relationships Lead provider 14% 11% Finance 48% 59% 14% 4% HSBC Closest peer 74% revenue. It also excludes Hang Seng and business banking customers Inbound: Client business generated from an entity based in a country that is different from where the client group's relationship is managed, is inbound client value for that entity's country Coalition Greenwich 2021 UK Middle Market Banking study, interviews conducted with 90 corporates with £300m-£1bn in turnover between September 2021 and February 2022 23#251. Global Banking and Markets Wealth and Personal Banking Universal banking model supports holistic product offering and revenue opportunities Markets and Securities Services FY21 client business¹: $0.4bn (+13% vs. FY20) Primarily FX flow income ~40-60% of Corporate customers use an FX product New propositions (e.g. Global Wallet) supporting increased SME penetration Employee Banking Solutions Supporting the employees of our customers Intro Exclusive preferential offers for personal banking products CMB WPB Global Banking FY21 client business¹: $0.2bn (+132% vs. FY20) Event driven fees from providing capital markets & advisory solutions to our commercial customer base Mid-Market M team established in 2021 and significant advisory mandates already secured Global Private Banking Referrals of business owners and C-suite executives to the Private Bank Represents the gross client business from GBM products sold to CMB customers, which is stated before any revenue share agreements between CMB and GBM Owner transition events being a key driver of activity COO Risk Finance Collaboration with HSBC Asset Management to develop a mutually beneficial partnership Senior Direct Lending strategy launched in Jan 2021 Private debt capital raised to deploy into middle market financial sponsor-backed loans, enabling: UK CMB to provide a competitive solution for financial sponsor clients HSBC Asset Management to source exposures for its institutional clients 24#26Trade Finance UK CMB Other banks 1. 2. 3. 4. Leveraging transaction banking as a core strength, underpinned by the HSBCnet digital platform Surveyed usage of Trade Finance products¹ HSBCnet 11% 29% 33% 38% 50% 47% 44% #1 Trade Finance Bank in the UK and #1 Trade Finance Bank Globally for the sixth and fifth consecutive year respectively² 34% UKEF General Export Facility market share by volume³ 27.4% Receivables Finance market share in the UK, up from 21.1% in 2017; International Receivables Finance market share of 54.0%, up from 31.0% in 20174 Euromoney Trade Finance Survey, 2022 Remaining 66% market share split between 5 other participating banks. Source: UKEF March 2022 Source: UK Finance 56% Coalition Greenwich 2021 UK Middle Market Banking study, interviews conducted with 90 corporates with £300m-£1bn in turnover between 5. September 2021 and February 2022 Intro 6. 7. 8. CMB Cash Management UK CMB Other banks WPB COO Surveyed usage of International Cash Management products¹ 31% 30% Risk 36% 36% 47% 43% Finance Awarding winning tailored platform supporting corporate customers' global transactional banking needs, allowing visibility and management in one convenient place whilst offering a comprehensive range of solutions from Trade Finance and Cash Management through to Markets and Securities Services 67% 64% Strength in international cash management provides a platform for other services International Large Corporates5 have products in >5 markets on average 12.9% deposit market share Launched award winning multi-currency virtual wallet, Global Wallet At 31 December 2021. Commercial deposits market source: Bank of England (shown for GLCM deposits on an average basis) B2B Payments Innovation of the Year, Payments Awards 2021 Best Mobile Technology Solution, 2019 TMI Awards for Innovation & Excellence in Treasury Management Defined as having a turnover of >£350m and with Global Liquidity and Cash Management (GLCM) products in 1 or more markets outside of the UK 25#2740 1. 30 2. 20 Market-leading customer experience scores in Corporate with improvements now emerging in the SME business which should support future uplift in scores UK CMB Net Promoter Score (NPS) by segment¹ 10 -10 0 -20 Pre Covid-19 - 36 - 35 -13 4Q19 1Q20 2020 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 Large Corporate² Mid Market3³ Business Banking³ Small Business³ Corporate extended market-leading positions SME saw declines through Covid-19, but improvements are now emerging in Small Business Banking which should support a future uplift in scores -15 1Q22 Small Business, Business Banking, Mid Market Rolling 12 month NPS scores from quarterly Savanta data (see footnote 3). Large Corporate scores from annual Coalition Greenwich survey (see footnote 2) with the quarterly position shown for presentational purposes only Coalition Greenwich 2021 UK Middle Market Banking study, interviews conducted with 90 corporates with £300m-£1bn in turnover between September 2021 and February 2022 Intro 3. Large Corporate² Mid Market³ CMB SME WPB COO Risk Finance #1 in the market for: Overall penetration, with 64% across all relationships Lead bank status; 40% consider HSBC their lead bank Strategic advice; 58% want to share their strategic thinking with HSBC Providing advice in the event of significant challenges #1 in the market for: Being considered innovative and forward thinking Making finance available Most capable of supporting UK businesses trade overseas Leading scores in key areas spanning: Relationship Director satisfaction Having flexible products and services Online satisfaction and 'making banking easy for your business' NPS Operational pressures from supporting new-to-bank BBLS customers Support shifted from proactive value-add to reactive Capacity has been added to the telephony channel through additional onshore and offshore resource MarketVue Business Banking from Savanta YE Q1 2022 data spanning £10-£250m turnover companies. Data weighted by region and turnover to be representative of businesses in Great Britain 26#284,435 3,768 Jan-21 Mar-21 ◆ 1. Digitising at scale to meet changing SME customer needs, particularly through mobile Digital Business Banking May-21 Logons, 000's Jul-21 Sep-21 6,667 4,179 Best Digital CX - Account Opening and Customer Onboarding (SME Banking), Digital CX Awards 2022 f Nov-21 Jan-22 Mar-22 Mobile Desktop Mobile now represents 61% of digital logons, from 54% in January 2021 Also increasing use of mobile for payments and other services vs. desktop Continued enhancements in functionality (e.g. card controls) are supporting improved customer journeys through the ability to digitally self serve Intro HSBC Kinetic Jan-21 CMB Logons, 000's Jul-21 WPB Jan-22 482 COO 3.4 Risk Cumulative customers onboarded, 000's 10.3 Finance 23.7 c.1.6x 7 37.1 Jan-21 Jun-21 Dec-21 May-22 69% new customers onboarded same day in April 2022, 88% within 48 hrs: Best Digital CX - Account Opening and Customer Onboarding (SME Banking)¹ Small business loans launched in March 2022, providing access to real-time funding for loans up to £10k New external partnerships bringing holistic support to SMEs (e.g. TalkTalk Business) 27#29UK CMB specialisms Agrifoods 1234 Franchise Specialist sector teams providing deep expertise across 10 particular areas Infrastructure Professional Services Sustainability Education & Not for Profit Organisations Healthcare Manufacturing Retail & Leisure Intro Technology CMB WPB Specialist sector relevant content Strategic insight Risk management COO Segment wide specialist sector teams, fully embedded within the business, providing: Industry brand profile Thought leadership and expertise Support product innovation, for example the Green SME Fund (Sustainability) and Growth Lending Pool (Technology) Sector specific events and external engagement with media, regulators and industry Strong presence in specialist sectors illustrated by banking relationships with: >80% of FTSE 100 and FTSE 250 Tech Firms¹ >50% of tech unicorns created in the last 2 years² 40 out of the top 50 UK law firms³ >40% of universities in the UK4 Recognised in the external market with recent award wins including: Best Franchisee Banking Provider, Business Moneyfacts Awards 2022 Bank/Capital Provider of the Year, Education Investor Awards 2021 1. Based on FTSE 100 and FTSE 250 at 13 June 2022. 'Tech Firm' defined as the following sectors: Software & IT Services, Telecommunications Services and Communications & Networking. Includes 3 clients managed outside of HSBC UK by Global Banking Source: Beauhurst, May 2022. A unicorn is a privately held start-up company valued at over $1 billion. Analysis excludes businesses that are FCA regulated 3. Based on The Lawyer's 2021 Top 200 UK law firms Based on 130 UK universities ranked in the 2022 university league tables, Complete University Guide Risk sky NEWS HD RETAIL FIGURES HEAD OF RETAIL HSBC CORPORATE JAMES 18:32 PLEDGE AT 8pm ON SKY NEWS AND AVAILABLE ON SKY NEWS CATCH UP AND THE SKY NEW Finance Good Growth Summit Leveraging Partnerships to Achieve Net-Zero Katie Whipp Head of Depid UK Deep Richard Templer Professor Imperial College London Richard Temper SILICON VALLEY 5 MODERATOR M WINNER Business Moneyfacts Awards 2022 tan Campbell Co-Founder/O Breathe Stary Technologes Campbell Vaughan Tyrell Director Sustainable Finance Education Investor Awards 2021 WINNER 28#30Wealth and Personal Banking Stuart Haire Head of WPB, HSBC UK HSBC UK#31Intro 2 CMB Ambitious growth plan supported by clear strategic opportunities 4 WPB COO Delivered resilient financial growth in 2021 1 ◆ PBT of £1.6bn benefitted from a net ECL release, supported by good revenue growth and active cost reductions Strong mortgage performance drove a 6% increase in lending, and deposits grew 12% Improvements in customer service, but more to do 3 ◆ Highest scores achieved for customer service through NPS since implementation ◆ A resolute approach to improving customer service Increased digital delivery cadence and scale, with robust delivery of core features Improving our mobile app functionality and experience Simplifying our security and onboarding processes through our new Digital Security Platform Risk Finance Clear strategic drivers to deliver scale growth Growth in strategic priority areas including Wealth, first direct and International, is expected to drive strong financial performance through the foundations of competitive pricing, proposition development and cost management 30#32UK WPB snapshot c.14m active customer relationships and 14k full-time equivalent staff ◆ Underweight in market share of key product areas Well-diversified revenue streams Market share of FY21 balances¹ Mortgages Credit cards Unsecured personal loans Current accounts Business overview: Growing market share and catering for all customer segments Savings 1. 2. 3. 4. 7.5% 10.4% 8.3% 12.8% 15.6% Change since FY18, ppts +0.8 +0.0 (1.7) +1.7 (0.1) UK WPB revenue by product² 31% Intro 9% 26% 34% CMB Mortgages Unsecured lending Deposits Insurance and Wealth Eligibility³ UK WPB customer relationships £23m £3.5m WPB £50,000 or other criteria4 COO Open for all UHNW HNW Mass Affluent Mass Retail Risk Finance At 31 December 2021. Mortgages market source: Bank of England; credit cards market source: UK Finance; unsecured personal loans market source: CACI; current accounts market source: CACI; savings market source: CACI Adjusted revenue is a management view by product and is stated after the impact of funds transfer pricing; Insurance excludes HSBC Life UK On the basis of investable assets, not including real estate Have an individual annual income of at least £75,000 and one of the following with HSBC UK: a mortgage, an investment, life insurance or a protection product. Alternatively hold and qualify for HSBC Premier in another country or region Customers 2k Universal banking model meets customer needs across the client continuum, from everyday personal banking to sophisticated wealth management solutions 8k 1m 13m 31#33Across UK high street banks, HSBC UK... ...has the highest proportion of Millennial & Gen Z customers¹ WPB UK has a commercially attractive customer base Millennial & Gen Z Monzo HSBC Royal Bank of Scotland Lloyds TSB Barclays Nationwide NatWest Bank of Scotland Halifax Santander UK first direct Co-operative Bank Source: AlphaWise; Morgan Stanley Research Gen X 1. UK: Generation distribution by primary bank account 2. UK: Income distribution by primary bank account Boomers ...has the highest % of customers whose account is their primary account NatWest % of customers who don't use the bank account where their salary gets paid as their primary account Nationwide Santander UK Barclays Halifax Lloyds HSBC 1% Intro 1% 0.11% 2% CMB 4% 4% 6% WPB >£100k COO ...has the most affluent customer base² £75k-£100k HSBC first direct Royal Bank of Scotland Barclays Halifax Lloyds NatWest Nationwide TSB Monzo Bank of Scotland Co-operative Bank Santander UK Risk Finance £45k-£75k <£45k 32#34FY21 financial performance £m Net interest income Non interest income Revenue ECL Costs Adjusted PBT Significant items Reported PBT £bn Customer loans Customer deposits RWAS FY21 2,774 595 3,369 439 (2,219) 1,589 (97) 1,492 FY21 131.7 178.7 24.7 FY20 2,703 573 3,276 (843) (2,328) 105 (30) 75 FY20 124.0 160.2 25.1 A 3% 4% 3% >100% 5% >100% ▲ >(100)% >100% ΔΙ 6% 12% 1% Intro CMB WPB COO Risk Finance WPB UK is 54% of HSBC UK's revenue and 67% of customer loans FY21 adjusted PBT of £1.6bn supported by a £0.4bn ECL release from the improving economic outlook; good revenue growth of 3% and costs down 5% from active cost management FY21 customer lending up 6% (£7.7bn) vs. FY20, primarily due to strong mortgage performance; deposits up 12% (£18.5bn) vs. FY20 as customers spent less and saved more due to government restrictions 79% of revenue from the HSBC retail franchise, 11% from first direct, 5% from M&S Bank, and 4% from the Private Bank Balance sheet is strong going into 2022 and facing into the challenges from inflation and the macro environment 33#35Mortgage portfolio Gross UK mortgage balances, £bn Market share¹ 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Mortgages: Continued growth realisation and potential in buy-to-let market Mortgage pricing 1. 2. 94.7 Jan-21 2018 6.7% 2 year SONIA swap 5 year SONIA swap 101.5 2019 7.0% - Apr-21 Jul-21 +25% Oct-21 110.7 2020 7.4% Market share of stock balances. Market source: Bank of England Direct channel market source: Bank of England 118.1 2 year customer rate - 70% LTV 5 year customer rate - 70% LTV 2021 7.5% Sources: Bloomberg; internal data Jan-22 Apr-22 Jul-22 Offered customer mortgage rates are substantially all pre-funded Intro 3. Intermediary market source: UK Finance 4. Buy-to-let market source: UK Finance CMB FY21 portfolio summary Average LTV of total portfolio Average LTV of new originations WPB % of book in Greater London COO Risk Mortgages on Standard Variable Rate Interest-only mortgages (incl. first direct offset mortgages) Finance 51% 67% 26% £2.9bn £18.6bn Buy-to-let (BTL) mortgages Strong mortgage growth, reaching £118.1bn in 2021 with market share gains Direct channel market share of 20%² and intermediary market share of 6.3%, up 2.7ppts vs. FY18³ £3.0bn Proposition development HSBC now has over 800 intermediary partners; and extended its range of BTL mortgages to the intermediary channel in 2021 Digitising to make it easier to remortgage, reducing application time and improving customer experience 2022 proposition enhancements: cashback offering; green / sustainable mortgage proposition; planned expansion of BTL, aiming to grow gross lending share from c.3% to c.5%4 by end 2022 34#36Gross unsecured balances, £bn Credit cards 7.3 1. Unsecured lending: Resilient performance with new proposition development 2018 8.2 7.4 2018 2019 Other unsecured personal lending 8.8 (17)% 2019 (12)% 5.9 FY21. Source: UK Finance. Card spend excludes Private Bank 2020 7.7 2020 +3% (6)% 6.0 2021 7.2 Intro 2021 CMB WPB COO Closing gaps to best-in- class capabilities and services within our traditional unsecured products Risk Unsecured lending market share impacted by deleveraging during Covid-19 Unsecured lending balances materially decreased during periods of restrictions in 2020 and 2021, as customers paid down their balances by utilising higher household savings Lower limit usage for overdrafts as customers continue to utilise less of their available limit during the current external environment 18.3% market share of credit card spend¹; 10.4% market share of credit card balances¹ Delivering a Point of Sale solution to meet the needs of emerging payment trends, particularly for younger customers Finance Significant opportunities to grow balances, revenue and market share ук Za HDi Exploring opportunities through growth of the electric vehicle market 35#372021 performance UK Wealth increased during periods of lockdown as a result of a lack of spending opportunities and low interest rate conditions for savings UK Wealth revenue, £m¹ Reported Invested Assets, £bn² 372 1. 2. 2020 +5% Wealth: Growth despite lockdowns, strong digital and sustainable ambitions with focus on HNW opportunity 392 2021 2021 key achievements ୮ 35 2020 +18% 41 2021 Launch of HSBC's first mobile Wealth journey, giving customers the opportunity to purchase funds on their phones Retirement Hub launched on the HSBC public website, providing access to education and tools Intro Completed core delivery of Wealth Discretionary platform migration and strategic de-risking of legacy infrastructure CMB 2022 proposition development B WPB Increase share of wallet from HSBC UK's customer base p. Enhanced discretionary proposition COO HNW point of sale and extended ongoing advice Risk ◆ Capture opportunity across customer segments through: Sophisticated investments via mobile trading - Expanding digital capabilities Deliver best-in-class customer service and access through digital ◆ Drive customer acquisition via mobile wealth developments in 2022 and beyond: Finance Become the leading UK sustainable investment provider Education and regular saver plans Integrated savings and investments (Pots and Goals) journey defaulting to sustainably labelled investments by 2023 Total UK WPB Wealth revenue. Private Bank revenue includes investment revenue (from annuity fees, and brokerage and trading) and lending revenue Invested assets comprise customer assets either managed by our Asset Management business or by external third-party investment managers, as well as self-directed investments by our customers ◆ Embed sustainable investments into investment journeys; fulfilling sustainability preferences and investment goals, with the aim of: Core product journeys Moving back book AUM in core products into sustainable investments by 2025 36#382021 1.6 FX opportunity and Global Money proposition HSBC has strong international customer market share but relatively low FX penetration Customer expectations have increased with neo-challenger banks offering 'fee-free' payments and card use abroad International: Connecting customers and geographies as the UK's international bank of choice UK WPB international customers by status, millions 0.4 0.3 2.3 Estimated UK annual cross border remittance market of £65bn² + Intro Non-UK national Multi-country Non-resident ◆ CMB 1. Market share analysis based on our active international customers as % of the United Nations data international migrant stock 2020 2. The Migration Observatory; May 2020 (Oxford University). For debit card spend outside of the UK, 2021 data from UK Finance to July, with +. 'One account opening up a world of opportunities' Send, spend and convert money in multiple currencies anywhere in the world Instant global transfers across worldwide HSBC accounts WPB International ambitions COO 'Fast and easy payments around the world' Send money to over 200 countries across >65 currencies Hold up to 18 currencies Keen pricing & up-to-date exchange rates Strong starting base, with c.25% of International customers banking with HSBC UK in 20211 We aim to significantly grow our International customer base and proportion of International customer revenue (+). Risk X 3:00 Finance Access the world with one account The Global Money Account is the convenient w to send, convert and hold money in multiple currencies. Next Leam mare HSBC UK Global Money Debil 11 VISA 'Spend like a local' Physical and virtual debit card Unlimited fee-free spend abroad, with no hidden fees Unlimited fee-free ATM withdrawals average of 2020 Jan to June data used to populate 2021 August to December. For other remittances, data from The Migration Observatory from 2018 with an internally assumed uplift of c.6% for 2021 remittances 37#39Mobile active¹ % of customers using mobile in last 30 days +4ppts 48% 1. 2. 2020 Digital: Strong adoption, driven through mobile with a robust platform established Sales penetration³ % of sales undertaken digitally +5ppts r 73% 52% 2020 2021 78% 2021 Mobile NPS² Personal loans Credit cards 53 Current accounts 2020 +5pts Product penetration comparison4 2021 58 December 2021 vs. December 2020. HSBC 30 day mobile users as a % of overall HSBC active customer base Full year mobile NPS 2021 vs. full year mobile NPS 2020 2021 72% 2020 98% 96% 83% 98% 90% Intro Including: CMB Closed servicing and acquisition gaps 2.0 3. 4. Balance transfers View PIN Activate card Create standing order, manage bills International payments ما WPB COO Instalment lending Mobile DIP New propositions and capabilities delivered to support growth Digital Security Platform Banking 2.0 Buy funds Risk Dispute transactions Transaction notifications Finance Digital savings Loan closures Increased mobile payment limits Significantly improved and simplified access Faster, more responsive and more accessible desktop banking Breakdown card purchases into monthly payments Responsive mortgage decision and onward application flows Start investing in-app from as little as £50 December 2021 vs. December 2020. HSBC retail sales as a % of all sales. Excluding general insurance FY21 vs. FY20. HSBC Retail sales as a % of all sales for specific product types 38#409:41 Home Digital: Supporting significant customer experience improvements My accounts VISA Your email is out of date Tap here to update your email address in your profile settings. As part of a broad digitisation and automation agenda, we are making specific investments aiming to deliver a truly differentiated customer experience Personal and relevant experiences Data-led, targeted, relevant messaging that deep links to services. Improved navigation. Personalised home page 'widgets' exposing key feature sets My everyday account 40-01-07 20951889 £3,642.00 -£1,000.00 Advance Credit **** **** **** ****1234 Suggested for f you Update my email X View all accounts > Contactless payment Last week you have spent £200.00 via contactless payment 9:41 Plan Spending insights Top category Your top category spend this month is Coffee Category budget 555 Expense so far £197.10 Balance after bills ů View transactions Food You've used over 80% of your budget View all My everyday account this month: £1,200.00 Your current balance is £3,642.00 View all Budget remaining £210.00 Intro CMB View all WPB COO Risk Support to manage financial health and personal aspirations through transaction enrichment, pots, goals and micro savings Finance Wealth and international capabilities Mobile wealth capabilities connected to planning tools. Normalising investment as part of everyday banking for a broad range of customers ◆ Manage, spend and send money in multiple currencies anywhere and anytime with Global Money Digital onboarding and immediate access In-app, new-to-bank acquisition with instant digital service registration, delivered through a global onboarding improvement programme Spend, save and invest, all in one place 39#41Customer experience improving but more to do FY21 performance Customer satisfaction (as measured through NPS), reached its highest level for the HSBC 'Red Brand' in 2H21, since implementing this system Overall NPS score, HSBC 'Red Brand' +4 1. 1H19 +3 2H19 first direct +5 HSBC 'Red Brand' 1H20 0 2H20 NPS market position¹ (incl. digital only challengers), FY21 +6 1H21 Further improvement required in our relative position for 'Red Brand' vs. peers. Position of first direct remains strong Market position is calculated after excluding institutions that do not provide full banking services +12 2H21 10th Intro 2nd 1| Strategic priorities, 2022-2023 3 CMB 4 WPB 5 COO 2 Increase channel accessibility and ease Build emotional (brand) equity Risk Simplify everyday journeys Empower people for the moments that matter Improve product satisfaction Finance 40#42first direct - 2021 built the foundations for scale growth Customers 2018 +8% 2021 first direct FY21 snapshot ◆ £361m in revenue, stable vs. FY20; £15.3bn of customer lending, £28.1bn of customer deposits c.1.5m active customers, 120k new accounts opened; highest in 10 years Our new digital journey takes less than 15 minutes to open a new account. Reduced from 10 days previously Continuing to pioneer high service standards: CMA rank 3rd position¹; sNPS scores at +46² UKCSI benchmarking saw fd retain #1 ranking for customer experience in financial services and #2 across all featured brands³ 62% mobile active rate the highest across HSBC group Transforming fd into an efficient digital organisation 1. At February 2022 2. Strategic NPS at 31 December 2021 3. UK Customer Satisfaction Index at January 2022 Total calls 2018 (38)% Intro 2021 Digital logons 2018 CMB +24% 2021 WPB COO 8:43 < Finance Choose your coaching style C Let us know how much support and intervention you wa from us so hap you keng on track and achieve your goals Dell Sergeant Jan S aby on trop by and Me you stay Firm but Fair Henry you minds and are not Easy Rider 0 y cone who .4% parts sin in Recors wh ter Risk 41#432022+ delivery through 4 strategic pillars Grow Target a new generation of 18-34 customers Make it easier for young people to get on the housing ladder Create simple, personalised unsecured lending journeys Establish a bold marketing strategy, driven by our purpose first direct - doubling customer base by 2026, reducing cost to serve, number 1 for customer service 11 Serve Retain position as the best bank for customer service in CMA rankings Offer customers more opportunities to service their relationship digitally Support customers dealing with financial difficulty or vulnerability Intro Protect our customers from financial fraud CMB WPB Amaze ◆ Become a digital innovation centre Deliver fast, easy, digital customer experiences Support customers in achieving their financial goals through hyper personalisation Ensure our bank is digitally resilient and secure 回 COO Finance ③ People Be an externally recognised employer of choice Risk Drive a purpose-led organisation, built around what matters to our people Inspire a fun and inclusive culture where the best want to work Help colleagues develop future skills 42#44Chief Operating Office Jennifer Strybel COO, HSBC UK HSBC UK#45Intro 2 CMB 3 WPB COO Simplifying and digitising our business to meet the future needs of our customers We are here to serve our customers 1 ◆ Make it easy for our customers to bank with us by accelerating digitisation efforts and simplifying journeys ◆ Ensure our customers' money and data are safe from fraud and cyber threats Risk Continue to invest in technology so we can support our business' growth ambitions Build new digital capabilities, such as Global Money, to grow market share and revenue Execute on our technology strategy to simplify our architecture and upskill our talent Leverage partnerships to address our customer demands quickly Identify opportunities where partners can help deploy new capabilities, faster, and at a lower cost ◆ Invest in partners that are continuously innovating and have an obsession about customer satisfaction Finance 44#46123 ◆ Improved our digital registration journey for our retail customers Standardising and modernising our digital platforms across brands Simplifying our business to make banking easier for our customers Our focus on simplifying our business... ◆ Simplified our terms and conditions, reducing content and making language simpler for customers. ◆ Digital, straight through onboarding journey for our first direct customers 1. March and April 2022, vs. August 2021 to January 2022 Intro 2. April 2019 to March 2020 vs. April 2021 to March 2022 3. May YTD 2022 vs. 2021 (>>> O CMB ما WPB ...is delivering results for our customers 4 COO Risk Finance 27pt increase in our digital registration NPS, since the launch of our new registration journeys¹ 5pt increase in our mobile NPS from 2020 to 2021 24% increase in first direct new account acquisitions² 83% increase in digital unsecured lending sales³ 45#47◆ We are a safe bank, recognised by Which? as the safest bank out of 15 UK banks tested for online security¹ 1. Bank HSBC NatWest (also Royal Bank of Scotland) Focusing on protecting our customers and improving resiliency across HSBC UK Improving resilience Barclays Protecting customers Santander Login (30%) 4 out of 5 ✰✰✰✰✰ 3 out of 5 4 out of 5 ★★★★★ 4 out of 5 Encryption (40%) 5 out of 5 5 out of 5 ✰✰✰✰✰ 5 out of 5 5 out of 5 Account management (15%) 5 out of 5 ★★★★ 4 out of 5 ★★★★ 4 out of 5 3 out of 5 Navigation and logout (15%) 4 out of 5 5 out of 5 ★★★★★ 2 out of 5 ★★★★ 3 out of 5. Overall test score 81% 75% Source: Which? 'How safe is online banking?' review. Testing in September 2021 and October 2021 73% 72% Invested in industry leading fraud detection capabilities and enhanced the warnings we provide Built secure and low friction mechanisms to allow customers to use web and mobile securely, and to verify and validate customers during onboarding and registration Built the first fraud awareness app launched by a high street bank in the UK to protect businesses from scams Intro CMB WPB COO Risk Finance ◆ New, resilient, and secure digital mobile and browser platforms for our customers Accelerating our adoption of public and private cloud and security standards, which has increased fourfold since 2019. This allows us to: Easily integrate with third party partners Develop modern applications quickly Reduce infrastructure constraints which could drive performance issues. Deployment of our UK and global Technology strategy which hinges on Speed, Scale, Resilience, and People 46#48Investments in our technology and operational capabilities to help drive operating productivity HSBC UK technology spend¹, £bn Share of total OpEx Investing in our technology to support our business objectives 0.6 2019 Investing in our business 15% 0.6 2020 15% 0.6 2021 17% 2022F HH 2025F Ambition: 20-22% Maintaining high levels of investment in outer years to support our growth ambitions through delivery of new technology and simplifying our business. Intro 1. Technology spend excludes technology spend within our global businesses, which we include in the equivalent Group disclosures CMB WPB COO Risk Finance Leveraging HSBC Group's capabilities and strengths HSBC UK is a beneficiary of HSBC Group's global technology and investment budget Economies of scale by centralising product management, and deploying technology cross-border Transfer of shared learnings around the Group on customers and markets Leverage state of the art cyber capabilities that benefit the UK 47#49◆ Multi-year strategy delivering long-term business benefits Providing the next generation of banking products and services for customers Built around modernising our technology architecture and operating model Aligned to the bank's four strategic pillars, the businesses, functions and regional strategies Executing on our multi-year technology strategy to help ensure we are fit for the future Speed Scale KN Resilience X People Improving our time to market and staying ahead of the competition Build products once and rapidly scale Make our services more secure, better for the environment and more available Intro Have the right people in the right places CMB WPB COO Risk Finance Migrating from multiple mortgage platforms to one core platform Enhancing ways of working to accelerate delivery for technology solutions, delivering more capabilities and features to our customers from the same capacity Demising legacy applications that have a high cost of ownership and are cumbersome to maintain Primary onboarding channel for small medium enterprise is Kinetic (iOS rating of 4.8), with >37k new to bank customers onboarded at 31 May 2022 Migrating key customer and staff channels to the cloud, enabling us to rapidly implement new capabilities and features, and to accommodate increased volumes Improved standards for resilience across application, data and infrastructure; applications such as trade finance are being uplifted to these standards Migration of our digitally active retail customers onto a more secure and resilient digital security platform; with a simpler and faster logon process Strengthening global collaboration by migrating 216,000 colleagues across the Group onto Microsoft 365 and Teams Building an engaged and committed technology team across the globe, as well locally in the UK; including a huge uplift to our graduate programme 48#50Leveraging partnerships to accelerate growth Partnerships Taking advantage of partners' new services and experiences to complement core systems and capabilities Security, crime prevention & identity ◆ Leveraging HSBC's global partnerships to bring new capabilities to the UK market at pace Quantexa Innovating to improve customer experience, make our bank more efficient, and enable our growth priorities Contextual data Intro BioCatch Biometric analytics CMB Cloud, data and analytics aws Cloud partnering A Cloud partnering WPB Google Cloud Cloud partnering IBM COO Quantum computing Risk Banking access divido Buy Now Pay Later bud Open Banking Finance 49#51Intro Playing our part on the transition to net zero CMB WPB COO HSBC Group wants to be net zero in its own operations and supply chain by 2030 or sooner Risk Reducing energy consumption Phase 2 roll-out of endotherm heating additive across the UK estate, a driver of significant energy savings Optimising property portfolio to reduce energy footprint Finance 100% renewable electricity by 2023 Innovative Power Purchase Agreement (PPA) to develop the Sorbie Wind Farm Project in Ayrshire, south-west of Glasgow 100% of the electricity purchased by HSBC in the UK to be from renewable sources by 2023, where c.90% of our electricity will be sourced from renewable projects and the remaining 10% topped up with green tariffs Reducing paper Successful pilots held across current accounts and credit cards in both HSBC UK and first direct Targeting a reduction of over 34 million letters being sent out by post in 2022; avoiding over 487,000 tonnes of CO₂ emissions Enrolling our supplier base in the Carbon Disclosure Programme (CDP) CDP is an environmental reporting programme which rates companies based on their disclosures We are inviting 500 of our top spend suppliers globally to join the programme with an aim of covering 60% of spend 50#52Today we are showcasing six innovation examples Providing innovative propositions for our customers CMB WPB Enhancing our digital capabilities to address evolving customer needs and deliver excellent digital experiences Building the SME bank of the future Building the infrastructure to seamlessly integrate with third parties and partners Reducing the cost and complexity of FX Intro Increased digital delivery cadence and scale, with robust delivery of core features Responding to increased customer expectations on FX Normalising investment as part of everyday banking Making managing money simpler and easier for our customers. CMB WPB Digital Channels Embedded Finance Global Wallet Global Money Mobile Wealth first direct Coach COO Risk Finance Digital Business Banking & Kinetic Embedded payment & working capital journeys Multi-currency virtual wallet Send, spend and convert money in multiple currencies anywhere in the world Investment capability via the mobile app Hyper-personalised messaging coaches customers on money management 51#53Risk Julia Dunn CRO, HSBC UK HSBC UK#54Intro 2 3 CMB Well-diversified, high quality loan portfolio 1 ◆ Low risk retail secured portfolio, with delinquencies below peers and pre-pandemic levels ◆ Wholesale portfolio performing well WPB HSBC UK's ambitions of safe and sustainable growth are supported by its robust risk management framework and prudent approach to lending Well prepared for potential economic downturns Deep risk team expertise developed in previous financial crises Stable portfolio currently showing no signs of stress Proactive horizon scanning and risk management approach Significant headroom in our risk appetite to support our growth ambitions Spare capacity across our credit risk appetite metrics ◆ Utilisation remains below our Board approved limits ◆ Robust and effective governance in place COO Risk Finance 53#55Well-diversified, high quality loan portfolio Personal lending gross loans & advances to customers, £bn At 31 December 2021 6.0 7.2 £131.3bn 118.1 Mortgages Cards Other personal lending Intro CMB At 31 December 2021 Health and care Transportation Wholesale gross loans & advances to customers, £bn and storage Publishing, audiovisual and broadcasting 2.5 NBFIs 2.1 Construction 3.4 Agriculture, forestry 4.1 and fishing Professional, scientific and technical WPB 3.9 1.8 1.9 Other 4.6 Administrative and support services COO 5.3 £66.1bn 7.1 Manufacturing Risk Real estate 10.5 7.9 Finance Wholesale and 11.0 retail trade Accommodation and food 54#56Strong retail mortgage portfolio vs. competitors FY21 average LTVs¹ Portfolio New business Stock balance % of total mortgage portfolio FY21 proportion of buy-to-let² HSBC UK 123 HSBC UK Firm A 2. 3. 51% 67% 3% £3bn £42bn Source: FY21 company reports. Firm A at 30 September 2021 Source: Company reports Source: process benchmarking limited 53% 21% 70% Firm B 54% 9% 66% Firm A Firm B Firm C Firm D £18bn £21bn Firm C 13% 51% 70% £51bn Intro 17% CMB WPB COO Mortgages over 3 months in arrears³, % Risk HSBC UK Finance 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 0.7% 0.4% Peer group average HSBC UK delinquency rates are lower than peer averages Limited exposure to interest rate rises: Mortgages on a standard variable rate of £2.9bn; less than 3% of the book 80% of the book is on fixed rates Opportunity to safely grow BTL proposition 55#57Credit quality distribution of our portfolio Gross loans & advances to customers, £bn Headroom to risk appetite available to support growth 124.4 117.6 5.8 Strong 63% 26.0 6.5 19.4 Good 13% 36.5 5.8 29.8 Satisfactory 19% Personal Corporate and commercial Non-bank financial institutions % of portfolio 6.5 6.0 Sub-standard Credit impaired 3% Intro 4.0 2% CMB WPB COO Risk Strong credit quality across personal, corporate and commercial portfolios. 76% of loans & advances to customers rated Strong or Good Significant headroom to internal risk appetite and risk metrics across all key product areas Finance Overall risk profile supportive of our growth strategy, although we remain cautious given the challenging external risk environment 56#58Overview of credit risk Portfolio performed well during the Covid- 19 pandemic First order impact of Russia / Ukraine is limited Economic outlook uncertain Retail Delinquencies remain at a low level, and better than before Covid-19 Financial health of our customers has, on average, improved with average debt and credit turnover at a higher level than pre-Covid-19 Minimal direct exposure to customers with connections to Russia and Belarus Watchful on second- and third-order impacts focused on inflation and rising cost of living Intro ◆ Impacts are not yet visible in portfolio delinquency or customer financial health metrics Proactive re-assessment of customer affordability models to maintain portfolio quality CMB WPB COO Wholesale Risk Finance Improving portfolio trends observed across a broad spectrum of metrics as the economy recovered in 2021 Direct exposure to Russia and Belarus has been reduced and first order impact is limited Second-order risks in sectors such as agriculture, food, industrial & conglomerates and automotive Portfolio continues to perform well in 2022, although we expect ECL charges to normalise from current low levels ◆ Ongoing sector analysis to identify vulnerable. industries as market conditions change 57#59We are well prepared to manage key external risks Conflict The current and potential risks to HSBC UK arising from the war in Ukraine are being closely managed Second- and third-order risks being proactively monitored Particular focus on cyber risks and ongoing compliance with sanctions Credit Monitoring impact of rising inflation and higher cost of living on our customers Strong inflationary headwinds had been building prior to the war in Ukraine Continued volatility in commodity prices expected throughout 2022 Intro Stagflation fears have worsened for both the UK and Europe CMB Covid-19 WPB Impact continues to reduce, with all restrictions being removed by the UK Government Consumer confidence remains low, driven. primarily by the inflationary environment We are maintaining heightened monitoring activities to identify sectors and customers experiencing financial difficulties COO Risk Climate Finance Increasing focus for HSBC and our regulators ◆ Assessment of transition risk for wholesale clients, and continuing work on Energy Performance Certificate ratings are key focus areas ◆ Climate risk being built into wholesale credit risk. processes to ensure embedded in risk assessments Risks are managed through monitoring and controls, including Early Warning Indicators and stress testing, with a range of risk management actions available to deploy as required. 58#60Finance Claire Baird CFO, HSBC UK and Global WPB HSBC UK#61Intro CMB 2 WPB COO Risk HSBC UK is a strong dividend contributor that is well positioned for growth We are a strong dividend payer to Group, and expect to increase our contribution over time 1 ◆ Good FY21 performance; net ECL release supported by revenue growth and cost reductions vs. FY20 We paid a dividend of £1.1bn to Group in respect of FY21 Our competitive advantages allow us to grow safely and sustainably Balance sheet growth ambitions are supported by our low funding costs, high liquidity and capital strength NII is already recovering from the impacts of Covid-19 and we are positively geared to further interest rate rises Finance Well positioned for the future 3 ◆ Track record of cost control; we continue to increase technology investments while reducing front-office costs Our capital base allows us to absorb increases from regulatory change, with limited expected impact from Basel 3 Reform 60#62£m Net interest income Non interest income Revenue ECL Costs Adjusted PBT Significant items Reported PBT Reported ROTE, % Adjusted ROTE, %² Good performance in 2021, strong start to 2022 (ahead of 2019 run-rate in 1Q22¹) £bn Customer loans Customer deposits RWAS CET1 ratio, % 1. 2. 1Q22 FY21 FY20 FY19 1,308 4,642 4,567 4,878 398 1,597 1,480 1,735 1,706 6,239 6,047 6,613 63 989 (2,115) (613) (830) (3,464) (3,598) (3,737) 939 3,764 334 2,263 (66) 873 (284) (171) (1,253) 163 1,010 3,480 n.d. 13.5% (0.1)% 2.4% 19.6% 14.7% 0.5% 9.9% 1Q22 198.8 283.7 89.8 13.6% FY21 195.5 281.9 83.7 15.3% Intro FY20 191.2 259.3 85.5 15.2% A FY21 vs. 20 2% 8% 3% >100% 4% >100% (66)% >100% 13.6ppts 14.2ppts CMB FY19 A FY21 vs. 20 183.1 2% 216.2 9% 85.9 2% 13.0% 0.1ppt WPB COO Risk Finance ◆ Delivered FY21 adjusted PBT of £3.8bn, primarily due to a net ECL release of £1.0bn, supported by revenue growth and good cost management ◆ Revenue up 3% vs. FY20, now ahead of 2019 levels based on run-rate in 1022 ◆ Track record of cost discipline, with costs down 4% vs. FY20, continuing in 1022 Continued balance sheet growth; loans up 2% and deposits up 9% vs. FY20 ◆ Strong CET1 capital build between 4019 and 4021 more than offset the impact of regulatory capital changes in 1022 On the basis of adjusted revenue and adjusted PBT In the event that the current IAS 19 Pension fund surplus was zero, FY21 pension adjusted ROTE would be 17.4% (FY20: (0.1) %); FY21 pension adjusted profit of £3,264 includes the deduction of £69m of pension surplus profit and £37m for the cost of non-CET1 capital from FY21 adjusted profit attributable to ordinary shareholders of £3,370m (FY20 pension adjusted loss: £(17)m; FY20 pension surplus profit deduction: £90m; FY20 cost of non-CET1 capital: £35m). 61#63Strong revenue growth across WPB and CMB Adjusted revenue by global business, £m 2020 2021 3,276 3,369 2,621 2,748 150 6,047 Intro 122 6,239 GBM and Corporate Centre CMB WPB +3% CMB WPB COO Risk Finance FY21 revenue up £0.2bn (3%) vs. FY20, primarily from higher mortgages and CMB lending revenue, partially offset by lower deposit income from lower interest rates FY21 revenue growth included a negative 2.4ppts impact from increased profit share payments made to M&S Bank driven by a net ECL release Fees up £0.1bn (6%) vs. FY20, primarily CMB (Credit & Lending: +£27m; Cash Management: +£14m; Trade: +£13m) as the market recovers following the Covid-19 pandemic 62#64HSBC UK loans and deposits, £bn +31% 183 Balance sheet positioned to support further lending growth 216 FY19 85% 191 +9% 259 FY20 74% 196 282 FY21 69% Customer loans Customer deposits 199 284 1Q22 70% Loan to deposit ratio 1. Rebased. January 2020 = 100 2. Card spend and balances market source: UK Finance. Card spend excludes Private Bank 1022 deposit surplus of £85bn driven by build-up of customer savings and lower spending during periods where Covid-19 restrictions were in place Strong mortgage growth of £21bn vs. FY19, offset by subdued personal unsecured and CMB borrowing during the pandemic Intro 120 HSBC UK WPB credit card spend¹ 110 100 90 80 70 60 CMB 0 Jan 105 WPB 84 47 COO 2022 Risk 2021 Finance 2020 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Credit card spend has recovered to above pre-Covid-19 levels, and delinquencies have remained subdued; FY21 card spend market share of 18.3%² Interest bearing balances remain below pre-Covid-19 levels; FY21 card balances market share of 10.4%² 63#65Margin evolution, % 2.45 NIM is expected to increase in 2022 following base rate increases 4021 annualised NII / L&A Deposits % NIM NII / L&A Retail mortgages CMB assets FY21 1.53 2.42 Other FY21 NII / L&A decreased 3bps vs. FY20 from base rate impacts on customer deposit margins, largely offset by increased margins on mortgages 2.69 The inclusion of cash and equivalent balances generates a 15bps reduction in NIM FY20 FY19 1.71 2.05 2.45 2.71 1Q22 annualised NII / L&A Intro FY21 vs. 1022 4021 FY20 (0.18)ppts 1.63 1.48 (0.03)ppts 2.69 2.45 CMB WPB COO HSBC UK NII sensitivity, £m At 31 December 2021. Change from 1 Jan 2022 to 31 December 2022 +25bps parallel -25bps parallel Risk Finance Total Sensitivity table uses an illustrative pass-through rate of 50%, net of 230 (329) hedging impacts +100bps parallel 958 HSBC UK balance sheet sensitivity is -100bps parallel (1,154) substantially all GBP Up-shock is primarily driven by over £100bn of cash (c.1/3rd of HSBC UK's balance sheet) positioned at the Bank of England repricing overnight Hedging We hedge a proportion of our deposit balances and equity to reduce the sensitivity of earnings to interest rate shocks Liabilities that do not have a defined contractual maturity are modelled and "behaviouralised" to define their interest rate risk tenor Natural offsets to this exposure are primarily provided by fixed rate residential mortgage loans The net residual position is transferred into Markets Treasury to manage through interest rate swaps under Macro Cash Flow Hedge accounting and securities held under Hold to Collect and Hold to Collect and Sell accounting 64#66Cost efficiency ratio Adjusted costs, £bn Costs excl. tech Technology¹ Average number of employees Continued cost discipline, with reduction in physical infrastructure supporting investment in technology Branches Digitally active retail customers (Red Brand) 1. 2. 56.5% 3.7 15% FY19 23k 621 59% 59.5% 3.6 15% FY20 22k 593 62% 55.5% 3.5 17% FY21 21k² 510 Intro 65% CMB WPB COO Risk FY21 adjusted costs down £0.1bn (4%) vs. FY20 and £0.3bn (7%) vs. FY19 due to: Finance Reduced staff costs in WPB and CMB, and lower back-office operations costs These were partially offset by: A lower benefit arising from our material pension surplus as discount rates fell The UK bank levy, which was allocated to HSBC UK for the first time in 2021 (£32m, 1% of total FY21 costs) Reported costs were stable vs. FY20, primarily due to increased CTA investment P&L technology costs (excluding CTA) post capitalisation and amortisation charges. Technology spend excludes technology spend within our global businesses, which we include in the equivalent Group disclosures In FY21, 3,607 full-time equivalent employees that were fully dedicated to HSBC UK Bank plc transferred from HSBC Global Services (UK) Limited to HSBC UK Bank plc We expect continued discipline in cost control, in line with the Group's target of 0-2% adjusted cost growth in FY23 65#67Consolidated balance sheet, £bn Other Financial / investments Cash and central bank reserves Net customer loans FY21 balance sheet strength: A simple, diversified, low-risk balance sheet 1. 346 24 14 112 196 Assets 346 18 12 10] 282 24 Liabilities Other TFSME Subordinated liabilities Customer accounts Equity Net customer loans, £bn Breakdown of customer loans and deposits 65 13 55 £196bn Customer deposits, £bn 48 £282bn 118 101 Intro CMB 78 Mortgages Other personal lending Corporate and commercial WPB current accounts WPB savings accounts CMB non-interest bearing current accounts WPB CMB interest bearing current accounts COO Key metrics Firm A Firm E Liquidity coverage ratio Net stable funding ratio Advances to deposits ratio Liquidity pool FY21 average deposit costs ¹ Firm B Firm D Risk Firm C HSBC UK FY21 0.12% 241% 165% 178% 150% 69% 85% £121bn £57bn 0.09% 0.08% 0.06% Finance FY19 0.26% 0.22% Source: Company reports. Peer group includes mainstream high street competitors of: Lloyds Banking Group, NatWest Group, Barclays UK, Nationwide Building Society and Santander UK. Average deposit costs = interest expense on customer deposits divided by average customer deposit balances 66#68CET1 ratio vs. requirements, % 1. 15.2 FY20 85.5 Strong FY21 capital build of 263bps, enabling total distribution of £1.1bn (132bps) 13.0 2.6 (1.3) (1.4) 0.2 transitional relief 15.3 Capital Dividends IFRS 9 Other FY21 build 83.7 12.8 Based on the nominal value of P2A add-on expressed as percentage of 31 December 2021 RWAS (1.7) 1 Jan 2022 regulatory changes 13.6 1 Jan 2022 90.7 12.3 Intro Buffer 10.6 1.0 2.5 2.6 4.5 CET1 requirements CMB RWAS, £bn CET1, £bn c.£2.7bn 3.0ppt WPB O-SII CCB Pillar 2A Pillar 1 COO Risk Finance 13.6% CET1 ratio, post 1 Jan 2022 regulatory changes, with 3.0ppts of current headroom to MDA¹ 1 Jan 2022 regulatory changes increased FY21 RWAs by £7bn (a subset of the Group increase of $27.2bn) RWA increases were primarily due to IRB repair and the introduction of a 10% risk weight floor on the performing residential mortgage portfolio Mortgage RWA density increased from 5.8% at FY21 to 11.1% at 1 Jan 2022 ◆ A UK countercyclical buffer of 1% will be reintroduced in 4Q22 Following the delay of Basel 3 Reform implementation until Jan 2025, no further regulatory headwinds are expected in the near term 67#69£m Net interest income Non interest income Revenue ECL release/ (charge) Costs Adjusted PBT Significant items Reported PBT Outlook: We are well-positioned to capture opportunities and deliver economically profitable growth in a competitive market £bn Customer loans Customer deposits RWAS CET1 ratio, % 1Q22 FY21 1021 1,308 4,642 1,116 398 1,597 371 1,706 6,239 1,487 63 989 211 (830) (3,464) (872) 939 3,764 826 (66) (284) (44) 873 3,480 782 1Q22 FY21 1Q21 198.8 195.5 190.2 283.7 281.9 265.0 89.8 83.7 84.1 13.6% 15.3% 15.5% Outlook (2yr) » » M » Outlook (2yr) Intro a CMB WPB COO Risk Finance ◆ Revenue growth driven by economically profitable lending, and benefit of expected interest rate rises Continued cost discipline supported by investment in technology and automation; cost inflation is expected to be in line with the Group's target of 0-2% We plan to deploy our healthy capital and liquidity to support future business growth We expect to be a significant dividend contributor to HSBC Group 68#70Conclusion HSBC UK#71HSBC UK is well-positioned to capture significant opportunities in the UK 2 3 Delivered a robust financial performance in 2021 HSBC UK is well-positioned to capture opportunities in an attractive but competitive market Clear strategy to deliver on the growth opportunity ahead of us 4 We have a vital societal role to play, particularly in supporting the transition to net zero 5 Significant profit and dividend contributor to the Group 70#72Appendix HSBC UK#73Today's speakers lan Stuart CEO, HSBC UK Stuart Tait Head of CMB UK Stuart Haire Head of WPB UK Chris Pitt CEO, first direct Jennifer Strybel COO, HSBC UK Julia Dunn CRO, HSBC UK Claire Baird CFO, HSBC UK Appendix lan was appointed CEO of HSBC UK Bank plc, with effect from April 2017, and is a member of HSBC Holdings plc's Group Executive Committee. Ian joined HSBC as head of its Commercial Banking business in the UK and Europe in 2014. He has ~40 years' experience in the banking industry. Stuart was appointed Head of UK CMB, with effect from December 2021. Prior to his current role, Stuart was the Head of CMB, Asia Pacific, and has previously held various positions across multiple businesses and markets within HSBC Group. Stuart has over 30 years' experience in the banking industry. Stuart was appointed Head of WPB UK (previously Retail Banking & Wealth Management UK) in November 2017. Prior to HSBC, Stuart led the Direct Bank for the Royal Bank of Scotland. Stuart has over 20 years' experience in the banking industry. Chris was appointed CEO, first direct, with effect from October 2020. Previously at HSBC UK, Chris was Head of Marketing. Prior to HSBC, Chris held roles at TSB and Tesco Bank. Chris has over 20 years' experience in the banking industry. Jennifer was appointed Chief Operating Officer (COO) for HSBC UK, effective April 2022. Previously Jennifer held the role as Chief Operating Officer for HSBC US. Jennifer has 30 years' experience in the banking industry. Julia was appointed Chief Risk Officer (CRO) for HSBC UK, effective May 2021. Prior to her current role, Julia was the Group CRO for Nationwide where she spent 9 years. Prior to this, Julia spent 13 years with the FSA, including holding the role of Director of Retail Banking Supervision. Julia has over 33 years' experience in the banking industry. Claire was appointed Chief Financial Officer (CFO) for HSBC UK, effective December 2021, in addition to her existing role as CFO for Global WPB. Prior to joining HSBC, Claire spent 18 years with RBS / NatWest Group. Claire has over 20 years' experience in the banking industry. 72#74CMB has an extensive product suite through collaboration with other business lines Credit and Lending Term Loans Revolving Credit Facilities Overdrafts Global Trade and Receivables Finance (GTRF) Trade Loans Receivables Finance Supply Chain Finance Guarantees Documentary Credits Commodity Finance Global Liquidity and Cash Management (GLCM) Deposit & Current Accounts Cross Border Cash Pooling Corporate Cards HSBCnet Liquidity Management Structured Finance Syndicated Debt Equity Leveraged Finance Advisory Foreign Exchange Markets products, Insurance and Investments and Other¹ 1. Includes CMB's share of revenue from the sale of Markets and Securities Services and Banking products to CMB customers Electronic Payment Services ◆ Clearing & Foreign Payments Fixed Income Futures Hedging Corporate Loan & Trustee Custody & Fund Services Insurance & Investment FY21 management view of adjusted revenue 10%. 26% Appendix 10% £2,747m 54% Credit and Lending GLCM GTRF Markets products, Insurance and Investments and Other 73#75CMB: Reducing RWAs through client optimisation and management actions FY19 - FY21 RWA walk, £bn 60.1 (4.7) FY19 2.5 (5)% 0.1 Asset size Asset quality Model updates Methodology and policy Management actions drove c.£8.7bn of RWA reductions over the period (1.1) 56.9 FY21 Appendix Asset size Reductions achieved under our transformation programme and other management actions Government guaranteed Covid-19 lending schemes contributed to further reductions in FY20 Asset quality Adverse credit migration in FY20 from Covid-19 impacts, partly offset by subsequent improvements in asset quality and portfolio mix changes in FY21 Methodology and policy updates Increase in the SME supporting factor benefit as part of the CRR 'Quick Fix' relief package Partially offset by changes to Markets Treasury allocation 74#76Risk: Government lending in focus Government loan schemes At 4 May 2022 Drawn balances £bn Market share¹ %, by value Current balance £bn Active PAYG £bn BBLS 7.3 15.4% 6.3 1.9 CBILS 3.1 11.7% 2.2 n/a CLBILS 0.9 16.2% 0.4 n/a Appendix 1. Market share of approved lending. Source: British Business Bank 2. £15bn of Covid-19 related lending is the total of all approved Covid-19 relief lending to customers, including HSBC UK specific measures HSBC was one of the only high street banks that provided BBLS for new-to-bank customers, as requested by HM Treasury and the Chancellor of the Exchequer ◆ We supported customers with over £15bn of vital Covid-19 related lending², or roughly the equivalent of 17 years' worth of applications in the first eight months alone The Pay As You Grow (PAYG) scheme allows customers to defer capital repayments for up to another two years after the first year moratorium. 26% of BBLS customers have opted for PAYG support 75#77Risk: Commercial real estate (CRE) in focus Total CRE¹ allowances for ECL by stage, £m Stage 1 Stage 2 Stage 3 Total Real estate Accommodation and food Total 1. 1Q22 48 66 145 259 1Q22 166 93 FY21 Total CRE¹ allowances for ECL by sub-sectors, £m 259 78 133 172 383 FY21 206 177 383 FY20 CRE is comprised of the 'real estate' and 'accommodation and food' sectors 76 191 211 478 FY20 229 249 FY19 478 29 40 124 193 FY19 144 49 193 1022 vs. FY19 19 26 21 66 1022 vs. FY19 22 44 66 Appendix ECL In 2020 and 2021, modelled provisions were supplemented with judgmental overlays in anticipation of elevated defaults on conclusion of Government support ◆ Substantially all of the remaining Covid-19 reserves were released in 1Q22 as the economy began to normalise Hotels ◆ London represents c.60% of the Hotels portfolio by limit Good credit metrics: 62% of cases have LTV under 55%. Valuations have mostly held up 76#78Glossary BB BBLS Bps CBILS CCB CET1 CMB CLBILS Corporate Centre CRE CRR CTA ECL GBM GLCM GPB Group GTRF Business Banking Bounce Back Loan Scheme. A UK Government-introduced measure to support businesses affected by the Covid-19 pandemic Basis points. One basis point is equal to one-hundredth of a percentage point Coronavirus Business Interruption Loan Scheme. A UK Government-introduced measure to support businesses affected by the Covid-19 pandemic Capital conservation buffer Common Equity Tier 1 Commercial Banking, a global business Coronavirus Large Business Interruption Loan Scheme. A UK Government-introduced measure to support businesses affected by the Covid-19 pandemic Corporate Centre comprises Central Treasury, our legacy businesses, interests in our associates and joint ventures and central stewardship costs Commercial real estate Capital Requirements Regulation Costs to achieve Expected credit losses. In the income statement, ECL is recorded as a change in expected credit losses and other credit impairment charges. In the balance sheet, ECL is recorded as an allowance for financial instruments to which only the impairment requirements in IFRS 9 are applied Global Banking and Markets, a global business Global Liquidity and Cash Management Global Private Banking HSBC Holdings plc and its subsidiary undertakings Global Trade and Receivables Finance GTRF IAS IFRS L&A LC LCR MME MSS NII NIM P2A PBT Ppt UK RFB RLS ROTE RWA SBB SME WPB Global Trade and Receivables Finance International Accounting Standard International Financial Reporting Standard Loans and advances to customers Large Corporates Liquidity coverage ratio Mid-Market Enterprises Markets and Securities Services Net interest income Net interest margin Pillar 2A Profit before tax Percentage points Appendix HSBC UK, the UK ring-fenced bank, established July 2018 as part of ring fenced bank legislation Recovery Loan Scheme. A UK Government-introduced measure to support businesses affected by the Covid-19 pandemic Return on average tangible equity Risk-weighted asset Small Business Banking Small and Medium-sized Enterprises Wealth and Personal Banking, a global business 77#79