#1Global Trade and Receivables Finance 28 September 2020 HSBC#2Disclaimer 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 Holdings plc (together with its consolidated subsidiaries, the "Group") 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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Additional detailed information concerning important factors that could cause actual results to differ materially from this Presentation is available in our Annual Report and Accounts for the fiscal year ended 31 December 2019 filed with the Securities and Exchange Commission (the "SEC") on Form 20-F on 19 February 2020 (the "2019 Form 20-F"), our 1Q 2020 Earnings Release furnished to the SEC on Form 6-K on 28 April 2020 (the "1Q 2020 Earnings Release"), and our Interim Financial Report for the six months ended 30 June 2020 which we furnished to the SEC on Form 6-K on 03 August 2020 (the "2020 Interim Report"). Non-GAAP financial information This Presentation contains non-GAAP financial information. The primary non-GAAP financial 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. 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Information in this Presentation was prepared as at 28 September 2020. 1 |PUBLIC❘#3Agenda 1 2 3 Why trade matters: relevance and evolution of trade Resilient performance in a challenging environment Transforming our business for the future of trade 2 |PUBLIC❘#4Why trade matters: relevance and evolution of trade ① Trade: essential service, now more than ever Trade in HSBC ■ Multinationals to SMEs; footprint covers 90% of trade/ capital flows¹ ☐ ☐ Key part of HSBC's transaction banking ($16.8bn revenue in FY19) Multiplier effect: 4x avg. revenue; 2x # of countries & products2 The role of trade HSBC in Trade ■ Revenue c.2x of top 2 peers³ ■ #1 Global Trade Finance Bank (3rd consecutive year)4 World's Best Bank for Transaction Services 20204 Trade in society ■ Flow of critical goods ☐ Catalyst for economic recovery/ growth Key to human progress, inclusion and building back better ■ Facilitate trade across ecosytems 1 Client priorities: The role of trade finance ■ Finance end to end trade, get finance to where and when it's needed, in a safer way5 Risk mitigation addressing increased risk complexity, with more precise/agile decisions Sustainable growth and working capital 2 Supply chain resilience 0. HSBC has a responsibility to lead the industry 1. Source: HSBC Holdings plc Annual Report and Accounts 2019 3. 2. Source: Internal HSBC MI; comparison of CMB Corporate clients with GTRF revenue vs. CMB Corporate clients without GTRF revenue 4. Source: FY19; Coalition GTB Revenue pools (see Appendix 1 and 2) Euromoney awards (see Appendix 1) 3 5. Source: ICC Trade register (see Appendix 4 - Risk characteristics of trade finance) |PUBLIC❘#5Why trade matters: relevance and evolution of trade 1 Trade in the age of Covid $bn Exports from Asian economies¹ 240 220 200 180 1 The four phases of trade 160 China during the Covid crisis Taiwan 140 Vietnam 120 3 1 Supply shock 2 USD liquidity crunch 4 Index 55 50 50 Purchasing Manager Index² 45 40 40 Global Germany China 35 3 Taiwan 20 Vietnam 0 30 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Composite Leading Indicator³ 3 Demand shock Index 100 99 98 3 4 Recovery(?) 97 1 96 95 94 93 92 Container Throughput4 Index 118 116 114 1 112 110 3 108 106 104 102 100 Jan-20 Mar-20 May-20 Jul-20 Nov-19 Jan-20 Mar-20 May-20 Jul-20 US China OECD+M6 86 - 85 . 84 Nov-19 1. 2. WTO Total merchandise exports. Aug China based on China Customs portal, Aug Taiwan based on Ministry of Finance portal. China Jan & Feb 2020 combined data apportioned using PY exports. HSBC Research articles for PMI (Purchasing manager Index) 3. OECD Composite Leading Indicators (CLI) Amplitude adjusted, M6 is major 6 non-members 4. RWI/ISL-Container-Throughput-Index (2015 = 100) seasonally and working day adjusted 4 |PUBLIC❘#6Resilient performance in a challenging environment 2 Resilient financial performance in 1H20, while gaining market share GTRF: resilient performance in 1H20 GTRF adjusted revenue, $bn (CMB and GBM) 1 Doing more with less GTRF; 1H20 vs 1H191 Gaining market share6 GTRF market share 1H19 1H20 +1.5 1.3 1.3 1H19 1H20 GTRF adjusted revenue in line with 1H19 ■ 12% revenue growth in Supply Chain Finance Repricing and market share gains offsetting lower global trade volumes - - Global trade 2: -13% in 1H20 - Global DC issuance ³: -19% in 1H20 -2% +0.5 FTES 12.4 10.9 +0.1 9.6 9.1 -2% Direct costs 6.1 6.2 -13% RWAS +11% Assets distributed4 +26bps Revenue / RWAs 5 Global Asia Traditional Trade #1 in Traditional Trade and Structured Trade Extended #1 position in Asia, where HSBC is >2x larger than top 2 peers in the region. Extended leadership in Traditional Trade, especially in Asia 1. Numbers presented on an adjusted basis, as defined in the HSBC Holdings plc Interim Report 2. 3. Source: Aggregated by HSBC Research from WTO country level merchandise exports monthly values Source: SWIFT; Global DC issuance values 5. Revenue/RW As is calculated using annualised adjusted revenues and adjusted average RWAs 6. Source: OW Coalition FY19 & 1H20 revenue benchmarking report 5 4. This is the total volume of all GTRF assets distributed into the secondary market to a diversified set of investors (banks or non-banks) |PUBLIC❘#7Resilient performance in a challenging environment 2 Supporting our customers when they have needed us most Operational resilience ■ Outstanding business contingency plans; no down times or impact on SLAs Enabled clients to transact digitally overnight1 ■ Fast track approvals. Mobilising full power of HSBC network ■ Experts to help clients diversify and repurpose their supply chains. ■ Worked with governments and partners to ensure flow of goods and documents² Leveraging our investment in Trade Transformation Supply chain finance capabilities to extend liquidity into supply chains New data capabilities to help clients navigate risks Process simplification; shift of volumes to offshore processing centres Record high Net Promoter Scores (+683) Internet Trade Services enablement via a phone call, only for clients already on HSBCnet Euromoney award for Global Excellence in Leadership in acknowledgement of our "extra efforts" to support customers, communities and employees through the coronavirus pandemic Average of June to August 2020 scores 1. 2. 3. Note: More details in Appendix 8 6 |PUBLIC❘#8Transforming our business for the future of trade 3 Delivering Trade Transformation outcomes Trade Transformation: Key customer and business outcomes by 2021 Progress so far ePenetration1, % 59 45 251 +34 2018E1 2019 July '20 Substantial elimination of manual paper handling Improve front office to back office ratio from 1:2 to 1:12 Digitisation ☐ Substantial change in customer ☐ experience: easier, faster and safer Significant improvement in net promoter score³ Capabilities to grow revenues faster than the rest of the market Increase pace of asset distribution by ☐ more than x2 from a baseline of $12bn (already achieved in 2019) Accumulated operational FTE saves 22% Driving efficiency as % of '17 baseline 15% 7% 2017-18 2017-19 2017-207 Client SLAs, % NPS 94 80 68 Improving 17 customer experience 1H17 1H20 1H17 1H20 17-19 revenue delta,% Asset Distribution 6, $bn 4.6 28 Driving growth 12 0.5 Market HSBC 5 2017 2019 1. ePenetration: 2018 value estimated on comparable basis 5. 2. 3. Front office FTEs comprise all client facing roles; back office FTEs comprise all FTEs dedicated to operations, baseline is 2017 Net Promoter Score is a metric to derive client satisfaction and likelihood of recommendation 6. 4. Source: OW Coalition FY19 revenue benchmarking report 7. Adjusted revenue as disclosed in 2019 Annual Report & Accounts This is the total volume of all GTRF assets distributed into the secondary market to a diversified set of investors (banks or non-banks) FY2020 Estimate 7 |PUBLIC❘#9Transforming our business for the future of trade 3 NextGen trade: our vision Trade today: not easy, siloed and fragmented Many platforms service everyday transactions from financing, invoicing, logistics, insurance to payments Platform proliferation makes trade difficult and costly for companies needing to connect to them The current platform landscape in trade Ordering (procurement) 1 ERP/AR/ AP systems SAP Making Match 3 Commodity Trade Platforms 4 Trading & Marketplaces opportunity network A serai For corporates (clients) GLOBALINKER For Fls Trade Club Alliance Production ORACLE TRITERRAS Payment Shipping (logistics) хего sage apruve msts. highradius \\'WeFi 9 eBills of Lading trade TRADELENS 11 Payments & Settlement 國支付宝 Ebury TransferWise N NETSUITE KRATOS AKT amazon E2 Alibaba.com 天貓 7 Open Account Financing taulia 8 Trade " Insurance Bolero ess D°CS THALL.COM coupang EH EULER HERMES coface C2FO 10 Logistics ORBIAN TRADELENS >Katradius CRXMARKETS LLOYD'S CAL N!AO NTP DP WORLD GSCF cíti ING BNP PARIBAS Standard Chartered A A CONTOUR we trade komgo >K PERLIN Marco Polo sTradeConnect BCI IBM Food Trust Client proprietary sales portal TEXAS INSTRUMENTS 15 Multi-Bank Trade 16 Data/Workflow Integration SIEMENS "TL.com" "SieGate" PR PrimeRevenue an for company 12 Banks FINASTRA Procurement & e-Invoicing TRADESHIFT A basware GT NEXUS TUNcoupa NETWORK SAP Ariba 13 Blockchain Solutions 14 Supply Chain Provenance/Sustainability cky Bolex DEMICA GTC 17 BigTech/BigTech Financial 18 Data & Analytics for Clients / Banks 19 Trade Tech for Banks TEALIUM Google CONPEND 20 Secondary Market / Distribution QPalantir TRAYDSTREAM Redatining Trade Finance Platforms tradeteq Platform enablers/partners CREDABLE halotrade ZILINGO TEADE TENNIS Ebury DEMICA A Surecomp Network mastercard ripple MARKETINVOICE The future of trade The next generation of trade will build a digital thread that binds all these silos together enabling: - - - Connectivity, convergence, interoperability. across ecosystems, so trade becomes simpler; More precise solutions, offered in the platforms where companies buy and sell; More inclusive solutions, reaching those with no previous access to trade finance; Transparency and traceability, to embed sustainability in supply chains; - Creation of new value for clients leveraging data, unlocking new revenue pools Trade Transformation has laid the foundation for the future of trade, which will unlock: New client acquisition + + + - New revenue streams + + + 蚂蚁金服 用支付宝 babelway. Microsoft previse amazon amazon pay FLOWCAST PAYZDAY Alibaba.com trade uns vector.al Quantexa TRADE LEDGER Moneta Go kyriba ccm A Current investments/partnerships ALIPAY New data capture + + + 8 |PUBLIC❘#10Recap of key messages 1 HSBC is the largest and leading trade bank1 2 Resilient performance during Covid; doing more with less, while gaining market share 3 Record high NPS, as we supported our clients when they've needed us most 4 Reaping the rewards from the Trade Transformation investment 5 The future of trade represents exciting opportunities for new client acquisition, data capture, new revenue streams 1. Source: i) OW Coalition FY19 & 1H20 revenue benchmarking report ii) Euromoney award for Global Excellence in Leadership iii) Euromoney award for Best Trade Bank for 3rd consecutive year 9 |PUBLIC❘#11Appendix HSBC#12Appendix 1 Why trade matters: relevance and evolution of trade 1 GTRF by numbers GTRF by numbers GTRF gained market share 2 ■ Global market share grew from 6.1% to 6.2% in 1H20 $760bn Trade facilitated annually1 $84bn Funded assets¹ ■ Traditional Trade: share increased to 12.4% from 10.9% in 1H19 ■ Structured Trade: maintained #1 globally (FY19) ■ Increased share in Americas (+47bps) and Asia (+44bps) in 1H20 #1 12.4% 2.2% Trade bank²: Revenue c.2x of top 2 peer Traditional Trade market share² (#1) Structured Trade market share 2 (#1) #1 Trade bank in Asia Pacific² Recognised by industry and customers #1 Global Trade Finance Bank 2020 (3rd consecutive year) World's Best Bank for Transaction Services 2020 GTR Leaders in Trade 2019 14 Live LC transactions completed on Contour blockchain platform 1. Source: HSBC FY19 Internal MI 2. Source: OW Coalition FY19 & 1H20 revenue benchmarking report 3. Source: HSBC Internal HR Data Best Trade Finance Bank 2019 Best Innovator 2019 EUROMONEY EUROMONEY EUROMONEY T T 2018 2019 EUROMONEY GTR 2019 Leaders In Trade Trade Finance Awards 11 |PUBLIC❘#13Appendix 2 Why trade matters: relevance and evolution of trade 1 Competitive landscape Full year 2019 Trade finance revenue, $bn 2.6 x1.9 1.4 1.2 0.8 HSBC Top 2 peers Next 3 peers Subsequent 3 peers Source: Outside-in view; Coalition GTB Revenue pools, HSBC numbers as per CMB and GBM GTRF, as disclosed in ARA 19, Peer group- BARC, BNPP, BOFA, CACIB, Citi, DB, ING, JPM, MUFG, SANT, SCB, SG, Stan B, WFC, 0.5 0.3 Subsequent 3 peers Subsequent 3 peers 12 |PUBLIC❘#14Appendix 3 Why trade matters: relevance and evolution of trade 1 GTRF in Asia - Continued leadership in market penetration and quality perception HSBC extended its leadership in market penetration Bank penetration as All, Top 3 & Lead provider¹ Clear leadership in quality perception Greenwich Quality Index(GQI) Asia 2 45% Industry Average HSBC 40% 33% 31% 29% 26% 40% 35% Bank A All Relationships Bank B 30% Bank C Bank D 25% 20% Bank E Bank F 15% Bank Bank H Bank G 10% I HSBC I Peer 1 Peer 2 Peer 3 Peer 4 5% 0% -20 0 20 40 60 Greenwich Quality Index - Difference From the Mean Source: Greenwich report, Asia Large Corporate Trade Finance 2020, August 2020 1. Market penetration based on number of citations for each bank in the Greenwich Asia Large Corporate Trade Finance Study, 2020. With Total Sample of 597 companies in 2020, and 605 companies in 2019, and Matched Sample of 426 companies that interviewed with Greenwich for 2 consecutive years. 13 2. The Greenwich Quality Index score is based on normalized composite of all qualitative evaluations, transformed to 0 to 1,000 scale. Scores shown are difference from the mean. Chart is based on 2020 sample of 597 companies. In Asia Large Corporate Trade Finance 2020, HSBC is the quality leader (tied with another bank). Peer group- ANZ, BNPP, BOC, Citi, DB, DBS, Mizuho Stan Chart, UOB, |PUBLIC❘#15Appendix 4 Why trade matters: relevance and evolution of trade 1 Risk characteristics of trade finance Drivers ■ Short-tenor asset class ■ Linked to real economy (working capital needs of companies) ■ Shorter time to recovery in a default scenario Default rate, Expected Loss & Time to recovery of trade finance and other asset classes, 2008-20181 Non Trade Finance Trade Finance Obligor-weighted default rate Product/asset class Import L/C 0.36% Export L/C 0.04% Loans for import/export 0.73% Performance guarantees 0.45% SME Banks & Fls Commodities finance 0.25% 0.68% 1.62% Obligor-weighted Expected Loss Loss Given Default 29.9% 0.11% 2.2% Time to recovery (days) 111 184 36.3% 0.02% 37.7% 0.28% 123 0.01% 0.44% 27.0% 28.0% 0.07% 24.0% 0.16% 66 393 427 350 Average "Event Likelihood" in the life of a performance guarantee, 2008-20181 100.0% 93.8% 2.1% Total Transactions Claims not made Claims made but unsuccessful Source: ICC Trade Register 2019 Trade finance Other asset classes Includes claims that are funded by client's overdraft account 4.1% Claim made and successful 14 |PUBLIC❘#16Appendix 5 Why trade matters: relevance and evolution of trade 1 Historical evolution of global trade Global merchandise trade, $tn CAGR 6.5% Global trade (Merchandise) $T 20 1989 Cold War ends 1992 15 10 5 0 1988 Maastricht Treaty Source: Economist Intelligence Unit; BCG analysis 11.4% 1.8% 2012- 1994 - WTO established 2001 China NAFTA signed joins WTO 2008 Global Financial China enters "new normal" slowdown 2018- US-China reciprocal tariffs Crisis 1999 Euro introduced 1998 2007 iPhone premiere Brent crude >$100 2008 2009 China & US Stimulus 2014 Commodity "super-cycle" ends 2018 15 |PUBLIC❘#17Appendix 6 Why trade matters: relevance and evolution of trade 1 The outlook for global trade The $10tn case for trade¹ Open trade scenario: ■ +$10tn GDP in 2025 vs "Baseline" ☐ +$2tn trade in 2025 vs "Baseline" G20 Merchandise Trade¹, $tn 15 ■ +$10tn trade in 2020-25 vs "Protectionism" Projected Trade Value Output Delta (cumulative 2020-2025) Expanding the trade finance supply² ■ The correct capital treatment for trade finance would release $1.2-2.4tn of additional supply² ■ The B20 has recommended the review of such treatment to unlock this supply and drive financial inclusion Global trade finance balances outstanding 2, $tn • • Empirical default rates show low risk nature of trade finance; The correct treatment of trade finance will free up c.30-45% of current capital 10 10 Positive effect: + $4.7-$6.3 "Open trade" 4.1-5.3 "Baseline" "Rising protectionism" 1.2-2.4 2.9 Negative effect: $3.4-$4.9 5 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2019 global trade finance balances Viable new trade finance supply 1. 2. Potential trade finance balances Source: HSBC-BCG joint paper "The $10 trillion case for open trade", September 2020; sources: IMF World Economic Outlook; UN Com trade, OECD; HIS; WTO; IMF; BCG Trade Finance Model 2020; BCG analysis Source: Benchmark data from ICC Trade register 2019. Bank Pillar 3 data adjusted from 6 international banks' Pillar 3 reports 16 |PUBLIC❘#18Appendix 7 Why trade matters: relevance and evolution of trade 1 Key trends reshaping trade Shift from West to East ■ Middle Income population growth in Asia (3.5bn by 20301) ■ Growth in intra-Asian trade; RCEP, ASEAN, CPTPP Faster Covid-19 rebound in the East Business model/ sector transformation Sector transformation (e.g. real estate, retail, tourism) ■ New business models: platform-based and sharing economy; shift from B2B to B2C; business "as a service" Supply chain resilience ■ Focus on risk, including diversification (67% of businesses want a more secure supply chain²) ■ No single point of failure ■ Traceability and transparency ■ Digitisation; growth in online and non-physical trade Digitisation, eCommerce, IOT, cloud-based services Non-physical/ Services; fastest growing area in trade ■ Platform proliferation; digitally connected supply chains Protectionism, trade block divergence ■ Protectionism/ government intervention; push for re-shoring and domestic sourcing Growth in intra-regional trade Sustainability, new social contract ■ 85% of businesses see environmental sustainability as priority² ■ 91% of businesses agree on the need to rebuild their business on firmer environmental foundations² Release of unparalleled big data, allowing businesses to connect to yet unseen opportunities with agility and precision, and to operate more sustainably for the long-term 1. Source: Global Economy and Development: The unprecedented expansion of the Global Middle Class, 2017 2. Source: HSBC Navigator report, 2020 17 |PUBLIC❘#19Appendix 8 Resilient performance in a challenging environment 2 Leading the industry¹ and supporting our customers during Covid-19 Supporting customers Record high Net Promoter Scores (+682) Leading the industry in the response to Covid-19 5 Exceptional personal commitment from our people, rallying around our customers when they've needed us most. B20 SAUDI ARABIA 2020 Enabled clients to transact digitally overnight, e.g. ITS enablement via a phone call³ Outstanding business contingency plans, ensuring the flow of goods and documents Supporting clients' funding and liquidity needs; fast track approvals; 50k+ trade finance extensions in 1H20 ADB Extending liquidity into supply chains (15% SCF asset growth 4), helping clients enhance and protect their supplier relationships Leveraging investment in new data capabilities to help clients navigate risks and repurpose their supply chains As Co-Chair of the B20 Trade & Investment Task Force, HSBC was instrumental in: ☐ Ensuring markets remained open in the midst of the crisis for the free flow of critical goods and services Establishing a fact base to show why open trade matters: $10tn increase in GDP in 20256 Reaching consensus among the B20 (representing millions of G20 corporates) on bold, ambitious, practical policy recommendations to unlock this value New partnership with the Asian Development Bank to support Covid-19 related supplies: Creating a new industry-wide standard for financing through partnerships (i.e. between Banks and Multilaterals/ ECAs) Establishing a capital efficient supply chain financing programme to support companies providing supplies relating to Covid-19; 1. Euromoney award for Best Trade Bank for 3rd consecutive year 5. 2. Average of June to August 2020 scores Euromoney award for Global Excellence in Leadership in acknowledgement of our "extra efforts" to support customers, communities and employees through the coronavirus pandemic 18 3. ITS Internet Trade Service, only for clients already on HSBC net 6. Source: HSBC-BCG joint paper "The $10 trillion case for open trade", September 2020 4. Supply Chain Finance period-end balances growth August 20 vs August 19 |PUBLIC❘#20Appendix 9 Transforming our business for the future of trade 3 Tangible progress in the transformation journey Digital transformation Simplification and automation Full Digital Offering Omni-channels across all products; 100% STP1 Trade Loans launched; Mobile app to authorise and track transactions, documents and containers in real time: 7.5k users Process simplification Automated 88% of steps required to issue a standard guarantee²; deployed 60+ robots to automate manual, repetitive activity New data-enabled solutions Real time credit decisioning using supply chain data feeds, making finance available in minutes e.g. Merchant lending (Alibaba) Customer Surveillance Deployed industry first automation of Sanctions and AML controls covering 96% and 72% 4 of volumes, respectively; removed all manual activity; increased risk detection accuracy Blockchain Progress in commercialising blockchain; rule books agreed; c.50 industry leading transactions додев Cognitive automation Deployment of cognitive and cloud- based Al technology to dematerialise paper and automate manual checks (covering 53% of volumes) Systems/ Platforms HSBC Trade Solutions New, holistic, future-proof trade IT stack; now live in HK with c.2k3 clients for Guarantees, Supply Chain Finance and Asset Distribution6 Supply Chain Cloud Platforms Deployed market leading cloud-based platform in 13 markets (c.40% 5 of total volume) with globally consistent, 100% digital client and supplier experience Trade as a Service Enabling clients to sell more and faster through own and third party platforms; e.g. Point of Sale financing (Google) 1. STP Straight Through Processing 5. Jul 20 Assets 2. 3. Standard guarantee requested through the customer channel As at 30 June 2020 6. GTRF assets distributed into the secondary market to a diversified set of investors (banks or non-banks) 4. FY19 volume (transaction count for Doc Trade and Guarantees) 19 |PUBLIC❘#21Appendix 10 Transforming our business for the future of trade 3 The future of trade (1/3) - Tech and Services trade Opportunity Key deals Cloud services Cloud services: +20% CAGR in 2020-22; $350bn in turnover by 20221 ■ Services Trade: +31% increase from 2019 to 2025 ($1.9tn increase) 2 Point of Sale financing Google ■ Client Needs: Provide flexible payment terms to buyers users to drive sales and increase market share in cloud services and licensing products; mitigate buyer credit risk ■ Our solution: Extending instalment payments to buyers/subscribers of fixed-price, multi-year services contracts at the point of sale through a Receivables Finance structure ■ Why HSBC: Ability and willingness to co-create structured solutions; strong client relationship and global coverage to support global footprint and underwrite obligor risks E-Commerce ☐ eCommerce sales of $25.6tn in 20183; c.40% of consumers will be digital natives by 2030 (up from 18% in 2019)4 Merchant financing E2 Alibaba Group ■ Client need: provide short-term working capital to help c.2K merchant sellers on Tmall Global e- commerce platform to stock inventory ■ Our solution: - - Partnered with Alibaba's smart logistics platform, CaiNiao, to leverage real-time data for credit decisioning and ongoing monitoring of controls to provide receivables-led asset based lending. - Provide indicative offers to merchants in just minutes through connection with CaiNiao API Why HSBC: co-create digital automated financing solution; API suite and full scope of banking services 1. Source: Gartner, 2020, Worldwide Public Cloud Service Revenue Forecast for 2021 & 2022 2. Source: Western Union and Oxford Economics, 2020, The Global Services Trade Revolution, growth over next 5 years Source: Global e-Commerce UNCTAD Press Release, April 2020 234 4. Source: The booming digital economy, September 2020, HSBC Research 20 |PUBLIC❘#22Appendix 11 Transforming our business for the future of trade 3 The future of trade (2/3) - Sustainability Opportunity ■ 85% of businesses see environmental sustainability as a priority1 Journey ■ 91% of businesses agree on the need to rebuild their business on firmer environmental foundations¹ ☐ ☐ $660 billion - Potential sustainable supply chain finance market, which will reach one third of the supply chain finance market² ESG stocks have outperformed their peers during the pandemic; an accelerator to build back better³ New revenue streams: co-creating Sustainable Supply Chain Solutions Developed bespoke solution with Walmart to reduce 1bn metric tonnes of GHGs4 in their supply chain improving profitability of the previous SCF5 program Going deeper: supporting our clients' transition (Buyers & Suppliers) This solution acts as a magnet for other anchor buyers that Iwant to be sustainable Sustainability dialogue is moving beyond buyer-led to direct supplier engagement for key transition requirements Going broader: expanding our solutions Built new solutions to cater for a broader base of clients (green trade loans, green RF6, Social SCF5) These solutions support clients future proof their business (e.g. Green trade facility for large EPC7 contractor in Middle East) Unlocking Value: Scaling through partnerships Partnership with IFC to support sustainable Trade Finance Allowing improved access to finance for new clients, while helping economies build back better Credentials Walmart ◉ eNGie Paul Y IFC International Finance Corporation Global Sustainable Supply Chain Finance program Supporting new renewable energy business development across the US -totalling $1.6bn Green trade loan to support Green construction Partnership with IFC to increase capacity for sustainable trade finance EUROMONEY AWARDS FOR EXCELLENCE 2020 SET ASIAN ASSET AVIARDS 202 A Asset *TREASURY RADE 080250 ■ ◉ ■ 1. Source: HSBC Navigator Survey Results 2. Source: BSR - Business for Social Responsibility: Win-Win-Win: The Sustainable Supply Chain Finance Opportunity 2018 3. Source: Climate Investment Update, September 2020, HSBC Research 4. GHGs Greenhouse gases World's Best Bank for Sustainable Finance Regional awards for Best Bank for Sustainable Finance in ASP, Western Europe & Middle East Best ESG Trade Finance Solution for Asia Best ESG Trade Finance Solution for Hong Kong 5. SCF Supply chain finance 599 6. RF Receivables Finance 7. EPC Energy, Procurement and Construction 21 |PUBLIC❘#23Appendix 12 Transforming our business for the future of trade 3 The future of trade (3/3) - Asia The Asia growth opportunity Shift in wealth and innovation ■ Asia-Pacific is forecasted to comprise 66% of the world's middle income population by 20301 Asia's share of global start-up funding increased from 16% in 2013 to 47% in 20182 Supply chains pivoting to Asia7 Share of supply chain, by location: Now Within 2 years % change within 2 years China 26.3% 27.5% +4.6% Asia ex China 21.4% 22.7% +6.1% Growth in intra-Asian trade ■ 60% of Asian trade is intra-regional, up from 52% in 20013 ■ 72%² of trade of Emerging Asia 4 countries is intra-regional North America 25.1% 24% -4.4% Europe 15.3% 14% -8.5% Rest of the world 11.9% 11.8% -0.8% Faster Covid-19 rebound Exports from Asian economies remained resilient 5 China first in and first out of lockdown; Chinese factories able to supply the world as output stalled elsewhere6 Source: East & Partners As the #1 trade finance bank in Asia³, HSBC is best placed to capture the Asia growth opportunity 1. Source: Why the evolution of supply chains is picking up speed in Asia-Pacific, World Economic Forum, 2020 2. Source: The future of Asia: Asian flows and networks are defining the next phase of globalization, McKinsey UNCTAD 2019 234 3. 4. Countries: Bhutan, Brunei, Cambodia, Indonesia, Laos, Malaysia, Mongolia, Myanmar, Nepal, Philippines, Thailand & Vietnam 5698 See Appendix 5: Leading indicators for world trade 6. Source: "But will it last", September 2020, HSBC Research 7. Source: "Reshaping the future of supply chains in Asia", HSBC and East & Partners 8. Source: OW Coalition FY19 revenue benchmarking report 22 |PUBLIC❘#24Appendix 13 Glossary ADB Asian Development Bank ESG Environmental, Social and Corporate Governance ΑΙ Artificial Intelligence FTE Full-time Equivalent GHG Greenhouse Gases AML Anti Money Laundering IFC ΑΡΙ Application Program Interface International Finance Corporation IOT Internet of Things ASEAN Association of Southeast Asian Nations ITS Internet Trade Service B20 Business 20 NPS Net Promoter Score B2B Business-to-business RCEP Regional Comprehensive Economic Partnership B2C Business-to-consumer RF Receivables Finance CAGR Compound Annual Growth Rate RWA Risk-weighted Asset Comprehensive and Progressive Agreement for Trans- CPTPP Pacific Partnership SCF Supply Chain Finance DC Documentary Credit SLA Service-level Agreement ECA Export Credit Agency STP Straight Through Processing EPC Energy, Procurement and Construction WTO World Trade Organization |PUBLIC❘