#1HSBC Mexico 1Q20 March 2020 HSBC PUBLIC#2Important notice and forward-looking statements YOU MUST READ THE FOLLOWING BEFORE CONTINUING. THE FOLLOWING APPLIES TO THE PRESENTATION MATERIALS FOLLOWING THIS PAGE, AND YOU ARE THEREFORE ADVISED TO READ THIS CAREFULLY BEFORE READING, ACCESSING OR MAKING ANY OTHER USE OF THE PRESENTATION MATERIALS. IN ACCESSING THE PRESENTATION MATERIALS AND/OR BY ATTENDING THE PRESENTATION, YOU AGREE TO BE BOUND BY THE FOLLOWING OBLIGATIONS AND LIMITATIONS. This presentation and the information contained herein and the subsequent discussions do not constitute a public offer for the purposes of any applicable law or a recommendation, advice offer or solicitation to buy purchase or sell any security, commodity, currency or other financial instrument. This presentation and the information contained herein and the subsequent discussions, do not purport to be comprehensive nor render any form of financial or other advice, and have been provided by HSBC Mexico, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC ("HSBC México"), solely for information purposes, and have not been independently verified, approved by any person. No responsibility, liability or obligation (whether in tort, contract or otherwise) is accepted by HSBC México, any of its affiliates or any of its or their officers, employees, agents or advisers (each an "Identified Person") as to or in relation to this presentation and any subsequent discussions (including the accuracy, completeness or sufficiency thereof) or any other written or oral information made available or any errors contained therein or omissions therefrom, and any such liability is expressly disclaimed. No responsibility or liability is accepted by HSBC México or any of its respective members, directors, officers, employees, affiliates or agents or any other person in relation to the accuracy, completeness or sufficiency of any information contained herein or any other written or oral information made available by HSBC Holding plc and its subsidiaries (together "HSBC"), in connection therewith or any data which any such information generates, or for any loss whatsoever arising from or in connection with the use of, or reliance on, this presentation and any such liability is expressly disclaimed. No representations or warranties, express or implied, are given by any Identified Person as to, and no reliance should be placed on the accuracy or completeness of any information contained in this presentation, any other written or oral information provided in connection therewith or any data which such information generates. No Identified Person undertakes, or is under any obligation, to provide the recipient with access to any additional information, to update, revise or supplement this presentation or any additional information or to remedy any inaccuracies in or omissions from this presentation. Past performance of HSBC Mexico can not be relied on as a guide to future performance. This presentation and subsequent discussion may contain projections, estimates, forecasts, targets, opinions, prospects, results, returns and forward-looking statements with respect to the financial condition, results of operations, capital position and business of HSBC Group and or/ of Grupo Financiero HSBC, S.A. de C.V. (together HSBC Group) together, "forward-looking statements". Any such forward-looking statements are not a reliable indicator of future performance, as they may involve significant assumptions and subjective judgments 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 Group. 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 or regulatory changes). Any such forward-looking statements are based on the beliefs, expectations and opinions of HSBC Group at the date the statements are made, and HSBC Group 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, express or implied, are given by any Identified Person as to the achievement or reasonableness of any projections, estimates, forecasts, targets, prospects or returns contained herein. Additional detailed information concerning important factors that could cause actual results to differ materially is available in HSBC Holdings plc's Annual Report and Accounts 2019, 1Q20 Earnings Release and the Local HSBC México press release. This presentation contains non-GAAP financial information. The primary non-GAAP financial measure we use is 'adjusted performance' 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 non-GAAP financial measurements and the most directly comparable measures under GAAP are provided in HSBC Holdings plc's Annual Report and accounts 2019, the Reconciliations of Non-GAAP Financial Measures document and HSBC México press release which are available at www.hsbc.com. This presentation does not constitute a prospectus or other offering document in whole or in part. Information contained in this presentation is a summary only. Under no circumstances shall these presentation materials constitute or form part of, and should not be construed as, an invitation or offer for sale or subscription of, or a solicitation of any offer to buy or subscribe for, any securities of HSBC México referred to below in any jurisdiction or an inducement to enter into investment activity. Nor should they or any part of them form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. The information and opinions contained herein are provided as at the date of this presentation and are subject to change without notice without giving reasons, at any time and in any respect, and will only be finalised at the time of the Issue. This document is for the exclusive use of the person(s) to whom it is provided. It should be read in its entirety and shall not be photocopied, reproduced, further distributed or disclosed in whole or in part to any person other than the recipient for any purpose without the prior written consent. This presentation is not intended for distribution, directly or indirectly, to, or for use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. This presentation does not constitute or form a part of any offer or solicitation to purchase or subscribe for any securities in the United States or any other jurisdiction. Credit ratings provided by third-party credit rating agencies may not reflect all risks of an investment in securities and may be subject to revision or withdrawal at any time. HSBC Group may in the course of its placement efforts be solicited by investment clients for whom it provides other services. HSBC México may also decide to allocate the Issue to the proprietary book of HSBC México or an affiliate. This represents a potential conflict of interest. HSBC has internal arrangements designed to ensure that HSBC México would give unbiased and full advice to a corporate finance client about valuation and pricing of an offering as well as internal systems, controls and procedures to identify and to manage potential conflicts of interest. HSBC México is a member of the HSBC Group. Information in this document was prepared on [May 22 2020]. PUBLIC 2#31. HSBC in Mexico HSBC PUBLIC 3#4HSBC in Mexico Our Mexican business is strategically important to the Group Ownership chart HSBC Mexico performance¹ Reported revenue HSBC Holdings plc USDbn HSBC Latin America Holdings (UK) Limited 100% HSBC Mexico, S.A. 99.99% 2. 1. Source: HSBC Holdings plc Annual Report Accounts 2019. Reported figures under IFRS Includes intra-group transactions 3. FY19 Group reported profit before tax includes a $7.3bn goodwill impairment charge +11% % of Group2 4.6% 2.6 2.3 4.3% FY18 FY19 FY18 FY19 Reported profit before tax³ USDbn +30% 2.7% 0.7 0.5 % of Group 5.1% FY18 FY19 FY18 FY19 PUBLIC 4#5HSBC in Mexico All lines of business grew profit before tax in FY19 HSBC Mexico - reported profit before tax USDM 194 +44% 279 +46% +10% 166 217 197 114 FY18 FY19 FY18 FY19 FY18 FY19 Retail Banking and Wealth Management Commercial Banking Global Banking and Markets 1. Source: HSBC Holdings plc Annual Report Accounts 2019. Reported figures under IFRS PUBLIC 5#6HBMX Wholesale 1. North America Corridor, comprising Mexico, Canada and the USA Retail HSBC in Mexico 2018-2020 strategy remains in place Two main strategic pillars... (i) Fully leverage our retail scale to reach a 10% market share (to match our branch market share), (ii) Become the leading wholesale bank for international customers and local customers with transaction banking needs. ...and ten strategic initiatives: 1 Leverage scale 2 SMES 3 4 Open Economy: International Connectivity / NAC Deepen relationships with clients Client-focused 5 Markets franchise Financial rime Risk 6 Management 7 Digital Client service and 8 client perception 9 People: culture and talent 10 IT transformation ■ Leverage retail scale in Mexico by adding product, digital and risk capabilities, growing our client base and improving product penetration Catch-up from an underweight market share position (<3%); capture the opportunity in the profitable and fast-growing SME segment (market credit growth of ~13%) Fully capture the international connectivity of Mexico by developing business within NAC1 and with other relevant corridors in Asia, Europe and Latin America ■ Use HSBC's global competitive advantages and HBMX's tailored services, products and platforms to deepen transactional relationships with clients Develop a Markets franchise on Corporate and Institutional Sales by using the bank's global platforms and extensive corporate client base ■ Enhance Financial Crime Risk Management allowing for a sustainable and sound growth Capture the opportunity presented by the low mobile/internet banking usage in Mexico ■ Deliver more efficient client service to improve customer journeys, and enhance our reputation by strengthening brand awareness ■ Sustain our unique culture, and compensate to attract and retain the best talent ■ Maintain and enhance a stable and fully reliable IT platform to serve the needs of our customers PUBLIC 6#7HSBC in Mexico Euromoney awards: a successful strategy HSBC Mexico: Latin America's best bank transformation 2018 EUROMONEY AWARDS FOR EXCELLENCE 2018 (C) Best Bank in Mexico 2019 EUROMONEY AWARDS FOR EXCELLENCE 2019 PUBLIC 7#8• • • HSBC in Mexico Covid-19 Support measures HSBC has donated MXN15million for the Temporary Hospital Unit of the Citibanamex Convention Center, and for the Mexican Red Cross in their purchase of ventilators and medical equipment We have encouraging and facilitating employees to join the fight against Covid-19 by donating to the Mexican Red Cross through various means (ATMs, internet banking, mobile banking, and HSBC branches) Client measures Employee measures Most GBM, CMB and Private Banking employees are working from home, with the necessary technology at their disposal, as well as applications such as Zoom for having teleconferences with clients Strengthen home office security, so that employees can continue working from home efficiently and limiting the risk of leaking confidential information 75% of branches remain open. HSBC Mexico has taken preventive measures in branches with access limited to 10-20 persons and a minimum distance of 1.5-2 metres. Branches operate with 60% employees, participating under a rotation scheme Customers and users are invited to make use of digital services; mobile banking, contact centre and depositors. ATMs can now supply up to MXN9,500 Our Business Banking executives have been equipped with the necessary technology to mobilise in the event that any SME client requires attention for their company We are able to advise clients about saving money in times of contingency and protection through their credit cards Increase the possibility of buying insurance with HSBC cards and with the Total Control application Increase security against fraud during the contingency due to fraud cases derived by Covid-19 Potencial impacts Should the Covid-19 outbreak continue to cause disruption to economic activity globally through 2020, it is expected to trigger an increase in expected credit losses. In addition, it will have impacts on our income due to lower lending and transaction volumes and lower wealth and insurance manufacturing revenue due to equity markets volatility and weakness and, lower interest rates which will negatively impact net interest income. In addition to credit risk, the Covid-19 outbreak will have material impacts on capital and liquidity. The Bank Regulator (CNBV) and the Central Bank have initiated a series of capital and liquidity measures, including the reduction of certain regulatory capital buffers and minimum liquidity ratios, to support the ability of banks to supply credit to businesses and households through this period of economic disruption. At 31 March 2020, our capital and liquidity ratios remain solid allowing to continue supporting our customers throughout the Covid-19 outbreak Source: HSBC Mexico PUBLIC 8#93. HSBC Mexico financial performance HSBC PUBLIC 9#10HSBC Mexico financial performance Reported financial performance 1Q20 - Mexico GAAP Revenue 1,2,3,4,5 MXNM Loan impairment charges and other credit risk provisions 3,4,5 -21% +7% +26% +4% 11,890 12,407 11,078 9,464 8,806 Mar16 Mar17 Mar18 Mar19 Mar20 Operating expenses MXN M +3% +3% +10% +3% 6,684 6,904 5,722 5,866 6,051 Mar16 Mar17 Mar18 Mar19 Mar20 MXN M (-62% -5% +29% (+28% 4,809 2,906 2,263 1,846 1,754 Mar17 Mar18 Mar19 Mar20 Mar16 Profit before tax² MXNM +99% +51% +76% -12% 2,958 2,616 1,677 1,108 557 Mar16 Mar17 Mar18 Mar19 Mar20 Source: HSBC Mexico 1Q20 press release. Figures under Mexico GAAP 1. Revenue refers to Total Operating Income excluding Loan impairment charges 2. March 2019 figures includes MXN 1,296m of gain in sale of 50% of the joint venture booked in January 2019 PUBLIC 10 3. March 2016 reported income, includes the reversal of previous year excess loan impairment reserves. 4. 5. From March 2018 onwards, the reversal of previous years excess reserves is reported in Loan impairment charges, following a change regulations. March 2017 reported income was MXN 9.126m. which included the reversal of previous years reserves in Other income. For comparison purposes. MXN 320m was reclassified to Loan impairment charges.#11HSBC Mexico financial performance Reported financial performance 1Q20 - Mexico GAAP LICS 1,2/loans % Net Loans advances to customers 1,2 MXN M MXNM +7% +19% +22% +11% 415,900 376,210 308,500 242,020 259,989 7.5 Mar19 Mar20 Mar16 Mar16 Mar17 Mar18 Non performing loan ratio 3% MXNm 5.1% 3.0% 2.3% 1.9% 1.9% 2.7 2.7 2.2 2.3 Mar17 Mar18 Mar19 Mar20 LLR4, loans % MXNM 6.1 4.5 3.7 3.4 3.2 Mar16 Mar17 Mar18 Mar19 Mar20 Mar16 Mar17 Mar18 Mar19 Mar20 1. 2. 3. Source: HSBC Mexico 1Q20 press release. Figures under Mexico GAAP Figures are under local GAAP. Annualised LICs as a % of gross loans and advances to customers. Non-performing loans as a % of gross loans and advances to customers. 4. LLR allowance for loan losses as a % of gross loans and advances to customers PUBLIC 11#12HSBC Mexico financial performance Credit portfolio and deposits. Deposits¹ MXNbn +12% +13% +20% +6% 418.4 394.9 328.1 290.0 258.0 Mar17 Mar18 Mar19 Mar20 Mar16 Advances to deposits ratio (ADR) %2 MXNbn 93.7% Mar16 89.7% Mar17 95.3% 94.0% Mar18 99.4% Mar19 Mar20 1. 2. Source: HSBC Mexico 1Q20 press release. Reported figures under local GAAP. Time Deposits exclude money market deposits Demand and Time Deposits disclosed in the Spanish version of the 1Q20 press release, and excludes money market deposits (Mercado de dinero). This Spanish version is publicly available on the HSBC Mexico website at https://www.about.hsbc.com.mx/es-mx/investor-relations PUBLIC 12 3. March 2020 ratio increased due to 25% FX rate depreciation in March 2020 mainly driven by the revaluation of the USD Loan portfolio partially offset by the revaluation of the USD Deposits.#13HSBC Mexico financial performance HSBC Mexico Bank - capital Total capital adequacy ratio at 1Q20 was 13.0%, 190bps above regulatory requirements Capitalisation %1 12.4% Total capital adequacy ratio 12.9% 12.8% 12.9% 13.0% 1.9 1.0 1.9 1.8 2.1 10:3 110 112 Mar16 Mar17 Mar18 Mar19 Mar20 Tier 1 ■Tier 2 CET1: Common Equity Tier 1 DSIB: Domestic Systemically Important Bank 1. ■ At 31 March 2020, the bank's total capital adequacy ratio was 13.0% and the tier 1 capital ratio was 11.2% ■ The minimum capital ratios for HSBC Mexico under local rules as of March 2020 are: • CET1 Ratio: CET1 ≥7% + DSIB • 7.60% Tier 1 Capital Ratio ≥ 8.5% + DSIB 9.10% • Total Capital Ratio ≥ 10.5% + DSIB 11.10% DSIB 60 bps In April 20, CNBV issued a press release allowing the banks to use up to 50% of their capital conservation buffer (2.5% of RWA's). Source: CNBV for figures from March 2016 to March 2019. March 2020 figures according to HSBC Mexico 1Q20 press release. PUBLIC 13#144. Peer bank review HSBC PUBLIC 14#15Peer Bank review HBMX vs Industry Total loans 1 MXNbn +10% Retail loans MXNbn Wholesale loans MXNbn +10% +7% +17% +12% 5,254 5,776 390 430 1,882 2,004 133 3,772 +7% 113 3,372 276 297 Mar19 Mar20 Mar19 Mar20 Mar19 Mar20 Mar19 Mar20 Mar19 Mar20 Mar19 Mar20 Banking Industry² HSBC Mexico Banking Industry² HSBC Mexico Banking Industry² HSBC Mexico Lending rates (NIM) Credit Cost (3 months rolling average) (Annualized LICs/avg. loans) Coverage index (loan reserves/NPL) % % % 8.9 4.2 8.0 6.1 5.7 2.7 2.9 153.4 2.4 150.4 183.2 165.1 Mar19 Mar20 Mar19 Mar20 Banking Industry² HSBC Mexico Mar19 Mar20 Banking Industry² Mar19 Mar20 HSBC Mexico Mar19 Mar20 Banking Industry² Mar19 Mar20 HSBC Mexico Source: CNBV, figures under local GAAP as of March 2020 1. Total loans may not cast due to rounding 2. Banking industry comprises the six largest banks in Mexico including HSBC PUBLIC 15#16Peer Bank review HBMX vs Industry - Liquidity coverage ratio 186% 149% 147% 145% Mar19 Mar20 Mar19 Mar20 Banking Industry¹ HSBC Mexico Source: CNBV 1. Banking industry average of the six largest banks in Mexico including HSBC PUBLIC 16#175. Characteristics of the offer HSBC PUBLIC 17#185. Characteristics of the offer Medium term notes Issuance of medium term notes (Certificados Bursátiles bancarios) up to MXN 10,000 million Issuer Type of Security Issuance amount Maximum amount of issuance Target issuance amount Currency Local rating Type of interest rate Local code for issuance Term Reference rate Frequency of interest payment Date of book creation Issuance date Maturity date Amortisation Guarantee Book runner HSBC México, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC Certificados Bursátiles Bancarios de largo plazo Up to MXN 40,000 million Up to MXN 10,000 million MXN 5,000 million Pesos [AAA (Mex) (Fitch); Aaa (Mex) (Moody's)] Variable HSBC 20 1,092 days (~3 yrs) TIIE 28 Every 28 days [11 June 2020] [15 June 2020] [12 June 2023] Bullet No specific guarantee HSBC Fix HSBC 20-2 3,640 days (~10 yrs) MBONO 29 Every 182 days [11 June 2020] [15 June 2020] [3 June 2030] PUBLIC 18#19Empty