Geschäftsbericht 2013 Annual Report 2013 Annual Report Financial Highlights of the HSBC Trinkaus Group 2013 2012* change in % Results in € m Operating revenues 703.0 705.4 – 0.3 Net loan impairment and other credit risk provisions 10.9 0.9 > 100 Administrative expenses 486.2 495.0 – 1.8 Pre-tax profit 219.1 217.9 0.6 Tax expenses 63.8 85.9 – 25.7 Net profit 155.3 132.0 1 7. 7 Balance sheet figures in € m Total assets 19,809.7 20,047.8 – 1.2 Shareholders’ equity 1,453.7 1,385.2 4.9 Ratios Cost efficiency ratio of usual business activity in % 67.9 69.4 – Return on equity before tax in % 16.5 1 7. 1 – Net fee income in % of operating revenues 57.0 54.4 – Funds under management and administration in € bn 149.2 150.3 – 0.7 Employees 2,527 2,528 0.0 Share information Number of shares issued in million 28.1 28.1 0.0 Dividend per share in € 2.50 2.50 0.0 Earnings per share in € 5.53 4.70 1 7. 7 Share price as at 31.12. in € 84.80 87.19 – 2.8 Market capitalisation in € m 2,383.5 2,450.7 – 2.8 Regulatory ratios** Tier 1 in € m 1,303.9 1,192.6 9.3 Regulatory capital in € m 1,638.5 1,534.6 6.8 Risk-weighted assets in € m 11,125.0 9,238.1 20.4 Tier 1 ratio in % 11. 7 12.9 – Regulatory capital ratio in % 14.7 16.6 – * Prior year’s figures adjusted. The adjustments are explained in Note 18. ** Following confirmation of the balance sheet Annual Report 2013 HSBC Trinkaus & Burkhardt Date of issue: April 2014 HSBC Trinkaus & Burkhardt AG Königsallee 21/23 40212 Düsseldorf Tel. +49 211 910-0 Fax +49 211 910-616 [email protected] www.hsbctrinkaus.de Contents 06 Letter from the Management Board 09 Executive and Supervisory Bodies 10 Management Board 12 Supervisory Board 15 Advisory Board 17 Group Management Report 18 The Foundations of the Group 25 Economic Report 33 Supplementary Report 34 Outlook and Opportunities 36 Risk Report 62 Internal Control System and Risk Management System with Regard to the Accounting Process 67 Information Relevant for Acquisitions 69 Sustainable Corporate Management 71 Staff 72 Compensation Report 75 Corporate Governance Statement 77 Consolidated Financial Statements 78 Consolidated Balance Sheet 79 Consolidated Statement of Comprehensive Income 81 Consolidated Statement of Changes in Capital 82 Consolidated Cash Flow Statement 83 Notes to the Consolidated Financial Statements 157 Auditor’s Report 158 Report of the Supervisory Board 161 Report on Corporate Governance in 2013 165 Responsibility Statement by the Management Board 166 Locations 168 Imprint 169 Key Dates Contents Annual Report 2013 5 Ladies and Gentlemen, The 2013 financial year was an eventful one for the Bank use the international network within the HSBC Group due to the general economic and regulatory setting as well more intensively. We are convinced that we will be able to as new strategic decisions. There were signs of recovery acquire new clients thanks to our global presence and our and growth in the global economy again last year – albeit capital strength as HSBC. only at a slow pace. Tighter regulatory requirements for banks are putting many institutions, their business models Our strategic orientation is based on the good results and balance sheets under additional pressure. in the latest financial year. Despite the difficult environ- ment and additional expenses for restructuring, pre-tax Thanks to our good capitalisation and outstanding liquidity profit of € 219.1 million was slightly higher than the ad- we, on the other hand, are in the position to expand our justed prior-year figure (€ 217.9 million). Net profit even business model. We want to make better use of our increased by 17.7 % compared to the adjusted prior-year strengths and benefit from the changes that are becoming figure, to € 155.3 million. evident in the banking sector. In July 2013 we therefore launched a growth initiative aimed at positioning HSBC There was a slight decline in the regulatory capital ratio in Trinkaus far more strongly than to date as the ‘Leading the latest financial year, from 16.6 % to 14.7 %. The Tier 1 International Bank’ in Germany and making us one of the capital ratio stands at 11.7%. Increased risk weighted as- leading banks in the business with the upper SME seg- sets as a result of the growth strategy launched in the cor- ment and large corporations by 2017. In order to achieve porate banking business and the associated expansion of this, we will primarily enlarge our client base of interna- our lending business were responsible for the slightly low- tionally-operating SMEs, extend our product offer, expand er ratios. HSBC Trinkaus is therefore in a very strong capi- the lending business with an adjusted appetite for risk and tal position for further growth and is well equipped for the 6 Annual Report 2013 Letter from the Management Board tighter requirements under Basel III applicable from the 2014 will be a challenging year for HSBC Trinkaus. Our 2014 financial year – in the future as well. In light of the business performance makes us confident that we will be good result, the Management Board and the Supervisory able to use the opportunities presented by the market and Board will propose to the Annual General Meeting the pay- competitive environment. The numerous regulatory chang- ment of an unchanged dividend of € 2.50 per share. es represent a challenge for our Bank as well, which we will have to meet with further increases in efficiency. The successful trend in business again confirms the sus- However, some of the changes can also result in opportu- tainability of our business model. We also have an impor- nities for us – on account of their influence on the struc- tant stand-alone feature in the German market. Thanks to ture of the banking sector. Our goal is to become the core our access to HSBC’s global network we offer internation- bank for a greater number of clients. al presence in the world’s most important growth mar- kets, but we are firmly rooted as a German bank with a Our employees play a decisive role in HSBC Trinkaus’ suc- history going back almost 230 years in Germany. The com- cess: their skills and commitment, but also their willing- bination is important for our positioning – above all in the ness to change and enthusiasm are indispensable above corporate banking business upon which our growth initia- all in times of growth and make it possible for us to con- tive is focused. It qualifies us as the partner of choice for stantly develop further at all. We owe our employees rec- German companies with international business or corre- ognition and thanks for the fact that they meet new chal- sponding goals. We will use our asset, our international lenges every day. In the awareness that our employees networking or ‘Global Connectivity’, more strongly from are our most important asset, we continue to attach major now on and also offer it in a corporate segment which is importance to the development of our staff – be it through relatively new for us: internationally-operating companies training and advanced training measures or international with an annual turnover of € 35 million and more will also placements. It is important during processes of change be included in our target client group in future. We are in particular that our employees can identify with HSBC convinced that the success of internationally-operating Trinkaus and support the reorientation of our business ac- companies in Germany will depend on whether they turn tivities. more strongly towards the fast-growing markets and that we can provide them with the best possible support in Finally, we would like to thank our clients and sharehold- their endeavours. ers for the trust they place in us, our business partners for their support and our employees for their constructive co- The balanced nature and stability of our business structure operation. can also be seen in the results of our four core segments Commercial Banking, Global Banking & Markets, Asset Management und Global Private Banking, which were able to improve their results further overall. The Global Banking & Yours sincerely, Markets segment again generated the greatest earnings contribution, even though the result is lower owing to an The Management Board extraordinary effect the previous year. The business seg- ments were able to make up for and largely overcome the difficult interest rate environment and the further increase in pressure on margins with higher fee income as well as cost reductions. Administrative expenses were reduced further as a result of restructuring measures to increase efficiency, even though additional expenses were incurred on account of the withdrawal from Luxembourg. In addi- tion, we see further potential in stronger cross-divisional cooperation: in terms of the product offer, the mutual in- troduction of clients and the integral servicing of clients, both private and commercial. Letter from the Management Board Annual Report 2013 7 Executive and Supervisory Bodies 10 Management Board 12 Supervisory Board 15 Advisory Board Executive and Supervisory Bodies Annual Report 2013 9 Executive and Supervisory Bodies of HSBC Trinkaus & Burkhardt AG Management Board Andreas Schmitz, Chairman Carola Gräfin v. Schmettow Paul Hagen Norbert Reis Düsseldorf Baden-Baden Berlin HSBC Trinkaus is an internationally-networked, client- Frankfurt am Main Hamburg Cologne oriented commercial bank. We are in a special position Munich Stuttgart among the German banks: in a global network as HSBC in Germany and therefore part of one of the world’s largest banking groups – and at the same time offering an individ- ual and highly-personalised customer service with the val- ues of our history going back almost 230 years.