The world's local bank - HSBC

HSBC FRANCE
Report of the Board of Directors to the Annual General Meeting of Shareholders (continued)
In addition, HSBC France offered its French customers
products from other parts of the HSBC Group:
– fxtrading@hsbc in foreign exchange;
– structured forex options;
– credit derivatives.
Synergies with the Commercial Banking business
continued, with strong growth in forex and interestrate
hedging products.
In Corporate Banking, HSBC confirmed its top 10
position in Mergers and Acquisitions and its top 5
position in bond issues:
– Mergers and acquisitions: HSBC no. 8 (versus
no. 7 in 2004 – Thomson – reported transaction
volumes). The main deals in 2005 included: the
Sagem/Snecma and Electrabel/Suez mergers,
the acquisition of Equant and Amena by France
Télécom, the APRR privatisation and the disposal
of Rexel by PPR (Pinault Printemps
Redoute).
– Primary equity markets: HSBC no. 7 (versus no. 12
in 2004 – Bondware). The main deals in 2005
included: capital increases for France Télécom,
Rhodia and Suez (lead manager or co-lead
manager) and IPOs for EDF, Sanef and Ipsen.
– Debt capital markets: HSBC no. 3 (versus no. 5 in
2004 – all French issuers in euros and across all
currencies – Bondware). The main deals in 2005
included: the French government’s first 50-year
bond issue and the first eurozone inflation-linked
bond issue by Veolia.
– Syndicated loans: HSBC no. 5 (versus no. 7 in
2004 – Loanware), 35 lead arranger mandates
and total lending volume of EUR 75 billion.
– Specialised finance (asset and structured finance,
LBO, real estate, project finance): record year in terms
of revenues and operating profit before provisions
with unrivalled diversity of large and international
transactions.
This increased commercial activity led to a rise in
risk-weighted assets. HSBC France assesses the
profitability of each client’s overall relationship, in
order to optimise our use of risk-weighted assets and
to define our strategic position.
Asset management
Asset management had an excellent 2005. Earnings
rose strongly, due to a 19 per cent rise in assets under
management to EUR 66 billion. Net new money
accounted for almost half the increase, rising to
EUR 5.2 billion, while an improved asset mix and
average margin also contributed to the increase.
– Sinopia’s alternative funds, distributed throughout
the HSBC Group, were a success.
– Equity funds generated high levels of new money,
particularly HSBC Group funds (BRIC Freestyle
with EUR 360 million, HSBC GIF India with
EUR 2.3 billion, HSBC GIF Chinese Equity with
EUR 950 million).
– Bond funds saw satisfactory new money inflows,
although this was offset by outflows from moneymarket
funds at the end of the year.
International expansion continued, particularly in
Italy and Asia.
Groundwork for a major reorganisation was done
of support in 2005. This reorganisation will be
carried out in early 2006, with the pooling of sales
forces and support functions and the outsourcing of
employee savings account-keeping to a platform
shared by four companies.
The quality and performance of HSBC France’s asset
management business was once again acknowledged:
– Sinopia Digit Très Long Terme: best fund over
5 years (Lipper Fund Awards – eurozone bond
category);
– HSBC Investments, best major retail network for
the 2005 performances (Victoires La Tribune –
Standard & Poor’s);
– Sinopia no. 3 and HSBC Investments no. 8 among
213 French asset management companies (Alpha
League Table Europerformance – Edhec ranking),
in terms of equity alpha;
– Sinopia Actiprimes Obligations: best fund over
10 years – Bond Global-Euro Hedged category
(Reuters Lipper Fund Awards France 2006).
Private Banking
The restructuring of the private banking business
was completed, and the new management team set
clear objectives.
2005 was a year of consolidation. Client base
expansion and sales approaches were refined, based
on the reorganisation of financial manager and
private banker teams. Central functions were
developed in order to enhance service quality.
In 2006, these efforts will be followed by the
introduction of a new information system known
as Group Private Banking European Platform,
comprising Bimas and related applications used by
the HSBC Group’s Private Banking entities.
Following the introduction of new agreements in
the first half of 2005, synergies with Personal
Financial Services and Commercial Banking started
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