Hsbc – the Management Report
The management report
In the annual reports for the two years (2009 and 2010) of HSBC bank we have found the management report represented by the report of directors. According to these reports, the group management board assesses HSBCs progress basing on the key financial performance indicators. In addition to these key performance indicators (KPIs) there are several targets to assess the performance of the bank. The key financial performance indicators are:
Revenue growth provides an important guide to the Groups success in generating business.
Revenue mix represents the relative distribution of revenue between different types of revenue. It helps to understand how changing economic environment influence the Group, to assess the performance of cross-selling fee-based services with deposit and loan services and also to indicate the relation of balance sheet utilization with income generation, which further would help to make investment decisions.
Cost efficiency is an indicator that shows the dependence from resources to generate revenue. This measure helps managers to evaluate the efficiency of technology utilization and the productivity of the Groups distribution and sale abilities.
Credit performance as measured by risk adjusted margin is an indicator to assess the correctness of credit pricing regarding the satisfaction of the Groups required return levels.
Return on average invested capital helps management to threshold HSBC touching competitors.
Return on average total shareholders equity assesses the return on average shareholders investment in the business. This also helps management to threshold HSBC performance against competitors.
Basic earnings per share is a portion of a companys profit allocated to each share of common stock. EPS is one of two indicators used to