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Employee compensation and benefits (Tables)
 12 Months Ended
Dec. 31, 2018
Employee Compensation And Benefits [Abstract]  
Disclosure of employee compensation and benefits
 
2018

2017

2016

 
$m

$m

$m

Wages and salaries
14,751

15,227

15,735

Social security costs
1,490

1,419

1,312

Post-employment benefits
1,132

669

1,042

Year ended 31 Dec
17,373

17,315

18,089
Disclosure of average number of employees
Average number of persons employed by HSBC during the year by global business

Footnotes
2018

2017

2016

Retail Banking and Wealth Management
 
135,239

134,021

137,234

Commercial Banking
 
48,757

46,716

45,912

Global Banking and Markets
 
48,990

49,100

47,623

Global Private Banking
 
8,206

7,817

8,322

Corporate Centre
1
1,658

7,134

7,842

Year ended 31 Dec
 
242,850

244,788

246,933

1 The reduction in the average number of people employed was due to the completion of the cost to achieve transformation programme at the end of 2017.
Average number of persons employed by HSBC during the year by geographical region

2018

2017

2016

Europe
67,007

70,301

71,196

Asia
127,992

125,004

122,282

Middle East and North Africa
9,798

10,408

12,021

North America
17,350

18,610

20,353

Latin America
20,703

20,465

21,081

Year ended 31 Dec
242,850

244,788

246,933
Disclosure of total incentive awards granted to income statement charge
Reconciliation of total incentive awards granted to income statement charge
 
2018

2017

2016

 
$m

$m

$m

Total incentive awards approved for the current year
3,473

3,303

3,035

Less: deferred bonuses awarded, expected to be recognised in future periods
(351
)
(337
)
(323
)
Total incentives awarded and recognised in the current year
3,122

2,966

2,712

Add: current year charges for deferred bonuses from previous years
322

336

371

Other
(70
)
(78
)
(128
)
Income statement charge for incentive awards
3,374

3,224

2,955
Disclosure of deferred incentive awards recognized and expected to be recognized
Year in which income statement is expected to reflect deferred bonuses
 
Charge recognised
Expected charge
 
2018

2017

2016

2019

2020 and beyond

 
$m

$m

$m

$m

$m

Variable compensation from 2018 bonus pool
150

—

—

149

202

Variable compensation from 2017 bonus pool
180

162

—

60

29

Variable compensation from 2016 bonus pool and earlier
142

336

320

111

85

Total
472

498

320

320

316

Cash awards
169

184

114

102

113

Equity awards
303

314

206

218

203
Explanation of effect of share-based payments on entity's profit or loss
‘Wages and salaries’ includes the effect of share-based payments arrangements, of which $450m were equity settled (2017: $500m; 2016: $534m), as follows:
 
2018
2017
2016
 
$m
$m
$m
Restricted share awards
499
520
591
Savings-related and other share award option plans
23
26
33
Year ended 31 Dec
522
546
624
Disclosure of terms and conditions of share-based payment arrangement
HSBC share awards
Award
Policy
Deferred share awards (including annual incentive awards, LTI awards delivered in shares) and Group Performance Share Plans (‘GPSP’)
•    An assessment of performance over the relevant period ending on 31 December is used to determine the amount of the award to be granted.
•    Deferred awards generally require employees to remain in employment over the vesting period and are not subject to performance conditions after the grant date.
•    Deferred share awards generally vest over a period of three, five or seven years.
•    Vested shares may be subject to a retention requirement post-vesting. GPSP awards are retained until cessation of employment.
•    Awards granted from 2010 onwards are subject to a malus provision prior to vesting.
•    Awards granted to Material Risk Takers from 2015 onwards are subject to clawback post-vesting.
International Employee Share Purchase Plan (‘ShareMatch’)
•    The plan was first introduced in Hong Kong in 2013 and now includes employees based in 27 jurisdictions.
•    Shares are purchased in the market each quarter up to a maximum value of £750, or the equivalent in local currency.
•    Matching awards are added at a ratio of one free share for every three purchased.
•    Matching awards vest subject to continued employment and the retention of the purchased shares for a maximum period of two years and nine months.
HSBC share option plans
Main plans
Policy
Savings-related share option plans (‘Sharesave’)
•    Two plans: the UK Plan and the International Plan. The last grant of options under the International Plan was in 2012.
•    From 2014, eligible employees could save up to £500 per month with the option to use the savings to acquire shares.
•    Exercisable within six months following either the third or fifth anniversary of the commencement of a three-year or five-year contract, respectively.
•    The exercise price is set at a 20% (2017: 20%) discount to the market value immediately preceding the date of invitation.
Disclosure of number and weighted average exercise prices of other equity instruments
Movement on HSBC share awards
 
2018

2017

 
Number

Number

 
(000s)

(000s)

Restricted share awards outstanding at 1 Jan
104,525

123,166

Additions during the year
61,569

62,044

Released in the year
(67,899
)
(76,051
)
Forfeited in the year
(3,298
)
(4,634
)
Restricted share awards outstanding at 31 Dec
94,897

104,525

Weighted average fair value of awards granted ($)
7.66

7.09
Disclosure of number and weighted average exercise prices of share options
Movement on HSBC share option plans
 
 
Savings-related
share option plans
 
 
Number

WAEP1

 
Footnotes
(000s)

£

Outstanding at 1 Jan 2018
 
64,670

4.49

Granted during the year
2
20,501

5.45

Exercised during the year
3
(23,260
)
4.14

Expired during the year
 
(3,148
)
5.20

Forfeited during the year
 
(1,698
)
4.53

Outstanding at 31 Dec 2018
 
57,065

4.92

Of which exercisable
 
3,513

4.09

Weighted average remaining contractual life (years)
 
2.59

 
 
 
 
 
Outstanding at 1 Jan 2017
 
70,027

4.30

Granted during the year
2
10,447

5.96

Exercised during the year
3
(9,503
)
4.83

Expired during the year
 
(3,902
)
4.45

Forfeited during the year
 
(2,399
)
4.27

Outstanding at 31 Dec 2017
 
64,670

4.49

Of which exercisable
 
1,129

5.00

Weighted average remaining contractual life (years)
 
2.42

 
1
Weighted average exercise price.
2
The weighted average fair value of options granted during the year was $1.40 (2017: $1.29).
3
The weighted average share price at the date the options were exercised was $8.28 (2017: $9.93).
Disclosure of defined benefit plan expense recognized In profit or loss explanatory
Income statement charge

2018

2017

2016


$m

$m

$m

Defined benefit pension plans
355

100

218

Defined contribution pension plans
756

603

783

Pension plans
1,111

703

1,001

Defined benefit and contribution healthcare plans
21

(34
)
41

Year ended 31 Dec
1,132

669

1,042
Disclosure of net defined benefit liability (asset)
Net assets/(liabilities) recognised on the balance sheet in respect of defined benefit plans
 
Fair value of
plan assets

Present value of defined benefit
obligations

Effect of
limit on plan
surpluses

Total

 
$m

$m

$m

$m

Defined benefit pension plans
42,799

(36,583
)
(35
)
6,181

Defined benefit healthcare plans
110

(524
)
—

(414
)
At 31 Dec 2018
42,909

(37,107
)
(35
)
5,767

Total employee benefit liabilities (within ‘Accruals, deferred income and other liabilities’)






(2,167
)
Total employee benefit assets (within ‘Prepayments, accrued income and other assets’)






7,934


 
 
 
 
Defined benefit pension plans
47,265

(40,089
)
(37
)
7,139

Defined benefit healthcare plans
124

(663
)
—

(539
)
At 31 Dec 2017
47,389

(40,752
)
(37
)
6,600

Total employee benefit liabilities (within ‘Accruals, deferred income and other liabilities’)
 
 
 
(2,152
)
Total employee benefit assets (within ‘Prepayments, accrued income and other assets’)
 
 
 
8,752

Net asset/(liability) under defined benefit pension plans

Fair value of plan assets
Present value of defined benefit obligations
Effect of the asset ceiling
Net defined benefit asset/(liability)

Principal
plan

Other
plans

Principal
plan

Other
plans

Principal
plan

Other
plans

Principal
plan

Other
plans


$m

$m

$m

$m

$m

$m

$m

$m

At 1 Jan 2018
38,265

9,000

(30,126
)
(9,963
)
—

(37
)
8,139

(1,000
)
Current service cost
—

—

(66
)
(157
)
—

—

(66
)
(157
)
Past service cost and gains/(losses) from settlements
—

—

(280
)
8

—

—

(280
)
8

Service cost
—

—

(346
)
(149
)
—

—

(346
)
(149
)
Net interest income/(cost) on the net defined benefit asset/(liability)
970

220

(759
)
(249
)
—

(1
)
211

(30
)
Remeasurement effects recognised in other comprehensive income
(1,501
)
(568
)
1,180

413

—

—

(321
)
(155
)
– return on plan assets (excluding interest income)
(1,501
)
(568
)
—

—

—

—

(1,501
)
(568
)
– actuarial gains/(losses)
—

—

1,051

505

—

—

1,051

505

– other changes
—

—

129

(92
)
—

—

129

(92
)
Exchange differences
(2,038
)
(151
)
1,601

86

—

3

(437
)
(62
)
Contributions by HSBC
197

128

—

—

—

—

197

128

– normal
197

128

—

—

—

—

197

128

– special
—

—

—

—

—

—

—

—

Contributions by employees
—

26

—

(26
)
—

—

—

—

Benefits paid
(1,138
)
(538
)
1,138

544

—

—

—

6

Administrative costs and taxes paid by plan
(51
)
(22
)
51

22

—

—

—

—

At 31 Dec 2018
34,704

8,095

(27,261
)
(9,322
)
—

(35
)
7,443

(1,262
)
Present value of defined benefit obligation relating to:
















– actives




(5,337
)
(4,443
)








– deferreds




(8,200
)
(1,589
)








– pensioners




(13,724
)
(3,290
)








 
 
 
 
 
 
 
 
 
At 1 Jan 2017
33,442

8,955

(29,279
)
(10,468
)
—

(24
)
4,163

(1,537
)
Current service cost
—

—

(65
)
(160
)
—

—

(65
)
(160
)
Past service cost and gains/(losses) from settlements
—

(833
)
(231
)
1,051

—

—

(231
)
218

Service cost
—

(833
)
(296
)
891

—

—

(296
)
58

Net interest income/(cost) on the net defined benefit asset/(liability)
864

272

(750
)
(300
)
—

(1
)
114

(29
)
Remeasurement effects recognised in other comprehensive income
1,410

784

1,730

(486
)
—

(9
)
3,140

289

– return on plan assets (excluding interest income)
1,410

784

—

—

—

—

1,410

784

– actuarial gains/(losses)
—

—

954

(491
)
—

(9
)
954

(500
)
– other changes
—

—

776

5

—

—

776

5

Exchange differences
3,292

239

(2,723
)
(306
)
—

(3
)
569

(70
)
Contributions by HSBC
449

236

—

—

—

—

449

236

– normal
58

215

—

—

—

—

58

215

– special
391

21

—

—

—

—

391

21

Contributions by employees
—

27

—

(27
)
—

—

—

—

Benefits paid
(1,143
)
(663
)
1,143

716

—

—

—

53

Administrative costs and taxes paid by plan
(49
)
(17
)
49

17

—

—

—

—

At 31 Dec 2017
38,265

9,000

(30,126
)
(9,963
)
—

(37
)
8,139

(1,000
)
Present value of defined benefit obligation relating to:
 
 
 
 
 
 
 
 
– actives
 
 
(5,837
)
(5,084
)
 
 
 
 
– deferreds
 
 
(8,745
)
(1,663
)
 
 
 
 
– pensioners
 
 
(15,544
)
(3,216
)
 
 
 
 
Disclosure of information about maturity profile of defined benefit obligation
Benefits expected to be paid from the plans to retirees over each of the next five years, and in aggregate for the five years thereafter, are as follows:
Benefits expected to be paid from plans
 


2019

2020

2021

2022

2023

2024 - 2028


Footnotes
$m

$m

$m

$m

$m

$m

The principal plan
1
820

856

911

981

1,004

5,248

Other plans
1
442

517

522

514

469

2,286

1
The duration of the defined benefit obligation is 17.0 years for the principal plan under the disclosure assumptions adopted (2017: 17.4 years) and 13.3 years for all other plans combined (2017: 12.9 years).
Disclosure of fair value of plan assets
Fair value of plan assets by asset classes

31 Dec 2018
31 Dec 2017

Value

Quoted
market price
in active
market

No quoted
market price
in active
market

Thereof
HSBC1

Value

Quoted
market price
in active
market

No quoted
market price
in active
market

Thereof
HSBC1


$m

$m

$m

$m

$m

$m

$m

$m

The principal plan
















Fair value of plan assets
34,704

31,300

3,404

1,034

38,265

33,624

4,641

1,006

– equities
3,675

3,675

—

—

6,131

5,503

628

—

– bonds
26,509

26,509

—

—

26,591

26,591

—

—

– derivatives
2,030

—

2,030

1,034

2,398

—

2,398

1,006

– other
2,490

1,116

1,374

—

3,145

1,530

1,615

—

Other plans
















Fair value of plan assets
8,095

6,795

1,300

182

9,000

7,737

1,263

114

– equities
1,663

742

921

2

2,005

1,340

665

—

– bonds
5,707

5,559

148

7

5,871

5,714

157

7

– derivatives
37

—

37

—

—

39

(39
)
—

– other
688

494

194

173

1,124

644

480

107

1
The fair value of plan assets includes derivatives entered into with HSBC Bank plc as detailed in Note 36.
Disclosure of defined benefit plans
Key actuarial assumptions for the principal plan
 
Discount rate
Inflation rate
Rate of increase for pensions
Rate of pay increase
 
%
%
%
%
UK
 
 
 
 
At 31 Dec 2018
2.80
3.40
3.10
3.65
At 31 Dec 2017
2.60
3.40
3.10
3.88
At 31 Dec 2016
2.50
3.50
3.20
4.00
Mortality tables and average life expectancy at age 65 for the principal plan
 
Mortality
table
Life expectancy at age 65 for
a male member currently:
Life expectancy at age 65 for
a female member currently:
 
 
Aged 65
Aged 45
Aged 65
Aged 45
UK
 
 
 
 
 
At 31 Dec 2018
SAPS S21
21.6
22.9
24.1
25.6
At 31 Dec 2017
SAPS S22
22.2
23.6
24.4
25.9
1
Self-administered pension scheme (‘SAPS’) S2 table (males: 'All pensioners' version; females: 'Normal pensions' version) with a multiplier of 1.05 for male and 1.01 for female pensioners. Improvements are projected in accordance with the continuous mortality investigation (‘CMI’) core projection model 2016 with a long-term rate of improvement of 1.25% per annum. Separate tables assuming lighter mortality have been applied to higher-paid pensioners.
2
Self-administered pension scheme (‘SAPS’) S2 table (males: 'All pensioners' version; females: 'Normal pensions' version) with a multiplier of 0.98 for both male and female pensioners. Improvements are projected in accordance with the continuous mortality investigation (‘CMI’) core projection model 2016 with a long-term rate of improvement of 1.25% per annum. Separate tables assuming lighter mortality have been applied to higher-paid pensioners.
Disclosure of sensitivity analysis for actuarial assumptions
The effect of changes in key assumptions on the principal plan
 
Impact on HSBC Bank (UK) Pension Scheme obligation
 
Financial impact of increase
Financial impact of decrease
 
2018

2017

2018

2017

 
$m

$m

$m

$m

Discount rate – increase/decrease of 0.25%
(1,097
)
(1,246
)
1,170

1,333

Inflation rate – increase/decrease of 0.25%
734

850

(724
)
(837
)
Pension payments and deferred pensions – increase/decrease of 0.25%
1,172

1,077

(1,105
)
(1,021
)
Pay – increase/decrease of 0.25%
55

62

(56
)
(61
)
Change in mortality – increase of 1 year
1,494

1,332

N/A

N/A