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HSBC France Annual Report and Accounts 2014

This Registration Document was filed with the Autorité des marchés financiers on 2 March 2015, in accordance with article 212-13 of the AMFs General Regulations. It may be used in support of a financial transaction if supplemented by a Transaction Note that has received approval from the Autorité des marchés financiers. This document was produced by the issuer and is binding upon its signatories.

The HSBC Group

HSBC is one of the largest banking and financial services organisations in the world.HSBC purpose is to be where the growth is, connecting customers to opportunities, enabling businesses to thrive and economies to prosper, and ultimately helping people to fulfill their hopes and realise their ambitions.

Customers: 51 million.Served by: 266,000 employees.Through four global businesses: Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, Global Private Banking. Located in: 73 countries and territories.Across five geographical regions: Europe, Asia, Middle East and North Africa, North America, Latin America.Offices: Over 6,100.Listed on stocks exchanges in: London, Hong Kong, New York, Paris, Bermuda.Shareholders: 216,000 in 127 countries and territories.

Highlights – Year ended 31 December 2014:Reported profit before tax was down 17 per cent to USD 18,680 million.Adjusted profit before tax was down 1 per cent to USD 22,829 million. Profit attributable to shareholders of the parent company was USD 13,688 million.Total assets were USD 2,634 billion.

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Annual Report and Accounts 2014

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Contents

2 Report of the Board of Directors to the Annual General Meeting

12 Senior Executives

14 Composition of the Board of Directors

25 Chairman’s report on corporate governance and internal control and risk management procedures

56 Corporate, social and environmental responsibility

81 Risk management and control within the HSBC France group

110 Financial highlights

112 Consolidated financial statements

235 Parent company financial statements

280 HSBC France’s principal subsidiaries and investment policy

284 Other legal documents relating to the Annual General Meeting to be held on 23 April 2015

290 Information on HSBC France and its share capital

295 Recent developments and outlook

296 Persons responsible for the Registration Document and for auditing the financial statements

298 Cross-reference table

300 Network of offices

This is a free translation into English of the original Registration Document issued in French and provided solely for the convenience of English-speaking readers. In case of discrepancy, the French version prevails.

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Report of the Board of Directors to the Annual General Meeting

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HSBC France is the subsidiary of one of the most solid banking groups in the world, the HSBC Group, which aims to be the world’s leading international bank. In France, HSBC aims to become the partner of reference to assist French companies in their international development and individuals in the management of their assets.

The HSBC Group’s purpose

Key strategic orientations The HSBC Group is based on a universal banking model and relies on a comprehensive range of banking and financial services aimed at a business and retail clientele wishing to benefit from the strengths of the HSBC Group, one of the world’s leading financial institutions, and especially its international presence and its solid financial position.

A global positioning

Long-term trends HSBC Group’s strategy is aligned to two long-term trends:

– The world economy is becoming ever more connected, with growth in world trade and cross-border capital flows continuing to outstrip growth in average gross domestic product. Over the next decade HSBC expects growth in trade and capital flows to outstrip GDP growth, and 35 markets to generate 90 per cent of world trade growth with a similar degree of concentration in cross-border capital flows;

– Of the world’s top 30 economies, HSBC expects those of Asia, Latin America, the Middle East and Africa to have increased by around four-fold in size by 2050, benefiting from demographics and urbanisation. By this time they will be larger than those of Europe and North America combined. By 2050, HSBC expects 18 of the 30 largest economies will be from Asia, Latin America or the Middle East and Africa.

HSBC business model is based on an international network connecting and serving a consistent portfolio of markets.

Competitive advantages In this environment HSBC’s competitive advantages come from:

– its meaningful presence and long-term commitment to its key strategic markets;

– its international business network, to cover global trade and capital flows;

– its balanced business portfolio centred on its global client franchise;

– its strong ability to add to its capital base while also providing competitive rewards to its staff and good returns to its shareholders;

– its local balance sheet strength.

Products and services

The HSBC Group divides its activities into four business segments: Retail Banking and Wealth Management (RBWM); Commercial Banking (CMB); Global Banking and Markets (GBM); and Global Private Banking (GPB).

The businesses lines are responsible for developing, implementing and managing their business propositions consistently across the HSBC Group.

Retail Banking and Wealth Management Retail Banking and Wealth Management includes Personal Financial Services, Asset Management and Insurance activities. It takes deposits and provides transactional banking services to enable customers to manage their day-to-day finances and save for the future. It offers credit facilities to assist them in their short or longer-term borrowing requirements and it provides financial advisory, insurance and investment services to help them to manage and protect their financial futures.

Commercial Banking Commercial Banking provides a broad range of banking and financial services to enable customers to manage and grow their businesses domestically and internationally. Its range of products, services and delivery channels is tailored to meet the needs of specific customer segments. HSBC is leading the development of the Renminbi as a trade currency, with Renminbi capabilities in more than 50 markets.

It has organised itself around its customers’ needs and degree of complexity by developing three distinct segments within Commercial Banking: Business Banking, Mid-Market and Large Corporates.

Global Banking and Markets Global Banking and Markets provides wholesale capital markets as well as transaction banking and financing services to its customers. It is an ideal partner for large corporations and institutionals, helps their projects and transactions, both in France and worldwide thanks to HSBC Group’s dimension as both a local and global player.

HSBC offers a complete range of services including: advisory, lending, structured finance, mergers and acquisitions, debt and equity capital markets, project finance, cash management, trade finance and market activities (rates, foreign exchange and equities).

Private Banking Drawing on the strength of the HSBC Group and the most suitable products from the marketplace, Private Banking works with its clients to provide solutions to grow, manage and preserve wealth for today and for the future.

It offers products and services tailored to the needs of resident and international high-net-worth individuals, through the expertise of its discretionary and advisory management teams.

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HSBC Group’s strategic priorities

HSBC France is carefully committed to deliver, in France, HSBC Group’s strategy organised around three interconnected and equally weighted priorities:

– grow the business and dividends; – implement Global Standards; – streamline processes and procedures.

Each priority is complementary and underpinned by initiatives within its day-to-day business. Together, they create value for its customers and shareholders and contribute to the long-term sustainability of HSBC.

Grow the business and dividends In growing the business and dividends, the targets are to grow risk-weighted assets (RWA) in line with its organic investment criteria and progressively grow dividends while maintaining a strong balance sheet.

HSBC aims to achieve growth by leveraging the international network and its client franchise to improve its market position in strategic products.

In 2014, HSBC launched a number of investment priorities to capitalise on its global network and accelerate organic growth focus on Global Trade and Receivables Finance (GTRF), Payments and Cash Management (PCM), Foreign Exchange (Fx) and Renmibi (RMB).

Implement Global Standards Through its Global Standards program, HSBC is adopting the highest or most effective controls and deploying them everywhere it operates.

It expects from its Global Standards to underpin its business practices now and in the future, and to provide a source of competitive advantage.

Streamline processes and procedures HSBC continue to refine its operational processes, develop its global functions, implement consistent business models and streamline IT.

Since 2011, HSBC has changed how the Group is managed by introducing a leaner reporting structure and establishing a global operating model with global businesses and functions to ensure central control and improved oversight.

A strategy executed in France

The HSBC Group concentrates its activity on its 21 priority markets which include France and where HSBC deploys all its business segments and has established global platforms for some markets activities.

HSBC France is fully aligned with HSBC Group’s strategy, which aims to seize growth opportunities while continuously improving efficiency and protecting its activity and customers through the most demanding standards in terms of compliance, with a specific focus on fighting against financial crime, under the Global Standards program implemented by the HSBC Group throughout the world. HSBC France continues to develop its activity across all global businesses by:

– continuing to focus on wealth management for individuals;

– leveraging HSBC Group’s assets, especially on its international connectivity, to increase its revenues on corporates market;

– reinforcing Global Banking and Markets positioning in Paris as a strategic hub for the HSBC Group;

– strengthening synergies across the different businesses.

In addition to these initiatives, HSBC France is also aiming to improve its efficiency by simplifying procedures and adapting the organisational structure of each global business. Furthermore, the organisation is also benefiting from an ambitious training policy. The development of leadership skills in managing their teams remains a strategic priority.

Retail Banking and Wealth Management Capitalising on the HSBC Group strengths, HSBC France’s ambition is to become the leading bank in Wealth Management. Benefiting from a physical presence in major French cities, and three direct branches, HSBC France is supported by teams of experts specialised by customer profile and offers adapted to HSBC Premier and HSBC Advance customers’ aspirations. HSBC France has undertaken many initiatives designed to:

– improve the investment and advisory offered in multi-management and brokerage platform to support the growing needs of customers in long-term investments, particularly for retirement preparation;

– continue to enhance the Wealth Management expertise of staff, especially for HSBC Premier, in order to provide customers products and services tailored to their individual expectations, while focusing on risk management awareness;

– address customers demand for multi-channel services.

Its three growth priorities are customer growth in target segments, deepening customer relationships through wealth management and relationship-led lending, and enhancing distribution capabilities, including digital.

Implementing Global Standards by enhancing risk management control models and simplifying processes also remain top priorities for Retail Banking and Wealth Management.

Commercial Banking Commercial Banking aims to be the first international bank for its French customers. It offers a full range of banking products and solutions and provides an international network and Relationship Managers to

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Report of the Board of Directors to the Annual General Meeting (continued)

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support its customers in their development. It has four growth priorities:

– ensuring consistency and efficiency for its customers through a business model organised around global customer segments and products;

– using its distinctive geographical footprint to support and facilitate global trade and capital flows;

– delivering excellence in its core flow products, specifically in Trade Finance and Payments and Cash Management;

– enhancing collaboration with other global businesses.

Implementing Global Standards, enhancing risk management controls and simplifying processes also remain top priorities for Commercial Banking.

Global Banking and Markets Global Banking and Markets business model and strategy is well established with the objective of being a ‘top 5’ bank for its priority clients.

HSBC focuses on the following growth priorities:

– connecting clients to international growth opportunities;

– continuing to be well-positioned on products that will benefit from global trends;

– leveraging its distinctive international expertise and geographical network which connects developed and faster-growing regions;

– enhancing risk management controls, implementing Global Standards, collaborating with other global businesses and simplifying processes.

HSBC France will continue to fulfil its role as a strategic platform for Continental Europe and as a centre of excellence in euro rate products and equity derivatives, with Continental Europe underlyings primarily by increasing synergies with other countries and by broadening the range of products offered to large corporate clients. HSBC France will continue to adjust the bank’s core business to changes in the regulatory environment while preserving its reputation and its leading position in the official league tables.

The regulatory provisions adopted in accordance with the Law on banking separation were published on 10 July and 3 October 2014. As specified by the law, on 30 June 2014, HSBC France submitted to the ACPR a file which included the mapping and qualification of its trading activities and the mandates of the trading units. The trading activities of HSBC France are performed within the framework specified by the law and do not require the creation of a dedicated subsidiary. A minor activity on rates financial instruments was put in run off. The control teams, notably, have been engaged in order to assess the internal operating framework, to ensure the traceability of information and to develop the enhanced control programme. Since 2 January 2015, most of the market making metrics are monitored. All the required metrics will be transmitted to the ACPR from 1 April 2015.

Private Banking Private Banking aims to continue to grow by building synergies with Commercial Banking and Retail Banking to expand its customer base. Implementing Global Standards, enhancing risk management controls, tax transparency and simplifying processes also remain top priorities for Private Banking.

Change of the organisational structures of HSBC Group in France HSBC France legal structures simplification program has continued with the objective to exit unnecessary corporate structures, make disposals or intra-group structures mergers.

In December 2013, HSBC France acquired all HSBC Assurances Vie (France) shares from HSBC Bank plc Paris Branch. Consequently, as at 31 December 2013, only the balance sheet was consolidated and the P&L of the insurance company are included in the scope of consolidation as of 1 January 2014.

In February 2014, HSBC Services (France), a 100 per cent subsidiary of HSBC France, sold its 34 per cent holding in Financière d’Uzès to the Goirand SA company.

The bank’s performance in 2014

Environment The bank’s performance developed facing a difficult economic background as well as severe regulatory changes.

2014 saw weaker overall economic growth than expected given the significant stimulus measures adopted (in both fiscal and monetary policy) and favourable economic factors, notably low inflation. Although growth there slowed, China became the world’s largest economic power. While some countries, including the USA and UK, saw a small recovery, economies remained depressed in 2014 both in France and in the rest of continental Europe, with growth and inflation close to zero, and rising business failures and unemployment.

Slower economic growth and an increase in supply triggered a significant fall in oil prices, increasing deflationary pressures. Against this background, the European Central Bank continued and stepped up its programme of massive liquidity injections, taking short-term interest rates close to zero and producing a fall of the euro on the FX markets.

The weak economic climate, coupled with geopolitical tensions on Europe’s borders, increased risk aversion for investors and pushed long-term interest rates to record lows, driving up the value of bond products but reducing interest margin. Conversely, equity indices, which rose in the first half, slipped back at the end of the year.

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European Banking Union continued to move forward in 2014, with the gradual introduction of Basel III standards. These standards, which introduce new requirements for liquidity and solvency, have the effect of increasing the requirements for capital and liquid assets at banks and will gradually result in an adjustment in their risk profiles. In addition, many laws or regulations have already been or are in the process of being enacted in several countries or at European level (law on separation of banking activities, resolution mechanisms, financial transactions tax), which will prompt banks to enhance their organisation structure and review risk appetite, and strengthen their control systems and consumer protection policies.

One significant advance in supra-national supervision within the eurozone is the creation of an authority within the framework of the European Central Bank’s Single Supervisory Mechanism. HSBC France, in common with all the main eurozone banking establishments, is now supervised by this new authority. On this occasion, the results of the Comprehensive Assessment helped reassure financial markets about the solidity of major European banks.

Since November 2014, HSBC France is regulated by the European Central Bank (ECB), the Autorité de contrôle prudentiel et de résolution (ACPR) and the Autorité des marchés financiers (AMF). On a Group-wide basis, French entities are regulated from the UK by the Prudential regulation authority (PRA) for prudential matters (safety and soundness) and by the Financial conduct authority (FCA) for conduct (consumer and market protection).

Scope of the performance review Performance is analysed below from three different perspectives, based on IFRS as defined in Note 11 to the consolidated financial statements:

– HSBC’s operations in France (managed perimeter)2; – HSBC France group’s consolidated results (legal

perimeter); – The “France” geographical segment as used by

HSBC Holdings plc in its analysis of geographical contribution to the HSBC Group’s results.

HSBC France’s performance on the basis of its parent company financial statements, prepared in accordance with the generally accepted accounting principles applicable to credit institutions in France3, is analysed in the Note to the parent company financial statements entitled “2014 Highlights”, page 246.

Consolidated Financial Results for HSBC in France (managed perimeter) In order to make easier to understand the review of the performance of the Group and its subsidiaries, HSBC has elected to supplement the accounting data published with a presentation of the main lines of management accounts on an ‘adjusted’ basis. This approach consists of restating reported figures for the effect of changes in scope and currency variations between the two periods under review, together with certain significant items, which are listed and quantified below where they concern France:

Significant items (in millions of euros) 2014 2013Revenues Impact of credit spread on own debt

under fair Value option . . . . . . . . . (61) (3)Non Qualifying Hedges relating

to housing loans portfolio. . . . . . . (173) 52DVA (Debit Valuation Adjustment) . (23) (4)Expenses Restructuring costs in respect

of the year . . . . . . . . . . . . . . . . . . . (7) (6)

Total adjustments . . . . . . . . . . . . . (264) 39

Reported profit before tax amounted EUR 252 million

compared with EUR 654 million in 2013. This evolution is mainly due to the impact of significant items listed above, the decrease in revenue of manufacturing insurance driven by a large unfavourable PVIF4 movement offset by a satisfactory performance from businesses as well as a profitability improvement driven by a fall in expense.

Total (in millions of euros) 2014 2013Net operating income before loan

impairment charges . . . . . . . . . . . 2,026 2,455Loan impairment charges . . . . . . . . (112) (97)Operating expenses. . . . . . . . . . . . . (1,662) (1,700)Income from associates . . . . . . . . . – (4)Reported profit before tax . . . . . . 252 654

Adjusted profit before tax . . . . . . 516 615

Reported revenue amounted EUR 2,026 million

compared with EUR 2,455 million in 2013. “Adjusted” revenue at HSBC France, at EUR 2,283 million, was slightly down on its level of EUR 2,410 million in the previous year, but nevertheless included a sharp fall in manufacturing insurance revenue, linked with the impact of the change in PVIF on life assurance policies (economic PVIF5 EUR -147 million in 2014, from EUR +9 million in 2013) hit by the sharp fall in long-term interest rates. HSBC France continues to support its customers, offering them financing solutions for their projects, and the strength of new loan production helped offset the negative effect of lower interest rates on deposit margins.

1 See Note 1 of the consolidated financial statements page 156. 2 The managed perimeter relates to the contribution of France to the results of HSBC Bank plc operations, which includes the HSBC France group legal

perimeter in its entirety, and also the Paris branch of HSBC Bank plc, which is engaged in equity derivative activities and comprises, until the end of 2013, the results of HSBC Assurances Vie (France). It does not include the costs of funding and the debt on acquisition recognised by HSBC Bank plc Paris Branch.

3 See Note 1 to the parent company financial statements, page 247. 4 Present Value of In Force (see Note 18 to the consolidated financial statements, page 156. 5 Economic PVIF includes accounting PVIF, hedging instruments and technical provisions.

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The cost of credit risk was EUR -112 million, from EUR -97 million in 2013, which was a record low at HSBC France, due primarily to substantial reversals of provisions on several files relating to large corporates. The level seen in 2014 was moderate and in line with the cost of risk observed between 2008 and 2012. In 2014, individual provisions rose slightly in Commercial Banking and returned to their trend level in Global Banking. The normative cost of risk represented 0.33 per cent of outstanding client loans, compared with 0.25 per cent in 2013 and 0.32 per cent in 2012.

Operating expense at HSBC in France was reduced to EUR 1,662 million (2 per cent lower than in 2013) due primarily to tight control of staff costs and the non-repetition of certain exceptional items. In accordance with HSBC Group global strategy, HSBC France continues to seek greater efficiency in order to meet the challenges of a changing market through a commitment to a programme of sustainable cost savings. Due to the strengthening of regulations, and Global Standards deployment, HSBC France pursues its compliance investments. Adjusted cost efficiency ratio was stable at 73 per cent prior to restatement of the significant PVIF movement.

Performance by global business

Retail Banking and Wealth Management As part of the HSBC Group’s strategic focus on Wealth Management, HSBC in France is consolidating its position as a leader in the mass affluent segment.

Retail Banking and Wealth Management (in millions of euros) 2014 2013Net operating income before loan

impairment charges . . . . . . . . . . . 656 1,014Loan impairment charges . . . . . . . . (21) (24)Operating expenses . . . . . . . . . . . . . (778) (776)Reported profit before tax . . . . . . (143) 214


This activity now has around 835,000 clients. The

HSBC Premier client base remains the market in which HSBC France wishes to maintain a particular commercial focus, notably with the Premier Relaunch campaign in the second half of 2014. This segment thus continued to make strong gains in customer recruitment, with around 28,000 new to bank. The proportion of HSBC Premier clients in the total remained stable at close to 48 per cent.

Retail Banking and Wealth Management’s strategy is based on two key areas: Wealth Management and mortgage lending as part of a full banking relationship.

Total client assets at the year-end increased to EUR 36.2 billion, from EUR 35.2 billion a year earlier.

Wealth Management benefited from an increase in client deposits, which stood at EUR 13.7 billion in 2014, with growth of 2 per cent and particularly strong growth in sight deposits which rose 9.5 per cent to EUR 6.3 billion, ahead of the 4.6 per cent growth in the market as a whole. Conversely, saving deposits fell by EUR 0.3 billion, with

the fall coming mainly in non-regulated saving accounts, in a stable market.

The life assurance business saw a very significant change in PVIF during 2014. This figure represents the present value of future revenue on policies over a 40-year period and changes are recognised in income. PVIF was significantly affected by the sharp fall in interest rates.

Life assurance inflows in 2014 kept increasing but at a slower pace than competition. Within the production, unit-linked products represented 16 per cent. Gross production rose by +3.5 per cent to EUR 1.9 billion and net inflows were positive and greater than in 2013. Assets under management by the insurance company were EUR 19.1 billion, from EUR 18.5 billion a year earlier (+3 per cent).

Asset Management continued to grow in both the institutional and high net worth segments. Assets managed and distributed reached EUR 75 billion, an increase of 11 per cent, with growth coming across all asset classes and a particularly strong improvement in long-term products.

The expertise of France in fixed income management within the HSBC Group made a significant contribution to growth in assets under management for international clients (new mandates and inflows on open funds and European institutional clients).

The retail loan book increased by 8 per cent, to more than EUR 17 billion in a French lending market that remained slack. New mortgage lending of EUR 4 billion was nevertheless EUR 1 billion below its level in 2013. Margins on the new lending were satisfactory after taking account of the liquidity cost.

As a result, reported revenue fell sharply from EUR 1,014 million in 2013 to EUR 656 million in 2014. Adjusted revenue (restated of changes in value of Non Qualifying Hedges), at EUR 829 million, was lower than in 2013 (EUR 962 million), driven by an increase in interest income and asset management fees. Excluding the effect of changes in economic PVIF, revenue grew by 3 per cent. It continued to be driven by interest margin and asset management commissions, confirming the strength of the various business activities.

The cost of risk in Retail Banking and Wealth Management remained under control at EUR -21 million, compared with EUR -24 million in 2013. 2014 saw a significantly lower impact from operational losses with respect to credit.

Operating expenses were EUR 778 million, stable from EUR 776 million in 2013.

Reported profit before tax in Retail Banking and Wealth Management was EUR -143 million compared with EUR 214 million the previous year. From an adjusted point of view, profit before tax displayed a EUR 34 million, from EUR 165 million in 2013. The effect of fall in manufacturing insurance revenue, linked with negative changes in PVIF, masked an actual improvement in performance in other activities.

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Commercial Banking In line with the HSBC Group’s strategy in France, Commercial Banking continued to focus on becoming the partner of choice for businesses, particularly in their international expansion.

Commercial Banking (in millions of euros) 2014 2013 Net operating income before loan

impairment charges . . . . . . . . . . 655 651 Loan impairment charges . . . . . . . (79) (73) Operating expenses . . . . . . . . . . . . (395) (386) Reported profit before tax . . . . . 181 192

Adjusted profit before tax . . . . . 182 195

Against a background of weak demand for lending

from companies, HSBC France increased its outstanding long-term and medium-term loan book by EUR 0.2 billion to EUR 7.7 billion. This result came from a strong staff performance and the introduction of a EUR 1.5 billion envelope dedicated to help clients’ international projects. Total outstanding loans in Commercial Banking averaged EUR 10 billion over 2014. Deposit growth accelerated with an increase of nearly 6 per cent to EUR 9.2 billion for sight deposits, against a background of low interest rates and limited attractiveness of bank investments.

Commercial Banking also continued to exploit synergies with Global Banking and Markets, seeking innovative solutions for its customers. This cooperation resulted in several major deals in debt issuance, initial public offerings and innovative financing structures.

Reported revenue in Commercial Banking, driven by interest margin and growth in insurance operations, came to EUR 655 million, an increase of 1 per cent on the 2013 figure of EUR 651 million.

The cost of risk in Commercial Banking was EUR -79 million, an increase of 8 per cent on 2013, as the result of a difficult economic background. Normative loan loss rate was increased to 0.84 per cent of outstanding loans.

Operating expense rose slightly between 2013 and 2014 (from EUR 386 million in 2013 to EUR 395 million in 2014). Thus, against an uncertain economic background, Commercial Banking delivered a solid performance with a stable cost efficiency ratio at 60 per cent.

Commercial Banking reported a EUR 181 million profit before tax from EUR 192 million in 2013. Adjusted profit before tax was EUR 182 million (EUR 195 million in 2013).

HSBC’s strategy in France which is to support SMEs in their international expansion, is reinforced by the revenue generated by French customers in other international HSBC Group entities, which now represents

the equivalent of one third of revenues generated by the same companies in France. In 2014, this revenue rose by 10 per cent to more than USD 77 million. Revenue generated by clients of other international HSBC Group entities in France rose by 35 per cent thanks to improvements in the structure for welcoming international clients.

Global Banking and Markets HSBC France supports large corporates, institutional investors and governments in their plans in both the French and international markets. It is the HSBC Group’s platform for euro fixed-income products and structured equity derivatives with Continental Europe underlyings.

Global Banking and Markets (in millions of euros) 2014 2013 Net operating income before loan

impairment charges . . . . . . . . . . . 721 770 Loan impairment charges . . . . . . . . (12) − Operating expenses . . . . . . . . . . . . (437) (501) Income from associates . . . . . . . . . – (4) Reported profit before tax . . . . . . 272 265


2014 was characterised by a sluggish economy, a

climate of record low interest rates, relatively low market volatility and an increase in regulatory pressure, particularly in terms of liquidity and capital requirements.

By continuing to support its clients through advisory and financing in these difficult circumstances, HSBC France consolidated or improved its positions in various rankings: 6th for Debt Capital Markets in France1 and 2nd in euro-denominated sovereign debt issuance2, 8th in mergers and acquisitions1 and Equity Capital Markets1.

In the Markets activity, HSBC France continued constantly to feature amongst the leading market makers in Eurozone countries issuing significant volumes of government debt, notably in France, where HSBC ranked fifth among the primary dealers (SVT)3. In particular, HSBC’s involvement in issuances conducted by the Republic of Portugal, Kingdom of Spain and EDF were recognised in the award of “Bond House of the Year”4, “SSAR Bond House of the Year”4 and “Derivatives House of the Year”4.

Reported net operating income in Global Banking and Markets was EUR 721 million in 2014 (EUR 770 million in 2013). From an “adjusted” point of view, NOI stood at EUR 744 million, down 4 per cent from 2013. 2014 revenues comprise EUR 20 million charge in respect of accounting for Funding Fair Value Adjustment. The decrease in revenues from 2013 came both in Banking and Capital Financing, despite a strong performance in debt and equity capital markets, and Markets which suffered a poor fourth quarter like much of the rest of the industry.

1 Dealogic 31/12/2014. 2 Dealogic 31/12/2014, “Euro SSA Bonds”. 3 Agence France Trésor. 4 International Financial Review (IFR).

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Revenue generated by French clients in international markets was stable on its 2013 level, and now accounts for more than 55 per cent of total revenue generated by French clients within the HSBC Group. In France, despite difficult economic conditions, revenue from clients of other entities in the HSBC Group rose by 21 per cent.

The cost of risk in Global Banking and Markets was EUR -12 million in 2014, marking a return to 2012 levels after the favourable impact of reversals of provisions in 2013.

Reported operating expense, at EUR -437 million, reflected the efforts made to control costs, were significantly lower than in 2013. In a more restrictive regulatory environment, HSBC in France is investing in compliance function and benefited from a reduction in non-recurring expenses.

Reported profit before tax amounted EUR 272 million from EUR 265 million in 2013. On an adjusted basis, profit before tax was EUR 296 million and EUR 270 the previous year.

Private Banking The Private Banking business was integrated within HSBC France in 2012. This was also an opportunity to redefine and refocus its strategy on the high net worth segment and to adapt its products to a demanding clientele.

Private Banking (in millions of euros) 2014 2013Net operating income before loan

impairment charges . . . . . . . . . . . 40 43Loan impairment charges . . . . . . . . − −Operating expenses . . . . . . . . . . . . . (40) (27)Reported profit before tax . . . . . . − 16

Adjusted profit before tax . . . . . . − 16

Against a background that did nothing to help the

Private Banking sector, assets under management remained at more than EUR 6 billion, with revenue slightly decreasing at EUR 40 million. Excluding the decrease in manufacturing insurance revenues linked to the PVIF movement, revenues were stable at EUR 43 million.

At EUR -40 million, operating expense was higher than in 2013, when it benefited from a favourable outcome to a long-running dispute.

Reported profit before tax is break-even. This result, which includes a change of EUR -3 million in PVIF in 2014, confirmed the return to profitability on ordinary operations.

Contribution of HSBC in France operations to the French economy HSBC in France operations contribute to the financing of the French economy over several ways.

Individuals financing HSBC France contributed with dynamism to the housing market financing with increased lending volumes in 2014 and a EUR 4 billion new loans. The total loan book increased by 8 per cent in a year.

Corporates financing and international support HSBC in France dedicated a EUR 1.5 billion envelope, fully allocated, to its SME customers’ international development. Medium and long term lending balances grew at EUR 7.7 billion.

HSBC is positioned as a core bank for its French customers thanks to its presence over 73 countries around the world and faster growing emerging markets (China, India, Brazil…) and contributed to significant deals with its large customers.

Governments and local authorities financing HSBC France is a major participant in the public debt market in France, ranking second in the primary market for government securities1. The HSBC Group is also one of the main participant in the public debt market in Europe. This market allows securities issuance, eases secondary market liquidity and helps governments to access the market and finance their projects.

With its historical presence in France, HSBC is one of the few banks to have its entire euro platform in Paris and to make Paris one of its four global centres of expertise in the Capital Markets worldwide.

Since 2008, local authorities increased their use of debt market which allows diversified financing sources for their investments (education, transports, etc.) in a situation of harder access to banking credit. HSBC France is positioned as the main bookrunner and arranger for local authorities issuances for more than ten years.

Other contributions In addition, HSBC France undertakes corporate sponsorship notably in relation to environment, education and cultural activities (the detailed information is presented in the chapter Corporate, social and environmental responsibility).

Consolidated financial results for the HSBC France group (legal perimeter) Reported Revenue at HSBC France was EUR 1,929 million, compared with EUR 2,222 million in 2013, down 13 per cent. This unfavourable change relates, for a large part, to the change in significant items: change in market value of Non Qualifying Hedges, change in market value of own debt under fair value option due to credit spread, and change in Debit Valuation Adjustment. 2014 revenues are slightly impacted by the integration of HSBC Assurances Vie within the consolidation scope, the significant negative PVIF2 movement offsetting additional revenue.

1 Dealogic 31/12/2014, “Euro SSA Bonds”. 2 Present Value of In force.

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Despite such elements, HSBC France’s lines of business displayed a satisfactory performance in an uneven context. Retail Banking and Wealth Management grew its revenue thanks to an increase in asset management fees and a sustained home loans production allowing to mitigate the fall in deposits margins. Revenue in Commercial Banking slightly increased despite a deteriorated background for corporates. Global Banking and Markets saw its revenue slightly decrease in a sluggish environment and change in Debit Valuation Adjustment (DVA) as well as accounting for Funding Fair Value Adjustment, while significantly lowering its balance sheet size.

The cost of risk was EUR -112 million, compared with EUR -97 million in 2013, which was a record low for cost of risk at HSBC France, due primarily to substantial reversals of provisions on several files relating to large customers. Loans loss rate displays a moderate 0.33 per cent of the loan book.

HSBC France had operating expenses of EUR -1,585 million, compared with EUR -1,575 million in 2013. This increase, of EUR 10 million, came from the change in the scope of consolidation relating to the integration of HSBC Assurances Vie (France) almost offset by a significant reduction in the cost base, firstly because of the non-recurrence of certain costs booked in 2013 and secondly because of HSBC France’s efforts, in accordance with HSBC Group global strategy, to seek greater efficiency in order to meet the challenges of a changing market through a commitment to a programme of sustainable saves. HSBC France is implementing the HSBC Global Standards’ programme and pursues its investments in regulatory and financial crime compliance.

Profit before tax on ordinary activities was EUR 232 million, compared with EUR 546 million in 2013. Net profit attributable to shareholders of the parent company in 2014 was EUR 198 million.

HSBC France’s consolidated balance sheet had total assets of EUR 201 billion at 31 December 2014, compared with EUR 209 billion at 31 December 2013. HSBC France’s central bank deposits were reduced by EUR 5 billion. The trading portfolio was down EUR 3 billion and reverse repo securities decreased by EUR 13 billion. Conversely, derivatives rose by EUR 11 billion due to the fall in interest rates. The customer loans portfolio continued to grow, by EUR 2 billion, due to further strong loan production.

On the liability side, deposits from banks rose by EUR 3 billion including HSBC France’s involvement in the Targeted Long Term Refinancing Operation (TLTRO). The trading portfolio decreased by EUR 8 billion with a reduction in short positions and repo securities fell by EUR 17 billion, whilst derivatives increased by EUR 13 billion in relation with fall in interest rates. The value of insurance contracts taken out by clients rose by EUR 1 billion.

The liquidity ratio remained high at 128 per cent and above the minimum required by French regulations of 100 per cent. The ACF (Advances to Core Funding) ratio, an internal indicator used by the HSBC Group, which compares customer loans with stable deposits and funding

with a maturity of more than one year, was 101 per cent, demonstrating HSBC France’s solid liquidity position.

In order to finance the development of its businesses, HSBC France issued EUR 2 billion medium-term negotiable debt securities with a 2-year term (28 basis points above 3-month Euribor). HSBC France participated to the Targeted Long Term Refinancing Operations (TLTRO) up to EUR 1.1 billion in order to continue to support the development of HSBC France’s clients by offering them lending at competitive rates.

HSBC France also increased its regulatory capital at the end of 2014 in the form of Tier 2 subordinated debt, of EUR 260 million, which was entirely subscribed by HSBC Holdings plc.

In 2014, risk-weighted assets increased by EUR 1 billion to EUR 33.3 billion, due notably to the impact of the Basel III rules on the assessment of counterparty risk.

As a result, the Common Equity Tier 1 (CET1) ratio rose from 13.7 per cent at end 2013 to 14.1 per cent at end 2014.

The Leverage Ratio came to 3.52 per cent at end 2014. The ratio will be communicated publicly from January 2015 and will be mandatory under Pillar I from 2018.

Results of the European Central Bank Comprehensive Assessment Before the European Central Bank (ECB) formally took responsibility for bank supervision under the Single Supervisory Mechanism (SSM), that started on 4 November 2014, it has conducted a Comprehensive Assessment of the “significant banks” that it now directly supervise. This assessment included notably an Asset Quality Review (AQR) and a stress test exercise (the latter carried out jointly with the European Banking Authority). It covered 128 banks in 18 Member States representing 85 per cent of the Eurozone bank assets. HSBC France, and HSBC Bank Malta plc, as part of the SSM, have been included in the assessment carried out. The rest of HSBC Group was not included.

Asset Quality Review findings and adjustments The Asset Quality Review, which was completed in July 2014, consisted of a detailed and wide review of the banks’ market and credit activities as well as Finance, assessing bank’s policies and processes of in-scope areas, but also reviewing credit files and several market models on HSBC France accounts as of 31 December 2013.

Asset Quality Review qualitative assessment acknowledged that procedures, accounting rules and processes enforced by HSBC France are compliant with French and International accounting rules.

The quantitative review led to several limited prudential adjustments on collective provisions, individual provisioning of credit files and Credit Valuation Adjustment. These adjustments totalled EUR 106 million as of 31 December 2013, representing -26 basis points of CET1 ratio.

H S B C F R A N C E


10

Following the AQR methodology, these prudential adjustments did not have to be automatically incorporated in HSBC France’s accounts. Nevertheless, in the course of 2014 and as part of the regular review process of provisions, HSBC France has increased its individual provisions by EUR 44.9 million on the credit files that have then been in the scope of the AQR.

Regarding the other prudential adjustments on collective provisions and CVA reserve, HSBC France has carried in-depth analyses of the relevance to reflect such amount in its 2014 accounts. These analyses led to the conclusion that the level of collective provisions and CVA reserve calculated by HSBC France, in compliance with accounting standard and HSBC Group policy, do reflect fairly the financial situation of the bank.

Stress test The joint ECB/EBA stress test followed the methodology communicated by the EBA in March and April 2014 for the 2014 EU-wide stress tests. The resilience of European Union banks has been assessed using a three year time horizon (2014-2016) under the assumption of a static balance sheet.

Results of the stress test have been published jointly by the EBA and the ECB on 26 October 2014. For SSM significant banks, like HSBC France, the stress test ratios have been corrected with the AQR adjustments. An 8 per cent Common Equity Tier 1 (CET1) ratio was the capital hurdle rate set for the baseline scenario and 5.5 per cent CET1 for the adverse scenario.

HSBC France passed the ECB/EBA Stress with lowest CET1 ratios in the period of the stress tests of 11.21 per cent and 6.60 per cent respectively for the base and the adverse scenarios, from an AQR-adjusted CET1 ratio as of 31 December 2013 of 12.59 per cent. These results are higher than the capital hurdle rates.

Evolution of CET1 ratios across stress tests scenarios for HSBC France Baseline Adverse 2013 2014 2015 2016 2014 2015 2016

CET1 – transitional not adjusted . . . . . . . . . . . . . 12.86% 11.49% 11.71% 11.97% 8.26% 7.45% 6.93%CET1 – transitional adjusted with AQR . . . . . 12.59% 11.21% 11.40% 11.63% 8.02% 7.17% 6.60%Capital buffer vs EBA thresholds

(in percentage points of CET1) . . . . . . . . . . . . − 3.21% 3.40% 3.63% 2.52% 1.67% 1.10%

Stress tests are more impacting for HSBC France compared to its French peers mainly due to the following reasons:

– HSBC France’s Corporate and Investment Banking activities are key in its business model; HSBC France is notably the Group platform for euro denominated products. These activities have been significantly stressed by the methodology of the exercise.

– Unlike many other significant banks, HSBC France did not use, for this exercise, any internal model to compute the stressed parameters (exposures, probability of default, loss given default). The bank has decided to use parameters provided by the ECB, more conservative as they have been designed to be applicable to any banks in a given eurozone country.

Financial results for the country “France”1 as considered by HSBC Holdings plc in its analysis of geographical contribution to the HSBC Group’s results In 2014, the country “France”, as considered by the HSBC Group, contributed to the global profit before tax of USD 214 million (EUR 150 million), compared with USD 750 million (EUR 567 million) in 2013.

Difference in figures between the above figures and those in commentaries in respect of the managerial perimeter is mainly due to the integration in the above figures of the funding costs related to the CCF acquisition in 2000 by HSBC Bank plc.

Proposed resolutions

The Board of Directors has drawn up the following resolutions presented at the Combined General Meeting on 23 April 2015.

In Resolution 1, the Board proposes that the shareholders, having read the Board’s management report, the Auditors’ report on the financial statements and the reports of the Chairman and the Statutory Auditors on the practices of the Board and internal control and risk management procedures, approve the annual financial statements for the year ended 31 December 2014 as well as the transactions reflected in those statements or summarised in those reports.

1 The contribution of the country “France” to the results of HSBC Group includes the HSBC France group, excluding the results of entities legally owned

by HSBC France but located outside France, and also includes the Paris branch of HSBC Bank plc, which is engaged in equity derivative activities, as well as the results of HSBC Assurances Vie (France) until the end of 2013, and including the costs of funding and the debt on acquisition recognised by HSBC Bank plc Paris Branch.

11

Resolution 2 concerns the allocation of the 2014 net profit of EUR 393,117,648.00. Along with retained earnings of EUR 3,357,913,364.26, the profit available for distribution amounts to EUR 3,751,031,012.26. The dividend to be paid to the shareholders would be EUR 2.23 per share, for a total distribution of EUR 150,386,354.21. Therefore, retained earnings would amount to EUR 3,600,644,658.05. The dividend will be payable on 23 April 2015.

Resolution 3 proposes that the shareholders approve the consolidated financial statements at 31 December 2014, so as to comply with article L. 225-100 of the French Commercial Code, after having heard the Statutory Auditors’ report on consolidated financial statements.

Resolution 4 proposes that the shareholders approve the related party agreements covered by article L. 225-38 of the French Commercial Code, after having heard the Statutory Auditors’ report on these agreements.

Resolution 5 proposes that the shareholders ratify the Board’s co-optation on 20 January 2015 of Mr Andrew Wild, as Director, to replace Mr Peter Shawyer who has resigned.

Resolutions 6 and 7 propose that the shareholders renew the directorships of Mrs Anne Méaux and Mr Philippe Pontet for a term of three years ending with the Annual General Meeting that will be called to approve the financial statements of the year ending in 2017.

Resolution 8 proposes to appoint Mrs Carola Gräfin Von Schmettow as Director in addition to the Directors currently in office.

In Resolution 9, the Board proposes that you appoint PricewaterhouseCoopers Audit and Mr Jean-Baptiste Deschryver as new statutory and alternate Auditors for the remaining term of their predecessors, KPMG Audit FS II and KPMG Audit FS I, who have resigned. That term will end with the General Meeting called to approve the financial statements of the year ending in 2017.

In accordance with the recommendation in paragraph 24.3 of the AFEP/MEDEF Code, to which the company refers pursuant to article L. 225-37 of the French Commercial Code, the shareholders are asked in Resolutions 10 and 11 to issue a favourable opinion on the components of compensation due or awarded to Mr Jean Beunardeau, Chief Executive Officer, and Mr Gilles Denoyel, Deputy Chief Executive Officer, in respect of the year just ended, as described in the Registration Document 2014 on pages 33 to 35.

In accordance with the provisions of article L. 511-73 of the French Monetary and Financial Code, the shareholders are asked in Resolution 12 to issue a favourable opinion on the aggregate amount of compensation of all kinds paid in 2014 to executive members and professionals having a significant impact on risks, which amounts to EUR 46,390,607.

To enable the company to build up its equity capital if necessary, or to take advantage of investment opportunities that may arise, Resolution 13 seeks authorisation for the Board to increase the company’s share capital by up to EUR 100 million. The proposed resolution also allows this to be done by incorporation of reserves and share premiums.

Under article L. 225-129-6, indent 1 of the French Commercial Code, whenever the shareholders delegate authority to the Board to make a cash capital increase, the shareholders must also, at the same Extraordinary General Meeting, consider a draft resolution to make a capital increase under the conditions set forth in articles L. 3332-18 and following of the French Labour Code, that is reserved for participants in an employee share-ownership plan.

To comply with the aforementioned legal requirement, Resolution 14 proposes that the shareholders decide on the principle of granting an authority to the Board to increase the share capital by issuing shares reserved for participants in the employee share ownership plan.

This resolution is presented to the shareholders to meet this legal obligation, but the Board is not disposed to make a capital increase of this kind, given that employees of the company are already able to participate in capital increases reserved for them under the Employee Share Ownership Plan of the HSBC Group.

Resolution 15 proposes to harmonise the Company’s Articles of Association with the requirements of Ordinance n°2014-863 of 31 July 2014 on company law and Decree 2014-1466 of 8 December 2014, which amended the date and the conditions for establishing the list of persons entitled to attend to the meetings of shareholders and bondholders of commercial companies.

The 16th and last resolution is intended to grant full powers to the bearer of an original, a copy or an excerpt of the minutes of this General Meeting to carry out the required formalities.

H S B C F R A N C E

Senior Executives

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Directors and members of the Executive Committee

Jean Beunardeau Chief Executive Officer, Head of Global Banking and Markets, France. Group General Manager of the HSBC Group. Age 53. Graduated from Ecole Polytechnique, Telecom engineer and Master of Economy, he began his career at the Ministry of Finance, mainly at the Treasury. He became Technical Advisor to the Prime Minister in 1995. He joined HSBC France in 1997 in Corporate Finance and became Managing Director in 2000. He was appointed Co-Head of Corporate Investment Banking and Markets, mainly in charge of Corporate and Investment Banking in March 2004. In 2005, he was appointed Senior Corporate Vice-President. In September 2007, he was appointed Head of Global Banking and Markets of HSBC France. Since 1 February 2010, he has been Deputy CEO and Deputy to the CEO, in addition to his current role as Head of Global Banking and Markets France. In November 2010, he was appointed Head of Global Banking, Continental Europe, HSBC Group. Since 10 January 2012, he has been CEO of HSBC France and retains his role as Head of Global Banking and Markets, France.

Andrew Wild Deputy Chief Executive Officer, Deputy to the CEO, HSBC France (since 1 March 2015). Head of Commercial Banking in France (since 2 February 2015). Age 44. British nationality. Graduate of the Business School of the University of Nottingham. He is also qualified as a chartered accountant. He joined the HSBC Group in 2005, after having been, in particular, Senior Manager Transaction Services at KPMG then, Corporate Finance Director at KPMG Corporate Finance. In June 2008, he was appointed Deputy Head of Commercial Banking of HSBC France. In April 2011, he was appointed Global Head of Corporate, Business Banking and Products of Commercial Banking, HSBC Group, then he became, in August 2013, Global Head of Mid-Market and Business Banking of Commercial Banking, HSBC Group. Since 2 February 2015, he is Head of Commercial Banking in France and Deputy Chief Executive Officer, Deputy to the CEO of HSBC France since 1 March 2015.

Philippe Pontet Chairman Investment Banking. Age 72. He joined HSBC France in 2005 as Vice-Chairman of Corporate Finance Europe. In February 2005, he was appointed member of HSBC France’s Board. At the end of August 2007, he was appointed member of HSBC’s New European Advisory council. Over the last 30 years he has held a number of leading positions in the French banking and industrial sectors, including Chairman and CEO of the banking group Crédit Industriel et Commercial; Chairman and CEO of Framatome; and Chairman of AREVA prior to joining HSBC in January 2005. Since September 2007, he has been Chairman Investment Banking.

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Other members of the Executive Committee

Anne-Lise Bapst Head of Communication Marine de Bazelaire Head of Corporate Sustainability Xavier Boisseau Head of Global Markets Loïc Bonnat Head of Principal Investments Hubert Bouxin Co-Head of Banking Anne-Catherine Colleau Head of Financial Crime Compliance Myriam Couillaud Head of Human Resources Eric Emoré Head of Insurance François Essertel Head of Private Banking Laurent Facque Head of Regulatory Compliance Sébastien Guillo Head of Strategy and Organisation Marc de Lapérouse Head of Legal Mathilde Lemoine Chief Economist - French Economic Research Department Nathalie Léonard Head of Tax Malachy McAllister Head of Capital Financing Philippe Moiroud Chief Operating Officer, HSBC France,

and Chief Operating Officer, Global Banking and Markets, France

François Mongin Head of HSBC France Internal Audit Matteo Pardi Head of Asset Management Emmanuel Rémy Chief Risk Officer Laurence Rogier Chief Financial Officer Pierre Ruhlmann Head of Retail Banking and Wealth Management Simon Vaughan Johnson Head of France Transformation

H S B C F R A N C E

Composition of the Board of Directors

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Composition of the Board of Directors of HSBC France on 1 March 20151

Samir Assaf Born in 1960 Holds 1 HSBC France share. First elected: 2012. Term ends: 2016.

Principal position: Member of the Group Management Board. Chief Executive Officer Global Banking and Markets, HSBC Group. Chairman of the Board of Directors, HSBC France. Member of the Nomination Committee and of the Remuneration Committee, HSBC France.

Other directorships in the HSBC Group: Director, HSBC Bank plc (since March 2014). Member of the Supervisory Board, HSBC Trinkaus & Burkhardt AG.

Other directorship outside of the HSBC Group: Chairman of the Board of Directors, Global Financial Markets Association (since May 2014).

Résumé: Joined CCF in 1994 from Group Total, where he was Head of Treasury. At CCF, he was appointed Head of Markets in 1998. He joined HSBC in 2000 when the bank acquired CCF. Started at HSBC as Head of Global Markets at HSBC France and Head of Fixed Income Trading, Europe. In 2006, promoted to Head of Global Markets, Europe and Middle-East. In January 2008, he became Head of Global Markets and a Group General Manager in May 2008. On 1 January 2011, he was appointed Group Managing Director and a member of the Group Management Board. Since 22 November 2012, he has been Chairman of the Board of Directors of HSBC France.

Jean Beunardeau Born in 19622 Holds 1 HSBC France share. First elected: 2008. Last re-elected: 2014. Term ends: 2017.

Principal position: Chief Executive Officer, HSBC France. Head of Global Banking and Markets, France. Group General Manager, HSBC Group.

Other directorships in the HSBC Group: Chairman of the Board, HSBC Global Asset Management (France). Director, Valeurs Mobilières Elysées. Director, HSBC Assurances Vie (France).

Other directorships outside of the HSBC Group: Director, Institut de la Gestion Déléguée. Director and Treasurer, Fondation ESTP. Member of the Supervisory Board, Société Anonyme des Galeries Lafayette.

Andrew Wild Born in 19702 Holds 1 HSBC France share. First elected: 2015. Term ends: 2016.

Principal position: Deputy CEO, Deputy to the CEO, HSBC France (since 1 March 2015). Head of Commercial Banking in France (since 2 February 2015).

1 As far as their directorship at HSBC France is concerned, the address of HSBC France’s Directors and Senior Executives is the company’s registered

office, 103 avenue des Champs-Elysées, 75419 Paris Cedex 08, France. 2 Résumé available on page 12.

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Gilles Denoyel Born in 1954 Holds 1 HSBC France share. First elected: 2004. Last re-elected: 2014. Term ends: 2017.

Principal position: President International Institutional Relations, Europe, HSBC Group (since 1 March 2015).

Other directorships in the HSBC Group: Vice-Chairman of the Board, HSBC Assurances Vie (France). Director, HSBC Bank A.S. Director, HSBC Global Asset Management (France) (permanent representative of HSBC France). Directorship and functions expired on 1 March 2015: Deputy CEO, Deputy to the CEO, Chief Risk Officer, HSBC France.

Other directorships outside of the HSBC Group: Director, Fonds de Garantie des Dépôts. Director, MEDEF (permanent representative of HSBC France). Director and Treasurer, Association Française des Banques. Chairman, Groupement des Banques Etrangères en France. Directorship expired in 2014: Director, DCNS.

Résumé: After a career in the French senior public service, he joined HSBC France in June 1996 as Chief Financial Officer. In 1998, he became Group General Secretary, put in charge of Logistics and Operations. From March 2000 to February 2004, he was appointed Senior Corporate Vice-President Finance. From March 2004 to 1 March 2015, he was appointed Deputy Chief Executive Officer of HSBC France, successively in charge of the support functions and the finance support services, then, in charge of the Asset Management activities, the Insurance activities and the non-finance support services and, finally, responsible for all risk management and control activities (Chief Risk Officer), and for relations with the regulatory supervisors. On 10 January 2012, he was appointed Deputy to the CEO. Since 1 March 2015, he has been President International Institutional Relations, Europe, HSBC Group.

Véronique Duquesne Born in 1964 Holds 1 HSBC France share. First elected: 2012. Term ends: 2016. Director elected by employees.

Principal position: Middle-Office Manager KYC (“Know Your Customer”) Commercial Banking, HSBC France.

Résumé: Joined HSBC France in 1986.

Michel Gauduffe Born in 1959 Holds 1 HSBC France share. First elected: 2008. Last re-elected: 2012. Term ends: 2016. Director elected by employees.

Principal position: Deputy Head of the Limoges branch, HSBC France.

Other directorships in the HSBC Group: Deputy Chairman of the Board, Institution de Gestion des Retraites Supplémentaires de la Caisse de Retraites HSBC France. Member of the Supervisory Board, France Actionnariat Fonds.

Other directorship outside of the HSBC Group: Director, APICIL-ARC.


Martine Gerow Born in 1960 Holds 1 HSBC France share. First elected: 2012. Term ends: 2016. Independent Director. Member of the Audit Committee and Member of the Risk Committee, HSBC France.

Principal position: Executive Vice-President and Chief Financial Officer, Carlson Wagonlit Travel (since September 2014).

Résumé: Internal Auditor at PPG Industries in France and in the USA (1983-1985) and Strategy Consultant within The Boston Consulting Group in New York until 1989. From 1989 to 2002, held various positions within the Strategy and Development Department of the Pepsico Group then Chief Financial Officer of Pepsico in France. From 2002 to 2007, Chief Financial Officer - Beverage Division then Group Financial Controller of the Danone Group. From 2008 to 2010, Chief Financial Officer of the Smithfield Group then Chief Financial Officer of the Campofrio Food Group. From 2010 to 2014, Executive Vice-President in charge of Finance, Purchasing and IT of Solocal Group. Since September 2014, Executive Vice-President and Chief Financial Officer of Carlson Wagonlit Travel.

H S B C F R A N C E

Composition of the Board of Directors (continued)

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Lindsay Gordon Born in 1952 Holds 1 HSBC France share. First elected: 2013. Last re-elected: 2013. Term ends: 2016. Independent Director. Member of the Audit Committee and Member of the Risk Committee, HSBC France.

Other directorships: Chancellor, University of British Columbia (since July 2014). Co-Chair, University of British Columbia Capital Campaign. Governor and Co-Founder, C.H.I.L.D. Foundation. Director, Clear Seas Centre for Responsible Marine Shipping (previously Centre of Excellence for Marine Transportation). Director, Export Development Canada (since April 2014). Director, Canadian Institute for Advanced Research (since October 2014).

Résumé: British and Canadian nationality. He joined HSBC Bank Canada in 1987 and has served in various roles in Toronto and Vancouver including Senior Executive Vice-President, Chief Credit Officer, Senior Vice-President and Head of Special Credit, and Vice-President Toronto Commercial Banking. He was appointed Chief Operating Officer in December 1999 then President and Chief Executive Officer of HSBC Bank Canada from October 2003 to January 2013, date of his retirement.

Philippe Houzé Born in 1947 Holds 1 HSBC France share. First elected: 1999. Last re-elected: 2012. Term ends: 2016. Independent Director. Chairman of the Nomination Committee and of the Remuneration Committee, HSBC France.

Principal position: Chairman of the Management Board, Groupe Galeries Lafayette.

Other directorships1: Deputy Chairman and Chief Executive Officer, Motier. Chairman, Motier Domaines (since July 2014). Director, iDbyMe. Director, Fondation d’entreprise Galeries Lafayette (Founders College). Member of the Supervisory Committee, Bazar de l’Hôtel de Ville-B.H.V. Member of the Steering Committee, Union du Grand Commerce de Centre-Ville (UCV). Elected Member, Chambre de Commerce et d’Industrie de Paris. Censor, Groupe Carrefour (since October 2014). President of the Council, France INSEAD. Director, INSEAD (since January 2015). Chairman of the Governing Board, Novancia Business School. Deputy Chairman, Association Alliance 46.2 Entreprendre en France pour le Tourisme (since February 2014). Director, EXPOFRANCE 2025 (since February 2015). Directorships expired in 2014: Chairman, Union du Grand Commerce de Centre-Ville (UCV). Vice President, Fondation France INSEAD.

Résumé: Director of Galeries Lafayette since 1974. Chairman of Monoprix from 1994 to 2013.

Alan Keir Born in 1958 Holds 1 HSBC France share. First elected: 2013. Term ends: 2016.

Principal position: Member of the Group Management Board, HSBC Group. Chief Executive Officer, HSBC Bank plc. Group Managing Director for the EMEA region (Europe, Middle-East, Africa).

Other directorships in the HSBC Group: Director, HSBC Bank plc. Director, HSBC Bank Middle East Limited (since February 2014). Member of the Supervisory Board, HSBC Trinkaus & Burkhardt AG.

Résumé: British nationality. He joined the HSBC Group in 1981. In 2003, he was appointed General Manager and Global Co-Head of the Group’s Commercial Banking activities. He was appointed Group General Manager, Commercial Banking in 2006, then, in 2011, Global Head of Commercial Banking and also became a Group Managing Director and a member of the HSBC Group Management Board. Since October 2013, Alan Keir is Group Managing Director EMEA and Chief Executive Officer, HSBC Bank plc.

1 For the most part, appointments held in companies which do not belong to the group in which the Director holds his principal position.

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Anne Méaux Born in 1954 Holds 1 HSBC France share. First elected: 2011. Term ends: 20151. Independent Director.

Principal position: Chairman, Image 7.

Other directorships: Chairman, Com Sept Finance. Chairman, Anne Méaux Conseil. Member of the Advisory Committee, Women’s Forum. Deputy Chairman, Association Force Femmes.

Résumé: Attached to the press relations department of the Elysée palace from 1976 to 1981 then Communication Officer for Valéry Giscard d’Estaing, former President of the French Republic and for the UDF parliamentary group in the French National Assembly from 1981 to 1986. From 1986 to 1988, Communication Officer to the cabinet of Alain Madelin (French Ministry of Industry). Since 1988, Chairman of Image 7 which she founded in 1988.

Thierry Moulonguet Born in 1951 Holds 1 HSBC France share. First elected: 2009. Last re-elected: 2013. Term ends: 2016. Independent Director. Chairman of the Audit Committee and Chairman of the Risk Committee, HSBC France.

Other directorship in the HSBC Group: Independent Director, Chairman of the Audit Committee (since October 2014) and Member of the Risk Committee, HSBC Bank plc.

Other directorships outside of the HSBC Group: Chairman and Chief Executive Officer, Revue Des Deux Mondes. Vice-Chairman of the Supervisory Board, Webedia. Director, Fimalac. Director, Fitch Rating Group Inc. Director, Groupe Lucien Barrière. Director, Valéo.

Résumé: After having held several positions in the French public service, he joined the Finance Department of Renault in 1991. From 1999 to 2003, Senior Vice-President, Chief Financial Officer, Member of the Executive Committee and of the Board of Directors of Nissan. Until 30 June 2010, Executive Vice-President and Chief Financial Officer of the Renault Group, and then, until 31 March 2011, Director and Special Adviser to the President of the Renault-Nissan Alliance.

Philippe Pontet Born in 19422 Holds 1 HSBC France share. First elected: 2005. Last re-elected: 2011. Term ends: 20151.

Principal position: Chairman Investment Banking, HSBC France.

Other directorship in the HSBC Group: Director, Valeurs Mobilières Elysées.

Guillaume Praud Born in 1976 Holds 1 HSBC France share. First elected: 2012. Term ends: 2016. Director elected by employees.

Principal position: Head of the branch Premier International Direct, HSBC France.


Philippe Purdy Born in 1958 Holds 1 HSBC France share. First elected: 2004. Last re-elected: 2012.Term ends: 2016. Director elected by employees.

Principal position: Sales representative, Mandelieu branch, HSBC France.


1 Director standing for re-election at the Annual General Meeting to be held on 23 April 2015. 2 Résumé available on page 12.

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Antonio Simoes Born in 1975 Holds 1 HSBC France share. First elected: 2012. Last re-elected: 2012. Term ends: 2016.

Principal position: Deputy Chief Executive, HSBC Bank plc and Chief Executive Officer of United Kingdom (since June 2014).

Other directorships in the HSBC Group: Director, HSBC Bank plc. Director, HSBC Bank A.S.

Résumé: Portuguese nationality. Joined HSBC in 2007 from McKinsey & Co, where he was a Partner in the London office. From September 2007 to September 2009, Group Head of Strategy, HSBC Holdings plc. From October 2009 to December 2011, Group Head of Strategy and Planning and Chief of Staff to the Group CEO, HSBC Holdings plc. He was appointed Group General Manager in 2011. From December 2011 to June 2014, Head of United Kingdom and of Retail Banking and Wealth Management Europe. Since June 2014, Chief Executive Officer of United Kingdom.

Brigitte Taittinger Born in 1959 Holds 1 HSBC France share. First elected: 2008. Last re-elected: 2012. Term ends: 2016. Independent Director.

Principal position: Director of Strategy and Development at Sciences Po, Paris.

Other directorships: Vice-President of the Board of Directors, Festival d’Aix-en-Provence. Member of the Board of Directors, Centre Georges Pompidou. Director, Groupe Fnac.

Résumé: Advertising Manager for Publicis from 1984 to 1988. Marketing Department of Groupe du Louvre from 1988 to 1991. Chairman and CEO of Annick Goutal from 1991 to 2012. From April 2013, Director of Strategy and Development at Sciences Po, Paris.

Jacques Veyrat Born in 1962 Holds 1 HSBC France share. First elected: 2009. Last re-elected: 2013.Term ends: 2016. Independent Director. Member of the Nomination Committee and of the Remuneration Committee, HSBC France.

Principal position: Chairman, Impala SAS.

Other directorships: Chairman, Impala Holding. Director, Groupe Fnac. Director, Nexity. Member of the Supervisory Board, Eurazeo. Member of the Supervisory Board, Neoen. Member of the Board of Directors, Cameron France Holding SAS. Censor, Sucres et Denrées (since October 2014). Directorships expired in 2014: Director, Imerys. Member of the Supervisory Board, Sucres et Denrées.

Résumé: After having held various positions of responsibility in several French ministries, he joined the Louis Dreyfus Group in 1995. In 1998, he set up LDCom, renamed Neuf Telecom in 2004 and Neuf Cegetel in 2005. In April 2008, he left Neuf Cegetel when it was sold to SFR. In May 2008, he was appointed Chairman of the Louis Dreyfus Group. In 2011, he left the Louis Dreyfus Group and created the Impala Group.

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Directorships held1 by the members of the Board of Directors (composition at 1 March 2015)

Information as at 31 December of each year from the year of appointment to the HSBC France Board of Directors.

Director’s name Principal position

First elected

Term ends 2014 2013 2012 2011 2010

Samir Assaf Member of the Group Management Board. Chief Executive Officer, Global Banking and Markets, HSBC Group. Chairman of the Board of Directors, HSBC France.

2012 2016 Directorships inthe HSBC Group:

Chairman of theBoard of Directors,

HSBC France.Director: HSBC

Bank plc.Member of the

Supervisory Board:HSBC Trinkaus &

Burkhardt AG.

Directorship outsideof the HSBC Group:

Chairman of theBoard of Directors:

Global FinancialMarkets

Association.

Directorships inthe HSBC Group:

Chairman of the Board of Directors:

HSBC France. Member of the

Supervisory Board: HSBC Trinkaus &

Burkhardt AG.


Chairman of the Board of Directors:


Supervisory Board: HSBC Trinkaus &

Burkhardt AG.

– –

Jean Beunardeau Chief Executive Officer, HSBC France. Head of Global Banking and Markets, France. Group General Manager, HSBC Group.


Director and CEO:HSBC France.

Chairman of theBoard: HSBC GlobalAsset Management

(France).Director: Valeurs

Mobilières Elysées,HSBC Assurances

Vie (France).

Directorshipsoutside of theHSBC Group:

Director: Institutde la Gestion

Déléguée. Directorand Treasurer:

Fondation ESTP.Member of the

Supervisory Board:Société Anonyme

des GaleriesLafayette.


Director and CEO:HSBC France.

Chairman of the Board: HSBC Global Asset Management


Mobilières Elysées, HSBC Assurances

Vie (France).

Directorships outside of the HSBC Group:

Director: Institut de la Gestion

Déléguée. Director and Treasurer:

Fondation ESTP. Member of the

Supervisory Board: Société Anonyme

des Galeries Lafayette.


Director and CEO: HSBC France.

Chairman of the Board: HSBC Global Asset Management


Mobilières Elysées, HSBC Assurances

Vie (France).



Déléguée. Director and Treasurer:

Fondation ESTP.


Director and Deputy CEO: HSBC France.

Director: Valeurs Mobilières Elysées, HSBC Global Asset

Management (France) (permanent

representative of HSBC France),

HSBC Real Estate Leasing (France).


Chairman: X-Banque.


Déléguée.



Chairman of the Board: Foncière

Elysées.Director: Nobel,

HSBC Global AssetManagement

(France) (permanent representative of

HSBC France), HSBC Real Estate Leasing (France).


Chairman: X-Banque.

Director: Amicale des Anciens Elèves

de Polytechnique, Institut de la

Gestion Déléguée.

1 For the most part, appointments held in companies which do not belong to the group in which the Director holds his principal position.

H S B C F R A N C E


20


First elected

Termends 2014 2013 2012 2011 2010

Gilles Denoyel President International Institutional Relations, Europe, HSBC Group (since 1 March 2015).


Director and DeputyCEO: HSBC France.

Vice-Chairman ofthe Board:

HSBC AssurancesVie (France).

Director: HSBC Bank A.S.,

HSBC Global AssetManagement

(France) (permanentrepresentative of

HSBC France).

Directorshipsoutside of theHSBC Group:

Director:Fonds de Garantie

des Dépôts,MEDEF (permanent

representative ofHSBC France).

Director andTreasurer:

AssociationFrançaise

des Banques.Chairman:

Groupement desBanques Etrangères

en France.



Vice-Chairman of the Board:

HSBC Assurances Vie (France).

Director: HSBC Bank A.S.,

HSBC Global Asset Management


HSBC France).


Director: DCNS,Fonds de Garantie

des Dépôts, MEDEF (permanent

representative of HSBC France).

Director and Treasurer:

Association Française


Groupement des Banques Etrangères

en France.





Director: HSBC Assurances

IARD (France), HSBC Bank A.S.,

HSBC Global Asset Management


HSBC France).





Director and Treasurer:




en France.





Director:HSBC Assurances

IARD (France), HSBC Global Asset

Management (France).





Chairman: Groupement des

Banques Etrangères en France.Treasurer:


des Banques.





Director:Halbis CapitalManagement

(France),HSBC Assurances

IARD (France), HSBC Global Asset

Management (France),

Sinopia Asset Management.

Member of the Supervisory Board:

HSBC Private Bank France.

Directorships outside of the HSBC

Group:Director: DCNS,

Fonds de Garantie des Dépôts,

MEDEF (permanent representative of

HSBC France).Chairman:


en France.Treasurer:


des Banques.

Véronique Duquesne Middle-Office Manager KYC Commercial Banking, HSBC France.

2012 2016 Director electedby employees:HSBC France.

Director elected by employees: HSBC France.


– –

21


First elected

Term ends 2014 2013 2012 2011 2010

Michel Gauduffe Deputy Head of the Limoges branch, HSBC France.


Director electedby employees:HSBC France.


Institution de Gestion des

Retraites Supplémentaires

de la Caissede Retraites


Supervisory Board: France Actionnariat

Fonds.

Directorshipoutside of the HSBC Group:

Director: APICIL-ARC.




Institution de Gestion des

Retraites Supplémentaires




Fonds.






Institution de Prévoyance Vernet, Institut de Gestion

des Retraites Supplémentaires




Fonds.



Directorships in the HSBC Group:





de la Caisse de Retraites



Fonds.

Directorship outside of the HSBC Group:

Director: AGIRA.



Vice-Chairman ofthe Board:




HSBC France.

Directorship outside of the HSBC Group:

Director: AGIRA.

Martine Gerow Executive Vice-President and Chief Financial Officer, Carlson Wagonlit Travel.

2012 2016 Directorship in the HSBC Group: Independent

Director:HSBC France.

Directorship in the HSBC Group: Independent




– –

Lindsay Gordon Company Director.




Chancellor: University of British

Columbia.Co-Chair: University of British Columbia Capital Campaign. Governor and Co-

Founder: C.H.I.L.D. Foundation.

Director: Clear Seas Centre

for Responsible Marine Shipping,

Export Development

Canada, Canadian Institute for

Advanced Research.




Co-Chair: University of British Columbia Capital Campaign. Governor and Co-

Founder: C.H.I.L.D. Foundation.

Director: Centre of

Excellence for Marine

Transportation.

– – –

H S B C F R A N C E


22


First elected

Term ends 2014 2013 2012 2011 2010

Philippe Houzé Chairman of the Management Board, Groupe Galeries Lafayette.




Chairman of the Management

Board: Groupe Galeries Lafayette.Deputy Chairman

and Chief Executive Officer: Motier.

Chairman: Motier Domaines.

Director: iDbyMe, Fondation

d’entreprise Galeries Lafayette

(Founders College). Member of the

Steering Committee:

Union du Grand Commerce de

Centre-Ville (UCV).Elected member:

Chambre de Commerce et

d’Industrie de Paris. Member of the

Supervisory Committee: Bazar

de l’Hôtel de Ville-B.H.V.

Censor: Groupe Carrefour.

President of the Council: France

INSEAD.Chairman of the

Governing Board: Novancia Business

School. Deputy Chairman:

Association Alliance 46.2 Entreprendre en France pour le

Tourisme.





Board: Groupe Galeries Lafayette.

Chairman:Union du Grand Commerce de

Centre-Ville (UCV). Member of the

Board of Directors: National Retail

Federation(NRF-USA).

Elected Member: Chambre de

Commerce et d’Industrie de Paris.

Member of the Supervisory

Committee: Bazar de l’Hôtel

de Ville-B.H.V.President of the Council: Insead

France.Chairman of the

Governing Board: Novancia Business

School.






Chairman:Union du Grand Commerce de

Centre-Ville (UCV). Member of the

Board of Directors: National Retail

Federation(NRF-USA).

Elected Member: Chambre de

Commerce et d’Industrie de Paris.

Directorships in the HSBC Group: Independent

Director: HSBC France,

HSBC Bank plc.




Director: Casino, Guichard-

Perrachon. Chairman:

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