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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington,D.C.20549 FORM 10-Q(Mark One)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31,2024 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _ to _ Commission file number 001-2979 WELLS FARGO&COMPANY(Exact name of registrant as specified in its charter)Delaware No.41-0449260(State of incorporation)(I.R.S.Employer Identification No.)420 Montgomery Street,San Francisco,California 94104(Address of principal executive offices)(Zip code)Registrants telephone number,including area code:1-866-249-3302 Securities registered pursuant to Section 12(b)of the Act:Title of Each Class TradingSymbol Name of Each Exchangeon Which Registered New York Stock Common Stock,par value$1-2/3 WFC Exchange(NYSE)7.5%Non-Cumulative Perpetual Convertible Class A Preferred Stock,Series L WFC.PRL NYSE Depositary Shares,each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock,Series Y WFC.PRY NYSE Depositary Shares,each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock,Series Z WFC.PRZ NYSE Depositary Shares,each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock,Series AA WFC.PRA NYSE Depositary Shares,each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock,Series CC WFC.PRC NYSE Depositary Shares,each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock,Series DD WFC.PRD NYSE Guarantee of Medium-Term Notes,Series A,due October 30,2028 of Wells Fargo Finance LLC WFC/28A NYSE Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No Indicate the number of shares outstanding of each of the issuers classes of common stock,as of the latest practicable date.Shares Outstanding April 23,2024 Common stock,$1-2/3 par value 3,486,315,358 FORM 10-Q CROSS-REFERENCE INDEX PART I Financial Information Item 1.Financial Statements Page Consolidated Statement of Income 55 Consolidated Statement of Comprehensive Income 56 Consolidated Balance Sheet 57 Consolidated Statement of Changes in Equity 58 Consolidated Statement of Cash Flows 59 Notes to Financial Statements 1 Summary of Significant Accounting Policies 60 2 Trading Activities 62 3 Available-for-Sale and Held-to-Maturity Debt Securities 63 4 Equity Securities 69 5 Loans and Related Allowance for Credit Losses 71 6 Mortgage Banking Activities 85 7 Intangible Assets and Other Assets 87 8 Leasing Activity 88 9 Preferred Stock 89 10 Legal Actions 90 11 Derivatives 92 12 Fair Values of Assets and Liabilities 98 13 Securitizations and Variable Interest Entities 106 14 Guarantees and Other Commitments 112 15 Securities and Other Collateralized Financing Activities 114 16 Pledged Assets and Collateral 116 17 Operating Segments 117 18 Revenue and Expenses 119 19 Employee Benefits 121 20 Earnings and Dividends Per Common Share 122 21 Other Comprehensive Income 123 22 Regulatory Capital Requirements and Other Restrictions 125 Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations(Financial Review)Summary Financial Data 2 Overview 3 Earnings Performance 6 Balance Sheet Analysis 23 Off-Balance Sheet Arrangements 25 Risk Management 26 Capital Management 43 Regulatory Matters 49 Critical Accounting Policies 50 Current Accounting Developments 50 Forward-Looking Statements 51 Risk Factors 53 Glossary of Acronyms 127 Item 3.Quantitative and Qualitative Disclosures About Market Risk 37 Item 4.Controls and Procedures 54 PART II Other Information Item 1.Legal Proceedings 128 Item 1A.Risk Factors 128 Item 2.Unregistered Sales of Equity Securities and Use of Proceeds 128 Item 5.Other Information 128 Item 6.Exhibits 129 Signature 130 Wells Fargo&Company 1 FINANCIAL REVIEW Summary Financial Data Mar 31,2024 Quarter ended%Change from Mar 31,Dec 31,Mar 31,Dec 31,Mar 31,($in millions,except ratios and per share amounts)2024 2023 2023 2023 2023 Selected Income Statement Data Total revenue$20,863 20,478 20,729 2%1 Noninterest expense 14,338 15,786 13,676(9)5 Pre-tax pre-provision profit(PTPP)(1)6,525 4,692 7,053 39(7)Provision for credit losses(2)938 1,282 1,207(27)(22)Wells Fargo net income 4,619 3,446 4,991 34(7)Wells Fargo net income applicable to common stock 4,313 3,160 4,713 36(8)Common Share Data Diluted earnings per common share 1.20 0.86 1.23 40(2)Dividends declared per common share 0.35 0.35 0.30 17 Common shares outstanding 3,501.7 3,598.9 3,763.2(3)(7)Average common shares outstanding 3,560.1 3,620.9 3,785.6(2)(6)Diluted average common shares outstanding 3,600.1 3,657.0 3,818.7(2)(6)Book value per common share(3)$46.40 46.25 43.02 8 Tangible book value per common share(3)(4)39.17 39.23 35.87 9 Selected Equity Data(period-end)Total equity 182,674 187,443 183,220(3)Common stockholders equity 162,481 166,444 161,893(2)Tangible common equity(4)137,163 141,193 134,992(3)2 Performance Ratios Return on average assets(ROA)(5)0.97%0.72 1.09 Return on average equity(ROE)(6)10.5 7.6 11.7 Return on average tangible common equity(ROTCE)(4)12.3 9.0 14.0 Efficiency ratio(7)69 77 66 Net interest margin on a taxable-equivalent basis 2.81 2.92 3.20 Selected Balance Sheet Data(average)Loans$928,075 938,041 948,651(1)(2)Assets 1,916,974 1,907,535 1,863,676 3 Deposits 1,341,628 1,340,916 1,356,694 (1)Selected Balance Sheet Data(period-end)Debt securities 506,280 490,458 511,597 3(1)Loans 922,784 936,682 947,991(1)(3)Allowance for credit losses for loans 14,862 15,088 13,705(1)8 Equity securities 59,556 57,336 60,610 4(2)Assets 1,959,153 1,932,468 1,886,400 1 4 Deposits 1,383,147 1,358,173 1,362,629 2 2 Headcount(#)(period-end)224,824 225,869 235,591 (5)Capital and Other Metrics Risk-based capital ratios and components(8):Standardized Approach:Common Equity Tier 1(CET1)11.19.43 10.81 Tier 1 capital 12.68 12.98 12.34 Total capital 15.40 15.67 15.09 Risk-weighted assets(RWAs)(in billions)$1,221.6 1,231.7 1,243.8(1)(2)Advanced Approach:Common Equity Tier 1(CET1)12.43.63 12.03 Tier 1 capital 14.09 14.34 13.73 Total capital 16.17 16.40 15.92 Risk-weighted assets(RWAs)(in billions)$1,099.6 1,114.3 1,117.9(1)(2)Tier 1 leverage ratio 8.20%8.50 8.36 Supplementary Leverage Ratio(SLR)6.85 7.09 6.96 Total Loss Absorbing Capacity(TLAC)Ratio(9)25.10 25.05 23.34 Liquidity Coverage Ratio(LCR)(10)126 125 122(1)Pre-tax pre-provision profit(PTPP)is total revenue less noninterest expense.Management believes that PTPP is a useful financial measure because it enables investors and others to assess the Companys ability to generate capital to cover credit losses through a credit cycle.(2)Includes provision for credit losses for loans,debt securities,and other financial assets.(3)Book value per common share is common stockholders equity divided by common shares outstanding.Tangible book value per common share is tangible common equity divided by common shares outstanding.(4)Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity,noncontrolling interests,goodwill,certain identifiable intangible assets(other than mortgage servicing rights)and goodwill and other intangibles on investments in consolidated portfolio companies,net of applicable deferred taxes.The methodology of determining tangible common equity may differ among companies.Management believes that return on average tangible common equity and tangible book value per common share,which utilize tangible common equity,are useful financial measures because they enable management,investors,and others to assess the Companys use of equity.For additional information,including a corresponding reconciliation to generally accepted accounting principles(GAAP)financial measures,see the“Capital Management Tangible Common Equity”section in this Report.(5)Represents Wells Fargo net income divided by average assets.(6)Represents Wells Fargo net income applicable to common stock divided by average common stockholders equity.(7)The efficiency ratio is noninterest expense divided by total revenue(net interest income and noninterest income).(8)For additional information,see the“Capital Management”section and Note 22(Regulatory Capital Requirements and Other Restrictions)to Financial Statements in this Report.(9)Represents TLAC divided by RWAs,which is our binding TLAC ratio,determined by using the greater of RWAs under the Standardized and Advanced Approaches.(10)Represents average high-quality liquid assets divided by average projected net cash outflows,as each is defined under the LCR rule.Wells Fargo&Company 2 This Quarterly Report,including the Financial Review and the Financial Statements and related Notes,contains forward-looking statements,which may include forecasts of our financial results and condition,expectations for our operations and business,and our assumptions for those forecasts and expectations.Do not unduly rely on forward-looking statements.Actual results may differ materially from our forward-looking statements due to several factors.Factors that could cause our actual results to differ materially from our forward-looking statements are described in this Report,including in the“Forward-Looking Statements”section,and in the“Risk Factors”and“Regulation and Supervision”sections of our Annual Report on Form 10-K for the year ended December 31,2023(2023 Form 10-K).When we refer to“Wells Fargo,”“the Company,”“we,”“our,”or“us”in this Report,we mean Wells Fargo&Company and Subsidiaries(consolidated).When we refer to the“Parent,”we mean Wells Fargo&Company.See the“Glossary of Acronyms”for definitions of terms used throughout this Report.Financial Review Overview Wells Fargo&Company is a leading financial services company that has approximately$1.96 trillion in assets.We provide a diversified set of banking,investment and mortgage products and services,as well as consumer and commercial finance,through our four reportable operating segments:Consumer Banking and Lending,Commercial Banking,Corporate and Investment Banking,and Wealth and Investment Management.Wells Fargo ranked No.47 on Fortunes 2023 rankings of Americas largest corporations.We ranked fourth in assets and third in the market value of our common stock among all U.S.banks at March 31,2024.Wells Fargos top priority remains building a risk and control infrastructure appropriate for its size and complexity.The Company is subject to a number of consent orders and other regulatory actions,some of which are described below.These regulatory actions may require the Company,among other things,to undertake certain changes to its business,operations,products and services,and risk management practices.Addressing these regulatory actions is expected to take multiple years,and we are likely to continue to experience issues or delays along the way in satisfying their requirements.We are also likely to continue to identify more issues as we implement our risk and control infrastructure,which may result in additional regulatory actions.Regulators have indicated the potential for escalating consequences for banks that do not timely resolve open issues or have repeat issues.Furthermore,issues or delays with one regulatory action could affect our progress on others.Failure to satisfy the requirements of a regulatory action on a timely basis could result in additional fines,penalties,business restrictions,limitations on subsidiary capital distributions,increased capital or liquidity requirements,enforcement actions,and other adverse consequences,which could be significant.While we still have significant work to do and have not yet satisfied certain aspects of these regulatory actions,the Company is committed to devoting the resources necessary to operate with strong business practices and controls,maintain the highest level of integrity,and have an appropriate culture in place.Federal Reserve Board Consent Order Regarding Governance Oversight and Compliance and Operational Risk Management On February 2,2018,the Company entered into a consent order with the Board of Governors of the Federal Reserve System(FRB).As required by the consent order,the Companys Board of Directors(Board)submitted to the FRB a plan to further enhance the Boards governance and oversight of the Company,and the Company submitted to the FRB a plan to further improve the Companys compliance and operational risk management program.The Company continues to engage with the FRB as the Company works to address the consent order provisions.The consent order also requires the Company,following the FRBs acceptance and approval of the plans and the Companys adoption and implementation of the plans,to complete an initial third-party review of the enhancements and improvements provided for in the plans.Until this third-party review is complete and the plans are adopted and implemented to the satisfaction of the FRB,the Companys total consolidated assets as defined under the consent order will be limited to the level as of December 31,2017.Compliance with this asset cap is measured on a two-quarter daily average basis to allow for management of temporary fluctuations.After removal of the asset cap,a second third-party review must also be conducted to assess the efficacy and sustainability of the enhancements and improvements.Consent Orders with the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency Regarding Compliance Risk Management Program,Automobile Collateral Protection Insurance Policies,and Mortgage Interest Rate Lock Extensions On April 20,2018,the Company entered into consent orders with the Consumer Financial Protection Bureau(CFPB)and the Office of the Comptroller of the Currency(OCC)to pay an aggregate of$1 billion in civil money penalties to resolve matters regarding the Companys compliance risk management program and past practices involving certain automobile collateral protection insurance policies and certain mortgage interest rate lock extensions.As required by the consent orders,the Company submitted to the CFPB and OCC an enterprise-wide compliance risk management plan and a plan to enhance the Companys internal audit program with respect to federal consumer financial law and the terms of the consent orders.In addition,as required by the consent orders,the Company submitted for non-objection plans to remediate customers affected by the automobile collateral protection insurance and mortgage interest rate lock matters,as well as a plan for the management of remediation activities conducted by the Company.The Company continues to work to address the provisions of the consent orders.On September 9,2021,the OCC assessed a$250 million civil money penalty against the Company related to insufficient progress in addressing requirements under the OCCs April 2018 consent order and loss mitigation activities in the Companys Home Lending business.On December 20,2022,the CFPB modified its consent order to clarify how it would terminate.Wells Fargo&Company 3 Overview(continued)Consent Order with the OCC Regarding Loss Mitigation Activities On September 9,2021,the Company entered into a consent order with the OCC requiring the Company to improve the execution,risk management,and oversight of loss mitigation activities in its Home Lending business.In addition,the consent order restricts the Company from acquiring certain third-party residential mortgage servicing and limits transfers of certain mortgage loans requiring customer remediation out of the Companys mortgage servicing portfolio until remediation is provided.Consent Order with the CFPB Regarding Automobile Lending,Consumer Deposit Accounts,and Mortgage Lending On December 20,2022,the Company entered into a consent order with the CFPB requiring the Company to provide customer remediation for multiple matters related to automobile lending,consumer deposit accounts,and mortgage lending;maintain practices designed to ensure auto lending customers receive refunds for the unused portion of certain guaranteed automobile protection agreements;comply with certain business practice requirements related to consumer deposit accounts;and pay a$1.7 billion civil penalty to the CFPB.The required actions related to many of these matters were already substantially complete at the time we entered into the consent order,and the consent order lays out a path to termination after the Company completes the remainder of the required actions.Customer Remediation Activities Our work to build a better company has included an effort to identify areas or instances where customers may have experienced financial harm,provide remediation as appropriate,and implement additional operational and control procedures.We are working with our regulatory agencies in this effort.We have accrued for the probable and estimable costs related to our customer remediation activities,which amounts may change based on additional facts and information,as well as ongoing reviews and communications with our regulators.We had$1.0 billion and$819 million of accrued liabilities for customer remediation activities as of March 31,2024,and December 31,2023,respectively.As our ongoing reviews continue and as we continue to strengthen our risk and control infrastructure,we have identified and may in the future identify additional items or areas of potential concern.To the extent issues are identified,we will continue to assess any customer harm and provide remediation as appropriate.Recent Developments Federal Deposit Insurance Corporation Special Assessment In November 2023,the Federal Deposit Insurance Corporation(FDIC)finalized a rule to recover losses to the FDIC deposit insurance fund as a result of bank failures in the first half of 2023.Under the rule,the FDIC will collect a special assessment based on an insured depository institutions estimated amount of uninsured deposits.Upon the FDICs finalization of the rule,we expensed an estimated amount of our special assessment of$1.9 billion(pre-tax)in fourth quarter 2023.Subsequent to the filing of our 2023 Form 10-K,the FDIC provided an update on losses to the deposit insurance fund,and we expensed an additional$284 million(pre-tax)in first quarter 2024 for the estimated amount of the special assessment.We expect the ultimate amount of the special assessment may continue to change as the FDIC determines the actual net losses to the deposit insurance fund.Overdraft Fees Proposal On January 17,2024,the CFPB issued a proposed rule that would limit overdraft fees charged by certain banks.We expect a significant reduction to our overdraft fees,which are included in deposit-related fees,if the rule is adopted as currently proposed.Debit Card Interchange Fees Proposal On October 25,2023,the FRB issued a proposed rule that would reduce the amount of debit card interchange fees received by debit card issuers.In addition,the proposed rule would allow for an update to the debit card interchange fee cap every other year based on an analysis of certain costs incurred by debit card issuers.We expect a significant reduction to our debit card interchange fees,which are included in card fees,if the rule is adopted as currently proposed.Wells Fargo&Company 4 Financial Performance Consolidated Financial Highlights Quarter ended Mar 31,($in millions)2024 2023$Change%Change Selected income statement data Net interest income$12,227 13,336(1,109)(8)%Noninterest income 8,636 7,393 1,243 17 Total revenue 20,863 20,729 134 1 Net charge-offs 1,157 564 593 105 Change in the allowance for credit losses(219)643(862)NM Provision for credit losses(1)938 1,207(269)(22)Noninterest expense 14,338 13,676 662 5 Income tax expense 964 966(2)Wells Fargo net income 4,619 4,991(372)(7)Wells Fargo net income applicable to common stock 4,313 4,713(400)(8)NM Not meaningful(1)Includes provision for credit losses for loans,debt securities,and other financial assets.In first quarter 2024,we generated$4.6 billion of net income and diluted earnings per common share(EPS)of$1.20,compared with$5.0 billion of net income and diluted EPS of$1.23 in the same period a year ago.Financial performance for first quarter 2024,compared with the same period a year ago,included the following:total revenue increased due to higher noninterest income,partially offset by lower net interest income;provision for credit losses reflected decreases for commercial real estate loans and auto loans,partially offset by increases for credit card loans;noninterest expense increased due to higher operating losses,technology,telecommunications and equipment expense,and other expense driven by the estimated FDIC special assessment,partially offset by lower professional and outside services expense;average loans decreased driven by a decline in loans in both our commercial and consumer loan portfolios;and average deposits decreased driven by reductions in Consumer Banking and Lending,Commercial Banking,and Wealth and Investment Management,partially offset by growth in Corporate and Investment Banking and Corporate.Capital and Liquidity We maintained a strong capital position in first quarter 2024,with total equity of$182.7 billion at March 31,2024,compared with$187.4 billion at December 31,2023.In addition,capital and liquidity at March 31,2024,included the following:our Common Equity Tier 1(CET1)ratio was 11.19%under the Standardized Approach(our binding ratio),which continued to exceed the regulatory minimum and buffers of 8.90%;our total loss absorbing capacity(TLAC)as a percentage of total risk-weighted assets was 25.10%,compared with the regulatory minimum of 21.50%;and our liquidity coverage ratio(LCR)was 126%,which continued to exceed the regulatory minimum of 100%.See the“Capital Management”and the“Risk Management Asset/Liability Management Liquidity Risk and Funding”sections in this Report for additional information regarding our capital and liquidity,including the calculation of our regulatory capital and liquidity amounts.Credit Quality Credit quality reflected the following:The allowance for credit losses(ACL)for loans of$14.9 billion at March 31,2024,decreased$226 million from December 31,2023.Our provision for credit losses for loans was$926 million in first quarter 2024,compared with$1.1 billion in the same period a year ago.The ACL for loans and the provision for credit losses for loans reflected decreases for commercial real estate loans and auto loans,partially offset by increases for credit card loans.The allowance coverage for total loans was 1.61%at both March 31,2024,and December 31,2023.Commercial portfolio net loan charge-offs were$341 million,or 25 basis points of average commercial loans,in first quarter 2024,compared with net loan charge-offs of$63 million,or 5 basis points of average commercial loans,in the same period a year ago,due to higher losses in all commercial portfolios,primarily in our commercial real estate portfolio driven by the office property type.Consumer portfolio net loan charge-offs were$808 million,or 84 basis points of average consumer loans,in first quarter 2024,compared with net loan charge-offs of$541 million,or 56 basis points of average consumer loans,in the same period a year ago,due to higher losses in our credit card portfolio.Nonperforming assets(NPAs)of$8.2 billion at March 31,2024,decreased$203 million,or 2%,from December 31,2023,driven by charge-offs and paydowns of commercial real estate nonaccrual loans,predominantly within the office property type.NPAs represented 0.89%of total loans at March 31,2024.Criticized loans in the commercial portfolio were$34.4 billion at March 31,2024,compared with$33.0 billion at December 31,2023,predominantly driven by an increase in criticized commercial and industrial loans.Wells Fargo&Company 5 Earnings Performance Wells Fargo net income for first quarter 2024 was$4.6 billion($1.20 diluted EPS),compared with$5.0 billion($1.23 diluted EPS)in the same period a year ago.Net income decreased in first quarter 2024,compared with the same period a year ago,predominantly due to a$1.1 billion decrease in net interest income and a$662 million increase in noninterest expense,partially offset by a$1.2 billion increase in noninterest income.Net Interest Income Net interest income and net interest margin decreased in first quarter 2024,compared with the same period a year ago,driven by the impact of higher interest rates on interest-bearing deposits and long-term debt,as well as lower loan balances,partially offset by higher interest rates on interest-earning assets.Table 1 presents the individual components of net interest income and net interest margin.Net interest income and net interest margin are presented on a taxable-equivalent basis in Table 1 to consistently reflect income from taxable and tax-exempt loans and debt and equity securities based on a 21deral statutory tax rate for the periods ended March 31,2024 and 2023.For additional information about net interest income and net interest margin,see the“Earnings Performance Net Interest Income”section in our 2023 Form 10-K.Wells Fargo&Company 6 Table 1:Average Balances,Yields and Rates Paid(Taxable-Equivalent Basis)(1)Quarter ended March 31,2024 2023($in millions)Averagebalance Interest income/expense Averageinterest rates Averagebalance Interest Averageincome/interest expense rates Assets Interest-earning deposits with banks$207,568 2,573 4.99%$114,858 1,167 4.12deral funds sold and securities purchased under resale agreements 69,719 914 5.28 68,633 696 4.12 Debt securities:Trading debt securities 112,170 1,144 4.08 96,405 801 3.33 Available-for-sale debt securities 139,986 1,396 3.99 145,894 1,282 3.54 Held-to-maturity debt securities 264,755 1,783 2.70 279,955 1,780 2.55 Total debt securities 516,911 4,323 3.35 522,254 3,863 2.97 Loans held for sale(2)5,835 114 7.82 6,611 97 5.90 Loans:Commercial and industrial U.S.305,159 5,437 7.16 307,176 4,772 6.30 Commercial and industrial Non-U.S.70,434 1,277 7.29 76,101 1,134 6.04 Commercial real estate mortgage 126,295 2,103 6.70 130,845 1,949 6.04 Commercial real estate construction 23,788 488 8.24 24,229 438 7.33 Lease financing 16,363 218 5.34 14,832 172 4.63 Total commercial loans 542,039 9,523 7.06 553,183 8,465 6.20 Residential mortgage first lien 248,259 2,144 3.45 255,018 2,088 3.28 Residential mortgage junior lien 10,794 198 7.36 12,966 210 6.53 Credit card 51,708 1,689 13.14 45,842 1,440 12.74 Auto 47,114 584 4.98 53,065 597 4.56 Other consumer 28,161 603 8.62 28,577 545 7.74 Total consumer loans 386,036 5,218 5.42 395,468 4,880 4.98 Total loans(2)928,075 14,741 6.38 948,651 13,345 5.69 Equity securities 21,350 150 2.82 28,651 170 2.39 Other 8,940 114 5.14 11,043 125 4.60 Total interest-earning assets$1,758,398 22,929 5.24%$1,700,701 19,463 4.62sh and due from banks 27,515 28,147 Goodwill 25,174 25,173 Other 105,887 109,655 Total noninterest-earning assets$158,576 162,975 Total assets$1,916,974 22,929 1,863,676 19,463 Liabilities Deposits:Demand deposits$439,176 2,254 2.06%$420,835 1,379 1.33%Savings deposits 350,807 907 1.04 402,285 547 0.55 Time deposits 186,758 2,453 5.28 78,866 725 3.72 Deposits in non-U.S.offices 20,133 197 3.93 18,240 110 2.45 Total interest-bearing deposits 996,874 5,811 2.34 920,226 2,761 1.22 Short-term borrowings:Federal funds purchased and securities sold under agreements to repurchase 78,917 1,054 5.37 39,235 416 4.30 Other short-term borrowings 16,071 164 4.09 19,261 154 3.25 Total short-term borrowings 94,988 1,218 5.16 58,496 570 3.95 Long-term debt 197,116 3,349 6.80 172,567 2,511 5.83 Other liabilities 32,821 235 2.88 33,427 178 2.16 Total interest-bearing liabilities$1,321,799 10,613 3.22%$1,184,716 6,020 2.05%Noninterest-bearing deposits 344,754 436,468 Other noninterest-bearing liabilities 63,752 58,195 Total noninterest-bearing liabilities$408,506 494,663 Total liabilities$1,730,305 10,613 1,679,379 6,020 Total equity 186,669 184,297 Total liabilities and equity$1,916,974 10,613 1,863,676 6,020 Interest rate spread on a taxable-equivalent basis(3)2.02%2.57%Net interest margin and net interest income on a taxable-equivalent basis(3)$12,316 2.81%$13,443 3.20%(1)The average balance amounts represent amortized costs,except for certain held-to-maturity(HTM)debt securities,which exclude unamortized basis adjustments related to the transfer of those securities from available-for-sale(AFS)debt securities.The average interest rates are based on interest income or expense amounts for the period and are annualized.Interest rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.(2)Nonaccrual loans and any related income are included in their respective loan categories.(3)Includes taxable-equivalent adjustments of$89 million,and$107 million for the quarters ended March 31,2024 and 2023,respectively,predominantly related to tax-exempt income on certain loans and securities.Wells Fargo&Company 7 Earnings Performance(continued)Noninterest Income Table 2:Noninterest Income Quarter ended Mar 31,($in millions)2024 2023$Change%Change Deposit-related fees$1,230 1,148 82 7%Lending-related fees 367 356 11 3 Investment advisory and other asset-based fees 2,331 2,114 217 10 Commissions and brokerage services fees 626 619 7 1 Investment banking fees 627 326 301 92 Card fees 1,061 1,033 28 3 Net servicing income 125 112 13 12 Net gains on mortgage loan originations/sales 105 120(15)(13)Mortgage banking 230 232(2)(1)Net gains from trading activities 1,454 1,342 112 8 Net losses from debt securities(25)(25)NM Net gains(losses)from equity securities 18(357)375 105 Lease income 421 347 74 21 Other 296 233 63 27 Total$8,636 7,393 1,243 17 NM Not meaningful First quarter 2024 vs.first quarter 2023 Deposit-related fees increased reflecting higher treasury management fees on commercial accounts driven by increased transaction service volumes and repricing.Investment advisory and other asset-based fees increased reflecting higher market valuations.Fees from the majority of Wealth and Investment Management(WIM)advisory assets are based on a percentage of the market value of the assets at the beginning of the quarter.For additional information on certain client investment assets,see the“Earnings Performance Operating Segment Results Wealth and Investment Management WIM Advisory Assets”section in this Report.Investment banking fees increased due to increased activity across all products.Net gains from trading activities increased driven by higher revenue in structured products and foreign exchange,partially offset by lower revenue in rates and commodities.Net gains from equity securities increased driven by lower impairment of equity securities from our venture capital investments.Lease income increased driven by a gain associated with the resolution of a legacy lease transaction.Other income increased driven by a gain related to earn-out provisions from the sale of Wells Fargo Asset Management in 2021.Wells Fargo&Company 8 Noninterest Expense Table 3:Noninterest Expense Quarter ended Mar 31,($in millions)2024 2023$Change%Change Personnel$9,492 9,415 77 1%Technology,telecommunications and equipment 1,053 922 131 14 Occupancy 714 713 1 Operating losses(1)633 267 366 137 Professional and outside services 1,101 1,229(128)(10)Leases(2)164 177(13)(7)Advertising and promotion 197 154 43 28 Other 984 799 185 23 Total$14,338 13,676 662 5(1)Includes expenses for customer remediation activities of$428 million and$57 million for the quarters ended March 31,2024 and 2023,respectively.(2)Represents expenses for assets we lease to customers.First quarter 2024 vs.first quarter 2023 Personnel expense increased due to:higher revenue-related compensation expense driven by higher fees in our Wealth and Investment Management business;partially offset by:the impact of efficiency initiatives;and lower severance expense.Technology,telecommunications and equipment expense increased due to higher expense for software maintenance and licenses and for the amortization of internally developed software.Operating losses increased driven by higher expense for customer remediation activities related to the further refinement of the remediation costs for historical mortgage lending and other consumer products matters.For additional Income Tax Expense Table 4:Income Tax Expense information on customer remediation activities,see the“Overview”section above.As previously disclosed,we have outstanding legal actions and customer remediation activities that could impact operating losses in the coming quarters.For additional information on operating losses,see Note 18(Revenue and Expenses)to Financial Statements in this Report.Professional and outside services expense decreased driven by efficiency initiatives to reduce our spending on consultants and contractors.Other expense increased reflecting an additional expense of$284 million for the estimated FDIC special assessment.For additional information on the FDICs special assessment,see Note 18(Revenue and Expenses)to Financial Statements in this Report.Quarter ended March 31,($in millions)2024 2023$Change%Change Income before income tax expense$5,587 5,846(259)(4)%Income tax expense 964 966(2)Effective income tax rate(1)17.3.2(1)Represents(i)Income tax expense(benefit)divided by(ii)Income(loss)before income tax expense(benefit)less Net income(loss)from noncontrolling interests.The increase in the effective income tax rate for first quarter 2024,compared with the same period a year ago,was driven by the impacts related to the expanded use of the proportional amortization method of accounting for renewable energy tax credit investments.For additional information on our adoption in first quarter 2024 of Accounting Standards Update(ASU)2023-02 Investments Equity Method and Joint Ventures(Topic 323):Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method,see Note 1(Summary of Significant Accounting Policies)to Financial Statements in this Report.For additional information on income taxes,see Note 23(Income Taxes)to Financial Statements in our 2023 Form 10-K.Wells Fargo&Company 9 Earnings Performance(continued)Operating Segment Results Our management reporting is organized into four reportable operating segments:Consumer Banking and Lending;Commercial Banking;Corporate and Investment Banking;and Wealth and Investment Management.All other business activities that are not included in the reportable operating segments have been included in Corporate.For additional information,see Table 5 below.We define our reportable operating segments by type of product and customer segment,and their results are based on our management reporting process.The management reporting process measures the performance of the reportable operating segments based on the Companys management structure,and the results are regularly reviewed with our Chief Executive Officer and relevant senior management.The management reporting process is based on U.S.GAAP and includes specific adjustments,such as funds transfer pricing for asset/liability management,shared revenue and expenses,and taxable-equivalent adjustments to consistently reflect income from taxable and tax-exempt sources,which allows management to assess performance consistently across the operating segments.Funds Transfer Pricing Corporate treasury manages a funds transfer pricing methodology that considers interest rate risk,liquidity risk,and other product characteristics.Operating segments pay a funding charge for their assets and receive a funding credit for their deposits,both of which are included in net interest income.The net impact of the funding charges or credits is recognized in corporate treasury.Revenue and Expense Sharing When lines of business jointly serve customers,the line of business that is responsible for providing the product or service recognizes revenue or expense with a referral fee paid or an allocation of cost to the other line of Table 5:Management Reporting Structure business based on established internal revenue-sharing agreements.When a line of business uses a service provided by another line of business or enterprise function(included in Corporate),expense is generally allocated based on the cost and use of the service provided.We periodically assess and update our revenue and expense allocation methodologies.Taxable-Equivalent Adjustments Taxable-equivalent adjustments related to tax-exempt income on certain loans and debt securities are included in net interest income,while taxable-equivalent adjustments related to income tax credits for affordable housing and renewable energy investments are included in noninterest income,in each case with corresponding impacts to income tax expense(benefit).Adjustments are included in Corporate,Commercial Banking,and Corporate and Investment Banking and are eliminated to reconcile to the Companys consolidated financial results.Allocated Capital Reportable operating segments are allocated capital under a risk-sensitive framework that is primarily based on aspects of our regulatory capital requirements,and the assumptions and methodologies used to allocate capital are periodically assessed and updated.Management believes that return on allocated capital is a useful financial measure because it enables management,investors,and others to assess a reportable operating segments use of capital.Selected Metrics We present certain financial and nonfinancial metrics that management uses when evaluating reportable operating segment results.Management believes that these metrics are useful to investors and others to assess the performance,customer growth,and trends of reportable operating segments or lines of business.Wells Fargo&Company Consumer Banking andLending Commercial Banking Corporate andInvestment Banking Wealth and Investment Management Corporate Consumer,Small and Business Banking Home Lending Credit Card Auto Personal Lending Middle Market Banking Asset-Based Lending and Leasing Banking Commercial Real Estate Markets Wells Fargo Advisors The Private Bank Corporate Treasury Enterprise Functions Investment Portfolio Venture capital and private equity investments Non-strategic businesses Wells Fargo&Company 10 Table 6 and the following discussion present our results by reportable operating segment.For additional information,see Note 17(Operating Segments)to Financial Statements in this Report.Table 6:Operating Segment Results Highlights Consumer Corporate and Wealth and Banking and Commercial Investment Investment Reconciling Consolidated(in millions)Lending Banking Banking Management Corporate(1)Items(2)Company Quarter ended March 31,2024 Net interest income$7,110 2,278 2,027 869 32(89)12,227 Noninterest income 1,981 874 2,955 2,873 291(338)8,636 Total revenue 9,091 3,152 4,982 3,742 323(427)20,863 Provision for credit losses 788 143 5 3(1)938 Noninterest expense 6,024 1,679 2,330 3,230 1,075 14,338 Income(loss)before income tax expense(benefit)2,279 1,330 2,647 509(751)(427)5,587 Income tax expense(benefit)573 341 666 128(317)(427)964 Net income(loss)before noncontrolling interests 1,706 989 1,981 381(434)4,623 Less:Net income from noncontrolling interests 3 1 4 Net income(loss)$1,706 986 1,981 381(435)4,619 Quarter ended March 31,2023 Net interest income$7,433 2,489 2,461 1,044 16(107)13,336 Noninterest income 1,931 818 2,441 2,637 5(439)7,393 Total revenue 9,364 3,307 4,902 3,681 21(546)20,729 Provision for credit losses 867(43)252 11 120 1,207 Noninterest expense 6,038 1,752 2,217 3,061 608 13,676 Income(loss)before income tax expense(benefit)2,459 1,598 2,433 609(707)(546)5,846 Income tax expense(benefit)618 399 615 152(272)(546)966 Net income(loss)before noncontrolling interests 1,841 1,199 1,818 457(435)4,880 Less:Net income(loss)from noncontrollinginterests 3 (114)(111)Net income(loss)$1,841 1,196 1,818 457(321)4,991(1)All other business activities that are not included in the reportable operating segments have been included in Corporate.For additional information,see the“Corporate”section below.(2)Taxable-equivalent adjustments related to tax-exempt income on certain loans and debt securities are included in net interest income,while taxable-equivalent adjustments related to income tax credits for affordable housing and renewable energy investments are included in noninterest income,in each case with corresponding impacts to income tax expense(benefit).Adjustments are included in Corporate,Commercial Banking,and Corporate and Investment Banking and are eliminated to reconcile to the Companys consolidated financial results.Wells Fargo&Company 11 Earnings Performance(continued)Consumer Banking and Lending offers diversified financial debit cards,as well as home,auto,personal,and small business products and services for consumers and small businesses with lending.Table 6a and Table 6b provide additional information for annual sales generally up to$10 million.These financial products Consumer Banking and Lending.and services include checking and savings accounts,credit and Table 6a:Consumer Banking and Lending Income Statement and Selected Metrics Quarter ended Mar 31,($in millions,unless otherwise noted)2024 2023$Change%Change Income Statement Net interest income$7,110 7,433(323)(4)%Noninterest income:Deposit-related fees 677 672 5 1 Card fees 990 958 32 3 Mortgage banking 193 160 33 21 Other 121 141(20)(14)Total noninterest income 1,981 1,931 50 3 Total revenue 9,091 9,364(273)(3)Net charge-offs 881 589 292 50 Change in the allowance for credit losses(93)278(371)NM Provision for credit losses 788 867(79)(9)Noninterest expense 6,024 6,038(14)Income before income tax expense 2,279 2,459(180)(7)Income tax expense 573 618(45)(7)Net income$1,706 1,841(135)(7)Revenue by Line of Business Consumer,Small and Business Banking(1)$6,092 6,374(282)(4)Consumer Lending:Home Lending 864 863 1 Credit Card(1)1,496 1,417 79 6 Auto 300 392(92)(23)Personal Lending 339 318 21 7 Total revenue$9,091 9,364(273)(3)Selected Metrics Consumer Banking and Lending:Return on allocated capital(2)14.5.5 Efficiency ratio(3)66 64 Retail bank branches(#,period-end)4,247 4,525(6)Digital active customers(#in millions,period-end)(4)35.5 34.3 3 Mobile active customers(#in millions,period-end)(4)30.5 28.8 6 Consumer,Small and Business Banking:Deposit spread(5)2.5%2.5 Debit card purchase volume($in billions)(6)$121.5 117.3 4.2 4 Debit card purchase transactions(#in millions)(6)2,442 2,369 3(continued on following page)Wells Fargo&Company 12 (continued from previous page)Quarter ended Mar 31,($in millions,unless otherwise noted)Home Lending:Mortgage banking:Net servicing income Net gains on mortgage loan originations/sales$2024 91 102 2023 84 76$Change 7 26%Change 84 Total mortgage banking$193 160 33 21 Retail originations($in billions)%of originations held for sale(HFS)Third-party mortgage loans serviced($in billions,period-end)(7)Mortgage servicing rights(MSR)carrying value(period-end)Ratio of MSR carrying value(period-end)to third-party mortgage loans serviced(period-end)(7)Home lending loans 30 days delinquency rate(period-end)(8)(9)(10)$3.5 43.5R7.5 7,249 1.37%0.30 5.6 46.8 666.8 8,819 1.32 0.26(2.1)(139.3)(1,570)(38)(21)(18)Credit Card(1):Point of sale(POS)volume($in billions)New accounts(#in thousands)Credit card loans 30 days delinquency rate(period-end)(9)(10)Credit card loans 90 days delinquency rate(period-end)(9)(10)$39.1 651 2.92%1.55 34.2 579 2.18 1.09 4.9 14 12 Auto:Auto originations($in billions)Auto loans 30 days delinquency rate(period-end)(9)(10)$4.1 2.36%5.0 2.25(0.9)(18)Personal Lending:New volume($in billions)$2.2 2.9(0.7)(24)NM Not meaningful(1)In first quarter 2024,we transferred our small business credit card business from Consumer,Small and Business Banking to Credit Card.Prior period balances have been revised to conform with the current period presentation.(2)Return on allocated capital is segment net income(loss)applicable to common stock divided by segment average allocated capital.Segment net income(loss)applicable to common stock is segment net income(loss)less allocated preferred stock dividends.(3)Efficiency ratio is segment noninterest expense divided by segment total revenue(net interest income and noninterest income).(4)Digital and mobile active customers is based on the number of consumer and small business customers who have logged on via a digital or mobile device,respectively,in the prior 90 days.Digital active customers includes both online and mobile customers.(5)Deposit spread is(i)the internal funds transfer pricing credit on segment deposits minus interest paid to customers for segment deposits,divided by(ii)average segment deposits.(6)Debit card purchase volume and transactions reflect combined activity for both consumer and business debit card purchases.(7)Excludes residential mortgage loans subserviced for others.(8)Excludes residential mortgage loans insured by the Federal Housing Administration(FHA)or guaranteed by the Department of Veterans Affairs(VA).(9)Excludes loans held for sale.(10)Delinquency balances exclude nonaccrual loans.First quarter 2024 vs.first quarter 2023 Revenue decreased driven by lower net interest income due to lower deposit balances.Provision for credit losses reflected a decrease driven by a lower allowance for auto loans,partially offset by a higher allowance for credit card and small business loans,as well as higher net charge-offs for credit card loans.Noninterest expense was stable reflecting:lower operating costs driven by the impact of efficiency initiatives;offset by:higher operating losses due to higher expense for customer remediation activities;and higher advertising expense due to higher marketing volume.Wells Fargo&Company 13 Earnings Performance(continued)Table 6b:Consumer Banking and Lending Balance Sheet Quarter ended Mar 31,($in millions)2024 2023$Change%Change Selected Balance Sheet Data(average)Loans by Line of Business:Consumer,Small and Business Banking(1)$6,465 7,037(572)(8)%Consumer Lending:Home Lending 214,335 222,561(8,226)(4)Credit Card(1)46,412 40,516 5,896 15 Auto 47,621 53,676(6,055)(11)Personal Lending 14,896 14,518 378 3 Total loans$329,729 338,308(8,579)(3)Total deposits 773,248 841,265(68,017)(8)Allocated capital 45,500 44,000 1,500 3 Selected Balance Sheet Data(period-end)Loans by Line of Business:Consumer,Small and Business Banking(1)$6,584 7,111(527)(7)Consumer Lending:Home Lending 213,289 222,012(8,723)(4)Credit Card(1)46,867 40,547 6,320 16 Auto 46,692 53,244(6,552)(12)Personal Lending 14,575 14,597(22)Total loans$328,007 337,511(9,504)(3)Total deposits 794,160 851,304(57,144)(7)(1)In first quarter 2024,we transferred our small business credit card business from Consumer,Small and Business Banking to Credit Card.Prior period balances have been revised to conform with the current period presentation.First quarter 2024 vs.first quarter 2023 Total loans(average and period-end)decreased due to:a decline in loan balances in our Home Lending business reflecting lower loan demand due to the impact of the higher interest rate environment;and a decline in loan balances in our Auto business due to lower origination volumes reflecting credit tightening actions;partially offset by:an increase in loan balances in our Credit Card business driven by higher point of sale volume and new account growth due to recent product launches.Total deposits(average and period-end)decreased driven by customer migration to higher yielding alternatives and consumer and small business deposit outflows.Wells Fargo&Company 14 Commercial Banking provides financial solutions to private,industry sectors and municipalities,secured lending and lease family owned and certain public companies.Products and products,and treasury management.Table 6c and Table 6d services include banking and credit products across multiple provide additional information for Commercial Banking.Table 6c:Commercial Banking Income Statement and Selected Metrics Quarter ended Mar 31,($in millions)2024 2023$Change%Change Income Statement Net interest income$2,278 2,489(211)(8)%Noninterest income:Deposit-related fees 284 236 48 20 Lending-related fees 138 129 9 7 Lease income 149 169(20)(12)Other 303 284 19 7 Total noninterest income 874 818 56 7 Total revenue 3,152 3,307(155)(5)Net charge-offs 75(39)114 292 Change in the allowance for credit losses 68(4)72 NM Provision for credit losses 143(43)186 433 Noninterest expense 1,679 1,752(73)(4)Income before income tax expense 1,330 1,598(268)(17)Income tax expense 341 399(58)(15)Less:Net income from noncontrolling interests 3 3 Net income$986 1,196(210)(18)Revenue by Line of Business Middle Market Banking$2,078 2,155(77)(4)Asset-Based Lending and Leasing 1,074 1,152(78)(7)Total revenue$3,152 3,307(155)(5)Revenue by Product Lending and leasing$1,309 1,324(15)(1)Treasury management and payments 1,421 1,562(141)(9)Other 422 421 1 Total revenue$3,152 3,307(155)(5)Selected Metrics Return on allocated capital 14.3.1 Efficiency ratio 53 53 NM Not meaningful First quarter 2024 vs.first quarter 2023 Revenue decreased driven by:lower net interest income reflecting higher deposit costs;partially offset by:higher deposit-related fees driven by higher treasury management fees on commercial accounts driven by increased transaction service volumes and repricing.Provision for credit losses reflected an increase in net charge-offs.Noninterest expense decreased due to lower personnel expense reflecting the impact of efficiency initiatives.Wells Fargo&Company 15 Earnings Performance(continued)Table 6d:Commercial Banking Balance Sheet Quarter ended Mar 31,($in millions)2024 2023$Change%Change Selected Balance Sheet Data(average)Loans:Commercial and industrial$163,273 163,210 63%Commercial real estate 45,296 45,862(566)(1)Lease financing and other 15,352 13,754 1,598 12 Total loans$223,921 222,826 1,095 Loans by Line of Business:Middle Market Banking$119,273 121,625(2,352)(2)Asset-Based Lending and Leasing 104,648 101,201 3,447 3 Total loans$223,921 222,826 1,095 Total deposits 164,027 170,467(6,440)(4)Allocated capital 26,000 25,500 500 2 Selected Balance Sheet Data(period-end)Loans:Commercial and industrial$166,842 166,853(11)Commercial real estate 45,292 45,895(603)(1)Lease financing and other 15,526 13,851 1,675 12 Total loans$227,660 226,599 1,061 Loans by Line of Business:Middle Market Banking$120,401 121,626(1,225)(1)Asset-Based Lending and Leasing 107,259 104,973 2,286 2 Total loans$227,660 226,599 1,061 Total deposits 168,547 169,827(1,280)(1)First quarter 2024 vs.first quarter 2023 Total loans(average and period-end)increased driven by:loan growth in Asset-Based Lending and Leasing due to an increase in client working capital needs;partially offset by:lower loan demand in Middle Market Banking reflecting the impact of a higher interest rate environment.Total deposits(average and period-end)decreased due to customer migration to higher yielding alternatives.Wells Fargo&Company 16 Corporate and Investment Banking delivers a suite of capital estate lending and servicing,equity and fixed income solutions as markets,banking,and financial products and services to well as sales,trading,and research capabilities.Table 6e and corporate,commercial real estate,government and institutional Table 6f provide additional information for Corporate and clients globally.Products and services include corporate banking,Investment Banking.investment banking,treasury management,commercial real Table 6e:Corporate and Investment Banking Income Statement and Selected Metrics Quarter ended Mar 31,($in millions)2024 2023$Change%Change Income Statement Net interest income$2,027 2,461(434)(18)%Noninterest income:Deposit-related fees 262 236 26 11 Lending-related fees 203 194 9 5 Investment banking fees 647 314 333 106 Net gains from trading activities 1,405 1,257 148 12 Other 438 440(2)Total noninterest income 2,955 2,441 514 21 Total revenue 4,982 4,902 80 2 Net charge-offs 196 17 179 NM Change in the allowance for credit losses(191)235(426)NM Provision for credit losses 5 252(247)(98)Noninterest expense 2,330 2,217 113 5 Income before income tax expense 2,647 2,433 214 9 Income tax expense 666 615 51 8 Net income$1,981 1,818 163 9 Revenue by Line of Business Banking:Lending$681 692(11)(2)Treasury Management and Payments 686 785(99)(13)Investment Banking 474 280 194 69 Total Banking 1,841 1,757 84 5 Commercial Real Estate 1,223 1,311(88)(7)Markets:Fixed Income,Currencies,and Commodities(FICC)1,359 1,285 74 6 Equities 450 437 13 3 Credit Adjustment(CVA/DVA)and Other 19 71(52)(73)Total Markets 1,828 1,793 35 2 Other 90 41 49 120 Total revenue$4,982 4,902 80 2 Selected Metrics Return on allocated capital 17.2.9 Efficiency ratio 47 45 NM Not meaningful First quarter 2024 vs.first quarter 2023 Revenue increased driven by:higher investment banking fees due to increased activity across all products;and higher net gains from trading activities driven by higher revenue in structured products and foreign exchange,partially offset by lower revenue in rates and commodities;partially offset by:lower net interest income driven by higher deposit costs and lower loan balances.Provision for credit losses reflected a decrease in the allowance for credit losses driven by commercial real estate loans.Noninterest expense increased driven by higher operating costs,partially offset by the impact of efficiency initiatives.Wells Fargo&Company 17 Earnings Performance(continued)Table 6f:Corporate and Investment Banking Balance Sheet Quarter ended Mar 31,($in millions)2024 2023$Change%Change Selected Balance Sheet Data(average)Loans:Commercial and industrial$185,432 193,770(8,338)(4)%Commercial real estate 97,811 100,972(3,161)(3)Total loans$283,243 294,742(11,499)(4)Loans by Line of Business:Banking$90,897 99,078(8,181)(8)Commercial Real Estate 131,709 136,806(5,097)(4)Markets 60,637 58,858 1,779 3 Total loans$283,243 294,742(11,499)(4)Trading-related assets:Trading account securities$121,347 112,628 8,719 8 Reverse repurchase agreements/securities borrowed 62,856 57,818 5,038 9 Derivative assets 17,033 17,928(895)(5)Total trading-related assets$201,236 188,374 12,862 7 Total assets 550,933 548,808 2,125 Total deposits 183,273 157,551 25,722 16 Allocated capital 44,000 44,000 Selected Balance Sheet Data(period-end)Loans:Commercial and industrial$178,986 191,020(12,034)(6)Commercial real estate 96,611 100,797(4,186)(4)Total loans$275,597 291,817(16,220)(6)Loans by Line of Business:Banking$86,066 97,178(11,112)(11)Commercial Real Estate 129,627 135,728(6,101)(4)Markets 59,904 58,911 993 2 Total loans$275,597 291,817(16,220)(6)Trading-related assets:Trading account securities$133,079 115,198 17,881 16 Reverse repurchase agreements/securities borrowed 62,019 57,502 4,517 8 Derivative assets 17,726 16,968 758 4 Total trading-related assets$212,824 189,668 23,156 12 Total assets 553,105 542,168 10,937 2 Total deposits 195,969 158,564 37,405 24 First quarter 2024 vs.first quarter 2023 Total loans(average and period-end)decreased due to lower origination volumes reflecting decreased loan demand.Total trading-related assets(average and period-end)increased reflecting:higher trading account securities driven by higher mortgage-backed securities;and an increased volume of reverse repurchase agreements.Total deposits(average and period-end)increased driven by additions of deposits from new and existing customers.Wells Fargo&Company 18 Wealth and Investment Management provides personalized wealth management,brokerage,financial planning,lending,private banking,trust and fiduciary products and services to affluent,high-net worth and ultra-high-net worth clients.We operate through financial advisors in our brokerage and wealth Table 6g:Wealth and Investment Management offices,consumer bank branches,independent offices,and digitally through WellsTrade and Intuitive Investor.Table 6g and Table 6h provide additional information for Wealth and Investment Management(WIM).Quarter ended Mar 31,($in millions,unless otherwise noted)2024 2023$Change%Change Income Statement Net interest income$869 1,044(175)(17)%Noninterest income:Investment advisory and other asset-based fees 2,267 2,061 206 10 Commissions and brokerage services fees 545 541 4 1 Other 61 35 26 74 Total noninterest income 2,873 2,637 236 9 Total revenue 3,742 3,681 61 2 Net charge-offs 6(1)7 700 Change in the allowance for credit losses(3)12(15)NM Provision for credit losses 3 11(8)(73)Noninterest expense 3,230 3,061 169 6 Income before income tax expense 509 609(100)(16)Income tax expense 128 152(24)(16)Net income$381 457(76)(17)Selected Metrics Return on allocated capital 22.7(.9 Efficiency ratio 86 83 Client assets($in billions,period-end):Advisory assets$939 825 114 14 Other brokerage assets and deposits 1,247 1,104 143 13 Total client assets$2,186 1,929 257 13 Selected Balance Sheet Data(average)Total loans$82,483 83,621(1,138)(1)Total deposits 101,474 126,604(25,130)(20)Allocated capital 6,500 6,250 250 4 Selected Balance Sheet Data(period-end)Total loans$82,999 82,817 182 Total deposits 102,478 117,252(14,774)(13)NM-Not meaningful First quarter 2024 vs.first quarter 2023 Revenue increased driven by:higher investment advisory and other asset-based fees reflecting higher market valuations;partially offset by:lower net interest income driven by lower deposit balances.Noninterest expense increased driven by:higher personnel expense driven by higher revenue-related compensation;partially offset by:the impact of efficiency initiatives.Total deposits(average and period-end)decreased due to customer migration to higher yielding alternatives.Wells Fargo&Company 19 Earnings Performance(continued)WIM Advisory Assets In addition to transactional accounts,WIM offers advisory account relationships to brokerage customers.Fees from advisory accounts are based on a percentage of the market value of the assets as of the beginning of the quarter,which vary across the account types based on the distinct services provided,and are affected by investment performance as well as asset inflows and outflows.Advisory accounts include assets that are financial advisor-directed and separately managed by third-party managers as well as certain client-directed brokerage assets where we earn a fee for advisory and other services,but do not have investment discretion.Table 6h:WIM Advisory Assets WIM also manages personal trust and other assets for high net worth clients,with fee income earned based on a percentage of the market value of these assets.Table 6h presents advisory assets activity by WIM line of business.Management believes that advisory assets is a useful metric because it allows management,investors,and others to assess how changes in asset amounts may impact the generation of certain asset-based fees.For the first quarter of both 2024 and 2023,the average fee rate by account type ranged from 50 to 120 basis points.Quarter ended(in billions)Balance,beginningof period Inflows(1)Outflows(2)Market impact(3)Balance,end of period March 31,2024 Client-directed(4)$185.3 8.9(10.3)10.3 194.2 Financial advisor-directed(5)264.6 12.0(10.4)18.3 284.5 Separate accounts(6)198.4 7.4(7.5)10.9 209.2 Mutual fund advisory(7)83.3 2.2(3.1)4.3 86.7 Total Wells Fargo Advisors$731.6 30.5(31.3)43.8 774.6 The Private Bank(8)159.5 5.6(8.0)7.1 164.2 Total WIM advisory assets$891.1 36.1(39.3)50.9 938.8 March 31,2023 Client-directed(4)$165.2 8.2(8.4)6.9 171.9 Financial advisor-directed(5)222.9 9.4(9.2)10.0 233.1 Separate accounts(6)176.5 5.9(6.1)6.4 182.7 Mutual fund advisory(7)78.6 2.0(3.1)3.1 80.6 Total Wells Fargo Advisors$643.2 25.5(26.8)26.4 The Private Bank(8)153.6 7.3(9.3)5.2 156.8 Total WIM advisory assets$796.8 32.8(36.1)31.6(1)Inflows include new advisory account assets,contributions,dividends,and interest.(2)Outflows include closed advisory account assets,withdrawals,and client management fees.(3)Market impact reflects gains and losses on portfolio investments.(4)Investment advice and other services are provided to the client,but decisions are made by the client and the fees earned are based on a percentage of the advisory account assets,not the number and size of transactions executed by the client.(5)Professionally managed portfolios with fees earned based on respective strategies and as a percentage of certain client assets.(6)Professional advisory portfolios managed by third-party asset managers.Fees are earned based on a percentage of certain client assets.(7)Program with portfolios constructed of load-waived,no-load,and institutional share class mutual funds.Fees are earned based on a percentage of certain client assets.(8)Discretionary and non-discretionary portfolios held in personal trusts,investment agency,or custody accounts with fees earned based on a percentage of client assets.Wells Fargo&Company 668.3 825.1 20 Corporate includes corporate treasury and enterprise functions,net of allocations(including funds transfer pricing,capital,liquidity and certain expenses),in support of the reportable operating segments,as well as our investment portfolio and venture capital and private equity investments.Corporate also Table 6i:Corporate Income Statement includes certain lines of business that management has determined are no longer consistent with the long-term strategic goals of the Company as well as results for previously divested businesses.Table 6i and Table 6j provide additional information for Corporate.Quarter ended Mar 31,($in millions)2024 2023$Change%Change Income Statement Net interest income$32 16 16 100%Noninterest income 291 5 286 NM Total revenue 323 21 302 NM Net charge-offs(1)(2)1 50 Change in the allowance for credit losses 122(122)(100)Provision for credit losses(1)120(121)NM Noninterest expense 1,075 608 467 77 Loss before income tax benefit(751)(707)(44)(6)Income tax benefit(317)(272)(45)(17)Less:Net income(loss)from noncontrolling interests(1)1(114)115 101 Net loss$(435)(321)(114)(36)NM Not meaningful(1)Reflects results attributable to noncontrolling interests predominantly associated with the Companys consolidated venture capital investments.First quarter 2024 vs.first quarter 2023 Revenue increased driven by higher net gains from equity securities reflecting lower impairment of equity securities from our venture capital investments.Provision for credit losses reflected a decrease in allowance for credit losses.Noninterest expense increased driven by:higher operating losses due to higher expense for customer remediation activities;and an additional expense of$284 million for the estimated FDIC special assessment.Corporate includes our rail car leasing business,which had long-lived operating lease assets,net of accumulated depreciation,of$4.6 billion at both March 31,2024,and December 31,2023.We may incur impairment charges based on changing economic and market conditions affecting the long-term demand and utility of specific types of rail cars.For additional information,see the“Earnings Performance Operating Segment Results Corporate”section in our 2023 Form 10-K.Wells Fargo&Company 21 Earnings Performance(continued)Table 6j:Corporate Balance Sheet Quarter ended Mar 31,($in millions)2024 2023$Change%Change Selected Balance Sheet Data(average)Cash and due from banks,and interest-earning deposits with banks Available-for-sale debt securities Held-to-maturity debt securities Equity securities Total loans Total assets Total deposits$211,612 122,794 257,088 15,958 8,699 663,483 119,606 117,419 128,770 272,718 15,519 9,154 596,087 60,807 94,193(5,976)(15,630)439(455)67,396 58,799 80%(5)(6)3(5)11 97 Selected Balance Sheet Data(period-end)Cash and due from banks,and interest-earning deposits with banks Available-for-sale debt securities Held-to-maturity debt securities Equity securities Total loans Total assets Total deposits$246,057 127,084 255,761 15,798 8,521 699,401 121,993 136,093 133,311 274,202 15,200 9,247 620,241 65,682 109,964(6,227)(18,441)598(726)79,160 56,311 81(5)(7)4(8)13 86 First quarter 2024 vs.first quarter 2023 Total assets(average and period-end)increased driven by:an increase in cash and due from banks,and interest-earning deposits with banks that are managed by corporate treasury as a result of an increase in issuances of certificates of deposits(CDs)and long-term debt,partially offset by a reduction in deposits held by our operating segments;partially offset by:paydowns and maturities of AFS and HTM debt securities.Total deposits(average and period-end)increased driven by issuances of CDs.Wells Fargo&Company 22 Balance Sheet Analysis At March 31,2024,our assets totaled$1.96 trillion,up$26.7 billion from December 31,2023.The following discussion provides additional information about the major components of our consolidated balance sheet.See the“Capital Management”section in this Report for information on changes in our equity.Available-for-Sale and Held-to-Maturity Debt Securities Table 7:Available-for-Sale and Held-to-Maturity Debt Securities March 31,2024 December 31,2023 Weighted Weighted Net average Net average Amortized unrealized gains expected Amortized unrealized gains expected($in millions)cost,net(1)(losses)Fair value maturity(yrs)cost,net(1)(losses)Fair value maturity(yrs)Available-for-sale(2)$145,606(7,361)138,245 5.1$137,155(6,707)130,448 4.7 Held-to-maturity(3)258,711(40,179)218,532 7.7 262,708(35,392)227,316 7.6 Total$404,317(47,540)356,777 n/a$399,863(42,099)357,764 n/a(1)Represents amortized cost of the securities,net of the allowance for credit losses of$2 million and$1 million related to available-for-sale debt securities and$96 million and$93 million related to held-to-maturity debt securities at March 31,2024,and December 31,2023,respectively.(2)Available-for-sale debt securities are carried on our consolidated balance sheet at fair value.(3)Held-to-maturity debt securities are carried on our consolidated balance sheet at amortized cost,net of the allowance for credit losses.Table 7 presents a summary of our portfolio of investments in available-for-sale(AFS)and held-to-maturity(HTM)debt securities.See the“Balance Sheet Analysis Available-for-Sale and Held-to-Maturity Debt Securities”section in our 2023 Form 10-K for additional information on our investment management objectives and practices and the“Risk Management Asset/Liability Management”section in this Report for information on liquidity and interest rate risk.The amortized cost,net of the allowance for credit losses,of the total AFS and HTM debt securities portfolio increased from December 31,2023.Purchases of AFS debt securities were partially offset by paydowns and maturities of AFS and HTM debt securities,as well as sales of AFS debt securities.The total net unrealized losses on AFS and HTM debt securities increased from December 31,2023,due to changes in interest rates.At March 31,2024,99%of the combined AFS and HTM debt securities portfolio was rated AA-or above.Ratings are based on external ratings where available and,where not available,based on internal credit grades.See Note 3(Available-for-Sale and Held-to-Maturity Debt Securities)to Financial Statements in this Report for additional information on AFS and HTM debt securities,including a summary of debt securities by security type.Wells Fargo&Company 23 Balance Sheet Analysis(continued)Loan Portfolios Table 8 provides a summary of total outstanding loans by portfolio segment.Commercial loans decreased from December 31,2023,due to decreases in both the commercial and industrial and commercial real estate loan portfolios as Table 8:Loan Portfolios paydowns exceeded originations and advances.Consumer loans decreased from December 31,2023,driven by decreases in the residential mortgage and auto loan portfolios as paydowns exceeded originations.($in millions)Mar 31,2024 Dec 31,2023$Change%Change Commercial$538,328 547,427(9,099)(2)%Consumer 384,456 389,255(4,799)(1)Total loans$922,784 936,682(13,898)(1)Average loan balances and a comparative detail of average loan balances is included in Table 1 under“Earnings Performance Net Interest Income”earlier in this Report.Additional information on total loans outstanding by portfolio segment and class of financing receivable is included in the“Risk Management Credit Risk Management”section in this Report.Period-end balances and other loan related information are in Note 5(Loans and Related Allowance for Credit Losses)to Financial Statements in this Report.See the“Balance Sheet Analysis Loan Portfolios”section in our 2023 Form 10-K for additional information regarding contractual loan maturities and the distribution of loans to changes in interest rates.Table 9:Deposits Deposits Deposits increased from December 31,2023,reflecting:growth in commercial deposits;and higher time deposits driven by issuances of CDs;partially offset by:customer migration to higher yielding alternatives;and consumer and small business deposit outflows.Table 9 provides additional information regarding deposit balances.Information regarding the impact of deposits on net interest income and a comparison of average deposit balances is provided in the“Earnings Performance Net Interest Income”section and Table 1 earlier in this Report.Our average deposit cost in first quarter 2024 increased to 1.74%,compared with 1.58%in fourth quarter 2023.($in millions)Mar 31,2024%of total deposits Dec 31,2023%of total deposits$Change%Change Noninterest-bearing demand deposits Interest-bearing demand deposits Savings deposits Time deposits Interest-bearing deposits in non-U.S.offices$356,162 460,826 356,587 189,909 19,663 263 26 14 1$360,279 436,908 349,181 187,989 23,816 262 26 14 2$(4,117)23,918 7,406 1,920(4,153)(1)%5 2 1(17)Total deposits$1,383,147 100%$1,358,173 100%$24,974 2 Wells Fargo&Company 24 Off-Balance Sheet Arrangements In the ordinary course of business,we engage in financial transactions that are not recorded on our consolidated balance sheet,or may be recorded on our consolidated balance sheet in amounts that are different from the full contract or notional amount of the transaction.Our off-balance sheet arrangements include unfunded credit commitments,transactions with unconsolidated entities,guarantees,derivatives,and other commitments.These transactions are designed to(1)meet the financial needs of customers,(2)manage our credit,market or liquidity risks,and/or(3)diversify our funding sources.Unfunded Credit Commitments Unfunded credit commitments are legally binding agreements to lend to customers with terms covering usage of funds,contractual interest rates,expiration dates,and any required collateral.The maximum credit risk for these commitments will generally be lower than the contractual amount because these commitments may expire without being used or may be cancelled at the customers request.Our credit risk monitoring activities include managing the amount of commitments,both to individual customers and in total,and the size and maturity structure of these commitments.For additional information,see Note 5(Loans and Related Allowance for Credit Losses)to Financial Statements in this Report.Transactions with Unconsolidated Entities In the normal course of business,we enter into various types of on-and off-balance sheet transactions with special purpose entities(SPEs),which are corporations,trusts,limited liability companies or partnerships that are established for a limited purpose.Generally,SPEs are formed in connection with securitization transactions and are considered variable interest entities(VIEs).For additional information,see Note 13(Securitizations and Variable Interest Entities)to Financial Statements in this Report.Guarantees and Other Commitments Guarantees are contracts that contingently require us to make payments to a guaranteed party based on an event or a change in an underlying asset,liability,rate or index.Guarantees are generally in the form of standby and direct pay letters of credit,written options,recourse obligations,exchange and clearing house guarantees,indemnifications,and other types of similar arrangements.We also enter into other commitments such as commitments to purchase securities under resale agreements.For additional information,see Note 14(Guarantees and Other Commitments)to Financial Statements in this Report.Derivatives We use derivatives to manage exposure to market risk,including interest rate risk,credit risk and foreign currency risk,and to assist customers with their risk management objectives.Derivatives are recorded on our consolidated balance sheet at fair value,and volume can be measured in terms of the notional amount,which is generally not exchanged,but is used only as the basis on which interest and other payments are determined.The notional amount is not recorded on our consolidated balance sheet and is not,when viewed in isolation,a meaningful measure of the risk profile of the instruments.For additional information,see Note 11(Derivatives)to Financial Statements in this Report.Wells Fargo&Company 25 Risk Management Wells Fargo manages a variety of risks that can significantly affect our financial performance and our ability to meet the expectations of our customers,shareholders,regulators and other stakeholders.For additional information about how we manage risk,see the“Risk Management”section in our 2023 Form 10-K.The discussion that follows supplements our discussion of the management of certain risks contained in the“Risk Management”section in our 2023 Form 10-K.Credit Risk Management Credit risk is the risk of loss associated with a borrower or counterparty default(failure to meet obligations in accordance with agreed upon terms).Credit risk exists with many of the Companys assets and exposures such as debt security holdings,certain derivatives,and loans.The Boards Risk Committee has primary oversight responsibility for credit risk.A Credit Subcommittee of the Risk Committee assists the Risk Committee in providing oversight of credit risk.At the management level,Corporate Credit Risk,which is part of Independent Risk Management,has oversight responsibility for credit risk.Corporate Credit Risk reports to the Chief Risk Officer and supports periodic reports related to credit risk provided to the Boards Risk Committee or its Credit Subcommittee.Loan Portfolio Our loan portfolios represent the largest component of assets on our consolidated balance sheet for which we have credit risk.Table 10 presents our total loans outstanding by portfolio segment and class of financing receivable.Table 10:Total Loans Outstanding by Portfolio Segment and Class of Financing Receivable(in millions)Mar 31,2024 Dec 31,2023 Commercial and industrial$372,963 380,388 Commercial real estate 148,786 150,616 Lease financing 16,579 16,423 Total commercial 538,328 547,427 Residential mortgage 257,622 260,724 Credit card 52,035 52,230 Auto 46,202 47,762 Other consumer 28,597 28,539 Total consumer 384,456 389,255 Total loans$922,784 936,682 We manage our credit risk by establishing what we believe are sound credit policies for underwriting new business,while monitoring and reviewing the performance of our existing loan portfolios.We employ various credit risk management and monitoring activities to mitigate risks associated with multiple risk factors affecting loans we hold including:Loan concentrations and related credit quality;Counterparty credit risk;Economic and market conditions;Legislative or regulatory mandates;Changes in interest rates;Merger and acquisition activities;and Reputation risk.In addition,the Company will continue to integrate climate considerations into its credit risk management activities.Our credit risk management oversight process is governed centrally,but provides for direct management and accountability by our lines of business.Our overall credit process includes comprehensive credit policies,disciplined credit underwriting,frequent and detailed risk measurement and modeling,extensive credit training programs,and a continual loan review and audit process.A key to our credit risk management is adherence to a well-controlled underwriting process,which we believe is appropriate for the needs of our customers as well as investors who purchase the loans or securities collateralized by the loans.Credit Quality Overview Table 11 provides credit quality trends.Table 11:Credit Quality Overview($in millions)Nonaccrual loans Commercial loans Consumer loans Total nonaccrual loans Nonaccrual loans as a%of total loans$Mar 31,2024 4,739 3,336 8,075 0.88c 31,2023 4,914 3,342 8,256 0.88 Allowance for credit losses(ACL)for loans ACL for loans as a%of total loans$14,862 1.61,088 1.61 Net loan charge-offs as a%of:Average commercial loans Average consumer loans Mar 31,2024 0.25%0.84 Mar 31,2023 0.05 0.56 Additional information on our loan portfolios and our credit quality trends follows.Wells Fargo&Company 26 Significant Loan Portfolio Reviews Our credit risk monitoring process is designed to enable early identification of developing risk and to support our determination of an appropriate allowance for credit losses.The following discussion provides additional characteristics and analysis of our significant portfolios.See Note 5(Loans and Related Allowance for Credit Losses)to Financial Statements in this Report for more analysis and credit metric information for each of the following portfolios.COMMERCIAL AND INDUSTRIAL LOANS AND LEASE FINANCING For purposes of portfolio risk management,we aggregate commercial and industrial loans and lease financing according to market segmentation and standard industry codes.We generally subject commercial and industrial loans and lease financing to individual risk assessment using our internal borrower and collateral quality ratings.Our ratings are aligned to regulatory definitions of pass and criticized categories with criticized segmented among special mention,substandard,doubtful,and loss categories.Table 12:Commercial and Industrial Loans and Lease Financing by Industry We had$16.1 billion of the commercial and industrial loans and lease financing portfolio internally classified as criticized in accordance with regulatory guidance at March 31,2024,compared with$14.6 billion at December 31,2023.The increase was driven by the utilities,entertainment and recreation,health care and pharmaceuticals,and food and beverage manufacturing industries,partially offset by the financials except banks industry.The majority of our commercial and industrial loans and lease financing portfolio is secured by short-term assets,such as accounts receivable,inventory and debt securities,as well as long-lived assets,such as equipment and other business assets.Generally,the primary source of repayment for this portfolio is the operating cash flows of customers,with the collateral securing this portfolio representing a secondary source of repayment.The portfolio decreased at March 31,2024,compared with December 31,2023,as a result of paydowns and decreased loan draws.Table 12 provides our commercial and industrial loans and lease financing by industry.The industry categories are based on the North American Industry Classification System.March 31,2024 December 31,2023 Loans%of Loans%of Nonaccrual outstanding total Total Nonaccrual outstanding total Total($in millions)loans balance loans commitments(1)loans balance loans commitments(1)Financials except banks$40 140,105 15%$230,518 9 146,635 16%$234,513 Technology,telecom and media 95 25,021 3 63,450 60 25,460 3 59,216 Real estate and construction 64 25,800 3 54,633 55 24,987 3 54,345 Retail 59 19,841 2 48,926 72 19,596 2 48,829 Equipment,machinery and parts manufacturing 35 25,914 3 48,633 37 24,785 3 48,265 Materials and commodities 86 15,301 2 38,653 112 14,235 2 37,758 Food and beverage manufacturing 20 16,321 2 33,212 15 16,047 2 33,957 Oil,gas and pipelines 30 10,125 1 32,316 2 10,730 1 32,544 Health care and pharmaceuticals 69 15,001 2 29,857 26 14,863 2 30,386 Auto related 11 15,669 2 29,298 8 15,203 2 28,795 Commercial services 43 10,813 1 26,054 37 11,095 1 26,025 Utilities 1 7,020*24,515 1 8,325*25,710 Diversified or miscellaneous 52 9,191*22,072 67 8,284*22,877 Entertainment and recreation 20 13,830 1 19,837 18 13,968 1 20,250 Insurance and fiduciaries 1 5,230*16,482 1 4,715*15,724 Transportation services 133 8,956*15,901 134 9,277*16,750 Agribusiness 17 6,476*11,927 31 6,466*12,080 Government and education 24 5,320*11,471 26 5,603*11,552 Banks 9,163*10,307 11,820 1 12,981 Other(2)26 4,445*12,486 15 4,717*12,297 Total$826 389,542 42%$780,548 726 396,811 42%$784,854*Less than 1%.(1)Total commitments consist of loans outstanding plus unfunded credit commitments,excluding issued letters of credit and discretionary amounts where our approval or consent is required prior to any loan funding or commitment increase.For additional information on issued letters of credit,see Note 14(Guarantees and Other Commitments)to Financial Statements in this Report.(2)No other single industry had total loans in excess of$3.3 billion and$3.0 billion at March 31,2024,and December 31,2023,respectively.Wells Fargo&Company 27 Risk Management Credit Risk Management(continued)Table 12a provides further loan segmentation for our largest industry category,financials except banks.This category includes loans to investment firms,financial vehicles,nonbank creditors,rental and leasing companies,securities firms,and investment banks.These loans are generally secured and have features to help manage credit risk,such as structural credit enhancements,Table 12a:Financials Except Banks Industry Category collateral eligibility requirements,contractual re-margining of collateral supporting the loans,and loan amounts limited to a percentage of the value of the underlying assets considering underlying credit risk,asset duration,and ongoing performance.March 31,2024 December 31,2023 Loans%of Loans%of($in millions)Nonaccrual loans outstandingbalance total loans Total commitments(1)Nonaccrual loans outstandingbalance total loans Total commitments(1)Asset managers and funds(2)$32 50,202 6%$96,145 51,842 6%$98,074 Commercial finance(3)2 49,770 5 77,939 2 52,007 6 78,369 Consumer finance(4)18,724 2 32,686 20,308 2 33,547 Real estate finance(5)6 21,409 2 23,748 7 22,478 2 24,523 Total$40 140,105 15%$230,518 9 146,635 16%$234,513(1)Total commitments consist of loans outstanding plus unfunded credit commitments,excluding issued letters of credit and discretionary amounts where our approval or consent is required prior to any loan funding or commitment increase.For additional information on issued letters of credit,see Note 14(Guarantees and Other Commitments)to Financial Statements in this Report.(2)Includes loans for subscription or capital calls and loans to prime brokerage customers and securities firms.(3)Includes asset-based lending and leasing,including loans to special purpose entities,loans to commercial leasing entities,structured lending facilities to commercial loan managers,and also includes collateralized loan obligations(CLOs)in loan form,all of which were rated AA or above,of$7.1 billion and$7.6 billion at March 31,2024,and December 31,2023,respectively.(4)Includes originators or servicers of financial assets collateralized by consumer loans such as auto loans and leases,and credit cards.(5)Includes originators or servicers of financial assets collateralized by commercial or residential real estate loans.Our commercial and industrial loans and lease financing portfolio included non-U.S.loans of$69.1 billion and$72.9 billion at March 31,2024,and December 31,2023,respectively.Significant industry concentrations of non-U.S.loans at March 31,2024,and December 31,2023,respectively,included:$39.3 billion and$40.5 billion in the financials except banks industry;$8.8 billion and$11.4 billion in the banks industry;and$1.7 billion and$2.0 billion in the oil,gas and pipelines industry.Wells Fargo&Company 28 COMMERCIAL REAL ESTATE(CRE)Our CRE loan portfolio is composed of CRE mortgage and CRE construction loans.The total CRE loan portfolio decreased$1.8 billion from December 31,2023,as paydowns exceeded originations and advances.The portfolio is diversified both geographically and by property type.The largest geographic concentrations of CRE loans are in California,New York,Florida,and Texas,which represented a combined 48%of the total CRE portfolio.The largest property type concentrations are apartments at 29%and office at 20%of the portfolio.Unfunded credit commitments at March 31,2024,and December 31,2023,were$6.0 billion and$7.7 billion,respectively,for CRE mortgage loans and$11.0 billion and$13.2 billion,respectively,for CRE construction loans.Table 13:CRE Loans by State and Property Type We generally subject CRE loans to individual risk assessment using our internal borrower and collateral quality ratings.We had$17.5 billion of CRE mortgage loans classified as criticized at both March 31,2024,and December 31,2023.We had$909 million of CRE construction loans classified as criticized at March 31,2024,compared with$830 million at December 31,2023.We continue to closely monitor the credit quality of the office property type given weakened demand for office space.Loans in California and New York represented approximately 40%of the office property type at both March 31,2024,and December 31,2023.Table 13 provides our CRE loans by state and property type.March 31,2024 December 31,2023 Real estate mortgage Real estate construction Total commercial real estate Total commercial real estate Loans Loans Loans Loans as%of Total Loans Total Nonaccrual outstanding Nonaccrual outstanding Nonaccrual outstanding total commitments outstanding commitments($in millions)loans balance loans balance loans balance loans(1)balance(1)By state:California$1,020 27,431 3,771 1,020 31,202 3%$34,884 31,619 35,629 New York 902 14,486 2,550 902 17,036 2 18,142 16,575 17,930 Florida 103 9,503 2,465 103 11,968 1 13,693 12,492 14,577 Texas 92 10,590 1,281 92 11,871 1 13,297 12,033 14,224 Georgia 184 5,300 1,076 184 6,376*6,824 6,105 6,804 North Carolina 25 4,331 1,208 25 5,539*6,170 5,397 6,408 Arizona 11 4,612 585 11 5,197*5,864 5,182 5,806 Washington 219 4,099 1,016 219 5,115*5,758 5,247 5,994 New Jersey 7 2,727 1,807 7 4,534*5,136 4,364 5,130 Virginia 159 3,405 994 159 4,399*4,875 4,372 4,983 Other(2)1,166 38,692 25 6,857 1,191 45,549 5 51,157 47,230 53,982 Total$3,888 125,176 25 23,610 3,913 148,786 16%$165,800 150,616 171,467 By property:Apartments$46 30,966 11,714 46 42,680 5%$50,220 42,585 51,749 Office 3,136 27,546 2,931 3,136 30,477 3 32,725 31,526 34,295 Industrial/warehouse 26 21,380 4,354 26 25,734 3 27,972 25,413 28,493 Hotel/motel 186 11,849 674 186 12,523 1 13,239 12,725 13,612 Retail(excl shopping center)263 11,402 1 78 264 11,480 1 12,220 11,670 12,338 Shopping center 177 8,313 348 177 8,661*9,263 8,745 9,356 Institutional 18 4,420 23 1,375 41 5,795*6,284 5,986 6,568 Mixed use properties 27 2,921 50 27 2,971*3,095 3,511 3,763 Storage facility 2,593 151 2,744*2,964 2,782 3,002 1-4 family structure 7 1,390 1,397*2,756 1,195 2,691 Other 9 3,779 1 545 10 4,324*5,062 4,478 5,600 Total$3,888 125,176 25 23,610 3,913 148,786 16%$165,800 150,616 171,467*Less than 1%.(1)Total commitments consist of loans outstanding plus unfunded credit commitments,excluding issued letters of credit.For additional information on issued letters of credit,see Note 14(Guarantees and Other Commitments)to Financial Statements in this Report.(2)Includes 40 states and non-U.S.loans.No state in Other had loans in excess of$4.2 billion and$4.4 billion at March 31,2024,and December 31,2023,respectively.Non-U.S.loans were$6.3 billion and$6.9 billion at March 31,2024,and December 31,2023,respectively.Wells Fargo&Company 29 Risk Management Credit Risk Management(continued)NON-U.S.LOANS Our classification of non-U.S.loans is based on whether the borrowers primary address is outside of the United States.At March 31,2024,non-U.S.loans totaled$75.5 billion,representing approximately 8%of our total consolidated loans outstanding,compared with$80.0 billion,or approximately 9%of our total consolidated loans outstanding,at December 31,2023.Non-U.S.loans were approximately 4%of our total consolidated assets at both March 31,2024,and December 31,2023.COUNTRY RISK EXPOSURE Our country risk monitoring process incorporates centralized monitoring of economic,political,social,legal,and transfer risks in countries where we do or plan to do business,along with frequent dialogue with our customers,counterparties and regulatory agencies.We establish exposure limits for each country through a centralized oversight process based on customer needs,and through consideration of the relevant and distinct risk of each country.We monitor exposures closely and adjust our country limits in response to changing conditions.We evaluate our individual country risk exposure based on our assessment of a borrowers ability to repay,which gives consideration for allowable transfers of risk,such as guarantees and collateral,and may be different from the reporting based on a borrowers primary address.Our largest single country exposure outside the U.S.at March 31,2024,was the United Kingdom,which totaled Table 14:Select Country Exposures$27.6 billion,or approximately 1%of our total assets,and included$4.4 billion of sovereign claims.Our United Kingdom sovereign claims arise from deposits we have placed with the Bank of England pursuant to regulatory requirements in support of our London branch.Table 14 provides information regarding our top 20 exposures by country(excluding the U.S.),based on our assessment of risk,which gives consideration to the country of any guarantors and/or underlying collateral.With respect to Table 14:Lending and deposits with banks exposure includes outstanding loans,unfunded credit commitments(excluding discretionary amounts where our approval or consent is required prior to any loan funding or commitment increase),and deposits with non-U.S.banks.These balances are presented prior to the deduction of the allowance for credit losses or collateral received under the terms of the credit agreements,if any.Securities exposure represents debt and equity securities of non-U.S.issuers.Long and short positions are netted,and net short positions are reflected as negative exposure.Derivatives and other exposure represents foreign exchange contracts,derivative contracts,securities resale agreements,and securities lending agreements.March 31,2024 Lending and depositswith banks(1)Securities Derivatives and other Total exposure Non-Non-Non-Non-(in millions)Sovereign sovereign Sovereign sovereign Sovereign sovereign Sovereign sovereign(2)Total Top 20 country exposures:United Kingdom$4,322 22,222 28(55)7 1,044 4,357 23,211 27,568 Canada 7 15,922 158 119 155 426 320 16,467 16,787 Japan 8,972 672 72 61 8,972 805 9,777 Luxembourg 8,059 293 229 8,581 8,581 Cayman Islands 7,739 140 7,879 7,879 Ireland 5 4,592 157 278 5 5,027 5,032 France 33 4,063 389 35 33 4,487 4,520 Germany 3,181 70 100 11 211 81 3,492 3,573 Bermuda 3,481 11 66 3,558 3,558 Netherlands 2,351 196 58 2,605 2,605 Guernsey 2,558 10 2,568 2,568 Australia 1,543 289 18 1,850 1,850 South Korea 1,501 210 5 8 5 1,719 1,724 Switzerland 1,252 36 295 1,583 1,583 China 3 1,056(50)526 16 9(31)1,591 1,560 Hong Kong 562 860 1 2 1 1,424 1,425 Chile 1,349 30 1,379 1,379 Brazil 1,201 (10)7 7 1,191 1,198 Spain 612 145 244 1,001 1,001 Norway 932 3 20 955 955 Total top 20 country exposures$13,342 84,848 206 3,371 202 3,154 13,750 91,373 105,123(1)Includes sovereign and non-sovereign deposits with banks of$13.3 billion and$2.8 billion,respectively.(2)Total non-sovereign exposure consisted of$43.0 billion exposure to financial institutions and$48.4 billion to non-financial corporations at March 31,2024.Wells Fargo&Company 30 RESIDENTIAL MORTGAGE LOANS Our residential mortgage loan portfolio is composed of 14 family first and junior lien mortgage loans.Residential mortgage first lien loans represented 96%of the total residential mortgage loan portfolio at both March 31,2024,and December 31,2023.The residential mortgage loan portfolio includes loans with adjustable-rate features.We monitor the risk of default as a result of interest rate increases on adjustable-rate mortgage(ARM)loans,which may be mitigated by product features that limit the amount of the increase in the contractual interest rate.The default risk of these loans is considered in our ACL for loans.ARM loans totaled$66.2 billion,or 7%of total loans,at March 31,2024,compared with$66.7 billion,or 7%of total loans,at December 31,2023,with an initial reset date in 2026 or later for the majority of this portfolio at March 31,2024.We do not offer option ARM products,nor do we offer variable-rate mortgage products with fixed payment amounts,commonly referred to within the financial services industry as negative amortizing mortgage loans.The residential mortgage junior lien portfolio consists of residential mortgage lines of credit and loans that are subordinate in rights to an existing lien on the same property.These lines and loans may have draw periods,interest-only payments,balloon payments,adjustable rates and similar features.The outstanding balance of residential mortgage lines of credit was$14.2 billion at March 31,2024,compared with$15.0 billion at December 31,2023.The unfunded credit commitments for these lines of credit totaled$27.4 billion at March 31,2024,compared with$28.6 billion at December 31,2023.For additional information on our residential mortgage loan portfolio,see the“Risk Management Credit Risk Management Residential Mortgage Loans”section in our 2023 Form 10-K.We monitor changes in real estate values and underlying economic or market conditions for the geographic areas of our Table 15:Residential Mortgage First Lien Portfolio Performance residential mortgage loan portfolio as part of our credit risk management process.Our periodic review of this portfolio includes original appraisals adjusted for the change in Home Price Index(HPI)or estimates from automated valuation models(AVMs)to support property values.For additional information about our use of appraisals and AVMs,see Note 5(Loans and Related Allowance for Credit Losses)to Financial Statements in this Report and the“Risk Management Credit Risk Management Residential Mortgage Loans”section in our 2023 Form 10-K.Part of our credit monitoring includes tracking delinquency,current Fair Isaac Corporation(FICO)credit scores and loan to collateral values(LTV)on the entire residential mortgage loan portfolio.For junior lien mortgages,LTV uses the total combined loan balance of first and junior lien mortgages(including unused line of credit amounts).For additional information regarding credit quality indicators,see Note 5(Loans and Related Allowance for Credit Losses)to Financial Statements in this Report.We continue to modify residential mortgage loans to assist homeowners and other borrowers experiencing financial difficulties.For additional information on loan modifications,see Note 5(Loans and Related Allowance for Credit Losses)to Financial Statements in this Report and the“Risk Management Credit Risk Management Residential Mortgage Loans”section in our 2023 Form 10-K.Residential Mortgage First Lien Portfolio Our residential mortgage first lien portfolio decreased$2.6 billion from December 31,2023,due to loan paydowns,partially offset by originations.Table 15 shows certain delinquency and loss information for the residential mortgage first lien portfolio and lists the top five states by outstanding balance.%of loans 30 days Net loan charge-off Outstanding balance%of total loans or more past due rate quarter ended(1)Mar 31,Dec 31,Mar 31,Dec 31,Mar 31,Dec 31,Mar 31,Dec 31,($in millions)2024 2023 2024 2023 2024 2023 2024 2023 California(2)$109,271 109,972 11.84.74 0.37 0.36 0.03 New York 31,144 31,322 3.38 3.34 0.76 0.79(0.01)0.02 Washington 10,628 10,672 1.15 1.14 0.21 0.29(0.03)New Jersey 10,056 10,161 1.09 1.08 1.12 1.13(0.04)(0.03)Florida 9,867 10,065 1.07 1.07 1.23 1.11(0.06)(0.06)Other(3)68,750 69,893 7.45 7.46 0.82 0.82(0.01)0.02 Total 239,716 242,085 25.98 25.83 0.61 0.61(0.01)0.02 Government insured/guaranteed loans(4)7,387 7,568 0.80 0.81 Total first lien mortgage portfolio$247,103 249,653 26.78&.64(1)Quarterly net charge-offs as a percentage of average respective loans are annualized.(2)Our residential mortgage loans to borrowers in California are located predominantly within the larger metropolitan areas,with no single California metropolitan area consisting of more than 4%of total loans.(3)Consists of 45 states;no state in Other had loans in excess of$7.3 billion and$7.4 billion at March 31,2024,and December 31,2023,respectively.(4)Represents loans,substantially all of which were purchased from Government National Mortgage Association(GNMA)loan securitization pools,where the repayment of the loans is predominantly insured by the Federal Housing Administration(FHA)or guaranteed by the Department of Veterans Affairs(VA).For additional information on GNMA loan securitization pools,see the“Risk Management Credit Risk Management Mortgage Banking Activities”section in this Report.Wells Fargo&Company 31 Risk Management Credit Risk Management(continued)Residential Mortgage Junior Lien Portfolio Our residential Table 16 shows certain delinquency and loss information for mortgage junior lien portfolio decreased$552 million from the residential mortgage junior lien portfolio and lists the top December 31,2023,driven by loan paydowns.five states by outstanding balance.Table 16:Residential Mortgage Junior Lien Portfolio Performance%of loans 30 days Net loan charge-off Outstanding balance%of total loans or more past due rate quarter ended(1)($in millions)Mar 31,2024 Dec 31,2023 Mar 31,2024 Dec 31,2023 Mar 31,2024 Dec 31,2023 Mar 31,2024 Dec 31,2023 California New Jersey Florida Pennsylvania New York$2,983 1,052 873 634 629 3,101 1,114 924 673 661 0.32%0.11 0.09 0.07 0.07 0.33 0.12 0.10 0.07 0.07 1.67 2.86 2.17 2.43 3.11 1.65 2.81 2.42 2.70 3.26(0.23)(0.27)(0.55)0.26 0.06(0.16)(0.25)(0.71)(0.08)0.14 Other(2)4,348 4,598 0.47 0.49 2.03 2.05(0.49)(0.31)Total junior lien
2024-08-07
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HSBC HOLDINGS PLC2024 Interim resultsNoel Quinn,Group Chief Executive,said:“After delivering record profits in 2023,we had another strong profit performance in the first half of 2024,which is further evidence that our strategy is working.Our investment in Wealth is delivering higher,more diversified revenue and we continue to grow our core international and scale businesses,all of which helped us to provide$13.7bn of distributions in respect of the first half.We are confident that we have the right strategy and model to grow revenue,even in a lower interest rate environment,and are therefore providing new guidance of a mid-teens return on average tangible equity in 2025.I have always been immensely proud of the heritage of this bank and the strategic role it plays in the world.My aim when I took this job was to deliver financial performance to match our standing.Working together,I believe we have done that and created a strong platform for growth.”Financial performance in 1H24Profit before tax of$21.6bn was stable compared with 1H23,including a$0.2bn net favourable revenue impact of notable items relating togains and losses recognised on certain strategic transactions.Profit after tax of$17.7bn was$0.4bn or 2%lower compared with 1H23.In 1H24,we completed the disposal of our banking business in Canada,recognising a gain of$4.8bn.We also recognised an impairment of$1.2bn following the classification of our business in Argentina as held for sale.Results in 1H23 included the impact of a$2.1bn reversal of animpairment relating to the sale of our retail banking operations in France and a$1.5bn gain recognised on the acquisition of Silicon Valley BankUK Limited(SVB UK).Constant currency profit before tax excluding notable items was stable at$18.1bn compared with 1H23,as revenue growth and lowerexpected credit losses and other impairment charges(ECL)were offset by a rise in operating expenses.Revenue rose by$0.4bn or 1%to$37.3bn compared with 1H23,including the gains and losses on certain strategic transactions describedabove.Net interest income(NII)fell by$1.4bn,as growth in HSBC UK andanumber of other markets was more than offset by reductions dueto business disposals,deposit migration,and redeployment into the trading book in HSBC Bank plc and our main entity in Hong Kong.Theincrease in funding costs associated with funding the trading book resulted in an increase in banking net interest income(banking NII)of$0.3bn or 1%.Revenue growth also reflected the impact of higher customer activity in our Wealth products in Wealth and Personal Banking(WPB),and inEquities and Securities Financing in Global Banking and Markets(GBM).Constant currency revenue excluding notable items rose by 2%to$33.7bn,primarily due to growth in Wealth in WPB,in Equities and Securities Financing in GBM,as well as an increase in Global PaymentSolutions(GPS).Net interest margin(NIM)of 1.62creased by 8 basis points(bps)compared with 1H23,reflecting a rise in the funding cost ofaverage interest-bearing liabilities.ECL charges were$1.1bn,a reduction of$0.3bn compared with 1H23.The reduction reflected a release of stage 3 allowances in GBM inHSBC Bank plc,lower ECL in Commercial Banking(CMB)in HSBC UK,and lower charges in the commercial real estate sector in mainlandChina.In WPB,ECL charges were broadly stable as a release of allowances in the UK was offset by higher charges in Mexico,reflectingunemployment trends and growth in our unsecured portfolio.Annualised ECL were 22bps of average gross loans,including a 4bps reductiondue to the inclusion of loans and advances classified as held for sale.Operating expenses of$16.3bn were$0.8bn or 5%higher than in 1H23,mainly due to higher technology spend and investment,inflationarypressures and an increase in the performance-related pay accrual.Target basis operating expenses rose by 7%compared with 1H23.This ismeasured on a constant currency basis,excluding notable items,the impact of retranslating the prior year results of hyperinflationary economiesat constant currency,and the direct costs from the sales of our France retail banking operations and our banking business in Canada.Customer lending balances of$938bn were stable on a reported basis,and increased by$12bn on a constant currency basis,comparedwith 31December 2023.Growth included higher balances in HSBC Bank plc in both CMB and GBM,and higher term lending in CMB in ourentities in mainland China and India.In addition,mortgage balances increased in HSBC UK inWPB.Customer accounts of$1.6tn fell by$18bn on a reported basis,and increased by$3bn on a constant currency basis compared with31December 2023,notably in GBM reflecting growth in time deposit balances in Asia.The increase in GBM included a short-term deposit froma single corporate customer.Common equity tier 1(CET1)capital ratio of 15.0%rose by 0.2 percentage points compared with 4Q23,driven by a reduction in risk-weighted assets(RWAs),partly offset by a reduction in our CET1 capital.The Board has approved a second interim dividend of$0.10 per share.We also intend to initiate a share buy-back of up to$3bn,which weexpect to complete within three months.Financial performance in 2Q24Reported profit before tax increased by$0.1bn to$8.9bn compared with 2Q23,due to a lower ECL charge,which more than offset higheroperating expenses and lower revenue.On a constant currency basis,profit before tax increased by$0.4bn or 4%.Revenue fell by$0.2bn to$16.5bn compared with 2Q23,notably as 2Q23 included the operating results of France and Canada for whichsales completed in 1Q24.In addition,2Q24 included a loss related to the recycling of reserves following the completion of the sale of ourbusiness in Russia.This was partly offset by growth in Securities Financing and Equities in GBM and from Wealth in WPB.ECL of$0.3bn decreased by$0.6bn,reflecting lower charges in 2Q24 in the commercial real estate sector in mainland China,compared with2Q23,as well as a reduction in charges in HSBC UK,and the release of stage 3 allowances in GBM in HSBC Bank plc.Operating expenses of$8.1bn rose by$0.3bn or 3%,due to higher technology costs,including investment,the 2Q23 reversal of historicalasset impairments,which did not recur,and inflationary impacts.This was partly offset by reductions following the completion of disposals inCanada and France.31 July 2024 Customer lending increased by$5bn compared with 1Q24 on a reported basis and by$8bn on a constant currency basis.The growth was mainly from CMB,notably in our entities in mainland China and India,and in WPB from mortgage balance growth in HSBC UK and our entity in the US.Customer accounts increased by$24bn compared with 1Q24 on a reported basis and by$27bn on a constant currency basis.The increase was across all businesses,primarily in Asia.The increase included a short-term deposit from a single corporate customer.OutlookWe will now target a return on average tangible equity(RoTE),excluding the impact of notable items,in the mid-teens for both 2024 and 2025.Based upon our current forecasts,we expect banking NII of around$43bn in 2024.This guidance remains dependent on the path of interest rates globally.While loan growth was 1%in 1H24,revenue has continued to benefit from elevated interest rates.Over the medium to long term,we continue to expect mid-single digit year-on-year percentage growth in customer lending.We are reiterating our cost growth guidance of approximately 5%for 2024 compared with 2023,on a target basis,and now expect ECL charges as a percentage of average gross loans in 2024 to be within our medium-term planning range of 30bps to 40bps(including customer lending balances transferred to held for sale).Our guidance reflects our current outlook for the global macroeconomic environment,including customer and financial markets activity.This includes our modelling of a number of market dependent factors,such as market-implied interest rates(as of mid-July 2024),as well as customer behaviour and activity levels.We intend to manage our CET1 capital ratio within our medium-term target range of 14%to 14.5%,with a dividend payout ratio target basis of 50%for 2024,which excludes material notable items and related impacts.Note:we do not reconcile our forward guidance on RoTE excluding notable items,target basis operating expenses,dividend payout ratio target basis or banking NII to their equivalent reported measures.2HSBC Holdings plc 2024 Interim ResultsKey financial metricsHalf-year to30 Jun 202430 Jun 2023Reported resultsProfit before tax($m)21,556 21,657 Profit after tax($m)17,665 18,071 Cost efficiency ratio(%)43.7 41.9 Net interest margin(%)1.62 1.70 Basic earnings per share($)0.89 0.86 Diluted earnings per share($)0.88 0.86 Dividend per ordinary share(in respect of the period)($)10.20 0.20 Alternative performance measuresConstant currency profit before tax($m)21,556 21,472 Constant currency cost efficiency ratio(%)43.7 41.8 Constant currency revenue excluding notable items($m)33,721 33,075 Constant currency profit before tax excluding notable items($m)18,067 18,117 Constant currency revenue excluding notable items and strategic transactions($m)33,543 32,462 Constant currency profit before tax excluding notable items and strategic transactions($m)17,975 17,969 Expected credit losses and other credit impairment charges(annualised)as%of average gross loans and advances to customers(%)0.23 0.28 Expected credit losses and other credit impairment charges(annualised)as%of average gross loans and advances to customers,including held for sale(%)0.22 0.26 Basic earnings per share excluding material notable items and related impacts($)0.68 0.70 Return on average ordinary shareholders equity(annualised)(%)19.8 20.8 Return on average tangible equity(annualised)(%)21.4 22.4 Return on average tangible equity excluding notable items(annualised)(%)17.0 18.5 Target basis operating expenses($m)16,052 14,983 At30 Jun 202431 Dec 2023Balance sheetTotal assets($m)2,975,0033,038,677Net loans and advances to customers($m)938,257938,535Customer accounts($m)1,593,8341,611,647Average interest-earning assets,year to date($m)2,097,8662,161,746Loans and advances to customers as%of customer accounts(%)58.9 58.2 Total shareholders equity($m)183,293 185,329Tangible ordinary shareholders equity($m)153,109 155,710Net asset value per ordinary share at period end($)8.978.82Tangible net asset value per ordinary share at period end($)8.358.19Capital,leverage and liquidityCommon equity tier 1 capital ratio(%)2 15.0 14.8 Risk-weighted assets($m)2,3 835,118 854,114 Total capital ratio(%)2,3 20.6 20.0 Leverage ratio(%)2,3 5.7 5.6 High-quality liquid assets(liquidity value,average)($m)3,4 646,052 647,505 Liquidity coverage ratio(average)(%)3,4,5 137 136 Share countPeriod end basic number of$0.50 ordinary shares outstanding(millions)18,330 19,006 Period end basic number of$0.50 ordinary shares outstanding and dilutive potential ordinary shares(millions)18,456 19,135 Average basic number of$0.50 ordinary shares outstanding(millions)18,666 19,478 For reconciliations of our reported results to a constant currency basis,including lists of notable items,see page 40 of the Interim Report 2024.For detail on other alternative performance measures,including definitions and calculations,see Reconciliation of alternative performance measures on pages 56 to 61 of the Interim Report 2024.1 Dividend per ordinary share for half year to 30 June 2024 excludes the special dividend of$0.21 per ordinary share arising from the proceeds of the sale of our banking business in Canada to Royal Bank of Canada.2 Unless otherwise stated,regulatory capital ratios and requirements are based on the transitional arrangements of the Capital Requirements Regulation in force at the time.References to EU regulations and directives(including technical standards)should,as applicable,be read as references to the UKs version of such regulation or directive,as onshored into UK law under the European Union(Withdrawal)Act 2018,and as may be subsequently amended under UK law.3 Regulatory numbers and ratios are as presented at the date of reporting.Small changes may exist between these numbers and ratios and those subsequently submitted in regulatory filings.Where differences are significant,we may restate in subsequent periods.4 The liquidity coverage ratio is based on the average value of the preceding 12 months.5 We have enhanced our calculation processes during 1H24.As Group LCR is reported as a 12-month average,the benefit of these changes will be recognised incrementally over the coming year starting from 30 June 2024.HSBC Holdings plc 2024 Interim Results3HighlightsHalf-year to30 Jun 202430 Jun 2023$m$mReported Revenue1,2,3,4 37,292 36,876 Change in expected credit losses and other credit impairment charges(1,066)(1,345)Operating expenses(16,296)(15,457)Share of profit in associates and joint ventures 1,626 1,583 Profit before tax 21,556 21,657 Tax(charge)/credit(3,891)(3,586)Profit after tax 17,665 18,071 Constant currency5Revenue1,2,3,4 37,292 36,502 Change in expected credit losses and other credit impairment charges(1,066)(1,317)Operating expenses(16,296)(15,244)Share of profit in associates and joint ventures 1,626 1,531 Profit before tax 21,556 21,472 Tax(charge)/credit(3,891)(3,514)Profit after tax 17,665 17,958 Notable itemsRevenueDisposals,acquisitions and related costs2,3,4 3,571 3,321 Fair value movements on financial instruments6 15 Operating expensesDisposals,acquisitions and related costs(101)(118)Restructuring and other related costs7 19 47 TaxTax(charge)/credit on notable items 14 (500)Uncertain tax positions 427 1 Net operating income before change in expected credit losses and other credit impairment charges,also referred to as revenue.2 Includes the reversal of a$2.1bn impairment loss relating to the sale of our retail banking operations in France in 1Q23.3 Includes a$4.8bn gain on disposal of our banking business in Canada,inclusive of a$0.3bn gain on the foreign exchange hedging of the sale proceeds,the recycling of$0.6bn in foreign currency translation reserve losses and$0.4bn of other reserves recycling losses.This is partly offset by a$1.2bn impairment recognised in relation to the planned sale of our business in Argentina.4 Includes the gain of$1.5bn recognised in respect of the acquisition of SVB UK in 1Q23.5 Constant currency performance is computed by adjusting reported results of comparative periods for the effects of foreign currency translation differences,which distort period-on-period comparisons.6 Fair value movements on non-qualifying hedges in HSBC Holdings.7 Relates to reversals of restructuring provisions recognised during 2022.4HSBC Holdings plc 2024 Interim ResultsReview by Noel Quinn,Group Chief ExecutiveAfter achieving a record profit performance in 2023,we had a strong first half financial performance that reflected our strategy execution and revenue diversification over the past five years.We remain confident that we can deliver attractive returns,even in a lower interest rate environment,as a result of macroeconomic trends that play to our strengths,market-leading businesses connecting high-growth markets that we are continuing to invest in,and ongoing cost discipline.As a result,we are providing new guidance of a mid-teens return on average tangible equity,excluding the impact of notable items,in 2025.Over the last 18 months,HSBCs business model has delivered our highest return on average tangible equity for more than a decade.We continued to perform well in our home markets of Hong Kong and the UK the two pillars upon which our bank is built.The international wholesale banking business that we have built on top of these pillars is mature and differentiated,and has substantial scale.It remains our biggest competitive advantage and is supported by leading transaction banking products and services in global trade,payments and foreign exchange.Finally,we are growing and investing in our international retail and wealth business to sit alongside this,which is helping to diversify revenue.Each of these strengths contributed to a good revenue performance in the first half of 2024,supported by higher interest rates.Our strategy is working and providing attractive returns for our shareholders.We have announced a second interim dividend of$0.10 per share,further to the first interim dividend of$0.10 per share and the special dividend of$0.21 paid in June.We are also today announcing a share buy-back of up to$3bn,further to the now completed$3bn share buy-back announced at our first quarter results.This means that we are announcing a further$4.8bn in distributions with these results,taking the amount of capital distributed in respect of the last 18 months to$34.4bn.As we look ahead,the path of interest rates and the outcomes of elections are amongst the factors that will shape the global operating environment.The progress that has been made reducing inflation has enabled central banks to start cutting interest rates.Although we expect a cautious approach,we have reduced our sensitivity to interest rates.2024 will also be the biggest election year on record,as more than 4 billion people have an opportunity to go to the polls.The US election result will be watched particularly closely considering the potential for policy change based on the result and the impact this could have beyond its borders.We will continue to monitor these situations.Continued strong financial performanceThe first half saw another strong profit performance,driven by growth in our scale businesses and in areas where we have been investing.There was strong revenue growth in Wealth,transaction banking revenue remained stable and wholesale lending increased again in the second quarter,on a constant currency basis,after growing in the first quarter.Profit before tax for the first half was$21.6bn,which was stable compared with the first half of 2023.This included a$4.8bn gain on the sale of our banking operations in Canada,partly offset by a$1.2bn impairment related to the planned sale of our banking operations in Argentina,which was announced in the first half.The prior year also included a$2.1bn reversal of an impairment relating to the sale of our retail banking operations in France and a$1.5bn gain recognised on the acquisition of SVB UK.Revenue increased by$0.4bn or 1%to$37.3bn,including the aforementioned acquisition and disposal impacts,driven mainly by higher banking net interest income.We achieved an annualised return on average tangible equity of 21.4%,or 17%excluding notable items.Our three global businesses continued to perform well.In Wealth and Personal Banking,profit before tax of$6.5bn was$2.2bn lower than in 2023 on a constant currency basis,primarily due to the non-recurrence of a$2.1bn reversal last year of an impairment relating to the sale of our retail banking operations in France and$0.1bn of profit before tax in the prior period from our Canadian banking operations.Wealth revenue of$4.3bn was 12%higher than the first half of last year,driven by increases in investment distribution and Global Private Banking,as well as growth in asset management and life insurance.In Commercial Banking,profit before tax of$6.5bn was down by$1.5bn on a constant currency basis,primarily due to the non-recurrence of a$1.6bn gain last year on the acquisition of SVB UK.Overall performance remained good,with revenue benefiting from the higher rates environment,growth in transaction banking and higher collaboration revenue.Global Banking and Markets delivered a good performance.Revenue grew by 5%on a constant currency basis,with good growth in areas like Equities and Securities Financing,while still benefiting from the interest rate environment.First half operating expenses of$16.3bn were around 5%higher than in 2023,mainly due to higher technology costs including investments,inflationary pressures and different phasing of the accrual of performance-related pay compared with 2023.On a target basis,operating expenses were 7%higher than the same period last year.As we expect the overall amount of performance-related pay for 2024 not to be materially different to 2023,we expect lower performance-related pay accrual in the second half.We are therefore reconfirming our cost growth guidance of approximately 5%for 2024 compared with 2023,on a target basis.ECL and other credit impairment charges for the first half were$1.1bn,which was a$0.3bn decrease on the first half of 2023.We now expect ECLs as a percentage of average gross loans in 2024 to be back within our medium-term planning range of 30bps to 40bps.Our CET1 ratio at the end of the first half was 15.0%.Our first half banking net interest income performance and the improved net interest income outlook mean that we are upgrading our 2024 banking net interest income guidance from at least$41bn to around$43bn.Further opportunities to grow revenueWe also expect to deliver a return on average tangible equity in the mid-teens for 2024 and 2025,excluding the impact of notable items.Clearly there are downside risks to net interest income when interest rates fall,but were confident that we have the levers to achieve these targets.The first lever is leveraging our international connectivity.We have a strong international wholesale franchise.After a softer year in 2023,international trade volumes are forecast to grow more quickly this year and next.As the worlds leading trade finance bank and the third-largest bank for global foreign exchange revenue since 2021,we expect to capitalise on this.To illustrate this growth potential,we grew wholesale multi-jurisdictional client revenue by 4%in the first half of 2024,on a constant currency basis and excluding HSBC Bank Canada,from$9.4bn to$9.7bn.Increasing global mobility amongst retail customers is also driving demand for innovative cross-border banking solutions.This helped us to grow international customers within Wealth and Personal Banking by 11%,bringing the total to 7m customers.Revenue from these customers also grew by 6%in the first half.We believe that there is still significant untapped potential amongst international wholesale and retail customers.HSBC Holdings plc 2024 Interim Results5The second lever is maintaining our leadership in our home markets.Our leading businesses in Hong Kong and the UK two of the biggest global financial centres both grew profits before tax in the first half,helped by their strong international connectivity with the rest of the Group.In Hong Kong,our scale and connectivity are delivering good profitability and enabling us to capture new opportunities.In the first half,345,000 new-to-bank customers opened accounts as we continued to capitalise on the significant inflows into Hong Kong as customers seek higher yields and quality products.In the UK,we grew international customers by 8%to 2.7m,underlining the differentiated nature of our UK business compared to other UK banks.Signs of economic recovery were also underlined by growth in customer lending of 2%compared with the first half of 2023.We remain confident in our ability to grow further in these two critical markets.The third lever is investing to diversify revenue.Over the last five years,we have taken a number of actions to reduce our sensitivity to interest rates and create the bank of the future.Building our wealth business,especially in Asia,to capitalise on increasing affluence has been one of the key priorities.As a result of this,wealth revenue was up 12%in the first half,while we attracted$32.4bn of net new invested assets.Payments is another fee-based business that we are investing in to capitalise on the expected increase in global payments revenue.We are the number two bank globally by payments revenue,up from top four in 2022,with a market share of 4.8%in2023 compared with 3.6%in the prior year.HSBC was also named Worlds Best Bank for Payments and Treasury by Euromoney,which was one of 33 awards given to the bank in 2024 that also included Best Bank in Asia and Worlds Best Bank for Sustainable Finance.Through HSBC Innovation Banking,we are building a global proposition that can help us to become known as the go-to bank for innovation companies.Revenue from the new proposition increased by 4%in the second quarter and we have onboarded almost 600 new-to-bank innovation companies globally since the acquisition ofSVB UK.Thank youAs I prepare to hand on the leadership of HSBC to Georges Elhedery in September,Iwould like to place on record what an enormous privilege it has been to lead this great institution.I never imagined when I started my career 37 years ago that I would have the honour of becoming Group Chief Executive.I have always been immensely proud of the heritage of this bank and the strategic role it plays in the world.My aim when I took this job was to deliver financial performance to match our standing.Working together,I believe we have done that and created a strong platform for growth.The success of our transformation programme is evident in the improved returns that we have delivered.Since I became Group Chief Executive,we have returned$36bn of dividends and$18bn of share buy-backs to our shareholders,inclusive of the distributions we have announced with these results,while also successfully navigating the global pandemic.This would not have been possible without the support and backing of the Board,my Group Executive Committee colleagues and,of course,the whole HSBC team.I have been very fortunate to work with many talented,dedicated and committed people during my career.I would like to thank them wholeheartedly for their friendship and partnership and I wish continued success to Georges,and to all those who will write the next chapter in the story of this great bank.Noel QuinnGroup Chief Executive31 July 20246HSBC Holdings plc 2024 Interim ResultsFinancial summaryHalf-year to30 Jun 202430 Jun 2023$m$mFor the periodProfit before tax 21,556 21,657 Profit attributable to:ordinary shareholders of the parent company 16,586 16,966 Dividends on ordinary shares1 11,691 6,591 At the period endTotal shareholders equity 183,293 184,170 Total regulatory capital 172,084 170,021 Customer accounts 1,593,834 1,595,769 Total assets 2,975,003 3,041,476 Risk-weighted assets 835,118 859,545 Per ordinary share$Basic earnings 0.89 0.86 Dividend per ordinary share(paid in the period)1 0.62 0.33 Net asset value28.97 8.44 1 The$0.62 dividend paid during the period consisted of a fourth interim dividend of$0.31 per ordinary share in respect of the financial year ended 31December 2023 paid in April 2024,a first interim dividend of$0.10 per ordinary share in respect of the financial year ending 31 December 2024 and a special dividend of$0.21 per ordinary share from the Canada sale proceeds.2 The definition of net asset value per ordinary share is total shareholders equity,less non-cumulative preference shares and capital securities,divided by the number of ordinary shares in issue,excluding own shares held by the company,including those purchased and held in treasury.Distribution of results by global businessConstant currency profit before taxHalf-year to30 Jun 202430 Jun 2023$m%$m%Wealth and Personal Banking 6,458 30.0 8,626 40.2 Commercial Banking 6,463 30.0 7,933 36.9 Global Banking and Markets 3,813 17.7 3,409 15.9 Corporate Centre1 4,822 22.3 1,504 7.0 Profit before tax 21,556 100.0 21,472 100.0 1 On 1 January 2024,HSBC Continental Europe completed the sale of its retail banking operations in France to CCF,a subsidiary of Promontoria MMB SAS(My Money Group).With effect from this date,we have prospectively reclassified the portfolio of retained loans,profit participation interest and licence agreement of the CCF brand from WPB to Corporate Centre.Distribution of results by legal entityReported profit/(loss)before taxHalf-year to30 Jun 202430 Jun 2023$m%$m%HSBC UK Bank plc 3,734 17.3 4,791 22.1 HSBC Bank plc 1,436 6.7 3,498 16.2 The Hongkong and Shanghai Banking Corporation Limited 10,893 50.5 10,917 50.4 HSBC Bank Middle East Limited 536 2.5 673 3.1 HSBC North America Holdings Inc.423 2.0 701 3.2 HSBC Bank Canada 186 0.9 475 2.2 Grupo Financiero HSBC,S.A.de C.V.466 2.2 436 2.0 Other trading entities1 1,034 4.7 1,282 6.0 of which:other Middle East entities(including Oman,Trkiye,Egypt and Saudi Arabia)411 1.9 420 1.9 of which:Saudi Awwal Bank 317 1.5 272 1.3 Holding companies,shared service centres and intra-Group eliminations2 2,848 13.2 (1,116)(5.2)Profit before tax 21,556 100.0 21,657 100.0 1 Other trading entities includes the results of entities located in Oman(pre merger with Sohar International Bank SAOG in August 2023),Trkiye,Egypt and Saudi Arabia(including our share of the results of Saudi Awwal Bank)which do not consolidate into HSBC Bank Middle East Limited.Supplementary analysis is provided on page 56 of the Interim Report 2024 for a fuller picture of the Middle East,North Africa and Trkiye regional performance.2 Includes a$4.8bn gain on disposal of our banking business in Canada,inclusive of a$0.3bn gain on the foreign exchange hedging of the sale proceeds,the recycling of$0.6bn in foreign currency translation reserve losses and$0.4bn of other reserves recycling losses.This is partly offset by a$1.2bn impairment recognised in relation to the planned sale of our business in Argentina.HSBC Holdings plc 2024 Interim Results7HSBC constant currency profit before tax and balance sheet dataHalf-year to 30 Jun 2024Wealth and Personal BankingCommercialBankingGlobalBanking andMarketsCorporate CentreTotal$m$m$m$m$mNet operating income/(expense)before change in expected credit losses and other credit impairment charges1 14,312 10,896 8,742 3,342 37,292 external 10,166 11,217 15,377 532 37,292 inter-segment 4,146 (321)(6,635)2,810 of which:net interest income/(expense)2 10,231 8,799 3,710 (5,829)16,911 Change in expected credit losses and other credit impairment charges(476)(573)(11)(6)(1,066)Net operating income 13,836 10,323 8,731 3,336 36,226 Total operating expenses(7,406)(3,861)(4,918)(111)(16,296)Operating profit 6,430 6,462 3,813 3,225 19,930 Share of profit in associates and joint ventures 28 1 1,597 1,626 Constant currency profit before tax 6,458 6,463 3,813 4,822 21,556%Share of HSBCs constant currency profit before tax 30.0 30.0 17.7 22.3 100.0 Constant currency cost efficiency ratio 51.7 35.4 56.3 3.3 43.7 Constant currency balance sheet data$m$m$m$m$mLoans and advances to customers(net)445,882 310,356 174,376 7,643 938,257 Interests in associates and joint ventures 567 25 111 27,762 28,465 Total external assets 864,948 597,808 1,365,439 146,808 2,975,003 Customer accounts 794,807 467,362 331,269 396 1,593,834 Constant currency risk-weighted assets3 182,508 335,692 225,145 91,773 835,118 Half-year to 30 Jun 2023Net operating income before change in expected credit losses and other credit impairment charges1 16,095 12,086 8,321 36,502 external 12,317 12,730 13,714 (2,259)36,502 inter-segment 3,778 (644)(5,393)2,259 of which:net interest income/(expense)2 10,130 8,073 3,401 (3,877)17,727 Change in expected credit losses and other credit impairment charges(484)(694)(136)(3)(1,317)Net operating income/(expense)15,611 11,392 8,185 (3)35,185 Total operating expenses(7,020)(3,458)(4,776)10 (15,244)Operating profit 8,591 7,934 3,409 7 19,941 Share of profit/(loss)in associates and joint ventures 35 (1)1,497 1,531 Constant currency profit before tax 8,626 7,933 3,409 1,504 21,472%Share of HSBCs constant currency profit before tax 40.2 36.9 15.9 7.0 100.0 Constant currency cost efficiency ratio 43.6 28.6 57.4 41.8 Constant currency balance sheet data$m$m$m$m$mLoans and advances to customers(net)460,395 315,271 175,055 293 951,014 Interests in associates and joint ventures 551 22 105 28,856 29,534 Total external assets 891,675 644,672 1,325,327 150,047 3,011,721 Customer accounts 803,962 466,302 309,526 628 1,580,418 Constant currency risk-weighted assets3 181,464 345,043 224,239 91,526 842,272 1 Net operating income before change in expected credit losses and other credit impairment charges,also referred to as revenue.2 Net interest expense recognised in the Corporate Centre includes$5.5bn(1H23:$3.8bn)of interest expense in relation to the internal cost to fund trading and fair value net assets;and the funding cost of foreign exchange swaps in our Markets Treasury function.3 Constant currency risk-weighted assets are calculated using reported risk-weighted assets adjusted for the effects of currency translation differences.8HSBC Holdings plc 2024 Interim ResultsConsolidated income statementHalf-year to30 Jun 202430 Jun 2023$m$mNet interest income 16,911 18,264 interest income 55,372 46,955 interest expense(38,461)(28,691)Net fee income 6,200 6,085 fee income 8,158 7,947 fee expense(1,958)(1,862)Net income from financial instruments held for trading or managed on a fair value basis1 10,516 8,112 Net income from assets and liabilities of insurance businesses,including related derivatives,measured at fair value through profit or loss 2,376 4,304 Insurance finance expense(2,486)(4,234)Insurance service result 662 524 insurance service revenue 1,310 1,104 insurance service expense(648)(580)Gain on acquisition2 1,507 Gain less impairment relating to sale of business operations3 3,256 2,130 Other operating(expense)/income(143)184 Net operating income before change in expected credit losses and other credit impairment charges4 37,292 36,876 Change in expected credit losses and other credit impairment charges(1,066)(1,345)Net operating income 36,226 35,531 Employee compensation and benefits(9,192)(8,954)General and administrative expenses(5,135)(4,912)Depreciation and impairment of property,plant and equipment and right-of-use assets(867)(782)Amortisation and impairment of intangible assets(1,102)(809)Total operating expenses(16,296)(15,457)Operating profit 19,930 20,074 Share of profit in associates and joint ventures 1,626 1,583 Profit before tax 21,556 21,657 Tax expense(3,891)(3,586)Profit after tax 17,665 18,071 Attributable to:ordinary shareholders of the parent company 16,586 16,966 other equity holders 526 542 non-controlling interests 553 563 Profit after tax 17,665 18,071$Basic earnings per ordinary share 0.89 0.86 Diluted earnings per ordinary share 0.88 0.86 1 Includes a$255m gain(1H23:$284m loss)on the foreign exchange hedging of the proceeds from the sale of our banking business in Canada.2 Gain recognised in respect of the acquisition of SVB UK.3 In the first half of 2024,a gain of$4.6bn inclusive of the recycling of$0.6bn in foreign currency translation reserve losses and$0.4bn of other reserves recycling losses on the sale of our banking business in Canada,and an impairment loss of$1.2bn relating to the planned sale of our business in Argentina was recognised.In the first quarter of 2023,the$2.1bn reversal of the held for sale classification was recognised relating to the sale of our retail banking operations in France.4 Net operating income before change in expected credit losses and other credit impairment charges,also referred to as revenue.HSBC Holdings plc 2024 Interim Results9Consolidated statement of comprehensive income Half-year to30 Jun 202430 Jun 2023$m$mProfit for the period 17,665 18,071 Other comprehensive income/(expense)Items that will be reclassified subsequently to profit or loss when specific conditions are met:Debt instruments at fair value through other comprehensive income(213)549 fair value(losses)/gains(378)804 fair value gains transferred to the income statement on disposal(24)(63)expected credit losses/(recoveries)recognised in the income statement 13 (3)disposal of subsidiary 90 income taxes 86 (189)Cash flow hedges(710)(1,062)fair value losses(612)(1,700)fair value(gains)/losses reclassified to the income statement(673)227 disposal of subsidiary 262 income taxes 313 411 Share of other comprehensive income/(expense)of associates and joint ventures 211 101 share for the period 211 101 Net finance income/(expense)from insurance contracts 17 (101)before income taxes 23 (136)income taxes(6)35 Exchange differences(2,588)(347)foreign exchange losses reclassified to the income statement on disposal of a foreign operation 648 other exchange differences(3,236)(347)Items that will not be reclassified subsequently to profit or loss:Fair value gains on property revaluation 5 1 Remeasurement of defined benefit asset/(liability)146 (112)before income taxes 178 (105)income taxes(32)(7)Changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in own credit risk(283)(653)before income taxes(372)(867)income taxes 89 214 Equity instruments designated at fair value through other comprehensive income 41 7 fair value gains 62 7 income taxes(21)Effects of hyperinflation 892 578 Other comprehensive expense for the period,net of tax(2,482)(1,039)Total comprehensive income for the period 15,183 17,032 Attributable to:ordinary shareholders of the parent company 14,131 15,986 other equity holders 526 542 non-controlling interests 526 504 Total comprehensive income for the period 15,183 17,032 10HSBC Holdings plc 2024 Interim ResultsConsolidated balance sheetAt30 Jun 202431 Dec 2023$m$mAssetsCash and balances at central banks 277,112 285,868 Items in the course of collection from other banks 9,977 6,342 Hong Kong Government certificates of indebtedness 43,026 42,024 Trading assets 331,307 289,159 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 117,014 110,643 Derivatives 219,269 229,714 Loans and advances to banks 102,057 112,902 Loans and advances to customers 938,257 938,535 Reverse repurchase agreements non-trading 230,189 252,217 Financial investments 467,356 442,763 Assets held for sale 5,821 114,134 Prepayments,accrued income and other assets 184,303 165,255 Current tax assets 1,308 1,536 Interests in associates and joint ventures 28,465 27,344 Goodwill and intangible assets 12,161 12,487 Deferred tax assets 7,381 7,754 Total assets 2,975,003 3,038,677 LiabilitiesHong Kong currency notes in circulation 43,026 42,024 Deposits by banks 82,435 73,163 Customer accounts 1,593,834 1,611,647 Repurchase agreements non-trading 202,770 172,100 Items in the course of transmission to other banks 10,482 7,295 Trading liabilities 77,455 73,150 Financial liabilities designated at fair value 140,800 141,426 Derivatives 217,096 234,772 Debt securities in issue 98,158 93,917 Liabilities of disposal groups held for sale 5,041 108,406 Accruals,deferred income and other liabilities 157,171 136,606 Current tax liabilities 2,837 2,777 Insurance contract liabilities 125,252 120,851 Provisions 1,536 1,741 Deferred tax liabilities 1,186 1,238 Subordinated liabilities 25,510 24,954 Total liabilities 2,784,589 2,846,067 EquityCalled up share capital 9,310 9,631 Share premium account 14,808 14,738 Other equity instruments 18,825 17,719 Other reserves(14,930)(8,907)Retained earnings 155,280 152,148 Total shareholders equity 183,293 185,329 Non-controlling interests 7,121 7,281 Total equity 190,414 192,610 Total liabilities and equity 2,975,003 3,038,677 HSBC Holdings plc 2024 Interim Results11Consolidated statement of changes in equityOther reservesCalled up share capital and share premiumOther equityinstru-mentsFinancial assets at FVOCI reserveCash flowhedgingreserveForeign exchangereserveMerger and other reservesInsurancefinancereserve1RetainedearningsTotal share-holders equityNon-controllinginterestsTotal equity$m$m$m$m$m$m$m$m$m$m$mAt 1 Jan 2024 24,369 17,719 (3,507)(1,033)(33,753)28,601 785 152,148 185,329 7,281 192,610 Profit for the period 17,112 17,112 553 17,665 Other comprehensive income(net of tax)(164)(691)(2,551)5 (10)956 (2,455)(27)(2,482)debt instruments at fair value through other comprehensive income (313)(313)10 (303)equity instruments designated at fair value through other comprehensive income 35 35 6 41 cash flow hedges (970)(970)(2)(972)changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in own credit risk (283)(283)(283)property revaluation 5 5 5 remeasurement of defined benefit asset/liability 136 136 10 146 share of other comprehensive income of associates and joint ventures 211 211 211 effects of hyperinflation 892 892 892 foreign exchange losses reclassified to income statement on disposal of a foreign operation 648 648 648 other reserves reclassified to income statement on disposal of a foreign operation 90 262 352 352 insurance finance income/(expense)recognised in other comprehensive income 17 17 17 other exchange differences 24 17 (3,199)(27)(3,185)(51)(3,236)Total comprehensive income for the period (164)(691)(2,551)5 (10)18,068 14,657 526 15,183 Shares issued under employee remuneration and shareplans 75 (75)Capital securities issued2 1,106 1,106 1,106 Dividends to shareholders (12,217)(12,217)(468)(12,685)Cost of share-based payment arrangements 274 274 274 Transfers3 (2,945)2,945 Share buy-backs4 (5,019)(5,019)(5,019)Cancellation of shares(326)326 Other movements 4 3 (844)(837)(218)(1,055)At 30 Jun 2024 24,118 18,825 (3,667)(1,724)(36,304)25,990 775 155,280 183,293 7,121 190,414 12HSBC Holdings plc 2024 Interim ResultsConsolidated statement of changes in equity(continued)Other reservesCalled up share capital and share premiumOther equity instru-mentsFinancial assets at FVOCI reserveCash flowhedgingreserveForeign exchange reserveMerger and other reservesInsurancefinancereserve1RetainedearningsTotal share-holdersequityNon-controllinginterestsTotal equity$m$m$m$m$m$m$m$m$m$m$mAt 1 Jan 2023 24,811 19,746 (7,038)(3,808)(32,575)33,209 1,079 142,409 177,833 7,364 185,197 Profit for the period 17,508 17,508 563 18,071 Other comprehensive income(net of tax)560 (1,077)(271)1 (101)(92)(980)(59)(1,039)debt instruments at fair value through other comprehensive income 546 546 3 549 equity instruments designated at fair value through other comprehensive income 14 14 (7)7 cash flow hedges (1,077)(1,077)15 (1,062)changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in own credit risk (654)(654)1 (653)property revaluation 1 1 1 remeasurement of defined benefit asset/liability (117)(117)5 (112)share of other comprehensive income of associates and joint ventures 101 101 101 effects of hyperinflation 578 578 578 insurance finance income/(expense)recognised in other comprehensive income (101)(101)(101)other exchange differences (271)(271)(76)(347)Total comprehensive income for the period 560 (1,077)(271)1 (101)17,416 16,528 504 17,032 Shares issued under employee remuneration and shareplans 78 (78)Capital securities issued 1,996 1,996 1,996 Dividends to shareholders (7,133)(7,133)(375)(7,508)Redemption of securities (2,350)(2,350)(2,350)Cost of share-based payment arrangements 228 228 228 Share buy-backs (2,007)(2,007)(2,007)Cancellation of shares(79)79 Other movements 6 1 (932)(925)(12)(937)At 30 Jun 2023 24,810 19,392 (6,472)(4,885)(32,846)33,290 978 149,903 184,170 7,481 191,651 HSBC Holdings plc 2024 Interim Results13Consolidated statement of changes in equity(continued)Other reservesCalled up share capital and share premiumOther equity instru-mentsFinancial assets at FVOCI reserveCash flowhedgingreserveForeign exchange reserveMerger and other reservesInsurancefinancereserve1RetainedearningsTotal share-holdersequityNon-controllinginterestsTotal equity$m$m$m$m$m$m$m$m$m$m$mAt 1 Jul 2023 24,810 19,392 (6,472)(4,885)(32,846)33,290 978 149,903 184,170 7,481 191,651 Profit for the period 6,025 6,025 463 6,488 Other comprehensive income(net of tax)1,842 4,107 60 (270)206 5,945 77 6,022 debt instruments at fair value through other comprehensive income 2,028 2,028 22 2,050 equity instruments designated at fair value through other comprehensive income (107)(107)(20)(127)cash flow hedges 3,996 3,996 19 4,015 changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in own credit risk (566)(566)(566)property revaluation remeasurement of defined benefit asset/liability (200)(200)(2)(202)share of other comprehensive income of associates and joint ventures (54)(54)(54)effects of hyperinflation 1,026 1,026 1,026 insurance finance income/(expense)recognised in other comprehensive income (263)(263)(263)other exchange differences (79)111 60 (7)85 58 143 Total comprehensive income for the period 1,842 4,107 60 (270)6,231 11,970 540 12,510 Shares issued under employee remuneration and shareplans 1 (1)Dividends to shareholders (4,460)(4,460)(228)(4,688)Redemption of securities (1,673)20 (1,653)(1,653)Cost of share-based payment arrangements 254 254 254 Transfers (5,130)5,130 Share buy-backs (5,018)(5,018)(5,018)Cancellation of shares(442)442 Other movements 1,123 (255)(967)(1)77 89 66 (512)(446)At 31 Dec 2023 24,369 17,719 (3,507)(1,033)(33,753)28,601 785 152,148 185,329 7,281 192,610 1 The insurance finance reserve reflects the impact of adoption of the other comprehensive income option for our insurance business in France.Underlying assets supporting these contracts are measured at fair value through other comprehensive income.Under this option,only the amount that matches income or expenses recognised in profit or loss on underlying items is included in finance income or expenses,resulting in the elimination of income statement accounting mismatches.The remaining amount of finance income or expenses for these insurance contracts is recognised in other comprehensive income(OCI).2 In June 2024,HSBC Holdings issued SGD1,500m of contingent convertible securities on which there were SGD15m of external issue costs.3 At 30 June 2024,an impairment of$2,945m of HSBC Overseas Holdings(UK)Limited was recognised post sale of our banking business in Canada,resulting in a permitted transfer from the merger reserve to retained earnings.4 In February 2024,HSBC Holdings announced a share buy-back of up to$2.0bn,which concluded in March 2024.Additionally,in April 2024,HSBC Holdings announced another share buy-back of up to$3.0bn,which was completed in July 2024.14HSBC Holdings plc 2024 Interim ResultsConsolidated statement of cash flowsHalf-year to30 Jun 202430 Jun 2023$m$mProfit before tax 21,556 21,657 Adjustments for non-cash items:Depreciation,amortisation and impairment 1,969 1,591 Net gain from investing activities(34)(41)Share of profit in associates and joint ventures(1,626)(1,583)Net gain on acquisition/disposal of subsidiaries,businesses,associates and joint ventures(3,199)(3,604)Change in expected credit losses gross of recoveries and other credit impairment charges 1,192 1,482 Provisions including pensions 15 148 Share-based payment expense 274 228 Other non-cash items included in profit before tax(4,237)(1,661)Elimination of exchange differences1 18,406 (6,558)Change in operating assets2(41,493)(52,745)Change in operating liabilities 36,486 72,836 Dividends received from associates 130 124 Contributions paid to defined benefit plans(76)(87)Tax paid(2,664)(1,664)Net cash from operating activities 26,699 30,123 Purchase of financial investments(259,999)(298,182)Proceeds from the sale and maturity of financial investments 223,443 263,838 Net cash flows from the purchase and sale of property,plant and equipment(464)(329)Net investment in intangible assets(1,058)(1,123)Net cash inflow on acquisition/disposal of subsidiaries,businesses,associates and joint ventures3 9,891 1,243 Net cash outflow on acquisition/disposal of subsidiaries,businesses,associates and joint ventures3(10,612)(15)Net cash from investing activities(38,799)(34,568)Issue of ordinary share capital and other equity instruments 1,106 1,996 Cancellation of shares(5,330)(1,273)Net sales/(purchases)of own shares for market-making and investment purposes(494)(823)Redemption of preference shares and other equity instruments (2,350)Subordinated loan capital issued 2,611 2,744 Subordinated loan capital repaid(2,000)(1,044)Dividends paid to shareholders of the parent company and non-controlling interests(12,685)(7,508)Net cash from financing activities(16,792)(8,258)Net decrease in cash and cash equivalents(28,892)(12,703)Cash and cash equivalents at the beginning of the period 490,933 521,671 Exchange differences in respect of cash and cash equivalents(13,057)8,565 Cash and cash equivalents at the end of the period4 448,984 517,533 Interest received was$54,197m(1H23:$46,817m),interest paid was$41,254m(1H23:$29,222m)and dividends received(excluding dividends received from associates,which are presented separately above)were$1,231m(1H23:$751m).1 Adjustments to bring changes between opening and closing balance sheet amounts to average rates.This is not done on a line-by-line basis,as details cannot be determined without unreasonable expense.2 Includes net settlement of the foreign exchange hedge of the proceeds from the sale of our banking business in Canada,with a$255m gain in 1H24(1H23:$284m loss).3 The Net cash inflow on acquisition/disposal of subsidiaries,businesses,associates and jointventures includes$9.3bn of net cash inflow on the sale of our banking business in Canada in March 2024.In 1H23,it included$1.2bn of net cash inflow on acquisition of Silicon Valley Bank UK Limited in March 2023.The Net cash outflow on acquisition/disposal of subsidiaries,businesses,associates and joint ventures includes$10.6bn of net cash outflow on the sale of our retail banking operations in France in January 2024.4 Includes$1.7bn(1H23:$7.5bn)of cash and cash equivalents classified as held for sale.HSBC Holdings plc 2024 Interim Results151Basis of preparation and material accounting policies(a)Compliance with International Financial Reporting Standards Our interim condensed consolidated financial statements have been prepared on the basis of the policies set out in the 2023 annual financial statements.They have also been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the UK,IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board(IASB),IAS 34 Interim Financial Reporting as adopted by the EU,and the Disclosure Guidance and Transparency Rules sourcebook of the UKs Financial Conduct Authority.Therefore,they include an explanation of events and transactions that are significant to an understanding of the changes in HSBCs financial position and performance since the end of 2023.The interim condensed consolidated financial statements should be read in conjunction with the Annual Report and Accounts 2023,which was prepared in accordance with UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006 and international financial reporting standards adopted pursuant to Regulation(EC)No 1606/2002 as it applies in the European Union.The interim condensed consolidated financial statements were also prepared in accordance with International Financial Reporting Standards(IFRS Accounting Standards)as issued by the IASB,including interpretations issued by the IFRS Interpretations Committee.At 30 June 2024,there were no IFRS Accounting Standards effective for the half-year to 30 June 2024 affecting these financial statements that were not approved for adoption in the UK by the UK Endorsement Board.There was no difference between IFRS Accounting Standards adopted by the UK,IFRS Accounting Standards as adopted by the EU,and IFRS Accounting Standards issued by the IASB in terms of their application to HSBC.Standards applied during the half-year to 30 June 2024There were no new standards or amendments to standards that had an effect on the interim condensed consolidated financial statements.(b)Use of estimates and judgements Management believes that the critical estimates and judgements applicable to the Group are those that relate to impairment of amortised cost and FVOCI debt financial assets,the valuation of financial instruments,deferred tax assets,provisions,interests in associates,impairment of goodwill and non-financial assets,and post-employment benefit plans.Other than in respect of non-current assets and disposal groups held for sale,there were no material changes in the current period to any of the critical estimates and judgements disclosed in 2023,which are stated on pages 101 and 343 to 354 of the Annual Report and Accounts 2023.(c)Composition of the Group In the first half of 2024 the sales of the retail banking operations in France,the banking business in Canada,and the business in Russia completed.There were no other material changes in the composition of the Group in the half-year to 30 June 2024.For further details of future business acquisitions and disposals,see Note 15 Assets held for sale,liabilities of disposal groups held for sale and business acquisitions in the Interim Report 2024.(d)Future accounting developmentsAmendments to IAS 21 Lack of ExchangeabilityIn August 2023,the IASB published amendments to IAS 21 Lack of Exchangeability effective from 1 January 2025.The Group is undertaking an assessment of the potential impact,which is not expected to be significant.Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments:DisclosuresIn May 2024,the IASB issued amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments:Disclosures,effective for annual reporting periods beginning on,or after,1 January 2026.In addition to guidance as to when certain financial liabilities can be deemed settled when using an electronic payment system,the amendments also provide further clarification regarding the classification of financial assets that contain contractual terms that change the timing or amount of contractual cash flows,including those arising from ESG-related contingencies,and financial assets with certain non-recourse features.The Group is undertaking an assessment of the potential impact.IFRS 18 Presentation and Disclosure in Financial StatementsIn April 2024,the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements,effective for annual reporting periods beginning on or after 1 January 2027.The new accounting standard aims to give users of financial statements more transparent and comparable information about an entitys financial performance.It will replace IAS 1 Presentation of Financial Statements but carries over many requirements from that IFRS Accounting Standard unchanged.In addition,there are three sets of new requirements relating to the structure of the income statement,management-defined performance measures and the aggregation and disaggregation of financial information.While IFRS 18 will not change recognition criteria or measurement bases,it might have a significant impact on presenting information in the financial statements,in particular the income statement.HSBC are currently assessing any impacts as well as data readiness before developing a more detailed implementation plan.(e)Going concern The financial statements are prepared on a going concern basis,as the Directors are satisfied that the Group and parent company have the resources to continue in business for the foreseeable future.In making this assessment,the Directors have considered a wide range of information relating to present and future conditions,including future projections of profitability,cash flows,capital requirements and capital resources.These considerations include stressed scenarios,as well as considering potential impacts from other top and emerging risks,and the related impact on profitability,capital and liquidity.16HSBC Holdings plc 2024 Interim Results(f)Accounting policies The accounting policies that we applied for the interim condensed consolidated financial statements are consistent with those described on pages 341 to 354 of the Annual Report and Accounts 2023,as are the methods of computation.2DividendsOn 31 July 2024,the Directors approved a second interim dividend for 2024 of$0.10 per ordinary share in respect of the financial year ending 31December 2024.This distribution amounts to approximately$1.849bn and will be payable on 27September 2024.No liability is recognised in the financial statements in respect of these dividends.Dividends paid to shareholders of HSBC Holdings plcHalf-year to30 Jun 202430 Jun 2023Per shareTotalPer shareTotal$m$mDividends paid on ordinary sharesIn respect of previous year:second interim dividend 0.23 4,590 fourth interim dividend 0.31 5,872 In respect of current year:first interim dividend 0.10 1,877 0.10 2,001 special dividend 0.21 3,942 Total 0.62 11,691 0.33 6,591 Total coupons on capital securities classified as equity 526 542 Dividends to shareholders 12,217 7,133 Second interim dividend for 2024 On 31 July 2024,the Directors approved a second interim dividend in respect of the financial year ending 31 December 2024 of$0.10 per ordinary share(the dividend),a distribution of approximately$1.849bn.The dividend will be payable on 27 September 2024 to holders of record on the Principal Register in the UK,the Hong Kong Overseas Branch Register or the Bermuda Overseas Branch Register on 16 August 2024.The dividend will be payable in US dollars,or in pounds sterling or Hong Kong dollars at the forward exchange rates quoted by HSBC Bank plc in London at or about 11.00am on 16 September 2024.The ordinary shares in London,Hong Kong and Bermuda will be quoted ex-dividend on 15August 2024.American Depositary Shares(ADSs)in New York will be quoted ex-dividend on 16 August 2024.The default currency on the Principal Register in the UK is pounds sterling,and dividends can also be paid in Hong Kong dollars or US dollars,or a combination of these currencies.International shareholders can register to join the Global Dividend Service to receive dividends in their local currencies.Please register and read the terms and conditions at www.investorcentre.co.uk.UK shareholders can also register their sterling bank mandates at www.investorcentre.co.uk.The default currency on the Hong Kong Overseas Branch Register is Hong Kong dollars,and dividends can also be paid in US dollars or pounds sterling,or a combination of these currencies.Shareholders can arrange for direct credit of Hong Kong dollar cash dividends into their bank account,or arrange to send US dollar or pound sterling cheques to the credit of their bank account.Shareholders can register for these services at can also download a dividend currency election form from www.hkexnews.hk.The default currency on the Bermuda Overseas Branch Register is US dollars,and dividends can also be paid in Hong Kong dollars or pounds sterling,or a combination of these currencies.Shareholders can change their dividend currency election by contacting the Bermuda investor relations team.Shareholders can download a dividend currency election form from to currency elections must be received by 12 September 2024 to be effective for this dividend.The dividend will be payable on ADSs,each of which represents five ordinary shares,on 27 September 2024 to holders of record on 16August2024.The dividend of$0.50 per ADS will be payable by the depositary in US dollars.Alternatively,the cash dividend may be invested in additional ADSs by participants in the dividend reinvestment plan operated by the depositary.Elections must be received by 6September2024.Any person who has acquired ordinary shares registered on the Principal Register in the UK,the Hong Kong Overseas Branch Register or the Bermuda Overseas Branch Register but who has not lodged the share transfer with the Principal Registrar in the UK,Hong Kong Overseas Branch Registrar or Bermuda Overseas Branch Registrar should do so before 4.00pm local time on 16 August 2024 in order to receive the dividend.Ordinary shares may not be removed from or transferred to the Principal Register in the UK,the Hong Kong Overseas Branch Register or the Bermuda Overseas Branch Register on 16 August 2024.Any person wishing to remove ordinary shares to or from each register must do so before 4.00pm local time on 15 August 2024.Transfer of ADSs must be lodged with the depositary by 11.00am on 16 August 2024 in order to receive the dividend.ADS holders who receive a cash dividend will be charged a fee,which will be deducted by the depositary,of$0.005 per ADS per cash dividend.Dividend on preference shareA quarterly dividend of 0.01 per Series A sterling preference share is payable on 15 March,17 June,16 September and 16December 2024 for the quarter then ended at the sole and absolute discretion of the Board of HSBC Holdings plc.Accordingly,the Board of HSBC Holdings plc has approved a quarterly dividend to be payable on 16 September 2024 to holders of record on 30 August 2024.HSBC Holdings plc 2024 Interim Results173Earnings per shareBasic earnings per ordinary share is calculated by dividing the profit attributable to ordinary shareholders of the parent company by the weighted average number of ordinary shares outstanding,excluding own shares held.Diluted earnings per ordinary share is calculated by dividing the basic earnings,which require no adjustment for the effects of dilutive potential ordinary shares,by the weighted average number of ordinary shares outstanding,excluding own shares held,plus the weighted average number of ordinary shares that would be issued on conversion of dilutive potential ordinary shares.Basic and diluted earnings per shareHalf-year to30 Jun 202430 Jun 2023ProfitNumberof sharesAmount per shareProfitNumber of sharesAmount per share$m(millions)$m(millions)$Basic1 16,586 18,666 0.89 16,966 19,693 0.86 Effect of dilutive potential ordinary shares 120 136 Diluted1 16,586 18,786 0.88 16,966 19,829 0.86 1 Weighted average number of ordinary shares outstanding(basic)or assuming dilution(diluted).4Constant currency balance sheet reconciliation At 30 Jun 2024At 30 June 2023At 31 Dec 2023Reported and constant currencyConstant currencyCurrency translationReportedConstant currencyCurrency translationReported$m$m$m$m$m$m$mLoans and advances to customers(net)938,257 951,014 (8,544)959,558 925,791 (12,744)938,535 Interests in associates and joint ventures 28,465 29,534 (12)29,546 26,967 (377)27,344 Total external assets 2,975,003 3,011,721 (29,755)3,041,476 2,997,845 (40,832)3,038,677 Customer accounts 1,593,834 1,580,418 (15,351)1,595,769 1,590,533 (21,114)1,611,647 5Reported and constant currency results1 Half-year to30 Jun 202430 Jun 2023$m$mRevenue2Reported 37,292 36,876 Currency translation(374)Constant currency 37,292 36,502 Change in expected credit losses and other credit impairment chargesReported(1,066)(1,345)Currency translation 28 Constant currency(1,066)(1,317)Operating expensesReported(16,296)(15,457)Currency translation 213 Constant currency(16,296)(15,244)Share of profit in associates and joint venturesReported 1,626 1,583 Currency translation(52)Constant currency 1,626 1,531 Profit before taxReported 21,556 21,657 Currency translation(185)Constant currency 21,556 21,472 Profit after taxReported 17,665 18,071 Currency translation(113)Constant currency 17,665 17,958 1 In the current period constant currency results are equal to reported as there is no currency translation.2 Net operating income before change in expected credit losses and other credit impairment charges,also referred to as revenue.18HSBC Holdings plc 2024 Interim ResultsNotable itemsHalf-year to30 Jun 202430 Jun 2023$m$mRevenueDisposals,acquisitions and related costs1,2 3,571 3,321 Fair value movements on financial instruments3 15 Operating expensesDisposals,acquisitions and related costs(101)(118)Restructuring and other related costs4 19 47 TaxTax(charge)/credit on notable items 14 (500)Recognition of losses Uncertain tax positions 427 1 Includes a$4.8bn gain on disposal of our banking business in Canada,inclusive of a$0.3bn gain on the foreign exchange hedging of the sales proceeds,the recycling of$0.6bn in foreign currency translation reserve losses and$0.4bn of other reserves recycling losses.This is partly offset by a$1.2bn impairment recognised in relation to the planned sale of our business in Argentina.2 In the first quarter of 2023,the$2.1bn reversal of the held for sale classification was recognised relating to the sale of our retail banking operations in France and a gain of$1.5bn was recognised in respect of the acquisition of SVB UK.3 Fair value movements on non-qualifying hedges in HSBC Holdings.4 Relates to reversals of restructuring provisions recognised during 2022.6Contingent liabilities,contractual commitments and guaranteesAt30 Jun 202431 Dec 2023$m$mGuarantees and other contingent liabilities:financial guarantees 16,343 17,009 performance and other guarantees 91,275 94,277 other contingent liabilities 543 636 At the end of the period 108,161 111,922 Commitments:1 documentary credits and short-term trade-related transactions 7,169 7,818 forward asset purchases and forward deposits placed 87,219 78,535 standby facilities,credit lines and other commitments to lend 780,929 810,797 At the end of the period 875,317 897,150 1 Includes$638,635m of commitments at 30 June 2024(31 December 2023:$661,015m),to which the impairment requirements in IFRS 9 are applied where HSBC has become party to an irrevocable commitment.Contingent liabilities arising from legal proceedings and regulatory and other matters against Group companies are excluded from this note but are disclosed in Note 7 below and Notes 11 and 13 of the Interim Report 2024.7Legal proceedings and regulatory matters HSBC is party to legal proceedings and regulatory matters in a number of jurisdictions arising out of its normal business operations.Apart from the matters described below,HSBC considers that none of these matters are material.The recognition of provisions is determined in accordance with the accounting policies set out in Note 1 of the Annual Report and Accounts 2023.While the outcomes of legal proceedings and regulatory matters are inherently uncertain,management believes that,based on the information available to it,appropriate provisions have been made in respect of these matters as at 30 June 2024(see Note 11 of the Interim Report 2024).Where an individual provision is material,the fact that a provision has been made is stated and quantified,except to the extent that doing so would be seriously prejudicial.Any provision recognised does not constitute an admission of wrongdoing or legal liability.It is not practicable to provide an aggregate estimate ofpotential liability for our legal proceedings and regulatory matters as a class of contingent liabilities.Bernard L.Madoff Investment Securities LLCVarious non-US HSBC companies provided custodial,administration and similar services to a number of funds incorporated outside the US whose assets were invested with Bernard L.Madoff Investment Securities LLC(Madoff Securities).Based on information provided by Madoff Securities as at 30 November 2008,the purported aggregate value of these funds was$8.4bn,including fictitious profits reported by Madoff.Based on information available to HSBC,the funds actual transfers to Madoff Securities minus their actual withdrawals from Madoff Securities during the time HSBC serviced the funds are estimated to have totalled approximately$4bn.Various HSBC companies have been named as defendants in lawsuits arising out of Madoff Securities fraud.US litigation:The Madoff Securities Trustee has brought lawsuits against various HSBC companies and others,seeking recovery of alleged transfers from Madoff Securities to HSBC in the amount of$543m(plus interest),and these lawsuits remain pending in the US Bankruptcy Court for the Southern District of New York(the US Bankruptcy Court).Certain Fairfield entities(together,Fairfield)(in liquidation)have brought a lawsuit in the US against fund shareholders,including HSBC companies that acted as nominees for clients,seeking restitution of redemption payments in the amount of$382m(plus interest).Fairfields claims against most of the HSBC companies have been dismissed by the US Bankruptcy Court and the US District Court for the Southern District of New York,but remain pending on appeal before the US Court of Appeals for the Second Circuit.Fairfields claims against HSBC Private Bank(Suisse)SA and HSBC Securities Services Luxembourg(HSSL)have not been dismissed and their appeals are also pending before the US Court of Appeals for the HSBC Holdings plc 2024 Interim Results19Second Circuit.Meanwhile,proceedings before the US Bankruptcy Court with respect to the claims against HSBC Private Bank(Suisse)SA and HSSL are ongoing.UK litigation:The Madoff Securities Trustee has filed a claim against various HSBC companies in the High Court of England and Wales,seeking recovery of transfers from Madoff Securities to HSBC.The claim has not yet been served and the amount claimed has not been specified.Luxembourg litigation:In 2009,Herald Fund SPC(Herald)(in liquidation)brought an action against HSSL before the Luxembourg District Court,seeking restitution of cash and securities in the amount of$2.5bn(plus interest),or damages in the amount of$2bn(plus interest).In 2018,HSBC Bank plc was added to the claim and Herald increased the amount of the alleged damages claim to$5.6bn(plus interest).The Luxembourg District Court has dismissed Heralds securities restitution claim,but reserved Heralds cash restitution and damages claims.Herald has appealed this dismissal to the Luxembourg Court of Appeal,where the matter is pending.Beginning in 2009,various HSBC companies have been named as defendants in a number of actions brought by Alpha Prime Fund Limited in the Luxembourg District Court seeking damages for alleged breach of contract and negligence in the amount of$1.16bn(plus interest).These matters are currently pending before the Luxembourg District Court.Beginning in 2014,HSSL and the Luxembourg branch of HSBC Bank plc have been named as defendants in a number of actions brought by Senator Fund SPC before the Luxembourg District Court seeking restitution of securities in the amount of$625m(plus interest),or damages in the amount of$188m(plus interest).These matters are currently pending before the Luxembourg District Court.Based on the facts currently known,it is not practicable at this time for HSBC to predict the resolution of the pending matters,including the timing or any possible impact on HSBC,which could be significant.US Anti-Terrorism Act litigationSince November 2014,a number of lawsuits have been filed in federal courts in the US against various HSBC companies and others on behalf of plaintiffs who are,or are related to,alleged victims of terrorist attacks in the Middle East.In each case,it is alleged that the defendants aided and abetted the unlawful conduct of various sanctioned parties in violation of the US Anti-Terrorism Act,or provided banking services to customers alleged to have connections to terrorism financing.Seven actions,which seek damages for unspecified amounts,remain pending and HSBCs motions to dismiss have been granted in three of these cases.These dismissals are subject to appeals and/or the plaintiffs re-pleading their claims.The four other actions are at an early stage.Based on the facts currently known,it is not practicable at this time for HSBC to predict the resolution of these matters,including the timing or any possible impact on HSBC,which could be significant.Interbank offered rates investigation and litigationEuro interest rate derivatives:In December 2016,the European Commission(EC)issued a decision finding that HSBC,among other banks,engaged in anti-competitive practices in connection with the pricing of euro interest rate derivatives,and the EC imposed a fine on HSBC based on a one-month infringement in 2007.The fine was annulled in 2019 and a lower fine was imposed in 2021.In January 2023,the European Court of Justice dismissed an appeal by HSBC and upheld the ECs findings on HSBCs liability.A separate appeal by HSBC concerning the amount of the fine remains pending before the General Court of the European Union.US dollar Libor:Beginning in 2011,HSBC and other panel banks have been named as defendants in a number of individual and putative class action lawsuits filed in federal and state courts in the US with respect to the setting of US dollar Libor.The complaints assert claims under various US federal and state laws,including antitrust and racketeering laws and the Commodity Exchange Act(US CEA).HSBC has concluded class settlements with five groups of plaintiffs,and several class action lawsuits brought by other groups of plaintiffs have been voluntarily dismissed.A number of individual US dollar Libor-related actions seeking damages for unspecified amounts remain pending.Based on the facts currently known,it is not practicable at this time for HSBC to predict the resolution of the pending matters,including the timing or any possible impact on HSBC,which could be significant.Foreign exchange-related investigations and litigation In December 2016,Brazils Administrative Council of Economic Defense initiated an investigation into the onshore foreign exchange market and identified a number of banks,including HSBC,as subjects of its investigation,which remains ongoing.Since 2017,HSBC Bank plc,among other financial institutions,has been defending a complaint filed by the Competition Commission of South Africa before the South African Competition Tribunal for alleged anti-competitive behaviour in the South African foreign exchange market.In 2020,a revised complaint was filed which also named HSBC Bank USA N.A.(HSBC Bank USA)as a defendant.In January 2024,the South African Competition Appeal Court dismissed HSBC Bank USA from the revised complaint but denied HSBC Bank plcs application to dismiss.The Competition Commission and HSBC Bank plc have appealed to the Constitutional Court of South Africa.Since 2015,various HSBC companies and other banks have been named as defendants in a putative class action in the US District Court for the Southern District of New York filed by a group of retail customers who dealt in foreign exchange products.The plaintiffs allege that the defendants conspired to manipulate foreign exchange rates and seek damages for unspecified amounts.In May 2024,the US Court of Appeals for the Second Circuit affirmed the dismissal of this action.HSBC Bank plc and HSBC Holdings have reached a settlement with plaintiffs in Israel to resolve a class action filed in the local courts alleging foreign exchange-related misconduct.The settlement remains subject to court approval.Lawsuits alleging foreign exchange-related misconduct remain pending against HSBC and other banks in courts in Brazil.In February 2024,HSBC Bank plc and HSBC Holdings were joined to an existing claim brought in the UK Competition Appeals Tribunal against various other banks alleging historical anti-competitive behaviour in the foreign exchange market and seeking approximately 3bn in damages from all the defendants.This matter is at an early stage.It is possible that additional civil actions will be initiated against HSBC in relation to its historical foreign exchange activities.There are many factors that may affect the range of outcomes,and the resulting financial impact,of the pending matters,which could be significant.20HSBC Holdings plc 2024 Interim ResultsPrecious metals fix-related litigationUS litigation:HSBC and other members of The London Silver Market Fixing Limited are defending a class action pending in the US District Court for the Southern District of New York alleging that,from January 2007 to December 2013,the defendants conspired to manipulate the price of silver and silver derivatives for their collective benefit in violation of US antitrust laws,the US CEA and New York state law.In May 2023,this action,which seeks damages for unspecified amounts,was dismissed but remains pending on appeal.HSBC and other members of The London Platinum and Palladium Fixing Company Limited are defending a class action pending in the US District Court for the Southern District of New York alleging that,from January 2008 to November 2014,the defendants conspired to manipulate the price of platinum group metals and related financial products for their collective benefit in violation of US antitrust laws and the US CEA.The defendants have reached a settlement-in-principle with the plaintiffs to resolve this action.The settlement-in-principle remains subject to documentation and court approval.Canada litigation:HSBC and other financial institutions are defending putative class actions filed in the Ontario and Quebec Superior Courts of Justice alleging that the defendants conspired to manipulate the price of silver,gold and related derivatives in violation of the Canadian Competition Act and common law.These actions each seek CA$1bn in damages plus CA$250m in punitive damages.Two of the actions are proceeding and the others have been stayed.There are many factors that may affect the range of outcomes,and the resulting financial impact,of the pending matters,which could be significant.Tax-related investigations In March 2023,the French National Financial Prosecutor announced an investigation into a number of banks,including HSBC Continental Europe and the Paris branch of HSBC Bank plc,in connection with alleged tax fraud related to the dividend withholding tax treatment of certain trading activities.HSBC Bank plc and the German branch of HSBC Continental Europe also continue to cooperate with investigations by the German public prosecutor into numerous financial institutions and their employees,in connection with the dividend withholding tax treatment of certain trading activities.Based on the facts currently known,it is not practicable at this time for HSBC to predict the resolution of these matters,including the timing or any possible impact on HSBC,which could be significant.Gilts trading investigation and litigationSince 2018,the UK Competition and Markets Authority(CMA)has been investigating HSBC and four other banks for suspected anti-competitive conduct in relation to the historical trading of gilts and related derivatives.In May 2023,the CMA announced its case against HSBC Bank plc and HSBC Holdings;both HSBC companies are contesting the CMAs allegations.In June 2023,HSBC Bank plc and HSBC Securities(USA)Inc.,among other banks,were named as defendants in a putative class action filed in the US District Court for the Southern District of New York by plaintiffs alleging anti-competitive conduct in the gilts market and seeking damages for unspecified amounts.In September 2023,the defendants filed a motion to dismiss which remains pending.It is possible that additional civil actions will be initiated against HSBC in relation to its historical gilts trading activities.Based on the facts currently known,it is not practicable at this time for HSBC to predict the resolution of these matters,including the timing or any possible impact on HSBC,which could be significant.UK collections and recoveries investigationIn 2019,the FCA began investigating HSBC Bank plcs,HSBC UK Bank plcs and Marks and Spencer Financial Services plcs compliance with regulatory standards relating to collections and recoveries operations in the UK between 2017 and 2018.In May 2024,the FCA concluded its investigation and imposed a 6m fine on HSBC Bank plc,HSBC UK Bank plc and Marks and Spencer Financial Services plc,which has been paid,and this matter is now closed.Korean short selling indictmentIn March 2024,the Korean Prosecutors Office issued a criminal indictment against The Hongkong and Shanghai Banking Corporation Limited and three current and former employees for breaching short selling rules under the Financial Investment Services and Capital Markets Act in connection with trades carried out between August 2021 and December 2021.The Hongkong and Shanghai Banking Corporation Limited is defending the action.Silicon Valley Bank(SVB)litigationIn May 2023,First-Citizens Bank&Trust Company(First Citizens)brought a lawsuit in the US District Court for the Northern District of California against various HSBC companies and seven US-based HSBC employees who had previously worked for SVB.The lawsuit seeks$1bn in damages and alleges,among other things,that the various HSBC companies conspired with the individual defendants to solicit employees from First Citizens and that the individual defendants took confidential information belonging to SVB and/or First Citizens.In July 2024,the court dismissed several of First Citizens claims and also dismissed certain defendants for lack of jurisdiction,but allowed limited discovery into whether some of these defendants may be subject to jurisdiction.The remaining claims are proceeding against certain defendants.Based on the facts currently known,it is not practicable at this time for HSBC to predict the resolution of this matter,including the timing or any possible impact on HSBC,which could be significant.Film Finance litigationIn June 2020,two separate investor groups issued claims against HSBC UK Bank plc(as successor to HSBC Private Bank(UK)Limited(PBGB)in the High Court of England and Wales seeking damages for unspecified amounts in connection with PBGBs role in the development of Eclipse film finance schemes.In March 2024,HSBC UK Bank plc reached a settlement with the first investor group.In April 2024,the High Court dismissed the second investor groups claims,and this matter is now closed.HSBC Holdings plc 2024 Interim Results21US mortgage securitisation litigationBeginning in 2014,a number of lawsuits were filed in various state and federal courts in the US against HSBC Bank USA,as a trustee of more than 280 mortgage securitisation trusts,seeking unspecified damages for losses in collateral value allegedly sustained by the trusts.HSBC Bank USA has reached settlements with a number of plaintiffs to resolve nearly all of these lawsuits.The remaining two actions are pending in a New York state court.HSBC Bank USA and certain of its affiliates continue to defend a mortgage loan repurchase action seeking unspecified damages and specific performance brought by the trustee of a mortgage securitisation trust in New York state court.There are many factors that may affect the range of outcomes,and the resulting financial impact,of the pending matters,which could be significant.Mexican government bond litigationHSBC Mexico S.A.and other banks are named as defendants in a consolidated putative class action pending in the US District Court for the Southern District of New York alleging anti-competitive conduct in the Mexican government bond market between 2010 and 2014 and seeking damages for unspecified amounts.In February 2024,the US Court of Appeals for the Second Circuit reversed an earlier dismissal of this lawsuit.In May 2024,the plaintiffs amended their complaint and this action is ongoing.Based on the facts currently known,it is not practicable at this time for HSBC to predict the resolution of this matter,including the timing or any possible impact on HSBC,which could be significant.Stanford litigationSince 2009,HSBC Bank plc has been named as a defendant in numerous claims filed in courts in the UK and the US arising from the collapse of Stanford International Bank Ltd,for which it was a correspondent bank from 2003 to 2009.In February 2023,HSBC Bank plc reached settlements with the plaintiffs to resolve the claims and these settlements have concluded.Other regulatory investigations,reviews and litigationHSBC Holdings and/or certain of its affiliates are also subject to a number of other enquiries and examinations,requests for information,investigations and reviews by various tax authorities,regulators,competition and law enforcement authorities,as well as legal proceedings including litigation,arbitration and other contentious proceedings,in connection with various matters arising out of their businesses and operations.At the present time,HSBC does not expect the ultimate resolution of any of these matters to be material to the Groups financial position;however,given the uncertainties involved in legal proceedings and regulatory matters,there can be no assurance regarding the eventual outcome of a particular matter or matters.8Events after the balance sheet dateOn 6 July 2024,the Hongkong and Shanghai Banking Corporation Limited(acting through its Mauritius Branch)completed the sale of its Wealth and Personal Banking business to ABSA Bank(Mauritius)Limited,a wholly-owned subsidiary of ABSA Bank Group Limited.The financial impact was not significant for the Group.A second interim dividend for 2024 of$0.10 per ordinary share in respect of the financial year ending 31 December 2024 was approved by the Directors on 31July 2024,as described in Note 2.On 31 July 2024,HSBC Holdings announced a share buy-back to purchase its ordinary shares up to a maximum consideration of$3.0bn,which is expected to commence shortly and complete within three months.22HSBC Holdings plc 2024 Interim Results9Capital structureCapital ratiosAt30 Jun 202431 Dec 2023%Transitional basisCommon equity tier 1 ratio 15.0 14.8 Tier 1 ratio 17.3 16.9 Total capital ratio 20.6 20.0 End point basisCommon equity tier 1 ratio 15.0 14.8 Tier 1 ratio 17.3 16.9 Total capital ratio 20.1 19.6 Total regulatory capital and risk-weighted assetsAt30 Jun 202431 Dec 2023$m$mTransitional basisCommon equity tier 1 capital 125,293 126,501 Additional tier 1 capital 18,965 17,662 Tier 2 capital 27,826 27,041 Total regulatory capital 172,084 171,204 Risk-weighted assets 835,118 854,114 End point basisCommon equity tier 1 capital 125,293 126,501 Additional tier 1 capital 18,965 17,662 Tier 2 capital 23,886 22,894 Total regulatory capital 168,144 167,057 Risk-weighted assets 835,118 854,114 Leverage ratio1At30 Jun 202431 Dec 2023$bn$bnTier 1 capital(leverage)144.3 144.2 Total leverage ratio exposure 2,514.5 2,574.8%Leverage ratio 5.7 5.6 1 Leverage ratio calculation is in line with the PRAs UK leverage rules.This includes IFRS 9 transitional arrangement and excludes central bank claims.10 Statutory accountsThe information in this media release is unaudited and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.The statutory accounts of HSBC Holdings plc for the year ended 31 December 2023 have been delivered to the Registrar of Companies in England and Wales in accordance with section 447 of the Companies Act 2006.The Groups auditor,PricewaterhouseCoopers LLP(PwC)has reported on those accounts.Its report was unqualified,did not include a reference to any matters to which PwC drew attention by way of emphasis without qualifying its report and did not contain a statement under section 498(2)or(3)of the Companies Act 2006.The information in this media release does not constitute the unaudited interim condensed consolidated financial statements which are contained in the Interim Report 2024.The Interim Report 2024 was approved by the Board of Directors on 31 July 2024.The unaudited interim condensed consolidated financial statements included in the Interim Report 2024 have been reviewed by the Groups auditor,PwC,in accordance with International Standard on Review Engagements(UK)2410,Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Financial Reporting Council for use in the United Kingdom.The full report of its review,which was unmodified,is included in the Interim Report 2024.11 Dealings in HSBC Holdings listed securitiesHSBC has policies and procedures that,except where permitted by statute and regulation,prohibit it undertaking specified transactions in respect of its securities listed on The Stock Exchange of Hong Kong Limited(HKEx).Except for dealings as intermediaries or as trustees by subsidiaries of HSBC Holdings,or in relation to HSBC Holdings ordinary share buy-backs,neither HSBC Holdings nor any of its subsidiaries has purchased,sold or redeemed any of its securities listed on HKEx during the half-year ended 30 June 2024.12 Earnings release and final resultsAn earnings release for the three-month period ending 30 September 2024 is expected to be issued on 29 October 2024.The results for the year to 31 December 2024 are expected to be announced on 19 February 2025.HSBC Holdings plc 2024 Interim Results2313 Corporate governance We are subject to corporate governance requirements in both the UK and Hong Kong.Throughout the six months ended 30 June 2024,we complied with the applicable provisions of the UK Corporate Governance Code,and also the requirements of the Hong Kong Corporate Governance Code.The UK Corporate Governance Code is available at www.frc.org.uk and the Hong Kong Corporate Governance Code is available at .hk.We note that the Financial Reporting Council have issued a new UK Corporate Governance Code,which will apply to financial reporting periods from 1 January 2025,and that The Stock Exchange of Hong Kong Limited is currently consulting on changes to the Hong Kong Corporate Governance Code.The Group will take the necessary actions to ensure that we continue to be compliant with both Codes as the new provisions come into force.The Board has codified obligations for transactions in Group securities in accordance with the requirements of the UK Market Abuse Regulation and the rules governing the listing of securities on the HKEx,save that the HKEx has granted waivers from strict compliance with the rules that take into account accepted practices in the UK,particularly in respect of employee share plans.All Directors have confirmed that they have complied with their obligations in respect of transacting in Group securities throughout the period.There have been no material changes to the information disclosed in the Annual Report and Accounts 2023 in respect of the remuneration of employees,remuneration policies,bonus and share option plans and training schemes.Details of the number of employees are provided on page34 of the Interim Report 2024.The Board of Directors of HSBC Holdings plc as at the date of this announcement comprises:Sir Mark Edward Tucker*,Noel Paul Quinn,Geraldine Joyce Buckingham,Rachel Duan,Georges Bahjat Elhedery,Dame Carolyn Julie Fairbairn,James Anthony Forese,Ann Frances Godbehere,Steven Craig Guggenheimer,Dr Jos Antonio Meade Kuribrea,Kalpana Jaisingh Morparia,Eileen K Murray,Brendan Robert Nelson and Swee Lian Teo.*Non-executive Group Chairman Independent non-executive Director14 Interim Report 2024The Interim Report 2024 will be made available to shareholders on or about 23 August 2024.Copies of the Interim Report 2024 and this news release may be obtained from Global Communications,HSBC Holdings plc,8 Canada Square,London E14 5HQ,United Kingdom;from Communications(Asia),The Hongkong and Shanghai Banking Corporation Limited,1 Queens Road Central,Hong Kong;or from US Communications,HSBC Bank USA,N.A.,1 West 39th Street,9th Floor,New York,NY 10018,USA.The Interim Report 2024 and this news release may also be downloaded from the HSBC website,.A Chinese translation of the Interim Report 2024 is available upon request from Computershare Hong Kong Investor Services Limited,Rooms 1712-1716,17th Floor,Hopewell Centre,183 Queens Road East,Hong Kong.The Interim Report 2024 will be available on The Stock Exchange of Hong Kong Limiteds website .hk.15 Cautionary statement regarding forward-looking statementsThis news release may contain projections,estimates,forecasts,targets,commitments,ambitions,opinions,prospects,results,returns and forward-looking statements with respect to the financial condition,results of operations,capital position,ESG related matters,strategy and business of the Group which can be identified by the use of forward-looking terminology such as may,will,should,expect,anticipate,project,estimate,seek,intend,target,plan,believe,potential or reasonably possible,or the negatives thereof or other variations thereon or comparable terminology(together,forward-looking statements),including the strategic priorities and any financial,investment and capital targets and any ESG targets,commitments and ambitions described herein.Any such forward-looking statements are not a reliable indicator of future performance,as they may involve significant stated or implied assumptions and subjective judgements which may or may not prove to be correct.There can be no assurance that any of the matters set out in forward-looking statements are attainable,will actually occur or will be realised or are complete or accurate.The assumptions and judgements may prove to be incorrect and involve known and unknown risks,uncertainties,contingencies and other important factors,many of which are outside the control of the Group.Actual achievements,results,performance or other future events or conditions may differ materially from those stated,implied and/or reflected in any forward-looking statements due to a variety of risks,uncertainties and other factors(including without limitation those which are referable to general market or economic conditions,regulatory and government policy changes,increased volatility in interest rates and inflation levels and other macroeconomic risks,geopolitical tensions such as the Russia-Ukraine war and the Israel-Hamas war and potential further escalations,specific economic developments,such as the uncertain performance of the commercial real estate sector in mainland China,or as a result of data limitations and changes in applicable methodologies in relation to ESG related matters).Any such forward-looking statements are based on the beliefs,expectations and opinions of the Group at the date the statements are made,and the Group does not assume,and hereby disclaims,any obligation or duty to update,revise or supplement them if circumstances or managements beliefs,expectations or opinions should change.For these reasons,recipients should not place reliance on,and are cautioned about relying on,any forward-looking statements.No representations or warranties,expressed or implied,are given by or on behalf of the Group as to the achievement or reasonableness of any projections,estimates,forecasts,targets,commitments,ambitions,prospects or returns contained herein.Additional detailed information concerning important factors,including but not limited to ESG related factors,that could cause actual results to differ materially from this news release is available in our Annual Report and Accounts for the fiscal year ended 31 December 2023 filed with the US Securities and Exchange Commission(the SEC)on Form 20-F on 22 February 2024,our 1Q 2024 Earnings Release furnished to the SEC on Form 6-K on 30 April 2024 and our Interim Report 2024 for the six months ended 30 June 2024 which we expect to furnish to the SEC on Form 6-K on or around 31 July 2024.24HSBC Holdings plc 2024 Interim Results16 Use of alternative performance measuresOur reported results are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board(IFRS Accounting Standards)as detailed in the interim condensed consolidated financial statements starting on page 113 of the Interim Report 2024.To measure our performance,we supplement our IFRS Accounting Standards figures with non-IFRS Accounting Standards measures,which constitute alternative performance measures under European Securities and Markets Authority guidance and non-GAAP financial measures defined in and presented in accordance with US Securities and Exchange Commission rules and regulations.These measures include those derived from our reported results that eliminate factors that distort period-on-period comparisons.The constant currency performance measure used in this report is described below.Definitions and calculations of other alternative performance measures are included in Reconciliation of alternative performance measures on pages 56 to 61 of the Interim Report 2024,which is available at .All alternative performance measures are reconciled to the closest reported performance measure.The global business segmental results are presented on a constant currency basis in accordance with IFRS 8 Operating Segments as detailed in Note 5:Segmental analysis on page 122 of the Interim Report 2024.Constant currency performanceConstant currency performance is computed by adjusting reported results for the effects of foreign currency translation differences,which distort period-on-period comparisons.We consider constant currency performance to provide useful information for investors by aligning internal and external reporting,and reflecting how management assesses period-on-period performance.Notable itemsWe separately disclose notable items,which are components of our income statement that management would consider as outside the normal course of business and generally non-recurring in nature.Certain notable items are classified as material notable items,which are a subset of notable items.Categorisation as a material notable item is dependent on the nature of each item in conjunction with the financial impact on the Groups income statement.For further information on our use of alternative performance measures,see pages 29 and 56 of the Interim Report 2024.17 Certain defined termsUnless the context requires otherwise,HSBC Holdings means HSBC Holdings plc and HSBC,the Group,we,us and our refer to HSBC Holdings together with its subsidiary undertakings.Within this document the Hong Kong Special Administrative Region of the Peoples Republic of China is referred to as Hong Kong.When used in the terms shareholders equity and total shareholders equity,shareholders means holders of HSBC Holdings ordinary shares and those preference shares and capital securities issued by HSBC Holdings classified as equity.The abbreviations$m and$bn represent millions and billions(thousands of millions)of US dollars,respectively.18 Investor Relations/Media Relations contactsFor further information contact:Investor Relations Media RelationsUK Neil Sankoff UK Gillian JamesTelephone: 44(0)20 7991 5072 Telephone: 44(0)7584 404 238Email: Email:Hong Kong Yafei Tian UK Kirsten SmartTelephone: 852 2899 8909 Telephone: 44(0)7725 733 311Email:.hk Email: Hong Kong Aman Ullah Telephone: 852 3941 1120 Email:.hkHSBC Holdings plc 2024 Interim Results25HSBCHoldingsplc8CanadaSquareLondonE145HQUnitedKingdomTelephone: 44(0)2079918888 Incorporated in England with limited liability Registered number 617987
2024-08-07
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-Q(Mark One)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June30,2024ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from _to _Commission file number 001-2979WELLS FARGO&COMPANY(Exact name of registrant as specified in its charter)DelawareNo.41-0449260(State of incorporation)(I.R.S.Employer Identification No.)420 Montgomery Street,San Francisco,California 94104(Address of principal executive offices)(Zip code)Registrants telephone number,including area code:1-866-249-3302Securities registered pursuant to Section 12(b)of the Act:Title of Each ClassTrading SymbolName of Each Exchangeon Which RegisteredCommon Stock,par value$1-2/3WFCNew York StockExchange(NYSE)7.5%Non-Cumulative Perpetual Convertible Class A Preferred Stock,Series LWFC.PRLNYSEDepositary Shares,each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock,Series YWFC.PRYNYSEDepositary Shares,each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock,Series ZWFC.PRZNYSEDepositary Shares,each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock,Series AAWFC.PRANYSEDepositary Shares,each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock,Series CCWFC.PRCNYSEDepositary Shares,each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock,Series DDWFC.PRDNYSEGuarantee of Medium-Term Notes,Series A,due October 30,2028 of Wells Fargo Finance LLCWFC/28ANYSEIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule12b-2 of the Exchange Act).Yes No Indicate the number of shares outstanding of each of the issuers classes of common stock,as of the latest practicable date.Shares OutstandingJuly 23,2024Common stock,$1-2/3 par value3,403,770,246FORM 10-QCROSS-REFERENCE INDEXPART IFinancial InformationItem 1.Financial StatementsPageConsolidated Statement of Income58Consolidated Statement of Comprehensive Income59Consolidated Balance Sheet60Consolidated Statement of Changes in Equity61Consolidated Statement of Cash Flows63Notes to Financial Statements 1 Summary of Significant Accounting Policies64 2 Trading Activities66 3 Available-for-Sale and Held-to-Maturity Debt Securities67 4 Equity Securities73 5 Loans and Related Allowance for Credit Losses75 6 Mortgage Banking Activities89 7 Intangible Assets and Other Assets91 8 Leasing Activity92 9 Preferred Stock93 10 Legal Actions94 11 Derivatives96 12 Fair Values of Assets and Liabilities103 13 Securitizations and Variable Interest Entities111 14 Guarantees and Other Commitments117 15 Securities and Other Collateralized Financing Activities119 16 Pledged Assets and Collateral121 17 Operating Segments122 18 Revenue and Expenses125 19 Employee Benefits128 20 Earnings and Dividends Per Common Share129 21 Other Comprehensive Income130 22 Regulatory Capital Requirements and Other Restrictions132Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations(Financial Review)Summary Financial Data2Overview3Earnings Performance6Balance Sheet Analysis25Off-Balance Sheet Arrangements27Risk Management28Capital Management45Regulatory Matters51Critical Accounting Policies53Current Accounting Developments53Forward-Looking Statements54Risk Factors56Glossary of Acronyms134Item 3.Quantitative and Qualitative Disclosures About Market Risk39Item 4.Controls and Procedures57PART IIOther InformationItem 1.Legal Proceedings135Item 1A.Risk Factors135Item 2.Unregistered Sales of Equity Securities and Use of Proceeds135Item 5.Other Information135Item 6.Exhibits136Signature137Wells Fargo&Company1FINANCIAL REVIEWSummary Financial DataQuarter endedJun 30,2024%Change fromSix months ended($in millions,except ratios and per share amounts)Jun 30,2024Mar 31,2024Jun 30,2023Mar 31,2024Jun 30,2023Jun 30,2024Jun 30,2023%ChangeSelected Income Statement DataTotal revenue$20,689 20,863 20,533 (1)%1$41,552 41,262 1%Noninterest expense 13,293 14,338 12,987 (7)2 27,631 26,663 4 Pre-tax pre-provision profit(PTPP)(1)7,396 6,525 7,546 13 (2)13,921 14,599 (5)Provision for credit losses(2)1,236 938 1,713 32 (28)2,174 2,920 (26)Wells Fargo net income 4,910 4,619 4,938 6 (1)9,529 9,929 (4)Wells Fargo net income applicable to common stock 4,640 4,313 4,659 8 8,953 9,372 (4)Common Share DataDiluted earnings per common share 1.33 1.20 1.25 11 6 2.53 2.48 2 Dividends declared per common share 0.35 0.35 0.30 17 0.70 0.60 17 Common shares outstanding 3,402.7 3,501.7 3,667.7 (3)(7)Average common shares outstanding 3,448.3 3,560.1 3,699.9 (3)(7)3,504.2 3,742.6 (6)Diluted average common shares outstanding 3,486.2 3,600.1 3,724.9 (3)(6)3,543.2 3,772.4 (6)Book value per common share(3)$47.01 46.40 43.87 1 7 Tangible book value per common share(3)(4)39.57 39.17 36.53 1 8 Selected Equity Data(period-end)Total equity 178,148 182,674 181,952 (2)(2)Common stockholders equity 159,963 162,481 160,916 (2)(1)Tangible common equity(4)134,660 137,163 133,990 (2)1 Performance RatiosReturn on average assets(ROA)(5)1.03%0.97 1.05 1.00%1.07 Return on average equity(ROE)(6)11.5 10.5 11.4 11.0 11.6 Return on average tangible common equity(ROTCE)(4)13.7 12.3 13.7 13.0 13.9 Efficiency ratio(7)64 69 63 66 65 Net interest margin on a taxable-equivalent basis 2.75 2.81 3.09 2.78 3.14 Selected Balance Sheet Data(average)Loans$916,977 928,075 945,906 (1)(3)$922,526 947,271 (3)Assets 1,914,647 1,916,974 1,878,253 2 1,915,810 1,871,005 2 Deposits 1,346,478 1,341,628 1,347,449 1,344,052 1,352,046 (1)Selected Balance Sheet Data(period-end)Debt securities 520,254 506,280 503,468 3 3 Loans 917,907 922,784 947,960 (1)(3)Allowance for credit losses for loans 14,789 14,862 14,786 Equity securities 60,763 59,556 67,471 2 (10)Assets 1,940,073 1,959,153 1,876,320 (1)3 Deposits 1,365,894 1,383,147 1,344,584 (1)2 Headcount(#)(period-end)222,544 224,824 233,834 (1)(5)Capital and Other MetricsRisk-based capital ratios and components(8):Standardized Approach:Common Equity Tier 1(CET1)11.01.19 10.73 Tier 1 capital 12.34 12.68 12.25 Total capital 15.02 15.40 15.00 Risk-weighted assets(RWAs)(in billions)$1,219.5 1,221.6 1,250.7 (2)Advanced Approach:Common Equity Tier 1(CET1)12.28.43 12.00 Tier 1 capital 13.77 14.09 13.70 Total capital 15.82 16.17 15.82 Risk-weighted assets(RWAs)(in billions)$1,093.0 1,099.6 1,118.4 (1)(2)Tier 1 leverage ratio 7.98%8.20 8.28 Supplementary Leverage Ratio(SLR)6.67 6.85 6.91 Total Loss Absorbing Capacity(TLAC)Ratio(9)24.78 25.10 23.12 Liquidity Coverage Ratio(LCR)(10)124 126 123(1)Pre-tax pre-provision profit(PTPP)is total revenue less noninterest expense.Management believes that PTPP is a useful financial measure because it enables investors and others to assess the Companys ability to generate capital to cover credit losses through a credit cycle.(2)Includes provision for credit losses for loans,debt securities,and other financial assets.(3)Book value per common share is common stockholders equity divided by common shares outstanding.Tangible book value per common share is tangible common equity divided by common shares outstanding.(4)Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity,noncontrolling interests,goodwill,certain identifiable intangible assets(other than mortgage servicing rights)and goodwill and other intangibles on investments in consolidated portfolio companies,net of applicable deferred taxes.The methodology of determining tangible common equity may differ among companies.Management believes that return on average tangible common equity and tangible book value per common share,which utilize tangible common equity,are useful financial measures because they enable management,investors,and others to assess the Companys use of equity.For additional information,including a corresponding reconciliation to generally accepted accounting principles(GAAP)financial measures,see the“Capital Management Tangible Common Equity”section in this Report.(5)Represents Wells Fargo net income divided by average assets.(6)Represents Wells Fargo net income applicable to common stock divided by average common stockholders equity.(7)The efficiency ratio is noninterest expense divided by total revenue(net interest income and noninterest income).(8)For additional information,see the“Capital Management”section and Note 22(Regulatory Capital Requirements and Other Restrictions)to Financial Statements in this Report.(9)Represents TLAC divided by RWAs,which is our binding TLAC ratio,determined by using the greater of RWAs under the Standardized and Advanced Approaches.(10)Represents average high-quality liquid assets divided by average projected net cash outflows,as each is defined under the LCR rule.2Wells Fargo&CompanyThis Quarterly Report,including the Financial Review and the Financial Statements and related Notes,contains forward-looking statements,which may include forecasts of our financial results and condition,expectations for our operations and business,and our assumptions for those forecasts and expectations.Do not unduly rely on forward-looking statements.Actual results may differ materially from our forward-looking statements due to several factors.Factors that could cause our actual results to differ materially from our forward-looking statements are described in this Report,including in the“Forward-Looking Statements”section,and in the“Risk Factors”and“Regulation and Supervision”sections of our Annual Report on Form 10-K for the year ended December 31,2023(2023 Form 10-K).When we refer to“WellsFargo,”“the Company,”“we,”“our,”or“us”in this Report,we mean WellsFargo&Company and Subsidiaries(consolidated).When we refer to the“Parent,”we mean WellsFargo&Company.See the“Glossary of Acronyms”for definitions of terms used throughout this Report.Financial ReviewOverviewWellsFargo&Company is a leading financial services company that has approximately$1.9 trillion in assets.We provide a diversified set of banking,investment and mortgage products and services,as well as consumer and commercial finance,through our four reportable operating segments:Consumer Banking and Lending,Commercial Banking,Corporate and Investment Banking,and Wealth and Investment Management.Wells Fargo ranked No.34 on Fortunes2024 rankings of Americas largest corporations.We ranked fourth in assets and third in the market value of our common stock among all U.S.banks at June30,2024.Wells Fargos top priority remains building a risk and control infrastructure appropriate for its size and complexity.The Company is subject to a number of consent orders and other regulatory actions,some of which are described below.These regulatory actions may require the Company,among other things,to undertake certain changes to its business,operations,products and services,and risk management practices.Addressing these regulatory actions is expected to take multiple years,and we are likely to continue to experience issues or delays along the way in satisfying their requirements.We are also likely to continue to identify more issues as we implement our risk and control infrastructure,which may result in additional regulatory actions.Regulators have indicated the potential for escalating consequences for banks that do not timely resolve open issues or have repeat issues.Furthermore,issues or delays with one regulatory action could affect our progress on others.Failure to satisfy the requirements of a regulatory action on a timely basis could result in additional fines,penalties,business restrictions,limitations on subsidiary capital distributions,increased capital or liquidity requirements,enforcement actions,and other adverse consequences,which could be significant.While we still have significant work to do and have not yet satisfied certain aspects of these regulatory actions,the Company is committed to devoting the resources necessary to operate with strong business practices and controls,maintain the highest level of integrity,and have an appropriate culture in place.Federal Reserve Board Consent Order Regarding Governance Oversight and Compliance and Operational Risk ManagementOn February 2,2018,the Company entered into a consent order with the Board of Governors of the Federal Reserve System(FRB).As required by the consent order,the Companys Board of Directors(Board)submitted to the FRB a plan to further enhance the Boards governance and oversight of the Company,and the Company submitted to the FRB a plan to further improve the Companys compliance and operational risk management program.The Company continues to engage with the FRB as the Company works to address the consent order provisions.The consent order also requires the Company,following the FRBs acceptance and approval of the plans and the Companys adoption and implementation of the plans,to complete an initial third-party review of the enhancements and improvements provided for in the plans.Until this third-party review is complete and the plans are adopted and implemented to the satisfaction of the FRB,the Companys total consolidated assets as defined under the consent order will be limited to the level as of December 31,2017.Compliance with this asset cap is measured on a two-quarter daily average basis to allow for management of temporary fluctuations.After removal of the asset cap,a second third-party review must also be conducted to assess the efficacy and sustainability of the enhancements and improvements.Consent Orders with the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency Regarding Compliance Risk Management Program,Automobile Collateral Protection Insurance Policies,and Mortgage Interest Rate Lock ExtensionsOn April 20,2018,the Company entered into consent orders with the Consumer Financial Protection Bureau(CFPB)and the Office of the Comptroller of the Currency(OCC)to pay an aggregate of$1 billion in civil money penalties to resolve matters regarding the Companys compliance risk management program and past practices involving certain automobile collateral protection insurance policies and certain mortgage interest rate lock extensions.As required by the consent orders,the Company submitted to the CFPB and OCC an enterprise-wide compliance risk management plan and a plan to enhance the Companys internal audit program with respect to federal consumer financial law and the terms of the consent orders.In addition,as required by the consent orders,the Company submitted for non-objection plans to remediate customers affected by the automobile collateral protection insurance and mortgage interest rate lock matters,as well as a plan for the management of remediation activities conducted by the Company.The Company continues to work to address the provisions of the consent orders.On September 9,2021,the OCC assessed a$250million civil money penalty against the Company related to insufficient progress in addressing requirements under the OCCs April 2018 consent order and loss mitigation activities in the Companys Home Lending business.On December 20,2022,the CFPB modified its consent order to clarify how it would terminate.Wells Fargo&Company3Consent Order with the OCC Regarding Loss Mitigation ActivitiesOn September 9,2021,the Company entered into a consent order with the OCC requiring the Company to improve the execution,risk management,and oversight of loss mitigation activities in its Home Lending business.In addition,the consent order restricts the Company from acquiring certain third-party residential mortgage servicing and limits transfers of certain mortgage loans requiring customer remediation out of the Companys mortgage servicing portfolio until remediation is provided.Consent Order with the CFPB Regarding Automobile Lending,Consumer Deposit Accounts,and Mortgage LendingOn December 20,2022,the Company entered into a consent order with the CFPB requiring the Company to provide customer remediation for multiple matters related to automobile lending,consumer deposit accounts,and mortgage lending;maintain practices designed to ensure auto lending customers receive refunds for the unused portion of certain guaranteed automobile protection agreements;comply with certain business practice requirements related to consumer deposit accounts;and pay a$1.7 billion civil penalty to the CFPB.The required actions related to many of these matters were already substantially complete at the time we entered into the consent order,and the consent order lays out a path to termination after the Company completes the remainder of the required actions.Customer Remediation ActivitiesOur work to build a better company has included an effort to identify areas or instances where customers may have experienced financial harm,provide remediation as appropriate,and implement additional operational and control procedures.We are working with our regulatory agencies in this effort.We have accrued for the probable and estimable costs related to our customer remediation activities,which amounts may change based on additional facts and information,as well as ongoing reviews and communications with our regulators.We had$678 million and$819 million of accrued liabilities for customer remediation activities as of June30,2024,and December31,2023,respectively.As our ongoing reviews continue and as we continue to strengthen our risk and control infrastructure,we have identified and may in the future identify additional items or areas of potential concern.To the extent issues are identified,we will continue to assess any customer harm and provide remediation as appropriate.Recent DevelopmentsCapital Matters On June 28,2024,the Company announced that it had completed the 2024 Comprehensive Capital Analysis and Review(CCAR)stress test process.The Company expects its stress capital buffer(SCB)to be 3.80%for the period October1,2024,through September 30,2025.The FRB has indicated that it will publish the Companys final SCB by August 31,2024.Our SCB for the period October1,2023,through September 30,2024,is 2.90%.On July 23,2024,the Board approved an increase to the Companys third quarter 2024 common stock dividend to$0.40 per share.In July 2024,we issued$2.0 billion of our Preferred Stock,Series FF.For additional information about capital planning,see the“Capital Management Capital Planning and Stress Testing”section in this Report.Federal Deposit Insurance Corporation Special AssessmentIn November 2023,the Federal Deposit Insurance Corporation(FDIC)finalized a rule to recover losses to the FDIC deposit insurance fund as a result of bank failures in the first half of 2023.Under the rule,the FDIC will collect a special assessment based on an insured depository institutions estimated amount of uninsured deposits.Upon the FDICs finalization of the rule,we expensed an estimated amount of our special assessment of$1.9billion(pre-tax)in fourth quarter 2023.During 2024,the FDIC provided updates on losses to the deposit insurance fund,and we expensed an additional$52million and$336million(pre-tax)in the second quarter and first half of 2024,respectively,for the estimated amount of the special assessment.We expect the ultimate amount of the special assessment may continue to change as the FDIC determines the actual net losses to the deposit insurance fund.Overdraft Fees ProposalOn January 17,2024,the CFPB issued a proposed rule that would limit overdraft fees charged by certain banks.We expect a significant reduction to our overdraft fees,which are included in deposit-related fees,if the rule is adopted as currently proposed.Debit Card Interchange Fees ProposalOn October 25,2023,the FRB issued a proposed rule that would reduce the amount of debit card interchange fees received by debit card issuers.In addition,the proposed rule would allow for an update to the debit card interchange fee cap every other year based on an analysis of certain costs incurred by debit card issuers.We expect a significant reduction to our debit card interchange fees,which are included in card fees,if the rule is adopted as currently proposed.Overview(continued)4Wells Fargo&CompanyFinancial PerformanceConsolidated Financial HighlightsQuarter ended June 30,Six months ended June 30,($in millions)20242023$Change%Change20242023$Change%ChangeSelected income statement dataNet interest income$11,923 13,163 (1,240)(9)%$24,150 26,499 (2,349)(9)%Noninterest income 8,766 7,370 1,396 19 17,402 14,763 2,639 18 Total revenue 20,689 20,533 156 1 41,552 41,262 290 1 Net charge-offs 1,303 764 539 71 2,460 1,328 1,132 85 Change in the allowance for credit losses(67)949 (1,016)NM(286)1,592 (1,878)NMProvision for credit losses(1)1,236 1,713 (477)(28)2,174 2,920 (746)(26)Noninterest expense 13,293 12,987 306 2 27,631 26,663 968 4 Income tax expense 1,251 930 321 35 2,215 1,896 319 17 Wells Fargo net income 4,910 4,938 (28)(1)9,529 9,929 (400)(4)Wells Fargo net income applicable to common stock 4,640 4,659 (19)8,953 9,372 (419)(4)NM Not meaningful(1)Includes provision for credit losses for loans,debt securities,and other financial assets.In second quarter 2024,we generated$4.9billion of net income and diluted earnings per common share(EPS)of$1.33,compared with$4.9billion of net income and diluted EPS of$1.25 in the same period a year ago.In the first half of 2024,we generated$9.5 billion of net income and diluted EPS of$2.53,compared with$9.9billion of net income and diluted EPS of$2.48 in the same period a year ago.Financial performance for the second quarter and first half of 2024,compared with the same periods a year ago,included the following:total revenue increased due to higher noninterest income,partially offset by lower net interest income;provision for credit losses reflected decreases for auto loans,commercial real estate loans,and residential mortgage loans,partially offset by increases for credit card loans;noninterest expense increased due to higher operating losses,and technology,telecommunications and equipment expense,partially offset by lower professional and outside services expense;average loans decreased driven by a decline in loans in both our commercial and consumer loan portfolios;andaverage deposits decreased driven by reductions in Consumer Banking and Lending and Wealth and Investment Management,partially offset by growth in Corporate and Investment Banking and Corporate.Capital and LiquidityWe maintained a strong capital position in the first half of 2024,with total equity of$178.1billion at June30,2024,compared with$187.4billion at December31,2023.In addition,capital and liquidity at June30,2024,included the following:our Common Equity Tier 1(CET1)ratio was 11.01%under the Standardized Approach(our binding ratio),which continued to exceed the regulatory minimum and buffers of 8.90%;our total loss absorbing capacity(TLAC)as a percentage of total risk-weighted assets was 24.78%,compared with the regulatory minimum of 21.50%;andour liquidity coverage ratio(LCR)was 124%,which continued to exceed the regulatory minimum of 100%.See the“Capital Management”and the“Risk Management Asset/Liability Management Liquidity Risk and Funding”sections in this Report for additional information regarding our capital and liquidity,including the calculation of our regulatory capital and liquidity amounts.Credit QualityCredit quality reflected the following:The allowance for credit losses(ACL)for loans of$14.8billion at June30,2024,decreased$299 million from December31,2023.Our provision for credit losses for loans was$2.2 billion in the first half of 2024,compared with$3.0 billion in the same period a year ago.The ACL for loans and the provision for credit losses for loans reflected decreases for auto loans,commercial real estate loans,and residential mortgage loans,partially offset by increases for credit card loans.The allowance coverage for total loans was 1.61%at both June30,2024,and December31,2023.Commercial portfolio net loan charge-offs were$468million,or 35basis points of average commercial loans,in second quarter 2024,compared with net loan charge-offs of$200million,or 15basis points,in the same period a year ago,due to higher losses in all commercial portfolios,primarily in our commercial real estate portfolio driven by the office property type.Consumer portfolio net loan charge-offs were$833million,or 88basis points of average consumer loans,in second quarter 2024,compared with net loan charge-offs of$564million,or 58basis points,in the same period a year ago,due to higher losses in our credit card portfolio.Nonperforming assets(NPAs)of$8.7billion at June30,2024,increased$207million,or 2%,from December31,2023,driven by an increase in commercial real estate nonaccrual loans,predominantly within the office property type.NPAs represented 0.94%of total loans at June30,2024.Criticized loans in the commercial portfolio were$35.5billion at June30,2024,compared with$33.0billion at December31,2023,predominantly driven by increases in criticized commercial and industrial loans and criticized commercial real estate loans.Wells Fargo&Company5Earnings PerformanceWells Fargo net income for second quarter 2024 was$4.9billion($1.33 diluted EPS),compared with$4.9billion($1.25diluted EPS)in the same period a year ago.Net income was stable in second quarter 2024,compared with the same period a year ago,predominantly due to a$1.2billion decrease in net interest income,a$321million increase in income tax expense,and a$306million increase in noninterest expense,offset by a$1.4billion increase in noninterest income and a$477million decrease in provision for credit losses.Net income for the first half of 2024 was$9.5billion($2.53diluted EPS),compared with$9.9 billion($2.48diluted EPS)in the same period a year ago.Net income decreased in the first half of 2024,compared with the same period a year ago,predominantly due to a$2.3 billion decrease in net interest income and a$1.0 billion increase in noninterest expense,partially offset by a$2.6 billion increase in noninterest income.Net Interest IncomeNet interest income and net interest margin decreased in both the second quarter and first half of 2024,compared with the same periods a year ago,driven by the impact of higher interest rates on interest-bearing deposits and long-term debt,as well as lower loan balances,partially offset by higher interest rates on interest-earning assets.Late in second quarter 2024,we increased pricing on sweep deposits in advisory brokerage accounts,which we expect will lower future net interest income.Table 1 presents the individual components of net interest income and net interest margin.Net interest income and net interest margin are presented on a taxable-equivalent basis in Table 1 to consistently reflect income from taxable and tax-exempt loans and debt and equity securities.The calculation for taxable-equivalent basis was based on a federal statutory tax rate of 21%.For additional information about net interest income and net interest margin,see the“Earnings Performance Net Interest Income”section in our 2023 Form10-K.6Wells Fargo&CompanyTable 1:Average Balances,Yields and Rates Paid(Taxable-Equivalent Basis)(1)Quarter ended June 30,20242023($in millions)AveragebalanceInterestincome/expenseAverage interestratesAveragebalanceInterestincome/expenseAverage interestratesAssetsInterest-earning deposits with banks$196,436 2,467 5.05%$129,236 1,450 4.50deral funds sold and securities purchased under resale agreements 71,769 942 5.27 69,505 820 4.73 Debt securities:Trading debt securities 120,590 1,247 4.14 102,605 898 3.50 Available-for-sale debt securities 150,024 1,577 4.21 149,320 1,388 3.72 Held-to-maturity debt securities 258,631 1,706 2.64 279,093 1,829 2.62 Total debt securities 529,245 4,530 3.43 531,018 4,115 3.10 Loans held for sale(2)7,091 133 7.53 6,031 94 6.22 Loans:Commercial and industrial U.S.307,034 5,501 7.21 307,858 5,156 6.72 Commercial and industrial Non-U.S.64,480 1,167 7.28 75,503 1,249 6.64 Commercial real estate mortgage 123,731 2,058 6.69 130,222 2,076 6.39 Commercial real estate construction 23,019 469 8.21 24,438 468 7.68 Lease financing 16,519 226 5.47 15,010 178 4.76 Total commercial loans 534,783 9,421 7.08 553,031 9,127 6.62 Residential mortgage first lien 245,876 2,143 3.49 253,797 2,109 3.32 Residential mortgage junior lien 10,313 191 7.45 12,331 210 6.83 Credit card 52,642 1,668 12.75 46,762 1,511 12.96 Auto 45,164 571 5.09 51,880 603 4.67 Other consumer 28,199 601 8.56 28,105 582 8.29 Total consumer loans 382,194 5,174 5.43 392,875 5,015 5.11 Total loans(2)916,977 14,595 6.40 945,906 14,142 5.99 Equity securities 26,332 195 2.99 27,891 194 2.79 Other 8,128 110 5.42 10,118 120 4.76 Total interest-earning assets$1,755,978 22,972 5.25%$1,719,705 20,935 4.88sh and due from banks 28,398 27,344 Goodwill 25,172 25,175 Other 105,099 106,029 Total noninterest-earning assets$158,669 158,548 Total assets$1,914,647 22,972 1,878,253 20,935 LiabilitiesDeposits:Demand deposits$450,930 2,448 2.18%$415,886 1,667 1.61%Savings deposits 353,715 1,123 1.28 386,831 734 0.76 Time deposits 183,251 2,396 5.26 115,025 1,260 4.40 Deposits in non-U.S.offices 18,910 182 3.86 19,144 144 3.02 Total interest-bearing deposits 1,006,806 6,149 2.46 936,886 3,805 1.63 Short-term borrowings:Federal funds purchased and securities sold under agreements to repurchase 91,572 1,227 5.39 66,568 811 4.89 Other short-term borrowings 15,113 149 3.98 16,491 150 3.65 Total short-term borrowings 106,685 1,376 5.19 83,059 961 4.64 Long-term debt 182,201 3,164 6.95 170,843 2,693 6.31 Other liabilities 34,613 271 3.13 34,496 208 2.41 Total interest-bearing liabilities$1,330,305 10,960 3.31%$1,225,284 7,667 2.51%Noninterest-bearing deposits 339,672 410,563 Other noninterest-bearing liabilities 63,118 57,963 Total noninterest-bearing liabilities$402,790 468,526 Total liabilities$1,733,095 10,960 1,693,810 7,667 Total equity 181,552 184,443 Total liabilities and equity$1,914,647 10,960 1,878,253 7,667 Interest rate spread on a taxable-equivalent basis(3)1.94%2.37%Net interest income and net interest margin on a taxable-equivalent basis(3)$12,012 2.75%$13,268 3.09%(continued on following page)Wells Fargo&Company7Six months ended June 30,20242023($in millions)AveragebalanceInterestincome/expenseAverage interest ratesAveragebalanceInterestincome/expenseAverage interest ratesAssetsInterest-earning deposits with banks$202,002 5,040 5.02%$122,087 2,617 4.32deral funds sold and securities purchased under resale agreements 70,744 1,856 5.28 69,071 1,516 4.43 Debt securities:Trading debt securities 116,380 2,391 4.11 99,522 1,699 3.42 Available-for-sale debt securities 145,005 2,973 4.11 147,616 2,670 3.63 Held-to-maturity debt securities 261,693 3,489 2.67 279,522 3,609 2.59 Total debt securities 523,078 8,853 3.39 526,660 7,978 3.04 Loans held for sale(2)6,463 247 7.66 6,320 191 6.05 Loans:Commercial and industrial U.S.306,097 10,938 7.18 307,519 9,928 6.51 Commercial and industrial Non-U.S.67,457 2,444 7.28 75,800 2,383 6.34 Commercial real estate mortgage 125,013 4,161 6.69 130,532 4,025 6.22 Commercial real estate construction 23,404 957 8.23 24,333 906 7.51 Lease financing 16,440 444 5.40 14,922 350 4.69 Total commercial loans 538,411 18,944 7.07 553,106 17,592 6.41 Residential mortgage first lien 247,067 4,287 3.47 254,404 4,197 3.30 Residential mortgage junior lien 10,553 389 7.41 12,647 420 6.68 Credit card 52,175 3,357 12.94 46,304 2,951 12.85 Auto 46,139 1,155 5.04 52,470 1,200 4.61 Other consumer 28,181 1,204 8.59 28,340 1,127 8.02 Total consumer loans 384,115 10,392 5.43 394,165 9,895 5.04 Total loans(2)922,526 29,336 6.39 947,271 27,487 5.84 Equity securities 23,841 345 2.91 28,269 364 2.59 Other 8,534 224 5.27 10,578 245 4.67 Total interest-earning assets$1,757,188 45,901 5.25%$1,710,256 40,398 4.75sh and due from banks 27,957 27,743 Goodwill 25,173 25,174 Other 105,492 107,832 Total noninterest-earning assets$158,622 160,749 Total assets$1,915,810 45,901 1,871,005 40,398 LiabilitiesDeposits:Demand deposits$445,053 4,702 2.12%$418,347 3,046 1.47%Savings deposits 352,261 2,030 1.16 394,515 1,281 0.66 Time deposits 185,004 4,849 5.27 97,045 1,985 4.12 Deposits in non-U.S.offices 19,522 379 3.90 18,695 254 2.74 Total interest-bearing deposits 1,001,840 11,960 2.40 928,602 6,566 1.43 Short-term borrowings:Federal funds purchased and securities sold under agreements to repurchase 85,244 2,281 5.38 52,977 1,227 4.67 Other short-term borrowings 15,592 313 4.04 17,868 304 3.43 Total short-term borrowings 100,836 2,594 5.17 70,845 1,531 4.36 Long-term debt 189,659 6,513 6.87 171,700 5,204 6.07 Other liabilities 33,717 506 3.01 33,964 386 2.29 Total interest-bearing liabilities$1,326,052 21,573 3.27%$1,205,111 13,687 2.28%Noninterest-bearing deposits 342,212 423,444 Other noninterest-bearing liabilities 63,435 58,079 Total noninterest-bearing liabilities$405,647 481,523 Total liabilities$1,731,699 21,573 1,686,634 13,687 Total equity 184,111 184,371 Total liabilities and equity$1,915,810 21,573 1,871,005 13,687 Interest rate spread on a taxable-equivalent basis(3)1.98%2.47%Net interest margin and net interest income on a taxable-equivalent basis(3)$24,328 2.78%$26,711 3.14%(1)The average balance amounts represent amortized costs,except for certain held-to-maturity(HTM)debt securities,which exclude unamortized basis adjustments related to the transfer of those securities from available-for-sale(AFS)debt securities.The average interest rates are based on interest income or expense amounts for the period and are annualized.Interest rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.(2)Nonaccrual loans and any related income are included in their respective loan categories.(3)Includes taxable-equivalent adjustments of$89 million and$105 million for the quarters ended June 30,2024 and 2023,respectively,and$178 million and$212 million for the first half of 2024 and 2023,respectively,predominantly related to tax-exempt income on certain loans and securities.Earnings Performance(continued)8Wells Fargo&CompanyNoninterest IncomeTable 2:Noninterest Income Quarter ended June 30,Six months ended June 30,($in millions)20242023$Change%Change20242023$Change%ChangeDeposit-related fees$1,249 1,165 84 7%$2,479 2,313 166 7%Lending-related fees 369 352 17 5 736 708 28 4 Investment advisory and other asset-based fees 2,415 2,163 252 12 4,746 4,277 469 11 Commissions and brokerage services fees 614 570 44 8 1,240 1,189 51 4 Investment banking fees 641 376 265 70 1,268 702 566 81 Card fees 1,101 1,098 3 2,162 2,131 31 1 Net servicing income 127 100 27 27 252 212 40 19 Net gains on mortgage loan originations/sales 116 102 14 14 221 222 (1)Mortgage banking 243 202 41 20 473 434 39 9 Net gains from trading activities 1,442 1,122 320 29 2,896 2,464 432 18 Net gains(losses)from debt securities 4 (4)(100)(25)4 (29)NMNet gains(losses)from equity securities 80 (94)174 185 98 (451)549 122 Lease income 292 307 (15)(5)713 654 59 9 Other 320 105 215 205 616 338 278 82 Total$8,766 7,370 1,396 19$17,402 14,763 2,639 18 NM Not meaningfulSecond quarter 2024 vs.second quarter 2023 Deposit-related fees increased reflecting higher treasury management fees on commercial accounts driven by increased transaction service volumes and repricing.Investment advisory and other asset-based fees increased driven by higher asset-based fees reflecting higher market valuations.Fees from the majority of Wealth and Investment Management(WIM)advisory assets are based on a percentage of the market value of the assets at the beginning of the quarter.For additional information on certain client investment assets,see the“Earnings Performance Operating Segment Results Wealth and Investment Management WIM Advisory Assets”section in this Report.Investment banking fees increased due to increased activity across all products.Net gains from trading activities increased driven by higher revenue in equities and structured products.Net gains(losses)from equity securities increased driven by higher unrealized gains on nonmarketable equity securities from our venture capital investments.Other income increased driven by impacts related to the expanded use of the proportional amortization method of accounting for renewable energy tax credit investments as a result of our adoption in first quarter 2024 of Accounting Standards Update(ASU)2023-02 Investments Equity Method and Joint Ventures(Topic 323):Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.For additional information on our adoption of ASU 2023-02,see Note 1(Summary of Significant Accounting Policies)to Financial Statements in this Report.First half of 2024 vs.first half of 2023 Deposit-related fees increased reflecting higher treasury management fees on commercial accounts driven by increased transaction service volumes and repricing.Investment advisory and other asset-based fees increased driven by higher asset-based fees reflecting higher market valuations.Investment banking fees increased due to increased activity across all products.Net gains from trading activities increased driven by higher revenue in structured products,equities,and foreign exchange,partially offset by lower revenue in rates.Net gains(losses)from equity securities increased driven by:lower impairment of equity securities from our venture capital investments;andhigher unrealized gains on nonmarketable equity securities from our venture capital investments.Lease income increased driven by a gain associated with the resolution of a legacy lease transaction.Other income increased driven by impacts related to the expanded use of the proportional amortization method of accounting for renewable energy tax credit investments as a result of our adoption of ASU 2023-02 in first quarter 2024.Wells Fargo&Company9Noninterest ExpenseTable 3:Noninterest Expense Quarter ended June 30,Six months ended June 30,($in millions)20242023$Change%Change20242023$Change%ChangePersonnel$8,575 8,606 (31)%$18,067 18,021 46%Technology,telecommunications and equipment 1,106 947 159 17 2,159 1,869 290 16 Occupancy 763 707 56 8 1,477 1,420 57 4 Operating losses(1)493 232 261 113 1,126 499 627 126 Professional and outside services 1,139 1,304 (165)(13)2,240 2,533 (293)(12)Leases(2)159 180 (21)(12)323 357 (34)(10)Advertising and promotion 224 184 40 22 421 338 83 25 Other 834 827 7 1 1,818 1,626 192 12 Total$13,293 12,987 306 2$27,631 26,663 968 4(1)Includes expenses for customer remediation activities of$184 million and$106 million for second quarter 2024 and 2023,respectively,and$612million and$163million for the first half of 2024 and 2023,respectively.(2)Represents expenses for assets we lease to customers.Second quarter 2024 vs.second quarter 2023 Personnel expense decreased due to the impact of efficiency initiatives,partially offset by higher revenue-related compensation expense driven by higher fees in our Wealth and Investment Management business.Technology,telecommunications and equipment expense increased due to higher expense for the amortization of internally developed software.Operating losses increased driven by higher expense for legal actions and higher expense for customer remediation activities related to the further refinement of the remediation costs for historical mortgage lending and other consumer products matters.For additional information on customer remediation activities,see the“Overview”section above.As previously disclosed,we have outstanding legal actions and customer remediation activities that could impact operating losses in the coming quarters.For additional information on operating losses,see Note 18(Revenue and Expenses)to Financial Statements in this Report.Professional and outside services expense decreased driven by efficiency initiatives to reduce our spending on consultants and contractors.First half of 2024 vs.first half of 2023 Personnel expense increased due to higher revenue-related compensation expense driven by higher fees in our Wealth and Investment Management business,partially offset by the impact of efficiency initiatives.Technology,telecommunications and equipment expense increased due to higher expense for the amortization of internally developed software.Operating losses increased driven by higher expense for legal actions and higher expense for customer remediation activities related to the further refinement of the remediation costs for historical mortgage lending and other consumer products matters.As previously disclosed,we have outstanding legal actions and customer remediation activities that could impact operating losses in the coming quarters.Professional and outside services expense decreased driven by efficiency initiatives to reduce our spending on consultants and contractors.Advertising and promotion expense increased due to higher marketing volume.Other expense increased reflecting an additional expense of$336 million for the estimated FDIC special assessment.For additional information on the FDICs special assessment,see Note 18(Revenue and Expenses)to Financial Statements in this Report.Earnings Performance(continued)10Wells Fargo&CompanyIncome Tax Expense Table 4:Income Tax Expense Quarter ended June 30,Six months ended June 30,($in millions)20242023$Change%Change20242023$Change%ChangeIncome before income tax expense$6,160 5,833 327 6%$11,747 11,679 68 1%Income tax expense 1,251 930 321 35 2,215 1,896 319 17 Effective income tax rate(1)20.3.8 18.9.0(1)Represents(i)Income tax expense(benefit)divided by(ii)Income(loss)before income tax expense(benefit)less Net income(loss)from noncontrolling interests.The increase in the effective income tax rate for the second quarter and first half of 2024,compared with the same periods a year ago,was driven by the impacts related to the expanded use of the proportional amortization method of accounting for renewable energy tax credit investments.For additional information on our adoption in first quarter 2024 of Accounting Standards Update(ASU)2023-02 Investments Equity Method and Joint Ventures(Topic 323):Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method,see Note 1(Summary of Significant Accounting Policies)to Financial Statements in this Report.For additional information on income taxes,see Note 23(Income Taxes)to Financial Statements in our 2023 Form 10-K.Wells Fargo&Company11Operating Segment Results Our management reporting is organized into four reportable operating segments:Consumer Banking and Lending;Commercial Banking;Corporate and Investment Banking;and Wealth and Investment Management.All other business activities that are not included in the reportable operating segments have been included in Corporate.For additional information,see Table 5 below.We define our reportable operating segments by type of product and customer segment,and their results are based on our management reporting process.The management reporting process measures the performance of the reportable operating segments based on the Companys management structure,and the results are regularly reviewed with our Chief Executive Officer and relevant senior management.The management reporting process is based on U.S.GAAP and includes specific adjustments,such as funds transfer pricing for asset/liability management,shared revenue and expenses,and taxable-equivalent adjustments to consistently reflect income from taxable and tax-exempt sources,which allows management to assess performance consistently across the operating segments.Funds Transfer Pricing Corporate treasury manages a funds transfer pricing methodology that considers interest rate risk,liquidity risk,and other product characteristics.Operating segments pay a funding charge for their assets and receive a funding credit for their deposits,both of which are included in net interest income.The net impact of the funding charges or credits is recognized in corporate treasury.Revenue and Expense Sharing When lines of business jointly serve customers,the line of business that is responsible for providing the product or service recognizes revenue or expense with a referral fee paid or an allocation of cost to the other line of business based on established internal revenue-sharing agreements.When a line of business uses a service provided by another line of business or enterprise function(included in Corporate),expense is generally allocated based on the cost and use of the service provided.We periodically assess and update our revenue and expense allocation methodologies.Taxable-Equivalent Adjustments Taxable-equivalent adjustments related to tax-exempt income on certain loans and debt securities are included in net interest income,while taxable-equivalent adjustments related to income tax credits for affordable housing and renewable energy investments are included in noninterest income,in each case with corresponding impacts to income tax expense(benefit).Adjustments are included in Corporate,Commercial Banking,and Corporate and Investment Banking and are eliminated to reconcile to the Companys consolidated financial results.Allocated Capital Reportable operating segments are allocated capital under a risk-sensitive framework that is primarily based on aspects of our regulatory capital requirements,and the assumptions and methodologies used to allocate capital are periodically assessed and updated.Management believes that return on allocated capital is a useful financial measure because it enables management,investors,and others to assess a reportable operating segments use of capital.Selected Metrics We present certain financial and nonfinancial metrics that management uses when evaluating reportable operating segment results.Management believes that these metrics are useful to investors and others to assess the performance,customer growth,and trends of reportable operating segments or lines of business.Table 5:Management Reporting StructureWells Fargo&CompanyConsumer Banking and LendingCommercial BankingCorporate and Investment BankingWealth and Investment ManagementCorporate Consumer,Small and Business Banking Home Lending Credit Card Auto Personal Lending Middle Market Banking Asset-Based Lending and Leasing Banking Commercial Real Estate Markets Wells Fargo Advisors The PrivateBank Corporate Treasury Enterprise Functions Investment Portfolio Venture capital and private equity investments Non-strategic businessesEarnings Performance(continued)12Wells Fargo&CompanyTable 6 and the following discussion present our results by reportable operating segment.For additional information,see Note 17(Operating Segments)to Financial Statements in this Report.Table 6:Operating Segment Results Highlights(in millions)Consumer Banking and LendingCommercial BankingCorporate and Investment BankingWealth and Investment ManagementCorporate(1)Reconciling Items(2)Consolidated CompanyQuarter ended June 30,2024Net interest income$7,024 2,281 1,945 906 (144)(89)11,923 Noninterest income 1,982 841 2,893 2,952 392 (294)8,766 Total revenue 9,006 3,122 4,838 3,858 248 (383)20,689 Provision for credit losses 932 29 285 (14)4 1,236 Noninterest expense 5,701 1,506 2,170 3,193 723 13,293 Income(loss)before income tax expense(benefit)2,373 1,587 2,383 679 (479)(383)6,160 Income tax expense(benefit)596 402 598 195 (157)(383)1,251 Net income(loss)before noncontrolling interests 1,777 1,185 1,785 484 (322)4,909 Less:Net income(loss)from noncontrolling interests 3 (4)(1)Net income(loss)$1,777 1,182 1,785 484 (318)4,910 Quarter ended June 30,2023Net interest income$7,490 2,501 2,359 1,009 (91)(105)13,163 Noninterest income 1,965 868 2,272 2,639 121 (495)7,370 Total revenue 9,455 3,369 4,631 3,648 30 (600)20,533 Provision for credit losses 874 26 933 24 (144)1,713 Noninterest expense 6,027 1,630 2,087 2,974 269 12,987 Income(loss)before income tax expense(benefit)2,554 1,713 1,611 650 (95)(600)5,833 Income tax expense(benefit)640 429 401 163 (103)(600)930 Net income before noncontrolling interests 1,914 1,284 1,210 487 8 4,903 Less:Net income(loss)from noncontrolling interests 3 (38)(35)Net income$1,914 1,281 1,210 487 46 4,938 Six months ended June 30,2024Net interest income$14,134 4,559 3,972 1,775 (112)(178)24,150 Noninterest income 3,963 1,715 5,848 5,825 683 (632)17,402 Total revenue 18,097 6,274 9,820 7,600 571 (810)41,552 Provision for credit losses 1,720 172 290 (11)3 2,174 Noninterest expense 11,725 3,185 4,500 6,423 1,798 27,631 Income(loss)before income tax expense(benefit)4,652 2,917 5,030 1,188 (1,230)(810)11,747 Income tax expense(benefit)1,169 743 1,264 323 (474)(810)2,215 Net income(loss)before noncontrolling interests 3,483 2,174 3,766 865 (756)9,532 Less:Net income(loss)from noncontrolling interests 6 (3)3 Net income(loss)$3,483 2,168 3,766 865 (753)9,529 Six months ended June 30,2023Net interest income$14,923 4,990 4,820 2,053 (75)(212)26,499 Noninterest income 3,896 1,686 4,713 5,276 126 (934)14,763 Total revenue 18,819 6,676 9,533 7,329 51 (1,146)41,262 Provision for credit losses 1,741 (17)1,185 35 (24)2,920 Noninterest expense 12,065 3,382 4,304 6,035 877 26,663 Income(loss)before income tax expense(benefit)5,013 3,311 4,044 1,259 (802)(1,146)11,679 Income tax expense(benefit)1,258 828 1,016 315 (375)(1,146)1,896 Net income(loss)before noncontrolling interests 3,755 2,483 3,028 944 (427)9,783 Less:Net income(loss)from noncontrolling interests 6 (152)(146)Net income(loss)$3,755 2,477 3,028 944 (275)9,929(1)All other business activities that are not included in the reportable operating segments have been included in Corporate.For additional information,see the“Corporate”section below.(2)Taxable-equivalent adjustments related to tax-exempt income on certain loans and debt securities are included in net interest income,while taxable-equivalent adjustments related to income tax credits for affordable housing and renewable energy investments are included in noninterest income,in each case with corresponding impacts to income tax expense(benefit).Adjustments are included in Corporate,Commercial Banking,and Corporate and Investment Banking and are eliminated to reconcile to the Companys consolidated financial results.Wells Fargo&Company13Consumer Banking and Lending offers diversified financial products and services for consumers and small businesses with annual sales generally up to$10 million.These financial products and services include checking and savings accounts,credit and debit cards,as well as home,auto,personal,and small business lending.Table 6a and Table 6b provide additional information for Consumer Banking and Lending.Table 6a:Consumer Banking and Lending Income Statement and Selected Metrics Quarter ended June 30,Six months ended June 30,($in millions,unless otherwise noted)20242023$Change%Change20242023$Change%ChangeIncome StatementNet interest income$7,024 7,490 (466)(6)%$14,134 14,923 (789)(5)%Noninterest income:Deposit-related fees 690 666 24 4 1,367 1,338 29 2 Card fees 1,036 1,022 14 1 2,026 1,980 46 2 Mortgage banking 135 132 3 2 328 292 36 12 Other 121 145 (24)(17)242 286 (44)(15)Total noninterest income 1,982 1,965 17 1 3,963 3,896 67 2 Total revenue 9,006 9,455 (449)(5)18,097 18,819 (722)(4)Net charge-offs 907 621 286 46 1,788 1,210 578 48 Change in the allowance for credit losses 25 253 (228)(90)(68)531 (599)NMProvision for credit losses 932 874 58 7 1,720 1,741 (21)(1)Noninterest expense 5,701 6,027 (326)(5)11,725 12,065 (340)(3)Income before income tax expense 2,373 2,554 (181)(7)4,652 5,013 (361)(7)Income tax expense 596 640 (44)(7)1,169 1,258 (89)(7)Net income$1,777 1,914 (137)(7)$3,483 3,755 (272)(7)Revenue by Line of BusinessConsumer,Small and Business Banking$6,129 6,448 (319)(5)$12,221 12,822 (601)(5)Consumer Lending:Home Lending 823 847 (24)(3)1,687 1,710 (23)(1)Credit Card 1,452 1,449 3 2,948 2,866 82 3 Auto 282 378 (96)(25)582 770 (188)(24)Personal Lending 320 333 (13)(4)659 651 8 1 Total revenue$9,006 9,455 (449)(5)$18,097 18,819 (722)(4)Selected MetricsConsumer Banking and Lending:Return on allocated capital(1)15.1.9 14.8.7 Efficiency ratio(2)63 64 65 64 Retail bank branches(#,period-end)4,227 4,455 (5)Digital active customers(#in millions,period-end)(3)35.6 34.2 4 Mobile active customers(#in millions,period-end)(3)30.8 29.1 6 Consumer,Small and Business Banking:Deposit spread(4)2.5%2.6 2.5%2.6 Debit card purchase volume($in billions)(5)$128.2 124.9 3.3 3$249.7 242.2 7.5 3 Debit card purchase transactions(#in millions)(5)2,581 2,535 2 5,023 4,904 2(continued on following page)Earnings Performance(continued)14Wells Fargo&Company(continued from previous page)Quarter ended June 30,Six months ended June 30,($in millions,unless otherwise noted)20242023$Change%Change20242023$Change%ChangeHome Lending:Mortgage banking:Net servicing income$89 62 27 44%$180 146 34 23%Net gains on mortgage loan originations/sales 46 70 (24)(34)148 146 2 1 Total mortgage banking$135 132 3 2$328 292 36 12 Retail originations($in billions)$5.3 7.7 (2.4)(31)$8.8 13.3 (4.5)(34)%of originations held for sale(HFS)38.6E.3 40.6F.0 Third-party mortgage loans serviced($in billions,period-end)(6)$512.8 609.1 (96.3)(16)Mortgage servicing rights(MSR)carrying value(period-end)7,061 8,251 (1,190)(14)Ratio of MSR carrying value(period-end)to third-party mortgage loans serviced(period-end)(6)1.38%1.35 Home lending loans 30 days delinquency rate(period-end)(7)(8)(9)0.33 0.25 Credit Card:Point of sale(POS)volume($in billions)$42.9 38.3 4.6 12$82.0 72.5 9.5 13 New accounts(#in thousands)677 618 10 1,328 1,197 11 Credit card loans 30 days delinquency rate(period-end)(8)(9)2.71%2.31 Credit card loans 90 days delinquency rate(period-end)(8)(9)1.40 1.10 Auto:Auto originations($in billions)$3.7 4.8 (1.1)(23)$7.8 9.8 (2.0)(20)Auto loans 30 days delinquency rate(period-end)(8)(9)2.31%2.55 Personal Lending:New volume($in billions)$2.7 3.3 (0.6)(18)$4.9 6.2 (1.3)(21)NM Not meaningful(1)Return on allocated capital is segment net income(loss)applicable to common stock divided by segment average allocated capital.Segment net income(loss)applicable to common stock is segment net income(loss)less allocated preferred stock dividends.(2)Efficiency ratio is segment noninterest expense divided by segment total revenue(net interest income and noninterest income).(3)Digital and mobile active customers is based on the number of consumer and small business customers who have logged on via a digital or mobile device,respectively,in the prior 90 days.Digital active customers includes both online and mobile customers.(4)Deposit spread is(i)the internal funds transfer pricing credit on segment deposits minus interest paid to customers for segment deposits,divided by(ii)average segment deposits.(5)Debit card purchase volume and transactions reflect combined activity for both consumer and business debit card purchases.(6)Excludes residential mortgage loans subserviced for others.(7)Excludes residential mortgage loans insured by the Federal Housing Administration(FHA)or guaranteed by the Department of Veterans Affairs(VA).(8)Excludes loans held for sale.(9)Delinquency balances exclude nonaccrual loans.Second quarter 2024 vs.second quarter 2023 Revenue decreased driven by lower net interest income due to lower deposit balances and lower loan balances.Provision for credit losses reflected an increase in the allowance for credit card loans,partially offset by a lower allowance for auto loans and residential mortgage loans.Noninterest expense decreased due to lower operating costs and the impact of efficiency initiatives,partially offset by higher advertising and occupancy expense.First half of 2024 vs.first half of 2023 Revenue decreased driven by lower net interest income due to lower deposit balances and lower loan balances.Provision for credit losses reflected a decrease in the allowance for auto loans and residential mortgage loans,partially offset by a higher allowance for credit card loans.Noninterest expense decreased due to:lower personnel expense and operating costs driven by the impact of efficiency initiatives;partially offset by:higher operating losses due to higher expense for customer remediation activities;andhigher advertising expense due to higher marketing volume.Wells Fargo&Company15Table 6b:Consumer Banking and Lending Balance Sheet Quarter ended June 30,Six months ended June 30,($in millions)20242023$Change%Change20242023$Change%ChangeSelected Balance Sheet Data(average)Loans by Line of Business:Consumer,Small and Business Banking$6,370 6,831 (461)(7)%$6,418 6,933 (515)(7)%Consumer Lending:Home Lending 211,994 220,641 (8,647)(4)213,164 221,596 (8,432)(4)Credit Card 47,463 41,609 5,854 14 46,937 41,066 5,871 14 Auto 45,650 52,476 (6,826)(13)46,636 53,073 (6,437)(12)Personal Lending 14,462 14,794 (332)(2)14,679 14,657 22 Total loans$325,939 336,351 (10,412)(3)$327,834 337,325 (9,491)(3)Total deposits 778,228 823,339 (45,111)(5)775,738 832,252 (56,514)(7)Allocated capital 45,500 44,000 1,500 3 45,500 44,000 1,500 3 Selected Balance Sheet Data(period-end)Loans by Line of Business:Consumer,Small and Business Banking$6,513 6,937 (424)(6)Consumer Lending:Home Lending 211,172 219,595 (8,423)(4)Credit Card 48,400 42,415 5,985 14 Auto 44,780 52,175 (7,395)(14)Personal Lending 14,495 15,095 (600)(4)Total loans$325,360 336,217 (10,857)(3)Total deposits 781,817 820,495 (38,678)(5)Second quarter and first half of 2024 vs.second quarter and first half of 2023 Total loans(average and period-end)decreased due to:a decline in loan balances in our Home Lending business reflecting lower loan demand due to the impact of the higher interest rate environment;anda decline in loan balances in our Auto business due to lower origination volumes reflecting credit tightening actions;partially offset by:an increase in loan balances in our Credit Card business driven by higher point of sale volume and new account growth.Total deposits(average and period-end)decreased driven by customer migration to higher yielding deposit products,including promotional savings and time deposit accounts.Earnings Performance(continued)16Wells Fargo&CompanyCommercial Banking provides financial solutions to private,family owned and certain public companies.Products and services include banking and credit products across multiple industry sectors and municipalities,secured lending and lease products,and treasury management.Table 6c and Table 6d provide additional information for Commercial Banking.Table 6c:Commercial Banking Income Statement and Selected Metrics Quarter ended June 30,Six months ended June 30,($in millions)20242023$Change%Change20242023$Change%ChangeIncome StatementNet interest income$2,281 2,501 (220)(9)%$4,559 4,990 (431)(9)%Noninterest income:Deposit-related fees 290 248 42 17 574 484 90 19 Lending-related fees 139 131 8 6 277 260 17 7 Lease income 133 167 (34)(20)282 336 (54)(16)Other 279 322 (43)(13)582 606 (24)(4)Total noninterest income 841 868 (27)(3)1,715 1,686 29 2 Total revenue 3,122 3,369 (247)(7)6,274 6,676 (402)(6)Net charge-offs 97 63 34 54 172 24 148 617 Change in the allowance for credit losses(68)(37)(31)(84)(41)41 100 Provision for credit losses 29 26 3 12 172 (17)189 NMNoninterest expense 1,506 1,630 (124)(8)3,185 3,382 (197)(6)Income before income tax expense 1,587 1,713 (126)(7)2,917 3,311 (394)(12)Income tax expense 402 429 (27)(6)743 828 (85)(10)Less:Net income from noncontrolling interests 3 3 6 6 Net income$1,182 1,281 (99)(8)$2,168 2,477 (309)(12)Revenue by Line of BusinessMiddle Market Banking(1)$2,153 2,199 (46)(2)$4,231 4,354 (123)(3)Asset-Based Lending and Leasing(1)969 1,170 (201)(17)2,043 2,322 (279)(12)Total revenue$3,122 3,369 (247)(7)$6,274 6,676 (402)(6)Revenue by ProductLending and leasing$1,308 1,332 (24)(2)$2,617 2,656 (39)(1)Treasury management and payments 1,412 1,584 (172)(11)2,833 3,146 (313)(10)Other 402 453 (51)(11)824 874 (50)(6)Total revenue$3,122 3,369 (247)(7)$6,274 6,676 (402)(6)Selected MetricsReturn on allocated capital 17.3.3 15.8.7 Efficiency ratio 48 48 51 51 NM Not meaningful(1)In second quarter 2024,we prospectively transferred our commercial auto business from Asset-Based Lending and Leasing to Middle Market Banking.Second quarter 2024 vs.second quarter 2023 Revenue decreased driven by:lower net interest income reflecting the impact of higher interest rates on deposit costs;partially offset by:higher deposit-related fees reflecting higher treasury management fees on commercial accounts driven by increased transaction service volumes and repricing.Noninterest expense decreased due to lower personnel expense reflecting the impact of efficiency initiatives,and lower operating costs.First half of 2024 vs.first half of 2023 Revenue decreased driven by:lower net interest income reflecting the impact of higher interest rates on deposit costs;partially offset by:higher deposit-related fees reflecting higher treasury management fees on commercial accounts driven by increased transaction service volumes and repricing.Provision for credit losses reflected an increase in net charge-offs.Noninterest expense decreased due to lower personnel expense reflecting the impact of efficiency initiatives.Wells Fargo&Company17Table 6d:Commercial Banking Balance Sheet Quarter ended June 30,Six months ended June 30,($in millions)20242023$Change%Change20242023$Change%ChangeSelected Balance Sheet Data(average)Loans:Commercial and industrial$164,027 165,980 (1,953)(1)%$163,650 164,603 (953)(1)%Commercial real estate 44,990 45,855 (865)(2)45,143 45,858 (715)(2)Lease financing and other 15,406 13,989 1,417 10 15,379 13,872 1,507 11 Total loans$224,423 225,824 (1,401)(1)$224,172 224,333 (161)Loans by Line of Business:Middle Market Banking(1)$128,259 122,204 6,055 5$123,766 121,916 1,850 2 Asset-Based Lending and Leasing(1)96,164 103,620 (7,456)(7)100,406 102,417 (2,011)(2)Total loans$224,423 225,824 (1,401)(1)$224,172 224,333 (161)Total deposits 166,892 166,747 145 165,460 168,597 (3,137)(2)Allocated capital 26,000 25,500 500 2 26,000 25,500 500 2 Selected Balance Sheet Data(period-end)Loans:Commercial and industrial$165,878 168,492 (2,614)(2)Commercial real estate 44,978 45,784 (806)(2)Lease financing and other 15,617 14,435 1,182 8 Total loans$226,473 228,711 (2,238)(1)Loans by Line of Business:Middle Market Banking(1)$129,023 122,104 6,919 6 Asset-Based Lending and Leasing(1)97,450 106,607 (9,157)(9)Total loans$226,473 228,711 (2,238)(1)Total deposits 168,979 164,764 4,215 3(1)In second quarter 2024,we prospectively transferred our commercial auto business from Asset-Based Lending and Leasing to Middle Market Banking.Second quarter 2024 vs.second quarter 2023 Total loans(average and period-end)decreased driven by lower loan demand reflecting the impact of a higher interest rate environment,partially offset by increased client working capital needs.Earnings Performance(continued)18Wells Fargo&CompanyCorporate and Investment Banking delivers a suite of capital markets,banking,and financial products and services to corporate,commercial real estate,government and institutional clients globally.Products and services include corporate banking,investment banking,treasury management,commercial real estate lending and servicing,equity and fixed income solutions as well as sales,trading,and research capabilities.Table 6e and Table 6f provide additional information for Corporate and Investment Banking.Table 6e:Corporate and Investment Banking Income Statement and Selected MetricsQuarter ended June 30,Six months ended June 30,($in millions)20242023$Change%Change20242023$Change%ChangeIncome StatementNet interest income$1,945 2,359 (414)(18)%$3,972 4,820 (848)(18)%Noninterest income:Deposit-related fees 263 247 16 6 525 483 42 9 Lending-related fees 205 191 14 7 408 385 23 6 Investment banking fees 634 390 244 63 1,281 704 577 82 Net gains from trading activities 1,387 1,081 306 28 2,792 2,338 454 19 Other 404 363 41 11 842 803 39 5 Total noninterest income 2,893 2,272 621 27 5,848 4,713 1,135 24 Total revenue 4,838 4,631 207 4 9,820 9,533 287 3 Net charge-offs 303 83 220 265 499 100 399 399 Change in the allowance for credit losses(18)850 (868)NM(209)1,085 (1,294)NMProvision for credit losses 285 933 (648)(69)290 1,185 (895)(76)Noninterest expense 2,170 2,087 83 4 4,500 4,304 196 5 Income before income tax expense 2,383 1,611 772 48 5,030 4,044 986 24 Income tax expense 598 401 197 49 1,264 1,016 248 24 Net income$1,785 1,210 575 48$3,766 3,028 738 24 Revenue by Line of BusinessBanking:Lending$688 685 3$1,369 1,377 (8)(1)Treasury Management and Payments 687 762 (75)(10)1,373 1,547 (174)(11)Investment Banking 430 311 119 38 904 591 313 53 Total Banking 1,805 1,758 47 3 3,646 3,515 131 4 Commercial Real Estate 1,283 1,333 (50)(4)2,506 2,644 (138)(5)Markets:Fixed Income,Currencies,and Commodities(FICC)1,228 1,133 95 8 2,587 2,418 169 7 Equities 558 397 161 41 1,008 834 174 21 Credit Adjustment(CVA/DVA)and Other 7 14 (7)(50)26 85 (59)(69)Total Markets 1,793 1,544 249 16 3,621 3,337 284 9 Other(43)(4)(39)NM 47 37 10 27 Total revenue$4,838 4,631 207 4$9,820 9,533 287 3 Selected MetricsReturn on allocated capital 15.4.2 16.3.0 Efficiency ratio 45 45 46 45 NM Not meaningfulSecond quarter 2024 vs.second quarter 2023 Revenue increased driven by:higher net gains from trading activities driven by higher revenue in equities,including a gain of$122 million related to an exchange of shares of Visa Inc.Class B common stock,and structured products;andhigher investment banking fees due to increased activity across all products;partially offset by:lower net interest income driven by higher deposit costs and lower loan balances.Provision for credit losses reflected a decrease in the allowance for credit losses,primarily driven by commercial real estate loans.Noninterest expense increased driven by higher operating costs,partially offset by the impact of efficiency initiatives.Wells Fargo&Company19First half of 2024 vs.first half of 2023 Revenue increased driven by:higher investment banking fees due to increased activity across all products;andhigher net gains from trading activities driven by higher revenue in structured products,equities,and foreign exchange,partially offset by lower revenue in rates;partially offset by:lower net interest income driven by higher deposit costs and lower loan balances.Provision for credit losses reflected a decrease in the allowance for credit losses driven by commercial real estate loans.Noninterest expense increased driven by higher operating costs,partially offset by the impact of efficiency initiatives.Table 6f:Corporate and Investment Banking Balance Sheet Quarter ended June 30,Six months ended June 30,($in millions)20242023$Change%Change20242023$Change%ChangeSelected Balance Sheet Data(average)Loans:Commercial and industrial$180,789 190,529 (9,740)(5)%$183,110 192,141 (9,031)(5)%Commercial real estate 94,998 100,941 (5,943)(6)96,405 100,956 (4,551)(5)Total loans$275,787 291,470 (15,683)(5)$279,515 293,097 (13,582)(5)Loans by Line of Business:Banking$86,130 95,413 (9,283)(10)$88,513 97,235 (8,722)(9)Commercial Real Estate 128,107 136,473 (8,366)(6)129,908 136,639 (6,731)(5)Markets 61,550 59,584 1,966 3 61,094 59,223 1,871 3 Total loans$275,787 291,470 (15,683)(5)$279,515 293,097 (13,582)(5)Trading-related assets:Trading account securities$136,101 118,462 17,639 15$128,724 115,561 13,163 11 Reverse repurchase agreements/securities borrowed 64,896 60,164 4,732 8 63,876 58,997 4,879 8 Derivative assets 18,552 17,522 1,030 6 17,793 17,724 69 Total trading-related assets$219,549 196,148 23,401 12$210,393 192,282 18,111 9 Total assets 558,063 550,091 7,972 1 554,498 549,453 5,045 1 Total deposits 187,545 160,251 27,294 17 185,408 158,908 26,500 17 Allocated capital 44,000 44,000 44,000 44,000 Selected Balance Sheet Data(period-end)Loans:Commercial and industrial$181,441 190,317 (8,876)(5)Commercial real estate 93,889 101,028 (7,139)(7)Total loans$275,330 291,345 (16,015)(5)Loans by Line of Business:Banking$84,054 93,596 (9,542)(10)Commercial Real Estate 126,080 136,257 (10,177)(7)Markets 65,196 61,492 3,704 6 Total loans$275,330 291,345 (16,015)(5)Trading-related assets:Trading account securities$140,928 130,008 10,920 8 Reverse repurchase agreements/securities borrowed 70,615 59,020 11,595 20 Derivative assets 19,186 17,804 1,382 8 Total trading-related assets$230,729 206,832 23,897 12 Total assets 565,334 559,520 5,814 1 Total deposits 200,920 158,770 42,150 27 Second quarter and first half of 2024 vs.second quarter and first half of 2023 Total loans(average and period-end)decreased driven by lower origination volumes reflecting decreased loan demand.Total trading-related assets(average and period-end)increased reflecting:higher trading account securities driven by higher mortgage-backed securities;andan increased volume of reverse repurchase agreements.Total deposits(average and period-end)increased driven by additions of deposits from new and existing customers.Earnings Performance(continued)20Wells Fargo&CompanyWealth and Investment Management provides personalized wealth management,brokerage,financial planning,lending,private banking,trust and fiduciary products and services to affluent,high-net worth and ultra-high-net worth clients.We operate through financial advisors in our brokerage and wealth offices,consumer bank branches,independent offices,and digitally through WellsTrade and Intuitive Investor.Table 6g and Table 6h provide additional information for Wealth and Investment Management(WIM).Table 6g:Wealth and Investment Management Quarter ended June 30,Six months ended June 30,($in millions,unless otherwise noted)20242023$Change%Change20242023$Change%ChangeIncome StatementNet interest income$906 1,009 (103)(10)%$1,775 2,053 (278)(14)%Noninterest income:Investment advisory and other asset-based fees 2,357 2,110 247 12 4,624 4,171 453 11 Commissions and brokerage services fees 521 494 27 5 1,066 1,035 31 3 Other 74 35 39 111 135 70 65 93 Total noninterest income 2,952 2,639 313 12 5,825 5,276 549 10 Total revenue 3,858 3,648 210 6 7,600 7,329 271 4 Net charge-offs(2)(1)(1)(100)4 (2)6 300 Change in the allowance for credit losses(12)25 (37)NM(15)37 (52)NMProvision for credit losses(14)24 (38)NM(11)35 (46)NMNoninterest expense 3,193 2,974 219 7 6,423 6,035 388 6 Income before income tax expense 679 650 29 4 1,188 1,259 (71)(6)Income tax expense 195 163 32 20 323 315 8 3 Net income$484 487 (3)(1)$865 944 (79)(8)Selected MetricsReturn on allocated capital 29.00.5 25.8).7 Efficiency ratio 83 82 85 82 Client assets($in billions,period-end):Advisory assets$945 850 95 11 Other brokerage assets and deposits 1,255 1,148 107 9 Total client assets$2,200 1,998 202 10 Selected Balance Sheet Data(average)Total loans$83,166 83,045 121$82,824 83,331 (507)(1)Total deposits 102,843 112,360 (9,517)(8)102,158 119,443 (17,285)(14)Allocated capital 6,500 6,250 250 4 6,500 6,250 250 4 Selected Balance Sheet Data(period-end)Total loans$83,338 82,456 882 1 Total deposits 103,722 108,532 (4,810)(4)NM-Not meaningfulSecond quarter 2024 vs.second quarter 2023 Revenue increased driven by:higher investment advisory and other asset-based fees driven by higher asset-based fees reflecting higher market valuations;partially offset by:lower net interest income driven by lower deposit balances and higher deposit costs.Noninterest expense increased reflecting:higher personnel expense driven by higher revenue-related compensation;andhigher operating losses;partially offset by:the impact of efficiency initiatives;andlower operating costs.Total deposits(average and period-end)decreased due to customer migration to higher yielding alternatives.First half of 2024 vs.first half of 2023 Revenue increased driven by:higher investment advisory and other asset-based fees driven by higher asset-based fees reflecting higher market valuations;partially offset by:lower net interest income driven by lower deposit balances.Noninterest expense increased reflecting:higher personnel expense driven by higher revenue-related compensation;andhigher operating losses;partially offset by:the impact of efficiency initiatives;andlower operating costs.Total deposits(average)decreased due to customer migration to higher yielding alternatives.Wells Fargo&Company21The Federal Trade Commission issued a final rule that broadly prohibits worker non-compete provisions.The rule has an effective date of September 4,2024,but is pending the results of third party litigation challenging the rule.If the rule becomes effective in its current form,we would expect an acceleration of expenses related to certain deferred compensation award programs for retired and retirement eligible employees in our WIM business that feature a non-compete provision as a condition of award vesting.WIM Advisory Assets In addition to transactional accounts,WIM offers advisory account relationships to brokerage customers.Fees from advisory accounts are based on a percentage of the market value of the assets as of the beginning of the quarter,which vary across the account types based on the distinct services provided,and are affected by investment performance as well as asset inflows and outflows.Advisory accounts include assets that are financial advisor-directed and separately managed by third-party managers as well as certain client-directed brokerage assets where we earn a fee for advisory and other services,but do not have investment discretion.WIM also manages personal trust and other assets for high net worth clients,with fee income earned based on a percentage of the market value of these assets.Table 6h presents advisory assets activity by WIM line of business.Management believes that advisory assets is a useful metric because it allows management,investors,and others to assess how changes in asset amounts may impact the generation of certain asset-based fees.For the second quarter of both 2024 and 2023,the average fee rate by account type ranged from 50 to 120 basis points.Table 6h:WIM Advisory Assets Quarter endedSix months ended(in billions)Balance,beginningof periodInflows(1)Outflows(2)Market impact(3)Balance,end of periodBalance,beginningof periodInflows(1)Outflows(2)Market impact(3)Balance,end of periodJune 30,2024Client-directed(4)$194.2 9.1 (10.1)3.2 196.4$185.3 18.0 (20.4)13.5 196.4 Financial advisor-directed(5)284.5 13.0 (12.1)5.7 291.1 264.6 25.0 (22.5)24.0 291.1 Separate accounts(6)209.2 8.3 (8.4)1.3 210.4 198.4 15.7 (15.9)12.2 210.4 Mutual fund advisory(7)86.7 2.2 (3.5)0.3 85.7 83.3 4.4 (6.6)4.6 85.7 Total Wells Fargo Advisors$774.6 32.6 (34.1)10.5 783.6$731.6 63.1 (65.4)54.3 783.6 The Private Bank(8)164.2 6.0 (9.6)0.9 161.5 159.5 11.6 (17.6)8.0 161.5 Total WIM advisory assets$938.8 38.6 (43.7)11.4 945.1$891.1 74.7 (83.0)62.3 945.1 June 30,2023Client-directed(4)$171.9 8.2 (9.1)6.4 177.4$165.2 16.4 (17.5)13.3 177.4 Financial advisor-directed(5)233.1 9.5 (10.1)11.2 243.7 222.9 18.9 (19.3)21.2 243.7 Separate accounts(6)182.7 5.8 (6.8)6.8 188.5 176.5 11.7 (12.9)13.2 188.5 Mutual fund advisory(7)80.6 1.8 (3.1)2.6 81.9 78.6 3.8 (6.2)5.7 81.9 Total Wells Fargo Advisors$668.3 25.3 (29.1)27.0 691.5$643.2 50.8 (55.9)53.4 691.5 The Private Bank(8)156.8 6.1 (8.9)4.0 158.0 153.6 13.4 (18.2)9.2 158.0 Total WIM advisory assets$825.1 31.4 (38.0)31.0 849.5$796.8 64.2 (74.1)62.6 849.5(1)Inflows include new advisory account assets,contributions,dividends,and interest.(2)Outflows include closed advisory account assets,withdrawals,and client management fees.(3)Market impact reflects gains and losses on portfolio investments.(4)Investment advice and other services are provided to the client,but decisions are made by the client and the fees earned are based on a percentage of the advisory account assets,not the number and size of transactions executed by the client.(5)Professionally managed portfolios with fees earned based on respective strategies and as a percentage of certain client assets.(6)Professional advisory portfolios managed by third-party asset managers.Fees are earned based on a percentage of certain client assets.(7)Program with portfolios constructed of load-waived,no-load,and institutional share class mutual funds.Fees are earned based on a percentage of certain client assets.(8)Discretionary and non-discretionary portfolios held in personal trusts,investment agency,or custody accounts with fees earned based on a percentage of client assets.Earnings Performance(continued)22Wells Fargo&CompanyCorporate includes corporate treasury and enterprise functions,net of allocations(including funds transfer pricing,capital,liquidity and certain expenses),in support of the reportable operating segments,as well as our investment portfolio and venture capital and private equity investments.Corporate also includes certain lines of business that management has determined are no longer consistent with the long-term strategic goals of the Company as well as results for previously divested businesses.Table 6i and Table 6j provide additional information for Corporate.Table 6i:Corporate Income Statement Quarter ended June 30,Six months ended June 30,($in millions)20242023$Change%Change20242023$Change%ChangeIncome StatementNet interest income$(144)(91)(53)(58)%$(112)(75)(37)(49)%Noninterest income 392 121 271 224 683 126 557 442 Total revenue 248 30 218 727 571 51 520 NMNet charge-offs(2)(2)(3)(4)1 25 Change in the allowance for credit losses 6 (142)148 104 6 (20)26 130 Provision for credit losses 4 (144)148 103 3 (24)27 113 Noninterest expense 723 269 454 169 1,798 877 921 105 Loss before income tax benefit(479)(95)(384)NM(1,230)(802)(428)(53)Income tax benefit(157)(103)(54)(52)(474)(375)(99)(26)Less:Net loss from noncontrolling interests(1)(4)(38)34 89 (3)(152)149 98 Net income(loss)$(318)46 (364)NM$(753)(275)(478)NMNM Not meaningful(1)Reflects results attributable to noncontrolling interests predominantly associated with the Companys consolidated venture capital investments.Second quarter 2024 vs.second quarter 2023 Revenue increased driven by higher net gains from equity securities reflecting higher unrealized gains on nonmarketable equity securities from our venture capital investments.Provision for credit losses reflected an increase in allowance for credit losses.Noninterest expense increased due to:higher operating losses due to higher expense for customer remediation activities;andan additional expense of$52 million for the estimated FDIC special assessment.First half of 2024 vs.first half of 2023 Revenue increased driven by higher net gains from equity securities reflecting lower impairment of equity securities and higher unrealized gains on nonmarketable equity securities from our venture capital investments.Noninterest expense increased due to:higher operating losses due to higher expense for customer remediation activities;andan additional expense of$336 million for the estimated FDIC special assessment.Corporate includes our rail car leasing business,which had long-lived operating lease assets,net of accumulated depreciation,of$4.5billion and$4.6 billion at June30,2024,and December31,2023,respectively.We may incur impairment charges based on changing economic and market conditions affecting the long-term demand and utility of specific types of rail cars.For additional information,see the“Earnings Performance Operating Segment Results Corporate”section in our 2023 Form10-K.Wells Fargo&Company23Table 6j:Corporate Balance SheetQuarter ended June 30,Six months ended June 30,($in millions)20242023$Change%Change20242023$Change%ChangeSelected Balance Sheet Data(average)Cash and due from banks,and interest-earning deposits with banks$202,812 132,505 70,307 53%$207,212 125,004 82,208 66%Available-for-sale debt securities 131,822 130,496 1,326 1 127,308 129,638 (2,330)(2)Held-to-maturity debt securities 251,100 270,999 (19,899)(7)254,094 271,854 (17,760)(7)Equity securities 15,571 15,327 244 2 15,765 15,422 343 2 Total loans 7,662 9,216 (1,554)(17)8,181 9,185 (1,004)(11)Total assets 656,535 610,417 46,118 8 660,009 603,293 56,716 9 Total deposits 110,970 84,752 26,218 31 115,288 72,846 42,442 58 Selected Balance Sheet Data(period-end)Cash and due from banks,and interest-earning deposits with banks$211,050 128,077 82,973 65 Available-for-sale debt securities 138,087 123,169 14,918 12 Held-to-maturity debt securities 247,746 269,414 (21,668)(8)Equity securities 15,297 15,097 200 1 Total loans 7,406 9,231 (1,825)(20)Total assets 670,494 593,597 76,897 13 Total deposits 110,456 92,023 18,433 20 Second quarter and first half of 2024 vs.second quarter and first half of 2023Total assets(average and period-end)increased reflecting:an increase in cash and due from banks,and interest-earning deposits with banks that are managed by corporate treasury;partially offset by:paydowns and maturities of HTM debt securities.Total deposits(average and period-end)increased driven by issuances of certificates of deposits(CDs).Earnings Performance(continued)24Wells Fargo&CompanyBalance Sheet AnalysisAt June30,2024,our assets totaled$1.94trillion,up$7.6billion from December31,2023.The following discussion provides additional information about the major components of our consolidated balance sheet.See the“Capital Management”section in this Report for information on changes in our equity.Available-for-Sale and Held-to-Maturity Debt SecuritiesTable 7:Available-for-Sale and Held-to-Maturity Debt SecuritiesJune 30,2024December 31,2023($in millions)Amortizedcost,net(1)Net unrealized gains(losses)Fair valueWeightedaverage expected maturity(yrs)Amortizedcost,net(1)Net unrealized gains(losses)Fair valueWeighted average expected maturity(yrs)Available-for-sale(2)$156,417 (7,665)148,752 6.1$137,155 (6,707)130,448 4.7 Held-to-maturity(3)250,736 (41,095)209,641 8.1 262,708 (35,392)227,316 7.6 Total$407,153 (48,760)358,393 n/a$399,863 (42,099)357,764 n/a(1)Represents amortized cost of the securities,net of the allowance for credit losses of$7million and$1 million related to available-for-sale debt securities and$97million and$93 million related to held-to-maturity debt securities at June30,2024,and December31,2023,respectively.(2)Available-for-sale debt securities are carried on our consolidated balance sheet at fair value.(3)Held-to-maturity debt securities are carried on our consolidated balance sheet at amortized cost,net of the allowance for credit losses.Table 7 presents a summary of our portfolio of investments in available-for-sale(AFS)and held-to-maturity(HTM)debt securities.See the“Balance Sheet Analysis Available-for-Sale and Held-to-Maturity Debt Securities”section in our 2023 Form10-K for additional information on our investment management objectives and practices and the“Risk Management Asset/Liability Management”section in this Report for information on liquidity and interest rate risk.The amortized cost,net of the allowance for credit losses,of the total AFS and HTM debt securities portfolio increased from December31,2023.Purchases of AFS debt securities were partially offset by paydowns and maturities of AFS and HTM debt securities,as well as sales of AFS debt securities.The total net unrealized losses on AFS and HTM debt securities increased from December31,2023,due to changes in interest rates.At June30,2024,99%of the combined AFS and HTM debt securities portfolio was rated AA-or above.Ratings are based on external ratings where available and,where not available,based on internal credit grades.See Note 3(Available-for-Sale and Held-to-Maturity Debt Securities)to Financial Statements in this Report for additional information on AFS and HTM debt securities,including a summary of debt securities by security type.Wells Fargo&Company25Loan PortfoliosTable 8 provides a summary of total outstanding loans by portfolio segment.Commercial loans decreased from December31,2023,due to decreases in both the commercial and industrial and commercial real estate loan portfolios as paydowns exceeded originations and advances.Consumer loans decreased from December31,2023,driven by decreases in the residential mortgage and auto loan portfolios as paydowns exceeded originations,partially offset by an increase in credit card loans due to higher purchase volume driven by new account growth.Table 8:Loan Portfolios($in millions)Jun 30,2024Dec 31,2023$Change%ChangeCommercial$536,611 547,427 (10,816)(2)%Consumer 381,296 389,255 (7,959)(2)Total loans$917,907 936,682 (18,775)(2)Average loan balances and a comparative detail of average loan balances is included in Table 1 under“Earnings Performance Net Interest Income”earlier in this Report.Additional information on total loans outstanding by portfolio segment and class of financing receivable is included in the“Risk Management Credit Risk Management”section in this Report.Period-end balances and other loan related information are in Note 5(Loans and Related Allowance for Credit Losses)to Financial Statements in this Report.See the“Balance Sheet Analysis Loan Portfolios”section in our 2023 Form 10-K for additional information regarding contractual loan maturities and the distribution of loans to changes in interest rates.DepositsDeposits increased from December31,2023,reflecting:growth in commercial deposits;partially offset by:customer migration to higher yielding alternatives;andlower time deposits driven by maturities of CDs.Table 9 provides additional information regarding deposit balances.Information regarding the impact of deposits on net interest income and a comparison of average deposit balances is provided in the“Earnings Performance Net Interest Income”section and Table 1 earlier in this Report.Our average deposit cost in second quarter 2024 increased to 1.84%,compared with 1.58%in fourth quarter 2023.Table 9:Deposits($in millions)Jun 30,2024%oftotaldepositsDec 31,2023%oftotaldeposits$Change%ChangeNoninterest-bearing demand deposits$348,525 26%$360,279 26%$(11,754)(3)%Interest-bearing demand deposits 463,453 34 436,908 32 26,545 6 Savings deposits 351,927 26 349,181 26 2,746 1 Time deposits 182,583 13 187,989 14 (5,406)(3)Interest-bearing deposits in non-U.S.offices 19,406 1 23,816 2 (4,410)(19)Total deposits$1,365,894 100%$1,358,173 100%$7,721 1 Balance Sheet Analysis(continued)26Wells Fargo&CompanyOff-Balance Sheet ArrangementsIn the ordinary course of business,we engage in financial transactions that are not recorded on our consolidated balance sheet,or may be recorded on our consolidated balance sheet in amounts that are different from the full contract or notional amount of the transaction.Our off-balance sheet arrangements include unfunded credit commitments,transactions with unconsolidated entities,guarantees,derivatives,and other commitments.These transactions are designed to(1)meet the financial needs of customers,(2)manage our credit,market or liquidity risks,and/or(3)diversify our funding sources.Unfunded Credit CommitmentsUnfunded credit commitments are legally binding agreements to lend to customers with terms covering usage of funds,contractual interest rates,expiration dates,and any required collateral.The maximum credit risk for these commitments will generally be lower than the contractual amount because these commitments may expire without being used or may be cancelled at the customers request.Our credit risk monitoring activities include managing the amount of commitments,both to individual customers and in total,and the size and maturity structure of these commitments.For additional information,see Note 5(Loans and Related Allowance for Credit Losses)to Financial Statements in this Report.Transactions with Unconsolidated EntitiesIn the normal course of business,we enter into various types of on-and off-balance sheet transactions with special purpose entities(SPEs),which are corporations,trusts,limited liability companies or partnerships that are established for a limited purpose.Generally,SPEs are formed in connection with securitization transactions and are considered variable interest entities(VIEs).For additional information,see Note 13(Securitizations and Variable Interest Entities)to Financial Statements in this Report.Guarantees and Other CommitmentsGuarantees are contracts that contingently require us to make payments to a guaranteed party based on an event or a change in an underlying asset,liability,rate or index.Guarantees are generally in the form of standby and direct pay letters of credit,written options,recourse obligations,exchange and clearing house guarantees,indemnifications,and other types of similar arrangements.We also enter into other commitments such as commitments to purchase securities under resale agreements.For additional information,see Note 14(Guarantees and Other Commitments)to Financial Statements in this Report.DerivativesWe use derivatives to manage exposure to market risk,including interest rate risk,credit risk and foreign currency risk,and to assist customers with their risk management objectives.Derivatives are recorded on our consolidated balance sheet at fair value,and volume can be measured in terms of the notional amount,which is generally not exchanged,but is used only as the basis on which interest and other payments are determined.The notional amount is not recorded on our consolidated balance sheet and is not,when viewed in isolation,a meaningful measure of the risk profile of the instruments.For additional information,see Note 11(Derivatives)to Financial Statements in this Report.Wells Fargo&Company27Risk Management Wells Fargo manages a variety of risks that can significantly affect our financial performance and our ability to meet the expectations of our customers,shareholders,regulators and other stakeholders.For additional information about how we manage risk,see the“Risk Management”section in our 2023 Form 10-K.The discussion that follows supplements our discussion of the management of certain risks contained in the“Risk Management”section in our 2023 Form 10-K.Credit Risk ManagementCredit risk is the risk of loss associated with a borrower or counterparty default(failure to meet obligations in accordance with agreed upon terms).Credit risk exists with many of the Companys assets and exposures such as debt security holdings,certain derivatives,and loans.The Boards Risk Committee has primary oversight responsibility for credit risk.At the management level,Corporate Credit Risk,which is part of Independent Risk Management,has oversight responsibility for credit risk.Corporate Credit Risk reports to the Chief Risk Officer and supports periodic reports related to credit risk provided to the Boards Risk Committee.Loan Portfolio Our loan portfolios represent the largest component of assets on our consolidated balance sheet for which we have credit risk.Table 10 presents our total loans outstanding by portfolio segment and class of financing receivable.Table 10:Total Loans Outstanding by Portfolio Segment and Class of Financing Receivable(in millions)Jun 30,2024Dec 31,2023Commercial and industrial$374,588 380,388 Commercial real estate 145,318 150,616 Lease financing 16,705 16,423 Total commercial 536,611 547,427 Residential mortgage 255,085 260,724 Credit card 53,756 52,230 Auto 44,280 47,762 Other consumer 28,175 28,539 Total consumer 381,296 389,255 Total loans$917,907 936,682 We manage our credit risk by establishing what we believe are sound credit policies for underwriting new business,while monitoring and reviewing the performance of our existing loan portfolios.We employ various credit risk management and monitoring activities to mitigate risks associated with multiple risk factors affecting loans we hold including:Loan concentrations and related credit quality;Counterparty credit risk;Economic and market conditions;Legislative or regulatory mandates;Changes in interest rates;Merger and acquisition activities;andReputation risk.In addition,the Company will continue to integrate climate considerations into its credit risk management activities.Our credit risk management oversight process is governed centrally,but provides for direct management and accountability by our lines of business.Our overall credit process includes comprehensive credit policies,disciplined credit underwriting,frequent and detailed risk measurement and modeling,extensive credit training programs,and a continual loan review and audit process.A key to our credit risk management is adherence to a well-controlled underwriting process,which we believe is appropriate for the needs of our customers as well as investors who purchase the loans or securities collateralized by the loans.Credit Quality Overview Table 11 provides credit quality trends.Table 11:Credit Quality Overview($in millions)Jun 30,2024Dec 31,2023Nonaccrual loansCommercial loans$5,161 4,914 Consumer loans 3,273 3,342 Total nonaccrual loans$8,434 8,256 Nonaccrual loans as a%of total loans 0.92%0.88 Allowance for credit losses(ACL)for loans$14,789 15,088 ACL for loans as a%of total loans 1.61%1.61 Quarter ended June 30,20242023Net loan charge-offs as a%of:Average commercial loans 0.35%0.15 Average consumer loans 0.88 0.58 Six months ended June 30,20242023Average commercial loans 0.30%0.10 Average consumer loans 0.86 0.57 Additional information on our loan portfolios and our credit quality trends follows.28Wells Fargo&CompanySignificant Loan Portfolio Reviews Our credit risk monitoring process is designed to enable early identification of developing risk and to support our determination of an appropriate allowance for credit losses.The following discussion provides additional characteristics and analysis of our significant portfolios.See Note 5(Loans and Related Allowance for Credit Losses)to Financial Statements in this Report for more analysis and credit metric information for each of the following portfolios.COMMERCIAL AND INDUSTRIAL LOANS AND LEASE FINANCINGFor purposes of portfolio risk management,we aggregate commercial and industrial loans and leasefinancing according tomarket segmentation andstandard industry codes.We generally subject commercial and industrial loans and lease financing to individual risk assessment using our internal borrower and collateral quality ratings.Our ratings are aligned to regulatory definitions of pass and criticized categories with criticized segmented among special mention,substandard,doubtful,and loss categories.We had$16.0 billion of the commercial and industrial loans and lease financing portfolio internally classified as criticized in accordance with regulatory guidance at June30,2024,compared with$14.6billion at December31,2023.The increase was driven by the entertainment and recreation,auto related,technology,telecom and media,and transportation services industries,partially offset by the financials except banks industry.The majority of our commercial and industrial loans and lease financing portfolio is secured by short-term assets,such as accounts receivable,inventory and debt securities,as well as long-lived assets,such as equipment and other business assets.Generally,the primary source of repayment for this portfolio is the operating cash flows of customers,with the collateral securing this portfolio representing a secondary source of repayment.The portfolio decreased at June30,2024,compared with December31,2023,as a result of paydowns and decreased loan draws.Table 12 provides our commercial and industrial loans and lease financing by industry.The industry categories are based on the North American Industry Classification System.Table 12:Commercial and Industrial Loans and Lease Financing by IndustryJune 30,2024December 31,2023($in millions)Nonaccrual loansLoans outstanding balance%of total loansTotal commitments(1)Nonaccrual loansLoans outstanding balance%of total loansTotal commitments(1)Financials except banks$51 145,269 16%$231,777 9 146,635 16%$234,513 Technology,telecom and media 87 24,661 3 61,246 60 25,460 3 59,216 Real estate and construction 87 26,090 3 54,542 55 24,987 3 54,345 Equipment,machinery and parts manufacturing 37 25,727 3 49,539 37 24,785 3 48,265 Retail 53 19,674 2 47,691 72 19,596 2 48,829 Materials and commodities 28 14,842 2 37,380 112 14,235 2 37,758 Food and beverage manufacturing 22 16,535 2 33,390 15 16,047 2 33,957 Oil,gas and pipelines 26 10,308 1 32,284 2 10,730 1 32,544 Auto related 11 17,224 2 30,723 8 15,203 2 28,795 Health care and pharmaceuticals 66 14,508 2 29,647 26 14,863 2 30,386 Commercial services 33 10,699 1 26,288 37 11,095 1 26,025 Utilities 1 6,839*24,269 1 8,325*25,710 Diversified or miscellaneous 56 8,395*21,908 67 8,284*22,877 Entertainment and recreation 22 13,040 1 19,429 18 13,968 1 20,250 Insurance and fiduciaries 1 5,749*17,285 1 4,715*15,724 Transportation services 161 9,407 1 16,360 134 9,277*16,750 Agribusiness 11 5,980*11,235 31 6,466*12,080 Government and education 40 5,566*11,075 26 5,603*11,552 Banks 8,276*9,314 11,820 1 12,981 Other(2)47 2,504*12,133 15 4,717*12,297 Total$840 391,293 43%$777,515 726 396,811 42%$784,854*Less than 1%.(1)Total commitments consist of loans outstanding plus unfunded credit commitments,excluding issued letters of credit and discretionary amounts where our approval or consent is required prior to any loan funding or commitment increase.For additional information on issued letters of credit,see Note 14(Guarantees and Other Commitments)to Financial Statements in this Report.(2)No other single industry had total loans in excess of$3.3 billion and$3.0 billion at June30,2024,and December31,2023,respectively.Wells Fargo&Company29Table 12a provides further loan segmentation for our largest industry category,financials except banks.This category includes loans to investment firms,financial vehicles,nonbank creditors,rental and leasing companies,securities firms,and investment banks.These loans are generally secured and have features to help manage credit risk,such as structural credit enhancements,collateral eligibility requirements,contractual re-margining of collateral supporting the loans,and loan amounts limited to a percentage of the value of the underlying assets considering underlying credit risk,asset duration,and ongoing performance.Table 12a:Financials Except Banks Industry CategoryJune 30,2024December
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Press release 26 July 2024 1 2024 HALF-YEAR RESULTS Continued progress in operational performance Market prices decreasing Higher nuclear power output in France,expected at upper end of the range Lowest ever carbon intensity Success of commercial offers Net financial debt stabilised“Ambitions 2035”:the Groups transformation continues Performance Sales:60.2 bn EBITDA:18.7 bn EBIT:9.6 bn Net income-Group share:7.0 bn Net Financial Debt:54.2 bn-NFD/EBITDA(1):1.28x Building the electricity system of tomorrow EDF is rolling out“Ambitions 2035”,a strategic plan for the companys development,performance and transformation with 4 pillars:helping customers to reduce their carbon footprint,producing more low-carbon electricity,expanding the networks to address the challenges of the energy transition,and developing flexibility solutions to meet electricity system requirements.To seize the opportunities offered by the energy transition,EDF is investing in skills for tomorrow and plans a large-scale recruitment drive over the next 10 years-starting with nearly 20,000 new hires in France in 2024 including 9,500 work-study trainees and interns,promoting a good gender balance and diversity and bringing young people into the workforce.Meanwhile,the EDF foundation has defined its new mission for the next 5 years to support the ecological and social transition,with a focus on education,training,and environmentally responsible citizenship.Helping customers to reduce their carbon footprint:Success of commercial offers in the new commercial policy:letters of intent representing more than 10TWh a year have already been signed with industrial partners(2)and nearly 2,200 contracts with 4 and 5-year horizons have been signed with firms of all sizes,covering close to 13TWh for 2028 and 7TWh for 2029.Residential customer portfolio growth in the G4 countries(3):up by 370,000 customers.Decarbonising uses:12%increase in the number of electric vehicle charging points installed or managed.Dalkia has developed the first very high temperature heat pump for industrial clients,with 1,000 tonnes a year lower CO2 emissions(installed in the Wepa Greenfield paper plant).Self-consumption:73%increase in solar panels on rooftops and car park canopies installed by EDF ENRs B2B activity.Press release 26 July 2024 2 Producing more low-carbon electricity:Electricity output constantly available on demand was up by 12%to 259TWh.With its 94rbon-free electricity output,EDF has one of the lowest carbon intensities in the world at 29 gCO2/kWh(and 3 gCO2/kWh in mainland France),27%lower than in the first-half 2023.In France,the 19.4TWh increase in nuclear power output to 177.4TWh reflects a good operational performance,whereas the first half of 2023 was affected by stress corrosion repairs and social movements.2024 has seen better-controlled outages,resulting in higher fleet availability.Estimated nuclear power output in France is expected to be in the upper end of the 315-345TWh range for 2024 and is confirmed in the 335-365TWh range for 2025 and 2026(4).The 9.9TWh increase in hydropower output(5)to 31.1TWh is explained by high availability and better hydrological conditions.The 13.1%increase in wind and solar power output to 15.5TWh is largely due to new installed capacities which brought the total to 24.8GW gross(including 500 MW for the Fcamp offshore wind farm).The portfolio of wind and solar projects also grew by 13%to 111GW gross(including the contract won for the Hydrom project in Oman(4.5GW and 2.5GW of storage).EDF has signed 5.8bn of green bank loans dedicated to financing the lifetime extension of existing French nuclear reactors,and successfully issued a 3bn multi-tranche green bond(to fund nuclear,renewables and network activities).EDF is mobilised for success in its nuclear projects:o Flamanville 3:fuel loading was completed in May 2024;reactor divergence is imminent and connection to the French grid is expected a few weeks afterwards.o New nuclear projects in the United Kingdom:Hinkley Point C:the first 3 steam generators have been delivered.Sizewell C:the Office for Nuclear Regulation has granted the Nuclear Site Licence required to continue the project.Framatome has signed contracts with Sizewell C for the nuclear heat production systems,the instrumentation and control system and fuel supply.o EPR 2:a new milestone was reached:the maturity of the design was validated with the support of a committee of experts from industry and government departments.Also,all environmental authorisations needed to install the 2 reactors at the Penly site have been issued.o Nuward SMR:the project has moved to a design based on proven technological building blocks.o Arabelle Solutions:acquisition of GE Steam Powers nuclear activities for nuclear plant conventional islands,including turbine generator sets(6).Expanding the networks to address the challenges of the energy transition:The networks are contributing to the energy transition:connections of renewable energy facilities by Enedis(7)were up by 33%.Investments by Enedis,EDF SEI(Island Energy Systems)and Electricit de Strasbourg increased by 9%,essentially due to the higher number of connections and the energy transition.For a larger,more reliable power supply between Sardinia,Corsica and Tuscany,replacement of the electrical connection has begun.Press release 26 July 2024 3 Developing flexibility solutions to meet electricity system requirements,via:Decarbonisation of flexible thermal plants:o Tests of 2 combustion turbines running on sustainable HVO bioliquid(8)rather than fuel oil at Vaires-sur-Marne in France conclusively show that flexible,dispatchable generation can be made carbon-free.o The project of liquid biomass power plant Ricanto(130MW in Corsica),to replace the Vazzio thermal plant has received administrative clearance.A 35%increase in the number of smart electric vehicle charging stations managed.Growth in B2C load-shedding contracts( 68%of customers).At its meeting of 25 July 2024,chaired by Luc Rmont,EDFs Board of Directors approved the consolidated financial statements at 30 June 2024.Luc Rmont,Chairman and Chief Executive Officer of EDF,said:“The rise in our operational and financial results in the first half of 2024 reflects the hard work put in by all EDFs teams to bring us back to high production levels.It also confirms our ability to supply competitive low carbon electricity on demand,so that consumers can feel fully confident about making the move to electrified uses.Against a backdrop of a rapid and sustained fall in market prices,EDF is rolling out its new“Ambitions 2035”plan to attain the levels of performance and investment needed for the electric revolution.”Outlook for 2024 EBITDA is expected to be down from 2023 due to the rapid drop in market prices Nuclear power output in France is expected to be in the upper end of the 315-345TWh range(4)2026 targets(9)Net financial debt/EBITDA:2.5x Adjusted economic debt/Adjusted EBITDA(10):4x (1)Based on cumulative EBITDA for H2 2023 and H1 2024.(2)Nuclear generation allocation contracts(3)France,UK,Italy,Belgium.Excluding B2B customers,and customers of lectricit de Strasbourg and the French island activities.(4)Estimated nuclear generation by the plants currently in operation(excluding Flamanville 3).(5)After deduction of pumped-storage consumption,hydropower output totals 27.1TWh in H1 2024 vs.18.4TWh in H1 2023.(6)See the press release of 31 May 2024.(7)Enedis is an independent subsidiary of EDF under the French Energy Code.(8)Recycled hydrotreated vegetable oil.(9)Based on scope and exchange rates as at 1 January 2024 and assuming French nuclear output by the plants currently in operation(excluding Flamanville 3)of 315-345TWh in 2024 and 335-365TWh in 2025 and 2026.(10)Applying constant S&P ratio methodology.Press release 26 July 2024 4 Key financial results:EBITDA (in millions of euros)H1 2023 H1 2024 Organic change France-Generation and supply 8,641 10,311 19.3%France-Regulated activities 1,176 2,822 140.0F Renewables 433 574 32.6lkia 220 230 5.0%Industry and Services(1)110 101-5.5%United Kingdom 2,266 1,989-15.2%Italy 828 993 21.5%Other international 508 455-10.8%Other activities 1,924 1,213-37.0%Group total 16,106 18,688 15.7%The almost 2.6 billion increase in EBITDA to 18.7 billion is explained by a good operational performance,leading to an increase in nuclear and hydropower output in France,despite a rapid market price downturn has already begun.Services and renewables activities in the rest of Europe also contributed to this rise in EBITDA.In the second half of the year,the declining market prices will result in a significantly lower H2 EBITDA in 2024 than in 2023.Financial result The financial result is an expense of 13 million,a clear 1.5 billion improvement compared to the first half of 2023,driven by:a good performance by the dedicated asset portfolio,which achieved a return of 5.5%(as in first-half 2023)thanks to favourable developments on the financial markets,particularly the equity markets,contributing to a 1 billion improvement in other financial income and expenses(limited impact on cash);a 0.7 billion decrease in the cost of unwinding the discount,principally relating to the 0.10%increase in the real discount rate applied for nuclear provisions in France in 2024 whereas the rate was stable in the first half of 2023(no cash impact);a 0.2 billion increase in the cost of gross financial debt,moderated by active management of debt in a context of rising interest rates(cash impact of-0.3 billion).The financial result excluding non-recurring items,particularly the change in fair value of the dedicated asset portfolio,is-1.7 billion,up by 1.3 billion.(1)This segment comprises Framatome and Arabelle Solutions,but no Arabelle Solutions items are incorporated in H1 2024 due to their non-material nature for the Groups income statement.Press release 26 July 2024 5 Net income Net income excluding non-recurring items amounts to 8.4 billion.The 2.1 billion increase primarily reflects the significant growth in EBITDA,less the tax expense.The Groups net income is 7.0 billion,up by nearly 1.2 billion year on year.Apart from the substantial increase in net income excluding non-recurring items,the principal items after tax contributing to this increase are:the new forecast cost estimate for spent fuel storage in France:2.4 billion,the change in fair value of financial instruments:0.4 billion,a provision relating to renegotiation of an amendment to the processing and recycling agreement with Orano:-0.8 billion in 2023,no equivalent in 2024.Cash flow Group cash flow for the first half of 2024 amounts to 1.9 billion vs.-1.6 billion in H1 2023.This is explained by a cash EBITDA of 17.6 billion,generated by a good operational performance despite falling market prices.Working capital rose by 0.7 billion,comprising:3.8 billion resulting essentially from the higher CSPE receivable,as lower market prices led to higher support for renewable energy producers,-3.8 billion due to the effect of the price downturn on trade receivables in France,the neutral impact of the optimisation/trading activity.This cash flow funded net investments of 11.1 billion,1.9 billion more than in first-half 2023 due notably to new nuclear projects including Hinkley Point C,network development and reinforcement and nuclear fleet maintenance.The acquisition of the nuclear activities of GE Steam Power(Arabelle Solutions)and Assystems 5%stake in Framatome also had a 0.9 billion effect on the rise in investments.Net financial debt(1)Net financial debt stands at 54.2 billion,stable compared to end-2023.The favourable impact of the positive cash flow was almost fully absorbed by the announcement that the hybrid bond issued in October 2018 for a nominal amount of 1.25 billion would be redeemed and its equity content replaced by the capital increase resulting from the conversion of the Oceane bonds in 2023(2).The bond issues during the first half of 2024,totalling around 5.5 billion,the lower level of short-term debt,and early repayments of bank loans lengthened the maturity of the Groups financial debt to 12.1 years at end-June 2024(vs.11 years at end-2023),and made it possible to control financing costs in a time of rising interest rates.(1)Net financial debt is not defined in the accounting standards and is not directly visible in the Groups consolidated balance sheet.It comprises total loans and financial liabilities,less cash and cash equivalents and liquid assets.Liquid assets are financial assets consisting of funds or securities with initial maturity of over three months that are readily convertible into cash and are managed according to a liquidity-oriented policy.(2)See the press release of 5 June 2024 announcing a hybrid bond redemption which took place on 5 July 2024:this announcement led to reclassification of the bond from equity to other financial liabilities at 30 June 2024.Press release 26 July 2024 6 Financial results by segment:Segment sales are presented before elimination of inter-segment operations.France-Generation and supply (in millions of euros)H1 2023 H1 2024 Organic change Sales 34,622 26,244-24.2ITDA 8,641 10,311 19.3%The increase in EBITDA is explained by higher output of nuclear power and hydropower,which had a favourable effect estimated at 1.5 billion and 0.8 billion respectively.The decline in sale prices had an estimated impact of-8.1 billion.This effect is largely explained by the change in the average forward market prices in the past 2 years:178/MWh in 2024 vs.218/MWh in 2023,and in the ARENH cropping price:102/MWh in 2024 vs.410/MWh in 2023.Falling market prices affecting net purchases in a context of higher nuclear output had a positive effect estimated at 7.8 billion;this effect should be very limited in the second half of the year.France-Regulated activities(1)(in millions of euros)H1 2023 H1 2024 Organic change Sales 9,978 10,467 4.9ITDA 1,176 2,822 140.0%Including Enedis 763 2,311 203%The increase in EBITDA is principally explained by a positive price effect estimated at 1.9 billion,caused by purchases to cover network losses made at lower market prices than in 2023(1.3 billion)and changes in the TURPE network access tariff(2)(0.5 billion).The 0.6TWh decline in volumes distributed excluding weather effects had a limited impact on EBITDA.(1)Including Enedis,lectricit de Strasbourg and the French island activities.(2)Indexed adjustment to the TURPE 6 distribution tariff: 6.51%at 1 August 2023.Press release 26 July 2024 7 EDF Renewables-Renewable Energies Group Renewables excluding hydropower in France(in millions of euros)H1 2023 H1 2024 Organic change Sales 1,705 2,142 7.3ITDA 763 1,066 31.6%Contribution by EDF Renewables (in millions of euros)H1 2023 H1 2024 Organic change Sales 985 1,020 3.4ITDA 433 574 32.6%Including EBITDA for generation 593 627 5.7%The increase in EBITDA for Group Renewables is attributable to a 13.1%increase in wind and solar power output thanks to new installed capacities that brought total net capacity to 15.3GW at 30 June 2024.In Italy and Belgium,hydropower output also rose substantially due to better hydrological conditions.At EDF Renewables,EBITDA for generation progressed due to 9.7%growth in volume output following the commissioning of new plants,despite less favourable wind and sunshine conditions in France,and a downturn in prices.The rise in EBITDA is also explained by portfolio rotation,notably involving sales of plants in the United States and Brazil.Press release 26 July 2024 8 Dalkia-Energy Services Group Energy Services(1)(in millions of euros)H1 2023 H1 2024 Organic change Sales 4,506 4,044-8.2ITDA 291 307 4.8%Contribution by Dalkia(in millions of euros)H1 2023 H1 2024 Organic change Sales 3,411 2,943-12.6ITDA 220 230 5.0%The service activities of Dalkia and IZI Confort in France contributed to the increase in EBITDA for Group Energy Services.At Dalkia,the rise in EBITDA is attributable to the business performance,particularly in energy efficiency services and decarbonisation in France.However,sales of electricity from cogeneration plants were down compared to the first half of 2023.Industry and Services(2)(in millions of euros)H1 2023 H1 2024 Organic change Sales 1,959 2,191 10.1ITDA(Framatome)307 326 7.2%Contribution(Framatome)to EDF group EBITDA 110 101-5.5%New nuclear projects in France and the United Kingdom explain the increase in EBITDA.Order intake amounts to approximately 15.2 billion at 30 June 2024,well above end-2023,largely due to new nuclear projects in France and the United Kingdom,particularly the Sizewell C project.Together with TechnicAtome,Framatome acquired Vanatome(Daher Valves)which specialises in the design,production and qualification of a wide range of valves for the nuclear and defence sectors.(1)Group Energy Services comprises Dalkia,IZI Confort,IZI Solutions,Sowee,Izivia,and the service activities of EDF Energy,Edison,Luminus and EDF SA.The services consist in particular of heating networks,decentralised low-carbon generation using local resources,street lighting,energy consumption management and electric mobility.(2)This segment comprises Framatome and Arabelle Solutions,but no Arabelle Solutions items are incorporated in H1 2024 due to their non-material nature for the Groups net income.Press release 26 July 2024 9 United Kingdom (in millions of euros)H1 2023 H1 2024 Organic change Sales 12,140 9,048-28.1ITDA 2,266 1,989-15.2%The decrease in EBITDA is explained in particular by lower margins in the domestic and small business customer segments,as the first half of 2023 benefited from an exceptional recovery of some of the costs incurred during the energy crisis.Operational performance was strong for the generation business,with a limited-0.1TWh downturn in nuclear power output to 18.1TWh despite unplanned outages at Heysham 1 and Hartlepool.The impact of these outages was largely offset by optimisation of scheduled outages and higher realised nuclear prices.Italy (in millions of euros)H1 2023 H1 2024 Organic change Sales 9,543 7,168-24.8ITDA 828 993 21.5%The increase in EBITDA in the electricity generation business was driven by the growth in renewables activities,especially a rise in hydropower thanks to exceptionally good hydrological conditions.The gas business has benefited from good optimisation performances on the portfolio of long-term gas contracts.In the sales activities,customer portfolio growth explains the improvement in EBITDA.Wind and solar power capacities totalled 669MW net(1)at 30 June 2024.(1)For the Edison scope.Press release 26 July 2024 10 Other international (in millions of euros)H1 2023 H1 2024 Organic change Sales 3,099 2,307-26.0ITDA 508 455-10.8%Including:-Belgium 408 352-14.2%-Brazil 107 104-2.8%The lower EBITDA in Belgium(1)is essentially explained by falling prices,despite better nuclear power output( 11%),after a year 2023 affected by the Chooz power plant shutdown,and higher hydropower output( 32%).Also,cost increases for nuclear waste were reinvoiced in 2023,and this had no equivalent in 2024.Wind power capacities totalled 635MW net(2)at 30 June 2024.In Brazil,EBITDA was down slightly due to the-4%indexed adjustment to the Power Purchase Agreement attached to EDFs Norte Fluminense plant in November 2023,despite an increase in revenues from system services.Other activities (in millions of euros)H1 2023 H1 2024 Organic change Sales 4,655 2,730-41.4ITDA 1,924 1,213-37.0%Including:-gas activities 7 278 x38.7-EDF Trading 1,866 885-52.6%The increase in EBITDA for the gas activities is explained by improved margins on the Groups assets in gas storage activities and sale of gas,despite the lower level of business at the Dunkirk terminal.EDF Tradings EBITDA decreased in a context of falling prices and volatility on the wholesale markets.(1)Luminus and EDF Belgium.(2)For the Luminus scope.Press release 26 July 2024 11 Extract from the consolidated financial statements Consolidated income statementConsolidated income statement (in millions of euros)H1 2024 H1 2023 Sales 60,200 75,499 Fuel and energy purchases (27,857)(48,899)Other external purchases(1)(4,701)(4,117)Personnel expenses (8,360)(8,201)Taxes other than income taxes (3,062)(2,714)Other operating income and expenses 2,468 4,538 Operating profit before depreciation and amortisation(EBITDA)18,688 16,106 Net changes in fair value on energy and commodity derivatives,excluding trading activities 696(276)Net depreciation and amortisation (5,772)(5,472)(Impairment)/reversals (276)(48)Other income and expenses (3,690)(1,696)Operating profit 9,646 8,614 Cost of gross financial indebtedness (2,026)(1,857)Discount effect (1,288)(1,977)Other financial income and expenses 3,301 2,304 Financial result (13)(1,530)Income before taxes of consolidated companies 9,633 7,084 Income taxes (2,466)(1,323)Share in net income of associates and joint ventures 178 142 Net income of discontinued operations -CONSOLIDATED NET INCOME 7,345 5,903 EDF net income 7,039 5,808 EDF net income-continuing operations 7,039 5,808 EDF net income-discontinued operations -Net income attributable to non-controlling interests 306 95 Net income attributable to non-controlling interests-continuing operations 306 95 Net income attributable to non-controlling interests-discontinued operations -(1)Other external expenses are reported net of capitalised production.Press release 26 July 2024 12 Consolidated balance sheetConsolidated balance sheet ASSETS(in millions of euros)30/06/2024 31/12/2023 Goodwill 9,007 7,895 Other intangible assets 11,903 11,300 Property,plant and equipment used in generation and other tangible assets owned by the Group,including right-of-use assets 105,668 100,587 Property,plant and equipment operated under French public electricity distribution concessions 67,188 66,128 Property,plant and equipment operated under concessions other than French public electricity distribution concessions 6,522 6,544 Investments in associates and joint ventures 9,448 9,037 Non-current financial assets 50,889 48,327 Other non-current receivables 2,231 2,110 Deferred tax assets 5,948 7,403 Non-current assets 268,804 259,331 Inventories 18,293 18,092 Trade receivables 20,314 26,833 Current financial assets 33,797 39,442 Current tax assets 861 669 Other current receivables 9,476 9,074 Cash and cash equivalents 9,238 10,775 Current assets 91,979 104,885 Assets held for sale 554 596 TOTAL ASSETS 361,337 364,812 EQUITY AND LIABILITIES(in millions of euros)30/06/2024 31/12/2023 Capital 2,084 2,084 EDF net income and consolidated reserves 57,061 50,084 Equity(EDF share)59,145 52,168 Equity(non-controlling interests)13,787 11,951 Total equity 72,932 64,119 Provisions related to nuclear generation-back-end of the nuclear cycle,plant decommissioning and last cores 63,291 60,206 Provisions for employee benefits 15,606 15,895 Other provisions 5,719 4,878 Non-current provisions 84,616 80,979 Special French public electricity distribution concession liabilities 50,357 50,010 Non-current financial liabilities 69,845 69,724 Other non-current liabilities 5,873 5,685 Deferred tax liabilities 782 978 Non-current liabilities 211,473 207,376 Current provisions 7,773 7,294 Trade payables 16,240 19,687 Current financial liabilities 28,911 38,103 Current tax liabilities 870 1,111 Other current liabilities 23,010 26,975 Current liabilities 76,804 93,170 Liabilities related to assets held for sale 128 147 TOTAL EQUITY AND LIABILITIES 361,337 364,812 Press release 26 July 2024 13 Consolidated cash flow statementConsolidated cash flow statement(in millions of euros)H1 2024 H1 2023 Operating activities:Consolidated net income 7,345 5,903 Net income from discontinued operations -Net income from continuing operations 7,345 5,903 Impairment/(reversals)276 45 Accumulated depreciation and amortisation,provisions and changes in fair value 6,707 9,389 Financial income and expenses 759 1,096 Dividends received from associates and joint ventures 83 384 Capital gains/losses 184 157 Income taxes 2,466 1,322 Share in net income of associates and joint ventures (178)(141)Change in working capital (706)(8,020)Net cash flow from operations 16,936 10,135 Net financial expenses disbursed (1,327)(1,083)Income taxes paid (2,094)(1,125)Net cash flow from continuing operating activities 13,515 7,927 Net cash flow from operating activities relating to discontinued operations -Net cash flow from operating activities 13,515 7,927 Investment subsidies:Acquisitions of equity investments,net of cash acquired (503)33 Disposals of equity investments,net of cash transferred 109 62 Investments in intangible assets and property,plant and equipment(1)(11,421)(10,052)Net proceeds from sale of intangible assets and property,plant and equipment 66 79 Changes in financial assets (1,577)(1,070)Net cash flow from continuing investing activities (13,326)(10,948)Net cash flow from investing activities relating to discontinued operations -Net cash flow from investing activities (13,326)(10,948)Financing activities:-EDF capital increase -Transactions with non-controlling interests(2)991 862 Dividends paid by parent company -Dividends paid to non-controlling interests (429)(190)Cash flow with shareholders 562 672 Issuance of borrowings 13,777 9,465 Repayments of borrowings (16,144)(10,498)Issuance of perpetual subordinated bonds -1,377 Repayments of perpetual subordinated bonds -(820)Payments to bearers of perpetual subordinated bonds (307)(300)Funding contributions received for assets operated under concessions and investment subsidies 192 101 Other cash flows from financing activities (2,482)(675)Net cash flows from continuing financing activities (1,920)(3)Net cash flow from financing activities relating to discontinued operations -Net cash flow from financing activities (1,920)(3)Cash flows from continuing operations (1,731)(3,024)Cash flows from discontinued operations -Net increase/(decrease)in cash and cash equivalents (1,731)(3,024)CASH AND CASH EQUIVALENTS OPENING BALANCE 10,775 10,948 Net increase/(decrease)in cash and cash equivalents (1,731)(3,024)Currency fluctuations 97 36 Financial income on cash and cash equivalents 156 96 Other non-monetary changes (59)18 CASH AND CASH EQUIVALENTS CLOSING BALANCE 9,238 8,074(1)Investments in intangible assets and property,plant and equipment comprise(9,663)million of acquisitions of property,plant and equipment(8,578)million in 2023),(1,151)million of acquisitions of intangible assets(868)million in 2023)and(606)million change in payables to suppliers of fixed assets(606)million in 2023 (2)In 2024,these transactions notably include a 1,086 million capital injection by the British government into the Sizewell C project and the purchase of Assystems minority interests in Framatome for(205)million.In 2023,they included an amount of 776 million corresponding to capital injections by CGN into NNB Holding(HPC)and by the British government into NNB Holding(SZC)Ltd.Press release 26 July 2024 14 Main press releases since announcement of the 2023 results Governance Appointment to EDFs Board of Directors(PR of 11/06/2024)Changes in EDFs business organisation and appointments to the EDF Group Executive Committee(PR of 29/03/2024)EDF Group appointments(PR of 28/03/2024)Nuclear EDF,Edison,Federacciai,Ansaldo Energia and Ansaldo Nucleare signed a Memorandum of Understanding for the use of nuclear energy to boost the competitiveness and decarbonisation of the Italian steel industry(PR of 23/07/2024)Framatome and TechnicAtome announce the acquisition of Daher Valves(PR of 01/07/2024)EDF acquires GE Steam Powers nuclear activities from GE Vernova(PR of 31/05/2024)Update on the Flamanville EPR(PR of 08/05/2024)EDF submits to the Czech operator EZ and its project company Elektrrna Dukovany II its Updated Initial Bid Supplement for up to four EPR1200 units in the Czech Republic(PR of 30/04/2024)Update on the Flamanville EPR(PR of 27/03/2024)EDF responds to the request of the French government to study the creation of an irradiation department to support the CEA (PR of 18/03/2024)Renewables EDF group commissions its largest wind farm in South America(PR of 18/07/2024)EDF inaugurates the largest solar power plant in Chile(PR of 09/07/2024)Fcamp,Frances First Offshore Wind Farm in Normandy,is Now Operational(PR of 15/05/2024)Customers GravitHy signs a letter of intent with EDF to secure part of the electricity supply to its future plant in Fos-sur-Mer(France)(PR of 11/04/2024)EDF group and CCI France renew their partnership for local economic development and acceleration of the energy transition(PR of 26/03/2024-French only)EDF Group and Morrison form strategic partnership to invest in the development of ultra-fast charging for electric vehicles(PR of 29/04/2024)BNP Paribas and EDF sign a partnership to support the banks retail clients in upgrading home energy efficiency(PR of 20/02/2024)Grids EDF and Italian Transmission System Operator Terna launch SACOI3,the power line replacement project between Corsica,Sardinia and Tuscany(PR of 28/05/2023)Human resources Nearly 20,000 new employees will join the EDF Group in 2024(PR of 28/05/2024)Financing EDF announces the success of its senior green multi tranche bond issue for a nominal amount of 3 billion euros(PR of 11/06/2024)Exercise of Redemption of Perpetual Subordinated Notes(PR of 05/06/2024)EDF announces its first green commercial paper issuance subscribed by Ecofi(PR of 15/05/2024)EDF announces the success of its senior multi-tranche bond issue for a nominal amount of CAD 750 million(PR of 14/05/2024)EDF announces the signature of green bank loans dedicated to the financing of the existing nuclear fleet,for an amount of c.5.8 billion euros(PR of 13/05/2024)EDF announces the success of its senior multi-tranche bond issue for a nominal amount of$2,050 million(PR of 16/04/2024)Press release 26 July 2024 15 This press release is certified.Check its authenticity on .The EDF Group is a key player in the energy transition,as an integrated energy operator engaged in all aspects of the energy business:power generation,distribution,trading,energy sales and energy services.The Group is a world leader in low-carbon energy,with a low carbon output of 434TWh(1),a diverse generation mix based mainly on nuclear and renewable energy(including hydropower).It is also investing in new technologies to support the energy transition.EDFs raison dtre is to build a net zero energy future with electricity and innovative solutions and services,to help save the planet and drive well-being and economic development.The Group supplies energy and services to approximately 40.9 million customers(2)and generated consolidated sales of 139.7 billion in 2023.(1)See EDFs 2024 URD sections 1.2.3,1.3.2 and 3.1(2)Customers are counted per delivery site.A customer may have two delivery points.This presentation is for information purposes only and does not constitute an offer or solicitation to sell or buy instruments,any part of the company or assets described,in the US or any other country.This document contains forward-looking statements or information.While EDF believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions at the time they are made,these assumptions are intrinsically uncertain,with inherent risks and uncertainties that are beyond the control of EDF.As a result,EDF cannot guarantee that these assumptions will materialise.Future events and actual financial and other results may differ materially from the assumptions underlying these forward-looking statements,including,but not limited to,differences in the potential timing and completion of the transactions they describe.Risks and uncertainties(notably linked to the economic,financial,competition,regulatory and climate situation)may include changes in economic and business trends,regulations,and factors described or identified in the publicly-available documents filed by EDF with the French financial markets authority(AMF),including those presented in Section 2.2“Risks to which the Group is exposed”of the EDF Universal Registration Document(URD)filed with the AMF on 4 April 2024(under number D.24-0238),which may be consulted on the AMF website at www.amf-france.org or the EDF website at www.edf.fr.Neither EDF nor any EDF affiliate is bound by a commitment or obligation to update the forward-looking information contained in this document to reflect any events or circumstances arising after the date of this presentation.Print this press release only if you need to.EDF SA 22-30 avenue de Wagram 75382 Paris cedex 08-France Capital of 2,084,365,041 552 081 317 R.C.S.Paris www.edf.fr Contacts Investors:edf-irteamedf.fr Press:service-de-presseedf.fr
2024-08-07
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RESULTSRESULTSOF THE SECOND OF THE SECOND QUARTER AND FIRST QUARTER AND FIRST HALF 2024HALF 2024WORKING EVERY DAY IN THE INTEREST OF OUR CUSTOMERS AND SOCIETY22NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSNOTEThe Crdit Agricole Group scope of consolidation comprises:the Regional Banks,the Local Banks,Crdit Agricole S.A.and their subsidiaries.This is the scope of consolidation that has been selected by the competent authorities to assess the Groups position in the recent stress test exercises.Crdit Agricole S.A.is the listed entity,which notably owns the subsidiaries of its business lines(Asset gathering,Large customers,Specialised financial services,French retail banking and International retail banking)DisclaimerThe financial information on Crdit Agricole S.A.and Crdit Agricole Group for the second quarter and first half of 2024 comprises this presentationand the attached appendices and press release which are available on the website:https:/www.credit- presentation may include prospective information on the Group,supplied as information on trends.This data does not represent forecastswithin the meaning of EU Delegated Act 2019/980 of 14 March 2019(Chapter 1,article 1,d).This information was developed from scenarios based on a number of economic assumptions for a given competitive and regulatory environment.Therefore,these assumptions are by nature subject to random factors that could cause actual results to differ from projections.Likewise,thefinancial statements are based on estimates,particularly in calculating market value and asset impairment.Readers must take all these risk factors and uncertainties into consideration before making their own judgement.The figures presented for the six-month period ending 30 June 2024 have been prepared in accordance with IFRS as adopted in the EuropeanUnion and applicable at that date,and with the applicable regulations in force.This financial information does not constitute a set of financialstatements for an interim period as defined by IAS 34“Interim Financial Reporting”and has not been audited.Note:The scopes of consolidation of the Crdit Agricole S.A.and Crdit Agricole Groups have not changed materially since the Crdit Agricole S.A.2023 Universal Registration Document and its A.01 update(including all regulatory information about the Crdit Agricole Group)were filed with theAMF(the French Financial Markets Authority).The sum of values contained in the tables and analyses may differ slightly from the total reported due to rounding.On 30 June 2024,Indosuez Wealth Management finalised the acquisition of Degroof Petercam and now holds 65%of Banque Degroof Petercamalongside with CLdN Cobelfret,its historical shareholder,which would maintain a 20%stake in capital.On 30 June 2024,Amundi finalised the acquisition of Alpha Associates,an independent asset manager offering multi-management investmentsolutions in private assets.32NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSKey messages and figures42NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCONTINUED PERFORMANCE OF THE UNIVERSAL BANKING MODEL Continued growth in half-year results,Net income Group share target 6bn confirmed for 2024 Very good quarterly results driven by high revenues,after a Q2-23 marked by extraordinary items linked to the reorganisation of the Mobility activitiesCost/income ratio maintained at a low level Solid capital and liquidity positionsPursuit of strategic projects(acquisition of a majority stake in Degroof Petercam,acquisition of Alpha Associates,definitive agreement on a partnership with Victory Capital)1.Growth in underlying Net Income Group share excluding the effect of the timing difference of the contribution to the deposit guarantee fund in Italy(DGS)recognised in Q2(vs.Q4 in 2023),for an impact of 30m on Net income Group share2.Underlying data,detail of specific items available on page 383.Underlying ROTE calculated on the basis of annualized underlying net income Group share and linearised IFRIC costs over the yearCrdit Agricole S.A.3.7bnNet income Group shareH1-2024 14.2%H1/H1Crdit Agricole S.A.1.8bnNet income Group share Q2-2024-10.4%Q2/Q2 0.2%Q2/Q2(1)Crdit Agricole S.A.11.6%Phased-in CET1June 2024Crdit Agricole S.A.15.5%Underlying ROTE(3)H1-2024Crdit Agricole S.A.53.4%Underlying cost/income ratio(2)H1 202452NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSKEY FIGURESNet income Group sharestatedRevenuesstatedGross Operating IncomestatedCRDIT AGRICOLE GROUP1ST HALF 2024CRDIT AGRICOLE S.A.Net income Group sharestatedRevenuesstatedGross Operating IncomestatedUnderlyingcost/income ratio(1)CET 1Phased-inCoR/outstandings4 rolling quartersLiquidity reserves59.3% 1.4 pp H1/H125 bpStable Q2/Q117.3%-0.2pp Jun./March478bn 0.4%Jun./MarchUnderlyingcost/income ratio(1)CET 1Phased-inCoR/outstandings4 rolling quartersROTEUnderlying(2)53.4% 1.1 pp H1/H132 bp-1bp Q2/Q111.6%-0.2pp June/March15.5% 0.8 pp H1/H12,028m-18.3%Q2/Q29,507m-0.4%Q2/Q23,819m-11.6%Q2/Q21.Underlying data,details of specific items available on pages 38 and 71;H1/H1 variation excl.SRF2.Underlying ROTE calculated on the basis of the underlying net income Group share and linearised IFRIC costs over the year2ND QUARTER 20241ST HALF 2024 1,828m-10.4%Q2/Q26,796m 1.8%Q2/Q23,175m-8.3%Q2/Q22ND QUARTER 20243,731m 14.2%H1/H113,602m 6.3%H1/H16,312m 9.9%H1/H14,412m 6.3%H1/H119,031m 3.0%H1/H17,755m 5.7%H1/H162NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSSTRONG ACTIVITY IN ALL BUSINESS LINESACTIVITY 482,000 gross 76,000 netNew customers(Q2-24)France(CR LCL):812( 0.3%)Italy:61( 2.2%)Total:873( 0.4%)Loans outstanding retail banking(bn)Wealth management:269( 44.6%)Life insurance:338( 3.6%)Asset management:2,156( 9.9%)Total:2,763( 11.7%)Assets under management(bn)Total:116( 8.2%)Of which Automotive(2):53%(stable)Consumer financeoutstandings(bn)Solid performance in retail banking and consumer financeVery good customer acquisition Increase in inflows this quarter in France and Italy Stabilisation of the home loan activity in France and slight increase in new corporate loan productionContinued growth in the international loan activity Consumer finance activity stable at a high level Strong activity in CIB,asset management and insuranceHigh gross inflows in life insurance and continued steady growth in property and casualty and personal insurance premium income High asset inflows and record level of assets under management High level of activity in CIB,record half-year#2 Syndicated loans in France and EMEA#3 All Bonds in EUR WorldwideSource:RefinitivChange June 24/June 23Property and casualty insurance equipment rate(1)43.5%( 0.7 pp)Regional Banks27.8%( 0.4 pp)LCL19.7%( 1.8 pp)CA ItaliaFrance(CR LCL):767( 4.6%)Italy:65( 2.5%)Total:832( 4.4%)On-balance sheet deposits in retail banking(bn)1.Car,home,health,legal,all mobile phones or personal accident insurance.2.CA Auto Bank,automotive JV and automotive activity of the other entities.72NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCrdit Agricole S.A.Summary 82NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.6,3296,7546,6766,796(273)(201) 211 318 66Q2-23underlyingQ2-23 statedAsset gatheringLargecustomersSFSRetail bankingCorporatecentreQ2-24 statedQ2-24underlying 1.8% 120m 6.7% 425mHIGH LEVEL OF REVENUES,SHARPLY UP IN UNDERLYING VISIONREVENUESQ2/Q2 change in revenues,by business line(m)Strong activityand integration of Degroof Petercam( 49m)CIB:Record Q2CACEIS:integration of ISB( 107m)and increase in fee incomeBase effect:reorganisation of the Mobility activities(-299m)France:improvement of NIIIRB:increase driven by fee income in Italy and NIM in PolandSteady increase since 2017Q2/Q2 dividend and valuation of BBPM shares(-71m Q2/Q2)Base effect:reversal for the Cheque Image Exchange fine(-42m)AG:Asset gathering;LC:Large customers;SFS:Specialised financial services;RB:Retail banking;CC:Corporate CentreUnderlying data,detail of specific items available on page 38Q2 underlying revenues(bn)Base effect linked to the reorganisation of the Mobility activities(299m in Q2-23)4.65.15.25.25.86.26.36.8Q2-17 Q2-18 Q2-19 Q2-20 Q2-21 Q2-22 Q2-23 Q2-24Q2Implementation of IFRS 17 since 202392NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.Q2/Q2 underlyingexpensesScope effect(2)DGS(3)Staff costsIT investmentsOthers 5,7% 181mQ2/Q2 change in expenses,by business line(m)SUPPORT FOR BUSINESS LINES DEVELOPMENT,LOW COST/INCOME RATIO AT 53.4%EXPENSESBreakdown by nature of costs(m)3,1963,2143,6213,591 98 168 15 95 30Q2-23underlyingQ2-24 statedAsset gatheringLargecustomersSFSRetail bankingCorporatecentreQ2-24 statedQ2-24underlying 12.6% 406m 395m 12.4CEIS:integration of ISB( 129m1)AG:Asset gathering;LC:Large customers;SFS:Specialised financial services;RB:Retail banking;CC:Corporate CentreUnderlying data,detail of specific items available on page 38France:increase in investmentsIRB:deposit guarantee fund in Italy( 58m)Integration of Degroof Petercam( 40m1)Underlying Q2/Q2 expenses excluding scope effect,excluding DGS 156 58 131 531.Scope effect and integration costs2.Scope effect:ISB( 104m),Degroof Petercam( 35m),ALD/Leaseplan in six European countries and Hiflow( 10m),Alpha Associates and consolidation of CATU for the remainder.3.Effect of the timing difference of the contribution to the deposit guarantee fund in Italy(DGS)recognised in Q2(vs.Q4 in 2023)for 58m-3 395Provision for variable compensation( 39m)102NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.CRDIT AGRICOLE GROUP1.Cost of risk for the last four quarters divided by the average of the outstandings at the start of all four quarters of the year.2.Annualised CoR/outstandings:cost of risk for the quarter multiplied by four divided by the outstandings at the start of the current quarter.(*)Including non-provisioned losses.COST OF RISK STABLE OVERALLRISKSCrdit Agricole S.A.underlying cost of risk(m)Cost of risk/outstandings(1)(bp)Cost of risk by business line SFS49%SFS50%LCL15%LCL22%IRB28%IRB17%LC7%LC91%Q2-23Q2-24424450Cost of risk/outstandingsNPL RatioLoans loss reservesCoverage ratio32 bps(1)32 bps(2)9.7bn2.5%-0.1 pp vs Q-171.3% 1.6 pp vs Q-1CRDITAGRICOLES.A.Cost of risk/outstandingsNPL RatioLoans loss reservesCoverage ratio25 bps(1)30 bps(2)CRDITAGRICOLEGROUP2.2%Stable vs Q-182.3% 1.1 pp vs Q-121.2bnCrdit Agricole GroupCrdit Agricole S.ALCLCA ItaliaCAPFMCAL&FFinancing activitiesRegional Banks252525252533333333321617182122576055555014119521818181920Q2-23Q3-23Q4-23Q1-24Q2-242123202121134128121117114AG:Asset gathering;LC:Large customers;SFS:Specialised financial services;RB:Retail banking;CC:Corporate Centre468487373384491-14-591-8-31-41665-37450429440380424Q2-23Q3-23Q4-23Q1-24Q2-24S3 CoR*S1&S2 CoROthersTotal CoR-5.82NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.(337)(95)(30) 425 26 411,8501,823Q2-23underlyingRevenuesOperatingexpensesexcl.DGSCost of riskTaxOtherQ2-24underlyingexcl.DGSDGSQ2-24underlying1,853 2.8% 88m 0.2% 3mVERY GOOD QUARTERLY RESULTSRESULTSQ2/Q2 change in Net income Group share by business line(m)By income statement line(m)1,8501,8232,0401,828(117)(6)(222) 60 72Q2-23underlyingQ2-23 statedAsset gatheringLargecustomersSFSRetail bankingCorporatecentreQ2-24 statedQ2-24underlying-10.4%-212m-1.5%-27mAG:Asset gathering;LC:Large customers;SFS:Specialised financial services;RB:Retail banking;CC:Corporate CentreUnderlying data,detail of specific items available on page 38Base effect:reorganisation of the Mobility activities(140m in Q2-23 Net income Group share)1.Effect of the timing difference of the contribution to the deposit guarantee fund in Italy(DGS)recognised in Q2(vs.Q4 in 2023),for an impact of 30m on Net income Group shareUnderlying Net income Group shareexcluding DGS(1)Underlying GOIexcluding DGSBase effect linked to the reorganisation of the Mobility activities(140m in Q2-23 in Net income Group share)122NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.34134640411213-0.3 1.3 1.2 3.3 1.0393399Mar.24AGRBSFSLCCCJune 24Credit riskOperational riskMarket risk 1.7% 6.5bn-12 bp-35 bp-1 bp 22 bp11.8.6%March 24Retained resultOrganic growthM&ARegulatory effects/OCI/OtherJune 24GOOD LEVEL OF SOLVENCYSTRONG FINANCIAL POSITION CRDIT AGRICOLE S.A.Insurance 5 bp(dividend payment)CACEIS-1.6bnChange in phased-in CET1 ratio(bp)Change in RWA by business line(bn)CET1 11.6%-0.2 pp vs Q-1 3 pp vs SREP requirementLEVERAGE RATIO3.8%-0.1 pp vs Q-1 0.8 pp vs requirement Distribution:0.29 in Q2Insurance-2.7bn(dividend payment)IntegrationDegroof Petercam 2.6bn Degroof Petercam-28 bp Alpha Associates-5 bpAG:Asset gathering;LC:Large customers;SFS:Specialised financial services;RB:Retail banking;CC:Corporate Centre132NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE GROUP54154964651213-0.2 3.8 3.3 1.2 1.8618628Mar.24RetailBankingAGLCSFSCCJune 24Credit riskOperational riskMarket risk 9.9bn 1.6%VERY HIGH CAPITALSTRONG FINANCIAL POSITION CRDIT AGRICOLE GROUP 18bp 2bp-9bp-9bp17,5,5%Sept.23Rsultat conservEvolution organiquedes mtiersMthodologie,effetsrglementairesOCI et autresDec.23Groupe Crdit Agricole:volution du ratio CET1 phas(pb) 25bp 2bp-18bp-27bp17.5.3%March 24Retained resultOrganic growthM&ARegulatoryeffects/OCI/otherJune 24Change in phased-in CET1 ratio(bp)Change in RWA by business line(bn)CET1 17.3%-0.2 pp vs Q-1 7.6 pp vs SREP requirementLEVERAGE RATIO5.5%stable vs Q-1 2.0 pp vs requirementTLAC/RWA27.1%-0.2 pp vs Q-1 4.8 pp vs requirementMREL/RWA32.8%-0.2 pp vs Q-1 6.6 pp vs requirementAG:Asset gathering;LC:Large customers;SFS:Specialised financial services;RB:Retail banking;CC:Corporate CentreDegroof Petercam-21 bp Alpha Associates-3 bpInsurance 5 bp(dividend payment)142NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE GROUPCRDIT AGRICOLE S.A.513%Sight depositsTime depositsRegulated passbooks(Livret A,LEP,LDD)STRONG LIQUIDITY POSITION STRONG FINANCIAL POSITION CRDIT AGRICOLE GROUP1,131bnStable,diversified and granular customer deposits 37m retail banking customers,of which 27m individual customers in France 60%(5)of guaranteed deposits in retail banking in FranceLiquidity reserves(bn)Customer deposits(bn)1,131bn 2%vs Q1-241.Receivables eligible for central bank refinancing providing access to LCR compliant resources2.Available securities,at market value after haircut3.Of which 2bn eligible in central bank4.Excluding cash(4bn)&mandatory reserves(10bn)5.Customers(individuals,professionals,corporates)LCL and Regional BanksCASALCRNSFR1520G1460%0.7bn198bnCAGTLTRO 3StableResources Position30/06/2024Sovereign,Public sector66!%3%Individuals/SMEs-including 100%of regulated passbooksCorporatesFinancial institutionsSovereign,Public sector152NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.INCOME STATEMENTMQ2-24Q2/Q2H1-24H1/H1Revenues6,796 1.8,602 6.3%Operating expenses(3,621) 12.5%(7,289) 11.4%Gross operating income3,175-8.3%6,312 9.9%Cost of risk(424)-20.7%(824)-9.3%Equity-accounted entities47 73.7-20.7%Net income on other assets15-46.7%9-72.6%Income before tax2,814-5.7%5,587 12.2%Tax(704) 3.9%(1,315) 9.7%Net income Group Share stated1,828-10.4%3,731 14.2%Spcific items5(25)Net income Group Share underlying1,823-1.5%3,756 21.2%excl.SRF162NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSUPDATE ON THE ENERGY TRANSITIONInstalled renewableenergy capacity(2)13.8 GWJune 2024 17%June 24/Dec.22Green loans(3)19.8bnJune 2024 60%June 24/Dec.22Low-carbon energy(1)financing21.7bn March 2024 X 2March 24/Dec.201.Low-carbon energy outstandings made up of renewable energy produced by the clients of all Crdit Agricole Group entities,including nuclear energy outstandings for Crdit Agricole CIB.2.CAA scope.3.Crdit Agricole CIB green asset portfolio,in line with the eligibility criteria of the Group Green Bond Framework published in November 2023.Crdit Agricole has published its Climate Transition Plan,the reference guide for its Net Zero 2050 approach.This edition updates the“Acting for the climate”guide published in 2023.It details the implementation and methodologies of the decarbonisation trajectories.Available in French,translation in progress.Massive roll-out of financing and investment to promote the transition172NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCrdit Agricole S.A.Business lines 182NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.AG INSURANCESavings/retirement:rise in gross inflows Gross inflows:8.1bn( 23.1%Q2/Q2);recovery in international business and success of euro payment campaigns;UL rate of gross inflows:32.2%Outstandings(3):337.9bn( 2.3%June/Dec.),historical high,driven by growth in net inflows(net euro inflows back to positive);UL rate in outstandings at 29.5%Property&Casualty:good performance driven by volumes and pricing Portfolio growth(2): 5.2%over one year to 16.4 million policies Increase in average premium:pricing revisions and evolution of the product mixPersonal insurance:good momentum in various activities Credit insurance activity up 8.7%Q2/Q2,driven by international activities Strong growth of 35.2%in group insurance.Revenues(4)buoyed by strong business momentum and positive operating varianceCSM:23.7bn(-0.8%June/Dec.);New business contribution higher than CSM allocation;unfavourable impact of stock revaluation(market effect).Annualised CSM allocation factor on stock:8.7%in H1 2024Combined ratio(5):94.6%(-1.3 pp H1/H1)benefiting from positive prior-year reserve developmentSolvency 2 Ratio as of 30/06/2024:200%1.Death and disability,creditor,group insurance 2.Including scope effect 1st consolidation of CATU(Property&Casualty entity in Poland)in Q2-24,retroactive to 01/01/2024: 0.4%in property and personal insurance;Property&Casualty: 0.9%of premium income and 2.0%of portfolio growth,i.e.310k contracts3.Savings,retirement and funeral insurance.4.Q2-24 revenues notably including revenues of 476m for savings/retirement and funeral insurance,115m for personal insurance and 75m for property and casualty insurance(net of reinsurance cost).5.Combined property&casualty ratio in France(Pacifica)including discounting and excluding undiscounting,net of reinsurance:(claims operating expenses fee and commission income)/premium income;Ratio calculated over H1 2024.The undiscounted ratio stands at 97.3%(-1.3 pp over one year).Savings/RetirementNet inflows(bn)Property and personal insurance(1)Premium income(bn)Contribution to earnings(in m)Q2-24stated Q2/Q2statedH1-24stated H1/H1statedRevenues774 15.8%1,496 8.4%Gross operating income686 15.6%1,317 7.7%Net income Group Share495 14.59 9.0% 1.5 1.5 0.7(1.8)(0.5) 0.8(0.2) 1.0 1.5Q2-23Q1-24Q2-24Unit-linkedIn Euros1.31.31.41.22.41.32.53.72.7Q2-23Q1-24Q2-24Personal insuranceProperty&Casualty 7,6%(2) 6.3%Q2/Q22 8.92NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.AG ASSET MANAGEMENT(AMUNDI)New record of assets under management:2,156bnHigh inflows in MLT assets exceeding 15bn(excluding JV)in both active and passive management,despite continued risk aversionJV:solid commercial momentum in all countries,with continued strong growth in India and positive inflows in ChinaRevenues:management fees up( 6.7%Q2/Q2 vs.average assets under management 8.1%Q2/Q2)in a favourable market context;stable performance fees at a high seasonal level;growth in technology revenues: 10.1%Q2/Q2Expenses:positive jaws effect;increase due to the first consolidation of Alpha Associates,the impact of revenue growth on variable compensation and the increase in investments;Equity-accounted entities:continued strong growth of contribution from SBI MF(India)Assets under management(in bn)Contribution to earnings(in m)Q2-24stated Q2/Q2statedH1-24stated H1/H1statedRevenues864 7.5%1,667 5.8%Operating expenses(471) 7.1%(919) 5.7%Gross operating income393 8.0t8 6.3%Equity-accounted entities33 19.9a 24.6%Net income325 9.1b1 7.7%Net income Group Share218 8.4A5 7.1%Cost/Income ratio(%)54.5%-0.2 pp55.1%-0.0 pp590647658107311371142298332356 2.2 1.7 11.6 24.51,9612,1162,156June 23Mar.24RetailInstitutionalsJVsMarket/Forexeffect/OthersJune 24RetailInstitutionalsJVs 15.5bn 9.9% 1.9%excl.SRFexcl.SRF202NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.AG WEALTH MANAGEMENT(INDOSUEZ WEALTH MANAGEMENT)Finalisation of Degroof Petercam acquisition 65%majority stake acquired on 3 June 2024 Successful takeover bid raising Indosuezs stake to 78.7%on 26 July 2024Assets under management including Degroof Petercam in excess of 200bn,Good level of inflows and positive market effect.Revenues benefiting from the integration of 65%of Degroof Petercam for one month(1);good momentum in fee and commission income offsetting the erosion of interest incomeExpenses under control 1.3%Q2/Q2 after restatement of the impact of Degroof Petercam(1),integration costs(-5m in Q2),and 2023 base effects(2)Net income Group share up 5.8%Q2/Q2 after restatement of integration and acquisition costs(3)and 2023 base effect(2)1.Degroof Petercam data for June included in Wealth Management results:Revenues of 49m and expenses of-35m2.Base effects of 10.5m in tax and property expenses in Q2;8.4m impact on Net income Group share3.Acquisition costs of 12m in Q2,20m in H1Assets under management waterfall over the quarter(in bn)See appendix for breakdown of Indosuez Wealth Management and LCL Banque Prive AuM.Contribution to earnings(in m)Q2-24stated Q2/Q2statedH1-24stated H1/H1statedRevenues307 17.3W0 9.2%Operating expenses(255) 26.6%(469) 16.1%Gross operating income52(13.6%)102(12.0%)Net income on other assets(12)ns(20)nsNet income Group Share24(44.9%)49(38.8%)Cost/Income ratio(%)83.1% 6.1 pp82.2% 4.9 ppexcl.SRFexcl.SRF212NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.4755353012826686801061671,5501,664Q2-23Q2-24InvestmentbankingCapital marketsStructuredfinanceCommercialbanking&otherFinMkts 1.7%(6.4%) 12.6% 58.1%Var Q2/Q2 7.3%LARGE CUSTOMERS CORPORATE AND INVESTMENT BANKINGCapital Markets and Investment Banking: 9.4%Q2/Q2 underlying(1).Continued high level of performance in Capital Markets.Good level of activity in Investment Banking,supported by Structured Equities and the upturn in M&A activity during the quarterFinancing activities: 5.2%Q2/Q2 underlying(1).Very good performance by Corporate origination and Telecom activities;good level of revenues from International Trade and Transaction BankingRevenues:best Q2,record half-yearExpenses up moderately,mainly due to variable compensation and IT projectsCost/income ratio improving and below the MTP target(10%0% 12%Net income Group share 6M/6M659mH1 2024 underlying net income group share16%Crdit Agricole S.A.underlying Net Income Group Share(11)CRDIT AGRICOLE GROUP IN ITALY50!%Retail bankingSpecialised financial servicesAsset gatheringLarge customersTotal net income:659mCRDIT AGRICOLE GROUP IN ITALY282NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.10.210.010.20.60.80.810.810.811.0June 23Mar.24June 24On-balance sheetOff-balance sheet 9.0% 1.4%6.97.07.0June 23Mar.24June 24Loans outstanding 5.6% 1.4%RB OTHER IRBCA Poland:revenues 21%Q2/Q2(1),driven by NIM;increasing fee and commission income;expenses 14%(1)impacted by taxes(base effect)and IT investments;cost of risk down(base effect on loans in CHF Q2 23);strong growth in net income Group shareCA Egypt:revenues up sharply 42%Q2/Q2(1),driven by NIM;expenses impacted by inflation( 27%in June);cost of risk under control;high level of net income Group shareCA Ukraine:Net income Group share remaining at a high level due to the interest rate conditions(2)Loans outstanding Poland,Egypt,Ukraine(bn)Customer assets Poland,Egypt,Ukraine(bn)Contribution to earnings(in m)Q2-24stated Q2/Q2statedH1-24stated H1/H1statedRevenues243 9.2R5 22.1%Operating expenses(116) 9.0%(239) 9.7%SRF-n.m.-n.m.Gross operating income127 9.3(6 34.8%Cost of risk(11)(71.1%)(32)(65.4%)Net income Group Share75 58.92x 2.3Cost/Income ratio(%)47.7%-0.1 pp45.6%-5.1 pp(1)1.Variation excluding FX impact2.Average interest rate in UAH at 14.2%in the second quarter of 2024CA Poland:Good commercial activity; 25%(1)on loan production; 3.4%(1)on loans outstanding driven by retail,professionals and agricultural segments; 3.0%(1)on-balance sheet depositsCA Egypt:Dynamic commercial activity in all markets; 34%(1)on loans outstanding; 12%(1)on-balance sheet depositsLiquidity:net deposits/loans surplus 3.4bn as of 30 June 2024Disposal of the residual 15%stake in Crdit du Maroc(1)excl.SRFexcl.SRF292NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.Contribution to earnings(in m)Q2-24 Q2/Q2H1-24 H1/H1Revenues(267)(201)(374)(56)Operating expenses(15)(36)(71)(53)Gross operating income(283)(232)(445)(32)Cost of risk(5)(3)(16)(15)Equity-accounted entities(25)(6)(46)(13)Net income on other assets242424 24Net income Group share stated(238)(222)(345)(25)Of which structural net income(stated):(245)(138)(351) 136 -Balance sheet&holding Crdit Agricole S.A.(332)(71)(627) 21 -Other activities(CACIF,CA Immobilier,BforBank,CATE,etc.)78(69)262 111 -Support functions(CAPS,CAGIP,SCI)9 113 4Of which other elements of the division(stated)7(84)6(161)CORPORATE CENTREStructural net income Group share:Unfavourable impact of the valuation of Banco BPM shares,partly offset by a higher dividend(-71m combined)Increase in expenses linked to projects and non-recurring tax itemsOther elements of the division:Base effect(-42m)related to the reversal of provision for the Cheque Image Exchange fine recorded in Q2-23.Declining contribution,mainly due to OIS/BOR volatility Impact of the“IFRS 17 internal margins”effect(217m,on revenues and expenses)(245)(78)(219)(24)(107)(29)(1)(31)91(238)(107)(218)(55)(16)Q2-24Q1-24Q4-23Q3-23Q2-23Structural net income excl.IFRIC21IFRIC21Other elementsStated net incomemexcl.SRF302NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCrdit Agricole GroupRegional Banks312NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE GROUPLoans outstanding(bn)Customer assets(bn)REGIONAL BANKSCustomers: 278k new customers over the quarter(1),further rise in the share of customers principal sight deposits,continued high level of digital customers 76%.Loans:outstandings stable across all markets June/June(2);production down-23%Q2/Q2,of which-34%in home loans(but recovery underway 18%Q2/Q1);home loan production rate at 3.67%(3)Customer assets(4)were dynamic:on-balance sheet deposits driven by term deposits( 4%June/March),recovery of sight deposits over the quarter( 1.9%June/March);off-balance sheet assets driven by unit-linked bond inflows( 3.2%June/June)Equipment rate:property and casualty insurance equipment rate of 43.5%at( 0.7 pp vs.June 2023)Payment instruments:number of cards 1.5%year on year;15.6%premium cards in the stock( 1.5 pp year on year)Revenues:net interest margin down(-4.9%Q2/Q2);increase in portfolio revenues( 17.4%Q2/Q2)due to higher dividends received(5);good trend in fee and commission income( 3.1%Q2/Q2),particularly in life insurance and account managementOperating expenses: 3.1%Q2/Q2 excluding base effect(6)Cost of risk:rise in defaults;cost of risk/outstandings of 20 bp(7)1.Net customer acquisition of 38k over the quarter2.Total loans market share 22.7%at end-March 2024( 0.3pp compared with March 2023)3.Average production rate for April May4.On-balance sheet deposits market share 20.2%at end-March 2024( 0.8pp compared with end-March 2023)5.Including the SAS Rue La Botie dividend paid annually in Q26.Base effect related to end-of-career allowances7.Cost of risk for the last four quarters divided by the average of the outstandings at the start of all four quarters of the year.391391390232324229229230642644644Jun.23Mar.24Jun.24SMEs-Small business.-Farm.-Local auth.Consumer creditHome loans 0.2%June/June 2.0%(0.0%) 0.6W9595602287298296866893898Jun.23Mar.24Jun.24On-balance sheet assetsOff-balance sheet 3.7%June/June 3.2% 3.9%Regional Banks consolidated results(5)(in m)Q2-24stated Q2/Q2statedH1-24stated H1/H1statedRevenues5,305 7.2%8,600 3.9%Operating expenses(2,540) 4.7%(5,005) 0.9%Gross operating income2,765 9.6%3,595 8.5%Cost of risk(459) 12.5%(706) 22.4%Net income Group Share2,262 11.0%2,701 9.3%Cost/Income ratio(%)47.9%-1.1 pp58.2%-1.8 pp322NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSAppendices Economic scenario332NDQUARTER AND 1ST HALF-YEAR 2024 RESULTS0.52.15.95.72.61.6-0.11.98.76.01.01.60.32.68.45.52.41.8202020212022202320242025FranceItalyEuro ZoneSources:Eurostat,Crdit Agricole S.A./ECO.Forecasts at 28 June 2024IMF(April 2024): 0.7%in 2024 and 1.4%in 2025European Commission(March 2024): 0.7%in 2024 and 1.3%in 2025OECD(March 2024): 0.7%in 2024 and 1.3%in 2025Banque de France(June 2024): 0.8%in 2024 and 1.2%in 2025Sources:Eurostat,Crdit Agricole S.A./ECO.Forecasts at 28 June 2024 Provisioning of performing loans:use of alternative scenarios complementary to the central scenario(April 2024)A favourable scenario:French GDP 1.2%in 2024 and 1.5%in 2025Unfavourable scenario:French GDP-0.2%in 2024 and 0.5%in 2025A GRADUAL RECOVERY IN GROWTHAPPENDICESFrance,Italy,Eurozone GDP GrowthFrance,Italy,Eurozone-Average annual Inflation(%)France,Italy,Eurozone Unemployment rateFrance institutional forecasts(GDP France)-7.76.42.50.90.91.3-9.08.34.11.00.80.9-6.25.93.40.50.71.5202020212022202320242025FranceItalyEuro zone 10 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024FranceItalyEuro zone%of labour forceSources:Eurostat,Crdit Agricole S.A./ECO.Forecasts at 28 June 2024 342NDQUARTER AND 1ST HALF-YEAR 2024 RESULTS7595115135155175EURO STOXX 50CAC 40CAC 40(quaterly avg.)%-101234EURIBOR 3MBUND 10YOAT 10Y%Equities(quarterly averages)EuroStoxx 50:spot-3.7%Q2/Q1;average 5.1%Q2/Q1( 15.2%Q2/Q2)Interest rates(month-end)10-year OAT: 17.5 bp over the quarter and 12.1%vs.June-23Spread at end-June 24:OAT/Bund 81 bp( 30 bp vs.March-24 and 26 bp vs.June-23)BTP/Bund:158 bp( 20 bp vs March-24 and-10 bp vs June-23)Foreign exchange(month-end)EUR/USD:-0.7%vs.March-24 and-1.8%vs.June 23Sources:LSEG Datastream,Crdit Agricole SA/ECO.Data at 28 June 2024 START OF MONETARY EASINGAPPENDICESInterest rates,in euros(%)Equity indexes(base 100=31/12/2018)France Household and corporate leaders confidence50607080901001101202010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024Household confidenceBusiness sentimentLT averageSources:LSEG Datastream,Crdit Agricole SA/ECO.Data at 28 June 2024 Sources:Insee,Crdit Agricole SA/ECO.Data at 28 June 2024 352NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSAppendices Earnings/Profitability362NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.Q2-24 STATED RESULTS(AMOUNTS IN M THEN Q2/Q2 CHANGE)APPENDICESQ2-24 statedmAGIns.Asset Mgt.Wealth Mgt.LCCIBAsset servicingSFSCAPFMCAL&FFRBIRBIRB othersCA ItaliaCorp.centerTotalRevenues1,9447748643072,2231,7065178896951949791,027243784(267)6,796Operating expenses exclud SRF(813)(88)(471)(255)(1,204)(839)(365)(443)(343)(100)(591)(555)(116)(439)(15)(3,621)SRF-Gross operationg result1,131686393521,01986715244735294389472127345(283)3,175Cost of risk(2)2(5)1(39)(30)(9)(211)(191)(20)(95)(72)(11)(61)(5)(424)Net income on other assets33-33-10282931-(25)47Tax(283)(179)(95)(8)(248)(209)(39)(54)(38)(17)(65)(117)(30)(87)63(704)Net income867509325337456321132101555523128386197(226)2,110Non controling interests(131)(14)(108)(9)(51)(15)(36)(23)(23)0(10)(55)(11)(44)(12)(282)Net income Group Share73649521824694618771871325522022875153(238)1,828 Q2-24/Q2-23 stated%AGIns.Asset Mgt.Wealth Mgt.LCCIBAsset servicingSFSCAPFMCAL&FFRBIRBIRB othersCA ItaliaCorp.centerTotalRevenues 12% 16% 8% 17% 17% 11% 39%(23%)(29%) 8% 2% 5% 9% 3%x 4.1 2%Operating expenses exclud SRF 14% 18% 7% 27% 16% 4% 58% 3% 2% 6% 7% 10% 9% 11%n.m. 13%SRF(100%)n.m.(100%)(100%)(100%)(100%)(100%)(100%)(100%)(100%)(100%)(100%)n.m.(100%)(100%)(100%)Gross operationg result 11% 16% 8%(14%) 17% 19% 7%(39%)(46%) 10%(5%)(1%) 9%(5%)x 5.6(8%)Cost of riskx 58.4n.m.x 2.3(53%) 19% 0%x 3.5(31%)(33%) 5% 38%(43%)(71%)(31%)x 3(21%)Net income on other assets 20%n.m. 20%n.m. 43%n.m. 17%x 2.7x 2.2n.m.n.m.(100%)(100%)(100%) 34% 74%Tax 15% 26% 5%(39%) 42% 53% 3%(62%)(69%)(22%)(13%) 13% 40% 6%(4%) 4%Net income 8% 13% 9%(34%) 11% 13% 3%(35%)(45%) 31%(14%) 12% 45% 2%x 37.6(9%)Non controling interests 6%(29%) 11% 32% 6% 9% 5% 10% 12%n.m.(14%) 0%(10%) 3% 21% 5%Net income Group Share 9% 15% 8%(45%) 12% 13% 2%(38%)(50%) 33%(14%) 16% 59% 2%x 14.9(10%)NB:this table presents the main income statement items and is not exhaustive372NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.H1-24 STATED RESULTS(AMOUNTS IN M THEN H1/H1 CHANGE)APPENDICESNB:this table presents the main income statement items and is not exhaustive6M-24 statedmAGIns.Asset Mgt.Wealth Mgt.LCCIBAsset servicingSFSCAPFMCAL&FFRBIRBIRB othersCA ItaliaCorp.centerTotalRevenues3,7331,4961,6675704,4893,4641,0251,7361,3653711,9332,0855251,559(374)13,602Operating expenses exclud SRF(1,567)(179)(919)(469)(2,501)(1,761)(740)(897)(698)(199)(1,193)(1,060)(239)(821)(71)(7,289)Gross operationg result2,1661,3177481021,9881,7032868396671727401,024286738(445)6,312Cost of risk(5)2(5)(1)(5)7(12)(429)(390)(39)(214)(154)(32)(123)(16)(824)Net income on other assets61-61-142125963-(46)90Tax(502)(302)(184)(16)(482)(414)(68)(97)(67)(30)(119)(259)(73)(186)144(1,315)Net income1,7011,016621641,5171,30021837227399412610181429(339)4,273Non controling interests(248)(27)(206)(15)(101)(31)(70)(42)(42)0(18)(126)(30)(96)(7)(542)Net income Group Share1,453989415491,4161,26914833023199393485152333(345)3,7316M/6M-23 stated%AGIns.Asset Mgt.Wealth Mgt.LCCIBAsset servicingSFSCAPFMCAL&FFRBIRBIRB othersCA ItaliaCorp.centerTotalRevenues 7% 8% 6% 9% 13% 7% 40%(5%)(8%) 9% 2% 7% 22% 3% 18% 6%Operating expenses exclud SRF 10% 15% 6% 16% 16% 4% 58% 12% 14% 6% 3% 7% 10% 7%x 4 11%Gross operationg result 6% 8% 6%(12%) 34% 35% 29%(17%)(23%) 24% 6% 11% 35% 4% 8% 10%Cost of riskx 5.4 27% 89%n.m.(92%)n.m.x 4.1(7%)(10%) 28% 58%(36%)(65%)(18%)x 32.4(9%)Net income on other assets 25%n.m. 25%n.m. 32%n.m. 15%(30%)(28%)n.m.n.m.(100%)(100%)(100%) 38%(21%)Tax 5% 8% 6%(35%) 35% 39% 14%(45%)(54%)(10%)(14%) 29%x 2 13%(6%) 10%Net income 5% 8% 8%(30%) 41% 44% 25%(22%)(32%) 35%(4%) 25%x 2 8% 15% 13%Non controling interests 4%(28%) 9% 25% 31% 42% 26%(6%)(4%)n.m.(4%) 12% 23% 9%(76%) 4%Net income Group Share 6% 9% 7%(39%) 42% 44% 24%(23%)(36%) 37%(4%) 29%x 2.3 7% 8% 1482NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.mGross impact*Impact on Net incomeGross impact*Impact on Net incomeGross impact*Impact on Net incomeGross impact*Impact on Net incomeDVA(LC)3727(15)(11)4231(23)(16)Loan portfolio hedges(LC)54(1)(1)75(25)(18)Home Purchase Savings Plans(FRB)11-32-Home Purchase Savings Plans(CC)(2)(1)-(2)(1)-Mobility activities reorganisation (SFS)-299214-299214Check Image Exchange penalty(CC)-4242-4242Check Image Exchange penalty(LCL)-2120-2120Total impact on revenues42303462645137315241Degroof Petercam integration costs(AG)(5)(4)-(5)(4)-ISB integration costs(LC)(25)(13)-(44)(23)-Mobility activities reorganisation (SFS)-(18)(13)-(18)(13)Total impact on operating expenses(30)(17)(18)(13)(50)(27)(18)(13)Provision for risk Ukraine(IRB)-(20)(20)-Mobility activities reorganisation (SFS)-(85)(61)-(85)(61)Total impact on cost of credit risk-(85)(61)(20)(20)(85)(61)Mobility activities reorganisation (SFS)-(12)(12)-(12)(12)Total impact equity-accounted entities-(12)(12)-(12)(12)Degroof Petercam aquisition costs(AG)(12)(9)-(20)(14)-Mobility activities reorganisation (SFS)-2812-2812Total impact Net income on other assets(12)(9)2812(20)(14)2812Total impact of specific items(0)5259190(39)(25)227167Asset gathering(17)(13)-(25)(18)-French Retail banking112120322120International Retail banking-(20)(20)-Specialised financial services-212140-212140Large customers1817(16)(11)512(47)(34)Corporate centre(2)(1)4242(2)(1)4242*Impact before tax and before minority interestsQ2-24Q2-23H1-24H1-23ALTERNATIVE PERFORMANCE INDICATORS SPECIFIC ITEMSAPPENDICES 5mNet impact of specific items on Q2-2024 net income392NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.mQ2-24statedSpecific itemsQ2-24underlyingQ2-23statedSpecific itemsQ2-23underlying Q2/Q2stated Q2/Q2underlyingRevenues6,796426,7546,6763466,329 1.8% 6.7%Operating expenses excl.SRF(3,621)(30)(3,591)(3,218)(18)(3,200) 12.5% 12.2%SRF-4-4(100.0%)(100.0%)Gross operating income3,175123,1633,4613283,133(8.3%) 1.0%Cost of risk(424)(0)(424)(534)(84)(450)(20.7%)(5.8%)Equity-accounted entities47(0)4727(12)39 73.7% 20.1%Net income on other assets15(12)2729281(46.7%)x 23.3Change in value of goodwill-n.m.n.m.Income before tax2,814(0)2,8142,9832592,724(5.7%) 3.3%Tax(704)(1)(703)(677)(69)(609) 3.9% 15.5%Net income from discontd or held-for-sale ope.-4-4n.m.n.m.Net income2,110(1)2,1112,3091902,119(8.6%)(0.4%)Non controlling interests(282)5(288)(269)(1)(269) 4.7% 7.0%Net income Group Share1,82851,8232,0401901,850(10.4%)(1.5%)Earnings per share()0.580.000.580.640.060.58(10.4%)(0.9%)Cost/Income ratio excl.SRF(%)53.3S.2H.2P.6% 5.1 pp 2.6 ppRECONCILIATION BETWEEN STATED AND UNDERLYING INCOME Q2-24 APPENDICESCrdit Agricole S.A.1,828mNet income Group share stated in Q2-24Crdit Agricole S.A.0.58Underlying earnings per share in Q2-24402NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.RECONCILIATION BETWEEN STATED AND UNDERLYING INCOME H1-24 APPENDICESCrdit Agricole S.A.3,731mNet income Group share stated in H1-24Crdit Agricole S.A.1.09Underlying earnings per share in H1-24mH1-24statedSpecific itemsH1-24underlyingH1-23statedSpecific itemsH1-23underlying H1/H1stated H1/H1underlyingRevenues13,6025113,55112,79731512,482 6.3% 8.6%Operating expenses excl.SRF(7,289)(50)(7,240)(6,546)(18)(6,528) 11.4% 10.9%SRF-(509)-(509)(100.0%)(100.0%)Gross operating income6,31216,3115,7412965,445 9.9% 15.9%Cost of risk(824)(20)(804)(908)(84)(824)(9.3%)(2.5%)Equity-accounted entities90(0)90113(12)125(20.7%)(28.4%)Net income on other assets9(20)2933285(72.6%)x 5.9Change in value of goodwill-n.m.n.m.Income before tax5,587(39)5,6264,9792274,752 12.2% 18.4%Tax(1,315)4(1,319)(1,199)(60)(1,138) 9.7% 15.8%Net income from discontd or held-for-sale ope.-6-6n.m.n.m.Net income4,273(35)4,3083,7861673,619 12.9% 19.0%Non controlling interests(542)10(551)(520)(0)(519) 4.2% 6.2%Net income Group Share3,731(25)3,7563,2661673,100 14.2% 21.2rnings per share()1.08(0.01)1.091.000.060.95 8.2% 15.4%Cost/Income ratio excl.SRF(%)53.6S.4Q.2R.3% 2.4 pp 1.1 pp412NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.1.See slide 38 for details on specific itemsA STABLE,DIVERSIFIED AND PROFITABLE BUSINESS MODELAPPENDICESUnderlying revenuesH1-2024 by business line(1)(excluding Corporate Centre)(%)Underlying net income Group share(1)H1-2024 by business line(excluding Corporate Centre)(%)Insurance11%Asset Mngt12%Wealth Mngt4%LCL14%IRB15%Consumer finance10%Leasing&Factoring3%CIB24%Asset servicing7%Underlying revenues excl.CC H1-24:13.9bnRetail banking 29%Spec.fin.serv.12%Large customers 32%Asset gathering 27%Insurance24%Asset Mngt10%Wealth Mngt2%LCL10%IRB12%Consumer finance6%Leasing&Factoring2%CIB30%Asset servicing4%Asset gathering 36%Spec.fin.serv.8%Large customers 34%Underlying Net income excl.CC H1-24:4.1bnRetail banking 22B2NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.*Methodology:9.5%of RWAs for each business line;Insurance:80%of Solvency 2 capital requirementsRWA AND ALLOCATED CAPITAL BY BUSINESS LINEAPPENDICESbnJune 2024March 2024June 2023June 2024March 2024June 2023Asset gathering55.555.846.912.812.712.4 -Insurance*32.635.327.610.710.810.5 -Asset management13.814.213.61.31.31.3 -Wealth Management9.16.35.70.90.60.5French Retail Banking(LCL)53.753.551.75.15.14.9International retail Banking46.245.147.14.44.34.5Specialised financial services71.670.469.96.86.76.6Large customers142.9139.6135.113.613.312.8 -Financing activities84.280.879.88.07.77.6 -Capital markets and investment banking47.145.746.24.54.34.4 -Asset servicing11.513.19.21.11.20.9Corporate Centre29.228.226.2-TOTAL399.2392.7376.942.742.141.2Risk-weighted assetsCapitalInsurance8%Asset Mngt3%Wealth Mngt2%LCL14%IRB12%Consumer finance14%Leasing&Factoring4%CIB33%Asset servicing3%Corporate centre7%Retail banking 100bn25%Asset gathering 55.5bn14%RWA end-June 2024:399.2bnLarge customers 142.9bn36%Spec.fin.serv.71.6bn18%Insurance25%Asset Mngt3%Wealth Mngt2%LCL12%IRB10%Consumer finance13%Leasing&Factoring3%CIB29%Asset servicing3%Retail banking 9.5bn22%Asset gathering 12.8bn30%Total allocated capital end-June 2024:42.7bnLarge customers 13.6bn32%Spec.fin.serv.6.8bn16C2NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.AG:Asset Gathering,including Insurance;RB:Retail Banking,SFS:Specialised financial services;LC:Large customers;CC:Corporate Centre 1.See pages 38(Crdit Agricole S.A.)and 71(Crdit Agricole Group)for further details on the specific items2.After deduction of AT1 coupons,charged to net equity,see page 45PROFITABLE BUSINESS LINESAPPENDICESH1-2024 annualised underlying RoNE(1,2)by business line and 2025 targets(%)26.9 .7%9.1.4.6A.0.5#.6.5.1.2.7$.6.6%AGLCSFSLCLCA ItaliaIRB OtherRoTE underlying CASAUnderlying S1-2024Underlying 20232025 MTP target442NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.Breakdown of share capitalNumber of shares%Number of shares%Number of shares%SAS Rue La Botie1,898,995,95262.8%1,822,030,01259.7%1,822,030,01260.2%Treasury shares1,263,9970.0#,559,1810.8%1,225,5780.0%Employees(company investment fund,ESOP)193,113,7766.49,528,9226.51,495,4316.3%Float932,528,62530.8%1,007,619,87633.0%1,011,151,32933.4%Total shares in issue(period end)3,025,902,3503,052,737,9913,025,902,350Total shares in issue,excluding treasury shares(period end)3,024,638,3533,029,178,8103,024,676,772Total shares in issue,excluding treasury shares(average number)3,008,046,1793,031,055,3333,024,431,94730/06/202431/12/202330/06/2023(1)1.Excluded in the calculation of earnings per share2.Taking into account the share buyback programme covering a maximum of 26,835,641 ordinary shares of Crdit Agricole S.A.,announced on 5 October 2023,launched on 6 October 2023 and which ended on 26 January 2024.The 26,835,641 ordinary shares were cancelled on 7 February 2024.(2)DISTRIBUTION OF SHARE CAPITAL AND NUMBER OF SHARESAPPENDICES452NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.(1)Underlying.See slide 38 for details of the specific items(2)Underlying ROTE calculated on the basis of an annualised underlyingnet income Group share and linearised IFRIC costs over the year(3)Average of the NTBV not revalued attributable to ordinary shares,calculated between 31/12/2023 and 30/06/2024(line E),restated with anassumption of dividend for current exercisesDATA PER SHAREAPPENDICESAdjusted(2)underlying(1)ROTE(%)(m)Q2-2024Q2-2023H1-24H1-23 Q2/Q2 H1/H1Net income Group share-stated1,8282,0403,7313,266(10.4%) 14.2%-Interests on AT1,including issuance costs,before tax(83)(94)(221)(235)(11.7%)(6.0%)-Foreign exchange impact on reimbursed AT1-(247)-n.m.n.m.NIGS attributable to ordinary shares-statedA1,7451,9463,2633,031(10.3%) 7.6%Average number shares in issue,excluding treasury shares(m)B3,0253,0253,0083,024 0.0%(0.5%)Net earnings per share-statedA/B0.58 0.64 1.08 1.00(10.4%) 8.2%Underlying net income Group share(NIGS)1,8231,8503,7563,100(1.5%) 21.2%Underlying NIGS attributable to ordinary sharesC1,7401,7563,2882,865(0.9%) 14.8%Net earnings per share-underlyingC/B0.58 0.58 1.09 0.95(0.9%) 15.4%(m)30/06/202430/06/2023Shareholders equity Group share70,39667,879-AT1 issuances(7,164)(7,235)-Unrealised gains and losses on OCI-Group share1,3051,352Net book value(NBV),not revaluated,attributable to ordin.sh.D64,53761,997-Goodwill&intangibles*-Group share(17,775)(17,077)Tangible NBV(TNBV),not revaluated attrib.to ordinary sh.E46,76344,920Total shares in issue,excluding treasury shares(period end,m)F3,0253,025NBV per share,after deduction of dividend to pay()D/F21.3 20.5 TNBV per share,after deduction of dividend to pay()G=E/F15.5 14.9*including goodwill in the equity-accounted entities(m)H1-24H1-23Net income Group share-statedK3,7313,266Impairment of intangible assets L00IFRICM-110-542Stated NIGS annualisedN=(K-L-M)*2 M7,5727,075Interests on AT1,including issuance costs,before tax,foreign exchange impact,annualisedO-689-470Stated result adjustedP=N O6,8846,605Tangible NBV(TNBV),not revaluated attrib.to ord.sh.-avg*(3)J44,71042,778Stated ROTE adjusted(%)=P/J15.4.4%Underlying Net income Group shareQ3,7563,100Underlying NIGS annualisedR=(Q-M)*2 M7,6226,741Underlying NIGS adjustedS=R O6,9346,271Underlying ROTE adjusted(%)=S/J15.5.7.4.5%Stated ROTE adjusted(%)Underlying ROTE adjusted(%)*including assumption of dividend for the current exercise462NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSAppendices Risk indicators472NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.EXPOSURE TO FRENCH SOVEREIGN RISK CREDIT AGRICOLE S.AAPPENDICESBanking activity(4)(in billion euros)Insurance activity(4)(in billion euros)30/06/2024Financialinstruments at fairvalue through profitor lossFinancial assets at fairvalue through othercomprehensive income(OCI)Financial assetsat amortisedcostTotal bankingactivity(3)French government bond(OAT)0.11.711.213.0Assimilated to French sovereign risk(1)-4.37.912.2Total French sovereign risk of banking activities0.16.019.125.230/06/2024Other models(2)VFA model(2)(Variable Fee Approach)Total insuranceactivityFinancialinstruments at fairvalue through profitor lossFinancial assets at fairvalue through othercomprehensive income(OCI)Financial assetsat amortisedcostTotal assets on other modelsFrench government bond(OAT)-1.40.41.832.634.4Assimilated to French sovereign risk(1)-1.70.62.310.212.5Total French sovereign risk of insurance activities-3.11.04.142.846.91.Public sector debt securities assimilated to central,regional or local administrations2.VFA model(Variable Fee Approach):Savings,Retirement and Funeral;BBA model(Building Block Approach):Personal protection(death&disability/creditor/group insurance);PAA model(Premium Allocation Approach):P&C3.Figures before hedging.Hedging on government bonds(OAT)of banking activity:0.3bn;Hedging on assimilated of banking activity:0.5bn4.Bonds only The liabilities accounted with VFA model under IFRS 17 are related to Savings,Retirement and Funeral scope.The impact of valuation changes of the financial assets backed by these commitments is not material neither on Crdit Agricole S.A net income nor on its equity because of symmetrical valuation effects of these liabilities.482NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE GROUPEXPOSURE TO FRENCH SOVEREIGN RISK CREDIT AGRICOLE GROUPAPPENDICES30/06/2024Financialinstruments at fairvalue through profitor lossFinancial assets at fairvalue through othercomprehensive income(OCI)Financial assetsat amortisedcostTotal bankingActivity(3)French government bond(OAT)2.42.019.523.9Assimilated to French sovereign risk(1)-4.316.721.0Total French sovereign risk of banking activities2.46.336.244.930/06/2024Other models(2)VFA model(2)(Variable Fee Approach)Total insuranceactivityFinancialinstruments at fairvalue through profitor lossFinancial assets at fairvalue through othercomprehensive income(OCI)Financial assetsat amortisedcostTotal assets on other modelsFrench government bond(OAT)-1.60.42.032.634.6Assimilated to French sovereign risk(1)-2.50.63.110.213.3Total French sovereign risk of insurance activities-4.11.05.142.847.91.Public sector debt securities assimilated to central,regional or local administrations2.VFA model(Variable Fee Approach):Savings,Retirement and Funeral;BBA model(Building Block Approach):Personal protection(death&disability/creditor/group insurance);PAA model(Premium Allocation Approach):P&C3.Figures before hedging.Hedging on government bonds(OAT)of banking activity:0.4bn;Hedging on assimilated of banking activity:0.6bn4.Bonds only The liabilities accounted with VFA model under IFRS 17 are related to Savings,Retirement and Funeral scope.The impact of valuation changes of the financial assets backed by these commitments is not material neither on Crdit Agricole Group net income nor on its equity because of symmetrical valuation effects of these liabilities.Banking activity(4)(in billion euros)Insurance activity(4)(in billion euros)492NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.CRDIT AGRICOLE GROUP2620122127-2133-7-5-3-2-5-11918141920-100-70-40-1020-10Q2-23Q3-23Q4-23Q1-24Q2-24S3 CoR*S1&S2 CoROthersTotal CoR116109-151752-45-7918-5631-1-23-1772291-3638-300-250-200-150-100-50050100-100-50050100150200Q2-23Q3-23Q4-23Q1-24Q2-24S3 CoR*S1&S2 CoROthersTotal CoR190199193203227105-22-2-2812-1-1-9201206170199191-104090140190240-351565115165215265315Q2-23Q3-23Q4-23Q1-24Q2-24S3 CoR*S1&S2 CoROthersTotal CoR92648912789-2466-74101-1269709611995-101030507090110130-302070120170Q2-23Q3-23Q4-23Q1-24Q2-24S3 CoR*S1&S2 CoROthersTotal CoR3774905059377-1370153194389849661610102030405060708090100-15525456585105125Q2-23Q3-23Q4-23Q1-24Q2-24S3 CoR*S1&S2 CoROthersTotal CoR(*)Cost of risk/outstandings(on an annualised quarterly basis)at 11 bp for Financing activities,111 bp for CAPFM,22 bp for LCL,41 bp for CA Italia,23 bp for CAL&F and 27 bp for the RBs.Coverage ratios are calculated based on loans and receivables due from customers in default.CoR:-5.0%Q2/Q2;CoR/outstandings:114 bpNPL ratio:4.3%;Coverage ratio:75.8%CoR:-47.4%Q2/Q2;CoR/outstandings:2 bp NPL ratio:2.3%;Coverage ratio:75.0%CoR: 9.7%Q2/Q2;CoR/outstandings:20 bp NPL ratio:1.9%;Coverage ratio:94.5%CoR: 37.7%Q2/Q2;CoR/outstandings:22 bp NPL ratio:2.0%;Coverage ratio:60.8%CoR:-30.8%Q2/Q2;CoR/outstandings:50 bp NPL ratio:3.2%;Coverage ratio:72.4%LCLCAPFMCrdit Agricole CIB Financing activitiesCA ItaliaRegional BanksCOST OF RISK APPENDICESCAL&FCoR: 4.6%Q2/Q2;CoR/outstandings:21 bp NPL ratio:3.2%;Coverage ratio:47.682352923052561692732-521716-7-318403254321247444-401060110160210260310360410460-5050150250350450550650Q2-23Q3-23Q4-23Q1-24Q2-24S3 CoR*S1&S2 CoROthersTotal CoR502NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.CRDIT AGRICOLE GROUPRISK INDICATORSAPPENDICESChange in loans outstandingmJune 23Sept.23Dec.23March 24June 24Gross customer loans outstanding 1,166,6361,170,7651,176,6171,179,9871,186,544of which:impaired loans24,65625,20625,03725,70525,723Loans loss reserves(incl.collective reserves)20,62520,85620,67620,88321,173of which:loans loss reserves for Stage 1&2 outstandings8,7398,7268,7158,6438,759of which:loans loss reserves for Stage 3 outstandings11,88612,13011,96212,24012,414Impaired loans ratio2.1%2.2%2.1%2.2%2.2%Coverage ratio(excl.collective reserves)48.2H.1G.8G.6H.3%Coverage ratio(incl.collective reserves)83.6.7.6.2.3%mJune 23Sept.23Dc.23March 24June 24Gross customer loans outstanding 520,646522,067525,847532,218538,317of which:impaired loans13,60513,90413,51813,82613,549Loans loss reserves(incl.collective reserves)9,7099,8289,5659,6449,662of which:loans loss reserves for Stage 1&2 outstandings3,4793,4503,3933,3633,315of which:loans loss reserves for Stage 3 outstandings6,2316,3786,1736,2806,347Impaired loans ratio2.6%2.7%2.6%2.6%2.5%Coverage ratio(excl.collective reserves)45.8E.9E.7E.4F.8%Coverage ratio(incl.collective reserves)71.4p.7p.8i.7q.3%Crdit Agricole S.A.-Evolution of credit risk outstandingsCrdit Agricole Group-Evolution of credit risk outstandings512NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.(1)Exposure at default is a regulatory definition used in Pillar 3.It corresponds to the exposure at default after integration of risk reduction factors.It includesexposures to balance sheet assets and part of the off-balance sheet commitments after application of the credit conversion factor(2)Internal rating equivalent(3)Crdit Agricole CIB scope only.75.6%of Corporate exposures are Investment Grade(2)SME exposures of 26.6bn at 30/06/2024 LBO exposures(3)of 3.8bn at the end of May 2024APPENDICESWELL-BALANCED CORPORATE PORTFOLIOCrdit Agricole S.A.:370bn of EAD(1)Corporate at 30/06/20240,7%0,8%0,9%1,5%1,9%2,3%2,8%3,1%3,2%3,4%3,9%4,1%4,1%4,8%5,0%5,1%5,2%5,4%5,6%7,0%7,6%7,9,7%WOOD/PAPER/PACKAGING(3 Bn)MEDIA/PUBLISHING(3 Bn)ENERGY(excl.O&G/Com traders et Electricity)(4 Bn)COMMODITY TRADERS O&G(6 Bn)TOURISM/HOTELS/RESTAURATION(7 Bn)CONSTRUCTION(9 Bn)HEALTHCARE/PHARMACEUTILCALS(11 Bn)OTHER INDUSTRIES(12 Bn)IT/TECHNOLOGY(12 Bn)INSURANCE(13 Bn)SHIPPING(15Bn)OTHER TRANSPORTS(15 Bn)AIR/SPACE(16 Bn)OIL&GAS modity traders(20 Bn)AGRICULTURE AND FOOD PROCESSING(19 Bn)RETAIL/CONSUMER GOODS INDUSTRIES(20 Bn)TELECOM(20 Bn)OTHER(21 Bn)HEAVY INDUSTRIES(21 Bn)AUTOMOTIVE(26 Bn)REAL ESTATE(29 Bn)Electricity(30 Bn)NON BANKING FINANCIAL ACTIVITIES(48 Bn)522NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.The VaR(99%,1 day)of the Crdit Agricole S.A.group is measured by taking account of the effects of diversification among the various Group entities.VaR(99%-1 day)as at 28 June 2024:11m for Crdit Agricole S.A.*Gains on risk factor diversification.RISK INDICATORSAPPENDICESVaR market risk exposures3332333344234434544446887765646101312101411976-7-7-8-7-9-10-9-7-9-88151919141816141210Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023Q2 2023Q3 2023Q4 2023Q1 2024Q2 2024Crdit Agricole S.A.-Quaterly average of VaR(99%-1 day,in m)CompensationeffectsCommoditiesFixed IncomeCreditForeign exchangeEquitiesVar CAGin mMinimumMaximumAverageFixed income57668Credit45445Foreign Exchange37463Equities35454Commodities00000Mutualised VaR for Crdit Agricole S.A.815101113Compensation Effects*-8-10-7 Crdit Agricole S.A.-Market risk exposures-VAR(99%-1 day)Q2-2428/06/202429/12/2023532NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSAppendicesFinancial structure and balance sheet542NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.FINANCIAL STRUCTURE AND BALANCE SHEET APPENDICESSolvency(bn)30/06/2431/12/23Share capital and reserves 30.8 30.9Consolidated reserves 38.7 36.3Other comprehensive income(2.9)(2.4)Net income(loss)for the year 3.7 6.3EQUITY-GROUP SHARE 70.4 71.1(-)Expected dividend(1.8)(3.2)(-)AT1 instruments accounted as equity(7.2)(7.2)Eligible minority interests 5.0 4.6(-)Prudential filters(0.2)(0.5)o/w:Prudent valuation(1.2)(1.1)(-)Deduction of goodwills and intangible assets(18.4)(17.6)Deferred tax assets that rely on future profitability excluding those arising from temporary differences(0.1)(0.1)Shortfall in adjustments for credit risk relative to expected losses under the internal ratings-based approach(0.3)(0.3)Amount exceeding thresholds 0.0 0.0Insufficient coverage for non-performing exposures(Pillar 2)(0.0)(0.0)Other CET1 components(1.2)(1.2)COMMON EQUITY TIER 1(CET1)46.2 45.6Additionnal Tier 1(AT1)instruments 7.3 6.0Other AT1 components(0.2)(0.3)TOTAL TIER 1 53.4 51.3Tier 2 instruments 16.5 15.1Other Tier 2 components 0.4 0.4TOTAL CAPITAL 70.3 66.7RWAs 399.2 387.5CET1 ratio11.6.8%Tier 1 ratio13.4.2%Total capital ratio17.6.2%Phased-in552NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.*FINANCIAL STRUCTURE AND BALANCE SHEET APPENDICESChange in equity(m)mGroup shareNon-controlling interestsTotalSubordinated debtAt 31 December 202371,0868,83379,91925,208Impacts of new standards -Capital increase(323)(323)Dividends paid out in 2024(3,177)(581)(3,758)Change in treasury shares held256256Issuance/redemption of equity instruments (65)(65)Remuneration for equity instruments issued(212)(59)(271)Impact of acquisitions/disposals on non-controlling interests(85)(85)Change due to share-based payments628Change in other comprehensive income(415)(16)(431)Change in share of reserves of equity affiliates1(7)(6)Result for the period3,7315424,273Other(407)(37)(444)At 30 June 202470,3968,67779,07327,828562NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.*FINANCIAL STRUCTURE AND BALANCE SHEETAPPENDICESBalance sheet(bn)Assets30/06/202431/12/2023Liabilities30/06/2024 31/12/2023 Cash and Central banks179.5177.3Central banks0.20.3Financial assets at fair value through profit or loss557.3523.6Financial liabilities at fair value through profit or loss389.6357.9Hedging derivative instruments21.620.5Hedging derivative instruments30.031.0Financial assets at fair value through other comprehensive income211.7215.5Loans and receivables due from credit institutions548.9554.9Due to banks179.4202.6Loans and receivables due from customers 528.7516.3Customer accounts845.2835.0Debt securities83.979.8Debt securities in issue272.4253.2Revaluation adjustment on interest rate hedged portfolios-8.1-6.2Revaluation adjustment on interest rate hedged portfolios-12.5-11.6Current and deferred tax assets6.16.3Current and deferred tax liabilities3.43.1Accruals,prepayments and sundry assets59.259.3Accruals and sundry liabilities64.760.6Non-current assets held for sale and discontinued operations0.80.0Liabilities associated with non-current assets held for sale0.20.0Insurance contrats issued-Assets-Insurance contrats issued-Liabilities349.8348.5Reinsurance contracts held -Assets1.11.1Reinsurance contracts held-Liabilities0.10.1Investments in equity affiliates2.92.6-Investment property10.710.8Provisions3.43.5Property,plant and equipment9.28.6Subordinated debt27.825.3Intangible assets3.13.1Shareholders equity70.471.1Goodwill16.215.9Non-controlling interests8.78.8Total assets2,232.92,189.4Total liabilities2,232.92,189.4572NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSAppendicesActivity indicators582NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.ACTIVITY INDICATORS AG DIVISIONAPPENDICESAssets under management(bn)bnJun.22Sept.22Dec.22Mar.23Jun.23Sept.23Dec.23Mar.24Jun.24 Jun./Jun.Asset management Amundi1,9251,8951,9041,9341,9611,9732,0372,1162,156 9.9%Savings/retirement319318322325326.3324.3330.3334.9337.9 3.6%Wealth management(1)180180180185186186190197269 44.6%Assets under management-Total2,4242,3942,4062,4432,4732,4842,5572,6482,763 11.7%(1)excluding institutional clients assets under custody bnJun.22Sept.22Dec.22Mar.23Jun.23Sept.23Dec.23Mar.24Jun.24 Jun./Jun.LCL Private Banking59.459.860.261.861.961.662.363.663.8 3.1I Wealth Management120.3120.5120.1123.2123.9124.9127.7133.2204.9 65.4%Of which France37.637.638.039.539.639.339.540.940.7 2.8%Of which International(1)82.782.982.183.784.385.688.192.2164.3 94.8%Total180180180185186186190197269 44.6%(1)excluding institutional clients assets under custody 592NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.Technical indicator,combined property&casualty ratio in France (Pacifica)including discounting and excluding undiscounting,net of reinsurance:(claims operating expenses fee and commission income)/premium income;Ratio calculated over H1 2024.Life insurance Breakdown of investments(excluding unit-linked)ACTIVITY INDICATORS AG DIVISION INSURANCEAPPENDICESAssets under management(bn)/Breakdown of investments75.5u.7u.3t.8%7.1%7.2%7.6%7.4%9.1%8.6%8.6%8.6%7.5%7.5%7.6%7.7%0.7%1.0%0.9%1.5%Market value Sept.23Market value Dec.23Market value Mar.24Market value Jun.24Short term investmentsOther(private equity,convertible bonds,etc)Real estate(buildings,shares,shares in SCIs)Other shares of net hedgingInterest rate products(bonds,etc)bnJun.22Sept.22Dec.22Mar.23Jun.23Sept.23Dec.23Mar.24Jun.24 Jun./Jun.Unit-linked80.478.982.288.191.189.695.498.799.8 9.6%In Euros239.0239.2239.3236.4235.2234.6234.9236.2238.2 1.3%Total319.4318.0321.5324.6326.3324.3330.3334.9337.9 3.6%Share of unit-linked25.2$.8%.6.2.9.6(.9).5).5% 1.6 ptH1-2024H1-2023Net combined ratio94,6,92NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.ACTIVITY INDICATORS AG DIVISION AMUNDI APPENDICESBreakdown of assets under management by asset class(bn)29.0).8.0.6%9.6%9.6%6.5%5.2.9.7%9.8%8.5.2.5%June 23June 24JVTreasuryPassive managementReal,alternative and structuredassetsEquitiesMulti-assetsBondsActive Management52a2NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.Customer assets/Loans outstanding(bn)ACTIVITY INDICATORS SFS DIVISIONAPPENDICESCAPFM OUTSTANDINGSPersonal Finance&Mobility-Gross managed loans(bn)Jun.22Sept.22Dec.22Mar.23Jun.23Sept.23Dec.23Mar.24Jun.24 Jun./Jun.Crdit Agricole Group(LCL&RBs)21.321.521.621.822.022.122.522.723.15.1%Automobile(CA Auto Bank auto partnerships)34.235.538.540.340.443.644.745.646.013.9%o/w CA Auto Bank-24.726.827.528.929.318.5%Other entities41.141.942.943.344.645.445.846.046.64.5%o/w CAPFM France12.713.013.313.313.613.713.713.513.4-1.4%o/w Agos14.815.115.615.916.416.516.817.017.35.8%o/w Other entitis13.513.814.014.114.715.115.315.515.98.6%-96.698.9103.0105.5107.0111.1113.0114.4115.88.2%O/w total consolidated loans37.138.039.139.464.565.866.868.168.66.2L&F OUTSTANDINGSLeasing&Factoring(CAL&F)-Leasing book and factored receivables(bn)Jun.22Sept.22Dec.22Mar.23Jun.23Sept.23Dec.23Mar.24Jun.24 Jun./Jun.Leasing portfolio16.717.017.617.818.318.518.919.419.88.5%incl.France13.413.614.114.414.714.915.115.415.77.2ctored turnover29.628.431.229.330.628.932.430.432.25.3%incl.France18.116.819.518.019.317.820.418.719.92.8%Consumer finance and leasing/factored revenues(m)622NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.LCL-Customer savings(bn)Customer savings(bn)*Jun.22Sept.22Dec.22Mar.23Jun.23Sept.23Dec.23Mar.24Jun.24 Jun./Jun.Securities12.311.612.014.913.914.213.815.714.4 4.1%Mutual funds and REITs7.67.17.98.58.98.99.29.89.6 8.7%Life insurance64.864.063.962.663.762.162.662.462.3(2.3%)Off-balance sheet savings84.682.883.886.186.585.285.687.986.4(0.1%)Demand deposits79.178.273.267.265.463.862.058.559.3(9.4%)Home purchase savings plans10.110.09.99.99.79.69.49.39.2(6.1%)Bonds4.44.76.37.48.08.010.010.211.7 47.3%Passbooks*43.744.446.649.749.150.151.052.953.0 8.1%Time deposits8.510.315.320.622.224.329.732.132.3 45.0%On-balance sheet savings145.8147.6151.4154.9154.4155.9162.0162.9165.4 7.1%TOTAL230.5230.4235.2241.0240.9241.0247.6250.8251.8 4.5%Passbooks*o/w(bn)Jun.22Sept.22Dec.22Mars23Juin 23Sept.23Dc.23Mar.24Jun.24 Jun./Jun.Livret A12.913.213.514.615.315.715.816.817.1 12.0%LEP1.01.11.21.51.61.72.02.32.4 48.4%LDD9.19.19.19.49.69.79.610.010.1 5.3%*Including liquid company savings.Outstanding Livret A,LDD and LEP before centralisation with the CDC.Retail Banking in France(LCL)-Loans outstandingsLoans outstanding(bn)Jun.22Sept.22Dec.22Mars23Juin 23Sept.23Dc.23Mar.24Jun.24 Jun./Jun.Corporate29.731.131.631.331.631.631.731.331.5(0.3%)Professionals22.623.223.523.924.124.224.424.424.4 1.2%Consumer credit8.48.58.78.68.78.68.78.68.6(1.6%)Home loans96.098.5100.5101.8102.9103.5103.9103.8103.7 0.8%TOTAL156.7161.3164.3165.6167.3168.0168.8168.1168.2 0.5TIVITY INDICATORS FRB DIVISIONAPPENDICESCustomer assets and loans outstanding(bn)632NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.526527477470455451480487454498454455463445482487464467500480629000052601980981940915936959944953954978Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23Q3-23Q4-23Q1-24Q2-24Home purchase savings plans(PEL/CEL)Fee and commission IncomeNet interest income excl.HPSPRevenues(m)Q2-22Q3-22Q4-22Q1-23Q2-23Q3-23Q4-23Q1-24Q2-24 Q2/Q2Net interest income555477470455451532493454500 10.9%Home purchase savings plans(PEL/CEL)29000052601Net interest income excl.HPSP527477470455451480487454498 10.6e and commission Income455463445482487464467500480(1.5%)-Securities32.430.225.630.930.330333330 0.1%-Insurance183.1182.7165.2196.4196.1182182204193(1.8%)-Account management and payment instruments239.2250.5253.8254.2281.8252252263257(8.8%)TOTAL1,010940915936959996959954979 2.2%TOTAL excl.HPSP981940915936959944953954978 2.0TIVITY INDICATORS FRB DIVISIONAPPENDICESRevenues(m)642NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE GROUPCustomer assets(bn)*Jun.22Sept.22Dec.22Mar.23Jun.23Sept.23Dec.23Mar.24Jun.24 Jun./Jun.Securities43.042.044.246.246.846.747.549.446.8(0.1%)Mutual funds and REITs24.824.225.326.827.827.628.529.529.6 6.4%Life insurance206.6205.0208.7211.6212.4210.6216.2218.7219.8 3.5%Off-balance sheet assets274.4271.2278.2284.6287.1284.9292.2297.6296.2 3.2mand deposits233.8235.7231.3218.0212.0211.2204.1197.5201.2(5.1%)Home purchase savings schemes111.5110.8111.5108.4105.8103.4101.696.793.5(11.6%)Passbook accounts180.4187.2191.6197.1198.1199.4203.8206.0207.6 4.7%Time deposits38.238.742.352.863.173.086.395.399.3 57.3%On-balance sheet assets563.9572.4576.7576.4579.0586.9595.8595.5601.5 3.9%TOTAL838.3843.6854.9861.0866.1871.9888.0893.1897.8 3.7%Passbooks,o/w(bn)*Jun.22Sept.22Dec.22Mar.23Juin 23Sept.23Dec.23Mar.24Jun.24 Jun./Jun.Livret A65.267.970.575.677.979.682.384.385.8 10.0%LEP12.313.414.817.217.818.622.924.424.5 37.9%LDD36.837.238.239.640.340.841.942.643.1 6.8%Mutual shareholders passbook account12.312.412.413.113.513.913.914.715.3 13.7%*including customer financial instruments.Livret A,LDD and LEP outstandings before centralisation with the CDC.Loans outstanding(bn)Jun.22Sept.22Dec.22Mar.23Juin 23Sept.23Dec.23Mar.24Jun.24 Jun./Jun.Home loans372.8378.9384.2387.2390.5392.1392.7390.7390.4(0.0%)Consumer credit22.522.622.922.923.223.223.623.523.6 2.0%SMEs 109.8112.8115.3116.8118.1119.5121.0121.7122.4 3.6%Small businesses30.630.730.631.031.130.830.530.129.9(3.9%)Farming loans44.644.944.645.546.346.546.046.346.8 1.2%Local authorities33.633.133.733.333.232.732.431.430.8(7.1%)TOTAL614.0622.9631.2636.7642.4644.9646.2643.6644.0 0.2TIVITY INDICATORS RB DIVISION APPENDICESCustomer assets and loans outstanding(bn)652NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE GROUPmQ2-22Q3-22Q4-22Q1-23Q2-23Q3-23Q4-23Q1-24Q2-24 Q2/Q2Services and other banking transactions223223232228227227209240230 1.5%Securities746968776865718076 11.5%Insurance7428107769768528528241,086885 3.9count management and payment instruments511524506519530538543543550 3.8%Net fees&commissions from other customer activities(1)9189106108126116152103119(5.3%)TOTAL(1)1,6401,7151,6891,9081,8011,7981,7992,0521,859 3.2%(1)Revenues generated by the subsidiaries of the Regional Banks,namely fees and commisions from leasing and operating leasing transactionsACTIVITY INDICATORS RB DIVISIONAPPENDICESFee and commission income breakdown/Evolution of credit risk outstandings(m)mJune 23Sept.23Dc.23March 24June 24Gross customer loans outstanding 645,827648,512650,552647,608648,040of which:impaired loans11,04811,29911,51611,87512,172Loans loss reserves(incl.collective reserves)10,91211,02511,10711,23611,507of which:loans loss reserves for Stage 1&2 outstandings5,2605,2765,3225,2805,443of which:loans loss reserves for Stage 3 outstandings5,6535,7495,7865,9566,064Impaired loans ratio1.7%1.7%1.8%1.8%1.9%Coverage ratio(excl.collective reserves)51.2P.9P.2P.2I.8%Coverage ratio(incl.collective reserves)98.8.6.5.6.5%Regional Banks-Evolution of credit risk outstandings662NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE GROUPLCL new loans production(excluding SGL)since 2018(Bn)Regional banks new loans production(excluding SGL)since 2018(Bn)CHANGE IN FRENCH RETAIL BANKING NEW LOANS PRODUCTIONAPPENDICES0.70.80.80.80.70.90.90.80.70.50.80.70.70.70.90.80.80.80.80.70.70.70.70.70.60.62.83.94.94.54.24.35.64.93.93.73.93.93.34.55.95.24.66.15.84.73.63.32.82.31.61.90.91.00.91.11.01.11.11.21.11.11.01.21.11.31.11.21.51.51.61.31.61.21.11.11.11.02.22.52.42.82.12.42.11.91.81.61.21.91.32.62.22.52.63.63.02.41.41.82.12.21.72.46.68.29.09.28.08.79.68.97.66.97.07.86.59.210.19.79.511.911.29.27.27.06.86.35.16.0Q12018Q22018Q32018Q42018Q12019Q22019Q32019Q42019Q12020Q22020Q32020Q42020Q12021Q22021Q32021Q42021Q12022Q22022Q32022Q42022Q12023Q22023Q32023Q42023Q12024Q22024Consumer creditHomeloansProfessionalsCorporateAverage prod.Average prod.Average prod.Average prod.Average prod.Average prod.8.28.87.38.910.56.85.5Average prod.2.02.32.22.42.12.32.22.72.01.42.42.22.12.42.12.42.22.32.12.12.02.01.92.01.82.012.613.915.714.713.014.717.516.914.213.915.818.914.918.018.616.115.216.917.916.313.012.911.59.67.28.58.58.88.010.28.69.79.111.65.610.88.611.19.310.79.311.910.712.510.413.211.511.09.510.98.99.523.125.025.927.323.726.728.831.321.726.126.832.326.331.130.030.428.031.830.531.626.625.922.922.518.020.0Q12018Q22018Q32018Q42018Q12019Q22019Q32019Q42019Q12020Q22020Q32020Q42020Q12021Q22021Q32021Q42021Q12022Q22022Q32022Q42022Q12023Q22023Q32023Q42023Q12024Q22024Consumer creditHome loansCorporates-Professionals-Agriculture-public entities25.3Average prod.27.6Average prod.26.7Average prod.29.5Average prod.30.5Average prod.24.5Average prod.19.0Average prod.672NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.CA Italy(bn)*June 22sept 2022Dec 22Mar.23June 23Sept 23Dec 23Mar 24June 24 June/JuneTotal loans outstanding58.859.059.459.259.759.561.160.161.0 2.2%o/w retail customer loans28.628.728.929.029.029.629.929.930.2 4.4%o/w professionals loans9.89.69.29.08.98.78.68.07.9(11.3%)o/w corporates loans,including SMEs17.918.118.418.418.818.219.519.119.7 4.7%On-balance sheet customer assets60.460.462.361.963.764.565.765.565.3 2.5%Off-balance sheet customer assets49.749.349.649.449.548.850.150.851.4 4.0%Total assets(bn)110.0109.7111.9111.3113.2113.2115.8116.3116.7 3.1%IRB Others(bn)*June 22sept 2022Dec 22Mar.23June 23Sept 23Dec 23Mar 24June 24 June/JuneTotal loans outstanding12.212.26.96.76.97.07.37.07.0 1.4%o/w retail customer loans5.85.73.63.63.83.84.04.04.1 6.7%o/w SMEs and professionnals0.30.40.30.30.30.30.30.30.4 19.3%o/w Large corporates6.06.13.02.82.82.93.02.72.6(8.0%)On-balance sheet customer assets13.914.29.89.610.210.311.210.010.2(0.5%)Off-balance sheet customer assets1.91.80.50.60.60.00.70.80.8 31.6%Total assets(bn)15.816.010.310.210.810.311.910.811.0 1.4%*Net of POCI outstandings*Disposal of the controlling stake in Crdit du Maroc in Q4 2022ACTIVITY INDICATORS BPI DIVISIONAPPENDICESLoans outstandings/On-balance sheet deposits/Revenues by entity and by type of customer(%)76%6%5%Revenues Q2-24 by entityItalyPolandEgyptUkraine87%8%2%3%Outstanding on-B/S depositsQ2-24 by entityItalyPolandEgyptUkraine90%8%1%1%Outstanding loans Q2-24 by entityItalyPolandEgyptUkraine682NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSAppendices Crdit Agricole Group 692NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE GROUPRB:Regional Banks;AG:Asset Gathering,including Insurance;IRB:International Retail Banking,SFS:Specialised financial services;LC:Large customers;CC:Corporate CentreCONTRIBUTION OF THE BUSINESS LINES TO Q2-24 EARNINGSAPPENDICESmRBLCLIRBAGSFSLCCCTotalRevenues3,2559791,0511,9468892,223(837)9,507Operating expenses excl.SRF(2,560)(591)(573)(813)(443)(1,204)497(5,687)SRF-Gross operating income6943894771,1334471,019(340)3,819Cost of risk(444)(95)(75)(2)(211)(39)(6)(872)Equity-accounted entities2-332910-74Net income on other assets120(12)(1)2(0)(7)Income before tax2532964021,152265993(347)3,014Tax(44)(65)(117)(282)(54)(248)48(762)Net income from discontd or held-for-sale ope.-Net income209231285870210745(299)2,252Non controlling interests(1)(0)(38)(124)(23)(36)(2)(224)Net income Group Share208231247746187710(300)2,028Q2-24(stated)mRBLCLIRBAGSFSLCCCTotalRevenues3,3539591,0051,7411,1621,905(578)9,546Operating expenses excl.SRF(2,448)(554)(520)(715)(430)(1,038)471(5,233)SRF26(0)(0)22(6)6Gross operating income9074114851,026735869(113)4,319Cost of risk(405)(69)(125)(0)(304)(32)(3)(938)Equity-accounted entities0-027117(0)46Net income on other assets4200260(0)33Income before tax5073453611,053468844(116)3,460Tax(93)(76)(105)(245)(143)(174)63(772)Net income from discontd or held-for-sale ope.-310-4Net income413269259809325670(53)2,692Non controlling interests(0)0(39)(122)(21)(34)5(211)Net income Group Share413269220687304635(48)2,481Q2-23(stated)702NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE GROUPRB:Regional Banks;AG:Asset Gathering,including Insurance;IRB:International Retail Banking,SFS:Specialised financial services;LC:Large customers;CC:Corporate CentreCONTRIBUTION OF THE BUSINESS LINES TO H1-24 EARNINGSAPPENDICESmRBLCLIRBAGSFSLCCCTotalRevenues6,5681,9332,1313,7391,7364,489(1,565)19,031Operating expenses excl.SRF(5,044)(1,193)(1,098)(1,567)(897)(2,501)1,024(11,276)SRF-Gross operating income1,5247401,0332,1728391,988(541)7,755Cost of risk(691)(214)(159)(5)(429)(5)(20)(1,523)Equity-accounted entities7-615914-142Net income on other assets34(0)(20)(1)2(2)(14)Income before tax8425308752,2084681,999(563)6,361Tax(191)(119)(260)(501)(97)(482)133(1,517)Net income from discontinued or held-for-sale operations-Net income6514126151,7073721,517(430)4,843Non controlling interests(1)(0)(89)(236)(42)(69)6(432)Net income Group Share6504125251,4713301,448(424)4,412H1-24(stated)mRBLCLIRBAGSFSLCCCTotalRevenues6,6861,8951,9943,4861,8343,956(1,378)18,473Operating expenses excl.SRF(4,889)(1,153)(1,020)(1,430)(800)(2,159)935(10,517)SRF(111)(44)(40)(6)(29)(312)(77)(620)Gross operating income1,6866989342,0501,0051,485(521)7,337Cost of risk(577)(135)(240)(1)(463)(68)(3)(1,486)Equity-accounted entities7-1498511(0)153Net income on other assets6200255(1)37Income before tax1,1225666952,0986521,433(525)6,042Tax(289)(138)(203)(475)(177)(358)157(1,483)Net income from discontinued or held-for-sale operations-510-6Net income8334284971,6244751,075(368)4,565Non controlling interests(0)(0)(79)(233)(44)(54)(4)(415)Net income Group Share8334284181,3904311,021(372)4,150H1-23(stated)712NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE GROUPALTERNATIVE PERFORMANCE INDICATORS SPECIFIC ITEMSAPPENDICES22mNet impact of specific items on Q2-2024 net incomemGross impact*Impact on Net incomeGross impact*Impact on Net incomeGross impact*Impact on Net incomeGross impact*Impact on Net incomeDVA(LC)3727(15)(11)4231(23)(17)Loan portfolio hedges(LC)54(1)(1)75(25)(18)Home Purchase Savings Plans(LCL)11-11-Home Purchase Savings Plans(CC)(2)(1)-(0)(0)-Home Purchase Savings Plans(RB)2217-6347-Mobility activities reorganisation (SFS)-299214-299214Check Image Exchange penalty(CC)-4242-4242Check Image Exchange penalty(LCL)-2121-2121Check Image Exchange penalty(RB)-4242-4242Total impact on revenues644838830611485356283Degroof Petercam integration costs(AG)(5)(4)-(5)(4)-ISB integration costs(LC)(25)(13)-(44)(23)-Mobility activities reorganisation (SFS)-(18)(13)-(18)(13)Total impact on operating expenses(30)(17)(18)(13)(50)(27)(18)(13)Mobility activities reorganisation (SFS)-(85)(61)-(85)(61)Provision for risk Ukraine(IRB)-(20)(20)-Total impact on cost of credit risk-(85)(61)(20)(20)(85)(61)Mobility activities reorganisation (SFS)-(12)(12)-(12)(12)Total impact equity-accounted entities-(12)(12)-(12)(12)Degroof Petercam aquisition costs(AG)(12)(9)-(20)(15)-Mobility activities reorganisation (SFS)-2812-2812Total impact on Net income on other assets(12)(9)2812(20)(15)2812Total impact of specific items22223012322422269209Asset gathering(17)(13)-(25)(19)-French Retail banking2418636365486363International Retail banking-(20)(20)-Specialised financial services-212140-212140Large customers1818(16)(12)513(47)(35)Corporate centre(2)(1)4242(0)(0)4242*Impact before tax and before minority interestsQ2-23Q2-24H1-24H1-23722NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE GROUPReconciliation between stated and underlying income Q2-24APPENDICESCrdit Agricole Group 2,028mNet income Group share stated in Q2-24mQ2-24statedSpecific itemsQ2-24underlyingQ2-23statedSpecific itemsQ2-23underlying Q2/Q2stated Q2/Q2underlyingRevenues9,507649,4439,5463889,159(0.4%) 3.1%Operating expenses excl.SRF(5,687)(30)(5,657)(5,233)(18)(5,215) 8.7% 8.5%SRF-6-6(100.0%)(100.0%)Gross operating income3,819343,7854,3193693,950(11.6%)(4.2%)Cost of risk(872)(0)(872)(938)(84)(854)(7.1%) 2.1%Equity-accounted entities74(0)7446(12)58 61.0% 27.5%Net income on other assets(7)(12)533285n.m.(14.5%)Change in value of goodwill-n.m.n.m.Income before tax3,014222,9923,4603013,160(12.9%)(5.3%)Tax(762)(6)(756)(772)(69)(704)(1.3%) 7.4%Net income from discontd or held-for-sale ope.-4-4(100.0%)(100.0%)Net income2,252162,2362,6922322,460(16.4%)(9.1%)Non controlling interests(224)6(230)(211)(0)(211) 5.9% 8.7%Net income Group Share2,028222,0062,4812322,249(18.3%)(10.8%)Cost/Income ratio excl.SRF(%)59.8Y.9T.8V.9% 5.0 pp 3.0 pp732NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE GROUPReconciliation between stated and underlying income H1-24 APPENDICESCrdit Agricole Group 4,412mNet income Group share stated in H1-24mH1-24statedSpecific itemsH1-24underlyingH1-23statedSpecific itemsH1-23underlying H1/H1stated H1/H1underlyingRevenues19,03111418,91718,47335618,117 3.0% 4.4%Operating expenses excl.SRF(11,276)(50)(11,226)(10,517)(18)(10,498) 7.2% 6.9%SRF-(620)-(620)(100.0%)(100.0%)Gross operating income7,755647,6917,3373386,999 5.7% 9.9%Cost of risk(1,523)(20)(1,503)(1,486)(84)(1,402) 2.5% 7.2%Equity-accounted entities142(0)142153(12)165(7.5%)(14.2%)Net income on other assets(14)(20)6372810n.m.(35.3%)Change in value of goodwill-n.m.n.m.Income before tax6,361246,3366,0422695,773 5.3% 9.8%Tax(1,517)(12)(1,505)(1,483)(60)(1,422) 2.3% 5.8%Net income from discontd or held-for-sale ope.-6-6(100.0%)(100.0%)Net income4,843124,8314,5652094,356 6.1% 10.9%Non controlling interests(432)10(442)(415)(0)(415) 4.0% 6.5%Net income Group Share4,412224,3894,1502093,941 6.3% 11.4%Cost/Income ratio excl.SRF(%)59.2Y.3V.9W.9% 2.3 pp 1.4 pp742NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE GROUPCRDIT AGRICOLE GROUPAPPENDICESUnderlying revenues and net income Group share by business line excluding CC(m)Insurance7%Asset management8%Wealth management3%Regional Banks32%LCL9%IRB10%Consum.Finance7%Leasing&Fact.2%CIB17%Asset servicing5%Underlying revenues excl.CC H1-24:20.5bnRetail banking 52%Asset gathering 18%Spec.fin.serv.8%Large customers 22%Insurance20%Asset managemenWealth management1%Regional Banks13%LCL9%IRB11%Consum.FinanceLeasing&Fact.2%CIB26%Asset servicingRetail banking 32%Asset gathering 31%Spec.fin.serv.7%Underlying NIGS excl.CC H1-24:4.8bnLarge customers 30u2NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE GROUPFINANCIAL STRUCTURE AND BALANCE SHEETAPPENDICESSolvency(m)30/06/2431/12/23Share capital and reserves 32.0 31.2Consolidated reserves 103.1 97.9Other comprehensive income(2.7)(2.2)Net income(loss)for the year 4.4 8.3EQUITY-GROUP SHARE 136.8 135.1(-)Expected dividend(0.7)(1.7)(-)AT1 instruments accounted as equity(7.2)(7.2)Eligible minority interests 4.0 3.7(-)Prudential filters(1.3)(1.5)o/w:Prudent valuation(2.4)(2.2)(-)Deduction of goodwills and intangible assets(19.1)(18.3)Deferred tax assets that rely on future profitability excluding those arising from temporary differences(0.1)(0.1)Shortfall in adjustments for credit risk relative to expected losses under the internal ratings-based approach(0.4)(0.4)Amount exceeding thresholds 0.0 0.0Insufficient coverage for non-performing exposures(Pillar 2)(1.3)(1.3)Other CET1 components(2.0)(1.4)COMMON EQUITY TIER 1(CET1)108.8 106.9Additionnal Tier 1(AT1)instruments 7.3 6.0Other AT1 components(0.1)(0.2)TOTAL TIER 1 116.0 112.6Tier 2 instruments 16.4 15.0Other Tier 2 components 1.2 1.2TOTAL CAPITAL 133.6 128.9RWAs 627.7 609.9CET1 ratio17.3.5%Tier 1 ratio18.5.5%Total capital ratio21.3!.1%Phased-in762NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE GROUP*FINANCIAL STRUCTURE AND BALANCE SHEETAPPENDICESBalance sheet(bn)Assets 30/06/2024 31/12/2023 Liabilities 30/06/2024 31/12/2023 Cash and Central banks182.8 180.7Central banks0.20.3Financial assets at fair value through profit or loss564.4527.3Financial liabilities at fair value through profit or loss386.1353.9Hedging derivative instruments34.232.1Hedging derivative instruments32.234.4Financial assets at fair value through other comprehensive income221.2224.4Loans and receivables due from credit institutions137.1132.4Due to banks81.9108.5Loans and receivables due from customers 1165.41155.9Customer accounts1142.31121.9Debt securities116.6111.3Debt securities in issue279.5260.2Revaluation adjustment on interest rate hedged portfolios-18.9-14.7Revaluation adjustment on interest rate hedged portfolios-13.3-12.2Current and deferred tax assets8.58.8Current and deferred tax liabilities3.12.9Accruals,prepayments and sundry assets54.559.8Accruals and sundry liabilities73.472.2Non-current assets held for sale and discontinued operations0.90.0Liabilities associated with non-current assets held for sale0.20.0Insurance contrats issued-Assets-Insurance contrats issued-Liabilities354.1351.8Reinsurance contracts held -Assets1.11.1Reinsurance contracts held-Liabilities0.10.1Investments in equity affiliates2.52.4Investment property12.212.2Provisions5.35.5Property,plant and equipment14.013.4Subordinated debt27.725.2Intangible assets3.53.5Shareholders equity136.8135.1Goodwill16.816.5Non-controlling interests7.17.2Total assets2,516.82,467.1Total liabilities2,516.82,467.1772NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSAppendicesLegal risks782NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.The main current legal risks for Crdit Agricole S.A.and its fully-consolidated subsidiaries are described in the management report for financial year 2023,found in the 2023 Universal Registration Document.They will be updated in the Amendment A03 to the 2023 Universal Registration Document.LEGAL RISKSAPPENDICES792NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSRatings802NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.Ratings FINANCIAL RATINGS(1)APPENDICESCrdit Agricole S.A.-Ratings RatingsLT/ST Counterparty Issuer/LT senior preferred debtOutlook/ReviewST senior preferred debtLast review date Rating actionS&P Global RatingsAA-/A-1 (RCR)A Stable outlookA-126/10/2023LT/ST ratings affirmed;outlook unchangedMoodysAa2/P-1(CRR)Aa3Stable outlookP-124/07/2024LT/ST ratings affirmed;outlook unchangedFitch RatingsAA-(DCR)A /AA-Stable outlookF110/01/2024LT/ST ratings affirmed;outlook unchanged DBRSAA(high)/R-1(high)(COR)AA(low)Stable outlookR-1(middle)19/07/2024LT/ST ratings affirmed;outlook unchanged1.the ratings reflect the analysis of Crdit Agricole Group812NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCASAS RATINGS(2)REFLECT A WELL-DIVERSIFIED BUSINESS MODEL AND STRONG FINANCIAL POSITIONA /AA-stable(1)A stable(1)A stable(1)“Sound earnings,cooperative status,and conservative capital policy support the groups very solid capital position.”“Firm leader in the French retail banking market,generating good and predictable risk-adjusted earnings”.“Increasingly diverse model business model and income sources,with leading franchises,notably in retail banking,insurance,and asset management.”“Robust capital generation stemming from stable and diversified earnings and high profit retention at group level”“Solid asset quality and strong coverage of risks by provisions”“Large capital buffer,which results in a solid loss absorption capacity”“A very diverse business model,leading franchises in multiple segments,low risk appetite,sound asset quality and profitability,strong capitalisation,and strong funding compared with large and European banks.”As of 01/12/2023As of 24/07/2024As of 25/01/20241.Issuer credit rating/Long Term Senior Preferred rating2.The ratings reflect the analysis of Crdit Agricole Group822NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE S.A.2010AAAA-NON-FINANCIAL RATINGSAPPENDICESCrdit Agricole S.A.Sustainalytics1Moodys AnalyticsISS ESGMSCICDP Climat 021.971C AAB.F.Crdit Mutuel 019.364C 012.964CAABBarclays plc 02262CAABBPCE S.A.018.561CAABDeutsche Bank 023.354ABA-BNP Paribas 023.770C AAAUBS Group 027.153CAAA-Standard Chartered 02550CAAA-HSBC Holdings 024.248C 065CAAA-ING Group 054 017.8AABC72C 19.218.2832NDQUARTER AND 1ST HALF-YEAR 2024 RESULTSCRDIT AGRICOLE PRESS CONTACTS:Alexandre Barat 33 1 57 72 12 19alexandre.baratcredit-agricole-sa.frOlivier Tassain 33 1 43 23 25 41olivier.tassaincredit-agricole-sa.frMathilde Durand 33 1 57 72 19 43mathilde.durandcredit-agricole-sa.frBndicte Gouvert 33 1 49 53 43 64benedicte.gouvertca-fnca.frThis presentation is available at:www.credit- all our press releases at:www.credit- www.creditagricole.infoCrdit_AgricoleCrdit Agricole Groupcrditagricole_saCRDIT AGRICOLE S.A.INVESTOR RELATIONS CONTACTS:Institutional investors 33 1 43 23 04 31investor.relationscredit-agricole-sa.frIndividual shareholders 33 800 000 777credit-agricole-sarelations-(toll-free call in France only)Ccile Mouton 33 1 57 72 86 79cecile.moutoncredit-agricole-sa.frJean-Yann Asseraf 33 1 57 72 23 81jean-yann.asserafcredit-agricole-sa.frFethi Azzoug 33 1 57 72 03 75 fethi.azzougcredit-agricole-sa.frJosphine Brouard 33 1 43 23 48 33josephine.brouardcredit-agricole-sa.frOriane Cante 33 1 43 23 03 07oriane.cantecredit-agricole-sa.frNicolas Ianna 33 1 43 23 55 51nicolas.iannacredit-agricole-sa.frLela Mamou 33 1 57 72 07 93leila.mamoucredit-agricole-sa.frAnna Pigoulevski 33 1 43 23 40 59anna.pigoulevskicredit-agricole-sa.frLIST OF CONTACTS:
2024-08-06
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H1 2024 ResultsQ2 2024 SalesJuly 24th,2024Key takeawaysAlexandre Bompard,Chairman&CEOJuly 24,2024H1 2024 RESULTS3H1 2024 Key financial highlights40.6bnNet Sales 12.1%LFL743mRecurring Operating Income 6.2X0mCost savingsof which 10.8%in Q2Strong growth in Braziland solid performance in France1.2bn target confirmed for FY24Stable Net free cash-flowvs H1 2023Driven by EBITDA andWCR thanks to continued improvement in inventoriesJuly 24,2024H1 2024 RESULTS4CSR Successful H1 2024 initiativesPartnership with GreenYellowPhotovoltaic panels over 350 car parks in France to generate 450 GWh per year within 3 years47 of Top 100 suppliershave a 1.5C trajectoryCSR and Food Transition Index107%-49%in GHG emissions vs.2019(vs.-40%in H1 23)48,105 partner producers(vs.35,618 in H1 23)329 suppliers committed to the Food Transition Pact(vs.233 in H1 23)H1 2024 RESULTSJuly 24,20245H1 2024 Strategic highlightsPrivate labels accounted for 37%of food sales, 2pts vs.H1 2023Unlimitail is now in 13 countries,and serves 30 active retail partnerse-commerce GMV increased by 30%,driven by Brazil R$2.3bn run-rate synergies achieved at June-end 2024.2025 target raised to R$3.0bnClosing of the acquisition of Cora and Match in France on July 1st,2024Fast expansion including 10 Atacado stores in Brazil,and 166 franchised convenience storesin FranceFinancial ResultsMatthieu Malige,Group CFOH1 2024 RESULTSJuly 24,20247Q2 2023 GrosssalesLFLExpansion&M&APetrolCalendarForexQ2 2024 Grosssales 10.8%(0.2)%(0.8)%(1.0)%(11.7),708m23,377m(2.9)%Q2 sales growth 10.8%LFL France:-3.5%Europe:-2.7%LatAm: 44.5%July 24,2024H1 2024 RESULTS-2%0%2%4%6%8 M food inflation in Europe0.3%0.1%0.3%(0.3)%0.0%0.4%0.0%0.2%(0.3)%0.0%0.1%0.4%(0.2)%-1%Jun23Jul23Aug23Sep23Oct23Nov23Dec23Jan24Feb24Mar24Apr24May24Jun248Source:local national institutes of statisticsStabilization of food inflation at low-single digit in EuropeMoM food inflation in France0.8%4.2%1.4%0.1%2.5%1.1%July 24,2024H1 2024 RESULTS9 Food sales down-2.7%LFL;Non-food-10.9%LFL Gradual improvement of market share dynamicsStabilization of market share in volume at the end of Q2(1)Cora/Match to contribute as of JulyLFL Q2 2024H1 2024France-3.5%-2.0%Hypermarkets-5.5%-3.4%Supermarkets-2.4%-1.2%Convenience&others-0.9%-0.1%France Q2 2024 LFL of-3.5%H1 2024 ROI up 6.2%ROI margin up 14bps at 1.6%H1 2024H1 2023286m1.6%marginFrance:Aggressive price investments&margin improvement(1)Source:Kantar WorldPanel(2)Include notably e-commerce,transfers to lease management and franchise,retail media,etc. 6.20m1.4%margin Strong price investment more than offset by cost discipline and positive impact from Carrefour 2026 initiatives(2)July 24,2024H1 2024 RESULTS10Europe:Price investments and adverse weather in Q2Temporary pressure on ROIH1 2024H1 202384m164m-48%LFL Q2 2024H1 2024Europe(excl.France)-2.7%-1.5%Spain-2.1%-0.8%Italy-5.4%-3.5lgium-3.8%-2.0%Romania 0.2% 0.9%Poland-2.5%-3.3%Price investments to protect competitiveness,particularly in Spain Integration costs of Cora stores in Romania temporarily weighing on profitability Highly competitive landscape in Italy and Poland Solid ROI and ROI margin trajectory in Belgium Inflation slowing down in all markets Sluggish market trends Poor weather conditions strongly affecting seasonal non-food sales and traffic in the hypermarket format in Western Europe High comps in BelgiumROI at current FX,evolution at constant FXEurope Q2 LFL of-2.7%July 24,2024H1 2024 RESULTS11Brazil Q2 2024 LFL of 6.0%H1 2024 ROI up 46%LFLQ2 2024H1 2024Brazil 6.0% 3.8%Atacado 7.4% 4.7%Retail 2.3% 0.4%Sams Club 2.5% 4.6%ROI at current FX,evolution at constant FXEuropeBrazil:Strong momentum lifted by strategic initiativesH1 2024H1 2023 4666m251m Positive operating leverage from sales growth Increasing contribution to profit from ex-Grupo BIG perimeter Market dynamics:growing volumes&return to positive food inflation Atacado:successful commercial strategyRoll-out of service corners in 80 storesDouble-digit sales growth from B2B customers 21.4%LFL at ex-Grupo BIG converted stores Retail:positive LFL sales growth thanks to revised pricing strategy and portfolio adjustments Sams Club: 25tive members vs June 23 Banco Carrefour:billings up 13%with continuous decrease in delinquenciesJuly 24,2024H1 2024 RESULTS12Grupo BIG:Synergies achieved Target raised to R$3.0bn by 2025414m(65)m(85)mR$2.3bnRun-rate synergies achieved in Q2 2024Rapidexecution of portfolio adjustments(closure&sale of supermarkets)Positive commercial synergies,accelerating since Q1 2024R$3.0bnNew 2025 synergy targetMainly including cost synergies(COGS and SG&A)which vastly exceeded initial target of R$1.3bnDriving incremental profit growthFurther potential identified on commercial synergies and(to a lesser extent)on costsvs.dis-synergies in 2022&2023 and initial 2025 target of R$700mJuly 24,2024H1 2024 RESULTS13Argentina Q2 2024 LFL of 233.1%H1 2024 ROI down-1.6m Very high inflation contextNegative food volumes in the marketMonthly inflation slowing down through the first half Carrefour has a resilient modelPrice leaderDiscount formats with Maxi and Hypermarkets3 additional Maxi stores opened in H1LFLQ2 2024H1 2024Argentina 233.1% 247.1%ROI-mH1 2023H1 2024Variationat constant-FXArgentina5351-3.0% 239.8%EuropeArgentina:roughly stable ROI-3Qm53mH1 2024H1 2023 Constant attention to costs-5m IAS 29 impactJuly 24,2024H1 2024 RESULTS14H1 2024 ROI 6.2%ROI margin improvement in H1Price investment,evolution of the integrated/franchised store mixin mH1 2023H1 2024VariationNet Sales40,74340,619-0.3%Gross margin8,0747,898-2.2%As a%of net sales19.8.4%-37bpsSG&A(6,356)(6,122)-3.7%As a%of net sales15.6.1%-53bpsRecurring operating income before D&A(EBITDA)1,8521,916 3.4%D&A(1,018)(1,032) 1.3%Recurring operating income(ROI)700743 6.2%Recurring operating margin1.7%1.8% 11bpsStrong cost discipline 24.9%at constant exchange rateJuly 24,2024H1 2024 RESULTS15in mH1 2023H1 2024Recurring operating income700743Net income from associates and JVs2414Non-recurring income and expenses,net(186)(126)EBIT538632Net financial expenses(276)(430)Cost of debt,net(191)(198)Net interest related to lease commitments(100)(111)Other financial income and expenses15(121)Income before taxes262201Income tax expense(153)(164)Normative tax rate27.2.6%Net income from discontinued operations761(1)Consolidated Net income87136Net income,Group share86725Net income from continuing operations,Group share11826Net income from discontinued operations,Group share749(1)Minority interests411Net income from continuing operations,Non-controlling interests(9)11Net income from discontinued operations,Non-controlling interests13-Adjusted net income,Group share(1)306313Adjusted earning per share(EPS)(1)0.420.46Adjusted EPS Impact of IAS 29 hyperinflation in Argentina Lower reorganization plans vs H1 2023Capital gain on divestment of Carrefour Taiwan recognized in 2023Adj.EPS up 8.0%(1)See detail of adjustments in appendix slide 30 Relatively stable July 24,2024H1 2024 RESULTS16in mH1 2023H1 2024VariationEBITDA1,8521,91664Income tax paid(146)(209)(63)Financial result(operations-related)(1)15(121)(136)Cash impact of restructuring items and others(26)(82)(56)Gross cash flow(excl.discontinued)1,6961,504(192)Change in working capital requirement(incl.change in consumer credit)(1,944)(1,795)149Discontinued operations35(0)(36)Operating cash flow(incl.exceptional items and discontinued)(213)(291)(78)Capital expenditure(687)(659)27Asset disposals(business related)289239(50)Change in net payables and receivables on fixed assets(246)(189)57Discontinued operations(11)-11Free cash flow(867)(900)(33)Payments related to leases(principal and interests)net of subleases payments received(581)(606)(25)Net cost of financial debt(191)(198)(7)Discontinued operations(45)-45Net Free Cash Flow(1,684)(1,704)(21)(1)Excluding cost of debt and interest related to leases commitmentsEBITDA to Net FCFStable Net Free Cash Flow Lower real estate divestments Good control of inventories,notably in non-foodIAS 29 adjustments related to hyperinflation in ArgentinaCash-out of reorganization plans announced in 2023Seasonality of CapexH1 2024 RESULTSJuly 24,202417(in m)H1 2023H1 2024VariationNet free cash-flow(incl.real estate)(1,684)(1,704)(21)Real estate Capex10196(5)Real estate asset disposal242208(34)Net real estate investment/(disposal)(141)(112)(29)Net free cash-flow(excl.real estate)(1,825)(1,816) 8Net Free Cash Flow excluding real estate July 24,2024H1 2024 RESULTS18Net debt variationNet M&A(2)June 30,2023 Net DebtLTM Net FCFDividends(1)Share buybackForex and Others(3)June 30,2024 Net Debt(1,602)5,0405,418636915284in m 378mNet FCF is returned to shareholdersNet debt slightly up with acquisitions and seasonality of buybacksNotes:(1)Including 36m dividends paid to minority shareholders(2)Notably including SuperCor in Spain&ex-Casino Stores in France(3)Mainly IAS 29 adjustments related to Argentina in H2 2023145APPENDIXJuly 24,2024H1 2024 RESULTS20OPERATIONAL OBJECTIVES2023H1 20242026Private labels36%of food sales37%of food sales( 2 pts vs H1 23)40%of food salesConvenience store openings 653 vs.2022 1,001 vs.2022 2,400 vs.2022Atacado store openings 92 vs.2022 102 vs.2022 200 vs.2022ESG OBJECTIVES2023H1 20242026Sales of certified sustainable products5.3bn(1)2.8bn(2)8bnTop 100 suppliers to adopt a 1.5C trajectory4447100Employees with disabilities13,35813,05015,000FINANCIAL OBJECTIVES2023H1 20242026E-commerce GMV5.3bn2.8bn in H1( 30%)10bnCost savings1,060m in 2023580m4.2bn(cumul.2023-2026)(3)Net Free Cash Flow(4)1,622m-21m vs n-11.7bnInvestments(Capex)1,850m659m2bn/yearCash dividend growth 55%(0.87/share)-5%/yearCarrefour 2026 objectivesNotes:(1)Sales in private labels certified“sustainable fishing”and“sustainable forest”are not taken into account in 2023;(2)Sales in private label certified“sustainable forest”in France are not taken into account for now,they were estimated at around 300m in H1 2023;(3)2024 target raised to 1.2bn(vs 1.0bn initially);(4)Net Free Cash Flow corresponds to free cash flow after net finance costs and net lease payments.It includes cash-out of exceptional chargesH1 2024 RESULTSJuly 24,202421Gross sales(in m)LFLex.petrolex.calendarOrganic growthex.petrolex.calendarChange at currentexch.rates inc.petrolChange at constantexch.rates inc.petrolFrance10,112-3.5%-4.8%-4.2%-4.2%Hypermarkets4,702-5.5%-7.1%-6.4%-6.4%Supermarkets3,456-2.4%-3.4%-3.2%-3.2%Others,incl.convenience1,953-0.9%-1.7%-0.6%-0.6%Other European countries6,242-2.7%-2.8%-2.7%-3.1%Spain2,776-2.1%-2.2%-3.2%-3.2%Italy1,022-5.4%-7.3%-8.6%-8.6lgium1,112-3.8%-3.7%-4.8%-4.8%Romania761 0.2% 2.8% 10.6% 11.3%Poland572-2.5%-2.4% 0.0%-5.4%Latin America(pre-IAS 29)6,354 44.5% 44.4%-0.8% 42.4%Brazil5,436 6.0% 5.9% 1.0% 4.9%Argentina(pre-IAS 29)918 233.1% 240.7%-10.3% 239.8%Group total(pre-IAS 29)22,708 10.8% 10.2%-2.9% 8.9%IAS 29 impact132Group total(post-IAS 29)22,840Q2 2024 Gross salesH1 2024 RESULTSJuly 24,202422CalendarPetrolForexFrance-0.9% 1.2%-Hypermarkets-0.7% 0.9%-Supermarkets-1.6% 1.5%-Others,incl.convenience-0.1% 1.3%-Other European countries-1.2%-0.2% 0.4%Spain-0.7%-0.6%-Italy-1.5% 0.2%-Belgium-1.1%-Romania-0.3%-0.1%-0.6%Poland-4.5% 1.5% 5.4%Latin America-0.9%-1.0%-43.2%Brazil-0.9%-0.2%-3.9%Argentina-1.0%-250.0%Group total-1.0%-0.8%-11.7%Q2 2024 Technical effectsH1 2024 RESULTSJuly 24,202423Gross sales(in m)LFLex.petrolex.calendarOrganic growthex.petrolex.calendarChange at currentexch.rates inc.petrolChange at constantexch.rates inc.petrolFrance20,112-2.0%-3.3%-3.2%-3.2%Hypermarkets9,509-3.4%-5.1%-5.1%-5.1%Supermarkets6,848-1.2%-2.0%-1.7%-1.7%Others,incl.convenience3,755-0.1%-1.2%-0.9%-0.9%Other European countries12,397-1.5%-1.6%-0.2%-0.7%Spain5,492-0.8%-0.8%-1.6%-1.6%Italy2,057-3.5%-5.2%-5.0%-5.0lgium2,214-2.0%-2.0%-1.8%-1.8%Romania1,486 0.9% 3.2% 12.1% 13.0%Poland1,148-3.3%-3.5% 4.5%-2.5%Latin America(pre-IAS 29)12,355 46.2% 46.0% 0.9% 45.0%Brazil10,604 3.8% 3.8% 3.5% 3.7%Argentina(pre-IAS 29)1,751 247.1% 254.6%-12.4% 255.0%Group total(pre-IAS 29)44,863 12.1% 11.4%-1.3% 10.5%IAS 29 impact207Group total(post-IAS 29)45,070H1 2024 Gross salesH1 2024 RESULTSJuly 24,202424CalendarPetrolForexFrance 0.2%-0.2%-Hypermarkets 0.4%-0.7%-Supermarkets-0.1% 0.3%-Others,incl.convenience 0.3% 0.1%-Other European countries 0.1%-0.4% 0.5%Spain-0.1%-0.8%-Italy 0.3%-0.2%-Belgium 0.1%-Romania 0.6%-0.1%-0.9%Poland-0.2% 1.2% 7.0%Latin America 0.1%-1.1%-44.1%Brazil 0.0%-0.1%-0.2%Argentina 0.4%-267.4%Group total 0.1%-1.5%-11.7%H1 2024 Technical effectsH1 2024 RESULTSJuly 24,202425-11.7%negative FX impactonH1 2024 gross sales-130mnegative FX impactonH1 2024 ROICURRENCYH1 2024evolution(1)Brazilian Real-0.2%Argentine Peso-75.3%Romanian Leu-0.8%Polish Zloty 7.2%(1)Average foreign exchange rateFX impact on resultsH1 2024 RESULTSJuly 24,202426NET SALESRECURRING OPERATING INCOMEin mH1 2023H1 2024Variation at constant exch.ratesVariation at current exch.ratesH1 2023H1 2024Variation at constant exch.ratesVariation at current exch.ratesFrance18,69418,146-2.9%-2.90286 6.2% 6.2%Other European countries11,30111,289-0.6%-0.1484-48.2%-49.0%Latin America10,74811,183 40.4% 4.104417 79.8% 37.3%Global functions-(38)(44) 15.8% 15.9%TOTAL40,74340,619 9.2%-0.3p0743 24.9% 6.2%Net sales and recurring operating income by regionH1 2024 RESULTSJuly 24,202427in mH1 2023H1 2024Restructuring costs(257)(77)Impairment and asset write-offs(56)(84)Results from asset disposals4237Other non-current items85(2)Non-recurring income and expenses,net(186)(126)Non-recurring expensesLower reorganization plansGoodwill reduction following divestment of underperforming ex-Grupo BIG storesH1 2024 RESULTSJuly 24,202428(1)Normative tax rate:-Reflects Carrefours geographic footprint and the relative weighting of each country-Calculation based on local corporate income tax rate applied to pre-tax income excluding non-current items(2)CVAE:local business tax in France based on a modified taxable income,recorded as corporate income tax;rate decrease by half starting in 2021Evolution of the geographic mixin mH1 2023H1 2024Income before taxes262201Non-recurring income and expenses,net(186)(126)Income before taxes(excl.non-recurring income and expense)448327Normative tax rate(1)27.2.6%Normative tax expense(122)(90)Non income-based taxes(mostly CVAE(2)(9)(6)Others(22)(68)Total tax expense(153)(164)Effective tax rate58.3.6%Tax expenseDepreciation of deferred tax assetsH1 2024 RESULTSJuly 24,202429in mH1 2023H1 2024Net sales40,74340,619Net sales,net of loyalty program costs40,30240,159Other revenue1,2871,343Total revenue41,58941,502Cost of goods sold(33,515)(33,604)Gross margin8,0747,898SG&A(6,356)(6,122)Recurring operating income before D&A(EBITDA)1,8521,916Amortization(1,018)(1,032)Recurring operating income(ROI)700743Recurring operating income including income from associates and joint ventures724757Non-recurring income and expenses(186)(126)Operating income538632Financial expense(276)(430)Income before taxes262201Income tax expense(153)(164)Net income from continuing operations,Group share11826Net income from discontinued operations,Group share749(1)Net income,Group share 86725Adjusted net income,Group share(1)306313Depreciation from supply chain(in COGS)(134)(140)H1 2024 income statement(1)See detail of adjustments in appendix slide 30 H1 2024 RESULTSJuly 24,202430in mH1 2023 publishedH1 2023 restated(1)H1 2024Net income,Group share86786725Restatement for non-recurring income and expenses(before tax)186186126Restatement for exceptional items in net financial expenses4111173Tax impact(2)31412Restatement on share of income from companies consolidated by the equity method-Restatement on share of income from minorities(22)(22)(24)Restatement for net income of discontinued operations,Group share(749)(749)1Adjusted net income,Group share326306313Net income,Group share,adjusted for exceptional items(1)Restated from financial result in Argentina;(2)Tax impact of restated items(non-recurring income and expenses and financial expenses)and exceptional tax itemsGiven the high volatility related to hyperinflation in Argentina and to exchange rates of the Argentine peso,theapplication of IAS 29 generates significant and unpredictable impacts on the financial result in Argentina(mostly non-cash),and represents most of this financial result.Consequently,Argentinas financial result has been considered as anexceptional item.H1 2023 adjusted net income has been restated accordingly,for the sake of comparison,as presented belowH1 2024 RESULTSJuly 24,20247501 2501 50085075075038727747722434331202420271,1372026202520282029365500793Debt redemption schedule(in m)As of June 30,2024Credit Rating as of June 30,2024:BBB stable outlook by S&PBaa1 stable outlook by Moodys On June 30,2024,average bond debt maturity is at 3.9 yearsJanuary 2024:252m equivalent bond issuance in Brazil(floating rate)February 2024:168m equivalent bond issuance in Brazil(floating rate after hedging)March 2024:USD500m convertible bond redemption(0%coupon)April 2024:750m bond redemption(0.75%coupon)Bonds in euros(1)Average annual coupon on Euro BondsBRL debt(in equivalent)1.25%1.83%2.08%4.13%Enhanced liquidity and solid balance sheet20301,5272.38%3.75%1,977872(1)Including US$denominated bonds swapped in euros4.38y32031H1 2024 RESULTSJuly 24,202432(1)Africa,Middle-East,Dominican Republic and Asia(#)Hypermarkets SupermarketsConvenienceCash&CarrySoft discountSams ClubTotalFrance2621,0494,67515333-6,172Other European countries4702,2193,4251299-6,225Spain2041591,070-66-1,499Italy424051,01712-1,476Belgium40350323-713Romania57194168-27-446Poland96151550-6-803Others31960297-1,288Latin America201173642400-541,470Brazil11990173371-54807Argentina828346929-663Others(1)23677213241-1,181Total1,1694,2138,8746061325415,048Stores under banners at end Q2 2024DISCLAIMERThis presentation contains both historical andforward-lookingstatements.Theseforward-lookingstatementsarebasedonCarrefourmanagements current views and assumptions.Such statements are not guarantees of futureperformanceoftheGroup.Actualresultsorperformances may differ materially from thosein such forward-looking statements as a resultof a number of risks and uncertainties,includingbut not limited to the risks described in thedocuments filed with the Autorit des MarchsFinanciers as part of the regulated informationdisclosurerequirementsandavailableonCarrefours website(),andinparticulartheUniversalRegistrationDocument.These documents are also availableintheEnglishlanguageonthecompanyswebsite.Investors may obtain a copy of thesedocumentsfromCarrefourfreeofcharge.Carrefour does not assume any obligation toupdate or revise any of these forward-lookingstatements in the future.
2024-08-06
33页
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Interim Report 2023中期報告香港聯合交易所股票代碼：00883（港幣櫃台）及80883（人民幣櫃台）上海證券交易所股票代碼：600938Registered Office65/F,Bank of China Tower,1 Garden Road,Hong Kong,ChinaTel :(852)2213 2500Fax :(852)2525 9322Beijing OfficeCNOOC Tower,No.25 Chaoyangmen Beidajie,Dongcheng District,Beijing,ChinaZip Code :100010Website :Investor RelationsBeijingTel :(8610)8452 0883Fax :(8610)8452 1441Hong KongTel:(852)2213 2502Fax :(852)2525 9322E-mail :Media/Public RelationsTel:(8610)8452 6832Fax:(8610)8452 1441E-mail:註冊辦公室中國香港花園道1號中銀大廈65層電話：(852)2213 2500傳真：(852)2525 9322北京辦公室中國北京東城區朝陽門北大街25號郵編：100010公司網址:投資者關係北京電話：(8610)8452 0883傳真：(8610)8452 1441香港電話：(852)2213 2502傳真：(852)2525 9322電子郵件:媒體/公共關係電話：(8610)8452 6832傳真：(8610)8452 1441電子郵件:2023INTERIM REPORT中期報告ContentsInterim Report 2023 CNOOC Limited12 IMPORTANT NOTICE4 COMPANY PROFILE8 FINANCIAL SUMMARY9 CHAIRMANS STATEMENT11 BUSINESS OVERVIEW19 RISK MANAGEMENT AND INTERNAL CONTROL26 CORPORATE GOVERNANCE REPORT32 MANAGEMENTS DISCUSSION AND ANALYSIS39 FINANCIAL REPORT2Important NoticeCNOOC Limited Interim Report 2023The board of directors(the“Board”or“Board of Directors”),directors and senior management of CNOOC Limited(the“Company”or“CNOOC Limited”)warrant the truthfulness,accuracy and completeness of the information contained herein and there are no material omissions from,or misrepresentation or misleading statements,and jointly and severally assume full responsibility for this interim report.The interim report has been considered and approved at the 2023 fourth meeting of the Board of the Company.All Directors of the Company attended this Board meeting.Mr.Zhou Xinhuai,Chief Executive Officer,Mr.Xie Weizhi,Chief Financial Officer and Ms.Wang Xin,Manager of Financial Department of the Company warrant the truthfulness,accuracy and completeness of the financial report set out in this interim report.The financial statements of the Company have been prepared in accordance with the Chinese Accounting Standards for Business Enterprises and the International Financial Reporting Standards(“IFRSs”)/Hong Kong Financial Reporting Standards(“HKFRSs”),respectively.The financial statements set out in this interim report are unaudited.In overall consideration of situations such as the operating results,financial position and cash flow of the Company,to provide returns to shareholders,as authorized by the Companys 2022 annual general meeting,the Board has resolved to declare an interim dividend of HK$0.59 per share(tax inclusive)for the first half of 2023.Dividends payable shall be denominated and declared in HKD,among which,dividend for A shares will be paid in RMB,applying an exchange rate which equals to the average central parity rate between HKD and RMB announced by the Peoples Bank of China in the week before the Board declared the interim dividend;dividend for Hong Kong shares will be paid in HKD.No appropriation of funds on a non-operating basis by the Companys controlling shareholder or its related parties has occurred.The Company did not provide external guarantees in violation of the stipulated decision-making procedures.Important NoticeInterim Report 2023 CNOOC Limited3This interim report includes forward-looking information,including statements regarding the likely future developments in the business of the Company and its subsidiaries,such as expected future events,business prospects or financial results.The words“expect”,“anticipate”,“continue”,“estimate”,“objective”,“ongoing”,“may”,“will”,“project”,“should”,“believe”,“plans”,“intends”and similar expressions are intended to identify such forward-looking statements.These statements are based on assumptions and analyses made by the Company as of this date in light of its experience and its perception of historical trends,current conditions and expected future developments,as well as other factors that the Company currently believes are appropriate under the circumstances.However,whether actual results and developments will meet the current expectations and predictions of the Company is uncertain.Actual results,performance and financial condition may differ materially from the Companys expectations,including but not limited to those associated with macro-political and economic factors,fluctuations in crude oil and natural gas prices,the highly competitive nature of the oil and natural gas industry,climate change and environment policies,the Companys price forecast,mergers,acquisitions and divestments activities,HSSE and insurance policies and changes in anti-corruption,anti-fraud,anti-money laundering and corporate governance laws and regulations.Consequently,all of the forward-looking statements made in this report are qualified by these cautionary statements.The Company cannot assure that the results or developments anticipated will be realised or,even if substantially realised,that they will have the expected effect on the Company,its business or operations.Totals presented in this report may not add correctly due to rounding of numbers.4Company ProfileCNOOC Limited Interim Report 2023CNOOC Limited,incorporated in the Hong Kong Special Administration Region(“Hong Kong”)in August 1999,was listed on The Stock Exchange of Hong Kong Limited(“HKSE”)(stock code:00883)on 28 February 2001.The Company was admitted as a constituent stock of the Hang Seng Index in July 2001.On 21 April 2022,the Companys RMB shares(“A shares”)were listed on the main board of the Shanghai Stock Exchange(“SSE”)(stock code:600938).On 19 June 2023,the Company launched RMB counter for trading of Hong Kong shares(stock code:80883)on HKSE.The Company is the largest producer of offshore crude oil and natural gas in China and one of the largest independent oil and gas exploration and production companies in the world.The Company mainly engages in exploration,development,production and sale of crude oil and natural gas.The Companys core operation areas are Bohai,the Western South China Sea,the Eastern South China Sea and the East China Sea in offshore China.The Company has oil and gas assets in Asia,Africa,North America,South America,Oceania and Europe.The basic information of CNOOC Limited:Chinese Name of the Company中國海洋石油有限公司Abbreviation of Chinese Name of the Company中國海油English Name of the CompanyCNOOC LimitedChief Executive Officer of the CompanyZhou XinhuaiSecretary to the Board of the Company:NameXu YugaoContact addressNo.25 Chaoyangmen Beidajie,Dongcheng District,BeijingTelephone(8610)8452 0883E-Company ProfileInterim Report 2023 CNOOC Limited5Place of registration,office address and contact information:Registered address of the Company65/F,Bank of China Tower,1 Garden Road,Hong KongDomestic office of the CompanyNo.25 Chaoyangmen Beidajie,Dongcheng District,BeijingPostal code for domestic office of the Company100010Overseas office of the Company65/F,Bank of China Tower,1 Garden Road,Hong KongPostal code for overseas office of the Company999077Website of the CE-Changes in the places for information disclosure and reference:The Companys designated press media for A shares information disclosureChina Securities Journal,Shanghai Securities News,Securities Times,Securities DailyDesignated stock exchange website for the interim www.hkexnews.hkThe interim report of the Company is available atA shares:12/F,No.25 Chaoyangmen Beidajie,Dongcheng District,BeijingHong Kong shares:65/F,Bank of China Tower,1 Garden Road Hong KongStock exchange where the shares are listed,stock abbreviation and stock code:Hong Kong shares:The Stock Exchange of Hong Kong LimitedStock Codes:00883(HKD counter)and 80883(RMB counter)A shares:Shanghai Stock ExchangeStock Abbreviation:中國海油Stock Code:6009386Definition and GlossaryCNOOC Limited Interim Report 2023DEFINITION OF TERMSWildcatA well drilled on any rock formation for the purpose of searching for petroleum accumulations,including a well drilled to obtain geological and geophysical parametresAppraisal wellAn exploratory well drilled for the purpose of evaluating the commerciality of a geological trap in which petroleum has been discoveredExploration wellsWildcat and appraisal wellsUpstream businessOil and gas exploration,development,production and salesProved reservesBased on geological and engineering data,estimates of oil or natural gas quantities reasonably thought to be recoverable from known oil and gas reservoirs under existing economic,operating conditions and regulations in future yearsReserve replacement ratioFor a given year,total additions to proved reserves divided by production during the yearSeismic explorationA geophysical exploration method based on the difference in elasticity and density of underground medium to generate wave impedance,which is received and processed to reflect and infer the attribute and state of underground rock strataProved in-place volumeThe geological reserves that have been proved economically recoverable by appraisal drilling during the Reservoir Appraisal phase.The volumes are estimated with a high level of confidenceUnconventional oil and gasOil and gas resources that cannot be obtained for natural industrial output using traditional development technologies,which can be economically exploited,continuously or quasi-continuously accumulated,only through the use of novel technologies which improve reservoir permeability or fluid viscosity,including tight oil and gas,shale oil and gas,coalbed methane,and natural gas hydratesDefinition and GlossaryInterim Report 2023 CNOOC Limited7GLOSSARYBblBarrelBcfBillion cubic feetBOEBarrel of oil equivalentMbblsThousand barrelsMboeThousand barrels of oil equivalentMcfThousand cubic feetMmboeMillion barrels of oil equivalentMmbblsMillion barrelsMmcfMillion cubic feetCONVERSIONFor crude oil,1 tonne is about 7.21 barrelsFor natural gas,1 cubic meter is about 35.26 cubic feet8Financial SummaryCNOOC Limited Interim Report 2023KEY FINANCIAL DATAKey Financial DataThis reporting period(From January to June)The same period of last yearIncrease/decrease as compared with the same period of last year(%)(RMB million)(RMB million)Revenue192,064202,355(5)Net profit attributable to equity shareholders of the Company63,76171,887(11)Net profit after deducting non-recurring profit items attributable to equity shareholders of the Company62,32470,910(12)Net cash flows from operating activities99,618102,227(3)At the end of this reporting periodAt the end of last yearIncrease/decrease at the end of the reporting period compared with the end of last year(%)Equity attributable to equity shareholders of the Company636,537597,1827Total assets999,074929,0318 KEY FINANCIAL INDICATORSKey Financial IndicatorsThis reporting period(From January to June)The same period of last yearIncrease/decrease as compared with the same period of last year(%)Basic earnings per share(RMB/share)1.341.57(15)Diluted earnings per share(RMB/share)1.341.57(15)Basic earnings per share,net of non-recurring profit(RMB/share)1.311.55(15)Weighted average return on net assets(%)10.1613.70Decreased by 3.54 percentage pointsWeighted average return on net assets,net of non-recurring profit(%)9.9313.52Decreased by 3.59 percentage points Chairmans StatementInterim Report 2023 CNOOC Limited9Dear shareholders,In the first half of 2023,macroeconomy stayed complex and volatile,while international oil prices saw fluctuations in a downward trend.In the face of uncertainties,we took resolute and proactive actions for various production and operation tasks,and delivered satisfactory results.We have actively pursued value-driven exploration and steadily expanded oil and gas resources base.In offshore China,several new discoveries were made,including Panyu 10-6 and Kaiping 18-1.Mid-to-large sized oil and gas structures such as Qinhuangdao 27-3 were successfully appraised.For onshore China,we efficiently advanced the exploration and appraisal of deep coalbed methane play to enhance recovery potential.Overseas,solid progress was made in the exploration of the Stabroek block in Guyana,with new discovery made in medium-to-deep plays.We remained committed to our annual production target and strived to increase oil and gas production.In the first half of the year,the Company achieved significant growth in oil and gas production in both China and overseas,with daily net production hitting a record high.The Company vigorously implemented effective measures such as adjustment wells to boost production,and the natural decline rate of the producing oilfields was brought to a record low.New projects such as the Buzios5 oilfield in Brazil successfully commenced production,bringing new growth in production.The key new projects progressed as scheduled,laying a solid foundation for future production growth.We focused on enhancement of quality and efficiency,and achieved stable improvement.All-in cost decreased year-over-year,which further strengthened our cost competitiveness.The Company maintained strong profitability,with net profit attributable to equity shareholders of RMB63.76 billion and the earnings per share of RMB1.34.In order to actively reward our shareholders,the Board of Directors has decided to declare an interim dividend of HK$0.59 per share(tax inclusive)for the first half of 2023.We dedicated great efforts and achieved significant results in technological innovation.The Company focused on research of core technologies such as exploration and development of deepwater and deep play reservoirs,efficient development of the low-permeable,marginal or heavy oilfields,which effectively supported the growth of oil and gas reserves.We continued with the construction of unmanned offshore platforms and smart oilfields.“Shenhai-1”has become the worlds first super-large deepwater platform with capability of remote control production operation.10Chairmans StatementCNOOC Limited Interim Report 2023In the first half of the year,the Company adhered to green development and made great progress in new energy business.“Haiyou Guanlan”and Wenchang deep-sea floating wind power demonstration project were successfully connected to the grid for power generation,which blazed the trail for wind power development from shallow waters into deep seas.The successful commissioning of the CCS demonstration project in the Enping 15-1 oilfield has filled the gap in Chinas offshore carbon dioxide storage technology.In order to provide more investment flexibility to our shareholders and potential investors,the Company has proactively applied for the launch of a RMB counter on the HKSE,and became one of the first listed companies included in the“HKD-RMB Dual Counter Model”.In the first half of the year,Mr.Lawrence J.Lau and Mr.Tse Hau Yin,Aloysius retired as Independent Non-executive Directors of the Company.Ms.Li Shuk Yin Edwina was appointed as an Independent Non-executive Director.Mr.Xia Qinglong resigned as an Executive Director and President of the Company.Mr.Zhou Xinhuai,an Executive Director and CEO,concurrently served as the President of the Company.On behalf of the Board of Directors,I would like to express my gratitude to Mr.Lawrence J.Lau,Mr.Tse Hau Yin,Aloysius and Mr.Xia Qinglong for their contributions to the Company during their tenure and welcome Ms.Li Shuk Yin Edwina.In the future,all Directors will continue to make unremitting efforts in an honest,responsible and diligent manner to facilitate healthy development of the Company.Looking forward to the second half of the year,we will adhere to safety and compliance requirements in our operations.We will exert our best efforts in reserves and production growth,quality and efficiency enhancement,and technological innovation to reach our annual targets and create greater value for the shareholders.Wang DongjinChairmanHong Kong,17 August 2023Business OverviewInterim Report 2023 CNOOC Limited11OVERVIEWThe Company is an upstream company specializing in oil and natural gas exploration,development and production,and remains the dominant oil and natural gas producer in offshore China.In terms of reserves and production,it is also one of the largest independent oil and natural gas exploration and development companies in the world.In the first half of 2023,approximately 70%of the Companys net production was from China.In China,the Company engages in oil and natural gas exploration,development and production in Bohai,Western South China Sea,Eastern South China Sea and East China Sea,as well as onshore unconventional oil and natural gas exploration,development and production,primarily through independent operations and cooperation projects.In terms of independent operations,we serve as the operator holding 100%interests and increase reserves and production by independent exploration and development.In terms of cooperation projects,we cooperate with partners through product sharing contracts(“PSCs”)in oil and natural gas exploration and development.In the first half of 2023,oil and gas fields in China under independent operations and cooperation projects accounted for approximately 86%and 14%of the net production,respectively.In overseas,the Company has a diversified and high-quality portfolio.It holds interests in various world-class oil and gas projects and has become a world-leading player in the industry.Currently,the Companys assets are located in more than 20 countries and regions around the globe,including Indonesia,Australia,Nigeria,Iraq,Uganda,Argentina,the U.S.,Canada,the U.K.,Brazil,Guyana,Russia and the United Arab Emirates.For the first half of 2023,net production in overseas accounted for approximately 30%of the total net production.During the reporting period,the recovery of global economy was sluggish while Chinas economy continued to recover.International oil prices swung down and average Brent oil price decreased by 24%on a year-on-year basis.The Company proactively responded to external challenges,continuously increased reserves and production and promoted technology innovation and green development,enhanced quality and efficiency to reduce costs,maintained a stable health,safety and environmental protection situation and achieved excellent production and operating results.12Business OverviewCNOOC Limited Interim Report 2023In the first half of 2023,the Company achieved a net oil and gas production of 331.8 million BOE,a year-on-year increase of 8.9%;oil and gas sales revenue of RMB151.69 billion,a year-on-year decrease of 14.1%;and net profit attributable to equity shareholders of the Company of RMB63.76 billion,a year-on-year decrease of 11.3%,far better than the performance of international oil prices during the same period.On 19 June 2023,the Company launched RMB counter for trading of Hong Kong shares(stock code:80883)on the HKSE to provide more investment flexibility to shareholders and potential investors and to enhance the liquidity and depth of the offshore RMB market.ExplorationIn the first half of 2023,the Company adhered to the value-driven exploration philosophy,increased venture exploration efforts and made major breakthroughs in new areas,new fields and new layers,laying a solid reserves foundation.In China,the Company actively explored deep and ultra-deep layers,expanded mature areas,explored ultra-shallow layers,and efficiently promoted the exploration of deep-play coalbed methane.In overseas,with focus on strategic core areas,the Company continuously promoted mid-to-deep play exploration of the Stabroek block in Guyana.In offshore China,the Company made 5 new discoveries,including Panyu 10-6,Kaiping 18-1,Xijiang 24-2,Qinhuangdao 32-6 East and Huizhou 26-6 North,and successfully appraised 14 oil and gas bearing structures.Among them,new discoveries of Panyu 10-6 and Kaiping 18-1,both have a proved in-place volume of over 20 million tons,demonstrating the exploration potential of mid-to-deep play in the Pearl River Mouth Basin.Qinhuangdao 27-3 large and medium-sized oil and gas bearing structures were successfully appraised with a proved in-place volume of over 50 million tons,expanding the exploration potential of large-scale lithologic reservoirs in shallow-play in Bohai.Significant progress was made in onshore unconventional gas exploration,and we efficiently promoted the exploration and appraisal of deep-play coalbed methane in Shenfu to further enhance the resource recovery potential.In overseas,mid-to-deep play exploration of the Stabroek block in Guyana made positive progress with a new discovery,Lancetfish,and Fangtooth-1 DST test confirmed productivity for the layers in the 6,000m depth.Business OverviewInterim Report 2023 CNOOC Limited13The Company drilled 181 exploration wells and acquired 6,391 square kilometres of 3D seismic data in the first half of the year.Major exploration activities are set out in the table below:TypeExploration WellsSeismic Data 3D (km2)WildcatAppraisal Wells Offshore China(Independent)39646,191Offshore China(PSC)1Onshore China(Unconventional)4723200Overseas61 Total93886,391 Engineering construction,development and productionIn the first half of the year,the Company strengthened its production organisation and efficiently accelerated the construction of production capacity.Among the new projects planned to commence production during the year,the Buzios5 project in Brazil has commenced production as scheduled,seven new projects,including Bozhong 19-6 condensate gas field Phase I,are under installation,and the construction of other new projects are advancing steadily.The Company strengthened the streamlined management of production and implemented measures such as adjustment wells to increase production and explored the potential of production growth.As such,the natural decline rate of oilfields reduced to the best level in history,and remarkable results were made in maintaining and increasing production of producing oil and gas fields.Meanwhile,the Company strengthened the coordination of resources and promoted the early commissioning of key new projects to provide strong support for the rapid growth of production.In the first half of the year,the net oil and gas production reached 331.8 million BOE,a record high for the same period,representing a year-on-year increase of 8.9%.By regions,the net oil and gas production from China was 231.2 million BOE,representing a year-on-year increase of 6.6%,mainly due to the production growth from oilfields such as Kenli 6-1 and Lufeng 15-1.The net oil and gas production from overseas was 100.7 million BOE,representing a year-on-year increase of 14.4%,mainly due to the production contribution from Liza Phase II in Guyana and Buzios oilfield in Brazil.In the first half of the year,the production of crude liquids and natural gas of the Company accounted for 78%and 22%,respectively.Oil production grew by 8.3%year on year,mainly because of newly commissioned oilfields including Kenli 6-1;natural gas production grew by 10.9%year on year,mainly due to the production contribution from 3M gas field in Southeast Asia and the production growth of onshore China unconventional natural gas.14Business OverviewCNOOC Limited Interim Report 2023Production SummaryFirst half of 2023First half of 2022Crude and liquids (million barrels)Natural gas(bcf)Total oil and gas (million BOE)Crude and liquids (million barrels)Natural gas(bcf)Total oil and gas (million BOE)ChinaBohai102.334.3108.096.032.3101.4Western South China Sea19.4123.240.818.8116.138.9Eastern South China Sea56.572.168.553.473.365.6East China Sea1.126.75.51.313.73.6Onshore0.0249.88.343.77.3 Subtotal179.3306.0231.2169.5279.1216.8 OverseasAsia(excluding China)10.932.116.78.624.813.0Oceania0.926.16.00.720.64.8Africa8.03.48.614.13.014.6North America (excluding Canada)9.819.613.010.920.314.3Canada15.015.011.311.3South America30.627.635.417.425.721.9Europe5.80.65.97.91.28.1 Subtotal81.1109.4100.771.095.788.0 Total*260.4415.5331.8240.5374.7304.8 *Including our interests in equity-accounted investees,which are approximately 10.2 million BOE for the first half of 2023 and approximately 10.0 million BOE for the first half of 2022.Business OverviewInterim Report 2023 CNOOC Limited15Scientific and Technological InnovationThe Company continued to strengthen the key technology system and enhance its self-innovation capabilities.In the first half of the year,the Company continued to improve the reliability of intelligent water injection technology,which contributed to the further decrease of the natural decline rate of offshore oil fields.Meanwhile,the Company accelerated the innovative application of heavy oil thermal recovery development technology,which enabled significant production growth from offshore heavy oil thermal recovery.The Company achieved remarkable results in construction of intelligent production.We steadily promoted the construction and optimization of unmanned platform and initially completed the formulation of standard system for smart oil fields.“Shenhai-1”smart gas field has been equipped with remote control production capacity,which is a crucial step towards the full-scale construction of the ultra-deepwater smart gas field.Green DevelopmentThe Company accelerated the integrated development of new energy and oil and gas business.In the first half of the year,the worlds first semi-submersible“Double Hundred”deep-sea floating wind power project was successfully connected to the grid for power generation in the Wenchang Oilfield in the South China Sea.“Haiyou Guanlan”,the main production facility,has an installed capacity of 7.25 MW,which is expected to reduce approximately 22,000 tons of CO2 emissions per year.The first offshore CCS demonstration project has been successfully put into use in the Enping 15-1 oilfield,and a preliminary system of offshore carbon dioxide capture,injection,storage,and monitoring technology and equipment has been established,filling the gap in Chinas offshore carbon dioxide storage technology.The Company accelerated the construction of a green and low-carbon production system.We further expanded the scope of application of onshore power projects and continued to reduce energy consumption and carbon emission intensity across the development process of oil and gas fields.The Company actively expanded the scale of green electricity usage in offshore oil and gas fields and expected to consume 500 million kWh of green electricity within the year,equivalent to a carbon reduction of approximately 440,000 tons.Meanwhile,the gradual advancement of key projects such as flare gas recycling and utilization will help the Company effectively manage and control the carbon emission intensity in the future.RURAL REVITALIZATIONIn the first half of 2023,the Company made new progress in rural revitalization and agricultural modernization.In Wuzhishan City and Baoting County of Hainan Province and Nyima County of Tibet,we invested RMB62 million into 23 projects,covering industrial revitalization,educational assistance and infrastructure construction.Reassuring results have been achieved from these diversified projects.We have bred new industries,increased farmers income,and significantly improved the living conditions of local communities.16Business OverviewCNOOC Limited Interim Report 2023ENVIRONMENTAL INFORMATIONEnvironmental protection information of the Company and its principal subsidiaries on the watch list of key pollutant discharging units published by the environmental protection authority(1)Key pollutant discharge information of key pollutant discharging unitsDuring the reporting period,7 affiliated entities of the Company were identified as key pollutant discharging units(hereinafter referred to as“key pollutant discharging units”)by the local competent ecological and environmental protection authorities,which were located in Tianjin,Huludao,Beihai,Chengmai,Dongfang and Sanya,respectively.Among the main pollutants discharged by key pollutant discharging units during the reporting period,waste water mainly includes COD and ammonia nitrogen,etc;waste gas mainly includes SO2,NOX and soot.In addition,solid waste generated by key units mainly includes domestic garbage,general industrial solid waste,and hazardous waste.For the main pollutants,key pollutant discharging units utilize environmental pollution prevention and control facilities such as production sewage treatment systems,air pollution emission control devices,VOCs recovery and treatment facilities and sedimentation pond,and adopt techniques such as flotation,biochemical treatment,biodegradation,catalytic oxidation by RCO furnace,catalytic oxidation by condensation and adsorption,sedimentation,and efficient combustion to meet processing standards before they discharge pollutants through designated discharge outlet.During the reporting period,the above-mentioned environmental pollution prevention and control facilities were in normal operation.There are a total of 5 wastewater discharge outlets in key pollutant discharging units,mainly distributed in production and domestic sewage discharge outlets;there are 48 waste gas emission outlets,mainly distributed in heat medium boilers,hot water boilers,heat medium furnaces,direct-fired furnaces,steam boilers and flare stacks.The emission standards adopted by the key pollutant discharging units include Integrated Wastewater Discharge Standard(污水綜合排放標準)(GB8978-1996),Wastewater Comprehensive Discharge Standard(污水綜合排放標準)(DB12/356-2018),the Integrated Wastewater Discharge Standard of Liaoning Province(遼寧省污水綜合排放標準)(DB21/1627-2008),Integrated Emission Standard of Air Pollutants(大氣污染物綜合排放標準)(GB16297-1996),Boiler Air Pollutant Emission Standard(鍋爐大氣污染物排放標準)(GB 13271-2014),Emission Standard of Air Pollutants from Boilers(鍋爐大氣污染物排放標準)(DB12/151-2020)and Emission Standard of Air Pollutants for Thermal Power Plants(火電廠大氣污染物排放標準)(GB 13223-2011).Business OverviewInterim Report 2023 CNOOC Limited17During the reporting period,the emission information on the above major pollutants discharged by key pollutant discharging units include:COD emissions of 33.96 tonnes,ammonia nitrogen emissions of 0.92 tonnes,SO2 emissions of 14.97 tonnes,NOX emissions of 91.20 tonnes,soot emissions of 0.07 tonnes and particulate matter emissions of 1.42 tonnes,all of which did not exceed the applicable 2023 semi-annual approved emissions.In addition,some key pollutant discharging units used domestic sewage as gardening water in factories in accordance with the standard of gardening water stipulated in the Reuse of Urban Recycling Water Water Quality Standard for Urban Miscellaneous Use(城市污水再生利用城市雜用水水質)(GB/T18920-2020).In accordance with the Law of the PRC on the Prevention and Control of Environmental Pollution by Solid Waste(中華人民共和國固體廢物污染環境防治法),the Measures for the Management of Hazardous Waste Transfer(危險廢物轉移管理辦法)and other relevant provisions,key pollutant discharging units temporarily stored domestic garbage,general industrial solid waste,hazardous waste and other waste,and then pass them to disposal units with corresponding qualifications after sorting.(2)Construction and operation of pollution prevention and control facilitiesAdhering to the principle of“developing in protection and protecting in development”,the Company considers conservation of ecological environment as the foundation of sustainable development,strictly complies with relevant laws and regulations and standards on environmental protection and further enhances the environmental protection management of the whole process of construction projects.It has invested about RMB321 million in environmental protection management and engineering in the first half of 2023.The Company established pollution prevention and control facilities for waste gas,wastewater,solid waste and noise in accordance with the standards and requirements of national and local regulations on environmental protection and pollutant prevention and control,and prepared and improved self-monitoring programs to ensure their effective and stable operation.The Company strengthened whole-process management of construction projects in terms of environmental protection,and strictly implemented the management requirements of environmental impact assessment,completion acceptance,operation and other aspects of construction projects.(3)Environmental impact assessment of construction projects and other administrative licenses for environmental protectionDuring the reporting period,the key pollutant discharging units implemented“three-simultaneous”system under which environmental protection facilities and main works are designed,constructed and put into operation at the same time.We carried out environmental impact assessment and environmental protection acceptance for construction projects in accordance with requirements and laws.As requested by competent ecological and environmental protection authorities under the government,the key pollutant discharging units have obtained and retained licenses such as Pollutant Discharge License and Radiation Safety License,and have completed formalities such as online filing of hazardous wastes and registration of pollutant discharge from stationary sources in accordance with the relevant applicable regulations on environmental protection.18Business OverviewCNOOC Limited Interim Report 2023(4)Contingency plan for environmental incidents and environmental self-monitoring planDuring the reporting period,the Company have made relevant efforts in line with the national contingency plan and management requirements on environmental incidents.The key pollutant discharging units prepared contingency plans for environmental incidents and environmental self-monitoring plans based on their own situations,and filed contingency plans for environmental incidents with their local competent environmental protection authorities as well as uploaded the environmental surveillance data to the platforms of the competent environmental protection authorities in a timely manner.(5)Any administrative penalties caused by environmental issues during the reporting periodDuring the reporting period,the key pollutant discharging units of the Company were not subject to any administrative penalties regarding environmental protection due to environment issues.During the reporting period,subsidiaries other than the key pollutant discharging units of the Company pushed forward environmental protection and fulfilled environmental protection responsibilities in accordance with the unified requirements of the Company,identified potential problems related to of environmental protection in a timely manner,maintained environmental pollution control facilities and minimized the impact from production and operation activities on the environment.For details of the environmental administrative penalties imposed on other subsidiaries of the Company,please refer to the information published on the websites of the governments competent ecological and environmental authorities.Risk Management and Internal ControlInterim Report 2023 CNOOC Limited19Since its establishment,the Company has treated risk management,internal control and compliance management system as a top priority.The Company recognizes that it is the duty and obligation of its management to establish and maintain a risk management,internal control and compliance management system which serves the Companys strategic objectives and meets the Companys business practice.The Board ensures that the Company establishes and maintains appropriate and effective risk management and internal control systems,strengthens the construction of compliance system on this basis,and regularly reviews their effectiveness.Such systems are designed to manage the risks a company may face in achieving its business objectives.The Board receives a report on risk management,internal control and compliance management systems from executives twice a year.All major risks are reported to the Board which also evaluates the risks and their response plan.Appropriate and effective risk management and internal control system can help the company reasonably reduce the possible loss caused by the occurrence of risks.The Companys Risk Management,Internal Control and Compliance Management Committee(RMICC Committee)is authorised by the Board to organise and carry out the Companys overall risk management and internal control.Its responsibilities include developing risk management and internal control systems,standardizing institutional framework,authorisation,responsibilities,processes and methods for the systems,continuously monitoring the operation of the systems,and regularly reporting the construction and compliance management of the systems to the Audit Committee and the Board.20Risk Management and Internal ControlCNOOC Limited Interim Report 2023RISK FACTORSAlthough we have established the risk management system to identify,analyze,evaluate and respond to risks,our business activities may subject to the following risks.MACRO ECONOMY AND POLICY RISKS(1)Macro economy riskThe industry in which the Company operates is closely linked to the macro economy.The global economy lacks momentum and liquidity continues to tighten.Global services and manufacturing continue to recover.Chinas economy is driven by pro-consumption policies,service consumption accelerated release,and consumption is expected to recover moderately.Macro economy changes will affect the supply and downstream demand for oil and gas,which adversely may affect the Companys performance.(2)Risk of changing international political and economic factorsThe international political and economic situation is complex and changeable.The conflict between Russia and Ukraine has accelerated the profound changes in the world landscape and triggered violent shocks in the international energy market.If some of the countries in which we operate may be considered politically and economically unstable,our financial condition and operating results could be adversely affected.The Arctic LNG 2 project in Russia,in which the Company has a 10%interest,has been adversely affected by sanctions stemming from the military conflict.Save that,as of the date of this report,other overseas projects of the company are not affected by the military conflict between Russia and Ukraine,and the production and operation situation is normal.(3)Risk of industry policy changesThe ongoing oil and gas system reform in China may have certain impacts on the Companys business in China.In the future,the Company may face competition and challenges from a variety of competitors in the industry to obtain and retain exploration rights in oil and gas fields.Risk Management and Internal ControlInterim Report 2023 CNOOC Limited21(4)Risk of climate change and environmental policy changesWith the coming into force of the Paris Agreement and the continuing growth of the publics awareness of climate change problems,China has put forward timeline target for“Carbon peak and Carbon neutrality”.It is expected that the CO2 emissions will increase as our production grows.CO2 emissions arising from the burning of fossil fuels in oil and gas fields will continue to increase without a mature and reliable CO2 reduction technologies in place.The Company expects to be supervised by relevant agencies and organizations in the future,we may experience additional costs,and our reputation may be adversely affected.Our offshore operating platforms and exploration and development activities will generate sewage and solid wastes.If they are not properly handled,they may not meet the standard of discharge or the disposal process is not in compliance,which will damage our reputation and operations and increase costs,and even expose us to lawsuits and penalties.MARKET RISKS(1)Risk arising from volatility in oil and gas pricesPrices for crude oil and natural gas may fluctuate widely in response to relative changes in the supply and demand for crude oil and natural gas,market uncertainty and various other factors beyond our control.Volatility in oil and gas prices may impact our business,cash flows and profits fluctuate.(2)Risk arising from increasing market competitionThe new round of scientific and technological revolution and industrial transformation has a profound impact on the development of the energy industry.We compete in the PRC and other countries in which we operate with national oil companies,major integrated oil and gas companies and various other independent oil and gas companies for access to oil and gas resources,products,alternative energy,customers,capital financing,technology and equipment,talents and business opportunities.This could impact our business,financial condition and results of operations.22Risk Management and Internal ControlCNOOC Limited Interim Report 2023BUSINESS RISKS(1)HSSE riskGiven the geographical area,operational diversity and technical complexity of our operations,every aspect of our daily operations exposes us to potential health,safety,security and environment(HSSE)risk.If a major HSSE risk materialises,it could result in casualties,environmental damage,disruption to business activities and material impact on our reputation,exclusion from bidding or eventually loss of our license to operate.In addition,the Companys oil and gas transportation involves marine,land and pipeline transportation,which are subject to hazards such as capsizing,collision,acts of piracy and damage or loss from severe weather conditions,explosions and oil and gas spills and leakages.These hazards could result in serious personal injury or loss of human life,significant damage to property and equipment,environmental pollution,operating loss,risk of financial loss and reputational harm.We may not be able to arrange insurance coverage for all of these risks,and uninsured losses and liabilities arising from these hazards may have a material and adverse effect on our business,financial condition and results of operations.(2)Risk of deviation between forward-looking judgments of oil and gas prices and the actualityThe Company will review the oil and natural gas price predictions on a periodic basis.Although we believe our current forward-looking predictions on long-term price range are prudent,if such predictions deviated in the future,it could have a material and adverse effect on us.(3)Risk that the anticipated benefits from mergers and acquisitions and disposals may not be realizedPart of the Companys oil and gas assets are acquired through mergers and acquisitions.In mergers and acquisitions practice,mergers and acquisitions may not succeed due to various reasons.In the case of asset disposals,we may be held liable for past acts,or failures to act or perform obligations,and we may also be subject to liabilities if a purchaser fails to fulfill its commitments.These risks may result in an increase in our costs and inability to achieve our business goals.(4)Risk of limited control over our investments in joint ventures and our joint operation with partnersOur limited ability to influence and control the operation or future development of such joint ventures could affect the realization of our target returns on capital investment and lead to unexpected future costs.Risk Management and Internal ControlInterim Report 2023 CNOOC Limited23(5)Risk of high concentration of customersDuring the reporting period,sales to major customers of the Company accounted for a relatively high proportion.If any of our major customers reduces its crude oil or natural gas purchases from us significantly,and the Company fails to find alternative customers in time,our results would be adversely affected.(6)Risk of high supplier concentrationDuring the reporting period,procurement from the Companys major suppliers accounted for a relatively high proportion.Services procurement is our main procurement.We maintain a good working relationship with our major suppliers,and actively explore new suppliers to ensure supply adequacy and foster competition.However,if the major suppliers fail to continue to provide services to the Company due to accidental factors,and the Company fails to find suitable alternative suppliers,its operating activities may be disrupted and the performance would be adversely affected.(7)Risk from irrealizable undeveloped reservesThere are various risks in developing reserves.Failure to develop these reserves in a timely and cost-effective manner could adversely affect the Companys results.The reliability of reserve estimates depends on a number of factors.The factors,assumptions and variables involved in estimating reserves are beyond our control and may be proved to be incorrect over time.That may result in volatility of our initial reserve data.(8)Technology development and deployment riskTechnology and innovation are vital for us to enhance the Companys competitiveness in a competitive environment and exploration and development challenges.We strive to rely on technologies and innovations to realize our strategy and enhance our competitiveness and operation capacity.If our core technology reserves are insufficient,it may have a negative impact on the Companys reserves and production targets and cost control targets.(9)Network security and IT infrastructure damage riskMalicious attacks on our cyber system,negligence in the management of our cyber security and IT system and other factors may cause damage or breakdown to our IT infrastructure,which may disrupt our operations,result in loss or misuse of data or sensitive information,cause injuries,environmental harm or damages in assets,violate laws or regulations and result in potential legal liability.These actions could result in significant increase in costs or damage to our reputation.24Risk Management and Internal ControlCNOOC Limited Interim Report 2023(10)Risks to business and operations in CanadaTransportation and export infrastructure in Canada is limited,and without the construction of new transportation and export infrastructure,realization of our full oil and natural gas production capability may be affected.Furthermore,First Nations in Canada have aboriginal land claims,including claims to certain mineral resources,in a substantial portion of western Canada.As a result,negotiations with First Nations prior to commencing future projects(including surface activities necessary to conduct mineral extraction)are prudent.Failure to successfully negotiate with affected First Nations may result in timing uncertainties or delays of future development activities.FINANCIAL RISKS(1)Exchange rate riskThe Companys oil and gas sales are substantially denominated in Renminbi and U.S.dollars.The Company may have exchange rate risk.When there is a capital gap in overseas capital expenditure,the Company needs to remit overseas payment by converting domestic RMB into USD,and the exchange rate fluctuation of RMB against USD brings certain exchange rate risks.(2)Risk of foreign exchange controlCertain restrictions on dividend distribution imposed by the laws of the countries in which we operate may adversely affect our cash flows.(3)Risk of related party transactionsWe regularly enter into connected transactions with CNOOC Group and its affiliates.Certain connected transactions require a review by the regulatory authorities of the place where the shares are listed and are subject to prior approvals by our independent shareholders.If these transactions are not approved,the Company may not be able to proceed with these transactions as planned.MANAGEMENT RISKRisk caused by the actual controllers influence on the CompanyCNOOC Group directly and indirectly owns or controls our shares.As a result,CNOOC Group can have an impact on the election of our Board members,our dividend payments and other decisions.Under current PRC laws,CNOOC Group has the exclusive right to enter into PSCs with foreign enterprises for petroleum resources exploitation in offshore China.Although CNOOC Group has undertaken to transfer all of its rights and obligations(except for those relating to administrative functions as a state-owned company)under any new PSCs that it enters into to us(save for certain exceptions),our strategies,results of operations and financial position may be adversely affected in the event CNOOC Group takes actions that favor its own interests over ours.Risk Management and Internal ControlInterim Report 2023 CNOOC Limited25LEGAL RISKS(1)Risk of violating anti-corruption,fraud,money laundering,corporate governance and other laws and regulationsLaws and regulations of the countries or regions in which we operate,such as laws on anti-corruption,anti-fraud,anti-money laundering and corporate governance,are constantly changing and becoming more comprehensive.If the Company,our directors,executives or employees fail to comply with any of such laws and regulations,it may expose us to prosecution or punishment,damage to our reputation and image,and our ability to obtain new resources and/or access to the capital markets,and it may even expose us to civil or criminal liabilities.(2)Risk of violating laws and regulations related to data securityAs a company with operations in various countries and regions,we are subject to data privacy and security laws in numerous jurisdictions as a result of having access to and processing confidential,personal or sensitive data in the course of our business.Therefore,compliance with the various data privacy regulations around the world may require significant expenditures.RISK OF U.S.SANCTIONSDifferent levels of the U.S.federal,state or local government may impose economic sanctions of varying severity against certain countries or regions and their residents or designated governments,individuals,and entities.It is impossible to predict whether the business of the Company or its affiliates,the countries/regions where the business is conducted or its partners will be affected by the U.S.sanctions regime in the future due to changes in the U.S.sanctions regime.If this happens,the Company may not be able to continue to carry out relevant business,or it may not be able to continue to carry out business in the affected countries or regions or with the affected partners,thus affecting investors perception of the Company and investment in the Company,and harming the Companys opportunity or ability to obtain new business.OVERALL RISK RESPONSE MEASURESThe Company has continued to improve the risk management and internal control management systems,coordinate responses to major risks,and form a whole-process risk management mechanism of“pre-prevention,in-process control and post-evaluation”.26Corporate Governance ReportCNOOC Limited Interim Report 2023BRIEF INTRODUCTION OF THE GENERAL MEETINGMeeting sessionDate of conventionWebsites designated for disclosure of resolutionsResolutions disclosing dateResolutions 2022 annual general meeting31 May 2023The HKSEs website(http:/www.hkexnews.hk)The SSEs website(http:/)The Companys website(https:/)31 May 2023(The HKSEs and the Companys website)/1 June 2023(The SSEs website)All total of the 11 resolutions proposed were duly passed at the meeting.No resolutions were voted against.For details,please refer to the Companys announcement published on the HKSEs website,the SSEs website and the Companys website.DIRECTORS INTERESTSAs at 30 June 2023,the interests and short positions of the Director and chief executive of the Company(current and resigned/retired during the reporting period)in the shares,underlying shares or debt securities of the Company or any associated corporations(within the meaning of the Securities and Futures Ordinance(“SFO”)which were required(i)to be notified to the Company and the HKSE pursuant to Divisions 7 and 8 of Part XV of the SFO(including interests and short positions which they are taken or deemed to have under such provisions of the SFO),(ii)pursuant to section 352 of the SFO,to be entered in the register referred to therein,(iii)pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers(the“Model Code”),to be notified to the Company and the HKSE,or the interests which were required to be disclosed in accordance with the relevant regulations of the China Securities Regulatory Commission(the“CSRC”)and the SSE,were as follows:Name of DirectorNature of interestOrdinary Hong Kong shares heldApproximate percentage of total issued Hong Kong sharesOrdinary A shares heldApproximate percentage of total issued A sharesApproximate percentage of total issued shares Chiu Sung HongBeneficial interest1,650,0000.004%0.003%Lawrence J.Lau(1)Beneficial interest400,0000.000%0.000%Note:(1)Mr.Lawrence J.Lau retired as an Independent Non-executive Director and a member of the Audit Committee,the Nomination Committee and the Strategy and Sustainability Committee of the Company with effect from 31 May 2023,the number of Hong Kong shares disclosed above is as at 31 May 2023.Corporate Governance ReportInterim Report 2023 CNOOC Limited27All the interests stated above represent long positions.As at 30 June 2023,save as disclosed above,none of the Directors and chief executive of the Company(current and resigned/retired during the reporting period)had any interests or short positions in the shares,underlying shares or debt securities of the Company or any associated corporations(within the meaning of the SFO)which were required(i)to be notified to the Company and the HKSE pursuant to Divisions 7 and 8 of Part XV of the SFO(including interests and short positions which they are taken or deemed to have under such provisions of the SFO),(ii)pursuant to section 352 of the SFO,to be entered in the register referred to therein,(iii)pursuant to the Model Code,to be notified to the Company and the HKSE or had any interests which were required to be disclosed in accordance with the relevant regulations of the CSRC and the SSE.During the six months ended 30 June 2023,no right to subscribe for shares,underlying shares or debt securities of the Company has been granted by the Company to,nor have any such rights been exercised by,any other person.SUBSTANTIAL SHAREHOLDERS INTERESTSAs at 30 June 2023,so far as was known to the Directors and chief executive of the Company,the persons,other than a Director or chief executive of the Company,who had an interest or a short position in the shares and underlying shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO were as follows:Ordinary Hong Kong shares heldApproximate percentage of total issued Hong Kong sharesOrdinary A shares heldApproximate percentage of total issued A sharesApproximate percentage of total issued shares (i)CNOOC(BVI)Limited(1)28,772,727,26864.55.49%(ii)Overseas Oil&Gas Corporation,Ltd.(“OOGC”)28,772,727,27364.55.49%(iii)CNOOC Group29,508,353,27366.20b.04%Note:(1)CNOOC(BVI)Limited is a direct wholly-owned subsidiary of OOGC,which is a direct wholly-owned subsidiary of CNOOC Group.Accordingly,CNOOC(BVI)Limiteds interests are recorded as the interests of OOGC and CNOOC Group.28Corporate Governance ReportCNOOC Limited Interim Report 2023All the interests stated above represent long positions.As at 30 June 2023,save as disclosed above,the Directors and chief executive of the Company are not aware of any other person having interests or short positions(other than the Directors and chief executives of the Company)in the shares and underlying shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO,or who is,directly or indirectly,interested in 10%or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Company.AUDIT COMMITTEEThe Audit Committee of the Board of the Company has reviewed together with the management the accounting principles and practices adopted by the Company and its subsidiaries and discussed the risk management,internal control and financial reporting matters.The interim results for the six months ended 30 June 2023 are unaudited,but have been reviewed by Ernst&Young in accordance with Hong Kong Standard on Review Engagements 2410“Review of Interim Financial Information Performed by the Independent Auditor of the Entity”,issued by the Hong Kong Institute of Certified Public Accountants.The interim report for the six months ended 30 June 2023 has been reviewed by the Audit Committee.PURCHASE,SALE OR REDEMPTION OF LISTED SECURITIESFor the six months ended 30 June 2023,CNOOC Petroleum North America ULC(“CPNA”,an indirect wholly-owned subsidiary of the Company)repurchased and cancelled the following bonds issued by it as issuer in the over-the-counter market:IssuerMaturity DateCoupon RateFace Amount(USD)Face Amount Repurchased(USD)Percentage of RepurchaseOutstanding Amount as at 30 June 2023 (USD)CPNA15 March 20327.875C1,456,00027,824,0006.453,632,000CPNA10 March 20355.875s2,246,0004,000,0000.55r8,246,000CPNA30 July 20397.500i6,000,0005,800,0000.83i0,200,000None of the above bonds was listed on HKSE or SSE.Save as disclosed in this interim report,there was no purchase,sale or redemption by the Company,or any of its subsidiaries,of its listed securities during the six months ended 30 June 2023.COMPLIANCE WITH THE CORPORATE GOVERNANCE CODEFor the six months ended 30 June 2023,the Company has complied with all code provisions set out in Part 2 of Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited(the“Listing Rules of Stock Exchange”).Corporate Governance ReportInterim Report 2023 CNOOC Limited29PROVISIONS FOR SECURITIES TRANSACTIONS BY DIRECTORSThe Company has adopted a Code of Ethics for Directors and Senior Management(“Code of Ethics”)incorporating the provisions for securities transactions by directors of listed issuers of the Model Code as set out in Appendix 10 to the Listing Rules of Stock Exchange,the Securities Law of the Peoples Republic of China and the Listing Rules of SSE.All Directors have confirmed that they have complied,during the six months ended 30 June 2023,with the Companys Code of Ethics and the required standards set out in the Model Code.CHANGES IN INFORMATION OF DIRECTORSPursuant to Rule 13.51B of the Listing Rules of Stock Exchange and the relevant regulations of the CSRC and the SSE,the changes in information of Directors subsequent to the date of the latest annual report of the Company and up to the date of this interim report are set out below:Name of DirectorDetails of Changes Lawrence J.LauRetired as an Independent Non-executive Director and a member of the Audit Committee,the Nomination Committee and the Strategy and Sustainability Committee of the Company with effect from 31 May 2023Tse Hau Yin,AloysiusRetired as an Independent Non-executive Director,the Chairman of the Audit Committee and a member of the Remuneration Committee of the Company with effect from 31 May 2023Li Shuk Yin EdwinaAppointed as an Independent Non-executive Director,the Chairman of the Audit Committee and a member of the Remuneration Committee of the Company with effect from 31 May 2023Lin BoqiangAppointed as a member of the Nomination Committee of the Company with effect from 31 May 2023Xia QinglongResigned as an Executive Director and the President of the Company due to work commitments with effect from 30 June 2023Zhou XinhuaiAppointed as the President of the Company with effect from 30 June 2023MISCELLANEOUSThe Directors are of the opinion that there have been no material changes to the information published in the Companys annual report for the year ended 31 December 2022,other than those disclosed in this interim report.30Corporate Governance ReportCNOOC Limited Interim Report 2023INTERIM DIVIDEND DISTRIBUTION PLAN AND CLOSURE OF HONG KONG REGISTER OF MEMBERSAt the Companys 2022 annual general meeting held on 31 May 2023,the Board was authorized to decide the Companys 2023 interim dividend distribution plan.In overall consideration of situations such as the operating results,financial position and cash flow of the Company,to provide returns to our shareholders,the Board has resolved to declare an interim dividend of HK$0.59 per share(tax inclusive)for the first half of 2023.Dividends payable shall be denominated and declared in HKD,among which,dividend for A shares will be paid in RMB,applying an exchange rate which equals to the average central parity rate between HKD and RMB announced by the Peoples Bank of China in the week before the Board declared the interim dividend;dividend for Hong Kong shares will be paid in HKD.The register of members of the Hong Kong shares of the Company(the“Register of Members”)will be closed from 11 September 2023(Monday)to 15 September 2023(Friday)(both days inclusive)during which no transfer of the Hong Kong shares of the Company can be registered.In order to qualify for the interim dividend,holders of Hong Kong shares are reminded to ensure that all instruments of transfer of the Hong Kong shares accompanied by the relevant share certificate(s)must be lodged with the Companys Hong Kong share registrar,Hong Kong Registrars Limited,Shops 1712-1716,17th Floor,Hopewell Centre,183 Queens Road East,Wanchai,Hong Kong,not later than 4:30 p.m.on 8 September 2023(Friday).The interim dividend will be paid on or around 18 October 2023(Wednesday)to shareholders whose names appear on the Register of Members of the Company on 15 September 2023(Friday).For holders of A shares of the Company,please refer to the Companys announcement in relation to the 2023 interim dividend distribution plan published on the websites of the Shanghai Stock Exchange and the Company.WITHHOLDING AND PAYMENT OF ENTERPRISE INCOME TAX FOR NON-RESIDENT ENTERPRISES IN RESPECT OF 2023 INTERIM DIVIDENDPursuant to the“Enterprise Income Tax Law of the Peoples Republic of China”,the“Regulations on the Implementation of the Enterprise Income Tax Law of the Peoples Republic of China”and the“Notice of the State Administration of Taxation on Issues about the Determination of Chinese-Controlled Enterprises Registered Abroad as Resident Enterprises on the Basis of Their Body of Actual Management”,the Company has been confirmed as a resident enterprise of the Peoples Republic of China(the“PRC”)and the withholding and payment obligation lies with the Company.The Company is required to withhold and pay 10%enterprise income tax when it distributes the 2023 interim dividend to its non-resident enterprise(as defined in the“Enterprise Income Tax Law of the Peoples Republic of China”)holders of Hong Kong shares.In respect of all holders of Hong Kong shares whose names appear on the Register of Members of the Company as at 15 September 2023 who are not individual natural person(including HKSCC Nominees Limited,corporate nominees or trustees such as securities companies and banks,and other entities or organisations,which are all considered as non-resident enterprise holders of Hong Kong shares),the Company will distribute the 2023 interim dividend after deducting enterprise income tax of 10%.The Company will not withhold and pay the income tax in respect of the 2023 interim dividend Corporate Governance ReportInterim Report 2023 CNOOC Limited31payable to any natural person holders of Hong Kong shares whose names appear on the Register of Members of the Company as at 15 September 2023.Investors who invest in the shares of the Company listed on the Main Board of the HKSE through the Shanghai Stock Exchange(the“Shanghai-Hong Kong Stock Connect investors”),and investors who invest in the shares in the Company listed on the Main Board of the HKSE through the Shenzhen Stock Exchange(the“Shenzhen-Hong Kong Stock Connect investors”),are investors who hold Hong Kong shares through HKSCC Nominees Limited,and in accordance with the above requirements,the Company will pay to HKSCC Nominees Limited the amount of the 2023 interim dividend after withholding for payment the 10%enterprise income tax.If any resident enterprise(as defined in the“Enterprise Income Tax Law of the Peoples Republic of China”)listed on the Register of Members of the Company which is duly incorporated in the PRC or under the laws of a foreign country(or a region)but with a PRC-based de facto management body,or any non-resident enterprise holders of Hong Kong shares who is subject to a withholding tax rate of less than 10%pursuant to any tax treaty between the country of residence of such holders of Hong Kong shares and the PRC or tax arrangements between mainland China and Hong Kong or Macau,or any other non-resident enterprise holders of Hong Kong shares who may be entitled to a deduction or exemption of enterprise income tax in accordance with the applicable PRC rules,does not desire to have the Company withhold and pay the total amount of the said 10%enterprise income tax,it shall lodge with Hong Kong Registrars Limited documents from its governing tax authority confirming its PRC resident enterprise status,or the documents in support that a withholding tax of less than 10%is required to be paid pursuant to the above-mentioned tax treaty or arrangements,or the documents confirming its entitlement to a deduction or exemption of enterprise income tax in accordance with the applicable PRC rules at or before 4:30 p.m.on 8 September 2023(Friday).If anyone would like to change the identity of the holders of Hong Kong shares,please enquire about the relevant procedures with the nominees or trustees.The Company will withhold and pay the enterprise income tax for its non-resident enterprise holders of Hong Kong shares strictly in accordance with the relevant laws and requirements of the relevant government departments and adhere strictly to the information set out in the Register of Members of the Company on 15 September 2023.The Company assumes no liability whatsoever in respect of and will not entertain any claims arising from any delay in,or inaccurate determination of,the status of holders of Hong Kong shares at the aforesaid date or any disputes over the mechanism of withholding.By Order of the BoardXu YugaoJoint Company SecretaryHong Kong,17 August 202332Managements Discussion and AnalysisCNOOC Limited Interim Report 2023ANALYSIS ON CORE COMPETITIVENESSAbundant oil and gas resources with leading production growth capacity in the industryThe Company has abundant resources and maintains a steady growth momentum in production.The reserve replacement ratio has been maintained at over 130%for consecutive years,and the reserve life has remained above 10 years,laying a resource foundation for increasing reserves and production.The Company continues to increase its development and production efforts,and its oil and gas production has maintained rapid growth for 5 consecutive years with a growth rate leading its peer companies.Leading exploration and development activities in offshore China with obvious advantages in regional developmentThe exploration in offshore China is in a relatively early stage,with huge potential of oil and gas resources exploration.The Company is the dominant producer of oil and natural gas in offshore China with extensive experiences in oil and gas exploration and development and high exploration success rate in offshore China.At present,with over 120 oil and gas fields in production,we have established offshore production facilities and subsea piping systems which will provide strong support to regional exploration and development in the future.In possession of a complete set of technical system for offshore oil and gas exploration and developmentThe Company has established a complete technology system for offshore oil and gas exploration,development and production.Breakthroughs have been made for ultra-deepwater oil and gas field development engineering in water depth of over 1,500 meters.The Company has made positive progress in key technical fields such as exploration in medium to deep play,enhanced recovery rate in producing oil and gas fields,subsea production system,and effective development of large-scale thermal recovery of heavy oil,which all provide strong support to the sustainable development of offshore oil and gas business.Managements Discussion and AnalysisInterim Report 2023 CNOOC Limited33Effective cost control and healthy financial performanceThe Company has a complete cost control system,industry-leading cost competitive advantage and profitability.Over the years,the Company has maintained a sound ability to generate cash flow,and its financial condition remained at high level in the industry.The Company has a steady financial position with a low gearing ratio and strong financing ability.In possession of a diversified asset portfolioThe Company has a diversified asset portfolio that possesses oil and gas assets worldwide.It holds interests in many world-class oil and gas projects,including Stabroek in Guyana and Buzios in Brazil.Its assets are distributed in more than 20 countries and regions around the world,which fully demonstrate the Companys strong capacity of globalized operation and management.Pursuing green and low-carbon development conceptThe Company adheres to the concept of green and low-carbon development,fully relies on the capability advantages in marine resource development,actively expanded business in new energy sector and accelerates the development of offshore wind power.Focusing on onshore power project and smart oilfield construction,it promoted the construction of a green and low-carbon management and control system.It also vigorously accelerated CCS/CCUS research,and strive to build a carbon reduction industrial chain.34Managements Discussion and AnalysisCNOOC Limited Interim Report 2023OPERATING RESULTSRevenueRevenue of the Company decreased by 5%to RMB192,064 million from RMB202,355 million in the same period of last year,primarily due to the impacts of higher oil and gas sales volume and marketing sales volume and lower oil prices in the international market.Our oil and gas sales,realised prices and sales volume are as follows:ChangeFirst halfof 2023First halfof 2022Amount%Oil and gas sales(RMB million)151,686 176,681(24,995)(14)Crude and liquids129,933 158,572(28,639)(18)Natural gas21,753 18,109 3,644 20Sales volume(million BOE)*320.6295.325.39Crude and liquids(million barrels)254.3235.918.48Natural gas(bcf)385.9346.639.311Realised pricesCrude and liquids(US$/barrel)73.57103.85(30.28)(29)Natural gas(US$/mcf)8.128.070.051 *Excluding our interest in equity-accounted investees.Operating expensesOperating expenses of the Company increased by 9%to RMB16,103 million from RMB14,820 million in the same period of last year,primarily due to increase of production driven by oil and gas fields commencement.Our operating expenses per BOE was US$7.16 per BOE,representing a decrease of 8%as compared to US$7.77 per BOE for the same period of last year.Exploration expensesExploration expenses of the Company decreased by 47%to RMB3,901 million from RMB7,405 million in the same period of last year,mainly due to the optimisation of exploration deployment and the improvement of exploration efficacy in the first half of the year.Managements Discussion and AnalysisInterim Report 2023 CNOOC Limited35Depreciation,depletion and amortisationDepreciation,depletion and amortisation of the Company increased by 14%to RMB33,738 million from RMB29,507 million in the same period of last year,mainly due to the increase of production as a result of oil and gas field commencement.The total amount of depreciation,depletion and amortisation(excluding the dismantling costs)increased by 14%to RMB31,577 million from RMB27,696 million.Our depreciation,depletion and amortisation per BOE(excluding the dismantling costs)decreased by 3%to US$14.14 per BOE from US$14.52 per BOE.The total amount of dismantlement provision-related depreciation,depletion and amortisation increased by 19%to RMB2,161 million from RMB1,811 million.Our dismantlement cost per BOE was US$0.96 per BOE,in line with US$0.95 for the same period of last year.Selling and administrative expensesSelling and administrative expenses of the Company increased by 14%to RMB4,990 million from RMB4,378 million in the same period of last year,primarily due to the increased costs associated with increased oil and gas sales volume.Selling and administrative expenses per BOE decreased by 4%to US$2.19 per BOE from US$2.29 per BOE.Interest incomeInterest income of the Company increased by 106%to RMB2,300 million from RMB1,115 million in the same period of last year,mainly due to the growth in deposit interest rate of USD.Income tax expenseIncome tax expense of the Company decreased by 12%to RMB22,874 million from RMB26,015 million in the same period of last year,mainly due to the decline in the Companys overall profit before tax resulted from the decline in international oil price.Net profitNet profit of the Company decreased by 11%to RMB63,748 million from RMB71,883 million in the same period of last year,mainly due to the Companys continuous efforts in increasing reserves and production as well as enhancing quality and efficiency,which effectively resisted the adverse impact of the decline in international oil price.36Managements Discussion and AnalysisCNOOC Limited Interim Report 2023Assets,liabilities and equityItems30 June 202331 December 2022Change(%)(RMB Million)(RMB Million)Current assets270,289 264,679 2Non-current assets728,785 664,352 10Total assets999,074 929,031 8Current liabilities152,289 113,391 34Non-current liabilities209,059 217,257(4)Total liabilities361,348 330,648 9Equity attributable to equity shareholders of the Company636,537 597,182 7Non-controlling interests1,189 1,201(1)Total equity637,726 598,383 7 The Companys financial position continued to maintain solid.As of 30 June 2023,our total assets and total liabilities reached RMB999,074 million and RMB361,348 million,respectively.In particular:Current assets amounted to RMB270,289 million,an increase of 2%from RMB264,679 million at the end of 2022,mainly due to the increase in cash and cash equivalents.Non-current assets amounted to RMB728,785 million,an increase of 10%from RMB664,352 million at the end of 2022,mainly due to the increase in property,plant and equipment,other non-current assets and other non-current financial assets.Current liabilities amounted to RMB152,289 million,an increase of 34%from RMB113,391 million at the end of 2022,mainly due to the increase in dividends payable.Non-current liabilities amounted to RMB209,059 million,a decrease of 4%from RMB217,257 million at the end of 2022,mainly due to the decrease in loans and borrowings.Managements Discussion and AnalysisInterim Report 2023 CNOOC Limited37Cash flowItemAmount for the periodAmount for the same period of last yearChange(%)(RMB Million)(RMB Million)Net cash flows from operating activities99,618 102,227(3)Net cash flows used in investing activities(50,244)(34,205)47Net cash flows(used in)/from financing activities(21,796)18,128(220)In the first half of 2023,the Company continued to maintain healthy cash flow position.Net cash flows from operating activities reached RMB99,618 million,representing a year-on-year decrease of 3%,mainly due to the decrease in cash flow from oil and gas sales resulted from the decline of international oil price.Net cash flows used in investing activities reached RMB50,244 million,representing a year-on-year increase of 47%,mainly due to the increase in cash outflow from investment in oil and gas assets resulted from the increase in reserves and production.Net cash flows used in financing activities reached RMB21,796 million,representing a year-on-year change of 220%,mainly due to the year-on-year increase in the repayment of financial notes due in the current period and cash received from the listing of the Companys A shares at the same period of last year.Capital expenditureIn the first half of the year,the capital expenditure budget of the Company was well implemented,which provided strong support for increasing reserves and production.Capital expenditure reached RMB56,514 million in total,representing an increase of 36%compared with the same period of last year.The changes are as follows:ChangeFirst half of 2023First half of 2022Amount%(RMB Million)(RMB Million)(RMB Million)Exploration9,8158,6741,14113Development35,50021,86713,63362Production Capitalization10,69010,4222683Others509609(100)(16)Total56,51441,57114,94336 *Above amounts exclude capitalized interest of RMB937 million and RMB1,254 million in first half of 2022 and first half of 2023 respectively.38Managements Discussion and AnalysisCNOOC Limited Interim Report 2023Gearing ratioAs of 30 June 2023,the Company and its subsidiaries gearing ratio was 15.98%,representing a decrease of 2.36 percentage points from the end of last year.The gearing ratio is calculated by dividing interest-bearing liabilities by total capital(the total of shareholders equity and interest-bearing liabilities).Pledge of assetsFor the pledged assets of the Company as of 30 June 2023,please refer to note 9 to the unaudited interim condensed consolidated financial statements of this interim report.WORK PLAN FOR THE SECOND HALF OF THE YEARIn the second half of the year,the Company will insist on value exploration,focus on key exploration areas and continue to increase reserves and production.We will promote production capacity construction in an efficient manner under the principle of safety production to ensure that we reach the annual goals of production and operation successfully.We will continue to strengthen refined management,maintain our cost competitiveness and improve our capabilities of value creation.DESCRIPTION OF CHANGE IN SHARES AND USE OF LISTING PROCEEDSOn 21 April 2023,the strategic placement restricted shares of RMB ordinary share(A share)issued by the Company at the initial public offering began their circulation and trading.The number of restricted shares in circulation was 1,091,666,663 shares,and the number of the circulating shares in circulation which are not subject to selling restrictions increased accordingly.This matter did not lead to any change in the total share capital of the Company.Proceeds from the initial public offering of RMB ordinary shares are applied to the following projects:Planned use of proceedsCommitted investment amountUnaudited utilised proceeds as of 30 June 2023Unaudited unutilised proceeds as of 30 June 2023Expected timetable for use of the unutilised proceeds(RMB million)(RMB million)(RMB million)Payara oil field development in Guyana 5,200.003,841.821,358.18 Expected to be used up by 31 December 2026Liuhua 11-1/4-1 oil field secondary development6,500.002,462.994,037.01Liza oil field phase II in Guyana2,200.002,153.9846.02Lufeng oil fields development 3,500.002,610.18889.82Lingshui 17-2 gas field development 3,000.002,806.97193.03Lufeng 12-3 oil field development1,000.001,000.00Qinhuangdao 32-6/Caofeidian 11-1 oil fields onshore power application construction project1,000.00825.78174.22Luda 6-2 oil field development500.00500.00Replenishment of working capital9,199.099,162.8436.25 Total 32,099.0925,364.576,734.52 Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income(unaudited)For the six months ended 30 June 2023(All amounts expressed in millions of Renminbi,except per share data)Interim Report 2023 CNOOC Limited39Six months ended 30 JuneNotes20232022 REVENUERevenue recognised from contracts with customersOil and gas sales3151,686176,681Marketing revenues335,56421,527Other revenue4,8144,147 192,064202,355 EXPENSESOperating expenses(16,103)(14,820)Taxes other than income tax6(ii)(8,369)(9,220)Exploration expenses(3,901)(7,405)Depreciation,depletion and amortisation(33,738)(29,507)Special oil gain levy6(iii)(3,052)(14,778)Impairment and provision recognised,net(302)(102)Expected credit losses reversal/(losses)2(1)Crude oil and product purchases(32,626)(20,619)Selling and administrative expenses(4,990)(4,378)Others(4,712)(4,461)(107,791)(105,291)PROFIT FROM OPERATING ACTIVITIES84,27397,064Interest income2,3001,115Finance costs5(2,800)(3,105)Exchange(losses)/gains,net(294)484Investment income1,9781,404Share of profits of associates423302Profit attributable to a joint venture424563Other income,net31871 PROFIT BEFORE TAX86,62297,898Income tax expense6(i)(22,874)(26,015)PROFIT FOR THE PERIOD63,74871,883 Attributable to:Equity shareholders of the Company63,76171,887Non-controlling interests(13)(4)63,74871,883 40CNOOC Limited Interim Report 2023Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income(unaudited)(continued)For the six months ended 30 June 2023(All amounts expressed in millions of Renminbi,except per share data)Six months ended 30 JuneNotes20232022 OTHER COMPREHENSIVE INCOME/(EXPENSE)Items that may be subsequently reclassified to profit or lossExchange differences on translation of foreign operations7,50610,016Share of other comprehensive income of associates32Cash flow hedge reserves(11)(44)Other items that will not be reclassified to profit or lossFair value change on equity investments designated as at fair value through other comprehensive(expense)/income(128)1,188Share of other comprehensive income of associates28-OTHER COMPREHENSIVE INCOME FOR THE PERIOD,NET OF TAX7,39811,162 TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 71,14683,045 Attributable to:Equity shareholders of the Company71,15983,049Non-controlling interests(13)(4)71,14683,045 EARNINGS PER SHARE FOR THE PERIOD ATTRIBUTABLE TO EQUITY SHAREHOLDERS OF THE COMPANYBasic(RMB Yuan)71.341.57Diluted(RMB Yuan)71.341.57 Details of the interim dividends declared for the period are disclosed in note 8 to the interim condensed consolidated financial statements.Interim Condensed Consolidated Statement of Financial Position(unaudited)30 June 2023(All amounts expressed in millions of Renminbi)Interim Report 2023 CNOOC Limited41Notes30 June 202331 December 2022 NON-CURRENT ASSETSProperty,plant and equipment9565,649532,719Right-of-use assets910,97110,465Intangible assets1017,07116,600Investments in associates28,55627,942Investment in a joint venture22,13220,985Debt investment7,1545,975Equity investments179821,075Deferred tax assets31,18929,885Other non-current assets32,89512,680Other non-current financial assets1712,1866,026 Total non-current assets728,785664,352 CURRENT ASSETSInventories and supplies6,0656,239Trade receivables1137,05637,992Other financial assets1782,96688,209Derivative financial instruments17130Other current assets11,21010,822Time deposits with maturity over three months but within one year18,92635,754Cash and cash equivalents114,06585,633 Total current assets270,289264,679 CURRENT LIABILITIESLoans and borrowings1322,04822,817Trade and accrued payables1263,52059,789Lease liabilities2,2801,873Contract liabilities2,3391,691Other payables and accrued liabilities10,61610,676Derivative financial instruments1532Dividends payable32,406-Taxes payable19,06516,513 Total current liabilities152,289113,391 NET CURRENT ASSETS118,000151,288 TOTAL ASSETS LESS CURRENT LIABILITIES846,785815,640 42CNOOC Limited Interim Report 2023Interim Condensed Consolidated Statement of Financial Position(unaudited)(continued)30 June 2023(All amounts expressed in millions of Renminbi)Notes30 June 202331 December 2022 NON-CURRENT LIABILITIESLoans and borrowings1390,252103,145Lease liabilities6,7256,561Provision for dismantlement90,61587,042Deferred tax liabilities10,80910,271Other non-current liabilities10,65810,238 Total non-current liabilities209,059217,257 NET ASSETS637,726598,383 EQUITYIssued capital1475,18075,180Reserves561,357522,002 Equity attributable to equity shareholders of the Company636,537597,182 Non-controlling interests1,1891,201 TOTAL EQUITY637,726598,383 Interim Condensed Consolidated Statement of Changes in Equity(unaudited)For the six months ended 30 June 2023(All amounts expressed in millions of Renminbi)Interim Report 2023 CNOOC Limited43Attributable to equity shareholders of the CompanyNon-controlling interestsTotal equity Issued capitalCumulative translation reservesStatutory and non-distributable reservesOther reservesRetained earningsProposed final dividendTotal Balance at 1 January 202243,081(17,712)70,0001,180384,363480,9121,064481,976Profit/(loss)for the period71,88771,887(4)71,883Other comprehensive income,net of tax10,0161,14611,16211,162 Total comprehensive income/(expense)10,0161,14671,88783,049(4)83,045Special dividend(47,372)(47,372)(47,372)Issue of shares,net of transaction costs32,09932,09932,099Capital contributions from non-controlling interests of subsidiaries6262Transfer of fair value reserve upon the disposal of equity investments(113)113Others333 Balance at 30 June 202275,180(7,696)70,0002,217408,990548,6911,122549,813 Balance at 1 January 202375,18023270,0002,785417,37531,610597,1821,201598,383Profit/(loss)for the period63,76163,761(13)63,748Other comprehensive income/(expense),net of tax7,506(108)7,3987,398 Total comprehensive income/(expense)7,506(108)63,76171,159(13)71,1462022 final dividend(204)(31,610)(31,814)(31,814)Others1010111 Balance at 30 June 202375,1807,73870,0002,687480,932636,5371,189637,726 44CNOOC Limited Interim Report 2023Interim Condensed Consolidated Statement of Cash Flows(unaudited)For the six months ended 30 June 2023(All amounts expressed in millions of Renminbi)Six months ended 30 June20232022 CASH FLOWS FROM OPERATING ACTIVITIESCash generated from operations119,302125,889Income taxes paid(19,684)(23,662)Net cash flows from operating activities99,618102,227 CASH FLOWS FROM INVESTING ACTIVITIESCapital expenditure(49,226)(31,804)Additions to investments in associates(1,676)(330)(Increase)/decrease in time deposits with maturity over three months(3,186)4,954Dividends received from associates148199Dividends received from a joint venture13645Interest received3,3021,136Investment income received1,061843Purchase of other financial assets(33,807)(45,896)Proceeds from sale of other financial assets33,00036,586Proceeds from disposal of property,plant and equipment462 Net cash flows used in investing activities(50,244)(34,205)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of shares32,099Repayment of guaranteed notes(17,374)(9,726)Repayments of lease liabilities(1,743)(903)Proceeds from bank loans10789Repayment of bank loans(157)(923)Interest paid(2,629)(2,570)Others62 Net cash flows(used in)/from financing activities(21,796)18,128 NET INCREASE IN CASH AND CASH EQUIVALENTS27,57886,150Cash and cash equivalents at beginning of the period85,63341,432Effect of foreign exchange rate changes,net8541,990 CASH AND CASH EQUIVALENTS AT END OF THE PERIOD114,065129,572 Notes to unaudited Interim Condensed Consolidated Financial Statements30 June 2023(All amounts expressed in millions of Renminbi,except number of shares and unless otherwise stated)Interim Report 2023 CNOOC Limited451.ORGANISATION AND PRINCIPAL ACTIVITIESCNOOC Limited(the“Company”)was incorporated in the Hong Kong Special Administrative Region(“Hong Kong”)of the Peoples Republic of China(the“PRC”)on 20 August 1999 to hold the interests in certain entities thereby creating a group comprising the Company and its subsidiaries.The Company and its subsidiaries are principally engaged in the exploration,development,production and sales of crude oil and natural gas.The registered office address of the Company is 65/F,Bank of China Tower,1 Garden Road,Hong Kong.In the opinion of directors of the Company(the“Directors”),the ultimate holding company of the Company is China National Offshore Oil Corporation(“CNOOC Group”),a company established in the PRC.As at 30 June 2023,the Company had direct or indirect interests in the following principal subsidiaries,joint venture and associates:Name of entityPlace of establishmentNominal value of ordinary shares issued and paid-up/registered capitalPercentage of equity attributable to the Company and its subsidiariesPrincipal activities Directly held subsidiaries:CNOOC China Limited(1)Tianjin,PRCRMB48 billion100%Offshore petroleum and natural gas exploration,development,production and sales,and shale gas exploration in the PRCCNOOC International Trading Co.,Ltd.(1)Hainan,PRCRMB400 million100%Sales and trading of petroleum and natural gasCNOOC International LimitedBritish Virgin IslandsUS$24,000,000,002100%Investment holding46CNOOC Limited Interim Report 2023Notes to unaudited Interim Condensed Consolidated Financial Statements30 June 2023(All amounts expressed in millions of Renminbi,except number of shares and unless otherwise stated)Name of entityPlace of establishmentNominal value of ordinary shares issued and paid-up/registered capitalPercentage of equity attributable to the Company and its subsidiariesPrincipal activities Indirectly held subsidiaries(2):CNOOC Exploration&Production Nigeria LimitedNigeriaNGN10 million100%Petroleum and natural gas exploration,development and production in AfricaCNOOC Petroleum North America ULCCanada13,671,421,700 common shares without a par value100%Petroleum and natural gas exploration,development and production in CanadaCNOOC Canada Energy Ltd.Canada100 common shares without a par value100%Oil sands exploration,development and production in Canada103,000 preferred shares without a par valueCNOOC Petroleum Europe LimitedEngland and WalesGBP98,009,131100%Petroleum and natural gas exploration,development and production in the UKCNOOC Energy U.S.A.LLCUSAN/A100%Petroleum and natural gas exploration,development and production in the USACNOOC Petroleum Offshore U.S.A.Inc.USAUS$15,830100%Petroleum and natural gas exploration,development and production in the USACNOOC PETROLEUM BRASIL LTDA.BrazilR$7,830,661,300100%Petroleum and natural gas exploration,development and production in BrazilCNOOC Petroleum Guyana LimitedBarbadosUS$200,100100%Petroleum and natural gas exploration,development and production in Guyana1.ORGANISATION AND PRINCIPAL ACTIVITIES(CONTINUED)As at 30 June 2023,the Company had direct or indirect interests in the following principal subsidiaries,joint venture and associates:(continued)Notes to unaudited Interim Condensed Consolidated Financial Statements30 June 2023(All amounts expressed in millions of Renminbi,except number of shares and unless otherwise stated)Interim Report 2023 CNOOC Limited47Name of entityPlace of establishmentNominal value of ordinary shares issued and paid-up/registered capitalPercentage of equity attributable to the Company and its subsidiariesPrincipal activities Joint venture:BC ENERGY INVESTMENTS CORP.British Virgin IslandsUS$102,325,58250%Investment holdingAssociates:CNOOC Finance Corporation Limited(3)Beijing,PRCRMB4 billion31.8%Provision of deposit,transfer,settlement,loan,discounting and other financing services to CNOOC Group and its member entitiesArctic LNG 2 LLCRussian FederationRUB15,976 million10%Exploration and development of natural gas and production and marketing of liquefied natural gas in Russia(1)Registered as a wholly foreign owned enterprise under the PRC law.(2)All subsidiaries are indirectly held through CNOOC International Limited.(3)Registered as limited liability company under the PRC law.The above table lists the subsidiaries,joint venture and associates of the Company which,in the opinion of the Directors,principally affected the results for the period or formed a substantial portion of the total assets of the Company and its subsidiaries.To give details of other subsidiaries and associates would,in the opinion of the Directors,result in particulars of excessive length.1.ORGANISATION AND PRINCIPAL ACTIVITIES(CONTINUED)As at 30 June 2023,the Company had direct or indirect interests in the following principal subsidiaries,joint venture and associates:(continued)48CNOOC Limited Interim Report 2023Notes to unaudited Interim Condensed Consolidated Financial Statements30 June 2023(All amounts expressed in millions of Renminbi,except number of shares and unless otherwise stated)2.BASIS OF PREPARATION AND ACCOUNTING POLICIESBasis of preparationThe interim condensed consolidated financial statements for the six months ended 30 June 2023 have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting and Hong Kong Accounting Standard 34 Interim Financial Reporting as well as the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited(the“Listing Rules of Stock Exchange”).The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements,and should be read in conjunction with the Company and its subsidiaries annual financial statements for the year ended 31 December 2022.The financial information relating to the year ended 31 December 2022 that is included in this interim report as comparative information does not constitute the Companys statutory annual consolidated financial statements for that year but is derived from those consolidated financial statements.Further information relating to these statutory financial statements required to be disclosed in accordance with section 436 of the Companies Ordinance(Chapter 622 of the Laws of Hong Kong)(the“Companies Ordinance”)is as follows:The Company has delivered the consolidated financial statements for the year ended 31 December 2022 to the Registrar of Companies as required by section 662(3)of,and Part 3 of Schedule 6 to,the Companies Ordinance.The Companys auditor has reported on those consolidated financial statements.The auditors report was unqualified;did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying its reports;and did not contain a statement under sections 406(2),407(2)or(3)of the Companies Ordinance.Changes in accounting policiesThe accounting policies adopted in the preparation of the interim condensed consolidated financial information are consistent with those applied in the preparation of the Company and its subsidiaries annual consolidated financial statements for the year ended 31 December 2022,except for the adoption of the following new and revised International Financial Reporting Standards(“IFRSs”)/Hong Kong Financial Reporting Standards(“HKFRSs”)for the first time for the current periods financial information.Notes to unaudited Interim Condensed Consolidated Financial Statements30 June 2023(All amounts expressed in millions of Renminbi,except number of shares and unless otherwise stated)Interim Report 2023 CNOOC Limited492.BASIS OF PREPARATION AND ACCOUNTING POLICIES(CONTINUED)Changes in accounting policies(continued)IFRS 17/HKFRS 17Insurance ContractsAmendments to IFRS 17/HKFRS 17Insurance ContractsAmendments to IFRS 17/HKFRS 17Initial Application of IFRS 17/HKFRS 17 and IFRS 9/HKFRS 9 Comparative InformationAmendments to IAS 1/HKAS 1 and IFRS/HKFRS Practice Statement 2Disclosure of Accounting PoliciesAmendments to IAS 8/HKAS 8Definition of Accounting EstimatesAmendments to IAS 12/HKAS 12Deferred Tax related to Assets and Liabilities arising from a Single TransactionAmendments to IAS 12/HKAS 12International Tax Reform Pillar Two Model Rules*The Company and its subsidiaries are currently assessing the exposure to amendments to IAS12/HKAS 12 International Tax Reform Pillar Two Model Rules.Besides the above mentioned amendments,the application of the new and amendments to IFRSs/HKFRSs in the current year has had no material impact on the accounting policies,the disclosures or the amounts recognised in the interim condensed consolidated financial statements of the Company and its subsidiaries.*The amendments to IAS 12 have been issued in May 2023,and the similar amendments to HKAS 12 have been issued in July 2023.3.OIL AND GAS SALES AND MARKETING REVENUESOil and gas sales represent the sales of oil and gas,net of royalties and obligations to government and other mineral interest owners.Revenue from the sales of oil and gas is recognised at a point in time when oil and gas has been delivered to the customer,which is when the customer obtains the control of oil and gas,and the Company and its subsidiaries have present right to payment and collection of the consideration is probable.Marketing revenues principally represent the sales of oil and gas belonging to the foreign partners under the production sharing contracts and revenues from the trading of oil and gas through the Companys subsidiaries,which is recognised at a point in time when oil and gas has been delivered to the customer,which is when the customer obtains the control of oil and gas,and the Company and its subsidiaries have present right to payment and collection of the consideration is probable.The cost of the oil and gas sold is included in“Crude oil and product purchases”in the interim condensed consolidated statement of profit or loss and other comprehensive income.50CNOOC Limited Interim Report 2023Notes to unaudited Interim Condensed Consolidated Financial Statements30 June 2023(All amounts expressed in millions of Renminbi,except number of shares and unless otherwise stated)4.SEGMENT INFORMATIONThe Company and its subsidiaries are engaged worldwide in the upstream operating activities of the conventional oil and gas,shale oil and gas,oil sands and other unconventional oil and gas business.The Company and its subsidiaries report the business through three operating and reporting segments:exploration and production(“E&P”),trading business and corporate.The division of these operating segments is made because the Companys chief operating decision makers make decisions on resource allocation and performance evaluation by reviewing the financial information of these operating segments.The following table presents revenue,profit or loss,assets and liabilities information for the Company and its subsidiaries operating segments.E&PTrading businessCorporateEliminationsConsolidatedSix months ended 30 JuneSix months ended 30 JuneSix months ended 30 JuneSix months ended 30 JuneSix months ended 30 June2023202220232022202320222023202220232022 External revenue43,99349,473147,844152,658227224192,064202,355Intersegment revenue*112,693131,147(112,274)(131,147)441(463)(1)Total revenue*156,686180,62035,57021,511271225(463)(1)192,064202,355 Segment profit/(loss)for the period61,00470,3322,4056273,2061,090(2,867)(166)63,74871,883 E&PTrading businessCorporateEliminationsConsolidated30 June 202331 December 202230 June 202331 December 202230 June 202331 December 202230 June 202331 December 202230 June 202331 December 2022 Other segment informationSegment assets632,400553,84237,36234,702532,193546,570(202,881)(206,083)999,074929,031 Segment liabilities(335,530)(339,134)(27,524)(27,625)(219,248)(188,591)220,954224,702(361,348)(330,648)*Certain oil and gas produced by the E&P segment are sold via the trading business segment.For the Companys chief operating decision makers assessment of segment performance,these revenues are reclassified back to E&P segment.*62%(six months ended 30 June 2022:69%)of the Company and its subsidiaries revenues recognised in the interim condensed consolidated statement of profit or loss and other comprehensive income are generated from the PRC customers,and revenues generated from customers in other locations are individually less than 10%.Notes to unaudited Interim Condensed Consolidated Financial Statements30 June 2023(All amounts expressed in millions of Renminbi,except number of shares and unless otherwise stated)Interim Report 2023 CNOOC Limited515.FINANCE COSTSAccretion expenses of approximately RMB1,428 million(six months ended 30 June 2022:approximately RMB1,419 million)relating to the provision for dismantlement liabilities have been recognised in the interim condensed consolidated statement of profit or loss and other comprehensive income for the six months ended 30 June 2023.6.TAX(i)Income taxThe Company and its subsi
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Q1 Trading Statement 2024/25 Serving our customers,communities and planet a little better every day.0 CONTINUED MOMENTUM GAINING MARKET SHARE&GROWING VOLUMES.Sales performance(exc.VAT,exc.fuel)for the 13 weeks ended 25 May 2024:Sales(m)LFL sales change UK&ROI 14,330 3.6%UK 11,368 4.6%ROI 731 4.4%Booker 2,231(1.3)ntral Europe 975 0.6%Retail 15,305 3.4%Ken Murphy,Chief Executive:“Weve continued to build momentum in the business,with strong volume growth across the UK,Republic of Ireland and Central Europe supported by easing inflation.We continue to be the cheapest full-line grocer and are the most competitive weve ever been,with our value,product quality and service driving better brand perception and customer satisfaction.Our market share reflects this,growing more than at any other time in the past two years,with customers switching to us from other retailers,shopping with us more often and with more in their baskets.We are looking forward to helping our customers celebrate a great summer of sport.We recently launched more than 100 new and exciting own brand products,including our Finest Dine In summer menu,based on classic pub dishes,and improved our Picnic&Deli,BBQ and Sweet Treat ranges.Tesco Finest growth was particularly strong in the quarter as customer perception of the quality of our products continues to improve.Following another strong quarter,were pleased to reiterate our guidance for the full year,with sales trends in line with our expectations and the business well-positioned for the months ahead.”Performance highlights1.UK:Strong market share performance and strengthening volumes Market share growing ahead of all key competitors,up 52bps to 27.6%2,supported by 15 consecutive periods of positive switching gains3 Food sales up 5.0%,including strong volume growth across the quarter,particularly in fresh food;non-food sales up 0.7%,driven by strong growth in clothing Cheapest of the full-line grocers for 19 consecutive periods4 through powerful combination of Aldi Price Match on c.700 lines,Low Everyday Prices,with 1,000 prices locked,and Clubcard Prices Growth in all channels;online sales up 8.9%,driven by volume growth and strong contribution from Whoosh Finest sales continue to grow strongly,up 12.5%;net switching gains from premium retailers for 22 periods3 Ongoing investment in colleague hours supporting further improvement in brand perception,customer satisfaction5 and availability,which is up 1.5ppts year-on-year to 95.9%ROI:Fourth consecutive quarter of volume growth drives further market share gains Continued growth in market share,up 59bps6,with 18 consecutive periods of positive switching gains7 Growth in all channels;food sales up 5.1%,with fresh volumes particularly strong,supported by investment in the fresh proposition Booker:Continued underlying growth in core retail&catering following exceptional performance last year Core retail*sales up 1.0%,with further improvements in availability and 204 net new retail partners Core catering*sales up 2.2%,with new Fareham DC supporting increased capacity and volumes Overall sales decline of(1.3)%reflects continued tobacco market decline and weakness in parts of the fast-food market serviced by Best Food Logistics;performance also reflects strength of prior year comparatives Recent acquisition of Venus Wine and Spirit Merchants PLC strengthens on-trade premium drinks offer CE:Sales growth driven by strengthening food volumes Positive customer response to sustained price investment supporting growing food volumes,up 2.8%Customer NPS growing ahead of the market in Hungary,Slovakia and Czech Republic8*Booker Core retail refers to retail excluding tobacco sales;Core catering refers to catering sales excluding Best Food Logistics Contacts.Investor Relations:Chris Griffith 01707 940 900 Media:Christine Heffernan 0330 6780 639 Teneo 0207 4203 143 A call for investors and analysts will be held today at 09:00am.A link will be available on our website at transcript and playback facility will also be made available after the call.We will report our Interim Results on Thursday 3 October 2024.Additional Q1 sales detail(exc.VAT,exc.fuel)(on a continuing operations basis).Sales(m)Total sales change(constant rates)Total sales change(actual rates)UK&ROI 14,330 4.1%3.9%UK 11,368 5.3%5.3%ROI 731 5.1%2.4%Booker 2,231(2.0)%(2.0)ntral Europe 975 0.9%(5.0)%Retail 15,305 3.8%3.3%Tesco Bank 271 59.9Y.9%Group 15,576 4.5%3.9%The results of our existing banking operations(credit cards,loans and savings)have been treated as discontinued following our 9 February 2024 announcement of the proposed sale to Barclays,with comparatives restated.As such,Tesco Bank sales included in continuing operations above refer only to the retained Tesco Bank business i.e.insurance and money services.Total Tesco Bank sales in the first quarter were 469m,which grew by 40.2%.We remain on track to complete the transaction by the end of this calendar year.UK Fuel.Sales(m)LFL sales change UK exc.fuel 11,368 4.6%Fuel 1,643(4.4)%UK revenue 13,011 3.4%Booker sales breakdown.LFL sales change Retail(ex.tobacco)1.0tering*(ex.tobacco)2.2%Tobacco(5.2)st Food Logistics(6.8)%Total Booker(1.3)%*Includes small businesses sales Guidance(as set out in our Preliminary Results published on 10 April 2024).For the 2024/25 financial year,we expect retail adjusted operating profit of at least 2.8bn.In addition,we expect total adjusted operating profit from the retained Tesco Bank business of around 80m,which includes a part-year amount of partnership income,based on the completion of the transaction towards the end of this calendar year.We expect to generate retail free cash flow within our guidance range of 1.4bn to 1.8bn.Notes.1.Sales growth percentages refer to like-for-like change unless otherwise stated 2.UK Kantar Tesco year-on-year change in market share of Grocers Total Till Roll for 12 weeks ended 12 May 2024 3.UK Kantar net switching gains 12 week ending rolling basis to 12 May 2024.Premium retailers comprise M&S and Waitrose 4.UK Price Index,an internal measure calculated using the retail selling price of each item on a per unit or unit of measure basis.Competitor retail selling prices are collected weekly by a third party.The price index includes price cut promotions and is weighted by sales to reflect customer importance.Full-line grocers comprise Tesco,Sainsburys,Asda and Morrisons 5.Brand perception and customer satisfaction based on year-on-year changes in YouGov BrandIndex scores for the 12 weeks ended 26 May 2024 6.ROI Kantar Tesco year-on-year change in market share of Total Grocery market for 12 weeks ended 12 May 2024 7.ROI Kantar net switching gains 12 weeks ending rolling basis to 12 May 2024 8.BASIS Global Brand Tracker.3 period rolling data.Responses to the question:“How likely is it that you would recommend the following company to a friend or colleague?”
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Q1 2024 SalesApril 24th,2024April 24,2024Q1 2024 SALES2Q1 2024:Solid execution of strategic roadmapGroup sales up 13.5%LFL in Q1 Stable sales in France and the rest of Europe,marked by a sharp slowdown in inflation and price investments Inflection in Brazil and continued strong momentum in ArgentinaIntensification of price investments in France and other Europe,supported by strengthened cost savings plan FY24 cost savings target raised to 1.2bn(vs.1.0bn)Sound execution of strategic initiatives in Q1 Continued increase in sales of Carrefour-branded products,reaching 37%of total sales( 2 pts YoY)E-commerce GMV up 33%,driven notably by Brazil NPS up 6 points( 8 points in France),notably thanks to an improvement in price perception criteria Ramp-up of European purchasing platform(“Eureca”),with 20 active suppliers( 16 vs 2023)FY 2024 financial targets confirmed:Growth in EBITDA and Recurring Operating Income vs 2023,Net FCF in line with the Carrefour 2026 plan trajectory700m annual share buyback program well-advanced,with 428m secured to dateApril 24,2024Q1 2024 SALES3Q1 2023Gross salesLFLExpansion&M&APetrolCalendarForexQ1 2024Gross sales 0.4%Q1 sales growth driven by LFL 13.5%(0.4)%(2.3)% 1.4%(11.8),071m22,156mApril 24,2024Q1 2024 SALES4Source:Local national institutes of statistics1.7%4.3%2.9%3.1%0.3%2.8%0%5 %Continued slowdown in food inflation in Europe0.6%0.3%0.9%1.4%1.0%0.8%1.0%1.7%1.1%1.7%0.5%0.5%1.7%1.7%1.8%0.6%0.3%0.3%0.1%0.3%(0.3)%0.0%0.4%0.0%0.2%(0.3)%0.0%-1%MoM food inflation in FranceYoY food inflation in EuropeApril 24,2024Q1 2024 SALES5FRANCEFrance:Stable sales;Price investments underway10,000m4,807m3,392m1,802mFranceHypermarketsSupermarketsOther formatsQ1 Sales inc.VAT-2.1%-3.8%-0.1%-1.3%Variation vs.Q1 23 0.8% 0.1%-1.3%-0.4%LFL ex.petrolex.calendarLFL sales down-0.4%on the back of slowing inflation,with continued pressure on volumes.Growth in foodsales( 0.4%LFL)offset by a decrease in non-food(-7.5%LFL)Price reductions on more than 700 basic products in Q1 at national level;New waves of-10%pricereductions every fortnight as of April 1st.Multiple additional price initiatives at store levelNPS improved by 8 points yoy,driven by price perception criteriaApril 24,2024Q1 2024 SALES6Spain:Solid momentum in food( 1.2%LFL)and resilience in non-food(-1.2%LFL).NPS increased by 6 points yoyItaly:Slight decline(-1.4%LFL)in sales against a backdrop of negative volumes in the marketBelgium:Strong sales growth in Jan/Feb( 4.3%LFL),negative in March(-7.6%)linked to very high comps with disruption at a competitor last year( 16.8%LFL in March 2023)Romania:Continued solid momentum despite a high comparable base and a sharp slowdown in inflation;first synergiesfrom the integration of Cora stores acquired in Q4Poland:Particularly tough market environment,with increased price competition since the beginning of the yearEurope:Stable sales with sequential slowdown in inflation6,155m2,716m1,035m1,102m725m576mEuropeSpainItalyBelgiumRomaniaPolandQ1 Sales inc.VAT 2.4%-1.2% 1.3% 9.4%Variation vs.Q1 23-4.2%-0.2%-1.4%-0.2%LFL ex.petrolex.calendar 0.2% 0.7% 13.7% 1.7%April 24,2024Q1 2024 SALES7129mBrazil:Significant improvement in all formats,with volume recovery and return to positive food inflation Atacado( 1.8%LFL):Normalized volumes in B2B and successful rollout of service counters targeting B2C customers Carrefour Retail(-1.4%LFL):Strong sequential improvement,LFL growth in March,solid non-food sales( 2.4%LFL)Sams Club( 6.9%LFL): 33.5%increase in active members vs Q1 2023 E-commerce( 52%GMV):Fast ramp-up at Atacado and integration of Grupo BIG Financial services: 22%increase in credit portfolioArgentina:Continued outstanding growth amid higher inflation(1)Pre-IAS 29(hyperinflation and foreign exchange)6,000m5,168m3,586m1,276m306m832mLatin AmericaBrazilAtacadoCarrefour RetailSams ClubArgentinaQ1 Sales inc.VAT 2.7% 10.5%-7.5%-14.7%Variation vs.Q1 23 265.0%-1.4% 1.8% 48.0%LFL ex.petrolex.calendar 6.2% 1.3%(1)Latin America:Brazil back to growth,Argentina remains strong 25.9% 6.9%April 24,2024Q1 2024 SALES8Rapid execution of share buyback428m of buybacks secured to date29 million shares repurchased in Q1Including 25m shares bought from Galfa 689.6 million outstanding shares to date2021202220232024272mto becompletedby year-end800m700m750m700m428mApril 24,2024Q1 2024 SALES9Key takeaways1Stable sales in Europe marked by sharp slowdown in inflation3Inflection in Brazil with improving macro,successful commercial initiatives and benefits of Grupo BIG integration2Successful execution of major strategic initiativesIntensification of price investments in France and other EuropeCost savings objective raised to 1.2bn in 2024(vs.1.0bn)4FY 2024 financial targets confirmedAPPENDIXApril 24,2024Q1 2024 SALES11CSR Q1 achievements Climate change:In January 2024,Carrefour nergies initiated a partnership with Octopus Energy in France,with the aim of offering its customers an ultra-competitive French green electricity offer,thus pursuing its actions in favor of the energy and environmental transitionDiversity:Ambitious action plan in France to reinforce diversity of origins among managers,based on 4 key pillars:training in non-discrimination and diversity awareness,creation of a community of role models,recruitment and promotion of candidates from diverse backgrounds,notably in conjunction with specialized associations Responsible consumption:Launch of the“Restart”project,aiming to test and deploy best practices for more sustainable and inclusive stores.Focus on anti-waste,packaging,climate,second hand,nutrition,accessibility and diversity Carrefour Foundation:In January 2024,the Carrefour Foundation began a new mandate,now focused on the fight against food insecurity,in the current context of increasing needs for food aid associationsApril 24,2024Q1 2024 SALES12Gross sales(in m)LFLex.petrolex.calendarOrganic growthex.petrolex.calendarChange at currentexch.rates inc.petrolChange at constantexch.rates inc.petrolFrance10,000-0.4%-1.8%-2.1%-2.1%Hypermarkets4,807-1.3%-3.0%-3.8%-3.8%Supermarkets3,392 0.1%-0.5%-0.1%-0.1%Others,inc.convenience1,802 0.8%-0.7%-1.3%-1.3%Other European countries6,155-0.2%-0.3% 2.4% 1.8%Spain2,716 0.7% 0.6% 0.2% 0.2%Italy1,035-1.4%-3.0%-1.2%-1.2lgium1,102-0.2%-0.2% 1.3% 1.3%Romania725 1.7% 3.7% 13.7% 15.0%Poland576-4.2%-4.7% 9.4% 0.6%Latin America(pre-IAS 29)6,000 48.0% 47.8% 2.7% 47.8%Brazil5,168 1.3% 1.6% 6.2% 2.5%Argentina(pre-IAS 29)832 265.0% 272.3%-14.7% 274.5%Group total(pre-IAS 29)22,156 13.5% 12.8% 0.4% 12.1%IAS 29 impact75Group total(post-IAS 29)22,230Q1 2024 gross salesApril 24,2024Q1 2024 SALES13CalendarPetrolForexFrance 1.4%-1.7%-Hypermarkets 1.6%-2.4%-Supermarkets 1.5%-1.1%-Others,inc.convenience 0.8%-1.2%-Other European countries 1.5%-0.5% 0.6%Spain 0.6%-1.0%-Italy 2.3%-0.5%-Belgium 1.5%-Romania 1.6%-0.1%-1.2%Poland 4.3% 1.0% 8.8%Latin America 1.2%-1.2%-45.1%Brazil 1.0%-0.1% 3.7%Argentina 2.2%-289.2%Group total 1.4%-2.3%-11.8%Q1 2024 technical effectsApril 24,2024Q1 2024 SALES14(1)Africa,Middle-East,Dominican Republic and Asia(#)Hypermarkets SupermarketsConvenienceCash&CarrySoft discountSams ClubTotalFrance2531,0374,59115233-6,066Other European countries4692,1763,4231297-6,177Spain2041531,061-63-1,481Italy424081,02012-1,482Belgium40349319-708Romania56192169-28-445Poland96151560-6-813Others31923294-1,248Latin America203193635395-511,477Brazil123108176366-51824Argentina808545929-653Others(1)23676012236-1,154Total1,1614,1668,7715951305114,874Stores under banners at end Q1 2024April 24,2024Q1 2024 SALES15Net FCF path to 2026 target1,0561,2271,2621,6221,7002020202120222023202420252026Net Free Cash Flow(in m)Objective:Net FCF to reach 1.7bn in 20262024 NFCF expected closer to initial 2022-2026 growth trajectoryTheoretical NFCF on the assumption of a linear trajectory to 1.7bn in 2026(1)Carrefour Taiwan reclassified as held-for-sale as per IFRS 5(1)DISCLAIMERThis presentation contains both historical andforward-lookingstatements.Theseforward-lookingstatementsarebasedonCarrefourmanagements current views and assumptions.Such statements are not guarantees of futureperformanceoftheGroup.Actualresultsorperformances may differ materially from thosein such forward-looking statements as a resultof a number of risks and uncertainties,includingbut not limited to the risks described in thedocuments filed with the Autorit des MarchsFinanciers as part of the regulated informationdisclosurerequirementsandavailableonCarrefours website(),andinparticulartheUniversalRegistrationDocument.These documents are also availableintheEnglishlanguageonthecompanyswebsite.Investors may obtain a copy of thesedocumentsfromCarrefourfreeofcharge.Carrefour does not assume any obligation toupdate or revise any of these forward-lookingstatements in the future.
2024-08-06
16页
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Meta Reports First Quarter 2024 ResultsMENLO PARK,Calif.April 24,2024 Meta Platforms,Inc.(Nasdaq:META)today reported financial results for the quarter ended March 31,2024.Its been a good start to the year,said Mark Zuckerberg,Meta founder and CEO.The new version of Meta AI with Llama 3 is another step towards building the worlds leading AI.Were seeing healthy growth across our apps and we continue making steady progress building the metaverse as well.First Quarter 2024 Financial HighlightsThree Months Ended March 31,%ChangeIn millions,except percentages and per share amounts20242023Revenue$36,455$28,645 27%Costs and expenses 22,637 21,418 6%Income from operations$13,818$7,227 91%Operating margin 38%Provision for income taxes$1,814$1,598 14fective tax rate 13%Net income$12,369$5,709 117%Diluted earnings per share(EPS)$4.71$2.20 114%First Quarter 2024 Operational and Other Financial HighlightsFamily daily active people(DAP)DAP was 3.24 billion on average for March 2024,an increase of 7%year-over-year.Ad impressions Ad impressions delivered across our Family of Apps increased by 20%year-over-year.Average price per ad Average price per ad increased by 6%year-over-year.Revenue Total revenue and revenue on a constant currency basis were$36.46 billion and$36.35 billion,respectively,both of which increased by 27%year-over-year.Costs and expenses Total costs and expenses were$22.64 billion,an increase of 6%year-over-year.Capital expenditures Capital expenditures,including principal payments on finance leases,were$6.72 billion.Capital return program Share repurchases were$14.64 billion of our Class A common stock and dividends payments were$1.27 billion.Cash,cash equivalents,and marketable securities Cash,cash equivalents,and marketable securities were$58.12 billion as of March 31,2024.Free cash flow was$12.53 billion.Headcount Headcount was 69,329 as of March 31,2024,a decrease of 10%year-over-year.1CFO Outlook CommentaryWe expect second quarter 2024 total revenue to be in the range of$36.5-39 billion.Our guidance assumes foreign currency is a 1%headwind to year-over-year total revenue growth,based on current exchange rates.We expect full-year 2024 total expenses to be in the range of$96-99 billion,updated from our prior outlook of$94-99 billion due to higher infrastructure and legal costs.For Reality Labs,we continue to expect operating losses to increase meaningfully year-over-year due to our ongoing product development efforts and our investments to further scale our ecosystem.We anticipate our full-year 2024 capital expenditures will be in the range of$35-40 billion,increased from our prior range of$30-37 billion as we continue to accelerate our infrastructure investments to support our artificial intelligence(AI)roadmap.While we are not providing guidance for years beyond 2024,we expect capital expenditures will continue to increase next year as we invest aggressively to support our ambitious AI research and product development efforts.Absent any changes to our tax landscape,we expect our full-year 2024 tax rate to be in the mid-teens.In addition,we continue to monitor an active regulatory landscape,including the increasing legal and regulatory headwinds in the EU and the U.S.that could significantly impact our business and our financial results.Q1 was a good start to the year.Were seeing strong momentum within our Family of Apps and are making important progress on our longer-term AI and Reality Labs initiatives that have the potential to transform the way people interact with our services over the coming years.2Webcast and Conference Call InformationMeta will host a conference call to discuss the results at 2:00 p.m.PT/5:00 p.m.ET today.The live webcast of Metas earnings conference call can be accessed at ,along with the earnings press release,financial tables,and slide presentation.Meta uses the and as well as Mark Zuckerbergs Facebook Page( account( Threads profile( means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.Following the call,a replay will be available at the same website.Transcripts of conference calls with publishing equity research analysts held today will also be posted to the website.About MetaMeta builds technologies that help people connect,find communities,and grow businesses.When Facebook launched in 2004,it changed the way people connect.Apps like Messenger,Instagram,and WhatsApp further empowered billions around the world.Now,Meta is moving beyond 2D screens toward immersive experiences like augmented and virtual reality to help build the next evolution in social technology.ContactsInvestors:Kenneth D M StatementsThis press release contains forward-looking statements regarding our future business plans and expectations.These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors including:the impact of macroeconomic conditions on our business and financial results,including as a result of geopolitical events;our ability to retain or increase users and engagement levels;our reliance on advertising revenue;our dependency on data signals and mobile operating systems,networks,and standards that we do not control;changes to the content or application of third-party policies that impact our advertising practices;risks associated with new products and changes to existing products as well as other new business initiatives,including our artificial intelligence initiatives and metaverse efforts;our emphasis on community growth and engagement and the user experience over short-term financial results;maintaining and enhancing our brand and reputation;our ongoing privacy,safety,security,and content review efforts;competition;risks associated with government actions that could restrict access to our products or impair our ability to sell advertising in certain countries;litigation and government inquiries;privacy,legislative,and regulatory concerns or developments;risks associated with acquisitions;security breaches;our ability to manage our scale and geographically-dispersed operations;and market conditions or other factors affecting the payment of dividends.These and other potential risks and uncertainties that could cause actual results to differ from the results predicted are more fully detailed under the caption Risk Factors in our Annual Report on Form 10-K filed with the SEC on February 2,2024,which is available on our Investor Relations website at and on the SEC website at www.sec.gov.Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended March 31,2024.In addition,please note that the date of this press release is April 24,2024,and any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of this date.We undertake no obligation to update these statements as a result of new information or future events.For a discussion of limitations in the measurement of certain of our community metrics,see the section entitled Limitations of Key Metrics and Other Data in our most recent quarterly or annual report filed with the SEC.Non-GAAP Financial Measures To supplement our condensed consolidated financial statements,which are prepared and presented in accordance with generally accepted accounting principles in the United States(GAAP),we use the following non-GAAP financial measures:revenue excluding foreign exchange effect,advertising revenue excluding foreign exchange effect,and free cash flow.The presentation of these financial measures is not intended to be considered in isolation or as a substitute for,or superior to,financial information prepared and presented in accordance with GAAP.Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool.In addition,these measures may be different from non-GAAP financial measures used by other companies,limiting their usefulness for comparison purposes.We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures.We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business,enable comparison of financial results between periods where certain items may vary independent of business performance,and allow for greater transparency with respect to key metrics used by management in operating our business.Our non-GAAP financial measures are adjusted for the following items:Foreign exchange effect on revenue.We translated revenue for the three months ended March 31,2024 using the prior years monthly exchange rates for our settlement or billing currencies other than the U.S.dollar,which we believe is a useful metric that facilitates comparison to our historical performance.Purchases of property and equipment;Principal payments on finance leases.We subtract both purchases of property and equipment,net of proceeds and principal payments on finance leases in our calculation of free cash flow because we believe that these two items collectively represent the amount of property and equipment we need to procure to support our business,regardless of whether we procure such property or equipment with a finance lease.We believe that this methodology can provide useful supplemental information to help investors better understand underlying trends in our business.Free cash flow is not intended to represent our residual cash flow available for discretionary expenditures.For more information on our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures,please see the Reconciliation of GAAP to Non-GAAP Results table in this press release.4META PLATFORMS,INC.CONDENSED CONSOLIDATED STATEMENTS OF INCOME(In millions,except per share amounts)(Unaudited)Three Months Ended March 31,20242023Revenue$36,455$28,645 Costs and expenses:Cost of revenue 6,640 6,108 Research and development 9,978 9,381 Marketing and sales 2,564 3,044 General and administrative 3,455 2,885 Total costs and expenses 22,637 21,418 Income from operations 13,818 7,227 Interest and other income,net 365 80 Income before provision for income taxes 14,183 7,307 Provision for income taxes 1,814 1,598 Net income$12,369$5,709 Earnings per share:Basic$4.86$2.21 Diluted$4.71$2.20 Weighted-average shares used to compute earnings per share:Basic 2,545 2,587 Diluted 2,625 2,596 5META PLATFORMS,INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In millions)(Unaudited)March 31,2024December 31,2023AssetsCurrent assets:Cash and cash equivalents$32,307$41,862 Marketable securities 25,813 23,541 Accounts receivable,net 13,430 16,169 Prepaid expenses and other current assets 3,780 3,793 Total current assets 75,330 85,365 Non-marketable equity securities 6,218 6,141 Property and equipment,net 98,908 96,587 Operating lease right-of-use assets 13,555 13,294 Goodwill 20,654 20,654 Other assets 8,179 7,582 Total assets$222,844$229,623 Liabilities and stockholders equityCurrent liabilities:Accounts payable$3,785$4,849 Operating lease liabilities,current 1,676 1,623 Accrued expenses and other current liabilities 22,640 25,488 Total current liabilities 28,101 31,960 Operating lease liabilities,non-current 17,570 17,226 Long-term debt 18,387 18,385 Long-term income taxes 7,795 7,514 Other liabilities 1,462 1,370 Total liabilities 73,315 76,455 Commitments and contingenciesStockholders equity:Common stock and additional paid-in capital 75,391 73,253 Accumulated other comprehensive loss(2,655)(2,155)Retained earnings 76,793 82,070 Total stockholders equity 149,529 153,168 Total liabilities and stockholders equity$222,844$229,623 6META PLATFORMS,INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In millions)(Unaudited)Three Months Ended March 31,20242023Cash flows from operating activitiesNet income$12,369$5,709 Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization 3,374 2,524 Share-based compensation 3,562 3,051 Deferred income taxes(456)(620)Impairment charges for facilities consolidation,net 240 770 Other(66)(7)Changes in assets and liabilities:Accounts receivable 2,520 2,546 Prepaid expenses and other current assets 100 821 Other assets(94)30 Accounts payable(1,112)(1,104)Accrued expenses and other current liabilities(1,274)94 Other liabilities 83 184 Net cash provided by operating activities 19,246 13,998 Cash flows from investing activitiesPurchases of property and equipment,net(6,400)(6,823)Purchases of marketable debt securities(6,887)(85)Sales and maturities of marketable debt securities 4,625 534 Acquisitions of businesses and intangible assets(72)(444)Other investing activities 75 Net cash used in investing activities(8,734)(6,743)Cash flows from financing activitiesTaxes paid related to net share settlement of equity awards(3,162)(1,009)Repurchases of Class A common stock(15,008)(9,365)Dividends payments(1,273)Principal payments on finance leases(315)(264)Other financing activities(9)122 Net cash used in financing activities(19,767)(10,516)Effect of exchange rate changes on cash,cash equivalents,and restricted cash(288)85 Net decrease in cash,cash equivalents,and restricted cash(9,543)(3,176)Cash,cash equivalents,and restricted cash at beginning of the period 42,827 15,596 Cash,cash equivalents,and restricted cash at end of the period$33,284$12,420 Reconciliation of cash,cash equivalents,and restricted cash to the condensed consolidated balance sheetsCash and cash equivalents$32,307$11,551 Restricted cash,included in prepaid expenses and other current assets 84 224 Restricted cash,included in other assets 893 645 Total cash,cash equivalents,and restricted cash$33,284$12,420 7META PLATFORMS,INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In millions)(Unaudited)Three Months Ended March 31,20242023Supplemental cash flow dataCash paid for income taxes,net$630$405 Cash paid for interest,net of amounts capitalized$121$182 Non-cash investing and financing activities:Property and equipment in accounts payable and accrued expenses and other current liabilities$4,217$4,466 Acquisition of businesses in accrued expenses and other current liabilities and other liabilities$116$263 8Segment ResultsWe report our financial results for our two reportable segments:Family of Apps(FoA)and Reality Labs(RL).FoA includes Facebook,Instagram,Messenger,WhatsApp,and other services.RL includes our virtual,augmented,and mixed reality related consumer hardware,software,and content.The following table presents our segment information of revenue and income(loss)from operations:Segment Information(In millions)(Unaudited)Three Months Ended March 31,20242023Revenue:Advertising$35,635$28,101 Other revenue 380 205 Family of Apps 36,015 28,306 Reality Labs 440 339 Total revenue$36,455$28,645 Income(loss)from operations:Family of Apps$17,664$11,219 Reality Labs(3,846)(3,992)Total income from operations$13,818$7,227 9Reconciliation of GAAP to Non-GAAP Results(In millions,except percentages)(Unaudited)Three Months Ended March 31,20242023GAAP revenue$36,455$28,645 Foreign exchange effect on 2024 revenue using 2023 rates(106)Revenue excluding foreign exchange effect$36,349 GAAP revenue year-over-year change%Revenue excluding foreign exchange effect year-over-year change%GAAP advertising revenue$35,635$28,101 Foreign exchange effect on 2024 advertising revenue using 2023 rates(105)Advertising revenue excluding foreign exchange effect$35,530 GAAP advertising revenue year-over-year changevertising revenue excluding foreign exchange effect year-over-year change&%Net cash provided by operating activities$19,246$13,998 Purchases of property and equipment,net(6,400)(6,823)Principal payments on finance leases(315)(264)Free cash flow$12,531$6,911 10
2024-08-06
10页
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Apr 25,2024Hyundai Motor Company Hyundai Motor Company Q1 2024 Business ResultsQ1 2024 Business Results1Cautionary Statement with Respect to ForwardCautionary Statement with Respect to Forward-Looking StatementsLooking StatementsIn the presentation that follows and in related comments by Hyundai Motors management,our use of thewords“expect,”“anticipate,”“project,”“estimate,”“forecast,”“objective,”“plan,”“goal,”“outlook,”“target,”“pursue”and similar expressions is intendedto identify forward looking statements.The financial data discussed herein are presented on a preliminary basis before the audit from ourIndependent Auditor;final data will be included in HMCs Independent auditors report.While thesestatements represent our current judgment on what the future may hold,and we believe these judgmentsare reasonable,actual results may differ materially due to numerous important factors.Such factorsinclude,among others,the following:changes in economic conditions,currency exchange rates orpolitical stability;shortages of fuel,labor strikes or work stoppages;market acceptance of thecorporations new products;significant changes in the competitive environment;changes in laws,regulations and tax rates;and the ability of the corporation to achieve reductions in cost and employmentlevels to realize production efficiencies and implement capital expenditures at levels and times planned bymanagement.We do not intend or assume any obligation to update any forward-looking statement,which speaks onlyas of the date on which it is made.P.3 5P.6 9AppendixP.10 14 Table of ContentsSales SummaryFinancial SummarySales SummaryGlobal Wholesale/Retail SalesP.4Sales AnalysisP.54Global Wholesale/Retail Sales1 US and Europe are based on retail sales,China ex-Factory,India Wholesale 2 AMEA,Asia-Pacific,Other regions,CV(ex.Korea,China CV)3Europe excluding CV4Wholesales including CV155155157157152152153153 1.8% 0.76048486161525219.9.3119116016019119116016016.3.3C137912.0%3,5923,7604.7%3,9564,1905.9%4,5004,6984.4%1,0251,14311.5,91019,4362.8% 2.0% 11.1%82582872872362362412411,022 1,022 1,007 1,007 987 987 947 947 4.0%1.5%0.3%3.42 959 926 895 1401381321321201201311311231236.6%8.6e656363636363630.2%3.29149161161140140145145 8.1% 3.31210101212101017.9.1%Wholesale Retail salesWholesale Retail sales(ex.China)ChinaEuropeKoreaN.AmericaIndiaRussiaS.AmericaOthers2KoreaUSChinaIndiaGlobalEurope3Global Demand1(Thousand units)HMC Global Sales4Q1 2023Q1 2024YoY(Thousand units)Q1 2023 WholesaleQ1 2024 WholesaleQ1 2023Retail SalesQ1 2024 Retail Sales34.6%6.2.1%6.0P.6%6.7T.7%6.3EVPHEVHEVEV34.6.1%5.1%6.3%5Sales AnalysisSales of Eco-Friendly VehiclesSales by Segment(Thousand units)(Thousand units)Based on wholesale Portion compared to total sales Based on wholesale GV60,GV70,GV80 are included in Genesis,when included in SUV,the portion is 60.6CDGenesisSUVOthers5.9%5.9%5.4%5.4S.2S.2W.2W.2%5.1%5.1%5.6%5.6%6.7%6.7%4.7%4.7.3.3.0.0%9.5%9.5%9.3%9.3%7.3%7.3%6.8%6.8%1Q 20231Q 20246.5%6.5%4.5%4.5%8.2%8.2%9.7%9.7%0.9%0.9%0.9%0.9%0.2%0.2%0.1%0.1%1Q 20231Q 2024 Others include commercial vehicles/each segment includes CKD volumesFinancial SummaryFinancial SummaryP.7Revenue&Operating Income AnalysisP.8Status of IncomeP.9Q1 2023Q1 2023Q4 2023Q4 2023Q1 2024Q1 2024YoYQoQRevenueRevenue37,770 37,770 41,669 41,669 40,659 40,659 7.6%2.4%Automotive30,638 33,462 31,718 3.5%5.2%Finance5,089 5,662 6,656 30.8.6%Others2,043 2,545 2,285 11.8.2%SG&A4,129 4,944 4,870 18.0%1.5%Operating IncomeOperating Income3,642 3,642 3,408 3,408 3,557 3,557 2.3%4.4%Automotive2,898 3,115 2,999 3.5%3.7%Finance368 209 425 15.43.4%Others171 228 232 36.1%1.9justment205 144 99 148.31.1%Income before Tax4,647 3,258 4,727 1.7E.1%NetNet IncomeIncome3,419 3,419 2,203 2,203 3,376 3,376 1.3S.3%7(Billion KRW)Financial Summary8Revenue&Operating Income Analysis1Q 20231Q 20231Q 20241Q 202437,77037,77040,65940,659VolumeMixFXOthers 2,889 2,889( 7.6%) 1,809 942231 3691Q 20231Q 20231Q 20241Q 20243,6423,6423,5573,557VolumeFinanceOthers8585(2.3%)Mix 57OPM(9.6%)OPMOPM(8.7%)(8.7%)21322FX 25150 Mix and incentive effectRevenue(Billion KRW)Operating Income9Status of IncomeCOGS RatioSG&ANon-operating IncomeNet Income1 Commission Fees,depreciation,etc.SalaryMarketingResearchOthers1WarrantiesNon-controllingControllingFinanceEquityIncomeOthers24.1Q23.1Q756 879 165 208 84 8323.1Q24.1Q 164( 16.5%)1,151 1,244 456 479 511 983 1,116 1,146 895 1,018 23.1Q24.1Q4,8704,8704,129 741( 17.9%)3,3123,23110814523.1Q24.1Q44(1.3%)3,3763,3763,42079.4y.3y.3%(Billion KRW)1,1701,1701,005Statement of IncomeP.12Statement of Financial PositionP.13AppendixSales by RegionP.11Statement of Cash FlowsP.14HEVPHEVFCEVEV11Sales by RegionUSKoreaOthersEurope(Thousand units)PVSUVCVSales by typeSales of Eco-Friendly Vehicles Based on wholesale/Portion compared to total sales by region Others:N.America(ex.US),China,India,Russia,S.America,Other regions9.0%4.4.7!.0%1.0%0.4%1Q 20231Q 20244141473.2%8.4%8.0%6.6%5.5.4.9%0.8%1.0%0.03%0.01%1Q 20231Q 20244141393.2%8.4%8.0.9.7.2.7%4.6%4.1%0.01%0.004%1Q 20231Q 20244848553.2%8.4%8.0%2.2%2.0%2.1%2.4%0.1%0.3%0.003%0.003%1Q 20231Q 20242323201Q 20231Q 20241Q 20231Q 20241Q 20231Q 202440.17.2).1I.7016019124.9u.1$.7u.3$024021936.5a.99.6X.3715715522.7!.2%1Q 20231Q 202444.0R.98.7W.5D94494573.1%3.8%1.6%2.1%(Billion KRW)Q1 2023Q1 2023Q4 2023Q4 2023Q1 2024Q1 2024YoYYoYQoQQoQRevenueRevenue37,77037,77041,66941,66940,65940,6597.6%2.4%Cost of Good SoldCost of Good Sold29,99929,99933,31733,31732,23132,2317.4%3.3%GrossGross ProfitProfit7,7717,7718,3528,3528,4288,4288.4%0.9%Margin(%)20.6 .0 .7%SG&ASG&A4,1294,1294,9444,9444,8704,87018.0%1.5%Portion(%)10.9.9.0%OperatingOperating IncomeIncome3,6423,6423,4083,4083,5573,5572.3%4.4%Margin(%)9.6%8.2%8.7%IncomeIncome before Taxbefore Tax4,6474,6473,2583,2584,7274,7271.7E.1%Margin(%)12.3%7.8.6%TaxTax1,2271,2271,0551,0551,3511,351NetNet IncomeIncome3,4193,4192,2032,2033,3763,3761.3S.3%Margin(%)9.1%5.3%8.3%D&AD&A1 11,3261,3261,3011,3011,2811,281EBITDAEBITDA4,9684,9684,7094,7094,8394,83912Statement of Income1Including lease amortization under IFRS 16(Billion KRW)4Q 20234Q 2023Q1 2024Q1 2024Diff.Diff.%changechange AssetAsset282,463282,463295,934295,93413,4714.8%Current Asset(a)101,725106,0844,3594.3%LiabilitiesLiabilities(b)(b)180,654180,654191,027191,02710,3735.7%Current Liability(c)73,36272,3919711.3bt(d)124,748131,8827,1345.7%Provision(g)11,65111,9753242.8%EquityEquity(e)(e)101,809101,809104,906104,9063,0973.0pital Stock1,4891,489-Capital Surplus4,3784,37530.1%Retained Earnings88,66689,3767100.8%Current Ratio(a/c)138.76.5%Liability to Equity(b/e)177.42.1bt to Equity(d/e)122.55.7Statement of Financial Position(Billion KRW)Q1 2023Q1 2023Q2 2023Q2 2023Q3 2023Q3 2023Q4 2023Q4 2023Q1 2024Q1 2024BeginningBeginning20,86520,86522,36922,36920,778 20,778 20,31320,31319,16719,167Net Income3,419 3,347 3,304 2,2033,376 Depreciation803 823 817 841 819 Amortization448 416 409 390 384 Acquisition of Tangible1,478 1,497 1,4522,6441,857 Acquisition of Intangible301 302 561617379 Dividends paid0 1,712 3943930 Others1,387 2,666 2,5889261,841 EndingEnding22,36922,36920,77820,77820,313 20,313 19,167 19,167 19,66919,66914Statement of Cash FlowsThank youQ&A
2024-08-06
17页
5星级
FY2024 1QAEON CO.,LTDJuly 12,2024Presentation MaterialsCopyright 2024 AEON CO.,LTD.All Rights Reserved.Consolidated Results11Q ResultsFY2024 1QFY2023 1QYoY%ChangeOperating revenue2,449.22,324.7 5.4% 124.4Operating profit47.751.4-7.1%-3.6Ordinary profit45.348.1-5.7%-2.7Profit attributable to owners of the parent company5.117.7-71.1%-12.6Continuous increases in operating revenue have reached a record high.Operating revenue and quarterly net income attributable to parent company shareholders were generally in line with expectations.Consolidated Results(Billion yen)Copyright 2024 AEON CO.,LTD.All Rights Reserved.Consolidated Results2Operating revenue increased for the fourth consecutive Q1 in each fiscal year,breaking records.Operating profit and ordinary profit were at the second highest level after the previous year,which was the highest ever.Operating revenue(Billion yen)Operating profit/loss(Billion yen)Profit/loss attributable to owners of the parent company(Billion yen)Ordinary profit/loss(Billion yen)2,116.3 2,076.2 2,153.2 2,203.2 2,324.7 2,449.2 1,8001,9002,0002,1002,2002,3002,4002,50019.1Q20.1Q21.1Q22.1Q23.1Q24.1Q27.7-12.539.143.851.447.7-20020406019.1Q20.1Q21.1Q22.1Q23.1Q24.1Q24.2-16.0 40.3 44.3 48.1 45.3-30030609019.1Q20.1Q21.1Q22.1Q23.1Q24.1Q-4.3-53.9 5.0 19.3 17.7 5.1-60-40-200204019.1Q20.1Q21.1Q22.1Q23.1Q24.1QCopyright 2024 AEON CO.,LTD.All Rights Reserved.Results by Segment3Operating revenue:Year-on-year increase in all segments other than the Services&Specialty Store BusinessOperating profit:Year-on-year increase in the Financial Service,Shopping Center Development,International,Services&Specialty Store,and Discount Store BusinessesOperating revenueOperating profitAmountYoYAmountYoYSegmentGeneral Merchandising Store(GMS)853.9 1.5%-3.4-4.6Supermarket(SM)731.7 10.1%3.6-2.6Discount Store(DS)100.4 0.9%1.9 0.2Health&Wellness317.96.1%5.3-1.8Financial Services127.19.8.9 5.4Shopping Center Development121.84.3.7 1.7Services&Specialty Store179.9-0.3%5.9 0.4International142.2 7.6%3.9 0.7Others15.2 16.6%-2.4-0.4Adjustment amount-141.5-2.1-2.8Consolidated total2,449.2 5.4G.7-3.6Results by Segment(Billion yen)Results by Segment(1Q)Copyright 2024 AEON CO.,LTD.All Rights Reserved.5*1 Prior year results were adjusted for reportable segment transfers*2 AR:AEON Retail(separate),AK:AEON KYUSHU(cons.),AH:AEON Hokkaido(separate),AT:AEON Tohoku(separate),CAN:CANDO(cons,.,segment changed),Sun:SUNDAY(cons.)*3 GMS major 14 companies includedGeneral Merchandising Store(GMS)BusinessSegment operating profit/loss*（Billion）Operating profit/loss /-*（Figures by company）（Billion yen）Same-store sales,YoY*（）Operating profit/loss /-factors（Billion）Amid sluggish consumption and a growing frugal mindset due to continued inflation and negative real wages,existing stores exceeded their targets from sales promotion efforts.A significant decrease in profits due to the disappearance of revenge spending after“COVID-19”and the use of points granted by the government to recipients of the My Number Card.Prompting strengthened product and pricing strategies in the second quarter-10-5 0 5 10MarAprMayJunApparelFoodHome FurnishingH&BCTotal-5.4-31.9-7.20.11.1-3.4-35.0-30.0-25.0-20.0-15.0-10.0-5.00.05.019.1Q 20.1Q 21.1Q 22.1Q 23.1Q 24.1QCopyright 2024 AEON CO.,LTD.All Rights Reserved.GMS Business,AEON Retail6Focusing on price strategy to secure market shareStill room for improvement in the gross profit mix due to a backlash from pent-up demand after COVID-19,despite increased sales promotion efforts.Continuous profit structure reforms and productivity improvements through the use of AI tools Operating profit/loss（Billion yen）Operating loss /-factorsSame-store sales YoY Progress in MTP and structural reforms,Impact of cost increase-4.6-28.4-8.0 0.2-1.8-3.2-40.0-30.0-20.0-10.00.010.019.1Q20.1Q21.1Q22.1Q23.1Q24.1Q-10.0-5.0 0.0 5.0 10.0 15.0MarAprMayJunApparelFoodHome FurnishingH&BCTotalTOPVALU sales YoY103.4%Man-hour productivity YoY102.2%Inventory*Change from previous Year-End124.4 bn 1.5 bnWage increase YoY 2.2 bn*Tenant rent revenue YoY 0.1 bnUtility cost increase YoY-2.5 bnSales in EC channel YoY107.6%Online supermarketWarehouse robotics100 storesRegi Go(Full self-checkout)218 storesAI workMaI board*326 storesAI order*337 storesAI kakaku(AI price)Delicatessen 347storesDaily 323 storesAmong 369 stores in AEON Retails at the end of May 2024*1 Including the impact of transferring to the TOPVALU Collection*2 Daily 11 categories,Delicatessen 2 categories *3 Including the impact of the minimum wage revision*4 A tool for sharing information via digital signage（Billion yen）（%）Copyright 2024 AEON CO.,LTD.All Rights Reserved.7*1 FY2019 and FY2020 results were adjusted for transfers between reportable segments*2 Results of FUJI,U.S.M.H,MAXVALU Tokai,MINISTOP,and Inageya are consolidated results in each group.Data of Inageya,Daiei,and My Basket are non-consolidated results.*3 Figures of Inageya indicate the consolidated amount to AEON from Jan.to Mar.2024*4 SM major 13 companies includedSupermarket(SM)BusinessOperating profit /-（Figures by companies）*（Billion yen）Same-store sales in major companies YoY*（）Operating profit /-factors（Billion yen）Profit increased in Maxvalu Tokai,My Basket,and the newly consolidated Inageya also contributed.Offsetting the impact of cost increases by boosting sales and gross profit margins through the expansion of TOPVALU and regional PB,and enhancing productivity through DX initiatives.-1.115.55.23.36.23.6-2.00.02.04.06.08.010.012.014.016.018.019.1Q 20.1Q 21.1Q 22.1Q 23.1Q 24.1QSegment operating profit/loss*（Billion）-4.0-2.0 0.0 2.0 4.0 6.0MarAprMayJunSalesNo.of customersNo.of items purchased per customerAvg.unit price0.0Copyright 2024 AEON CO.,LTD.All Rights Reserved.8Discount Store BusinessOperating profit /-（Figures by company）（Billion）Operating profit /-factors（Billion）Increased revenue and profits through the establishment of a dedicated PB and DS format with low-cost operations.The PMI of the new AEON Big is progressing smoothly,and the company aims to open double-digit numbers of stores from 2025 onwards while strengthening its structure.-0.61.60.40.0 1.61.9-1.0-0.50.00.51.01.52.02.519.1Q 20.1Q 21.1Q 22.1Q 23.1Q 24.1Q0.0Same-store sales YoY（）Segment operating profit/loss（Billion）0.0-10.0-5.0 0.0 5.0 10.0MarAprMayJunSalesNo.of customersNo.of items purchased per customerAvg.unit priceCopyright 2024 AEON CO.,LTD.All Rights Reserved.9Health&Wellness BusinessSame-store sales of WELCIA HD,monthly transition and YoY by category（%）Revenue increased due to the expansion of PB and store dispensing prescription drugs,as well as increased purchases from visitors to JapanA new loyalty program was introduced;The number of stores ceasing cigarette sales reached 1,000TSURUHA,WELCIA,and AEON share the Ideal Image of the drugstore alliance,and discussions on integration are progressing.7.5 9.9 7.0 7.4 7.1 5.3 0.02.04.06.08.010.012.019.1Q 20.1Q 21.1Q 22.1Q 23.1Q 24.1QCategoryYoYOTC products97.6Cosmetics103.0Household goods103.4Food products104.1Others92.6Total sales of products101.1Dispensing106.8Subtotal102.2Segment operating profit（Billion yen）Operating profit /-factors（Billion yen） 0.0 2.0 4.0 6.0MarAprMayJunFY24FY23FY22Copyright 2024 AEON CO.,LTD.All Rights Reserved.10Financial Services BusinessDomestic:Revenue increased due to higher card and financial revenue,while profits rose despite increased bad debt-related expenses,thanks to controlled promotional expenses.Overseas:Although the speed of recovery varied by area,the Malay region rebounded strongly,driving overseas operating income.16.5-0.6 22.0 15.5 9.4 14.9-5.00.05.010.015.020.025.019.1Q 20.1Q 21.1Q 22.1Q 23.1Q 24.1QTransaction volumes and balance of operating receivables*（Billion yen）Operating profit in Japan and global（Figures by area）*AEON Financial Service Co.,Ltd.:Results by area*（Billion yen）0JapanYoYChinaYoYMekongYoYMalayYoYOperating profit1Q6.3753%1.991%2.596%4.2128d debt related expenses1Q6.0130%2.3196%8.8104%5.9113%TransactionvolumesYoYBalance of operating receivablesIncrease in 1QJapanShopping1,849.81051,384.180.0Cash advance transaction102.7102427.114.8GlobalShopping126.0127154.63.4Cash advance transaction46.4132147.63.0*1 Prior year results were adjusted for reportable segment transfers.*2 AFS stands for AEON Financial Service Co.,Ltd.AFS China:China,Hong Kong,AFS Mekong:Vietnam,Thailand,Cambodia,Laos,Myanmar,AFS Malay:Malaysia,Indonesia,Philippines,India*3 Changes in AFS Japans operating profit and year-on-year comparisons are calculated based on figures that have been retrospectively adjusted from the previous years results.*4 The balance of operating receivables is the value before liquidation（Billion yen）Segment operating profit/loss*（Billion）Copyright 2024 AEON CO.,LTD.All Rights Reserved.11*1 AMJ refers to AEON Malls operating segment in Japan,while AMC represents the same segment in China.Similarly,AMA denotes the equivalent segment in ASEAN.*2 Number of visitors to existing mallsShopping Center Development BusinessSegment operating profit（Billion yen）Operating profit /-YoY*(Figures by company)（Billion）AEON Mall achieved record highs in operating revenue and operating profit.Domestic:Operating profit increased due to growth in sales-based payment on the increase in specialty store revenues,and reduced electricity costs due to a switch to market-price-linked pricing,etc.Overseas:Operating profit reached a record high due to increased profits in Vietnam,driven by specialty store sales growth,and in Indonesia,where the reduction of vacant floor space progressed.Specialty store sales15.6 2.8 10.8 13.0 14.0 15.7 0.02.04.06.08.010.012.014.016.018.019.1Q 20.1Q 21.1Q 22.1Q 23.1Q 24.1QExisting malls by area(%)YoYJapan103.1China106.7Vietnam108.8Cambodia100.6Indonesia*114.9Existing malls in Japan by business category(%)YoYLarge-scale specialty stores106.0Apparel99.7Accessories103.7Miscellaneous goods104.2Dining105.0Amusement94.9Services107.2Total102.60.0Copyright 2024 AEON CO.,LTD.All Rights Reserved.12*1 FY2019 results exclude the impact of Kajitaku.*2 AD:AEON DELIGHT(cons.),AE:AEON ENTERTAINMENT(separate),AF:AEON Fantasy(cons.).Figures of GFOOT and COX are consolidated in each group.*3 Services include major 4 companies and Specialty stores includes major 7 companiesServices&Specialty Store BusinessOperating profit /-*by company（Billion yen）Operating profit /-factors（Billion yen）AEON Fantasy experienced increased revenue and profits driven by higher sales at the new business model in Japan and the impact of new strategic small-format stores.COX achieved increased profits by lowering the cost of sales and absorbing the growth in SG&A expenses through an improvement in the gross profit margin.AEON ENTERTAINMENT saw a reactionary effect from the record-breaking sales of the previous years blockbuster movie release in the first quarter and profit decreased.Same-store sales of major subsidiaries,YoY*（）6.8-11.9-1.12.85.45.9-15.0-10.0-5.00.05.010.019.1Q 20.1Q 21.1Q 22.1Q 23.1Q 24.1Q-30.0-20.0-10.0 0.0 10.0 20.0 30.0MarAprMayJunServicesSpecialty storeSegment operating profit/loss*（Billion）0.00.0Copyright 2024 AEON CO.,LTD.All Rights Reserved.13*1 China:Business in China,AM:AEON CO.(M),AV:AEON VIETNAM,AC:AEON(CAMBODIA),AI:AEON INDONESIA,Other ASEAN:Other 4 companies in ASEAN *2 ASEAN:AEON CO.(M),AEON BIG(M),AEON(Thailand),AEON VIETNAM;China:AEON STORES(HONG KONG),AEON EAST CHINA(SUZHOU),青島永旺東泰商業,GUANGDONG AEON TEEM,永旺商業,AEON SOUTH CHINA,AEON(HUBEI),*3 Operating Gross Profit *4 Operating ProfitInternational BusinessOperating profit /-by company*（Billion yen）Operating profit /-factors（Billion yen）ASEAN:AEON Malaysia increased revenue and profits through improved profitability and stringent cost management.China：Despite sluggish results in Hong Kong,profit increased,or losses decreased in Guangdong,South China,Qingdao,Beijing,and Hubei.The Wuhan Jiangxia Branch in Hubei performed well.Same store sales YoY*（）1.61.42.12.83.23.90.00.51.01.52.02.53.03.54.04.519.1Q 20.1Q 21.1Q 22.1Q 23.1Q 24.1Q-40-20 0 20 40JanFebMarAprMayJunASEANChinaSegment operating profit（Billion yen）0.0Forecast for FY2024Copyright 2024 AEON CO.,LTD.All Rights Reserved.Same-store sales YoYBusinessGeneral Merchandising Store(GMS) 6.2Supermarket(SM) 2.5Discount Store(DS) 6.1Health&Wellness 3.1Shopping Center Development 12.5Services-2.8Specialty Store 13.9China-15.0ASEAN 6.1Recent Developments15Same-store sales in June remarkably increased year-on-year.Strengthening group-wide measures to recover the top line.Same-store sales YoY in JulyExamples of Group InitiativesThe figures for each business are based on the performance of major companies.General Merchandising Store:14 companies,Supermarket:13 companies,Discount Stores:3 companies,Health&Wellness:3 companiesServices:4 companies,Service&Specialty Stores:7 companies,Shopping Center Development:AEON Mall,AEON Retail,AEON Tohoku DV,China:7 companies,ASEAN:4 companiesGroup initiatives in Q2 and onwardsNext Generation Delicatessen Process Center“Craft Delica Funabashi”Copyright 2024 AEON CO.,LTD.All Rights Reserved.Assumptions and 1Q results of increase in electricity cost and wage 16YoY impact on consolidated FY2024 financial results compared to FY2023*FY2024 1Q resultsElectricity cost increaseImpact on utility cost 10.0 bn YoYImpact on utility cost-7.1 bn YoYThe 2024 problem in logisticsImpact on Group logistics cost 4.0 bn YoYImpact on Group logistics cost 0.9 bn YoYWage increaseImpact on labor cost 65.0 bn YoYNormal increase 15.0 bn yen Strategical increase 50.0 bn yenImpact on labor cost 12.5 bn YoY*The financial forecast includes the estimated impact amounts and the anticipated effects of the measures taken.Copyright 2024 AEON CO.,LTD.All Rights Reserved.FY2024 Forecast17FY2024FY2023ForecastYoYChange1Q ResultsResultsOperating revenue10,000.0 4.7 446.42,449.29,553.5Operating profit270.0 7.6 19.147.7250.8Ordinary profit260.0 9.5 22.545.3237.4Profit attributable to owners of the parent 46.0 2.9% 1.35.144.6No change to the initial forecast.First quarter results were generally in line with expectations.（Billion yen)Copyright 2024 AEON CO.,LTD.All Rights Reserved.1Consolidated Balance Sheet at the End of May 2024Feb.2024May 2024Change from Feb.2023Cash&deposits1,165.5866.7-298.7Notes and accounts receivabletrade(incl.installmentreceivables)1,957.41,838.1-119.3Inventories625.2651.7 26.4Operating loans and loans&bills discounted for banking business3,222.83,566.6 343.7Property,Plant and equipment3,414.93,475.5 60.5Investments and other assets 1,105.71,173.4 67.7Total assets excl.financialsubsidiaries12,940.86,400.613,087.46,540.9 146.5 140.3Feb.2024May 2024Change from Feb.2023Notes and accounts payable1,073.11,123.9 50.7Interest-bearing debt(excl.financial subsidiaries)2,402.7 2,466.7 64.0Interest-bearing debt(finance subsidiaries)1,312.9 1,308.4-4.4 Deposits for banking business 4,533.24,563.5 30.2Total liabilities excl.financialsubsidiaries10,853.54,779.011,010.34,931.8 156.6 152.8Shareholders equity913.3904.7-8.6Total net assets excl.financialsubsidiaries2,087.21,621.52,077.11,609.0-10.0-12.4Total net assets andliabilitiesexcl.financialsubsidiaries12,940.86,400.613,087.46,540.9 146.5 140.3Assets(main items only)Liabilities and net assets(main items only)(Billion yen)(Billion yen)ReferenceCopyright 2024 AEON CO.,LTD.All Rights Reserved.Dividends2FY2024FY2025（Forecast）End of the second quarterOrdinarydividend18 yenOrdinarydividend18 yenCommemorative dividend 2 yenFiscal year-endOrdinarydividend18 yenOrdinarydividend 18 yenCommemorative dividend 2 yenTotalOrdinarydividend36yenOrdinarydividend36yenCommemorative dividend 4 yenCommemorative dividend for the 50th anniversary of the Companys listing will be paid.Forecasting dividend of 40 yen per year,ordinary dividend of 36 yen and commemorative dividend of 4 yen.ReferenceCopyright 2024 AEON CO.,LTD.All Rights Reserved.FY2024 1Q Results of Daiei and ex-Daiei GMS3BusinessSegmentCompany NameOperating revenueOperating profitResultYoY%ResultYoY changeGMSAEON Retail store*Former DaieiGMS in Kanto,Kinki,and Nagoya region23.3-6.0-0.6 0.2SMDaiei75.7 3.1-0.4-0.0(Billion yen,%）ReferenceDisclaimer regarding Forecast StatementThese materials are intended to provide information,not to encourage any specificactions.The company has prepared these materials(including business plans)based on available information believed to be reliable,but there are risks anduncertainties.The company bears no liability for the accuracy or completeness of theinformation.Please use these materials at your discretion.The company bears no liability for anyloss or harm that may arise from investment decisions made based on any of theprojections or targets contained in these materials.All rights of authorship of these materials revert to AEON CO.,LTD.These materialsmay not be reproduced or distributed without the permission of the company
2024-08-06
23页
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Jul 25,2024Hyundai Motor Company Hyundai Motor Company Q2 2024 Business ResultsQ2 2024 Business Results1Cautionary Statement with Respect to ForwardCautionary Statement with Respect to Forward-Looking StatementsLooking StatementsIn the presentation that follows and in related comments by Hyundai Motors management,our use of thewords“expect,”“anticipate,”“project,”“estimate,”“forecast,”“objective,”“plan,”“goal,”“outlook,”“target,”“pursue”and similar expressions is intendedto identify forward looking statements.The financial data discussed herein are presented on a preliminary basis before the audit from ourIndependent Auditor;final data will be included in HMCs Independent auditors report.While thesestatements represent our current judgment on what the future may hold,and we believe these judgmentsare reasonable,actual results may differ materially due to numerous important factors.Such factorsinclude,among others,the following:changes in economic conditions,currency exchange rates orpolitical stability;shortages of fuel,labor strikes or work stoppages;market acceptance of thecorporations new products;significant changes in the competitive environment;changes in laws,regulations and tax rates;and the ability of the corporation to achieve reductions in cost and employmentlevels to realize production efficiencies and implement capital expenditures at levels and times planned bymanagement.We do not intend or assume any obligation to update any forward-looking statement,which speaks onlyas of the date on which it is made.P.3 5P.6 9AppendixP.10 14 Table of ContentsSales SummaryFinancial SummarySales SummaryGlobal Wholesale/Retail SalesP.4Sales AnalysisP.54Global Wholesale/Retail Sales1 US,Europe,Korea are based on retail sales,China ex-Factory,India Wholesale 2 Europe excluding CV3Based on China Passenger Car Association4AMEA,Asia-Pacific,Other regions,CV(ex.Korea,China CV)5Wholesales including CV4664229%4,1234,129 0%4,1864,2953%5,3545,2302%1,0021,0343 ,39820,5491%Wholesale Retail salesWholesale Retail sales(ex.China)ChinaEuropeKoreaN.AmericaIndiaRussiaS.AmericaOthers4KoreaUSChina3IndiaGlobalEurope2Global Demand1(Thousand units)HMC Global Sales5Q2 2023Q2 2024YoY(Thousand units)Q2 2023 WholesaleQ2 2024 WholesaleQ2 2023Retail SalesQ2 2024 Retail Sales1661661571571641641631635.1%0.96035356464434341.42.0 62061862062061861869.6%9.6% 5.2% 15.2&92693103102712712852851401381281291361248.8% 0.6i69797966667777 16.1% 15.89149150150144144146146 0.7% 0.81411111414101019.9(.6%1,060 1,060 1,057 1,057 1,065 1,065 1,034 1,034 3.0%0.2% 2.2%1.1%1,000 1,022 1,002 990 34.6%6.2.1%6.0P.6%6.7T.7%6.3EVPHEVHEVEV34.6.1%5.1%6.3%5Sales AnalysisSales of Eco-Friendly VehiclesSales by Segment Based on wholesale Portion compared to total sales Based on wholesale GV60,GV70,GV80 are included in Genesis,when included in SUV,the portion is 60.6CDGenesisSUVOthers Others include commercial vehicles/each segment includes CKD volumes5.9%5.9%5.5%5.5S.4S.4T.8T.8%5.9%5.9%5.7%5.7%7.0%7.0%7.4%7.4.8.8.6.6.2.2%9.6%9.6%5.8%5.8%6.4%6.4%2Q 20232Q 20241,0601,0571,0577.4%7.4%5.6%5.6%9.1%9.1.6.6%1.5%1.5%0.9%0.9%0.1%0.1%0.1%0.1%2Q 20232Q 2024192192192192(59)(122)(10)(1)(78)(97)(16)(Thousand units)(Thousand units)(1)Financial SummaryFinancial SummaryP.7Revenue&Operating Income AnalysisP.8Status of IncomeP.9Q2 2023Q2 2023Q1 2024Q1 2024Q2 2024Q2 2024YoYQoQRevenueRevenue42,23342,23340,65940,65945,02145,0216.6.7%Automotive33,75033,75031,71831,71835,23835,2384.4.1%Finance5,7485,7486,6566,6567,1057,10523.6%6.8%Others2,7352,7352,2852,2852,6782,6782.1.2%SG&A4,650 4,650 4,871 4,871 5,458 5,458 17.4.1%Operating IncomeOperating Income4,2484,2483,5573,5574,2794,2790.7 .3%Automotive3,8513,8512,9992,9993,7233,7233.3$.1%Finance42542542542556156132.12.1%Others34034023223229029014.6$.6justment3683689999295295Income before Tax5,004 5,004 4,727 4,727 5,566 5,566 11.2.7%NetNet IncomeIncome3,3473,3473,3763,3764,1744,17424.7#.6%7(Billion KRW)Financial Summary8Revenue&Operating Income Analysis2Q 20232Q 20232Q 20242Q 2024VolumeMixFXOthers2Q 20232Q 20232Q 20242Q 2024VolumeFinanceOthersMixFX Mix and incentive effectRevenue(Billion KRW)Operating Income42,23342,23345,02145,021 1,300 203 713 572 2,788 2,788( 6.6%)4,2484,2484,2794,279 31 31( 0.7%) 136OPM(10.1%)OPMOPM(9.5%)(9.5%) 95753 400 1539Status of IncomeCOGS RatioSG&ANon-operating IncomeNet Income1 Commission Fees,depreciation,etc.SalaryMarketingResearchOthers1WarrantiesNon-controllingControllingFinanceEquityIncomeOthers(Billion KRW)2Q 20242Q 202378.9x.4x.4% 531( 70.2%)3,235 3,970 112 204 2Q 20232Q 2024 827( 24.7%)4,1744,1743,3475,4585,4584,650 808( 17.4%)1,020 1,123 179 62 443102 2Q 20232Q 20241,2871,2877561,236 1,429 523 570 717 1,152 1,227 1,262 947 1,045 2Q 202324 2QStatement of IncomeP.12Statement of Financial PositionP.13AppendixSales by RegionP.11Statement of Cash FlowsP.142Q 20232Q 20242Q 20232Q 20242Q 20232Q 20242Q 20232Q 2024HEVPHEVFCEVEV11Sales by RegionUSKoreaOthersEurope(Thousand units)PVSUVCVSales by typeSales of Eco-Friendly Vehicles Based on wholesale/Portion compared to total sales by region Others:N.America(ex.US),China,India,Russia,S.America,Other regions28.8q.2&.8s.2%425422534.4c.98.3Y.9715716641.5T.89.8V.2F04604633.7%4.0%1.7%1.99.69.66.9B.6618620620.8 .5.0%5.5.8.3%0.5%0.7%2Q 20232Q 20244747583.2%8.4%8.0%8.9%8.4.0.2%1.7%0.8%0.02%0.01%2Q 20232Q 20245959463.2%8.4%8.0.1.9.9 .9%6.3%4.2%0.01%0.003%2Q 20232Q 20245757623.2%8.4%8.0%2.4%2.2%2.8%3.9%0.2%0.2%0.005%0.01%2Q 20232Q 2024292926(Billion KRW)Q2 2023Q2 2023Q1 2024Q1 2024Q2 2024Q2 2024YoYYoYQoQQoQRevenueRevenue42,23342,23340,65940,65945,02145,0216.6.7%Cost of Good SoldCost of Good Sold33,33533,33532,23132,23135,28435,2845.8%9.5%GrossGross ProfitProfit8,8988,8988,4288,4289,7379,7379.4.5%Margin(%)21.1 .7!.6%SG&ASG&A4,6504,6504,8714,8715,4585,45817.4.1%Portion(%)11.0.0.1%OperatingOperating IncomeIncome4,2484,2483,5573,5574,2794,2790.7 .3%Margin(%)10.1%8.7%9.5%IncomeIncome before Taxbefore Tax5,0045,0044,7274,7275,5665,56611.2.7%Margin(%)11.8.6.4%TaxTax1,4891,4891,0321,0321,3921,392NetNet IncomeIncome3,3473,3471 13,3763,3762 24,1744,17424.7#.6%Margin(%)7.9%8.3%9.3%D&AD&A1 11,2941,2941,2811,2811,2731,273EBITDAEBITDA5,5425,5424,8394,8395,5525,55212Statement of Income1 Including net loss of KRW 168B from discontinued operations2 Including net loss of KRW 319B from discontinued operations3Including lease amortization under IFRS 16(Billion KRW)4Q 20234Q 2023Q2 2024Q2 2024Diff.Diff.%changechange AssetAsset282,463282,463306,928306,92824,4658.7%Current Asset(a)101,725106,3274,6024.5%LiabilitiesLiabilities(b)(b)180,654180,654197,119197,11916,4659.1%Current Liability(c)73,36273,0613010.4bt(d)124,748137,69712,94910.4%Provision(g)11,65112,3747236.2%EquityEquity(e)(e)101,809101,809109,809109,8098,0007.9pital Stock1,4891,48900.0pital Surplus4,3784,37530.1%Retained Earnings88,66692,7754,1094.6%Current Ratio(a/c)138.75.5%Liability to Equity(b/e)177.49.5bt to Equity(d/e)122.55.4Statement of Financial Position(Billion KRW)Q2 2023Q2 2023Q3 2023Q3 2023Q4 2023Q4 2023Q1 2024Q1 2024Q2 2024Q2 2024BeginningBeginning22,36922,36920,778 20,778 20,31320,31319,167 19,167 19,66919,669Net Income3,347 3,304 2,2033,376 4,174 Depreciation823 817 841 819 838 Amortization416 409 390 384 357 Acquisition of Tangible1,497 1,4522,6441,857 1,965 Acquisition of Intangible302 561617379 402 Dividends paid1,712 3943930 2,833 Others2,666 2,5889261,841 1,692 EndingEnding20,77820,77820,313 20,313 19,167 19,167 19,669 19,669 18,14618,14614Statement of Cash FlowsThank youQ&A
2024-08-06
17页
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=AchievedPOTENTIAL APPROVALS US/EUPLANNED SUBMISSIONS US/EUPOTENTIAL CLINICAL DATASum of Check ChangeSum of Check ChangeSum of Check ChangePhase IIIOPSUMIT(macitentan)USOPSUMIT(macitentan)USSIMPONI(golimumab)P P TREMFYA(guselkumab)EUPediatric Pulmonary Arterial Hypertension(TOMORROW)Pediatric Pulmonary Arterial Hypertension(TOMORROW)EUPediatric Ulcerative ColitisCrohns Disease(GALAXI)P PUSOPSYNVI(macitentan/tadalafil STCT)UPTRAVI(selexipag)STELARA(ustekinumab)P P TREMFYA(guselkumab)EUPulmonary Arterial HypertensionP PEUPediatric Pulmonary Arterial Hypertension(SALTO)P PEUPediatric Crohns DiseaseUlcerative Colitis Monotherapy(QUASAR)P PUSEDURANT(rilpivirine)REKAMBYSUSTREMFYA(guselkumab)P P RYBREVANT(amivantamab)EUHIV pediatric 2-12 year oldP PEUHIV AdolescentsPediatric PsoriasisSubcutaneous(PALOMA-3)P PUSBALVERSA(erdafitinib)USnipocalimabP PUSTREMFYA(guselkumab)ERLEADA(apalutamide)EUUrothelial Cancer(THOR)EUGeneralized Myasthenia GravisP PEUCrohns Disease(GALAXI)High Risk Prostate Cancer(PROTEUS)USDARZALEX(daratumumab)USSPRAVATO(esketamine)monotherapyUSTREMFYA(guselkumab)P P seltorexantFrontline multiple myeloma transplant eligible(PERSEUS)Treatment Resistant Depression(TRD4005)Pediatric Juvenile Psoriatic ArthritisAdjunctive treatment for major depressive disorder with insomnia symptomsP PUSCARVYKTI(ciltacabtagene autoleucel)P PUSRYBREVANT(amivantamab)P PUSTREMFYA(guselkumab)P P nipocalimabP PEURelapsed Refractory multiple myeloma w/1-3 PL(CARTITUDE-4)P PEUSubcutaneous(PALOMA-3)P PEUUlcerative Colitis Monotherapy(QUASAR)Generalized Myasthenia GravisP PUSRYBREVANT(amivantamab)P PUSDARZALEX(daratumumab)USTREMFYA(guselkumab)TREMFYA(guselkumab)P PEUFrontline Non Small Cell Lung Cancer in combination with chemotherapy(PAPILLON)P PEUFrontline multiple myeloma transplant eligible(PERSEUS)Ulcerative Colitis Subcutaneous Induction(ASTRO)Crohns Disease Subcutaneous Induction(GRAVITI)USRYBREVANT/lazertinibP PUSTREMFYA(guselkumab)aticaprantEUNon Small Cell Lung Cancer 2L(MARIPOSA-2)P PEUCrohns Disease Subcutaneous Induction(GRAVITI)Adjunctive Major Depressive Disorder(VENTURA 1)USRYBREVANT/lazertinibP P SPRAVATO(esketamine)monotherapyEUNon Small Cell Lung Cancer(MARIPOSA)Treatment Resistant Depression(TRD4005)DARZALEX(daratumumab)Amyloidosis(ANDROMEDA)Phase IIJNJ-4804 Co-antibody TherapeuticPsoriatic Arthritis(AFFINITY)P P nipocalimabSjogrens Disease(DAHLIAS)TAR-200(RIS/gemcitabine plus cetrelimab)Non Muscle Invasive Bladder Cancer(SunRISe-1)Johnson&Johnson Innovative Medicine PipelineKey Events in 2024*This information is as of July 17,2024 to the best of the Companys knowledge.Johnson&Johnson assumes no obligation to update this information.BALVERSA US Full Approval
2024-08-06
23页
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