Okay, so we're gonna calculate HSBC's average return on tangible equity.

And the focus here is on ordinary shareholders.

If we're thinking about return on tangible equity, we're gonna need return information from the income statement.

And we're gonna need tangible equity information from the balance sheet.

So if we scroll a little further down the question, we can start to pick up the numbers for the answer.

And the first thing we're gonna look at is the net income.

So if we go and look at the income statement extract, I've got profit for the year.

But you'll notice below that that profit for the year is divided between different interested parties.

I wanna pick up the profit at triple to ordinary shareholders.

So that is our focus here.

And now what we need to think about is the equity from the balance sheet.

So first of all, we could maybe look at the total equity off the balance sheet, but you'll notice directly above that we've got triple to the NCI.

We don't wanna think about that. So we want the total shareholders' equity, let's go and grab that.

Now, some of that shareholders' equity might be injected by preference shareholders.

So we're gonna strip out the preference share and other equity instruments to give us the total ordinary shareholders' equity like so.

And having calculated that, we're now almost at the position where we can complete the calculation.

However, some of the equity will include intangible assets and liabilities.

And if we look at the balance sheet, actually HSBC lists, goodwill and other intangible assets, deferred tax assets and deferred tax liabilities.

And all these things are classic things we would strip out when we're trying to calculate return on tangible equity.

So let's go and grab the Goodwill asset from the balance sheet and let's just copy that out to the right.

And let's do the same for the deferred tax asset and copy that out to the right.

And we've also got a deferred tax liability.

So if you think about the bank, imagine the bank was being liquidated and you said, well, okay, what's the, you know, what's the value? What's the equity here? The, the goodwill has no real value.

It's not an asset you can sell to someone.

The deferred tax asset, you know, liquidation, you can't, you can't sell that to anyone. You can't realize any value. So we script those out.

So now we're gonna calculate the tangible total equity.

I'm gonna go and pick up the total ordinary shareholder's equity.

I'm going to reduce that by the goodwill, reduce that by the deferred tax asset. And I'm gonna add back the deferred tax liability that gives me the tangible total equity.

Now we're in a position where we can calculate the average.

So let's go and grab the two numbers that we've calculated to arrive at the average.

And now of course, we can calculate the return on tangible equity of 4.3%.