And our previous policy probably didn't get that balance right, we were too much into distribution and not enough into funding future growth. Your next question comes from the line of Omar Keenan from Credit Suisse. Good morning. Thank you very much for taking my questions. So I just had a question on the Asia wealth management strategy. Just bearing in mind that you're looking at a couple of bolt-on opportunities, when you look at the HSBC wealth management offering in Asia, where do you think might be a particular geographic or product gaps that you might be looking to fill in?
And secondly, just I had a question on the U. I was wondering if there's been any thoughts around perhaps pursuing inorganic strategies there as well? Thanks, Omar. I'll take that. Assuming, the first one, on wealth bolt-ons, we're clearly looking at pan-Asia.
We believe we have good organic growth opportunities with the platform we have in Hong Kong. And therefore, that would be the primary focus, I think, in Hong Kong would be primarily organic growth in Hong Kong. We're organically investing in China to grow our Wealth business there and we've given you the plans for that, recruiting an additional 3, people over the medium-term with already done in the first -- up until the first half this year. If you're looking at, therefore, where the bolt-ons are likely to be, they're likely to be rest of Asia.
In terms of capabilities, we're looking at both product and distribution capabilities to accelerate our organic growth plans there. We're willing to invest organically in the rest of Asia, but if we can find some bolt-on acquisitions that can accelerate those organic investment plans, that would be helpful.
We are looking at three to four as we speak and they are a combination of products and distribution capabilities being acquired in areas such as insurance, high net worth wealth management, and asset management.
So those would be the primary areas of focus. On mortgage growth, Ewen can fill you in a bit more on that, but just for clarity, our share of mortgages in the U. So yes, we're taking market share from others, but it's to rebuild to where we believe we should be more naturally positioned. And maybe just to add a few more comments to what Noel said. Our stock share is currently 7. We are, and have been consistently growing our flow share in excess of stock share.
We grew flow share around 8. Over the last few years, we've fully built out broker distribution and we're sitting on a lot with excess liquidity in the U. We think the returns on new business are highly attractive.
So I think you should expect us to continue to target higher growth in the mortgage market if we can continue to take share of the type of margins that we are currently seeing.
And sorry, you should read into that, too, that given that we have we think substantial organic growth opportunity, we do not see the need to go out and invest inorganically in the U. Your next question comes from the line of Aman Rakkar from Barclays. Hi, Aman. Good morning, Ewen. Just one quick follow-up on mortgages, if I may. Just around your ROTE, I mean, is there any chance that you could give us an indication of what kind of ROE you're booking on mortgages as you currently observe it now?
I mean, how much of that do you think is down to normalizing markets versus restructuring? And do you think we can continue to expect any kind of revenue attrition from restructuring this year in that business?
Look, on mortgages, we're not going to go into the detail, but we're earning returns on capital materially above our cost of capital, yes, partly because, as you know, U. So that is very accretive business for us. On Global Banking and Markets, I think we've said previously that we expect to be down on , but above I think that continues to be our position.
As you know, the whole Street had a particularly weak quarter in fixed income, partly because of the strength of fixed income a year ago and we do think that there are some lines in that fixed income business that are important to us like FX that will naturally recover as customer activity recovers, both on the commercial side and the retail side out of COVID.
Equities for us actually had a really good quarter, outperformed peers, but it's a relatively small part of our overall Global Banking and Markets franchise and Capital Markets and Advisory, remember, we are weaker than some peers in the U. Can I just ask one quick follow-up on the mortgages. I mean, there is set to be quite a lot of regulatory RWA inflation coming down the pipe in the next 12 to 18 months. I mean, do you have any sense as to whether that might provide a floor to any of the pricing at a system level?
Or do you think the system is already pricing basically adjusting for this RWA inflation? Yeah, I mean, well, we are certainly thinking about that RWA uplift. Your next question comes from the line of Andrew Coombs, Citi. One on costs and then one on wealth, please. Just firstly on cost, you flagged the step-up in variable pay this quarter, but your full year cost guidance is unchanged.
So just trying to understand, that's just the timing issue in the variable pay or whether the mix of the costs in your full-year guidance is perhaps slightly different to what you first thought? That would be the first question. Second question, wealth. If I look at life insurance, manufacturing, investment distribution, the life insurance manufacturing number obviously has some benefit from market movement that makes up quite a big chunk of the revenue contribution in this quarter.
If we were to strip that out, do you think that's a more normalized base level this quarter? Obviously, you've still got the offshore sales to come back, but perhaps if you could just comment, both on whether investment distribution and life insurance manufacturing adjusted is a more normalized quarter and a fair base to run from comparison? Yes, look, on costs for this year, I think there is a mix change going on of a few hundred million.
Not all of that increase in variable pay is a sort of timing issue. Some of it is an increase in the variable pay accrual relative to what we thought, but yes, the mix shift I think, Andy, is because we had anticipated in the second half that there were various line items that we would begin to see a return to normalization from COVID that we think is going to be much slower than what we previously anticipated.
So generally, costs associated with running the bank like travel, printing, office premises and the like, I think, are going to run a few hundred million lower than what we previously anticipated for this year, which offsets a slightly higher accrual into the variable pay pool. So that's why we're sort of still confident in committing to the flat cost target. On wealth, I think, yes, you have to bifurcate between the domestic Hong Kong business and what you see there is -- actually, the Hong Kong business is doing OK and better than in previous quarters.
And the -- effectively, the international business, particularly the Mainland China business, which continues to be significantly impacted because of the closure of the border. We don't expect that border to reopen until Q4 at the earliest. So I wouldn't describe this quarter as a normalized quarter for insurance. I would describe it as normalized probably for the Hong Kong business and continuing to be abnormally low for the China business.
And just on the cost, a quick, quick follow-up. So is there hope that, that variable comp may also reverse slightly at that point? No, I mean, look, I mean, I think I would describe it as sort of margin for error in '22 has tightened because of that pay pressure that we're seeing relative to what we previously thought. You're right that those COVID-related savings should get back to more normal levels or what we describe as more normal levels from '22 onwards, but remember also, I think embedded in that is, it's new normal versus old normal.
For example, we've reduced our travel budget. So the other thing, just -- again, just for all of you, our cost target was based on constant FX. Hi, good morning, Noel and Ewen and thanks for taking the questions. Just a couple of follow-ups. The first one was on margin. Within that, we should be assuming it's still going to be tilted slightly more toward secured.
We can then obviously keep an eye on rates and other factors to come to adjustment on NIM, but just helpful to think about how much of that loan growth just to flow through into NII growth. And then just going back to distributions and timing, your So it feels like capital shouldn't move an awful lot in the second half, even pro forma for the accrual.
If that's broadly correct and you're stuck there with basis points to basis points of headwind to the target coming into the year, can we take your comments around buybacks being a bit forward and sort of next six months depending on bolt-ons? Is that fair? Hey, if I could just quickly take the new business comment. We're not expecting a significant change in our mix between secured and unsecured. I think we see the portfolio having a similar balance to history. So we're not reweighting that portfolio mix.
As you know, we tend to be more of a secured book than an unsecured book. We do have a credit card business. We do have unsecured lending, but in our wealth business, we have a strong mortgage book. And in our Commercial Banking and Wholesale business, it tends to be secured.
So we don't see a significant change. Do you want to take the second question, Ewen? So I think -- I'm not going to sort of comment on your math in terms of where our Core Tier 1 ratio may be at the end of the year but I think we would be slightly more cautious than you in saying that we expect it to be in line with where we currently are partly, I think, because we are anticipating decent RWA growth in the second half of the year, but overall, in terms of -- yes, the main comment in relation to buybacks is, I mean, if you recall at the full year results back in February, I said, definitely no buybacks this year.
We softened that language slightly at Q1. We're softening it again now and we will definitely keep it under review and we're not -- we are no longer calling out that there's an absolute ban on buybacks this year. So we'll keep it under review. We will now take our last question and it comes from the line of Manus Costello from Autonomous.
Good morning, everyone. I wanted to just follow-up on the comments on insurance, please. You were talking about the offshore sales coming back, hopefully, from Q4 onwards. Do you think we can get back to that kind of level quite quickly once the border reopens?
And do you think there might even be a catch-up of the lost business from the last couple of years coming through setting you up for a very strong if the border reopens?
And secondly, and somewhat related, I wondered if you could give us any indication of how you think IFRS 17 will impact the business? Or if you can't indicate how it will impact the business, can you tell us when you will give us some indication of how it impacts the business? I think on the insurance, I mean, it's very hard to predict life after COVID relative to life before COVID because there are so many things that are changing, but we would expect to rebound but also, you've got to be cognizant of the fact we're investing in the Greater Bay area.
We're investing in Pinnacle, we're investing in our insurance capabilities and wealth management capabilities onshore. So we believe we'll be well positioned whether it comes back into Hong Kong or it stays in Hong Kong -- sorry, stays in the Greater Bay Area, we'll have the ability to serve both markets.
Credit Suisse names a raft of U. Analyst estimates compiled by HSBC had pointed to a 3. HSBC did not announce any dividends for the third quarter.
Ewen Stevenson, HSBC's group chief financial officer, said the bank's capital position has been "very strong. HSBC said in its earnings release that as of Sept. The bank was referring to the Chinese government's "three red lines" policy that was rolled out to limit a company's debt in relation to its cash flows, assets and capital levels.
Fact: our reported profit before tax was USD Fact: our wealth balances were USD1. Fact: we have provided and facilitated USD Cumulative sustainable finance and investments provided and facilitated since 1 January Average weekly card spend. Average weekly mortgage drawdowns. Fact: our return on average tangible equity per cent annualised was 9. Fact: our Asia wealth revenue grew by 26 per cent compared with 1H Growth of Asia Wealth revenue vs 1H Mortgages growth in 2Q21 vs 1Q Interim Report Key documents.
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