Annual Financial Report - 50 of 54

RNS Number : 0602I

HSBC Holdings PLC

20 March 2015

 



HSBC

Maturity analysis of assets and liabilities

		At 31 December 2014
		Due not        more than            1 month		Due over            1 month               but not        more than          3 months		Due over          3 months               but not        more than          6 months		Due over          6 months               but not        more than          9 months		Due over          9 months               but not        more than                1 year		Due over                1 year               but not        more than              2 years		Due over              2 years               but not        more than              5 years		Due over              5 years		Total
		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
Financial assets
Cash and balances at central banks		129,957		−		−		−		−		−		−		−		129,957
Items in the course of collection from other banks		4,927		−		−		−		−		−		−		−		4,927
Hong Kong Government certificates of indebtedness		27,674		−		−		−		−		−		−		−		27,674
Trading assets		303,463		−		−		−		−		−		730		−		304,193
-  reverse repos		567		−		−		−		−		−		730		−		1,297
-  other trading assets		302,896		−		−		−		−		−		−		−		302,896
Financial assets designated at fair value		244		399		417		346		208		1,825		4,634		20,964		29,037
Derivatives		341,558		56		463		220		32		1,003		1,033		643		345,008
-  trading		341,416		−		−		−		−		−		−		−		341,416
-  non-trading		142		56		463		220		32		1,003		1,033		643		3,592
Loans and advances to banks1		73,758		17,649		5,682		1,934		1,850		7,371		1,981		1,924		112,149
Loans and advances to customers1		203,130		76,236		55,018		35,347		37,674		91,300		187,728		288,227		974,660
-  personal		42,170		9,673		8,911		7,486		8,672		27,305		54,439		230,298		388,954
-  corporate and commercial		146,250		61,809		41,924		23,720		23,697		56,398		124,796		56,590		535,184
-  financial		14,710		4,754		4,183		4,141		5,305		7,597		8,493		1,339		50,522
Reverse repurchase agreements - non-trading1		116,002		30,490		9,076		2,230		582		868		2,465		−		161,713
Financial investments		28,237		50,445		41,503		14,577		17,011		48,392		96,891		118,411		415,467
Accrued income and other financial assets		17,870		7,572		2,415		605		327		748		1,282		9,803		40,622
Financial assets at 31 December 2014		1,246,820		182,847		114,574		55,259		57,684		151,507		296,744		439,972		2,545,407
Non-financial assets		−		−		−		−		−		−		−		88,732		88,732
Total assets at 31 December 2014		1,246,820		182,847		114,574		55,259		57,684		151,507		296,744		528,704		2,634,139

Maturity analysis of assets and liabilities (continued)

		At 31 December 2014
		Due not        more than            1 month		Due over 1 month but not        more than 3 months		Due over 3 months but not        more than 6 months		Due over 6 months but not        more than 9 months		Due over 9 months but not        more than 1 year		Due over 1 year    but not        more than 2 years		Due over 2 years but not        more than 5 years		Due                   over              5 years		Total
		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
Financial liabilities
Hong Kong currency notes in circulation		27,674		−		−		−		−		−		−		−		27,674
Deposits by banks1		66,829		2,890		2,539		511		810		621		2,963		263		77,426
Customer accounts1,2		1,216,574		57,127		32,925		15,023		13,586		9,278		5,819		310		1,350,642
-  personal		572,459		28,580		16,728		10,609		9,625		7,220		3,967		125		649,313
-  corporate and commercial		465,990		21,841		10,688		3,716		2,894		1,615		1,316		150		508,210
-  financial		178,125		6,706		5,509		698		1,067		443		536		35		193,119
Repurchase agreements - non-trading1		95,243		5,029		4,054		1,392		714		−		−		1,000		107,432
Items in the course of transmission to other banks		5,990		−		−		−		−		−		−		−		5,990
Trading liabilities		155,604		2,041		2,636		1,439		2,918		5,744		9,603		10,587		190,572
-  repos		746		909		224		264		1,249		406		−		−		3,798
-  debt securities in issue		1,686		1,132		2,412		1,175		1,669		5,338		9,603		10,587		33,602
-  other trading liabilities		153,172		−		−		−		−		−		−		−		153,172
Financial liabilities designated at fair value		981		912		4,264		972		1,557		8,500		15,037		43,930		76,153
-  debt securities in issue: covered bonds		−		−		−		205		−		−		2,705		2,942		5,852
-  debt securities in issue: otherwise secured		−		−		−		−		−		−		−		−		−
-  debt securities in issue: unsecured		942		868		4,242		742		1,409		8,500		9,576		14,233		40,512
-  subordinated liabilities and preferred securities		−		36		−		−		18		−		2,623		20,640		23,317
-  other		39		8		22		25		130		−		133		6,115		6,472
Derivatives		335,802		23		86		223		54		621		1,121		2,739		340,669
-  trading		335,400		−		−		−		−		−		−		−		335,400
-  non-trading		402		23		86		223		54		621		1,121		2,739		5,269
Debt securities in issue		14,741		15,424		13,027		7,854		6,050		14,209		19,481		5,161		95,947
-  covered bonds		-		-		−		−		−		−		81		−		81
-  otherwise secured		8,807		1,063		60		283		272		912		1,562		1,008		13,967
-  unsecured		5,934		14,361		12,967		7,571		5,778		13,297		17,838		4,153		81,899
Accruals and other financial liabilities		21,084		9,198		3,069		1,221		1,820		1,568		2,225		3,655		43,840
Subordinated liabilities		−		150		−		3		167		113		3,607		22,624		26,664
Total financial liabilities at 31 December 2014		1,940,522		92,794		62,600		28,638		27,676		40,654		59,856		90,269		2,343,009
Non-financial liabilities		-		-		-		-		-		-		-		91,152		91,152
Total liabilities at 31 December 2014		1,940,522		92,794		62,600		28,638		27,676		40,654		59,856		181,421		2,434,161

		At 31 December 2013
		Due not more than 1 month		Due over 1 month but not more than 3 months		Due over 3 months but not more than 3 months		Due over 6 months but not more than 9 months		Due over 9 months but not more than 1 year		Due over 1 year but not more than 2 years		Due over 2 years but not more than 5 years		Due over 5 years		Total
		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
Financial assets
Cash and balances at central banks		166,599		-		-		-		-		-		-		-		166,599
Items in the course of collection from other banks		6,021		-		-		-		-		-		-		-		6,021
Hong Kong Government certificates of indebtedness		25,220		-		-		-		-		-		-		-		25,220
Trading assets		296,396		3,098		1,536		2,062		100		−		−		−		303,192
-  reverse repos		3,324		3,098		1,536		2,062		100		−		−		−		10,120
-  other trading assets		293,072		-		-		-		-		-		-		-		293,072
Financial assets designated at fair value		1,929		254		494		426		328		2,145		2,819		30,035		38,430
Derivatives		277,747		48		88		389		552		716		1,486		1,239		282,265
-  trading		277,709		-		-		-		-		-		-		-		277,709
-  non-trading		38		48		88		389		552		716		1,486		1,239		4,556
Loans and advances to banks1		76,551		22,107		5,397		1,429		1,290		6,129		2,779		4,364		120,046
Loans and advances to customers1		230,736		73,463		56,053		29,273		32,194		87,942		182,525		299,903		992,089
-  personal		43,805		8,929		8,561		6,603		7,578		26,915		58,611		243,124		404,126
-  corporate and commercial		171,713		60,827		43,723		19,505		21,093		53,183		113,897		53,981		537,922
-  financial		15,218		3,707		3,769		3,165		3,523		7,844		10,017		2,798		50,041
Reverse repurchase agreements - non-trading		134,242		35,329		5,287		1,239		2,072		1,136		385		-		179,690
Financial investments		34,331		48,053		35,877		22,353		18,816		50,711		105,340		110,444		425,925
Accrued income and other financial assets		18,719		7,684		2,467		1,369		700		1,133		1,027		4,536		37,635
Total financial assets at 31 December 2013		1,268,491		190,036		107,199		58,540		56,052		149,912		296,361		450,521		2,577,112
Non-financial assets		-		-		-		-		-		-		-		94,206		94,206
Total assets at 31 December 2013		1,268,491		190,036		107,199		58,540		56,052		149,912		296,361		544,727		2,671,318

Maturity analysis of assets and liabilities (continued)

		At 31 December 2013
		Due not        more than            1 month		Due over 1 month but not        more than 3 months		Due over 3 months but not        more than 6 months		Due over 6 months but not        more than 9 months		Due over 9 months but not        more than 1 year		Due over 1 year     but not        more than 2 years		Due over 2 years   but not        more than 5 years		Due                    over              5 years		Total
		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
Financial liabilities
Hong Kong currency notes in circulation		25,220		-		-		-		-		-		-		-		25,220
Deposits by banks1		76,298		3,931		1,796		858		318		737		1,922		647		86,507
Customer accounts1,2		1,229,694		60,683		26,940		13,704		15,384		8,717		5,937		238		1,361,297
-  personal		572,514		33,956		16,953		10,544		10,520		6,093		5,138		59		655,777
-  corporate and commercial		494,612		18,084		3,414		1,717		1,786		1,643		674		140		522,070
-  financial		162,568		8,643		6,573		1,443		3,078		981		125		39		183,450
Repurchase agreements - non-trading		136,137		13,058		6,583		3,711		4,231		-		-		500		164,220
Items in the course of transmission to other banks		6,910		-		-		-		-		-		-		-		6,910
Trading liabilities		161,231		11,405		4,886		2,844		3,653		6,323		7,979		8,704		207,025
-  repos		2,565		9,763		2,715		1,012		1,279		87		−		-		17,421
-  debt securities in issue		1,217		1,642		2,171		1,832		2,374		6,236		7,979		8,704		32,155
-  other trading liabilities		157,449		-		-		-		-		-		-		-		157,449
Financial liabilities designated at fair value		4,907		157		92		2,266		68		9,348		21,544		50,702		89,084
-  debt securities in issue: covered bonds		−		−		−		1,268		−		230		2,841		3,257		7,596
-  debt securities in issue: otherwise secured		−		−		−		−		−		−		−		−		−
-  debt securities in issue: unsecured		3,511		5		45		945		11		8,876		18,117		14,256		45,766
-  subordinated liabilities and preferred securities		−		121		−		−		−		21		−		21,773		21,915
-  other		1,396		31		47		53		57		221		586		11,416		13,807
Derivatives		269,816		33		95		84		61		563		1,978		1,654		274,284
-  trading		269,739		-		-		-		-		-		-		-		269,739
-  non-trading		77		33		95		84		61		563		1,978		1,654		4,545
Debt securities in issue		20,739		8,280		15,734		7,442		8,106		18,552		19,850		5,377		104,080
-  covered bonds		−		−		−		−		−		6		92		−		98
-  otherwise secured		10,450		1,051		675		1,260		764		1,857		2,313		1,013		19,383
-  unsecured		10,289		7,229		15,059		6,182		7,342		16,689		17,445		4,364		84,599
Accruals and other financial liabilities		25,267		10,475		3,278		1,280		1,599		1,831		1,592		936		46,258
Subordinated liabilities		21		28		1,171		144		6		1,435		3,406		22,765		28,976
Total financial liabilities at 31 December 2013		1,956,240		108,050		60,575		32,333		33,426		47,506		64,208		91,523		2,393,861
Non-financial liabilities		-		-		-		-		-		-		-		86,998		86,998
Total liabilities at 31 December 2013		1,956,240		108,050		60,575		32,333		33,426		47,506		64,208		178,521		2,480,859

1   See footnote 3 on page 344.

2   Includes US$342,927m (2013: US$355,980m) insured by guarantee schemes.

Maturity analysis of off-balance sheet commitments received

Due not        more than            1 month

Due over            1 month               but not        more than          3 months

Due over          3 months               but not        more than          6 months

Due over          6 months               but not        more than          9 months

Due over          9 months               but not        more than                1 year

Due over                1 year               but not        more than              2 years

Due over              2 years               but not        more than              5 years

Due over              5 years

Total

US$m

US$m

US$m

US$m

US$m

US$m

US$m

US$m

US$m

At 31 December 2014

Loan and other credit-related commitments

3,313

−

4,312

607

−

−

−

−

8,232

At 31 December 2013

Loan and other credit-related commitments

953

−

−

−

−

−

−

−

953

Maturity analysis of off-balance sheet commitments given

		Due not        more than            1 month		Due over            1 month               but not        more than          3 months		Due over          3 months               but not        more than          6 months		Due over          6 months               but not        more than          9 months		Due over          9 months               but not        more than                1 year		Due over                1 year               but not        more than              2 years		Due over              2 years               but not        more than              5 years		Due over              5 years		Total
		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
At 31 December 2014
Loan and other credit-related commitments		455,319		52,398		8,919		14,163		41,500		13,979		48,333		16,769		651,380
Of which:
-  personal		179,088		15,784		452		305		14,036		1,432		1,003		955		213,055
-  corporate and commercial		239,646		34,657		7,595		12,556		23,519		9,926		36,918		12,185		377,002
-  financial		36,585		1,957		872		1,302		3,945		2,621		10,412		3,629		61,323
At 31 December 2013
Loan and other credit-related commitments		404,598		45,255		18,770		16,927		20,242		13,320		46,652		21,839		587,603
Of which:
-  personal		148,541		14,700		454		10,683		12,131		1,273		704		6,469		194,955
-  corporate and commercial		225,333		29,191		17,794		5,662		4,879		9,009		41,851		12,096		345,815
-  financial		30,724		1,364		522		582		3,232		3,038		4,097		3,274		46,833

HSBC Holdings

Maturity analysis of assets, liabilities and off-balance sheet commitments

		Due not more than 1 month		Due over 1 month but not more than 3 months		Due over 3 months but not more than 6 months		Due over 6 months but not more than 9 months		Due over 9 months but not more than 1 year		Due over 1 year but not more than 2 years		Due over 2 years but not more than 5 years		Due over 5 years		Total
		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
Financial assets
Cash at bank and in hand:
-  balances with HSBC undertakings		249		-		-		-		-		-		-		-		249
Derivatives		2,287		-		-		-		-		-		127		357		2,771
-  trading		2,287		-		-		-		-		-		-		-		2,287
-  non-trading		-		-		-		-		-		-		127		357		484
Loans and advances to HSBC undertakings		7,007		858		7,676		-		14		-		-		28,355		43,910
Financial investments in HSBC undertakings		26		6		-		-		-		-		-		4,041		4,073
Accrued income and other financial assets		8		-		-		-		-		-		-		-		8
Total financial assets at 31 December 2014		9,577		864		7,676		-		14		-		127		32,753		51,011
Non-financial assets		-		-		-		-		-		-		-		96,853		96,853
Total assets at 31 December 2014		9,577		864		7,676		-		14		-		127		129,606		147,864
Financial liabilities
Amounts owed to HSBC undertakings		2,423		-		32		-		1		436		-		-		2,892
Financial liabilities designated at fair value		-		-		-		-		-		1,110		2,623		14,946		18,679
-  debt securities in issue		-		-		-		-		-		1,110		-		7,075		8,185
-  subordinated liabilities and preferred securities		-		-		-		-		-		-		2,623		7,871		10,494
Derivatives		1,066		-		-		-		-		-		103		-		1,169
-  trading		1,066		-		-		-		-		-		-		-		1,066
-  non-trading		-		-		-		-		-		-		103		-		103
Debt securities in issue		-		-		-		-		-		-		-		1,009		1,009
Accruals and other financial liabilities		924		208		137		21		-		-		-		-		1,290
Subordinated liabilities		-		-		-		-		-		-		1,951		15,304		17,255
Total financial liabilities at 31 December 2014		4,413		208		169		21		1		1,546		4,677		31,259		42,294
Non-financial liabilities		-		-		-		-		-		-		-		125		125
Total liabilities at 31 December 2014		4,413		208		169		21		1		1,546		4,677		31,384		42,419
Off-balance sheet commitments given
Undrawn formal standby facilities, credit lines and other commitments to lend		16		-		-		-		-		-		-		-		16

		Due not more than 1 month		Due over 1 month but not more than 3 months		Due over 3 months but not more than 6 months		Due over 6 months but not more than 9 months		Due over 9 months but not more than 1 year		Due over 1 year but not more than 2 years		Due over 2 years but not more than 5 years		Due over 5 years		Total
		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
Financial assets
Cash at bank and in hand:
-  balances with HSBC undertakings		407		-		-		-		-		-		-		-		407
Derivatives		2,729		-		-		-		-		-		-		60		2,789
-  trading		2,729		-		-		-		-		-		-		-		2,729
-  non-trading		-		-		-		-		-		-		-		60		60
Loans and advances to HSBC undertakings		8,394		4,374		7,595		14		16		-		-		32,951		53,344
Financial investments  in HSBC undertakings		23		-		8		-		-		-		330		849		1,210
Accrued income and other financial assets		10		-		-		-		-		-		-		-		10
Total financial assets at 31 December 2013		11,563		4,374		7,603		14		16		-		330		33,860		57,760
Non-financial assets		-		-		-		-		-		-		-		93,076		93,076
Total assets at 31 December 2013		11,563		4,374		7,603		14		16		-		330		126,936		150,836
Financial liabilities
Amounts owed to HSBC undertakings		3,770		12		2,234		-		1		-		463		5,205		11,685
Financial liabilities designated at fair value		-		-		-		-		-		-		1,283		19,744		21,027
-  debt securities in issue		-		-		-		-		-		-		1,283		6,823		8,106
-  subordinated liabilities and preferred securities		-		-		-		-		-		-		-		12,921		12,921
Derivatives		704		-		-		-		-		-		-		-		704
-  trading		704		-		-		-		-		-		-		-		704
-  non-trading		-		-		-		-		-		-		-		-		-
Debt securities in issue		-		-		1,721		-		-		-		-		1,070		2,791
Accruals and other financial liabilities		777		109		261		22		-		-		-		-		1,169
Subordinated liabilities		-		-		-		-		-		-		2,210		11,957		14,167
Total financial liabilities at 31 December 2013		5,251		121		4,216		22		1		-		3,956		37,976		51,543
Non-financial liabilities		-		-		-		-		-		-		-		206		206
Total liabilities at 31 December 2013		5,251		121		4,216		22		1		-		3,956		38,182		51,749
Off-balance sheet commitments given
Undrawn formal standby facilities, credit lines and other commitments to lend		1,245		-		-		-		-		-		-		-		1,245

32    Offsetting of financial assets and financial liabilities

Accounting policy

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously ('the offset criteria').

Financial assets subject to offsetting, enforceable master netting arrangements and similar agreements

		Gross amounts of recognised financial assets		Gross amounts offset in the balance sheet		Amounts presented in the balance sheet		Amounts not set off in the balance sheet
								Financial instruments1		Cash  collateral received		Net amount
		US$m		US$m		US$m		US$m		US$m		US$m
Derivatives2 (Note 16)		595,473		(250,465)		345,008		(271,040)		(42,260)		31,708
Reverse repos, stock borrowing and similar agreements3		259,655		(88,676)		170,979		(166,958)		(249)		3,772
Classified as:
-  trading assets		9,656		(390)		9,266		(9,256)		-		10
-  non-trading assets		249,999		(88,286)		161,713		(157,702)		(249)		3,762
Loans and advances to customers at amortised cost4		101,220		(37,527)		63,693		(55,989)		(310)		7,394
At 31 December 2014		956,348		(376,668)		579,680		(493,987)		(42,819)		42,874
Derivatives2 (Note 16)		569,595		(287,330)		282,265		(215,957)		(36,387)		29,921
Reverse repos, stock borrowing and similar agreements3		288,903		(88,775)		200,128		(197,287)		(57)		2,784
Classified as:
-  trading assets		39,008		(18,570)		20,438		(20,438)		-		-
-  non-trading assets		249,895		(70,205)		179,690		(176,849)		(57)		2,784
Loans and advances to customers at amortised cost4		192,437		(92,654)		99,783		(89,419)		-		10,364
At 31 December 2013		1,050,935		(468,759)		582,176		(502,663)		(36,444)		43,069

1   Including non-cash collateral.

2   Including amounts that are both subject to and not subject to enforceable master netting agreements and similar agreements.

3   For the amount of reverse repos, stock borrowing and similar agreements recognised in the balance sheet, see the 'Funding sources and uses' table on page 168. In the analysis above, the US$9,266m (31 December 2013: US$20,438m) of trading assets presented in the balance sheet comprised US$1,297m of reverse repos (31 December 2013: US$10,120m) and US$7,969m of stock borrowing (31 December 2013: US$10,318m).

4   At 31 December 2014, the total amount of loans and advances to customers at amortised cost was US$974,660m (31 December 2013: US$992,089m) of which US$63,693m (31 December 2013: US$99,783m) was subject to offsetting. For the amount of loans and advances to customers at amortised cost recognised in the balance sheet, see the 'Funding sources and uses' table on page 168.

Financial liabilities subject to offsetting, enforceable master netting arrangements and similar agreements

		Gross amounts of recognised financial liabilities		Gross amounts offset in the balance sheet		Amounts presented in the balance sheet		Amounts not set off in the balance sheet
								Financial instruments1		Cash  collateral pledged		Net amount
		US$m		US$m		US$m		US$m		US$m		US$m
Derivatives2 (Note 16)		591,134		(250,465)		340,669		(272,815)		(40,291)		27,563
Repos, stock lending and similar agreements3		211,938		(88,676)		123,262		(121,722)		(105)		1,435
Classified as:
-  trading liabilities		16,220		(390)		15,830		(15,828)		-		2
-  non-trading liabilities		195,718		(88,286)		107,432		(105,894)		(105)		1,433
Customer accounts at amortised cost4		107,088		(37,527)		69,561		(55,989)		-		13,572
At 31 December 2014		910,160		(376,668)		533,492		(450,526)		(40,396)		42,570
Derivatives2 (Note 16)		561,614		(287,330)		274,284		(216,596)		(29,093)		28,595
Repos, stock lending and similar agreements3		282,634		(88,775)		193,859		(193,354)		(81)		424
Classified as:
-  trading liabilities		48,209		(18,570)		29,639		(29,625)		-		14
-  non-trading liabilities		234,425		(70,205)		164,220		(163,729)		(81)		410
Customer accounts at amortised cost4		195,153		(92,654)		102,499		(89,394)		-		13,105
At 31 December 2013		1,039,401		(468,759)		570,642		(499,344)		(29,174)		42,124

1   Including non-cash collateral.

2   Including amounts that are both subject to and not subject to enforceable master netting agreements and similar agreements.

3   For the amount of repos, stock lending and similar agreements recognised in the balance sheet, see the 'Funding sources and uses' table on page 168. In the analysis above, the US$15,830m (31 December 2013: US$29,639m) of trading liabilities presented in the balance sheet comprised US$3,798m of repos (31 December 2013: US$17,421m) and US$12,032m of stock lending (31 December 2013: US$12,218m).

4   At 31 December 2014, the total amount of customer accounts at amortised cost was US$1,350,642m (31 December 2013: US$1,361,297m) of which US$69,561m (31 December 2013: US$102,499m) was subject to offsetting. For the amount of customer accounts at amortised cost recognised in the balance sheet, see the 'Funding sources and uses' table on page 168.

The 'Amounts not set off in the balance sheet' for derivatives and reverse repurchase/repurchase, stock borrowing/ lending and similar agreements include transactions where:

·   the counterparty has an offsetting exposure with HSBC and a master netting or similar arrangement is in place with a right of set off only in the event of default, insolvency or bankruptcy, or the offset criteria are otherwise not satisfied; and

·   cash and non-cash collateral received/pledged in respect of the transactions described above.

For loans and advances to customers and Customer accounts at amortised cost the amounts included in the table above typically relate to transactions entered into with corporate and commercial customers for working capital management purposes. The 'Amounts not set off in the balance sheet' relate to transactions where the customer has an offsetting exposure with HSBC and an agreement is in place with the right of offset but the offset criteria are otherwise not satisfied. For risk management purposes, the net amounts of such exposures are subject to limits which are monitored and the relevant customer agreements are subject to review and updated, as necessary, to ensure the legal right of offset remains appropriate.

33    Foreign exchange exposures

Structural foreign exchange exposures

HSBC's structural foreign exchange exposures are represented by the net asset value of its foreign exchange equity and subordinated debt investments in subsidiaries, branches, joint ventures and associates with non-US dollar functional currencies. Gains or losses on structural foreign exchange exposures are recognised in other comprehensive income. HSBC's management of its structural foreign exchange exposures is discussed on page 181.

Net structural foreign exchange exposures

		2014		2013
		US$m		US$m
Currency of structural exposure
Pound sterling1		30,071		28,403
Chinese renminbi		24,578		20,932
Hong Kong dollars		24,028		18,974
Euros		20,378		22,014
Mexican pesos		5,249		5,932
Brazilian real		4,910		5,581
Canadian dollars		4,187		4,372
Indian rupees		3,466		3,222
Saudi riyals		2,910		2,531
Malaysian ringgit		2,219		2,194
UAE dirhams		2,199		3,069
Swiss francs		1,864		1,940
Taiwanese dollars		1,721		1,527
Australian dollars		1,516		1,515
Turkish lira		1,366		1,533
Korean won		1,360		1,373
Indonesian rupiah		1,352		1,244
Singapore dollars		1,185		849
Argentine pesos		1,059		1,067
Egyptian pounds		868		739
Others, each less than US$700m		5,918		6,157
At 31 December		142,404		135,168

1   During 2014, we entered into a forward foreign exchange contract amounting to US$1.6bn in order to manage our sterling structural foreign exchange exposure.

Shareholders' equity would decrease by US$2,522m (2013: US$2,521m) if euro and sterling foreign currency exchange rates weakened by 5% relative to the US dollar.

34    Non-controlling interests

		2014		2013
		US$m		US$m
Non-controlling interests attributable to holders of ordinary shares in subsidiaries		7,104		5,900
Preferred securities issued by subsidiaries		2,427		2,688
		9,531
At 31 December		9,531		8,588

Preferred securities issued by subsidiaries

Preferred securities are securities for which there is no obligation to pay a dividend and, if the dividend is not paid, it may not be cumulative. Such securities do not generally carry voting rights but rank higher than ordinary shares for dividend payments and in the event of a winding-up. These securities have no stated maturity date but may be called and redeemed by the issuer, subject to prior notification to the PRA and, where relevant, the consent of the local banking regulator. Dividends on floating rate preferred securities are generally related to interbank offer rates.

Included in the capital base of HSBC are non-cumulative preferred securities classified as additional tier 1 capital and cumulative preferred securities classified as tier 2 capital in accordance with CRD IV rules, by virtue of the application of grandfathering provisions.

Preferred securities issued by HSBC's subsidiaries

		First call date		2014 US$m		2013 US$m
HSBC USA Inc.
US$150m	Depositary shares each representing 25% interest in a share of adjustable-rate cumulative preferred stock, series D	Jul 1999		150		150
US$150m	Cumulative preferred stock	Oct 2007		150		150
US$518m	Floating rate non-cumulative preferred stock, series F	Apr 2010		518		518
US$374m	Floating rate non-cumulative preferred stock, series G	Jan 2011		374		374
US$374m	6.50% non-cumulative preferred stock, series H	Jul 2011		374		374
HSBC Finance Corporation.
US$575m	6.36% non-cumulative preferred stock, series B	Jun 2010		559		559
HSBC Bank Canada
CAD175m	Non-cumulative redeemable class 1 preferred shares, series C	Jun 2010		151		164
CAD175m	Non-cumulative class 1 preferred shares, series D	Dec 2010		151		164
CAD250m1	Non-cumulative 5 year rate reset class 1 preferred shares, series E	Jun 2014		-		235
At 31 December				2,427		2,688

1   In June 2014, HSBC redeemed its non-cumulative 5 year reset class 1 preferred shares series E for US$234m.

35   Called up share capital and other equity instruments

Accounting policy

Financial instruments issued are classified as equity when there is no contractual obligation to transfer cash, other financial assets or issue a variable number of own equity instruments. Incremental costs directly attributable to the issue of equity instruments are shown in equity as a deduction from the proceeds, net of tax. HSBC Holdings shares held by HSBC are recognised in equity as a deduction from retained earnings until they are cancelled. When such shares are subsequently sold, reissued or otherwise disposed of, any consideration received is included in equity, net of any directly attributable incremental transaction costs and related income tax effects.

Issued and fully paid

HSBC Holdings ordinary shares of US$0.50 each

		2014		2013
		US$m		US$m
HSBC Holdings ordinary shares1 at 31 December		9,609		9,415
		Number		US$m
At 1 January 2014		18,830,007,039		9,415
Shares issued under HSBC employee share plans		119,391,238		60
Shares issued in lieu of dividends		268,475,983		134
At 31 December 2014		19,217,874,260		9,609
At 1 January 2013		18,476,008,664		9,238
Shares issued under HSBC employee share plans		120,033,493		60
Shares issued in lieu of dividends		233,964,882		117
At 31 December 2013		18,830,007,039		9,415

HSBC Holdings non-cumulative preference shares of US$0.01 each

		Number		US$m
At 1 January 2014 and 31 December 20142		1,450,000		-
At 1 January 2013 and 31 December 2013		1,450,000		-

1   All HSBC Holdings ordinary shares in issue confer identical rights, including in respect of capital, dividends and voting.

2   Included in the capital base of HSBC as additional tier 1 capital in accordance with the CRD IV rules, by virtue of the application of grandfathering provisions.

Dividends on the HSBC Holdings non-cumulative dollar preference shares in issue ('dollar preference shares') are paid quarterly at the sole and absolute discretion of the Board of Directors. The Board of Directors will not declare a dividend on the dollar preference shares if payment of the dividend would cause HSBC Holdings not to meet the applicable capital adequacy requirements of the PRA or the profit of HSBC Holdings available for distribution as dividends is not sufficient to enable HSBC Holdings to pay in full both dividends on the dollar preference shares and dividends on any other shares that are scheduled to be paid on the same date and that have an equal right to dividends. HSBC Holdings may not declare or pay dividends on any class of its shares ranking lower in the right to dividends than the dollar preference shares nor redeem nor purchase in any manner any of its other shares ranking equal with or lower than the dollar preference shares unless it has paid in full, or set aside an amount to provide for payment in full, the dividends on the dollar preference shares for the then current dividend period. The dollar preference shares carry no rights to conversion into ordinary shares of HSBC Holdings. Holders of the dollar preference shares will only be entitled to attend and vote at general meetings of shareholders of HSBC Holdings if the dividend payable on the dollar preference shares has not been paid in full for four consecutive dividend payment dates. In such circumstances, holders of the dollar preference shares will be entitled to vote on all matters put to general meetings until such time as HSBC Holdings has paid a full dividend on the dollar preference shares. HSBC Holdings may redeem the dollar preference shares in whole at any time on or after 16 December 2010, subject to prior notification to the PRA.

HSBC Holdings non-cumulative preference share of £0.01

The one non-cumulative sterling preference share of £0.01 in issue ('sterling preference share') has been in issue since 29 December 2010 and is held by a subsidiary of HSBC Holdings. Dividends on the sterling preference share are paid quarterly at the sole and absolute discretion of the Board. The sterling preference share carries no rights of conversion into ordinary shares of HSBC Holdings and no rights to attend and vote at general meetings of shareholders of HSBC Holdings. HSBC Holdings may redeem it in whole at any time at the option of the Company.

Other equity instruments

Other equity instruments which have been included in the capital base of HSBC comprise of additional tier 1 capital securities and additional tier 1 - contingent convertible securities.

Additional tier 1 capital securities

Additional tier 1 capital securities are perpetual subordinated securities on which coupon payments may be deferred at the discretion of HSBC Holdings. While any coupon payments are unpaid or deferred, HSBC Holdings will not declare, pay dividends or make distributions or similar periodic payments in respect of, or repurchase, redeem or otherwise acquire any securities of lower or equal rank. Such securities do not generally carry voting rights but rank higher than ordinary shares for coupon payments and in the event of a winding-up. These securities have been included in the capital base of HSBC in accordance with CRD IV rules by virtue of the application of grandfathering provisions.

At HSBC Holdings' discretion, and subject to certain conditions being satisfied, the capital securities may be exchanged on any coupon payment date for non-cumulative preference shares to be issued by HSBC Holdings and ranking pari passu with the dollar and sterling preference shares in issue. The preference shares would be issued at a nominal value of US$0.01 per share and a premium of US$24.99 per share, with both such amounts being subscribed and fully paid. These securities may be called and redeemed by HSBC subject to prior notification to the PRA.

HSBC's additional tier 1 capital securities in issue which are accounted for in equity

		First call date		2014 US$m		2013 US$m
US$2,200m	8.125% perpetual subordinated capital securities	Apr 2013		2,133		2,133
US$3,800m	8.00% perpetual subordinated capital securities, Series 2	Dec 2015		3,718		3,718
At 31 December				5,851		5,851

Additional tier 1 capital - contingent convertible securities

During 2014, HSBC issued new contingent convertible securities that are included in HSBC's capital base as fully CRD IV compliant additional tier 1 capital securities on an end point basis. The net proceeds of the issuances will be used for general corporate purposes and to further strengthen the capital base pursuant to requirements under CRD IV. These securities bear a fixed rate of interest until their initial call dates. After the initial call dates, in the event they are not redeemed, the securities will bear interest at rates which are fixed periodically in advance for five year periods based on prevailing market rates. Interest on the contingent convertible securities will be due and payable only at the sole discretion of HSBC, and HSBC has sole and absolute discretion at all times and for any reason to cancel (in whole or in part) any interest payment that would otherwise be payable on any interest payment date. There are limitations on the payment of distributions if such payments are prohibited under UK banking regulations, or other requirements, if HSBC Holdings has insufficient reserves available for distribution or if HSBC fails to satisfy the solvency condition as defined in the securities' terms.

The contingent convertible securities are undated and are repayable, at the option of HSBC, in whole at the initial call date, or on any fifth anniversary after the initial call date. In addition, the securities are repayable at the option of HSBC in whole for certain regulatory or tax reasons. Any repayments require the prior consent of the PRA. These securities rank pari passu with HSBC's dollar and sterling preference shares and are therefore ahead of ordinary shares. The contingent convertible securities will be converted into ordinary shares of HSBC, at a pre-determined price, should HSBC's consolidated, end-point CET1 ratio fall below 7.0%. Therefore, per the terms of the securities, on bail-in the securities will convert into ordinary shares at a conversion price of £2.70 subject to certain anti-dilution and foreign exchange adjustments and will rank pari passu with the fully paid ordinary shares in issue.

HSBC's additional tier 1 capital - contingent convertible securities in issue which are accounted for in equity

		First call date		2014 US$m		2013 US$m
US$2,250m	6.375% perpetual subordinated contingent convertible securities	Sep 2024		2,244		-
US$1,500m	5.625% perpetual subordinated contingent convertible securities	Jan 2020		1,494		-
€1,500m	5.25% perpetual subordinated contingent convertible securities	Sep 2022		1,943		-
At 31 December				5,681		-

Shares under option

For details of the options outstanding to subscribe for HSBC Holdings ordinary shares under the HSBC Holdings Group Share Option Plan, the HSBC Share Plan and HSBC Holdings savings-related share option plans, see Note 6.

Aggregate options outstanding under these plans

		Number of                          HSBC Holdings                      ordinary shares		Period of exercise		Exercise price
31 December 2014		63,918,042		2014 to 2020		£3.3116 - 7.9911
		6,468,782		2014 to 2018		HK$37.8797 - 63.9864
		571,502		2014 to 2018		€3.6361 - 6.0657
		1,867,328		2014 to 2018		US$4.8876 - 8.2094
31 December 2013		119,085,250		2013 to 2019		£3.3116 - 7.9911
		24,215,341		2013 to 2018		HK$37.8797 -92.5881
		1,574,652		2013 to 2018		€3.6361 - 7.5571
		3,997,069		2013 to 2018		US$4.8876 - 11.8824
31 December 2012		159,703,771		2013 to 2018		£3.3116 - 7.9911
		31,637,840		2013 to 2018		HK$37.8797 - 94.5057
		2,180,263		2013 to 2018		€3.6361 - 9.5912
		6,488,894		2013 to 2018		US$4.8876 - 12.0958

Maximum obligation to deliver HSBC Holdings ordinary shares

At 31 December 2014, the maximum obligation to deliver HSBC Holdings ordinary shares under all of the above option arrangements, together with GPSP awards and restricted share awards granted under the HSBC Share Plan and/or the HSBC Share Plan 2011, was 193,154,512 (2013: 265,534,885). The total number of shares at 31 December 2014 held by employee benefit trusts that may be used to satisfy such obligations to deliver HSBC Holdings ordinary shares was 7,943,191 (2013: 12,068,136).

36   Notes on the statement of cash flows

Other non-cash items included in profit before tax

		HSBC						HSBC Holdings
		2014		2013		2012		2014		2013
		US$m		US$m		US$m		US$m		US$m
Depreciation, amortisation and impairment		2,251		2,330		2,531		39		35
(Gains)/losses arising from dilution of interests in associates		32		(1,051)		-		-		-
Revaluations on investment property		(120)		(113)		(72)		-		-
Share-based payment expense		732		630		988		74		49
Loan impairment losses gross of recoveries and other credit risk provisions		5,125		7,356		9,358		-		-
Provisions		3,074		2,578		5,732		-		-
Impairment/(release of impairment) of financial investments		54		(36)		519		-		-
Charge/(credit) for defined benefit plans		535		121		476		-		-
Accretion of discounts and amortisation of premiums		(421)		180		246		(62)		(10)
Year ended 31 December		11,262		11,995		19,778		51		74

Change in operating assets

		HSBC						HSBC Holdings
		2014		2013		2012		2014		2013
		US$m		US$m		US$m		US$m		US$m
Change in loans to HSBC undertakings		-		-		-		1,364		(11,669)
Change in net trading securities and net derivatives		(18,498)		(24,870)		(36,829)		483		923
Change in loans and advances to banks		5,147		(4,739)		1,174		-		-
Change in loans and advances to customers		12,666		(46,551)		(79,388)		-		-
Change in reverse repurchase agreements - non-trading		18,900		(70,403)		6,678		-		-
Change in financial assets designated at fair value		3,269		(4,922)		(2,698)		-		-
Change in other assets		4,393		2,586		(5,458)		7		(49)
Year ended 31 December		25,877		(148,899)		(116,521)		1,854		(10,795)

Change in operating liabilities

		HSBC						HSBC Holdings
		2014		2013		2012		2014		2013
		US$m		US$m		US$m		US$m		US$m
Change in deposits by banks		(9,081)		(7,781)		274		-		-
Change in customer accounts		(8,362)		57,365		92,238		-		-
Change in repurchase agreements - non-trading		(56,788)		123,653		(7,834)		-		-
Change in debt securities in issue		(8,133)		(15,381)		(11,552)		(149)		98
Change in financial liabilities designated at fair value		(10,734)		994		2,549		(694)		(550)
Change in other liabilities		(716)		5,907		13,395		(9,071)		(609)
Year ended 31 December		(93,814)		164,757		89,070		(9,914)		(1,061)

Cash and cash equivalents

Accounting policy

Cash and cash equivalents include highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. Such investments are normally those with less than three months' maturity from the date of acquisition.

Cash and cash equivalents

		HSBC						HSBC Holdings
		2014		2013		2012		2014		2013
		US$m		US$m		US$m		US$m		US$m
Cash at bank with HSBC undertakings		-		-		-		249		407
Cash and balances at central banks		129,957		166,599		141,532		-		-
Items in the course of collection from other banks		4,927		6,021		7,303		-		-
Loans and advances to banks of one month or less		89,285		96,584		119,400		-		-
Reverse repurchase agreements with banks of one month or less		68,930		68,007		28,832		-		-
Treasury bills, other bills and certificates of deposit less than three months		14,192		15,980		25,379		-		-
Less: items in the course of transmission to other banks		(5,990)		(6,910)		(7,138)		-		-
At 31 December		301,301		346,281		315,308		249		407

1   Measured at amortised cost from 2013.

Interest and dividends

		HSBC						HSBC Holdings
		2014		2013		2012		2014		2013
		US$m		US$m		US$m		US$m		US$m
Interest paid		(15,633)		(17,262)		(18,412)		(2,463)		(2,705)
Interest received		51,522		50,823		61,112		1,945		1,986
Dividends received		1,199		1,133		766		9,077		20,925

The amount of cash and cash equivalents not available for use by HSBC at 31 December 2014 was US$43,738m (2013: US$38,019m), of which US$29,883m (2013: US$21,811m) related to mandatory deposits at central banks.

Disposal of subsidiaries and businesses

During 2014, we completed the disposals of HSBC Bank Middle East Limited's banking business in Jordan and operations in Pakistan. This resulted in a net US$303m outflow of cash and cash equivalents which is included under 'Cash flow from investing activities' in the Consolidated statement of cash flows on page 338.

In October 2013, we completed the disposal of HSBC Bank (Panama) S.A., receiving total cash consideration of US$2,210m which is included under 'Cash flow from investing activities' in the Consolidated statement of cash flows on page 338.

The effect of disposals of subsidiaries and businesses in 2012 is tabulated below.

		2012
		US cards business		US branch network		Other disposals		Total
		US$m		US$m		US$m		US$m
Total assets excluding cash and cash equivalents		28,007		2,166		7,302		37,475
Total liabilities		161		13,206		8,463		21,830
Aggregate net assets at date of disposal, excluding cash and cash equivalents		27,846		(11,040)		(1,161)		15,645
Non-controlling interests disposed		-		-		(81)		(81)
Gain on disposal including costs to sell		3,148		864		355		4,367
Add back: costs to sell		72		15		56		143
Selling price		31,066		(10,161)		(831)		20,074
Satisfied by:
Cash and cash equivalents received/(paid) as consideration		31,066		(10,091)		(542)		20,433
Cash and cash equivalents sold		-		(70)		(321)		(391)
Cash consideration received/(paid) up to 31 December 2012		31,066		(10,161)		(863)		20,042
Cash still to be received at 31 December 2012		-		-		32		32
Total cash consideration		31,066		(10,161)		(831)		20,074

 

END

 

 

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