Interim Report - 20 of 21

RNS Number : 9229Q

HSBC Holdings PLC

13 August 2010

 



Term	Brief description
ABS1	Asset-backed security
ADS	American Depositary Share
Advance	HSBC Advance, a global banking proposition for the mass-affluent segment of customers
ALCO	Asset and Liability Management Committee
ARM	Adjustable-rate mortgage
Bank Ekonomi	PT Bank Ekonomi Raharja Tbk
Bank of Communications	Bank of Communications Co., Limited, mainland China's fourth largest bank by market capitalisation
Bao Viet	Bao Viet Holdings
Barion	Barion Funding Limited, a term funding vehicle
Basel Committee	Basel Committee on Banking Supervision
Basel I	1988 Basel Capital Accord
Basel II1	2006 Basel Capital Accord
CARD Act	Credit Card Accountability, Responsibility and Disclosure Act, US
CDO1	Collateralised debt obligation
CDPC	Credit derivative product company
CDS1	Credit default swap
CGU	Cash generating unit
CNAV1	Constant Net Asset Value
Combined Code	Combined Code on Corporate Governance issued by the Financial Reporting Council
CP1	Commercial paper
CPI	Consumer price index
CRD	Capital Requirements Directive
CRR1	Customer risk rating
DPF	Discretionary participation feature of insurance and investment contracts
DTR	Disclosure Rules and Transparency Rules of the FSA, UK
EAD1	Exposure at default
Enhanced VNAV1	Enhanced Variable Net Asset Value
EU	European Union
Fannie Mae	Federal National Mortgage Association, US
Freddie Mac	Federal Home Loan Mortgage Corporation, US
FSA	Financial Services Authority, UK
FTSE	Financial Times - Stock Exchange index
G20	Leaders, Finance Ministers and Central Bank Governors of the Group of Twenty
GDP	Gross domestic product
Ginnie Mae	Government National Mortgage Association, US
Global Markets	HSBC's treasury and capital markets services in Global Banking and Markets
GMO	Group Management Office
Group	HSBC Holdings together with its subsidiary undertakings
Hang Seng Bank	Hang Seng Bank Limited, the third largest bank listed in Hong Kong by market capitalisation
HFC	HFC Bank Limited, the UK-based consumer finance business acquired through the acquisition by HSBC of HSBC Finance
HIBOR	Hong Kong Interbank Offer Rate
HNAH	HSBC North America Holdings Inc.
Hong Kong	The Hong Kong Special Administrative Region of the People's Republic of China
HSBC	HSBC Holdings together with its subsidiary undertakings
HSBC Bank	HSBC Bank plc, formerly Midland Bank plc

Term	Brief description
HSBC Bank Bermuda	HSBC Bank Bermuda Limited, formerly The Bank of Bermuda Limited
HSBC Bank Malaysia	HSBC Bank Malaysia Berhad
HSBC Bank Middle East	HSBC Bank Middle East Limited, formerly The British Bank of the Middle East
HSBC Bank Panama	HSBC Bank (Panama) S.A., formerly Grupo Banistmo S.A.
HSBC Bank USA	HSBC's retail bank in the US. From 1 July 2004, HSBC Bank USA, N.A. (formerly HSBC Bank USA, Inc.)
HSBC Finance	HSBC Finance Corporation, the US consumer finance company (formerly Household International, Inc.)
HSBC France	HSBC's French banking subsidiary, formerly CCF S.A.
HSBC Holdings	HSBC Holdings plc, the parent company of HSBC
HSBC Mexico	HSBC México S.A., the commercial banking subsidiary of Grupo Financiero HSBC, S.A. de C.V.
HSBC Private Bank (Suisse)	HSBC Private Bank (Suisse) S.A., HSBC's private bank in Switzerland (merged with HSBC Guyerzeller Bank in 2009)
IAS	International Accounting Standard
IASB	International Accounting Standards Board
IFRIC	International Financial Reporting Interpretations Committee
IFRSs	International Financial Reporting Standards
Industrial Bank	Industrial Bank Co. Limited, a national joint-stock bank in mainland China
IRB1	Internal ratings-based
ISDA	International Swaps and Derivatives Association
KPMG	KPMG Audit Plc and its affiliates
LGD1	Loss given default
LIBOR	London Interbank Offer Rate
M&S Money	Marks and Spencer Retail Financial Services Holdings Limited
Mainland China	People's Republic of China excluding Hong Kong
Malachite	Malachite Funding Limited, a term funding vehicle
Mazarin	Mazarin Funding Limited, an asset-backed CP conduit
MBS1	Mortgage-backed security
Monoline1	Monoline insurance company
MSCI	Morgan Stanley Capital International index
MTN1	Medium-term note
NYSE	New York Stock Exchange
OFT	Office of Fair Trading, UK
OTC1	Over-the-counter
PD1	Probability of default
Performance Shares	Awards of HSBC Holdings ordinary shares under employee share plans that are subject to corporate performance conditions
Ping An Insurance	Ping An Insurance (Group) Company of China, Limited, the second-largest life insurer in the PRC
PPI	Payment protection insurance product
Premier	HSBC Premier, HSBC's premium global banking service
PVIF	Present value of in-force long-term insurance business
Repo	Sale and repurchase transaction
Restricted Shares	Awards of Restricted Shares define the number of HSBC Holdings ordinary shares to which the employee will become entitled, generally between one and three years from the date of the award, and normally subject to the individual remaining in employment
Reverse repo	Security purchased under commitments to sell
RMM	Risk Management Meeting of the Group Management Board
RWA1	Risk-weighted asset
S&P	Standard and Poor's rating agency
SEC	Securities and Exchange Commission, US
Term	Brief description
SIC1	Securities investment conduit
SIV1	Structured investment vehicle
SME	Small and medium-sized enterprise
Solitaire	Solitaire Funding Limited, a special purpose entity managed by HSBC
SPE1	Special purpose entity
STIP	Short-term income protection insurance product
The Hongkong and Shanghai Banking Corporation	The Hongkong and Shanghai Banking Corporation Limited, the founding member of the HSBC Group
UAE	United Arab Emirates
UK	United Kingdom
US	United States
VAR1	Value at risk
VNAV	Variable Net Asset Value

1  For full definitions, see pages 251 to 256.

Term	Definition
Alt-A	A US description for loans regarded as lower risk than sub-prime, but with higher risk characteristics than lending under normal criteria. US credit scores, as well as the level and completeness of mortgage documentation held (such as whether there is proof of income), are considered when determining whether classification as Alt-A is appropriate.
Arrears	Customers are said to be in arrears (or in a state of delinquency) when they are behind in fulfilling their obligations, with the result that an outstanding loan is unpaid or overdue. When a customer is in arrears, the total outstanding loans on which payments are overdue are described as delinquent.
Asset-backed securities ('ABS's)	Securities that represent an interest in an underlying pool of referenced assets. The referenced pool can comprise any assets which attract a set of associated cash flows but are commonly pools of residential or commercial mortgages.
Back-testing	A statistical technique used to monitor and assess the accuracy of a model, and how that model would have performed had it been applied in the past.
Basel II	The capital adequacy framework issued by the Basel Committee on Banking Supervision in June 2006 in the form of the 'International Convergence of Capital Measurement and Capital Standards'.
Collateralised debt obligation ('CDO')	A security issued by a third party which references ABSs and/or certain other related assets purchased by the issuer. CDOs may feature exposure to sub-prime mortgage assets through the underlying assets.
Collectively assessed impairment	Impairment assessment on a collective basis for homogeneous groups of loans that are not considered individually significant.
Commercial paper ('CP')	An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories and meeting short-term liabilities. The debt is usually issued at a discount, reflecting prevailing market interest rates.
Commercial real estate	Any real estate investment, comprising buildings or land, intended to generate a profit, either from capital gain or rental income.
Conduits	A vehicle that holds ABSs such as mortgages, vehicle finance loans and credit card loans which is financed by short-term debt normally issued in the form of commercial paper which is collateralised by the asset-backed debt.
Constant net asset value fund ('CNAV')	A fund that prices its assets on an amortised cost basis, subject to the amortised book value of the portfolio remaining within 50 basis points of its market value.
Contractual maturities	The date on which the final payment (principal or interest) of any financial instrument is due to be paid, at which point all the remaining outstanding principal and interest have been repaid.
Core tier 1 capital	The highest quality form of regulatory capital that comprises total shareholders' equity and related non-controlling interests, less goodwill and intangible assets and certain other regulatory adjustments.
Credit default swap	A derivative contract whereby a buyer pays a fee to a seller in return for receiving a payment in the event of a defined credit event (e.g. bankruptcy, payment default on a reference asset or assets, or downgrades by a rating agency) on an underlying obligation (which may or may not be held by the buyer).

...

Term	Definition
Credit derivative product companies	Independent companies that specialise in selling credit default protection on corporate exposures in the form of credit derivatives.
Credit enhancements	Facilities used to enhance the creditworthiness of financial obligations and cover losses due to asset default.
Credit risk	Risk of financial loss if a customer or counterparty fails to meet an obligation under a contract. It arises mainly from direct lending, trade finance and leasing business, but also from products such as guarantees, derivatives and debt securities.
Credit risk adjustment	An adjustment to the valuation of OTC derivative contracts to reflect the creditworthiness of OTC derivative counterparties.
Credit risk mitigation	A technique to reduce the credit risk associated with an exposure by application of credit risk mitigants such as collateral, guarantee and credit protection.
Customer deposits	Money deposited by account holders. Such funds are recorded as liabilities.
Customer risk rating	A scale of 22 grades measuring internal obligor probability of default.
Debt restructuring	A restructuring by which the terms and provisions of outstanding debt agreements are changed. This is often done in order to improve cash flow and the ability of the borrower to repay the debt. It can involve altering the repayment schedule as well as debt or interest charge reduction.
Debt securities	Assets on the Group's balance sheet representing certificates of indebtedness of credit institutions, public bodies or other undertakings, excluding those issued by central banks.
Debt securities in issue	Transferable certificates of indebtedness of the Group to the bearer of the certificates. These are liabilities of the Group and include certificates of deposits.
Delinquency	See 'Arrears'.
Economic capital	The internally calculated capital requirement which is deemed necessary by HSBC to support the risks to which it is exposed at a confidence level consistent with a target credit rating of AA.
Economic profit	The difference between the return on financial capital invested by shareholders ('return on invested capital') and the cost of that capital. Economic profit may be expressed as a whole number or as a percentage.
Enhanced variable net asset value funds	Funds that price their assets on a fair value basis. Consequently, prices may change from one day to the next.
Expected loss ('EL')	A regulatory calculation of the amount expected to be lost on an exposure using a 12-month time horizon and downturn loss estimates. EL is calculated by multiplying the Probability of Default (a percentage) by the Exposure at Default (an amount) and Loss Given Default (a percentage).
Exposure	A claim, contingent claim or position which carries a risk of financial loss.
Exposure at default ('EAD')	The amount expected to be outstanding after any credit risk mitigation, if and when the counterparty defaults. EAD reflects drawn balances as well as allowance for undrawn amounts of commitments and contingent exposures.

Term	Definition
Fair value adjustment	An adjustment to the fair value of a financial instrument which is determined using a valuation technique (level 2 and level 3) to include additional factors that would be considered by a market participant that are not incorporated within the valuation model.
First lien	A security interest granted over an item of property to secure the repayment of a debt that places its holder first in line to collect repayment from the sale of the underlying collateral in the event of a default on the debt.
Funded exposures	A funded exposure is one where the notional amount of a contract is or has been exchanged.
Funding risk	A form of liquidity risk arising when the liquidity needed to fund illiquid asset positions cannot be obtained at the expected terms and when required.
Impaired loans	Loans where the Group does not expect to collect all the contractual cash flows or expects to collect them later than they are contractually due.
Impairment allowances	Management's best estimate of losses incurred in the loan portfolios at the balance sheet date.
Individually assessed impairment	Exposure to loss is assessed on all individually significant accounts and all other accounts that do not qualify for collective assessment.
Insurance risk	A risk, other than a financial risk, transferred from the holder of a contract to the insurance provider. The principal insurance risk is that, over time, the combined cost of claims, administration and acquisition of the contract may exceed the aggregate amount of premiums received and investment income.
Internal Capital Adequacy Assessment Process	The Group's own assessment of the levels of capital that it needs to hold through an examination of its risk profile from regulatory and economic capital viewpoints.
Internal Model Method	One of three approaches defined by Basel II to determine exposure values for counterparty credit risk.
Internal ratings-based approach ('IRB')	A method of calculating credit risk capital requirements using internal, rather than supervisory, estimates of risk parameters.
Invested capital	Equity capital invested in HSBC by its shareholders.
IRB advanced approach	A method of calculating credit risk capital requirements using internal PD, LGD and EAD models.
IRB foundation approach	A method of calculating credit risk capital requirements using internal PD models but with supervisory estimates of LGD and conversion factors for the calculation of EAD.
ISDA Master agreement	Standardised contract developed by International Swaps and Derivatives Association used as an umbrella under which bilateral derivatives contracts are entered into.
Level 1 - quoted market price	Financial instruments with quoted prices for identical instruments in active markets.
Level 2 - valuation technique using observable inputs	Financial instruments with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial instruments valued using models where all significant inputs are observable.
Level 3 - valuation technique with significant unobservable inputs	Financial instruments valued using valuation techniques where one or more significant inputs are unobservable.

Term	Definition
Leveraged finance	Funding provided for entities with higher than average indebtedness, which typically arises from sub-investment grade acquisitions or event-driven financing.
Liquidity risk	The risk that HSBC does not have sufficient financial resources to meet its obligations as they fall due, or will have to do so at an excessive cost. This risk arises from mismatches in the timing of cash flows.
Loan modification	A process by which the terms of a loan are modified either temporarily or permanently, including changes to the rate and/or the payment. Modification may also lead to a re-ageing of the account.
Loan-to-value ratio ('LTV')	A mathematical calculation that expresses the amount of the loan as a percentage of the value of security. A high LTV indicates that there is less cushion to protect the lender against house price falls or increases in the loan if repayments are not made and interest is added to the outstanding loan balance.
Loans past due	Loans on which repayments are overdue.
Loss given default ('LGD')	The estimated ratio (percentage) of the loss on an exposure to the amount outstanding at default (EAD) upon default of a counterparty.
Market risk	The risk that movements in market risk factors, including foreign exchange rates and commodity prices, interest rates, credit spreads and equity prices, will reduce income or portfolio values.
Medium-term notes ('MTN's)	Notes issued by corporates across a range of maturities. MTNs are frequently issued by corporates under MTN Programmes whereby notes are offered on a regular and continuous basis to investors.
Monoline insurers	Entities which specialise in providing credit protection to the holders of debt instruments in the event of default by the debt security counterparty. This protection is typically held in the form of derivatives such as CDSs referencing the underlying exposures held.
Mortgage-backed securities ('MBS's)	Securities that represent interests in groups of mortgages, which may be on residential or commercial properties. Investors in these securities have the right to cash received from future mortgage payments (interest and/or principal). When the MBS references mortgages with different risk profiles, the MBS is classified according to the highest risk class.
Mortgage-related assets	Assets which are referenced to underlying mortgages.
Mortgage vintage	The year a mortgage was originated.
Negative equity mortgages	Negative equity is the value of the asset less the outstanding balance on the loan. It arises when the value of the property purchased is below the balance outstanding on the loan.
Net interest income	The amount of interest received or receivable on assets net of interest paid or payable on liabilities.
Net principal exposure	The gross principal amount of assets that are not protected by CDSs. It includes assets that benefit from monoline protection, except where this protection is purchased with a CDS.
Non-conforming mortgages	Mortgages that do not meet normal lending criteria, e.g. where the normal level of documentation has not been provided or where increased risk factors are present, such as poor credit history, result in lending at a rate that is higher than the normal lending rate.
Operational risk	The risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events, including legal risk.
Over-the-counter ('OTC')	A bilateral transaction (e.g. derivatives) that is not exchange traded and valued using valuation models.

Term	Definition
Performance Shares	Awards of HSBC Holdings ordinary shares under employee share plans that are subject to the achievement of corporate performance conditions.
Prime	A US description for mortgages granted to the most creditworthy category of borrowers.
Private equity investments	Equity securities in operating companies not quoted on a public exchange, often involving the investment of capital in private companies or the acquisition of a public company that results in the delisting of public equity.
Probability of default ('PD')	The probability that an obligor will default within a one-year time horizon.
Regulatory capital	The capital which HSBC holds, determined in accordance with rules established by the FSA for the consolidated Group and by local regulators for individual Group companies.
Renegotiated loans	Loans whose terms have been renegotiated and are treated as up to date loans for measurement purposes once the minimum number of payments required under the new arrangements have been received.
Restricted Shares	Awards of HSBC Holdings ordinary shares to which employees will normally become entitled, generally between one and three years, subject to remaining an employee.
Retail loans	Money loaned to individuals rather than institutions. This includes both secured and unsecured loans such as mortgages and credit card balances.
Risk appetite	An assessment of the types and quantum of risks to which HSBC wishes to be exposed.
Risk-weighted assets ('RWA's)	Calculated by assigning a degree of risk expressed as a percentage (risk weight) to an exposure in accordance with the applicable Standardised or IRB approach rules.
Second lien	A security interest granted over an item of property to secure the repayment of a debt that is issued against the same collateral as a first lien but that is subordinate to it. In the case of default, repayment for this debt will only be received after the first lien has been repaid.
Securities investment conduits ('SIC's)	Special purpose entities established to remove the risk of a forced sale of assets previously held by Structured Investment Vehicles ('SIV's). The entities invest in a diversified portfolio of interest-earning assets, predominantly funded through the issue of commercial paper, medium-term notes and sale and repurchase agreements.
Securitisation	A transaction or scheme whereby the credit risk associated with an exposure, or pool of exposures, is tranched and where payments to investors in the transaction or scheme are dependent upon the performance of the exposure or pool of exposures. A traditional securitisation involves the transfer of the exposures being securitised to an SPE which issues securities. In a synthetic securitisation, the tranching is achieved by the use of credit derivatives and the exposures are not removed from the balance sheet of the originator.
Structured Investment Vehicles ('SIV's)	Special purpose entities which invest in diversified portfolios of interest-earning assets, generally funded through issues of commercial paper, medium-term notes and other senior debt to take advantage of the spread differentials between the assets in the SIV and the funding cost.

Term	Definition
Special purpose entities ('SPE's)	A corporation, trust or other non-bank entity, established for a narrowly defined purpose, including for carrying on securitisation activities. The structure of the entity and activities are intended to isolate the obligations of the SPE from those of the originator and the holders of the beneficial interests in the securitisation.
Standardised approach	In relation to credit risk, a method for calculating credit risk capital requirements using External Credit Assessment Institutions ('ECAI') ratings and supervisory risk weights. In relation to operational risk, a method of calculating the operational capital requirement by the application of a supervisory defined percentage charge to the gross income of eight specified business lines.
Structured finance / notes	An instrument whose return is linked to the level of a specified index or the level of a specified asset. The return on a structured note can be linked to equities, interest rates, foreign exchange, commodities or credit. Structured notes may or may not offer full or partial capital protection in the event of a decline in the underlying index or asset.
Student loan related assets	Securities with collateral relating to student loans.
Subordinated liabilities	Liabilities which rank after the claims of other creditors of the issuer in the event of insolvency or liquidation.
Sub-prime	A US description for customers with high credit risk, for example those who have limited credit histories, modest incomes, high debt-to-income ratios, high loan-to-value ratios (for real estate secured products) or have experienced credit problems caused by occasional delinquencies, prior charge-offs, bankruptcy or other credit-related problems.
Tier 1 capital	A component of regulatory capital, comprising core tier 1 and other tier 1 capital. Other tier 1 capital includes qualifying hybrid capital instruments such as non-cumulative perpetual preference shares and innovative tier 1 securities.
Tier 2 capital	A component of regulatory capital, comprising qualifying subordinated loan capital, related non-controlling interests, allowable collective impairment allowances and unrealised gains arising on the fair valuation of equity instruments held as available-for-sale. Tier 2 capital also includes reserves arising from the revaluation of properties.
Troubled debt restructuring	A US description for restructuring a debt whereby the creditor for economic or legal reasons related to a debtor's financial difficulties grants a concession to the debtor that it would not otherwise consider.
Unfunded exposures	An exposure where the notional amount of a contract has not been exchanged.
Value-at-risk ('VAR')	A technique that measures the loss that could occur on risk positions as a result of adverse movements in market risk factors (e.g. rates, prices, volatilities) over a specified time horizon and to a given level of confidence.
Wholesale loans	Money loaned to sovereign borrowers, banks, non-bank financial institutions and corporate entities.
Write-down	Reduction in the carrying value of an asset due to impairment or fair value movements.
Wrong-way risk	An adverse correlation between the counterparty's probability of default and the mark-to-market value of the underlying transaction.

Accounting policies 103, 213

Areas of special interest 148

Asset-backed securities 97, 101, 102, 105, 179

Assets

by customer group 30

by geographical region 46, 231

financial assets designated at fair value 220

held in custody and under administration 29

maturity analysis 227

movement in 26

non-current assets held for sale 226

trading 219

Associates and joint ventures 24

Auditor's review report 234

Balance sheet

consolidated 26, 206

data 31, 33, 38, 39, 41, 43, 48, 53, 56, 65, 69, 73, 76, 80, 84, 88, 92

movement 26

underlying/reported reconciliation 28

Basis of preparation 30, 212

Business (and financial) highlights 31, 33, 35, 39

Business performance review

Europe 49

Hong Kong 57

Latin America 89

Middle East 74

North America 81

Rest of Asia-Pacific 66

Capital

future developments 192

management 189

measurement and allocation 190

structure 193

Cash flow

consolidated statement 207

notes 229

projected scenario analysis 174

Cautionary statement regarding forward-looking statements 4

Challenges 11, 138

Client assets 39

Collateral 142

Commercial Banking 33

Commitments to lend 136

Comparative information 213

Compliance with IFRSs 212

Composition of group (changes in) 213

Constant currency 12

Contents 1, 212

Contingent liabilities, contractual commitments and financial guarantee contracts 230

Copies of the Interim Report 2010 246

Corporate governance 136, 245

Credit quality 159

Credit risk 141

credit exposure 141, 142

Customer accounts 47, 56, 64, 72, 79, 87

Customer groups and global businesses 30

Daily distribution of trading revenues 178

Dealings in HSBC Holdings shares 243

Defined terms - Inside front cover

Derivatives 144

by product contract type 221

hedging instruments 222

trading and credit 222

Directors

biographies 198

interests 235

Dividends 214, 244

Earnings per share 3, 204, 214

Economic briefing

Europe 49

Hong Kong 57

Latin America 88

Middle East 73

North America 79

Rest of Asia-Pacific 64

Economic profit/(loss) 25

Equity 27, 208

Equity securities available for sale 180

Estimates and assumptions 213

Europe

balance sheet data 46, 48, 53

business performance review 49

challenges in regulation and supervision 139

customer accounts 47

economic briefing 49

impairment allowances 164

loans and advances 47, 124

profit before tax 46, 47, 48, 53

risk-weighted assets 46

Events after the balance sheet date 232

Fair values

of financial instruments at fair value 18, 114

of financial instruments not at fair value 123

valuation bases 116

Fee income (net) 16

Final results 245

Financial assets

designated at fair value 220

reclassification 98

Financial highlights 2, 31, 33, 35, 39, 41

Financial investments 224

Financial liabilities designated at fair value 227

Footnotes 95, 137, 196, 211

Foreclosed properties in US 159

Foreign exchange rates 3

Funds under management 28

Future accounting developments 213

Gains less losses from financial investments 19

Geographical regions 46

Global Banking and Markets 35

ABSs classified as AFS 101

management view 36

Goodwill impairment 231

Group Chief Executive's Review 5

Group Managing Directors 203

Hong Kong

balance sheet data 46, 56, 60

business performance review 57

economic briefing 57

impairment allowances 164

loans and advances 56, 124

profit before tax 46, 56, 60

risk-weighted assets 46

HSBC Finance 174

Impairment

allowances and charges 164

available-for-sale assets 102

by geographical region 164, 169

by industry 166

charges and other credit risk provisions 21

impaired loans 164, 169, 170

Income from financial instruments designated at fair value (net) 18

Income statement (consolidated) 14, 204

Insurance

balance sheet by type of contract 187

claims incurred and movement in liabilities to policyholders (net) 21

net earned premiums 19

liabilities under contracts issued 186

risk management 185

Interest income (net) 15

sensitivity 180

Interest rate repricing gap 182

Interim Management Statement 245

Interim Report 2010 232

Latin America

balance sheet data 46, 88, 92

business performance review 89

customer accounts 87

economic briefing 88

impairment allowances 164

loans and advances 87, 124, 147

profit before tax 46, 87, 88, 92

risk-weighted assets 46

Legal risk 184

Leveraged finance transactions 102, 113, 136

Liabilities

financial liabilities designated at fair value 227

maturity analysis 227

movement in 27

trading 227

Liquidity and funding 172

contingent liquidity risk 174

Litigation 231

Loans and advances

by country/region 47, 56, 64, 72, 79, 87, 124

by credit quality 159

by industry sector 145

delinquency in the US 157

exposure 144

impaired 164, 170

mortgage lending 152

past due but not impaired 162

personal lending 150

potential problem loans 171

renegotiated 158

to banks/customers 145, 220

unimpaired loans contractually past due 90 days or more 170

wholesale lending 148

within Rest of Asia-Pacific, Middle East and Latin America 147

Loan impairment charges and other credit risk provisions 21

Market risk 175, 192

measures applicable to parent 182

Market turmoil

accounting policies 103

asset-backed securities 98, 101, 102, 105

business model 102

disclosure policy 97

exposures 98, 103, 110, 129

financial effect 100

impact on liquidity risk 175

impact of market risk 177

reclassification of financial assets 99

special purpose entities 101, 125, 134

Middle East

balance sheet data 46, 73, 76

business performance review 74

customer accounts 72

economic briefing 73

impairment allowances 164

loans and advances 72, 124, 147

profit/(loss) before tax 46, 72, 73, 76

risk-weighted assets 46

Money market funds 130

Monoline insurers 111

Mortgage lending 152

Non-trading portfolios 179

North America

balance sheet data 46, 80, 84

business performance review 81

challenges in regulation and supervision (US) 140

customer accounts 79

economic briefing 79

impairment allowances 164

loans and advances 79, 124, 147

profit/(loss) before tax 46, 79, 80, 84

risk-weighted assets 46

Notifiable interests in share capital 243

Off-balance sheet arrangements 136

Operating expenses 23

Operating income (net) 231

Operating income (other) 20

Operational risk 183, 192

'Other' customer group 41

Pension scheme 182

Personal Financial Services 31

Pillar 1, 2 and 3 191, 192

Post-employment benefits 215

Potential problem loans 171

Principal activities 11

Private Banking 39

Profit before tax

attributable 215

by country 47, 63, 72, 79, 87

by customer group 30, 31, 33, 35, 39, 41, 43, 53, 60, 69, 76, 84, 92

by geographical region 46, 48, 53, 56, 60, 65, 69, 73, 76, 80, 84, 88, 92, 231

consolidated 204

data 3

underlying/reported reconciliations 11, 13, 32, 34, 37, 40, 42, 49, 52, 57, 59, 66, 68, 74, 75, 81, 83, 89, 91

Ratios

advances to core funding 173

capital 3

cost efficiency 3, 24

credit coverage 3

earnings to combined fixed charges 29

efficiency and revenue mix 3

financial 3

performance 3

stressed one month coverage 173

Regulation and supervision (challenges) 138

Related parties 29

Reputational risk 184

Responsibility statement 233

Rest of Asia-Pacific

balance sheet data 46, 65, 69

business performance review 66

customer accounts 64

economic briefing 64

impairment allowances 164

loans and advances 64, 124, 147

profit before tax 46, 63, 65, 69

risk-weighted assets 46

Risk elements, analysis of 171

Risk elements in the loan portfolio 170

Risk management 103, 140

compliance 184

contingent liquidity 174

credit 141

credit spread 179

foreign exchange 183

gap 179

insurance operations 185

legal 184

liquidity and funding 172

market 175, 192

operational 183, 192

pension 182

reputational 184

security and fraud 184

Risk-weighted assets 46, 194

Securities held for trading 144

Securitisation 192

Segmental analysis 231

Sensitivity 175

projected net interest income 180

Share capital - notifiable interests 243

Shareholder enquiries 246

Share information 4

Share option plans

discretionary share incentive plans 240

subsidiary company plans

HSBC Bank Bermuda 242

HSBC Finance 241

HSBC France 241

Directors' interests 235

employee share option plans 238

Sovereign risk 148

Special purpose entities 101, 125, 134, 136

Staff numbers 23

Statement of comprehensive income (consolidated) 205

Stock codes 246

Strategic direction 11

Stress testing 176

Tax expense 217

Telephone and online share-dealing service 245

Total shareholder return 4

Trading

assets 219

derivatives 222

income (net) 17

liabilities 227

portfolios 178

Troubled debt restructurings 170

Underlying performance 12

Value at risk 176

Wholesale lending 148

 

END

 

 

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