Annual Financial Report - 24 of 54

RNS Number : 0760I

HSBC Holdings PLC

20 March 2015

 



Risk profile2	111
Managing risk2	112
Risk management framework	112
Risk factors	113
Risks managed by HSBC	114
Risk management processes and procedures	117
Risk governance			204
Risk appetite			205
Top and emerging risks2	118
Macroeconomic and geopolitical risk	118
Macro-prudential, regulatory and legal risks to our business model	119
Regulatory commitments and consent orders	120
Risks related to our business operations, governance and internal control systems	122
Areas of special interest2	124
Financial crime compliance and regulatory compliance	124
Private Bank	124
Regulatory stress tests	125
Oil and gas prices	126
Russia	126
Eurozone	126
Credit risk4	127		206
Liquidity and funding4	163		215
Market risk4	175		221
Operational risk2	186		228
Compliance risk	189		229
Legal risk			229
Global security and fraud risk			230
Systems risk			231
Vendor risk management			231
Risk management of insurance operations3	190		231
Other material risks2	199
Reputational risk	199		235
Fiduciary risk	200		235
Pension risk	200		236
Sustainability risk	201		237
1   Appendix to Risk - risk policies and practices.
2   Unaudited.     3  Audited.     4  Audited where indicated.

For details of HSBC's policies and practices regarding risk management and governance see the Appendix to Risk on page 204.

Risk profile

(Unaudited)

Managing our risk profile

·   A strong balance sheet remains core to our philosophy.

·   Our portfolios continue to be aligned to our risk appetite and strategy.

·   Our risk management framework is supported by strong forward-looking risk identification.

Maintaining capital strength and a strong liquidity position

·   Our transitional common equity tier 1 capital ratio remains strong at 10.9%.

·   We have sustained our strong liquidity position throughout 2014.

·   The ratio of customer advances to deposits remains significantly below 90%.

Strong governance

·   Robust risk governance and accountability is embedded across the Group.

·   The Board, advised by the Group Risk Committee, approves our risk appetite.

·   Our global risk operating model supports adherence to globally consistent standards and risk management policies across the Group.

Our top and emerging risks

·   Macroeconomic and geopolitical risk.

·   Macro-prudential, regulatory and legal risks to our business model.

·   Risks related to our business operations, governance and internal control systems.

 

END

 

 

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