Annual Financial Report - 44y of 48

RNS Number : 3949B

HSBC Holdings PLC

03 April 2013

 



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

The table on page 486 provides an analysis of consolidated total assets, liabilities and off-balance sheet commitments by residual contractual maturity at the balance sheet date. Asset and liability balances are included in the maturity analysis as follows:

·     except for reverse repos, repos and debt securities in issue, trading assets and liabilities (including trading derivatives) are included in the 'Due less than one month' time bucket, and not by contractual maturity because trading balances are typically held for short periods of time;

·     financial assets and liabilities with no contractual maturity (such as equity securities) are included in the 'Due over five years' time bucket. Undated or perpetual instruments are classified based on the contractual notice period which the counterparty of the instrument is entitled to give. Where there is no contractual notice period, undated or perpetual contracts are included in the 'Due over five years' time bucket;

·     non financial assets and liabilities with no contractual maturity (such as property, plant and equipment, goodwill and intangible assets, current and deferred tax assets and liabilities and retirement benefit liabilities) are included in the 'Due over five years' time bucket;

·     financial instruments included within assets and liabilities of disposal groups held for sale are classified on the basis of the contractual maturity of the underlying instruments and not on the basis of the disposal transaction; and

·     liabilities under insurance contracts are included in the 'Due over five years' time bucket. Liabilities under investment contracts are classified in accordance with their contractual maturity. Undated investment contracts are classified based on the contractual notice period investors are entitled to give. Where there is no contractual notice period, undated contracts are included in the 'Due over five years' time bucket.

Loan and other credit-related commitments are classified on the basis of the earliest date they can be drawn down.

HSBC

Maturity analysis of assets and liabilities

	At 31 December 2012
	Due    less than     1 month		Due     between       1 and 3      months		Due     between       3 and 6      months		Due     between       6 and 9      months		Due     between   9 months and 1 year		Due     between       1 and 2          years		Due     between       2 and 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 ...................................	141,532		-		-		-		-		-		-		-		141,532
Items in the course of collection from other banks ..........	7,303		-		-		-		-		-		-		-		7,303
Hong Kong Government certificates of indebtedness .......	22,743		-		-		-		-		-		-		-		22,743
Trading assets ..................................................................	382,654		12,506		9,829		248		3,169		405		-		-		408,811
- Reverse repos ...........................................................	92,525		12,506		9,829		248		3,169		405		-		-		118,682
- Other trading assets ..................................................	290,129		-		-		-		-		-		-		-		290,129
Financial assets designated at fair value ............................	437		576		425		526		239		2,462		3,545		25,372		33,582
Derivatives ......................................................................	354,222		65		252		22		227		596		1,127		939		357,450
- Trading .....................................................................	353,803		-		-		-		-		-		-		-		353,803
- Non-trading ..............................................................	419		65		252		22		227		596		1,127		939		3,647
Loans and advances to banks ...........................................	104,397		22,683		5,859		2,292		5,032		6,238		2,027		4,018		152,546
- Reverse repos ...........................................................	28,833		3,101		2,071		356		963		138		-		-		35,462
- Other loans and advances to banks ........................... :	75,564		19,582		3,788		1,936		4,069		6,100		2,027		4,018		117,084
Loans and advances to customers .....................................	221,242		69,709		47,507		29,659		71,928		59,100		194,147		304,331		997,623
- Personal ...................................................................	49,042		8,578		7,242		6,763		9,547		17,696		66,684		241,329		406,881
- Corporate and commercial ........................................	138,999		49,166		35,463		19,334		53,766		38,070		119,330		55,910		510,038
- Financial ...................................................................	33,201		11,965		4,802		3,562		8,615		3,334		8,133		7,092		80,704
Of which:
- Reverse repos .......................................................	19,847		10,640		2,310		1,050		554		250		-		-		34,651
Financial investments ......................................................	28,085		51,339		33,996		14,072		26,478		61,443		93,127		112,561		421,101
Assets held for sale ..........................................................	4,953		298		515		125		669		519		1,079		9,964		18,122
Accrued income ...............................................................	2,776		2,325		739		493		542		164		217		1,284		8,540
Other financial assets .......................................................	13,383		3,486		1,759		337		745		332		372		3,170		23,584
Total financial assets ...................................................	1,283,727		162,987		100,881		47,774		109,029		131,259		295,641		461,639		2,592,937
Non financial assets .........................................................	-		-		-		-		-		-		-		99,601		99,601
Total assets ....................................................................	1,283,727		162,987		100,881		47,774		109,029		131,259		295,641		561,240		2,692,538

	At 31 December 2012
	Due    less than     1 month		Due     between       1 and 3      months		Due     between       3 and 6      months		Due     between       6 and 9      months		Due     between   9 months and 1 year		Due     between       1 and 2          years		Due     between       2 and 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 ............................	22,742		-		-		-		-		-		-		-		22,742
Deposits by banks ...............................................................	79,100		12,029		1,957		437		2,155		1,695		9,440		616		107,429
- Repos ..........................................................................	6,593		4,645		711		-		-		-		-		-		11,949
- Other deposits by banks ...............................................	72,507		7,384		1,246		437		2,155		1,695		9,440		616		95,480
Customer accounts1 ............................................................	1,193,736		67,638		34,010		11,939		16,019		7,034		8,985		653		1,340,014
- Personal ......................................................................	539,792		35,260		21,939		7,900		11,100		4,687		3,916		307		624,901
- Corporate and commercial ...........................................	473,370		24,018		9,044		2,925		3,354		1,069		1,193		305		515,278
- Financial ......................................................................	180,574		8,360		3,027		1,114		1,565		1,278		3,876		41		199,835
Of which: repos ..............................................................	22,446		3,869		1,047		345		567		344		-		-		28,618
Items in the course of transmission to other banks .............	7,131		7		-		-		-		-		-		-		7,138
Trading liabilities ................................................................	240,212		29,003		4,707		1,820		5,197		3,867		9,736		10,021		304,563
- Repos ..........................................................................	96,690		27,002		3,319		985		2,227		-		-		-		130,223
- Debt securities in issue .................................................	380		2,001		1,388		835		2,970		3,867		9,736		10,021		31,198
- Other trading liabilities ................................................	143,142		-		-		-		-		-		-		-		143,142
Financial liabilities designated at fair value ..........................	427		81		2,068		2,163		1,605		2,916		28,902		49,558		87,720
- Debt securities in issue: covered bonds ..........................	-		-		-		-		-		-		4,633		-		4,633
- Debt securities in issue: otherwise secured .....................	-		8		2,023		-		22		2,040		228		221		4,542
- Debt securities in issue: unsecured .................................	392		49		1		2,117		1,357		690		23,495		15,933		44,034
- Subordinated liabilities and preferred securities .............	-		-		-		-		-		-		21		21,538		21,559
- Other ...........................................................................	35		24		44		46		226		186		525		11,866		12,952
Derivatives .........................................................................	352,696		75		43		29		2,408		628		1,212		1,795		358,886
- Trading ........................................................................	352,195		-		-		-		-		-		-		-		352,195
- Non-trading .................................................................	501		75		43		29		2,408		628		1,212		1,795		6,691
Debt securities in issue ........................................................	23,738		12,368		6,355		2,840		27,992		11,992		29,100		5,076		119,461
- Covered bonds .............................................................	-		-		1,133		422		757		2,328		1,920		486		7,046
- Otherwise secured ........................................................	14,598		1,894		-		184		753		1,634		5,779		950		25,792
- Unsecured ....................................................................	9,140		10,474		5,222		2,234		26,482		8,030		21,401		3,640		86,623
Liabilities of disposal groups held for sale ............................	2,475		242		433		254		188		166		45		-		3,803
Accruals ..............................................................................	3,369		4,173		907		521		1,200		232		419		842		11,663
Subordinated liabilities .........................................................	32		44		-		10		-		1,481		1,516		26,396		29,479
Other financial liabilities .....................................................	19,837		4,881		2,115		519		867		599		1,409		2,190		32,417
Total financial liabilities ...............................................	1,945,495		130,541		52,595		20,532		57,631		30,610		90,764		97,147		2,425,315
Non financial liabilities .......................................................	-		-		-		-		-		-		-		84,094		84,094
Total liabilities ................................................................	1,945,495		130,541		52,595		20,532		57,631		30,610		90,764		181,241		2,509,409

Maturity analysis of assets and liabilities (continued)

	At 31 December 2011
	Due      less than      1 month		Due       between        1 and 3        months		Due       between        3 and 6        months		Due       between        6 and 9        months		Due       between     9 months   and 1 year		Due       between        1 and 2           years		Due       between        2 and 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 ...................................	129,902		-		-		-		-		-		-		-		129,902
Items in the course of collection from other banks ..........	8,208		-		-		-		-		-		-		-		8,208
Hong Kong Government certificates of indebtedness .......	20,922		-		-		-		-		-		-		-		20,922
Trading assets ..................................................................	318,031		7,432		1,712		225		3,033		18		-		-		330,451
- Reverse repos ...........................................................	67,428		7,432		1,712		225		3,033		18		-		-		79,848
- Other trading assets ..................................................	250,603		-		-		-		-		-		-		-		250,603
Financial assets designated at fair value ............................	595		565		687		595		139		2,748		4,145		21,382		30,856
Derivatives ......................................................................	343,980		155		275		136		423		606		605		199		346,379
- Trading .....................................................................	342,914		-		-		-		-		-		-		-		342,914
- Non-trading ..............................................................	1,066		155		275		136		423		606		605		199		3,465
Loans and advances to banks ...........................................	123,370		25,288		5,460		2,573		14,441		3,120		3,346		3,389		180,987
- Reverse repos ...........................................................	35,372		3,854		-		1,047		135		1,301		201		-		41,910
- Other loans and advances to banks ............................	87,998		21,434		5,460		1,526		14,306		1,819		3,145		3,389		139,077
Loans and advances to customers .....................................	211,680		70,941		45,294		28,769		53,251		63,518		186,601		280,375		940,429
- Personal ...................................................................	47,609		8,314		6,912		5,975		7,674		19,005		66,525		221,851		383,865
- Corporate and commercial ........................................	123,130		49,856		34,082		17,304		38,875		39,467		112,270		56,061		471,045
- Financial ...................................................................	40,941		12,771		4,300		5,490		6,702		5,046		7,806		2,463		85,519
Of which:
- Reverse repos .......................................................	23,704		10,450		2,306		3,710		-		250		1,000		-		41,420
Financial investments ......................................................	25,546		50,070		39,698		14,879		21,902		45,266		90,953		111,730		400,044
Assets held for sale ..........................................................	4,922		5,767		4,427		3,233		2,934		7,223		7,064		2,238		37,808
Accrued income ...............................................................	2,787		2,479		765		393		361		231		339		1,596		8,951
Other financial assets .......................................................	8,878		3,403		2,084		785		2,771		513		140		5,466		24,040
Total financial assets .......................................................	1,198,821		166,100		100,402		51,588		99,255		123,243		293,193		426,375		2,458,977
Non financial assets .........................................................	-		-		-		-		-		-		-		96,602		96,602
Total assets .....................................................................	1,198,821		166,100		100,402		51,588		99,255		123,243		293,193		522,977		2,555,579

	At 31 December 2011
	Due      less than      1 month		Due       between        1 and 3        months		Due       between        3 and 6        months		Due       between        6 and 9        months		Due       between     9 months   and 1 year		Due       between        1 and 2           years		Due       between        2 and 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 ............................	20,922		-		-		-		-		-		-		-		20,922
Deposits by banks ...............................................................	84,091		12,056		2,145		1,406		1,673		1,681		8,938		832		112,822
- Repos ..........................................................................	16,301		336		-		979		-		-		-		-		17,616
- Other deposits by banks ...............................................	67,790		11,720		2,145		427		1,673		1,681		8,938		832		95,206
Customer accounts1 ............................................................	1,054,843		84,853		35,792		16,650		22,052		12,982		25,362		1,391		1,253,925
- Personal ......................................................................	488,966		40,522		19,917		6,433		14,057		6,214		12,260		723		589,092
- Corporate and commercial ...........................................	405,015		32,088		12,754		9,148		3,933		5,484		8,272		599		477,293
- Financial ......................................................................	160,862		12,243		3,121		1,069		4,062		1,284		4,830		69		187,540
Of which: repos ..............................................................	13,299		6,921		3,444		5,330		1,412		379		-		-		30,785
Items in the course of transmission to other banks .............	8,745		-		-		-		-		-		-		-		8,745
Trading liabilities ................................................................	228,365		7,757		1,782		726		6,794		4,185		8,418		7,165		265,192
- Repos ..........................................................................	77,900		6,056		716		-		2,160		6		-		-		86,838
- Debt securities in issue .................................................	2,098		1,701		1,066		726		4,634		4,179		8,418		7,165		29,987
- Other trading liabilities ................................................	148,367		-		-		-		-		-		-		-		148,367
Financial liabilities designated at fair value ..........................	39		22		2,846		430		5,923		4,575		24,857		47,032		85,724
- Debt securities in issue: covered bonds ..........................	-		-		-		-		2		-		2,263		374		2,639
- Debt securities in issue: otherwise secured .....................	-		-		-		-		-		2,164		2,013		109		4,286
- Debt securities in issue: unsecured .................................	-		-		2,802		385		3,115		2,093		20,091		16,786		45,272
- Subordinated liabilities and preferred securities .............	-		-		-		-		2,765		1		17		18,828		21,611
- Other ...........................................................................	39		22		44		45		41		317		473		10,935		11,916
Derivatives .........................................................................	339,092		103		68		19		144		389		1,202		4,363		345,380
- Trading ........................................................................	338,788		-		-		-		-		-		-		-		338,788
- Non-trading .................................................................	304		103		68		19		144		389		1,202		4,363		6,592
Debt securities in issue ........................................................	31,806		15,900		4,920		5,577		15,926		14,438		36,120		6,326		131,013
- Covered bonds .............................................................	4		627		383		52		1,548		2,277		4,133		1,119		10,143
- Otherwise secured ........................................................	17,869		5,293		273		387		392		704		3,894		2,171		30,983
- Unsecured ....................................................................	13,933		9,980		4,264		5,138		13,986		11,457		28,093		3,036		89,887
Liabilities of disposal groups held for sale ............................	16,412		1,164		462		225		2,536		343		297		561		22,000
Accruals ..............................................................................	3,141		4,921		1,142		443		707		415		384		646		11,799
Subordinated liabilities .........................................................	129		-		-		300		381		10		3,026		26,760		30,606
Other financial liabilities .....................................................	12,403		5,415		2,419		835		1,576		814		626		1,823		25,911
Total financial liabilities .....................................................	1,799,988		132,191		51,576		26,611		57,712		39,832		109,230		96,899		2,314,039
Non financial liabilities .......................................................	-		-		-		-		-		-		-		75,447		75,447
Total liabilities ...................................................................	1,799,988		132,191		51,576		26,611		57,712		39,832		109,230		172,346		2,389,486

1  Includes US$366,203m (2011: US$387,655m) insured by guarantee schemes

Maturity analysis of off-balance sheet commitments received

	Due    less than     1 month		Due     between       1 and 3      months		Due     between       3 and 6      months		Due     between       6 and 9      months		Due     between   9 months and 1 year		Due     between       1 and 2          years		Due     between       2 and 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 2012
Loan and other credit-related commitments .....................................	2,455		3		8		5		8		25		75		98		2,677
At 31 December 2011
Loan and other credit-related commitments .....................................	5,280		2		36		3		6		19		508		143		5,997

Maturity analysis of off-balance sheet commitments given

	Due    less than     1 month		Due     between       1 and 3      months		Due     between       3 and 6      months		Due     between       6 and 9      months		Due     between   9 months and 1 year		Due     between       1 and 2          years		Due     between       2 and 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 2012
Loan and other credit-related commitments ...................	408,815		43,394		8,389		5,191		37,751		11,598		45,910		18,421		579,469
Of which:
- Personal ..................................................................	153,255		6,999		704		185		19,049		1,216		1,616		8,159		191,183
- Corporate and commercial ......................................	225,899		34,368		6,365		4,951		15,412		9,488		37,179		8,593		342,255
- Financial .................................................................	29,661		2,027		1,320		55		3,290		894		7,115		1,669		46,031
At 31 December 2011
Loan and other credit-related commitments ...................	373,426		47,187		20,076		35,673		38,368		32,230		78,831		29,113		654,904
Of which:
- Personal ..................................................................	246,570		7,569		2,124		4,848		4,431		7,507		12,262		7,706		293,017
- Corporate and commercial ......................................	114,741		36,866		15,289		19,589		25,890		20,767		57,853		18,281		309,276
- Financial .................................................................	12,115		2,752		2,663		11,236		8,047		3,956		8,716		3,126		52,611

HSBC Holdings

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

	At 31 December 2012
	Due    less than     1 month		Due     between       1 and 3      months		Due     between       3 and 6      months		Due     between       6 and 9      months		Due     between   9 months and 1 year		Due     between       1 and 2          years		Due     between       2 and 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 ............................	353		-		-		-		-		-		-		-		353
Derivatives ....................................................................	3,768		-		-		-		-		-		-		-		3,768
Loans and advances to HSBC undertakings .....................	6,275		2,395		3,992		-		15		35		635		28,328		41,675
Financial investments ....................................................	23		-		8		-		-		-		-		1,177		1,208
Other financial assets .....................................................	4		-		-		-		-		-		-		-		4
Total financial assets .................................................	10,423		2,395		4,000		-		15		35		635		29,505		47,008
Non financial assets .......................................................	-		-		-		-		-		-		-		92,476		92,476
Total assets ..................................................................	10,423		2,395		4,000		-		15		35		635		121,981		139,484
Financial liabilities
Amounts owing to HSBC undertakings ...........................	3,576		19		980		-		-		-		1,333		6,948		12,856
Financial liabilities designated at fair value .....................	-				-		-		-		-		1,258		21,937		23,195
- Debt securities in issue ................................................	-		-		-		-		-		-		1,258		7,319		8,577
- Subordinated liabilities and preferred securities ............	-		-		-		-		-		-		-		14,618		14,618
Derivatives ....................................................................	760		-		-		-		-		-		-		-		760
Debt securities in issue ...................................................	-		-		-		-		-		1,646		-		1,045		2,691
Accruals .........................................................................	223		171		190		21		-		-		-		-		605
Subordinated liabilities ....................................................	-		-		-		-		-		-		-		11,907		11,907
Total financial liabilities ..........................................	4,559		190		1,170		21		-		1,646		2,591		41,837		52,014
Non financial liabilities ..................................................	-		-		-		-		-		-		-		443		443
Total liabilities ...........................................................	4,559		190		1,170		21		-		1,646		2,591		42,280		52,457
Off-balance sheet commitments given
Undrawn formal standby facilities, credit lines and other commitments to lend .................................................	1,200		-		-		-		-		-		-		-		1,200

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

	At 31 December 2011
	Due      less than      1 month		Due       between        1 and 3        months		Due       between        3 and 6        months		Due       between        6 and 9        months		Due       between     9 months   and 1 year		Due       between        1 and 2           years		Due       between        2 and 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 ............................	316		-		-		-		-		-		-		-		316
Derivatives ....................................................................	3,568		-		-		-		-		-		-		-		3,568
Loans and advances to HSBC undertakings .....................	5,518		973		4,028		366		1,312		-		1,994		13,857		28,048
Financial investments ....................................................	22		-		9		-		-		-		-		1,047		1,078
Other financial assets .....................................................	1		-		-		-		-		-		-		-		1
Total financial assets .....................................................	9,425		973		4,037		366		1,312		-		1,994		14,904		33,011
Non financial assets .......................................................	-		-		-		-		-		-		-		90,851		90,851
Total assets ...................................................................	9,425		973		4,037		366		1,312		-		1,994		105,755		123,862
Financial liabilities
Amounts owing to HSBC undertakings ...........................	1,101		-		64		-		-		-		1,314		-		2,479
Financial liabilities designated at fair value .....................	-		-		-		-		2,765		-		1,177		17,209		21,151
- Debt securities in issue ................................................	-		-		-		-		-		-		1,177		4,576		5,753
- Subordinated liabilities and preferred securities ............	-		-		-		-		2,765		-		-		12,633		15,398
Derivatives ....................................................................	1,067		-		-		-		-		-		-		-		1,067
Debt securities in issue ...................................................	-		-		-		-		-		-		1,612		1,001		2,613
Accruals .........................................................................	200		167		188		20		-		-		-		-		575
Subordinated liabilities ....................................................	-		-		-		-		-		-		-		12,450		12,450
Other financial liabilities ................................................	885		-		-		-		-		-		-		-		885
Total financial liabilities ................................................	3,253		167		252		20		2,765		-		4,103		30,660		41,220
Non financial liabilities ..................................................	-		-		-		-		-		-		-		459		459
Total liabilities ..............................................................	3,253		167		252		20		2,765		-		4,103		31,119		41,679
Off-balance sheet commitments given
Undrawn formal standby facilities, credit lines and other commitments to lend .................................................	1,810		-		-		-		-		-		-		-		1,810

35   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 268.

In its separate financial statements, HSBC Holdings recognises its foreign exchange gains and losses on structural foreign exchange exposures in the income statement.

Net structural foreign exchange exposures

	At 31 December
	2012		2011
	US$m		US$m
Currency of structural exposure
Pound sterling .........................................................................................................................	27,305		22,668
Euro ........................................................................................................................................	23,945		22,400
Chinese renminbi ....................................................................................................................	19,060		21,234
Hong Kong dollars ..................................................................................................................	14,466		4,828
Brazilian reais .........................................................................................................................	6,279		6,097
Mexican pesos ........................................................................................................................	5,948		5,319
Canadian dollars ......................................................................................................................	5,024		4,848
Indian rupees ...........................................................................................................................	3,967		3,967
Swiss francs .............................................................................................................................	2,925		2,133
UAE dirhams ..........................................................................................................................	2,807		2,650
Saudi riyals ..............................................................................................................................	2,219		1,965
Malaysian ringgit ....................................................................................................................	2,165		1,829
Turkish lira .............................................................................................................................	1,787		1,565
Australian dollars ....................................................................................................................	1,602		1,455
Korean won ............................................................................................................................	1,520		1,411
Taiwanese dollars ....................................................................................................................	1,513		1,457
Indonesian rupiah ....................................................................................................................	1,317		1,235
Argentine pesos ......................................................................................................................	1,054		984
Egyptian pounds .....................................................................................................................	699		692
Vietnamese dong .....................................................................................................................	762		686
Singapore dollars .....................................................................................................................	874		670
Philippine pesos ......................................................................................................................	787		663
Thailand baht...........................................................................................................................	653		484
Qatari rial ...............................................................................................................................	599		608
Others, each less than US$500m .............................................................................................	4,169		4,167
Total ......................................................................................................................................	133,446		116,015

Shareholders' equity would decrease by US$2,562m (2011: US$2,146m) if euro and sterling foreign currency exchange rates weakened by 5% relative to the US dollar.

36    Assets charged as security for liabilities and collateral accepted as security for assets

Financial assets pledged to secure liabilities

	Assets pledged at 31 December
	2012		2011
	US$m		US$m
Treasury bills and other eligible securities ................................................................................	4,381		5,185
Loans and advances to banks ...................................................................................................	22,074		19,247
Loans and advances to customers ............................................................................................	81,333		81,570
Debt securities .........................................................................................................................	198,671		210,255
Equity shares ...........................................................................................................................	6,255		6,916
Other ......................................................................................................................................	1,090		1,003
	313,804		324,176

The table above shows assets over which a legal charge has been granted to secure liabilities. The amount of such assets may be greater than the book value of assets utilised as collateral for funding purposes or to cover liabilities. This is the case for securitisations and covered bonds where the amount of liabilities issued, plus any mandatory over-collateralisation, is less than the book value of financial assets available for funding or collateral purposes in the relevant pool of assets. This is also the case where financial assets are placed with a custodian or settlement agent, which has a floating charge over all the financial assets placed to secure any liabilities under settlement accounts.

These transactions are conducted under terms that are usual and customary to collateralised transactions, including, where relevant, standard securities lending and repurchase agreements.

Collateral accepted as security for assets

The fair value of assets accepted as collateral that HSBC is permitted to sell or repledge in the absence of default is US$295,709m (2011: US$302,285m). The fair value of any such collateral that has been sold or repledged was US$202,662m (2011: US$188,682m). HSBC is obliged to return equivalent securities.

These transactions are conducted under terms that are usual and customary to standard securities borrowing and reverse repurchase agreements.

37   Non-controlling interests

	At 31 December
	2012		2011
	US$m		US$m
Non-controlling interests attributable to holders of ordinary shares in subsidiaries ...................	5,159		4,656
Preferred securities issued by subsidiaries ..................................................................................	2,728		2,712
	7,887		7,368

Preferred securities issued by subsidiaries

Preferred securities are securities for which there is no obligation to pay a dividend and, if not paid, the dividend 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 FSA and, where relevant, the consent of the local banking regulator. Dividends on the 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 tier 1 capital and cumulative preferred securities classified as tier 2 capital in accordance with the rules and guidance in the FSA's GENPRU.

HSBC's subsidiaries have the following preferred securities in issue:

				At 31 December
		First call date		2012 US$m		2011 US$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		176		171
CAD175m	Non-cumulative class 1 preferred shares, series D ..................................	Dec 2010		176		171
CAD250m	Non-cumulative 5 year rate reset class 1 preferred shares, series E ........	Jun 2014		251		245
				2,728		2,712

38   Called up share capital and other equity instruments

Issued and fully paid

	At 31 December
	2012		2011
	US$m		US$m
HSBC Holdings ordinary shares1 ..............................................................................................	9,238		8,934

	Number		US$m
HSBC Holdings ordinary shares of US$0.50 each
At 1 January 2012 ..................................................................................................................	17,868,085,646		8,934
Shares issued under HSBC employee share plans ......................................................................	238,587,766		119
Shares issued in lieu of dividends ..............................................................................................	369,335,252		185
At 31 December 2012 .............................................................................................................	18,476,008,664		9,238
At 1 January 2011 ..................................................................................................................	17,686,155,902		8,843
Shares issued under HSBC employee share plans ......................................................................	11,354,577		6
Shares issued in lieu of dividends ..............................................................................................	170,575,167		85
At 31 December 2011 .............................................................................................................	17,868,085,646		8,934
	Number		US$m
HSBC Holdings non-cumulative preference shares of US$0.01 each
At 1 January 2012 and 31 December 20122 ............................................................................	1,450,000		-
At 1 January 2011 and 31 December 2011 ..............................................................................	1,450,000		-

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

2  Included in the capital base of HSBC as tier 1 capital in accordance with the rules and guidance in GENPRU.

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 FSA 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 FSA.

HSBC Holdings non-cumulative preference shares of £0.01 each

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 were issued in accordance with the rules and guidance in the FSA's GENPRU. These securities may be called and redeemed by HSBC subject to prior notification to the FSA. If not redeemed at the first call date interest coupons remain unchanged.

Tier 1 capital securities

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.

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 which would rank pari passu with the dollar and sterling preference shares in issue. The preference shares will 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.

HSBC has the following qualifying tier 1 capital securities in issue which are accounted for in equity:

				At 31 December
		First call date		2012 US$m		2011 US$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
				5,851		5,851

Shares under option

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 are given in Note 7.

Aggregate options outstanding under these plans

	Number of         HSBC Holdings         ordinary shares		Period of exercise		Exercise price
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
31 December 2011 ...........................................	216,078,250		2012 to 2017		£3.3116 - 7.9911
	45,422,511		2012 to 2017		HK$37.8797 - 94.5057
	3,176,265		2012 to 2017		€3.6361 - 9.5912
	9,752,066		2012 to 2017		US$4.8876 - 12.0958
31 December 2010 ...........................................	249,242,968		2011 to 2016		£3.3116 - 8.4024
	47,428,892		2011 to 2016		HK$37.8797 - 94.5057
	3,128,508		2011 to 2016		€3.6361 - 9.5912
	10,899,415		2011 to 2016		US$4.8876 - 12.0958

HSBC France plan

When it was acquired in 2000, HSBC France and certain of its subsidiary companies, including HSBC Private Bank France, operated employee share option plans under which options could be granted over their respective shares.  There were outstanding options over the shares of HSBC Private Bank France, a subsidiary of HSBC France. On exercise of those options, the HSBC Private Bank France shares were exchangeable for HSBC Holdings ordinary shares at the ratio of 2.099984 HSBC Holdings ordinary shares for each HSBC Private Bank France share.

On 31 October 2011, HSBC Private Bank France merged with HSBC France. Options held over shares of HSBC Private Bank France were converted into options over shares of HSBC France, at an exchange ratio of 7 HSBC France shares for 45 HSBC Private Bank France shares. The options outstanding at 31 October 2011 were adjusted to reflect the option exchange ratio. On exercise of these options, HSBC France shares would have been exchanged for HSBC Holdings ordinary shares in the ratio of 13.499897 HSBC Holdings ordinary shares for each HSBC France share.

During 2011 and 2012 there were no HSBC Private Bank France shares issued and no shares were exchanged for HSBC Holdings ordinary shares. During 2012, 22,645 options over HSBC France shares lapsed (2011: 141,525). At 31 December 2012 no options over HSBC France shares were outstanding.

At 31 December 2012, The CCF Employee Benefit Trust 2001 (Private Banking France) held 989,502 (2011: 989,502) HSBC Holdings ordinary shares.

HSBC France options outstanding over HSBC Holdings ordinary shares

	Number of HSBC             France shares       exchangeable for         HSBC Holdings          ordinary shares		Period of exercise		Exercise price
31 December 2012 ...............................................	-		2012		€142.84
31 December 20111 ................................................	22,645		2012		€142.84
31 December 2010 .................................................	287,100		2011 to 2012		€20.80 - 22.22

1  These options replaced the options over shares in HSBC Private Bank France which were outstanding on 31 October 2011 prior to the merger taking place.

HSBC Finance

Upon the acquisition of HSBC Finance in 2003, all outstanding options over, and rights to receive, HSBC Finance common shares were converted into options over, and rights to receive, HSBC Holdings ordinary shares in the same ratio as the share exchange offer for the acquisition of HSBC Finance (2.675 HSBC Holdings ordinary shares for each HSBC Finance common share). The exercise price payable for each option was adjusted using the same ratio.

During 2012, 2,053,838 (2011: nil) options were exercised over HSBC Holdings ordinary shares and 2,053,838 (2011: nil) HSBC Holdings ordinary shares were delivered from The HSBC (Household) Employee Benefit Trust 2003. During 2012, options over 375,700 (2011: 8,688,288) HSBC Holdings ordinary shares lapsed.  At 31 December 2012 no options over HSBC Holdings ordinary share were outstanding.

At 31 December 2012, The HSBC (Household) Employee Benefit Trust 2003 held a total of 281,477 (2011: 2,335,315) HSBC Holdings ordinary shares and 1,455 (2011: 1,455) ADSs.  Each ADS represents five HSBC Holdings ordinary shares.

Options outstanding over HSBC Holdings ordinary shares under the HSBC Finance share plan

	Number of         HSBC Holdings         ordinary shares		Period of exercise		Exercise price
31 December 2012 ...............................................	-		2012		US$9.29
31 December 2011 .................................................	2,429,538		2012		US$9.29
31 December 2010 .................................................	11,117,826		2011 to 2012		US$9.29 - 18.62

HSBC Bank Bermuda plans

Upon the acquisition of HSBC Bank Bermuda Limited ('HSBC Bank Bermuda') in 2004, all outstanding options over HSBC Bank Bermuda shares were converted into options to acquire HSBC Holdings ordinary shares using an exchange ratio calculated by dividing US$40 (being the consideration paid for each HSBC Bank Bermuda Share) by the average price of HSBC Holdings ordinary shares over the five-day period to the completion of the acquisition. The exercise price payable for each option was adjusted using the same exchange ratio.

During 2011 and 2012 there were no options exercised over HSBC Holdings ordinary shares and no shares were delivered from the HSBC (Bank of Bermuda) Employee Benefit Trust 2004. During 2012, options over 880,983 (2011: 2,108,830) HSBC Holdings ordinary shares lapsed.

At 31 December 2012, the HSBC (Bank of Bermuda) Employee Benefit Trust 2004 held 2,108,830 (2011: 2,108,830) HSBC Holdings ordinary shares which may be used to satisfy the exercise of employee options.

Options outstanding over HSBC Holdings ordinary shares under the HSBC Bank Bermuda share plan

	Number of         HSBC Holdings          ordinary shares		Period of exercise		Exercise price
31 December 2012 ...............................................	149,924		2013		US$9.32 - 10.33
31 December 2011 .................................................	1,030,907		2012 to 2013		US$9.32 - 15.99
31 December 2010..................................................	2,339,033		2011 to 2013		US$9.32 - 15.99

Maximum obligation to deliver HSBC Holdings ordinary shares

At 31 December 2012, 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 364,082,766 (2011: 538,265,410). The total number of shares at 31 December 2012 held by employee benefit trusts that may be used to satisfy such obligations to deliver HSBC Holdings ordinary shares was 18,009,459 (2011: 31,840,893).

39   Notes on the statement of cash flows

Other non-cash items included in profit before tax

	HSBC						HSBC Holdings
	2012		2011		2010		2012		2011
	US$m		US$m		US$m		US$m		US$m
Depreciation, amortisation and impairment ............	2,531		3,135		2,801		457		1
Gains arising from dilution of interests in associates	-		(208)		(188)		-		-
Revaluations on investment property .....................	(72)		(118)		(93)		-		-
Share-based payment expense .................................	988		1,162		812		55		57
Loan impairment losses gross of recoveries and other credit risk provisions .................................	9,358		13,553		15,059		-		-
Provisions ..............................................................	5,732		2,199		680		-		-
Impairment of financial investments ......................	519		808		105		-		-
Charge/(credit) for defined benefit plans .................	476		(140)		526		-		-
Accretion of discounts and amortisation of premiums ............................................................................	246		(513)		(815)		23		19
	19,778		19,878		18,887		535		77

Change in operating assets

	HSBC						HSBC Holdings
	2012		2011		2010		2012		2011
	US$m		US$m		US$m		US$m		US$m
Change in loans to HSBC undertakings ....................	-		-		-		(3,451)		(4,548)
Change in prepayments and accrued income ............	557		1,907		457		(5)		96
Change in net trading securities and net derivatives .	(36,829)		27,058		60,337		(507)		(1,001)
Change in loans and advances to banks ....................	1,083		2,618		5,213		-		-
Change in loans and advances to customers .............	(72,619)		(30,853)		(79,283)		-		-
Change in financial assets designated at fair value ....	(2,698)		(583)		154		-		-
Change in other assets .............................................	(6,015)		(7,559)		(145)		(48)		(36)
	(116,521)		(7,412)		(13,267)		(4,011)		(5,489)

Change in operating liabilities

	HSBC						HSBC Holdings
	2012		2011		2010		2012		2011
	US$m		US$m		US$m		US$m		US$m
Change in accruals and deferred income ...................	78		(800)		716		10		258
Change in deposits by banks ....................................	(5,393)		2,238		(14,288)		-		-
Change in customer accounts ...................................	90,071		48,401		68,691		-		-
Change in debt securities in issue ..............................	(11,552)		(14,388)		(1,495)		86		(45)
Change in financial liabilities designated at fair value .............................................................................	2,549		5,468		5,659		2,464		(475)
Change in other liabilities ........................................	13,317		3,093		(17,011)		391		(152)
	89,070		44,012		42,272		2,951		(414)

Cash and cash equivalents

	HSBC						HSBC Holdings
	2012		2011		2010		2012		2011
	US$m		US$m		US$m		US$m		US$m
Cash at bank with HSBC undertakings ......................	-		-		-		353		316
Cash and balances at central banks ...........................	141,532		129,902		57,383		-		-
Items in the course of collection from other banks ..	7,303		8,208		6,072		-		-
Loans and advances to banks of one month or less ..	148,232		169,858		189,197		-		-
Treasury bills, other bills and certificates of deposit less than three months .........................................	25,379		26,226		28,087		-		-
Less: items in the course of transmission to other banks ...................................................................	(7,138)		(8,745)		(6,663)		-		-
	315,308		325,449		274,076		353		316

Interest and dividends

	HSBC						HSBC Holdings
	2012		2011		2010		2012		2011
	US$m		US$m		US$m		US$m		US$m
Interest paid ............................................................	(18,412)		(23,125)		(21,405)		(2,661)		(2,392)
Interest received ......................................................	61,112		66,734		63,696		1,759		1,559
Dividends received ...................................................	766		602		563		13,709		6,874

The amount of cash and cash equivalents not available for use by HSBC at 31 December 2012 was US$32,368m (2011: US$39,345m), of which US$20,464m (2011: US$25,819m) related to mandatory deposits at central banks.

Disposal of subsidiaries and businesses

	US cards business		US branch network		Other disposals		Total
	US$m		US$m		US$m		US$m
Assets
Loans and advances to banks ........................................................	-		-		799		799
Loans and advances to customers .................................................	26,748		2,091		3,632		32,471
Financial investments ..................................................................	-		-		924		924
Prepayments and accrued income .................................................	572		-		53		625
Goodwill and intangible assets .......................................................	318		7		276		601
Other assets .................................................................................	369		68		1,618		2,055
Total assets excluding cash and cash equivalents ...........................	28,007		2,166		7,302		37,475
Liabilities
Deposits by banks ........................................................................	-		-		385		385
Customer accounts .......................................................................	-		13,199		5,986		19,185
Liabilities under insurance contracts .............................................	-		-		1,080		1,080
Other liabilities ............................................................................	161		7		1,012		1,180
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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