Annual Financial Report - 44y of 48 | RNS | Ticker

Annual Financial Report - 44y of 48

RNS Announcement

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

This information is provided by RNS

The company news service from the London Stock Exchange

END

ACSNKBDKABKDDQK

RNS metadata

Title: Annual Financial Report - 44y of 48
Time: 18:05:05
Date: 3 Apr 2013
Category: Results
ID: 3949B