Annual Financial Report - 52 of 56 | RNS | Ticker

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Annual Financial Report - 52 of 56

RNS Announcement

RNS Number : 6402S

HSBC Holdings PLC

18 March 2016

HSBC

Maturity analysis of assets and liabilities

	Due not more than 1 month	Due over 1 month but not more than 3 months	Due over 3 months but not more than 6 months	Due over 6 months but not more than 9 months	Due over 9 months but not more than 1 year	Due over 1 year but not more than 2 years	Due over 2 years but not more than 5 years	Due over 5 years	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m
Financial assets
Cash and balances at central banks	98,934	−	−	−	−	−	−	−	98,934
Items in the course of collection from other banks	5,768	−	−	−	−	−	−	−	5,768
Hong Kong Government certificates of indebtedness	28,410	−	−	−	−	−	−	−	28,410
Trading assets	224,691	34	−	−	−	112	−	−	224,837
- reverse repos	292	34	−	−	−	112	−	−	438
- other trading assets	224,399	−	−	−	−	−	−	−	224,399

Financial assets designated at fair value	429	194	222	83	390	896	2,603	19,035	23,852
Derivatives	285,797	215	223	198	33	499	841	670	288,476
- trading	285,678	−	−	−	−	−	−	−	285,678
- non-trading	119	215	223	198	33	499	841	670	2,798

Loans and advances to banks	57,296	14,530	4,063	1,964	2,499	5,134	3,274	1,641	90,401
Loans and advances to customers	176,862	69,638	54,730	33,095	34,774	81,560	201,253	272,542	924,454
- personal	39,191	8,328	8,510	7,457	9,350	22,438	57,283	218,646	371,203
- corporate and commercial	123,901	54,711	40,489	21,081	21,811	50,355	131,166	49,564	493,078
- financial	13,770	6,599	5,731	4,557	3,613	8,767	12,804	4,332	60,173

Reverse repurchase agreements - non-trading	110,478	21,978	7,220	2,786	580	2,985	228	−	146,255
Financial investments	35,104	59,098	36,897	19,102	17,293	48,634	94,549	118,278	428,955
Assets held for sale	15,816	2,628	2,544	1,218	2,611	4,675	6,365	4,422	40,279
Accrued income and other financial assets	12,732	6,682	1,995	483	395	463	445	2,115	25,310

Financial assets at 31 December 2015	1,052,317	174,997	107,894	58,929	58,575	144,958	309,558	418,703	2,325,931

Non-financial assets	−	−	−	−	−	−	−	83,725	83,725

Total assets at 31 December 2015	1,052,317	174,997	107,894	58,929	58,575	144,958	309,558	502,428	2,409,656

Maturity analysis of assets and liabilities (continued)

	Due not more than 1 month	Due over 1 month but not more than 3 months	Due over 3 months but not more than 6 months	Due over 6 months but not more than 9 months	Due over 9 months but not more than 1 year	Due over 1 year but not more than 2 years	Due over 2 years but not more than 5 years	Due over 5 years	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m
Financial liabilities
Hong Kong currency notes in circulation	28,410	−	−	−	−	−	−	−	28,410
Deposits by banks	46,693	2,225	1,049	325	116	712	3,182	69	54,371

Customer accounts¹	1,185,091	50,831	21,397	10,421	10,869	6,596	3,852	529	1,289,586
- personal	574,468	27,646	13,032	7,371	7,990	3,566	2,920	354	637,347
- corporate and commercial	459,813	18,802	7,314	2,479	2,495	2,926	828	156	494,813
- financial	150,810	4,383	1,051	571	384	104	104	19	157,426

Repurchase agreements - non-trading	73,478	3,788	1,816	164	154	−	500	500	80,400
Items in the course of transmission to other banks	5,638	−	−	−	−	−	−	−	5,638
Trading liabilities	111,691	1,471	1,529	882	2,184	4,344	10,105	9,408	141,614
- repos	77	365	−	−	−	−	−	−	442
- debt securities in issue	967	1,106	1,529	882	2,184	4,344	10,105	9,408	30,525
- other trading liabilities	110,647	−	−	−	−	−	−	−	110,647

Financial liabilities designated at fair value	2,036	1,822	2,943	342	1,900	4,930	14,316	38,119	66,408
- debt securities in issue: covered bonds	−	−	−	−	−	2,012	1,608	2,577	6,197
- debt securities in issue: otherwise secured	−	−	−	−	−	−	−	−	−
- debt securities in issue: unsecured	1,972	973	2,926	342	1,786	2,918	9,819	10,745	31,481
- subordinated liabilities and preferred securities	−	848	−	−	−	−	2,773	18,889	22,510
- other	64	1	17	−	114	−	116	5,908	6,220

Derivatives	276,765	34	251	213	52	524	1,063	2,169	281,071
- trading	276,558	−	−	−	−	−	−	−	276,558
- non-trading	207	34	251	213	52	524	1,063	2,169	4,513

Debt securities in issue	16,536	9,326	16,295	5,542	1,365	10,754	22,866	6,265	88,949
- covered bonds	−	−	1	−	1	83	17	33	135
- otherwise secured	8,436	173	195	206	173	2,082	4,354	1,118	16,737
- unsecured	8,100	9,153	16,099	5,336	1,191	8,589	18,495	5,114	72,077

Liabilities of disposal groups held for sale	20,350	1,416	1,548	1,344	1,246	5,050	1,484	115	32,553
Accruals and other financial liabilities	14,802	7,965	2,467	659	421	925	1,454	665	29,358
Subordinated liabilities	−	401	−	−	34	650	4,579	17,038	22,702

Total financial liabilities at 31 December 2015	1,781,490	79,279	49,295	19,892	18,341	34,485	63,401	74,877	2,121,060

Non-financial liabilities	−	−	−	−	−	−	−	91,078	91,078

Total liabilities at 31 December 2015	1,781,490	79,279	49,295	19,892	18,341	34,485	63,401	165,955	2,212,138

	Due not more than 1 month	Due over 1 month but not more than 3 months	Due over 3 months but not more than 6 months	Due over 6 months but not more than 9 months	Due over 9 months but not more than 1 year	Due over 1 year but not more than 2 years	Due over 2 years but not more than 5 years	Due over 5 years	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m
Financial assets
Cash and balances at central banks	129,957	−	−	−	−	−	−	−	129,957
Items in the course of collection from other banks	4,927	−	−	−	−	−	−	−	4,927
Hong Kong Government certificates of indebtedness	27,674	−	−	−	−	−	−	−	27,674
Trading assets	303,463	−	−	−	−	−	730	−	304,193
- reverse repos	567	−	−	−	−	−	730	−	1,297
- other trading assets	302,896	−	−	−	−	−	−	−	302,896

Financial assets designated at fair value	244	399	417	346	208	1,825	4,634	20,964	29,037
Derivatives	341,558	56	463	220	32	1,003	1,033	643	345,008
- trading	341,416	−	−	−	−	−	−	−	341,416
- non-trading	142	56	463	220	32	1,003	1,033	643	3,592

Loans and advances to banks	73,758	17,649	5,682	1,934	1,850	7,371	1,981	1,924	112,149
Loans and advances to customers	203,130	76,236	55,018	35,347	37,674	91,300	187,728	288,227	974,660
- personal	42,170	9,673	8,911	7,486	8,672	27,305	54,439	230,298	388,954
- corporate and commercial	146,250	61,809	41,924	23,720	23,697	56,398	124,796	56,590	535,184
- financial	14,710	4,754	4,183	4,141	5,305	7,597	8,493	1,339	50,522

Reverse repurchase agreements - non-trading	116,002	30,490	9,076	2,230	582	868	2,465	−	161,713
Financial investments	28,237	50,445	41,503	14,577	17,011	48,392	96,891	118,411	415,467
Assets held for sale	114	186	13	18	10	41	126	6,224	6,732
Accrued income and other financial assets	17,756	7,386	2,402	587	317	707	1,156	3,579	33,890

Financial assets at 31 December 2014	1,246,820	182,847	114,574	55,259	57,684	151,507	296,744	439,972	2,545,407

Non-financial assets	−	−	−	−	−	−	−	88,732	88,732

Total assets at 31 December 2014	1,246,820	182,847	114,574	55,259	57,684	151,507	296,744	528,704	2,634,139

Maturity analysis of assets and liabilities (continued)

	Due not more than 1 month	Due over 1 month but not more than 3 months	Due over 3 months but not more than 6 months	Due over 6 months but not more than 9 months	Due over 9 months but not more than 1 year	Due over 1 year but not more than 2 years	Due over 2 years but not more than 5 years	Due over 5 years	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m
Financial liabilities
Hong Kong currency notes in circulation	27,674	−	−	−	−	−	−	−	27,674
Deposits by banks	66,829	2,890	2,539	511	810	621	2,963	263	77,426

Customer accounts¹	1,216,574	57,127	32,925	15,023	13,586	9,278	5,819	310	1,350,642
- personal	572,459	28,580	16,728	10,609	9,625	7,220	3,967	125	649,313
- corporate and commercial	465,990	21,841	10,688	3,716	2,894	1,615	1,316	150	508,210
- financial	178,125	6,706	5,509	698	1,067	443	536	35	193,119

Repurchase agreements - non-trading	95,243	5,029	4,054	1,392	714	−	−	1,000	107,432
Items in the course of transmission to other banks	5,990	−	−	−	−	−	−	−	5,990
Trading liabilities	155,604	2,041	2,636	1,439	2,918	5,744	9,603	10,587	190,572
- repos	746	909	224	264	1,249	406	−	−	3,798
- debt securities in issue	1,686	1,132	2,412	1,175	1,669	5,338	9,603	10,587	33,602
- other trading liabilities	153,172	−	−	−	−	−	−	−	153,172

Financial liabilities designated at fair value	981	912	4,264	972	1,557	8,500	15,037	43,930	76,153
- debt securities in issue: covered bonds	−	−	−	205	−	−	2,705	2,942	5,852
- debt securities in issue: otherwise secured	−	−	−	−	−	−	−	−	−
- debt securities in issue: unsecured	942	868	4,242	742	1,409	8,500	9,576	14,233	40,512
- subordinated liabilities and preferred securities	−	36	−	−	18	−	2,623	20,640	23,317
- other	39	8	22	25	130	−	133	6,115	6,472

Derivatives	335,802	23	86	223	54	621	1,121	2,739	340,669
- trading	335,400	−	−	−	−	−	−	−	335,400
- non-trading	402	23	86	223	54	621	1,121	2,739	5,269

Debt securities in issue	14,741	15,424	13,027	7,854	6,050	14,209	19,481	5,161	95,947
- covered bonds	-	-	−	−	−	−	81	−	81
- otherwise secured	8,807	1,063	60	283	272	912	1,562	1,008	13,967
- unsecured	5,934	14,361	12,967	7,571	5,778	13,297	17,838	4,153	81,899

Liabilities of disposal groups held for sale	191	28	56	55	63	213	551	2,837	3,994
Accruals and other financial liabilities	20,893	9,170	3,013	1,166	1,757	1,355	1,674	818	39,846
Subordinated liabilities	−	150	−	3	167	113	3,607	22,624	26,664

Total financial liabilities at 31 December 2014	1,940,522	92,794	62,600	28,638	27,676	40,654	59,856	90,269	2,343,009

Non-financial liabilities	-	-	-	-	-	-	-	91,152	91,152

Total liabilities at 31 December 2014	1,940,522	92,794	62,600	28,638	27,676	40,654	59,856	181,421	2,434,161

1 'Customer accounts' includes $342,908m (2014: $342,927m) insured by guarantee schemes.

Maturity analysis of off-balance sheet commitments received

Due not

more than

1 month

Due over

1 month

but not

more than

3 months

Due over

3 months

but not

more than

6 months

Due over

6 months

but not

more than

9 months

Due over

9 months

but not

more than

1 year

Due over

1 year

but not

more than

2 years

Due over

2 years

but not

more than

5 years

Due over

5 years

Total

At 31 December 2015

Loan and other credit-related commitments

3,472

−

2,149

−

111

−

5,732

At 31 December 2014

Loan and other credit-related commitments

3,313

−

4,312

607

−

8,232

Maturity analysis of off-balance sheet commitments given

	Due not more than 1 month	Due over 1 month but not more than 3 months	Due over 3 months but not more than 6 months	Due over 6 months but not more than 9 months	Due over 9 months but not more than 1 year	Due over 1 year but not more than 2 years	Due over 2 years but not more than 5 years	Due over 5 years	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m

At 31 December 2015
Loan and other credit-related commitments	472,277	45,792	16,271	9,798	47,122	11,325	48,756	15,089	666,430
Of which:
- personal	161,843	11,547	6,333	963	19,607	1,207	425	1,018	202,943
- corporate and commercial	272,044	32,764	9,126	8,372	23,984	8,227	38,838	12,558	405,913
- financial	38,390	1,481	812	463	3,531	1,891	9,493	1,513	57,574

At 31 December 2014
Loan and other credit-related commitments	455,319	52,398	8,919	14,163	41,500	13,979	48,333	16,769	651,380
Of which:
- personal	179,088	15,784	452	305	14,036	1,432	1,003	955	213,055
- corporate and commercial	239,646	34,657	7,595	12,556	23,519	9,926	36,918	12,185	377,002
- financial	36,585	1,957	872	1,302	3,945	2,621	10,412	3,629	61,323

HSBC Holdings

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

	Due not more than 1 month	Due over 1 month but not more than 3 months	Due over 3 months but not more than 6 months	Due over 6 months but not more than 9 months	Due over 9 months but not more than 1 year	Due over 1 year but not more than 2 years	Due over 2 years but not more than 5 years	Due over 5 years	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m
Financial assets
Cash at bank and in hand:
- balances with HSBC undertakings	242	-	-	-	-	-	-	-	242
Derivatives	1,990	-	-	-	-	-	109	368	2,467
- trading	1,990	-	-	-	-	-	-	-	1,990
- non-trading	-	-	-	-	-	-	109	368	477
Loans and advances to HSBC undertakings	7,805	2,629	4,618	-	-	-	-	29,298	44,350
Financial investments in HSBC undertakings	40	6	-	-	-	-	-	4,239	4,285
Accrued income and other financial assets	7	-	-	-	-	-	-	109	116

Total financial assets at 31 December 2015	10,084	2,635	4,618	-	-	-	109	34,014	51,460
				-	-	-
Non-financial assets	-	-	-	-	-	-	-	98,734	98,734

Total assets at 31 December 2015	10,084	2,635	4,618	-	-	-	109	132,748	150,194

Financial liabilities
Amounts owed to HSBC undertakings	1,629	-	-	-	-	415	-	108	2,152
Financial liabilities designated at fair value	-	960	-	-	-	-	2,285	16,608	19,853
- debt securities in issue	-	960	-	-	-	-	-	6,937	7,897
- subordinated liabilities and preferred securities	-	-	-	-	-	-	2,285	9,671	11,956
Derivatives	2,065	-	-	-	-	-	213	-	2,278
- trading	2,065	-	-	-	-	-	-	-	2,065
- non-trading	-	-	-	-	-	-	213	-	213
Debt securities in issue	-	-	-	-	-	-	-	960	960
Accruals and other financial liabilities	1,231	195	132	20	-	-	-	-	1,578
Subordinated liabilities	-	-	-	-	-	-	1,749	14,146	15,895
					-
Total financial liabilities at 31 December 2015	4,925	1,155	132	20	-	415	4,247	31,822	42,716
					-
Non-financial liabilities	-	-	-	-	-	-	-	64	64
					-
Total liabilities at 31 December 2015	4,925	1,155	132	20	-	415	4,247	31,886	42,780

Off-balance sheet commitments given
Undrawn formal standby facilities, credit lines and other commitments to lend	-	-	-	-	-	-	-	-	-

	Due not more than 1 month	Due over 1 month but not more than 3 months	Due over 3 months but not more than 6 months	Due over 6 months but not more than 9 months	Due over 9 months but not more than 1 year	Due over 1 year but not more than 2 years	Due over 2 years but not more than 5 years	Due over 5 years	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m
Financial assets
Cash at bank and in hand:
- balances with HSBC undertakings	249	-	-	-	-	-	-	-	249
Derivatives	2,287	-	-	-	-	-	127	357	2,771
- trading	2,287	-	-	-	-	-	-	-	2,287
- non-trading	-	-	-	-	-	-	127	357	484
Loans and advances to HSBC undertakings	7,007	858	7,676	-	14	-	-	28,355	43,910
Financial investments in HSBC undertakings	26	6	-	-	-	-	-	4,041	4,073
Accrued income and other financial assets	8	-	-	-	-	-	-	-	8

Total financial assets at 31 December 2014	9,577	864	7,676	-	14	-	127	32,753	51,011

Non-financial assets	-	-	-	-	-	-	-	96,853	96,853

Total assets at 31 December 2014	9,577	864	7,676	-	14	-	127	129,606	147,864

Financial liabilities
Amounts owed to HSBC undertakings	2,423	-	32	-	1	436	-	-	2,892
Financial liabilities designated at fair value	-	-	-	-	-	1,110	2,623	14,946	18,679
- debt securities in issue	-	-	-	-	-	1,110	-	7,075	8,185
- subordinated liabilities and preferred securities	-	-	-	-	-	-	2,623	7,871	10,494
Derivatives	1,066	-	-	-	-	-	103	-	1,169
- trading	1,066	-	-	-	-	-	-	-	1,066
- non-trading	-	-	-	-	-	-	103	-	103
Debt securities in issue	-	-	-	-	-	-	-	1,009	1,009
Accruals and other financial liabilities	924	208	137	21	-	-	-	-	1,290
Subordinated liabilities	-	-	-	-	-	-	1,951	15,304	17,255

Total financial liabilities at 31 December 2014	4,413	208	169	21	1	1,546	4,677	31,259	42,294

Non-financial liabilities	-	-	-	-	-	-	-	125	125

Total liabilities at 31 December 2014	4,413	208	169	21	1	1,546	4,677	31,384	42,419

Off-balance sheet commitments given
Undrawn formal standby facilities, credit lines and other commitments to lend	16	-	-	-	-	-	-	-	16

32 Offsetting of financial assets and financial liabilities

Accounting policy

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

The disclosure below has been enhanced this year with the inclusion of 'Amounts not subject to enforceable netting arrangements' resulting in a change in the basis of preparation from the prior period. Prior period data have been represented accordingly.

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

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

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

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

Footnotes to the table on page 435 are set out below:

1 At 31 December 2015, the amount of cash margin received that has been offset against the gross derivatives assets is $4,135m (2014: $606m). The amount of cash margin paid that has been offset against the gross derivatives liabilities is $4,224m (2014: $190m).

2 For the amount of reverse repos, stock borrowing and similar agreements recognised in the balance sheet, see the 'Funding sources and uses; table on page 160. In the analysis below, the $7,556m (2014: $9,266m) of trading assets presented in the balance sheet comprised $438m of reverse repos (2014: $1,297m) and $7,118m of stock borrowing (2014: $7,969m).

3 At 31 December 2015, the total amount of loans and advances to customers at amortised cost was $924,454m (2014: $974,660m) of which $45,904m (2014: $62,096m) was subject to offsetting. For the amount of loans and advances to customers at amortised cost recognised in the balance sheet, see the 'Funding sources and uses' table on page 160.

4 For the amount of repos, stock lending and similar agreements recognised in the balance sheet, see the 'Funding sources and uses' table on page 160. In the analysis below, the $9,301m (2014: $15,830m) of trading liabilities presented in the balance sheet comprised $442m of repos (2014: $3,798m) and $8,859m of stock lending (2014: $12,032m).

5 At 31 December 2015, the total amount of customer accounts at amortised cost was $1,289,586m (2014: $1,350,642m) of which $51,442m (2014: $69,082m) was subject to offsetting. For the amount of customer accounts at amortised cost recognised in the balance sheet, see the 'Funding sources and uses' table on page 160.

6 These exposures continue to be secured by financial collateral, but we may not have sought or been able to obtain a legal opinion evidencing enforceability of the right of offset.

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

	Amounts subject to enforceable netting arrangements							Amounts not subject to enforceable netting arrangements⁶	Total
				Amounts not set off in the balance sheet
	Gross amounts	Amounts offset	Net amounts in the balance sheet	Financial instruments	Non-cash collateral	Cash collateral	Net amount
	$m	$m	$m	$m	$m	$m	$m	$m	$m
Financial assets
Derivatives (Note 16)¹	385,682	(105,860)	279,822	(215,531)	(8,621)	(34,040)	21,630	8,654	288,476
Reverse repos, stock borrowing and similar agreements²	208,417	(77,925)	130,492	(544)	(129,476)	(270)	202	23,319	153,811
Classified as:
- trading assets	7,496	-	7,496	-	(7,495)	-	1	60	7,556
- non-trading assets	200,921	(77,925)	122,996	(544)	(121,981)	(270)	201	23,259	146,255

Loans and advances to customers at amortised cost³	77,547	(31,643)	45,904	(40,790)	-	-	5,114	1,487	47,391

At 31 December 2015	671,646	(215,428)	456,218	(256,865)	(138,097)	(34,310)	26,946	33,460	489,678

Derivatives (Note 16)¹	584,359	(250,465)	333,894	(262,856)	(7,655)	(41,750)	21,633	11,114	345,008
Reverse repos, stock borrowing and similar agreements²	208,893	(88,676)	120,217	(5,117)	(114,394)	(249)	457	50,762	170,979
Classified as:
- trading assets	9,341	(390)	8,951	-	(8,951)	-	-	315	9,266
- non-trading assets	199,552	(88,286)	111,266	(5,117)	(105,443)	(249)	457	50,447	161,713

Loans and advances to customers at amortised cost³	99,623	(37,527)	62,096	(55,989)	-	-	6,107	1,597	63,693

At 31 December 2014	892,875	(376,668)	516,207	(323,962)	(122,049)	(41,999)	28,197	63,473	579,680

Financial liabilities
Derivatives (Note 16)¹	377,930	(105,860)	272,070	(215,508)	(13,629)	(30,063)	12,870	9,001	281,071
Repos, stock lending and similar agreements⁴	136,040	(77,925)	58,115	(2,034)	(56,030)	(26)	25	31,586	89,701
Classified as:
- trading liabilities	9,300	-	9,300	-	(9,299)	-	1	1	9,301
- non-trading liabilities	126,740	(77,925)	48,815	(2,034)	(46,731)	(26)	24	31,585	80,400

Customer accounts at amortised cost⁵	83,085	(31,643)	51,442	(40,790)	-	(1)	10,651	729	52,171

At 31 December 2015	597,055	(215,428)	381,627	(258,332)	(69,659)	(30,090)	23,546	41,316	422,943

Derivatives (Note 16)¹	580,644	(250,465)	330,179	(262,864)	(9,465)	(39,571)	18,279	10,490	340,669
Repos, stock lending and similar agreements⁴	165,514	(88,676)	76,838	(8,934)	(67,793)	(105)	6	46,424	123,262
Classified as:
- trading liabilities	16,206	(390)	15,816	-	(15,813)	-	3	14	15,830
- non-trading liabilities	149,308	(88,286)	61,022	(8,934)	(51,980)	(105)	3	46,410	107,432

Customer accounts at amortised cost⁵	106,609	(37,527)	69,082	(55,989)	-	-	13,093	479	69,561

At 31 December 2014	852,767	(376,668)	476,099	(327,787)	(77,258)	(39,676)	31,378	57,393	533,492

For footnotes, see page 434.

33 Foreign exchange exposures

Structural foreign exchange exposures

HSBC's structural foreign exchange exposures are represented by the net asset value of its foreign exchange equity and subordinated debt investments in subsidiaries, branches, joint ventures and associates with non-US dollar functional currencies. Gains or losses on structural foreign exchange exposures are recognised in other comprehensive income. HSBC's management of its structural foreign exchange exposures is discussed on page 171.

Net structural foreign exchange exposures

	2015	2014
	$m	$m
Currency of structural exposure
Pound sterling¹	32,701	30,071
Hong Kong dollars	28,270	24,028
Chinese renminbi	24,117	24,578
Euros	19,966	20,378
Mexican pesos	4,228	5,249
Indian rupees	3,645	3,466
Canadian dollars	3,595	4,187
Saudi riyals	3,109	2,910
Brazilian real	2,865	4,910
Swiss francs	2,642	1,864
Malaysian ringgit	1,994	2,219
UAE dirhams	1,898	2,199
Taiwanese dollars	1,702	1,721
Singapore dollars	1,454	1,185
Australian dollars	1,396	1,516
Indonesian rupiah	1,303	1,352
Korean won	1,296	1,360
Turkish lira	1,006	1,366
Egyptian pounds	925	868
Argentine pesos	875	1,059
Others, each less than $700m	5,775	5,918

At 31 December	144,762	142,404

1 During 2015, we entered into new forward exchange contracts amounting to $2.6bn (2014: $1.6bn) in order to manage our sterling structural foreign exchange exposure.

Shareholders' equity would decrease by $2,633m (2014: $2,522m) if euro and sterling foreign currency exchange rates weakened by 5% relative to the US dollar.

34 Non-controlling interests

	2015	2014
	$m	$m

Non-controlling interests attributable to holders of ordinary shares in subsidiaries	6,981	7,104
Preferred securities issued by subsidiaries	2,077	2,427

At 31 December	9,058	9,531

Preferred securities issued by subsidiaries

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

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

Preferred securities issued by HSBC's subsidiaries

		First call date	2015 $m	2014 $m
HSBC USA Inc.
$150m¹	Depositary shares each representing 25% interest in a share of adjustable-rate cumulative preferred stock, series D	Jul 1999	-	150
$150m²	Cumulative preferred stock	Oct 2007	-	150
$518m	Floating rate non-cumulative preferred stock, series F	Apr 2010	518	518
$374m	Floating rate non-cumulative preferred stock, series G	Jan 2011	374	374
$374m	6.50% non-cumulative preferred stock, series H	Jul 2011	374	374

HSBC Finance Corporation
$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	126	151
CAD175m	Non-cumulative class 1 preferred shares, series D	Dec 2010	126	151

At 31 December			2,077	2,427

1 In May 2015, HSBC redeemed its depositary shares representing 25% interest in a share of adjustable-rate cumulative preferred stock, series D for $152m.

2 In May 2015, HSBC redeemed its cumulative preferred stock for $152m.

35 Called up share capital and other equity instruments

Accounting policy

Financial instruments issued are classified as equity when there is no contractual obligation to transfer cash or other financial assets or issue a variable number of own equity instruments. Incremental costs directly attributable to the issue of equity instruments are shown in equity as a deduction from the proceeds, net of tax.

HSBC Holdings equity instruments held by HSBC are recognised in equity as a deduction from retained earnings until they are cancelled. When such instruments are subsequently sold, reissued or otherwise disposed of, any consideration received is included in equity, net of any directly attributable incremental transaction costs and related income tax effects.

Issued and fully paid

HSBC Holdings ordinary shares of $0.50 each

	2015	2014
	$m	$m

HSBC Holdings ordinary shares¹ at 31 December	9,842	9,609

	Number	$m

At 1 January 2015	19,217,874,260	9,609
Shares issued under HSBC employee share plans	91,265,909	45
Shares issued in lieu of dividends	375,956,765	188

At 31 December 2015	19,685,096,934	9,842

At 1 January 2014	18,830,007,039	9,415
Shares issued under HSBC employee share plans	119,391,238	60
Shares issued in lieu of dividends	268,475,983	134

At 31 December 2014	19,217,874,260	9,609

HSBC Holdings non-cumulative preference shares of $0.01 each

	Number	$m

At 1 January 2015 and 31 December 2015²	1,450,000	-
At 1 January 2014 and 31 December 2014	1,450,000	-

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

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

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

HSBC Holdings non-cumulative preference share of £0.01

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

Other equity instruments

HSBC has included three types of additional tier 1 capital securities in its tier 1 capital. The two types of additional tier 1 securities presented in this Note are accounted for as equity because HSBC does not have an obligation to transfer cash or a variable number of its own ordinary shares to holders under any circumstances outside its control. See Note 30 for additional tier 1 securities accounted for as liabilities.

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

Additional tier 1 capital securities

Additional tier 1 capital securities are perpetual subordinated securities on which coupon payments may be deferred at the discretion of HSBC Holdings. While any coupon payments are unpaid or deferred, HSBC Holdings will not declare, pay dividends or make distributions or similar periodic payments in respect of, or repurchase, redeem or otherwise acquire any securities of lower or equal rank. Such securities do not generally carry voting rights but rank higher than ordinary shares for coupon payments and in the event of a winding-up. These securities do not meet the identifying criteria in full for recognition as tier 1 capital under CRD IV but are eligible as regulatory capital subject to grandfathering limits and progressive phase-out.

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

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

		First call date	2015 $m	2014 $m

$2,200m	8.125% perpetual subordinated capital securities	Apr 2013	2,133	2,133
$3,800m	8.00% perpetual subordinated capital securities, Series 2	Dec 2015	3,718	3,718

At 31 December			5,851	5,851

Additional tier 1 capital - contingent convertible securities

During 2015, HSBC continued to issue contingent convertible securities that are included in HSBC's capital base as fully CRD IV compliant additional tier 1 capital securities on an end point basis. The net proceeds of the issuances will be used for general corporate purposes and to further strengthen the capital base pursuant to requirements under CRD IV. These securities bear a fixed rate of interest until their initial call dates. After the initial call dates, in the event they are not redeemed, the securities will bear interest at rates which are fixed periodically in advance for five-year periods based on prevailing market rates. Interest on the contingent convertible securities will be due and payable only at the sole discretion of HSBC, and HSBC has sole and absolute discretion at all times and for any reason to cancel (in whole or in part) any interest payment that would otherwise be payable on any interest payment date. There are limitations on the payment of distributions if such payments are prohibited under UK banking regulations, or other requirements, if HSBC Holdings has insufficient reserves available for distribution or if HSBC fails to satisfy the solvency condition as defined in the securities' terms.

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

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

		First call date	2015 $m	2014 $m

$2,250m	6.375% perpetual subordinated contingent convertible securities	Sep 2024	2,244	2,244
$1,500m	5.625% perpetual subordinated contingent convertible securities	Jan 2020	1,494	1,494
€1,500m	5.25% perpetual subordinated contingent convertible securities	Sep 2022	1,943	1,943
$2,450m	6.375% perpetual subordinated contingent convertible securities	Mar 2025	2,459	-
€1,000m	6.000% perpetual subordinated contingent convertible securities	Sep 2023	1,121	-

At 31 December			9,261	5,681

Shares under option

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

Aggregate options outstanding under these plans

	Number of HSBC Holdings ordinary shares	Period of exercise	Exercise price

31 December 2015	72,840,810	2015 to 2021	£4.0472 - 5.4738
	1,114,830	2015 to 2018	HK$55.4701 - 63.9864
	153,610	2015 to 2018	€5.3532 - 6.0657
	665,445	2015 to 2018	$7.1456 - 8.2094

31 December 2014	63,918,042	2014 to 2020	£3.3116 - 7.9911
	6,468,782	2014 to 2018	HK$37.8797 - 63.9864
	571,502	2014 to 2018	€3.6361 - 6.0657
	1,867,328	2014 to 2018	$4.8876 - 8.2094

31 December 2013	119,085,250	2013 to 2019	£3.3116 - 7.9911
	24,215,341	2013 to 2018	HK$37.8797 - 92.5881
	1,574,652	2013 to 2018	€3.6361 - 7.5571
	3,997,069	2013 to 2018	$4.8876 - 11.8824

Maximum obligation to deliver HSBC Holdings ordinary shares

At 31 December 2015, the maximum obligation to deliver HSBC Holdings ordinary shares under all of the above option arrangements and the HSBC International Employee Share Purchase Plan, together with GPSP awards and restricted share awards granted under the HSBC Share Plan and/or the HSBC Share Plan 2011, was 193,178,906 (2014: 193,154,512). The total number of shares at 31 December 2015 held by employee benefit trusts that may be used to satisfy such obligations to deliver HSBC Holdings ordinary shares was 4,753,747 (2014: 7,943,191).

36 Notes on the statement of cash flows

Other non-cash items included in profit before tax

	HSBC			HSBC Holdings
	2015	2014	2013	2015	2014
	$m	$m	$m	$m	$m

Depreciation, amortisation and impairment	2,181	2,251	2,330	30	39
(Gains)/losses arising from dilution of interests in associates	-	32	(1,051)	-	-
Revaluations on investment property	(61)	(120)	(113)	-	-
Share-based payment expense	757	732	630	86	74
Loan impairment losses gross of recoveries and other credit risk provisions	4,546	5,125	7,356	-	-
Provisions	3,210	3,074	2,578	-	-
Impairment/(release of impairment) of financial investments	94	54	(36)	-	-
Charge for defined benefit plans	262	535	121	-	-
Accretion of discounts and amortisation of premiums	(224)	(421)	180	(2)	(61)

Year ended 31 December	10,765	11,262	11,995	114	52

Change in operating assets

	HSBC			HSBC Holdings
	2015	2014	2013	2015	2014
	$m	$m	$m	$m	$m

Change in loans to HSBC undertakings	-	-	-	(729)	1,364
Change in net trading securities and net derivatives	24,384	(18,498)	(24,870)	1,413	483
Change in loans and advances to banks	1,218	5,147	(4,739)	-	-
Change in loans and advances to customers	31,753	12,666	(46,551)	-	-
Change in reverse repurchase agreements - non-trading	(3,011)	18,900	(70,403)	-	-
Change in financial assets designated at fair value	2,394	3,269	(4,922)	-	-
Change in other assets	9,090	4,393	2,586	(141)	7

Year ended 31 December	65,828	25,877	(148,899)	543	1,854

Change in operating liabilities

	HSBC			HSBC Holdings
	2015	2014	2013	2015	2014
	$m	$m	$m	$m	$m

Change in deposits by banks	(21,534)	(9,081)	(7,781)	-	-
Change in customer accounts	(44,373)	(8,362)	57,365	-	-
Change in repurchase agreements - non-trading	(26,481)	(56,788)	123,653	-	-
Change in debt securities in issue	960	(8,133)	(15,381)	(49)	(149)
Change in financial liabilities designated at fair value	(10,785)	(10,734)	994	(1,228)	(694)
Change in other liabilities	(4,549)	(716)	5,907	(1,065)	(9,071)

Year ended 31 December	(106,762)	(93,814)	164,757	(2,342)	(9,914)

Interest and dividends

	HSBC			HSBC Holdings
	2015	2014	2013	2015	2014
	$m	$m	$m	$m	$m

Interest paid	(14,559)	(15,633)	(17,262)	(2,309)	(2,463)
Interest received	47,623	51,522	50,823	2,026	1,945
Dividends received	914	1,199	1,133	8,469	9,077

Cash and cash equivalents

Accounting policy

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

Cash and cash equivalents

	HSBC			HSBC Holdings
	2015	2014	2013	2015	2014
	$m	$m	$m	$m	$m

Cash at bank with HSBC undertakings	-	-	-	242	249
Cash and balances at central banks	98,934	129,957	166,599	-	-
Items in the course of collection from other banks	5,768	4,927	6,021	-	-
Loans and advances to banks of one month or less	70,985	89,285	96,584	-	-
Reverse repurchase agreements with banks of one month or less	53,971	68,930	68,007	-	-
Treasury bills, other bills and certificates of deposit less than three months	19,843	14,192	15,980	-	-
Less: items in the course of transmission to other banks	(5,638)	(5,990)	(6,910)	-	-

At 31 December	243,863	301,301	346,281	242	249

The amount of cash and cash equivalents not available for use by HSBC at 31 December 2015 was $33,744m (2014: $43,738m), of which $21,773m (2014: $29,883m) related to mandatory deposits at central banks.

Disposal of subsidiaries and businesses

During 2014, we completed the disposals of HSBC Bank Middle East Limited's banking business in Jordan and operations in Pakistan. This resulted in a net $303m outflow of cash and cash equivalents which is included under 'Cash flow from investing activities' in the consolidated statement of cash flows on page 340.

In October 2013, we completed the disposal of HSBC Bank (Panama) S.A., receiving total cash consideration of $2,210m which is included under 'Cash flow from investing activities' in the consolidated statement of cash flows on page 340.

This information is provided by RNS

The company news service from the London Stock Exchange

END

ACSUWVVRNWAOAAR

RNS metadata

Title: Annual Financial Report - 52 of 56
Time: 17:06:02
Date: 18 Mar 2016
Category: Results
ID: 6402S