Annual Financial Report - 54 of 60

RNS Number : 1683D

HSBC Holdings PLC

25 March 2014

 



4  The interest rate payable after June 2015 is the sum of the three-month Euribor plus 0.93%.

5  This subordinated note is measured at amortised cost in HSBC Holdings, where the interest rate risk is hedged using a fair value hedge, while it is measured at fair value in the Group.

6  In June 2013, HSBC Holdings called its US$1,250m 4.61% fixed/floating subordinated notes at par.

7  In January 2014, HSBC Holdings gave notice that it will call and redeem the €1,400m 5.3687% fixed/floating subordinated notes at par in March 2014.

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

The table on page 533 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 not more than 1 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 5 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 5 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 5 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 5 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 5 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 2013
	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
	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....................................	166,599		-		-		-		-		-		-		-		166,599
Items in the course of collection from other banks ..........	6,021		-		-		-		-		-		-		-		6,021
Hong Kong Government certificates of indebtedness .......	25,220		-		-		-		-		-		-		-		25,220
Trading assets ..................................................................	296,396		3,098		1,536		2,062		100		−		−		−		303,192
-  reverse repos ............................................................	3,324		3,098		1,536		2,062		100		−		−		−		10,120
-  other trading assets ..................................................	293,072		-		-		-		-		-		-		-		293,072
Financial assets designated at fair value ............................	1,929		254		494		426		328		2,145		2,819		30,035		38,430
Derivatives ......................................................................	277,747		48		88		389		552		716		1,486		1,239		282,265
-  trading .....................................................................	277,709		-		-		-		-		-		-		-		277,709
-  non-trading ..............................................................	38		48		88		389		552		716		1,486		1,239		4,556
Loans and advances to banks ...........................................	144,558		41,509		6,886		1,910		2,164		6,966		3,164		4,364		211,521
-  reverse repos ............................................................	68,007		19,402		1,489		481		874		837		385		−		91,475
-  other loans and advances to banks ............................	76,551		22,107		5,397		1,429		1,290		6,129		2,779		4,364		120,046
Loans and advances to customers .....................................	296,971		89,390		59,851		30,031		33,392		88,241		182,525		299,903		1,080,304
-  personal ...................................................................	43,805		8,929		8,561		6,603		7,578		26,915		58,611		243,124		404,126
-  corporate and commercial ........................................	173,965		58,038		43,723		19,896		21,092		53,887		113,897		53,981		538,479
-  financial ...................................................................	79,201		22,423		7,567		3,532		4,722		7,439		10,017		2,798		137,699
of which:
-  reverse repos ........................................................	66,235		15,927		3,798		758		1,198		299		−		−		88,215
Financial investments ......................................................	34,331		48,053		35,877		22,353		18,816		50,711		105,340		110,444		425,925
Assets held for sale ..........................................................	1,067		541		193		199		229		156		373		744		3,502
Accrued income ...............................................................	3,593		2,312		619		644		148		653		581		1,626		10,176
Other financial assets .......................................................	14,059		4,831		1,655		526		323		324		73		2,166		23,957
Total financial assets ...................................................	1,268,491		190,036		107,199		58,540		56,052		149,912		296,361		450,521		2,577,112
Non-financial assets .........................................................	-		-		-		-		-		-		-		94,206		94,206
Total assets ....................................................................	1,268,491		190,036		107,199		58,540		56,052		149,912		296,361		544,727		2,671,318

Maturity analysis of assets and liabilities (continued)

	At 31 December 2013
	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
	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 ............................	25,220		-		-		-		-		-		-		-		25,220
Deposits by banks ...............................................................	113,566		7,492		3,329		858		661		737		1,922		647		129,212
-  repos ..........................................................................	37,268		3,561		1,533		−		343		−		−		−		42,705
-  other deposits by banks ..............................................	76,298		3,931		1,796		858		318		737		1,922		647		86,507
Customer accounts1 ............................................................	1,328,563		70,180		31,990		17,415		19,272		8,717		5,937		738		1,482,812
-  personal .....................................................................	572,514		33,956		16,953		10,544		10,520		6,093		5,138		59		655,777
-  corporate and commercial ..........................................	506,902		21,209		7,414		2,717		3,786		1,643		674		140		544,485
-  financial .....................................................................	249,147		15,015		7,623		4,154		4,966		981		125		539		282,550
of which: repos ...........................................................	98,869		9,497		5,050		3,711		3,888		−		−		500		121,515
Items in the course of transmission to other banks .............	6,910		−		−		−		−		−		−		−		6,910
Trading liabilities ................................................................	161,231		11,405		4,886		2,844		3,653		6,323		7,979		8,704		207,025
-  repos ..........................................................................	2,565		9,763		2,715		1,012		1,279		87		−		-		17,421
-  debt securities in issue .................................................	1,217		1,642		2,171		1,832		2,374		6,236		7,979		8,704		32,155
-  other trading liabilities ................................................	157,449		-		-		-		-		-		-		-		157,449
Financial liabilities designated at fair value ..........................	4,907		157		92		2,266		68		9,348		21,544		50,702		89,084
-  debt securities in issue: covered bonds .........................	−		−		−		1,268		−		230		2,841		3,257		7,596
-  debt securities in issue: otherwise secured ....................	−		−		−		−		−		−		−		−		−
-  debt securities in issue: unsecured ................................	3,511		5		45		945		11		8,876		18,117		14,256		45,766
-  subordinated liabilities and preferred securities ............	−		121		−		−		−		21		−		21,773		21,915
-  other ..........................................................................	1,396		31		47		53		57		221		586		11,416		13,807
Derivatives .........................................................................	269,816		33		95		84		61		563		1,978		1,654		274,284
-  trading ........................................................................	269,739		-		-		-		-		-		-		-		269,739
-  non-trading ................................................................	77		33		95		84		61		563		1,978		1,654		4,545
Debt securities in issue ........................................................	20,739		8,280		15,734		7,442		8,106		18,552		19,850		5,377		104,080
-  covered bonds .............................................................	−		−		−		−		−		6		92		−		98
-  otherwise secured ........................................................	10,450		1,051		675		1,260		764		1,857		2,313		1,013		19,383
-  unsecured ....................................................................	10,289		7,229		15,059		6,182		7,342		16,689		17,445		4,364		84,599
Liabilities of disposal groups held for sale ...........................	2,125		208		131		98		107		49		42		5		2,765
Accruals .............................................................................	6,016		3,950		1,388		584		741		811		618		460		14,568
Subordinated liabilities ........................................................	21		28		1,171		144		6		1,435		3,406		22,765		28,976
Other financial liabilities ....................................................	17,126		6,317		1,759		598		751		971		932		471		28,925
Total financial liabilities ...............................................	1,956,240		108,050		60,575		32,333		33,426		47,506		64,208		91,523		2,393,861
Non-financial liabilities ......................................................	-		-		-		-		-		-		-		86,998		86,998
Total liabilities ................................................................	1,956,240		108,050		60,575		32,333		33,426		47,506		64,208		178,521		2,480,859

	At 31 December 2012
	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
	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 ............................................................	28,832		3,101		2,071		356		963		138		-		-		35,461
-  other loans and advances to banks ............................	75,565		19,582		3,788		1,936		4,069		6,100		2,027		4,018		117,085
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

Maturity analysis of assets and liabilities (continued)

	At 31 December 2012
	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
	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

1  Includes US$355,980m (2012: US$366,203m) 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

US$m

US$m

US$m

US$m

US$m

US$m

US$m

US$m

US$m

At 31 December 2013

Loan and other credit-related commitments .....................................

953

−

−

−

−

−

−

−

953

At 31 December 2012

Loan and other credit-related commitments .....................................

2,455

3

8

5

8

25

75

98

2,677

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
	US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
At 31 December 2013
Loan and other credit-related commitments ..................	404,598		45,255		18,770		16,927		20,242		13,320		46,652		21,839		587,603
Of which:
-  personal .................................................................	148,541		14,700		454		10,683		12,131		1,273		704		6,469		194,955
-  corporate and commercial .....................................	225,333		29,191		17,794		5,662		4,879		9,009		41,851		12,096		345,815
-  financial ................................................................	30,724		1,364		522		582		3,232		3,038		4,097		3,274		46,833
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

HSBC Holdings

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

	At 31 December 2013
	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
	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 ...........................	407		-		-		-		-		-		-		-		407
Derivatives ....................................................................	2,789		-		-		-		-		-		-		-		2,789
Loans and advances to HSBC undertakings .....................	8,394		4,374		7,595		14		16		-		-		32,951		53,344
Financial investments ....................................................	23		-		8		-		-		-		330		849		1,210
Other financial assets .....................................................	10		-		-		-		-		-		-		-		10
Total financial assets .....................................................	11,623		4,374		7,603		14		16		-		330		33,800		57,760
Non-financial assets .......................................................	-		-		-		-		-		-		-		93,076		93,076
Total assets ...................................................................	11,623		4,374		7,603		14		16		-		330		126,876		150,836
Financial liabilities
Amounts owing to HSBC undertakings ...........................	3,770		12		2,234		-		1		-		463		5,205		11,685
Financial liabilities designated at fair value .....................	-		-		-		-		-		-		1,283		19,744		21,027
-  debt securities in issue .............................................	-		-		-		-		-		-		1,283		6,823		8,106
-  subordinated liabilities and preferred securities ........	-		-		-		-		-		-		-		12,921		12,921
Derivatives ....................................................................	704		-		-		-		-		-		-		-		704
Debt securities in issue ...................................................	-		-		1,721		-		-		-		-		1,070		2,791
Accruals .........................................................................	777		109		261		22		-		-		-		-		1,169
Subordinated liabilities ....................................................	-		-		-		-		-		-		2,210		11,957		14,167
Total financial liabilities ................................................	5,251		121		4,216		22		1		-		3,956		37,976		51,543
Non-financial liabilities ..................................................	-		-		-		-		-		-		-		206		206
Total liabilities ..............................................................	5,251		121		4,216		22		1		-		3,956		38,182		51,749
Off-balance sheet commitments given
Undrawn formal standby facilities, credit lines and other commitments to lend .................................................	1,245		-		-		-		-		-		-		-		1,245

	At 31 December 2012
	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
	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

34    Offsetting of financial assets and financial liabilities

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

	Gross amounts of recognised financial assets		Gross amounts offset in the balance sheet		Amounts presented in the balance sheet		Amounts not offset in the balance sheet
							Financial instruments1		Cash  collateral received		Net amount
	US$m		US$m		US$m		US$m		US$m		US$m
At 31 December 2013
Derivatives2 (Note 18) ........................	569,595		(287,330)		282,265		(215,957)		(36,387)		29,921
Reverse repos, stock borrowing and similar agreements3 .......	288,903		(88,775)		200,128		(197,287)		(57)		2,784
Classified as:
-  trading assets .	39,008		(18,570)		20,438		(20,438)		-		-
-  loans and advances to banks at amortised cost ...............	106,684		(15,209)		91,475		(88,711)		(39)		2,725
-  loans and advances to customers at amortised cost ......................	143,211		(54,996)		88,215		(88,138)		(18)		59
Loans and advances to customers excluding reverse repos at amortised cost4 ..	192,437		(92,654)		99,783		(89,419)		-		10,364
	1,050,935		(468,759)		582,176		(502,663)		(36,444)		43,069
At 31 December 2012
Derivatives2 (Note 18) ........................	729,679		(372,229)		357,450		(271,944)		(38,915)		46,591
Reverse repos, stock borrowing and similar agreements3........	293,953		(89,089)		204,864		(202,575)		(214)		2,075
Classified as:
-  trading assets .	195,112		(60,360)		134,752		(134,328)		-		424
-  loans and advances to banks at amortised cost ...............	42,430		(6,969)		35,461		(33,721)		(170)		1,570
-  loans and advances to customers at amortised cost ......................	56,411		(21,760)		34,651		(34,526)		(44)		81
Loans and advances to customers excluding reverse repos at amortised cost4...	172,530		(89,838)		82,692		(76,761)		-		5,931
	1,196,162		(551,156)		645,006		(551,280)		(39,129)		54,597

1  Including non-cash collateral.

2  Including amounts that are both subject to and not subject to enforceable master netting agreements and similar agreements.

3  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 221. In the analysis above, the US$20,438m (2012: US$134,752m) of trading assets presented in the balance sheet comprised US$10,120m of reverse repos (2012: US$118,681m) and US$10,318m of stock borrowing (US$16,071m).

4  At 31 December 2013, the total amount of loans and advances to customers excluding reverse repos at amortised cost was US$992,089m (2012: US$962,972m) of which US$99,783m (2012: US$82,692m) was subject to offsetting. For the amount of loans and advances to customers excluding reverse repos at amortised cost recognised in the balance sheet, see the 'Funding sources and uses' table on page 221.

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

	Gross amounts of recognised financial liabilities		Gross amounts offset in the balance sheet		Amounts presented in the balance sheet		Amounts not offset in the balance sheet
							Financial instruments1		Cash  collateral pledged		Net amount
	US$m		US$m		US$m		US$m		US$m		US$m
At 31 December 2013
Derivatives2 (Note 18) ..........................	561,614		(287,330)		274,284		(216,596)		(29,093)		28,595
Repos, stock lending and similar agreements3 .........	282,634		(88,775)		193,859		(193,354)		(81)		424
Classified as:
-  trading liabilities ............................	48,209		(18,570)		29,639		(29,625)		-		14
-  deposits by banks at amortised cost .	57,914		(15,209)		42,705		(42,375)		(70)		260
-  customer accounts at amortised cost .	176,511		(54,996)		121,515		(121,354)		(11)		150
Customer accounts excluding repos at amortised cost4 ....................	195,153		(92,654)		102,499		(89,394)		-		13,105
	1,039,401		(468,759)		570,642		(499,344)		(29,174)		42,124
At 31 December 2012
Derivatives2 (Note 18) ..........................	731,115		(372,229)		358,886		(275,723)		(39,594)		43,569
Repos, stock lending and similar agreements3..........	266,697		(89,089)		177,608		(176,573)		(94)		941
Classified as:
-  trading liabilities ............................	197,401		(60,360)		137,041		(136,173)		-		868
-  deposits by banks at amortised cost .	18,918		(6,969)		11,949		(11,857)		(92)		-
-  customer accounts at amortised cost .	50,378		(21,760)		28,618		(28,543)		(2)		73
Customer accounts excluding repos at amortised cost4 ....................	180,494		(89,838)		90,656		(76,761)		-		13,895
	1,178,306		(551,156)		627,150		(529,057)		(39,688)		58,405

1  Including non-cash collateral.

2  Including amounts that are both subject to and not subject to enforceable master netting agreements and similar agreements.

3  For the amount of repos, stock lending and similar agreements recognised in the balance sheet, see the 'Funding sources and uses' table on page 221. In the analysis above, the US$29,639m (2012: US$137,041m) of trading liabilities presented in the balance sheet comprised US$17,421m of repos (2012: US$130,223m) and US$12,218m of stock lending (US$6,818m).

4  At 31 December 2013, the total amount of customer accounts excluding repos at amortised cost was US$1,361,297m (2012: US$1,311,396m) of which US$102,499m (2012: US$90,656m) was subject to offsetting. For the amount of customer accounts excluding repos at amortised cost recognised in the balance sheet, see the 'Funding sources and uses' table on page 221.

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').

Derivatives and reverse repurchase/repurchase agreements included in the 'Amounts not offset in the balance sheet' column relate to 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 received/pledged in respect of the transactions described above.

The Group offsets certain loans and advances to customers and customer accounts when the offset criteria are met and the amounts presented above represent this subset of the total amounts recognised in the balance sheet. Of this subset, the loans and advances to customers and customer accounts included in 'Amounts not offset in the balance sheet' column primarily relate to transactions where the counterparty 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.

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 285.

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
	2013		2012
	US$m		US$m
Currency of structural exposure
Pound sterling .........................................................................................................................	28,403		27,305
Euro ........................................................................................................................................	22,014		23,945
Chinese renminbi ....................................................................................................................	20,932		19,060
Hong Kong dollars ..................................................................................................................	18,974		14,466
Mexican pesos ........................................................................................................................	5,932		5,948
Brazilian reais .........................................................................................................................	5,581		6,279
Canadian dollars ......................................................................................................................	4,372		5,024
Indian rupees ...........................................................................................................................	3,222		3,967
UAE dirhams...........................................................................................................................	3,069		2,807
Saudi riyals ..............................................................................................................................	2,531		2,219
Malaysian ringgit ....................................................................................................................	2,194		2,165
Swiss francs .............................................................................................................................	1,940		2,925
Turkish lira .............................................................................................................................	1,533		1,787
Taiwanese dollars ....................................................................................................................	1,527		1,513
Australian dollars ....................................................................................................................	1,515		1,602
Korean won ............................................................................................................................	1,373		1,520
Indonesian rupiah ....................................................................................................................	1,244		1,317
Argentine pesos ......................................................................................................................	1,067		1,054
Singapore dollars .....................................................................................................................	849		874
Egyptian pounds .....................................................................................................................	739		699
Qatari rial ...............................................................................................................................	624		599
Thailand baht ..........................................................................................................................	593		653
Philippine pesos ......................................................................................................................	553		787
Others, each less than US$500m .............................................................................................	4,387		4,931
Total ......................................................................................................................................	135,168		133,446

Shareholders' equity would decrease by US$2,521m (2012: US$2,562m) 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
	2013		2012
	US$m		US$m
Treasury bills and other eligible securities ................................................................................	6,387		4,381
Loans and advances to banks ...................................................................................................	17,733		22,074
Loans and advances to customers ............................................................................................	87,894		81,333
Debt securities .........................................................................................................................	190,095		198,671
Equity shares ...........................................................................................................................	8,816		6,255
Other ......................................................................................................................................	1,035		1,090
	311,960		313,804

The table above shows assets where a charge has been granted to secure liabilities on a legal and contractual basis. 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 in relation to reverse repo and stock borrowing that HSBC is permitted to sell or repledge in the absence of default is US$259,617m (2012: US$295,709m). The fair value of any such collateral that has been sold or repledged was US$186,013m (2012: US$202,662m). 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
	2013		2012
	US$m		US$m
Non-controlling interests attributable to holders of ordinary shares in subsidiaries ...................	5,900		5,159
Preferred securities issued by subsidiaries ..................................................................................	2,688		2,728
	8,588		7,887

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 tier 1 capital and cumulative preferred securities classified as tier 2 capital in accordance with the rules and guidance in GENPRU.

Preferred securities issued by HSBC's subsidiaries

				At 31 December
		First call date		2013 US$m		2012 US$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		164		176
CAD175m	Non-cumulative class 1 preferred shares, series D ..................................	Dec 2010		164		176
CAD250m	Non-cumulative 5 year rate reset class 1 preferred shares, series E ........	Jun 2014		235		251
				2,688		2,728

38   Called up share capital and other equity instruments

Issued and fully paid

HSBC Holdings ordinary shares of US$0.50 each

	At 31 December
	2013		2012
	US$m		US$m
HSBC Holdings ordinary shares1 ..............................................................................................	9,415		9,238
	Number		US$m
At 1 January 2013 ..................................................................................................................	18,476,008,664		9,238
Shares issued under HSBC employee share plans ......................................................................	120,033,493		60
Shares issued in lieu of dividends ..............................................................................................	233,964,882		117
At 31 December 2013 .............................................................................................................	18,830,007,039		9,415
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

HSBC Holdings non-cumulative preference shares of US$0.01 each

	Number		US$m
At 1 January 2013 and 31 December 20132 ............................................................................	1,450,000		-
At 1 January 2012 and 31 December 2012 ..............................................................................	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 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 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

Other equity instruments which have been included in the capital base of HSBC were issued in accordance with the rules and guidance in the PRA's GENPRU. These securities may be called and redeemed by HSBC subject to prior notification to the PRA. 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 ranking pari passu with the dollar and sterling preference shares in issue. The preference shares would 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's qualifying tier 1 capital securities in issue which are accounted for in equity

				At 31 December
		First call date		2013 US$m		2012 US$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

For 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, see Note 7.

Aggregate options outstanding under these plans

	Number of         HSBC Holdings         ordinary shares		Period of exercise		Exercise price
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		US$4.8876 - 11.8824
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

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 2012 and 2013 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 2013, options over 149,924 (2012: 880,983) HSBC Holdings ordinary shares lapsed.

At 31 December 2013, the HSBC (Bank of Bermuda) Employee Benefit Trust 2004 held nil (2012: 2,108,830) HSBC Holdings ordinary shares.

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 2013................................................	-		2013		US$9.32 - 10.33
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

Maximum obligation to deliver HSBC Holdings ordinary shares

At 31 December 2013, 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 265,534,885 (2012: 364,082,766). The total number of shares at 31 December 2013 held by employee benefit trusts that may be used to satisfy such obligations to deliver HSBC Holdings ordinary shares was 12,068,136 (2012: 18,009,459).

39   Notes on the statement of cash flows

Other non-cash items included in profit before tax

	HSBC						HSBC Holdings
	2013		2012		2011		2013		2012
	US$m		US$m		US$m		US$m		US$m
Depreciation, amortisation and impairment ............	2,330		2,531		3,135		35		457
Gains arising from dilution of interests in associates	(1,051)		-		(208)		-		-
Revaluations on investment property .....................	(113)		(72)		(118)		-		-
Share-based payment expense .................................	630		988		1,162		49		55
Loan impairment losses gross of recoveries and other credit risk provisions .................................	7,356		9,358		13,553		-		-
Provisions ..............................................................	2,578		5,732		2,199		-		-
Impairment of financial investments ......................	(36)		519		808		-		-
Charge/(credit) for defined benefit plans .................	121		476		(140)		-		-
Accretion of discounts and amortisation of premiums ............................................................................	180		246		(513)		(10)		23
	11,995		19,778		19,878		74		535

Change in operating assets

	HSBC						HSBC Holdings
	2013		2012		2011		2013		2012
	US$m		US$m		US$m		US$m		US$m
Change in loans to HSBC undertakings ....................	-		-		-		(11,669)		(3,451)
Change in prepayments and accrued income ............	(1,568)		557		1,907		(65)		(5)
Change in net trading securities and net derivatives .	(24,870)		(36,829)		27,058		923		(507)
Change in loans and advances to banks ....................	(21,578)		1,083		2,618		-		-
Change in loans and advances to customers .............	(100,115)		(72,619)		(30,853)		-		-
Change in financial assets designated at fair value ....	(4,922)		(2,698)		(583)		-		-
Change in other assets .............................................	4,154		(6,015)		(7,559)		16		(48)
	(148,899)		(116,521)		(7,412)		(10,795)		(4,011)

Change in operating liabilities

	HSBC						HSBC Holdings
	2013		2012		2011		2013		2012
	US$m		US$m		US$m		US$m		US$m
Change in accruals and deferred income ...................	3,085		78		(800)		248		10
Change in deposits by banks ....................................	22,975		(5,393)		2,238		-		-
Change in customer accounts ...................................	150,262		90,071		48,401		-		-
Change in debt securities in issue ..............................	(15,381)		(11,552)		(14,388)		98		86
Change in financial liabilities designated at fair value .............................................................................	994		2,549		5,468		(550)		2,464
Change in other liabilities ........................................	2,822		13,317		3,093		(857)		391
	164,757		89,070		44,012		(1,061)		2,951

Cash and cash equivalents

	HSBC						HSBC Holdings
	2013		2012		2011		2013		2012
	US$m		US$m		US$m		US$m		US$m
Cash at bank with HSBC undertakings ......................	-		-		-		407		353
Cash and balances at central banks ...........................	166,599		141,532		129,902		-		-
Items in the course of collection from other banks ..	6,021		7,303		8,208		-		-
Loans and advances to banks of one month or less ..	164,591		148,232		169,858		-		-
Treasury bills, other bills and certificates of deposit less than three months .........................................	15,980		25,379		26,226		-		-
Less: items in the course of transmission to other banks ...................................................................	(6,910)		(7,138)		(8,745)		-		-
	346,281		315,308		325,449		407		353

Interest and dividends

	HSBC						HSBC Holdings
	2013		2012		2011		2013		2012
	US$m		US$m		US$m		US$m		US$m
Interest paid ............................................................	(17,262)		(18,412)		(23,125)		(2,705)		(2,661)
Interest received ......................................................	50,823		61,112		66,734		1,986		1,759
Dividends received ...................................................	1,133		766		602		20,925		13,709

The amount of cash and cash equivalents not available for use by HSBC at 31 December 2013 was US$38,019m (2012: US$32,368m), of which US$21,811m (2012: US$20,464m) related to mandatory deposits at central banks.

Disposal of subsidiaries and businesses

In October 2013, we completed the disposal of HSBC Bank (Panama) S.A., receiving total cash consideration of US$2,210m which is included under 'Cash flow from investing activities' in the Consolidated statement of cash flows on page 420. The effect of disposals of subsidiaries and businesses in 2012 is tabulated below.

	2012
	US cards business		US branch network		Other disposals		Total
	US$m		US$m		US$m		US$m
Assets
Loans and advances to banks ........................................................	-		-		799		799
Loans and advances to customers .................................................	26,748		2,091		3,632		32,471
Financial investments ..................................................................	-		-		924		924
Prepayments and accrued income .................................................	572		-		53		625
Goodwill and intangible assets .......................................................	318		7		276		601
Other assets .................................................................................	369		68		1,618		2,055
Total assets excluding cash and cash equivalents ...........................	28,007		2,166		7,302		37,475
Liabilities
Deposits by banks ........................................................................	-		-		385		385
Customer accounts .......................................................................	-		13,199		5,986		19,185
Liabilities under insurance contracts .............................................	-		-		1,080		1,080
Other liabilities ............................................................................	161		7		1,012		1,180
Total liabilities .............................................................................	161		13,206		8,463		21,830
Aggregate net assets at date of disposal, excluding cash and cash equivalents ...............................................................................	27,846		(11,040)		(1,161)		15,645
Non-controlling interests disposed ...............................................	-		-		(81)		(81)
Gain on disposal including costs to sell .........................................	3,148		864		355		4,367
Add back: costs to sell ..................................................................	72		15		56		143
Selling price .................................................................................	31,066		(10,161)		(831)		20,074
Satisfied by:
Cash and cash equivalents received/(paid) as consideration ........	31,066		(10,091)		(542)		20,433
Cash and cash equivalents sold ..................................................	-		(70)		(321)		(391)
Cash consideration received/(paid) up to 31 December 2012 ....	31,066		(10,161)		(863)		20,042
Cash still to be received at 31 December 2012 ..........................	-		-		32		32
Total cash consideration ..........................................................	31,066		(10,161)		(831)		20,074

 

END

 

 

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