Interim Report - 17 of 21

RNS Number : 9208Q

HSBC Holdings PLC

13 August 2010

 



Footnotes to Financial Statements

1  Adjustment to bring changes between opening and closing balance sheet amounts to average rates. This is not done on a line-by-line basis, as details cannot be determined without unreasonable expense.

2  Share premium includes the deduction of US$1 million (30 June 2009: US$1 million; 31 December 2009: nil) in respect of issue costs incurred during the period.

3  Cumulative goodwill amounting to US$5,138 million has been charged against reserves in respect of acquisitions of subsidiaries prior to 1 January 1998, including US$3,469 million charged against the merger reserve arising on the acquisition of HSBC Bank plc. The balance of US$1,669 million was charged against retained earnings.

4  Retained earnings include 127,950,817 (US$1,578 million) of own shares held within HSBC's insurance business, retirement funds for the benefit of policyholders or beneficiaries within employee trusts for the settlement of shares expected to be delivered under employee share schemes or bonus plans, and the market-making activities in Global Markets (30 June 2009: 180,429,757 (US$2,429 million); 31 December 2009: 179,964,968 (US$2,572 million)).

5  Amounts transferred to the income statement in respect of cash flow hedges include US$129 million loss (30 June 2009: US$284 million loss; 31 December 2009: US$218 million loss) taken to 'Net interest income' and US$1,515 million loss (30 June 2009: US$572 million loss; 31 December 2009: US$266 million gain) taken to 'Net trading income'.

6  Statutory share premium relief under Section 131 of the Companies Act 1985 (the 'Act') was taken in respect of the acquisition of HSBC Bank plc in 1992, HSBC France in 2000 and HSBC Finance Corporation in 2003 and the shares issued were recorded at their nominal value only. In HSBC's consolidated financial statements the fair value differences of US$8,290 million in respect of HSBC France and US$12,768 million in respect of HSBC Finance Corporation were recognised in the merger reserve. The merger reserve created on the acquisition of HSBC Finance Corporation subsequently became attached to HSBC Overseas Holdings (UK) Limited ('HOHU'), following a number of intra-group reorganisations. At 30 June 2010, nil (30 June 2009: nil; 31 December 2009: US$5,945 million) was transferred from this reserve to retained earnings as a result of impairment in HSBC Holdings' investment in HOHU. During 2009, pursuant to Section 131 of the Companies Act 1985, statutory share premium relief was taken in respect of the rights issue and US$15,796 million was recognised in the merger reserve. The merger reserve includes the deduction of US$614 million in respect of costs relating to the rights issue, of which US$149 million was subsequently transferred to the income statement. Of this US$149 million, US$121 million was a loss arising from accounting for the agreement with the underwriters as a contingent forward contract. The merger reserve excludes the loss of US$344 million on a forward foreign exchange contract associated with hedging the proceeds of the rights issue.

7  During June 2010, HSBC Holdings issued US$3,800 million of Perpetual Subordinated Capital Securities, Series 2 ('capital securities'), on which there were US$82 million of issuance costs which are classified as equity under IFRSs. The capital securities are exchangeable at HSBC Holdings' option into non-cumulative US dollar preference shares on any coupon payment date. Interest on the capital securities is paid quarterly and may be deferred at the discretion of HSBC Holdings. The capital securities may only be redeemed at the option of HSBC Holdings.

Note		Page
1	Basis of preparation ............................	212
2	Accounting policies ............................	213
3	Dividends ..............................................	214
4	Earnings per share ...............................	214
5	Post-employment benefits ..................	215
6	Tax expense ..........................................	217
7	Trading assets ......................................	219
8	Financial assets designated at fair value ...................................................	220
9	Derivatives ............................................	221
10	Financial investments .........................	224
11	Non-current assets held for sale .......	226
12	Trading liabilities .................................	227

Note		Page
13	Financial liabilities designated at fair value ............................................	227
14	Maturity analysis of assets and liabilities .............................................	227
15	Notes on the statement of cash flows .............................................................	229
16	Contingent liabilities, contractual commitments and guarantees .........	230
17	Segmental analysis ..............................	231
18	Goodwill impairment ............................	231
19	Litigation ...............................................	231
20	Events after the balance sheet date...	232
21	Interim Report 2010 and statutory accounts ............................................	232

1     Basis of preparation

(a)   Compliance with International Financial Reporting Standards

The interim consolidated financial statements of HSBC have been prepared in accordance with the Disclosure Rules and Transparency Rules of the Financial Services Authority and IAS 34 'Interim Financial Reporting' ('IAS 34') as issued by the International Accounting Standards Board ('IASB') and as endorsed by the European Union ('EU').

The consolidated financial statements of HSBC at 31 December 2009 were prepared in accordance with International Financial Reporting Standards ('IFRSs') as issued by the IASB and as endorsed by the EU. EU‑endorsed IFRSs may differ from IFRSs as issued by the IASB if, at any point in time, new or amended IFRSs have not been endorsed by the EU. At 31 December 2009, there were no unendorsed standards effective for the year ended 31 December 2009 affecting the consolidated financial statements at that date, and there was no difference between IFRSs endorsed by the EU and IFRSs issued by the IASB in terms of their application to HSBC. Accordingly, HSBC's financial statements for the year ended 31 December 2009 were prepared in accordance with IFRSs as issued by the IASB.

At 30 June 2010, there were no unendorsed standards effective for the period ended 30 June 2010 affecting these interim consolidated financial statements, and there was no difference between IFRSs endorsed by the EU and IFRSs issued by the IASB in terms of their application to HSBC.

IFRSs comprise accounting standards issued by the IASB and its predecessor body as well as interpretations issued by the International Financial Reporting Interpretations Committee ('IFRIC') and its predecessor body.

During the period ended 30 June 2010, HSBC adopted the following significant changes to IFRSs:

·      On 1 January 2010, HSBC adopted the revised IFRS 3 'Business Combinations' ('IFRS 3') and the amendments to IAS 27 'Consolidated and Separate Financial Statements'. The main changes under the standards are that:

-     acquisition-related costs are recognised as an expense in the income statement in the period in which they are incurred;

-     all consideration transferred, including contingent consideration, is recognised and measured at fair value at the acquisition date;

-     equity interests held prior to control being obtained are remeasured to fair value at the date of obtaining control, and any gain or loss is recognised in the income statement;

-     changes in a parent's ownership interest in a subsidiary that do not result in a change of control are treated as transactions between equity holders and are reported in equity; and

-     an option is available, on a transaction-by-transaction basis, to measure any non-controlling (previously referred to as minority) interests in the entity acquired either at fair value, or at the non-controlling interests' proportionate share of the net identifiable assets of the entity acquired.

In terms of their application to HSBC, the revised IFRS 3 and the amendments to IAS 27 apply prospectively to acquisitions made on or after 1 January 2010, and have no significant effect on these consolidated financial statements.

In addition to the above, during the period ended 30 June 2010, HSBC adopted a number of standards and interpretations and amendments thereto which had an insignificant effect on these consolidated financial statements.

(b)  Presentation of information

HSBC's consolidated financial statements are presented in US dollars which is also HSBC Holdings' functional currency. HSBC Holdings' functional currency is the US dollar because the US dollar and currencies linked to it are the most significant currencies relevant to the underlying transactions, events and conditions of its subsidiaries, as well as representing a significant proportion of its funds generated from financing activities. HSBC uses the US dollar as its presentation currency in its consolidated financial statements because the US dollar and currencies linked to it form the major currency bloc in which HSBC transacts and funds its business.

(c)   Comparative information

These interim consolidated financial statements include comparative information as required by IAS 34, the UK Disclosure Rules and Transparency Rules and the Hong Kong Listing Rules.

(d)  Use of estimates and assumptions

The preparation of financial information requires the use of estimates and assumptions about future conditions. The use of available information and the application of judgement are inherent in the formation of estimates; actual results in the future may differ from those reported. Management believes that HSBC's critical accounting policies where judgement is necessarily applied are those which relate to impairment of loans and advances, goodwill impairment, the valuation of financial instruments, the impairment of available-for-sale financial assets and deferred tax assets. These critical accounting policies are described on pages 61 to 65 of the Annual Report and Accounts 2009.

(e)   Consolidation

The interim consolidated financial statements of HSBC comprise the financial statements of HSBC Holdings and its subsidiaries. The method adopted by HSBC to consolidate its subsidiaries is described on page 367 of the Annual Report and Accounts 2009.

(f)   Future accounting developments

At 30 June 2010, a number of standards and interpretations, and amendments thereto, had been issued by the IASB which are not yet effective for these consolidated financial statements. Except for those described on page 368 of the Annual Report and Accounts 2009, HSBC does not expect the adoption of any of these to have a significant effect on these consolidated financial statements.

(g)  Changes in composition of the Group

There were no material changes in the composition of the Group.

2     Accounting policies

The accounting policies adopted by HSBC for these interim consolidated financial statements are consistent with those described on pages 369 to 385 of the Annual Report and Accounts 2009, except as discussed in Note 1, 'Basis of preparation'. The methods of computation applied by HSBC for these interim consolidated financial statements are consistent with those applied for the Annual Report and Accounts 2009.

3     Dividends

Dividends to shareholders of the parent company were as follows:

	Half-year to
	30 June 2010						30 June 2009						31 December 2009
	Per   share      US$		Total   US$m		Settled in scrip   US$m		Per     share       US$		Total    US$m		Settled in scrip    US$m		Per     share       US$		Total    US$m		Settled in scrip    US$m
Dividends declared on ordinary shares
In respect of previous year:
- fourth interim dividend .....................	0.10		1,733		838		0.10		1,210		624		-		-		-
In respect of current year:
- first interim dividend ........................	0.08		1,394		746		0.08		1,384		190		-		-		-
- second interim dividend ....................	-		-		-		-		-		-		0.08		1,385		696
- third interim dividend .......................	-		-		-		-		-		-		0.08		1,391		160
	0.18		3,127		1,584		0.18		2,594		814		0.16		2,776		856
Quarterly dividends on preference shares classified as equity
March dividend ....................................	15.50		22				15.50		22				-		-
June dividend .......................................	15.50		23				15.50		23				-		-
September dividend ..............................	-		-				-		-				15.50		22
December dividend ...............................	-		-				-		-				15.50		23
	31.00		45				31.00		45				31.00		45
Quarterly coupons on capital securities classified as equity
January coupon ....................................	0.508		44				0.508		44				-		-
April coupon .......................................	0.508		45				0.508		45				-		-
July coupon .........................................	-		-				-		-				0.508		45
October coupon ...................................	-		-				-		-				0.508		45
	1.016		89				1.016		89				1.016		90

The Directors have declared a second interim dividend in respect of the financial year ending 31 December 2010 of US$0.08 per ordinary share, a distribution of approximately US$1,401 million. The second interim dividend will be payable on 6 October 2010. Further details are contained in item 6 of the Additional Information section on page 244. No liability is recorded in the financial statements in respect of the second interim dividend for 2010.

On 15 July 2010, HSBC paid a further coupon on the capital securities of US$0.508 per security, a distribution of US$45 million. No liability is recorded in the balance sheet at 30 June 2010 in respect of this coupon payment.

4      Earnings per share

Basic earnings per ordinary share was calculated by dividing the profit attributable to ordinary shareholders of the parent company by the weighted average number of ordinary shares outstanding, excluding own shares held. Diluted earnings per ordinary share was calculated by dividing the basic earnings, which require no adjustment for the effects of dilutive potential ordinary shares, by the weighted average number of ordinary shares outstanding, excluding own shares held, plus the weighted average number of ordinary shares that would be issued on conversion of dilutive potential ordinary shares.

Profit attributable to ordinary shareholders of the parent company

	Half-year to
	30 June		30 June		31 December
	2010		2009		2009
	US$m		US$m		US$m
Profit attributable to shareholders of the parent company ..................	6,763		3,347		2,487
Dividend payable on preference shares classified as equity ..................	(45)		(45)		(45)
Coupon payable on capital securities classified as equity .....................	(89)		(89)		(90)
Profit attributable to ordinary shareholders of the parent company ....	6,629		3,213		2,352

Basic and diluted earnings per share

	Half-year to 30 June 2010						Half-year to 30 June 2009						Half-year to 31 December 2009
	Profit     US$m		Number of shares (millions)		Amount per share        US$		Profit      US$m		Number of shares (millions)		Amount per share         US$		Profit      US$m		Number of shares (millions)		Amount per share         US$
Basic ............................	6,629		17,310		0.38		3,213		15,353		0.21		2,352		17,187		0.13
Effect of dilutive potential ordinary shares .......................			202						52						231
Diluted .........................	6,629		17,512		0.38		3,213		15,405		0.21		2,352		17,418		0.13

5     Post-employment benefits

Included within 'Employee compensation and benefits' are components of net periodic benefit cost related to HSBC's defined benefit pension plans and other post-employment benefits, as follows:

	Half-year to
	30 June                2010		30 June                2009	2005	31 December                2009
	US$m		US$m		US$m
Current service cost ..................................................................	291		335		270
Interest cost .............................................................................	811		711		760
Expected return on plan assets ..................................................	(717)		(647)		(704)
Past service cost .......................................................................	8		3		16
Gains on curtailments ...............................................................	(148)		(53)		(5)
Other (gains)/losses ...................................................................	1		(499)		5
Net defined benefit cost ............................................................	246		(150)		342

HSBC revalues its defined benefit post-employment plans each year at 31 December, in consultation with the plans' local actuaries. The assumptions underlying the calculations are used to determine the expected income statement charge for the year going forward.

At 30 June each year, HSBC revalues all plan assets to current market prices. HSBC also reviews the assumptions used to calculate the defined benefit obligations (the liabilities of the plans) and updates the carrying amount of the obligations if there have been significant changes as a consequence of changes in assumptions.

In the first half of 2010, there was a decrease in the average yields of high quality (AA rated or equivalent) debt instruments in the UK, together with a decrease in inflation expectations. As a result, the defined benefit obligation for the HSBC Bank (UK) Pension Scheme increased by US$576 million in respect of actuarial losses mainly caused by the changes to discount and inflation rate assumptions. For other plans, the average discount rates used generally decreased after 31 December 2009, resulting in actuarial losses and an increase in the defined benefit obligations of US$479 million. All differences from changes in the assumptions used were recognised directly in other comprehensive income as actuarial gains or losses.

In November 2009, the Board of Directors of HSBC North America Holdings, Inc. ('HNAH') approved actions to cease all future benefit accruals for legacy participants under the final average pay formula components of the HSBC North America Pension Plan with effect from 1 January 2011. Affected employees were informed of this decision in February 2010. As a result of these changes, HNAH recorded a one-time curtailment gain of US$147 million.

The discount rates used to calculate HSBC's obligations under its defined benefit pension and post-employment healthcare plans were as follows:

Discount rates

	At           30 June                2010		At             30 June                2009	2005	At    31 December                2009
	%		%		%
UK .................................................................................................	5.40		6.20		5.70
Hong Kong ....................................................................................	2.29		2.65		2.58
US ..................................................................................................	5.45		6.50		5.92
Jersey .............................................................................................	5.70		6.20		5.70
Mexico ..........................................................................................	7.50		8.50		8.50
Brazil .............................................................................................	11.25		11.25		11.25
France ............................................................................................	4.50		5.75		5.50
Canada ...........................................................................................	5.75		6.50		6.25
Switzerland .....................................................................................	2.60		3.00		3.25
Germany ........................................................................................	4.50		5.75		5.50

The inflation rate used to calculate the HSBC Bank (UK) Pension Scheme obligation at 30 June 2010 was 3.5 per cent (30 June 2009: 3.6 per cent; 31 December 2009: 3.7 per cent). There were no material changes to other assumptions.

Actuarial gains and losses

	Half-year to
	30 June                2010		30 June                2009	2005	31 December                2009
	US$m		US$m		US$m
Experience gains/(losses) on plan liabilities ..............................	(17)		42		(243)
Experience gains/(losses) on plan assets ...................................	956		(1,620)		2,564
Losses from changes in actuarial assumptions ..........................	(1,038)		(2,000)		(2,292)
Other movements1...................................................................	17		-		(37)
Total net actuarial losses .........................................................	(82)		(3,578)		(8)

1  Other movements include changes in the effect of the limit on plan surpluses.

Actuarial gains and losses comprise experience adjustments on plan assets and liabilities as well as adjustments arising from changes in actuarial assumptions. The experience gains and losses on plan assets arise as a result of the difference between the expected returns on the plan assets and the actual movement in the value of the plan assets during the period. The changes in actuarial assumptions arise as a result of changes in the plan assumptions, primarily discount rates and inflation rates, as previously described.

Total cumulative net actuarial losses, including the cumulative effect of the limit on plan surpluses recognised in equity at 30 June 2010, were US$4,742 million (30 June 2009: US$4,652 million cumulative losses; 31 December 2009: US$4,660 million cumulative losses). Of this the cumulative effect of the limit on plan surpluses was US$29 million (30 June 2009: US$9 million; 31 December 2009: US$47 million).

In February 2010, HSBC Bank plc agreed with the Trustee of the HSBC Bank (UK) Pension Scheme ('the Scheme') to reduce the deficit of the plan by meeting a schedule of future funding payments, as disclosed on page 390 of the Annual Report and Accounts 2009. On 17 June 2010, HSBC Bank plc agreed with the Trustee to accelerate the reduction of the deficit of the plan with a special contribution of £1,760 million (US$2,638 million) in 2010 followed by a revised payment schedule in the following years, as shown below:

	Original		Original		Revised		Revised
	plan		plan		plan		plan
	US$m1		£m		US$m1		£m
2010 ..........................................................................................................................	-		-		2,638		1,760
2011 ..........................................................................................................................	-		-		-		-
2012 ..........................................................................................................................	697		465		-		-
2013 ..........................................................................................................................	697		465		-		-
2014 ..........................................................................................................................	697		465		-		-
2015 ..........................................................................................................................	944		630		-		-
2016 ..........................................................................................................................	944		630		742		495
2017 ..........................................................................................................................	944		630		944		630
2018 ..........................................................................................................................	944		630		944		630

1  The payment schedule was agreed with the Trustee in pounds sterling and the equivalent US dollar amounts are shown at the exchange rate effective as at 30 June 2010.

On the same day, HSBC Bank plc made the £1,760 million (US$2,638 million) contribution and the Scheme used the contribution to acquire debt securities with a fair value of £1,760 million (US$2,638 million) from HSBC in a transaction at an arm's length value determined by the Scheme's independent third-party advisors. The debt securities sold comprised supranational, agency and government-guaranteed securities, asset-backed securities, corporate subordinated debt and auction rate securities. The contribution together with an actuarial gain on plan assets of US$986 million helped achieve a reduction in the net liability of the scheme from US$3,822 million at 31 December 2009 to US$495 million at 30 June 2010.

As disclosed in 'Related party transactions' on page 470 in the Annual Report and Accounts 2009, HSBC Bank (UK) Pension Scheme entered into collateralised swap transactions with HSBC to manage the inflation and interest rate sensitivity of the Scheme's pension obligations. At 30 June 2010, the swaps had a positive fair value of US$1,891 million to the scheme (30 June 2009: US$609 million positive to the scheme; 31 December 2009: US$1,049 million positive to the scheme). All swaps were executed at prevailing market rates and within standard market bid-offer spreads.

6     Tax expense

	Half-year to
	30 June		30 June		31 December
	2010		2009		2009
	US$m		US$m		US$m
Current tax
UK corporation tax charge .................................................................	609		60		146
Overseas tax .......................................................................................	2,439		1,472		375
	3,048		1,532		521
Deferred tax
Origination and reversal of temporary differences ..............................	808		(246)		(1,422)
Tax expense .......................................................................................	3,856		1,286		(901)
Effective tax rate ...............................................................................	34.7%		25.6%		(43.7%)

The UK corporation tax rate applying to HSBC was 28 per cent (2009: 28 per cent). Overseas tax included Hong Kong profits tax of US$426 million (first half of 2009: US$416 million; second half of 2009: US$367 million). Subsidiaries in Hong Kong provided for Hong Kong profits tax at the rate of 16.5 per cent (2009: 16.5 per cent) on the profits for the period assessable in Hong Kong. Other overseas subsidiaries and overseas branches provided for taxation at the appropriate rates in the countries in which they operate. The following table reconciles the overall tax expense which would apply if all profits had been taxed at the UK corporation tax rate:

	Half-year to
	30 June 2010				30 June 2009				31 December 2009
	US$m		%		US$m		%		US$m		%
Analysis of tax expense1
Taxation at UK corporation tax rate of 28 per cent (2009: 28 per cent) ......................................	3,109		28.0		1,405		28.0		577		28.0
Non-deductible loss on foreign exchange swaps on rights issue proceeds2 ...............................	-		-		-		-		96		4.7
Effect of taxing overseas profits in principal locations at different rates ............................	(326)		(2.9)		(598)		(11.9)		(747)		(36.2)
Gains not subject to tax ....................................	(180)		(1.6)		(34)		(0.7)		(204)		(9.9)
Adjustments in respect of prior period liabilities ......................................................................	(20)		(0.2)		(5)		(0.1)		(34)		(1.7)
Low income housing tax credits3 ......................	(44)		(0.4)		(49)		(1.0)		(49)		(2.4)
Effect of profit in associates and joint ventures	(332)		(3.0)		(243)		(4.8)		(256)		(12.4)
Deferred tax temporary differences not provided ......................................................................	8		0.1		813		16.2		(453)		(22.0)
Non taxable income .........................................	(164)		(1.5)		(109)		(2.2)		(256)		(12.4)
Permanent disallowables ...................................	99		0.9		138		2.7		85		4.1
Additional provision for tax on overseas dividends .......................................................	-		-		2		-		339		16.5
Tax impact of intragroup transfer of subsidiary	1,590		14.3		-		-		-		-
Bank payroll tax ..............................................	91		0.8		-		-		-		-
Other items ......................................................	25		0.2		(34)		(0.6)		1		-
Overall tax expense1 ........................................	3,856		34.7		1,286		25.6		(901)		(43.7)

1  Interim period income tax expense is accrued using the estimated average annual effective income tax rates, which have been substantially enacted by 30 June 2010, and which will be applicable to expected total annual earnings.

2  In August 2009, the UK Government enacted legislation that gains or losses on transactions designated to hedge foreign exchange exposures connected to rights issues should be disregarded for tax purposes.

3  Low income housing tax credits arise in the US and are designed to encourage the provision of rental housing for low income households.

On 22 June 2010, the UK Government announced its intention to reduce the main rate of corporation tax from 28 per cent to 24 per cent. The fall will be phased in over a period of four years with a 1 per cent reduction in the main corporation tax rate for each year starting on 1 April 2011. The Finance (No. 2) Act 2010 enacted on 27 July 2010 included legislation on the initial phase to reduce the main rate of corporation tax from 28 per cent to 27 per cent from 1 April 2011. The tax rate change was not substantively enacted at 30 June 2010, therefore the change has not been reflected in the amounts recognised as at that date. However, it is not expected that the proposed rate changes will have a significant effect on the net UK deferred tax position recognised at 30 June 2010 of US$301 million.

For the period ended 30 June 2010, HSBC's share of associates' tax on profit was US$356 million (30 June 2009: US$203 million; 31 December 2009: US$287 million), which is included within share of profit in associates and joint ventures in the income statement.

Of the total net deferred tax assets of US$6.2 billion at 30 June 2010 (30 June 2009: US$7.9 billion; 31 December 2009: US$8.6 billion), US$3.5 billion (30 June 2009: US$4.9 billion; 31 December 2009: US$5.1 billion) arose in respect of HSBC's US operations where there has been a recent history of losses. Management's analysis of the recognition of these deferred tax assets significantly discounts the benefit which would arise from future expected profits from the US operations and relies to a greater extent on capital support to the US operations from HSBC, including tax planning strategies implemented in relation to such support. Further to the implementation of this strategy, an internal reorganisation on 31 January 2010 provided substantial support for the recoverability of the US deferred tax assets, and the associated taxable gain arising in the US operations reduced the deferred tax assets by US$1.6 billion. Management's updated analysis is consistent with the assumption that it is probable that there will be sufficient taxable income to support the resulting deferred tax assets that have been recognised in respect of the US operations as at 30 June 2010.

US legislation enacted on 6 November 2009 allowed for an extended carryback period for certain federal tax net operating losses. This had the effect of reducing the net deferred tax assets related to such losses by approximately US$1.6 billion at 31 December 2009, and the equivalent federal tax refund was received in early 2010.

7     Trading assets

	At           30 June                2010		At             30 June                2009		At    31 December                2009
	US$m		US$m		US$m
Trading assets:
-. not subject to repledge or resale by counterparties ........................	315,137		313,641		320,155
-. which may be repledged or resold by counterparties ......................	88,663		100,717		101,226
	403,800		414,358		421,381
Treasury and other eligible bills ............................................................	22,236		22,990		22,346
Debt securities .....................................................................................	194,390		190,870		201,598
Equity securities ...................................................................................	27,360		25,484		35,311
Trading securities valued at fair value ...................................................	243,986		239,344		259,255
Loans and advances to banks ...............................................................	77,434		73,636		78,126
Loans and advances to customers .........................................................	82,380		101,378		84,000
	403,800		414,358		421,381

Trading securities valued at fair value

	At           30 June                2010		At             30 June                2009		At    31 December                2009
	US$m		US$m		US$m
US Treasury and US Government agencies2 ..........................................	22,774		22,586		17,620
UK Government ..................................................................................	11,874		8,936		12,113
Hong Kong Government ......................................................................	14,325		6,637		10,649
Other government ...............................................................................	79,177		95,672		94,264
Asset-backed securities1,3 .....................................................................	4,381		4,769		5,308
Corporate debt and other securities1 .....................................................	84,095		75,260		83,990
Equity securities ...................................................................................	27,360		25,484		35,311
	243,986		239,344		259,255

1  Included within the above figures are debt securities issued by banks and other financial institutions of US$35,424 million (30 June 2009: US$41,590 million; 31 December 2009: US$41,466 million), of which US$8,399 million (30 June 2009: US$4,129 million; 31 December 2009: US$7,280 million) are guaranteed by various governments.

2  Includes securities that are supported by an explicit guarantee issued by the US Government.

3  Excludes asset-backed securities included under US Treasury and US Government agencies.

Trading securities listed on a recognised exchange and unlisted

	Treasury        and other eligible bills		Debt       securities		Equity       securities		Total
	US$m		US$m		US$m		US$m
Fair value at 30 June 2010
Listed on a recognised exchange1 .........................	2,097		146,713		26,900		175,710
Unlisted2 ..............................................................	20,139		47,677		460		68,276
	22,236		194,390		27,360		243,986
Fair value at 30 June 2009
Listed on a recognised exchange1 .........................	50		146,939		24,798		171,787
Unlisted2 ..............................................................	22,940		43,931		686		67,557
	22,990		190,870		25,484		239,344
Fair value at 31 December 2009
Listed on a recognised exchange1 .........................	3,107		159,030		33,428		195,565
Unlisted2 ..............................................................	19,239		42,568		1,883		63,690
	22,346		201,598		35,311		259,255

1  Included within listed securities are US$3,384 million (30 June 2009: US$3,552 million; 31 December 2009: US$3,229 million) of investments listed in Hong Kong.

2  Unlisted treasury and other eligible bills primarily comprise treasury bills not listed on a recognised exchange but for which there is a liquid market.

Loans and advances to banks held for trading

	At           30 June                2010		At             30 June                2009		At    31 December                2009
	US$m		US$m		US$m
Reverse repos .....................................................................................	43,820		42,085		50,357
Settlement accounts ...........................................................................	12,843		18,040		10,128
Stock borrowing .................................................................................	5,793		2,017		4,711
Other .................................................................................................	14,978		11,494		12,930
	77,434		73,636		78,126

Loans and advances to customers held for trading

	At           30 June                2010		At             30 June                2009		At    31 December                2009
	US$m		US$m		US$m
Reverse repos .....................................................................................	36,330		47,168		42,172
Settlement accounts ...........................................................................	22,039		20,933		12,134
Stock borrowing .................................................................................	12,487		18,778		18,042
Other .................................................................................................	11,524		14,499		11,652
	82,380		101,378		84,000

8     Financial assets designated at fair value

	At           30 June                2010		At             30 June                2009		At    31 December                2009
	US$m		US$m		US$m
Financial assets designated at fair value:
-  not subject to repledge or resale by counterparties .......................	32,239		33,345		37,166
-  which may be repledged or resold by counterparties .....................	4		16		15
	32,243		33,361		37,181
Treasury and other eligible bills ..........................................................	249		495		223
Debt securities ....................................................................................	16,153		19,825		20,718
Equity securities .................................................................................	13,893		12,060		14,983
Securities designated at fair value ........................................................	30,295		32,380		35,924
Loans and advances to banks ..............................................................	1,149		204		354
Loans and advances to customers .......................................................	799		777		903
	32,243		33,361		37,181

Securities designated at fair value

	At           30 June                2010		At             30 June                2009		At    31 December                2009
	US$m		US$m		US$m
US Treasury and US Government agencies2 ........................................	49		88		78
UK Government .................................................................................	1,119		4,995		4,799
Hong Kong Government ....................................................................	155		244		177
Other government ..............................................................................	3,206		3,153		3,491
Asset-backed securities1,3 ....................................................................	5,986		6,598		6,463
Corporate debt and other securities1 ...................................................	5,887		5,242		5,933
Equity securities .................................................................................	13,893		12,060		14,983
	-
	30,295		32,380		35,924

1  Included within the above figures are debt securities issued by banks and other financial institutions of US$9,643 million (30 June 2009: US$13,391 million; 31 December 2009: US$13,745 million), of which US$46 million (30 June 2009: US$47 million; 31 December 2009: US$49 million) are guaranteed by various governments.

2  Includes securities that are supported by an explicit guarantee issued by the US Government.

3  Excludes asset-backed securities included under US Treasury and US Government agencies.

Securities listed on a recognised exchange and unlisted

	Treasury        and other eligible bills		Debt       securities		Equity       securities		Total
	US$m		US$m		US$m		US$m
Fair value at 30 June 2010
Listed on a recognised exchange1 .........................	105		3,252		9,358		12,715
Unlisted ...............................................................	144		12,901		4,535		17,580
	249		16,153		13,893		30,295
Fair value at 30 June 2009
Listed on a recognised exchange1 .........................	69		7,126		8,684		15,879
Unlisted ...............................................................	426		12,699		3,376		16,501
	495		19,825		12,060		32,380
Fair value at 31 December 2009
Listed on a recognised exchange1 .........................	78		7,168		10,549		17,795
Unlisted ...............................................................	145		13,550		4,434		18,129
	223		20,718		14,983		35,924

1  Included within listed securities are US$544 million (30 June 2009: US$608 million; 31 December 2009: US$506 million) of investments listed in Hong Kong.

9     Derivatives

Fair values of derivatives by product contract type

	Assets						Liabilities
	Trading		Hedging		Total		Trading		Hedging		Total
	US$m		US$m		US$m		US$m		US$m		US$m
At 30 June 2010
Foreign exchange ................	60,502		775		61,277		61,269		879		62,148
Interest rate ........................	311,491		3,461		314,952		306,571		4,250		310,821
Equities ...............................	15,381		-		15,381		17,805		-		17,805
Credit ..................................	26,223		-		26,223		25,227		-		25,227
Commodity and other .........	927		-		927		1,494		-		1,494
Gross total fair values ..........	414,524		4,236		418,760		412,366		5,129		417,495
Netting ................................					(130,481)						(130,481)
Total ...................................					288,279						287,014
At 30 June 2009
Foreign exchange ................	66,117		1,408		67,525		61,436		303		61,739
Interest rate ........................	221,869		4,051		225,920		216,665		3,539		220,204
Equities ...............................	17,216		-		17,216		18,815		-		18,815
Credit ..................................	47,828		-		47,828		45,775		-		45,775
Commodity and other .........	1,365		-		1,365		1,401		-		1,401
Gross total fair values ..........	354,395		5,459		359,854		344,092		3,842		347,934
Netting ................................					(49,058)						(49,058)
Total ...................................					310,796						298,876
At 31 December 2009
Foreign exchange ................	55,036		1,695		56,731		54,502		300		54,802
Interest rate ........................	212,102		3,506		215,608		209,351		3,274		212,625
Equities ...............................	15,729		-		15,729		19,013		-		19,013
Credit ..................................	28,479		-		28,479		27,042		-		27,042
Commodity and other .........	1,135		-		1,135		960		-		960
Gross total fair values ..........	312,481		5,201		317,682		310,868		3,574		314,442
Netting ................................					(66,796)						(66,796)
Total ...................................					250,886						247,646

The 15 per cent increase in the fair value of derivative assets during the first half of 2010 was driven both by an increased volume of trades, particularly of interest rate derivatives, and by declines in yield curves of major currencies, especially at longer maturities, as market concerns grew in the second quarter regarding the pace of recovery and the impact of austerity measures. The netting adjustment increased as increasing volumes of transactions were executed through clearing houses.

A description of HSBC's determination of the fair values of financial instruments, including derivatives, is provided on page 171 of the Annual Report and Accounts 2009.

Trading derivatives

The notional contract amounts of these instruments indicate the nominal value of transactions outstanding at the reporting date; they do not represent amounts at risk.

Notional contract amounts of derivatives held for trading purposes by product type

	At           30 June                2010		At             30 June                2009		At    31 December                2009
	US$m		US$m		US$m
Foreign exchange ...............................................................................	3,373,419		2,849,035		2,883,201
Interest rate .......................................................................................	16,377,107		12,148,712		13,874,355
Equities ..............................................................................................	240,954		226,043		217,828
Credit .................................................................................................	1,147,016		1,377,155		1,237,055
Commodity and other ........................................................................	77,683		46,577		53,720
	21,216,179		16,647,522		18,266,159

Credit derivatives

The notional contract amount of credit derivatives of US$1,147 billion (30 June 2009: US$1,377 billion; 31 December 2009: US$1,237 billion) consisted of protection bought of US$571 billion (30 June 2009: US$680 billion; 31 December 2009: US$615 billion) and protection sold of US$576 billion (30 June 2009: US$697 billion; 31 December 2009: US$622 billion).

HSBC may utilise securities to hedge exposures arising through derivative transactions. The mismatch between protection bought and sold, while small both in terms of both notional and fair value, should therefore not be interpreted as representing the open risk position. The credit derivative business operates within the market risk management framework described on page 175.

Derivatives valued using models with unobservable inputs

The difference between the fair value at initial recognition (the transaction price) and the value that would have been derived had valuation techniques used for subsequent measurement been applied at initial recognition, less subsequent releases, is as follows.

Unamortised balance of derivatives valued using models with unobservable inputs

	Half-year to
	30 June                2010		30 June                2009		31 December                2009
	US$m		US$m		US$m
Unamortised balance at beginning of period ........................................	260		204		218
Deferral on new transactions ..............................................................	223		71		121
Recognised in the income statement during the period:
-  amortisation ...............................................................................	(48)		(44)		(42)
-  subsequent to unobservable inputs becoming observable ...............	(14)		(4)		(15)
-  maturity or termination, or offsetting derivative ........................	(134)		(19)		(23)
Exchange differences ..........................................................................	(21)		10		1
Risk hedged ........................................................................................	(10)		-		-
Unamortised balance at end of period1 ................................................	256		218		260

1  This amount is yet to be recognised in the consolidated income statement.

Hedging instruments

The notional contract amounts of these instruments indicate the nominal value of transactions outstanding at the balance sheet date; they do not represent amounts at risk.

Notional contract amounts of derivatives held for hedging purposes by product type

	At 30 June 2010				At 30 June 2009				At 31 December 2009
	Cash flow hedge		Fair value hedge		Cash flow hedge		Fair value hedge		Cash flow hedge		Fair value hedge
	US$m		US$m		US$m		US$m		US$m		US$m
Foreign exchange ..................................	11,143		1,748		12,943		2,453		12,359		2,469
Interest rate ..........................................	241,552		51,734		212,673		44,346		236,388		42,224
	252,695		53,482		225,616		46,799		248,747		44,693

Fair value hedges

Fair value of derivatives designated as fair value hedges

	At 30 June 2010				At 30 June 2009				At 31 December 2009
	Assets		Liabilities		Assets		Liabilities		Assets		Liabilities
	US$m		US$m		US$m		US$m		US$m		US$m
Foreign exchange ..................................	120		-		263		-		342		-
Interest rate ..........................................	136		2,285		300		926		242		1,085
	256		2,285		563		926		584		1,085

Gains/(losses) arising from fair value hedges

	Half-year to
	30 June                2010		30 June                2009		31 December                2009
	US$m		US$m		US$m
Gains/(losses):
-  on hedging instruments .................................................................	(1,249)		72		42
-  on the hedged items attributable to the hedged risk ........................	1,266		(75)		(84)
	17		(3)		(42)

The gains and losses on ineffective portions of fair value hedges are recognised immediately in 'Net trading income'.

Cash flow hedges

Fair value of derivatives designated as cash flow hedges

	At 30 June 2010				At 30 June 2009				At 31 December 2009
	Assets		Liabilities		Assets		Liabilities		Assets		Liabilities
	US$m		US$m		US$m		US$m		US$m		US$m
Foreign exchange ..................................	655		879		1,145		303		1,353		300
Interest rate ..........................................	3,325		1,965		3,751		2,613		3,264		2,189
	3,980		2,844		4,896		2,916		4,617		2,489

The gains and losses on ineffective portions of such derivatives are recognised immediately in 'Net trading income'. During the period to 30 June 2010, a loss of US$24 million was recognised due to hedge ineffectiveness (first half of 2009: gain of US$70 million; second half of 2009: gain of US$74 million).

Hedges of net investments in foreign operations

At 30 June 2010, the fair values of outstanding financial instruments designated as hedges of net investments in foreign operations were assets of US$3 million and liabilities of US$38 million (30 June 2009: liabilities of US$25 million; 31 December 2009: liabilities of US$28 million), and contract notional values of US$617 million (30 June 2009: US$517 million; 31 December 2009: US$566 million).

The ineffectiveness recognised in 'Net trading income' for the period ended 30 June 2010 was nil (both halves of 2009: nil).

10   Financial investments

	At           30 June               2010		At             30 June                2009		At    31 December                2009
	US$m		US$m		US$m
Financial investments:
-. not subject to repledge or resale by counterparties .........................	361,931		346,877		356,864
-. which may be repledged or resold by counterparties .......................	23,540		6,567		12,294
	385,471		353,444		369,158

	At 30 June 2010				At 30 June 2009				At 31 December 2009
	Carrying      amount		Fair          value		Carrying        amount		Fair           value		Carrying        amount		Fair           value
	US$m		US$m		US$m		US$m		US$m		US$m
Treasury and other eligible bills .............	61,275		61,275		54,262		54,262		58,434		58,434
-. available for sale ............................	61,150		61,150		54,262		54,262		58,333		58,333
-. held to maturity ............................	125		125		-		-		101		101
Debt securities .......................................	315,367		316,654		290,382		290,663		301,600		302,171
-. available for sale ............................	296,579		296,579		274,092		274,092		284,074		284,074
-. held to maturity ............................	18,788		20,075		16,290		16,571		17,526		18,097
Equity securities
-. available for sale ............................	8,829		8,829		8,800		8,800		9,124		9,124
Total financial investments ..................	385,471		386,758		353,444		353,725		369,158		369,729

Financial investments at amortised cost and fair value

	Amortised                  cost		Fair               value
	US$m		US$m
At 30 June 2010
US Treasury ......................................................................................................................	24,162		24,756
US Government agencies2 .................................................................................................	18,418		19,051
US Government sponsored entities2 ..................................................................................	5,016		5,278
UK Government ...............................................................................................................	27,339		28,191
Hong Kong Government ...................................................................................................	35,447		35,443
Other government ............................................................................................................	94,320		95,478
Asset-backed securities1,3 ..................................................................................................	42,534		34,010
Corporate debt and other securities1 ..................................................................................	134,393		135,722
Equities .............................................................................................................................	6,568		8,829
	388,197		386,758
At 30 June 2009
US Treasury ......................................................................................................................	20,936		20,963
US Government agencies2 .................................................................................................	14,105		14,266
US Government sponsored entities2 ..................................................................................	3,511		3,605
UK Government ...............................................................................................................	9,028		9,138
Hong Kong Government ...................................................................................................	19,692		19,703
Other government ............................................................................................................	76,048		76,720
Asset-backed securities1,3 ..................................................................................................	52,242		33,131
Corporate debt and other securities1 ..................................................................................	168,644		167,399
Equities .............................................................................................................................	6,874		8,800
	371,080		353,725

	Amortised                  cost		Fair                value
	US$m		US$m
At 31 December 2009
US Treasury ......................................................................................................................	17,650		17,635
US Government agencies2 .................................................................................................	12,539		12,804
US Government sponsored entities2 ..................................................................................	4,885		4,924
UK Government ...............................................................................................................	9,653		9,782
Hong Kong Government ...................................................................................................	37,747		37,763
Other government ............................................................................................................	87,122		87,881
Asset-backed securities1,3 ..................................................................................................	48,500		34,914
Corporate debt and other securities1 ..................................................................................	153,639		154,902
Equities .............................................................................................................................	7,051		9,124
	378,786		369,729

1  Included within the above figures are debt securities issued by banks and other financial institutions with a carrying amount of US$115,836 million (30 June 2009: US$170,277 million; 31 December 2009: US$133,256 million), of which US$45,171 million (30 June 2009: US$70,398 million; 31 December 2009: US$55,324 million) are guaranteed by various governments. The fair value of the debt securities issued by banks and other financial institutions at 30 June 2010 was US$116,316 million (30 June 2009: US$170,483 million; 31 December 2009: US$133,461 million).

2  Includes securities that are supported by an explicit guarantee issued by the US Government.

3  Excludes asset-backed securities included under US Government agencies and sponsored entities.

Financial investments listed on a recognised exchange and unlisted

	Treasury   and other eligible bills    available     for sale		Treasury   and other      eligible bills       held to    maturity		Debt securities    available      for sale		Debt securities       held to    maturity		Equity securities    available      for sale		Total
	US$m		US$m		US$m		US$m		US$m		US$m
Carrying amount at 30 June 2010
Listed on a recognised exchange1 ..................	3,394		125		139,398		3,142		524		146,583
Unlisted2 .......................................................	57,756		-		157,181		15,646		8,305		238,888
	61,150		125		296,579		18,788		8,829		385,471
Carrying amount at 30 June 2009
Listed on a recognised exchange1 ..................	7,834		-		134,312		2,143		712		145,001
Unlisted2 .......................................................	46,428		-		139,780		14,147		8,088		208,443
	54,262		-		274,092		16,290		8,800		353,444
Carrying amount at 31 December 2009
Listed on a recognised exchange1 ..................	2,334		-		135,653		2,743		911		141,641
Unlisted2 .......................................................	55,999		101		148,421		14,783		8,213		227,517
	58,333		101		284,074		17,526		9,124		369,158

1  The fair value of listed held-to-maturity debt securities at 30 June 2010 was US$3,302 million (30 June 2009: US$2,116 million; 31 December 2009: US$2,769 million). Included within listed investments were US$1,668 million (30 June 2009: US$1,481 million; 31 December 2009: US$1,670 million) of investments listed in Hong Kong.

2  Unlisted treasury and other eligible bills available for sale primarily comprise treasury bills not listed on a recognised exchange but for which there is a liquid market.

Maturities of debt securities at carrying amount

	At           30 June                2010		At             30 June                2009		At    31 December                2009
	US$m		US$m		US$m
Remaining contractual maturities of total debt securities:
1 year or less .....................................................................................	74,101		70,497		75,782
5 years or less but over 1 year ...........................................................	138,240		140,343		141,683
10 years or less but over 5 years ........................................................	42,770		28,412		31,934
over 10 years ....................................................................................	60,256		51,130		52,201
	315,367		290,382		301,600
Remaining contractual maturities of debt securities available for sale:
1 year or less .....................................................................................	73,411		69,762		75,160
5 years or less but over 1 year ...........................................................	131,587		134,976		135,187
10 years or less but over 5 years ........................................................	36,301		22,345		26,105
over 10 years ....................................................................................	55,280		47,009		47,622
	296,579		274,092		284,074
Remaining contractual maturities of debt securities held to maturity:
1 year or less .....................................................................................	690		735		622
5 years or less but over 1 year ...........................................................	6,653		5,367		6,496
10 years or less but over 5 years ........................................................	6,469		6,067		5,829
over 10 years ....................................................................................	4,976		4,121		4,579
	18,788		16,290		17,526

11   Non-current assets held for sale

	At           30 June                2010		At             30 June                2009		At    31 December                2009
	US$m		US$m		US$m
Interest in associates ..........................................................................	85		-		105
Property, plant and equipment ...........................................................	1,224		1,099		1,639
Financial assets ...................................................................................	110		846		1,359
Other .................................................................................................	7		10		15
Total assets classified as held for sale ..................................................	1,426		1,955		3,118

Interest in associates

In June 2010, HSBC entered into a contract for the sale of its investment in British Arab Commercial Bank plc for a consideration of £57 million (US$85 million). The transaction is expected to complete in the fourth quarter of 2010. A loss of £31 million (US$47 million) was recognised on reclassifying the investment as held for sale. The investment is presented in the geographical segment, Middle East.

Property, plant and equipment

Property, plant and equipment classified as held for sale principally results from the repossession of property that had been pledged as collateral by customers. These assets are expected to be disposed of within 12 months of acquisition. The majority arose within the geographical segment, North America. Neither a gain nor a loss was recognised on reclassifying these assets as held for sale during the period.

12   Trading liabilities

	At           30 June                2010		At             30 June                2009		At    31 December                2009
	US$m		US$m		US$m
Deposits by banks ...............................................................................	52,639		44,036		41,165
Customer accounts .............................................................................	102,919		116,227		99,306
Other debt securities in issue ...............................................................	28,782		30,746		37,592
Other liabilities - net short positions in securities ...............................	90,496		73,553		90,067
	274,836		264,562		268,130

At 30 June 2010, the cumulative amount of change in fair value attributable to changes in credit risk was a gain of US$374 million (30 June 2009: gain of US$415 million; 31 December 2009: gain of US$119 million).

13   Financial liabilities designated at fair value

	At           30 June                2010		At             30 June                2009		At    31 December                2009
	US$m		US$m		US$m
Deposits by banks and customer accounts ...........................................	6,360		6,535		6,586
Liabilities to customers under investment contracts ............................	10,384		9,485		10,865
Debt securities in issue ........................................................................	41,042		34,576		38,208
Subordinated liabilities ........................................................................	18,763		23,416		20,180
Preference shares ...............................................................................	3,887		3,302		4,253
	80,436		77,314		80,092

The carrying amount at 30 June 2010 of financial liabilities designated at fair value was US$1,987 million more than the contractual amount at maturity (30 June 2009: US$2,777 million less; 31 December 2009: US$1,346 million more). At 30 June 2010, the cumulative amount of the change in fair value attributable to changes in credit risk was a gain of US$2,571 million (30 June 2009: gain of US$5,451 million; 31 December 2009: gain of US$1,510 million).

14   Maturity analysis of assets and liabilities

The following is an analysis, by remaining contractual maturities at the reporting date, of asset and liability line items that represent amounts expected to be recovered or settled within one year, and after one year.

Trading assets and liabilities are excluded because they are not held for collection or settlement over the period of contractual maturity.

	Due within         one year		Due after      more than         one year		Total
	US$m		US$m		US$m
At 30 June 2010
Assets
Financial assets designated at fair value ...............................................	3,887		28,356		32,243
Loans and advances to banks ..............................................................	188,946		7,350		196,296
Loans and advances to customers .......................................................	405,218		488,119		893,337
Financial investments .........................................................................	135,608		249,863		385,471
Other financial assets .........................................................................	21,205		5,766		26,971
	754,864		779,454		1,534,318
Liabilities
Deposits by banks ...............................................................................	122,026		5,290		127,316
Customer accounts .............................................................................	1,103,851		43,470		1,147,321
Financial liabilities designated at fair value ..........................................	7,773		72,663		80,436
Debt securities in issue ........................................................................	89,012		64,588		153,600
Other financial liabilities ....................................................................	69,905		5,705		75,610
Subordinated liabilities ........................................................................	381		27,866		28,247
	1,392,948		219,582		1,612,530

	Due within           one year		Due after        more than           one year		Total
	US$m		US$m		US$m
At 30 June 2009
Assets
Financial assets designated at fair value ...............................................	3,953		29,408		33,361
Loans and advances to banks ..............................................................	172,881		9,385		182,266
Loans and advances to customers .......................................................	399,211		525,472		924,683
Financial investments .........................................................................	123,481		229,963		353,444
Other financial assets .........................................................................	23,041		6,537		29,578
	722,567		800,765		1,523,332
Liabilities
Deposits by banks ...............................................................................	116,379		12,772		129,151
Customer accounts .............................................................................	1,123,792		39,551		1,163,343
Financial liabilities designated at fair value ..........................................	5,540		71,774		77,314
Debt securities in issue ........................................................................	87,564		68,635		156,199
Other financial liabilities ....................................................................	69,204		3,463		72,667
Subordinated liabilities ........................................................................	392		29,742		30,134
	1,402,871		225,937		1,628,808

At 31 December 2009
Assets
Financial assets designated at fair value ...............................................	3,786		33,395		37,181
Loans and advances to banks ..............................................................	172,916		6,865		179,781
Loans and advances to customers .......................................................	381,967		514,264		896,231
Financial investments .........................................................................	134,824		234,334		369,158
Other financial assets .........................................................................	26,189		7,383		33,572
	719,682		796,241		1,515,923
Liabilities
Deposits by banks ...............................................................................	118,308		6,564		124,872
Customer accounts .............................................................................	1,114,149		44,885		1,159,034
Financial liabilities designated at fair value ..........................................	4,666		75,426		80,092
Debt securities in issue ........................................................................	83,590		63,306		146,896
Other financial liabilities ....................................................................	67,061		3,606		70,667
Subordinated liabilities ........................................................................	369		30,109		30,478
	1,388,143		223,896		1,612,039

 

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