5th Aug 2008 07:00
|
Note |
Page |
|
|
1 |
Basis of preparation |
211 |
|
2 |
Accounting policies |
213 |
|
3 |
Dividends |
214 |
|
4 |
Earnings per share |
214 |
|
5 |
Post-employment benefits |
215 |
|
6 |
Tax expense |
216 |
|
7 |
Trading assets |
217 |
|
8 |
Financial assets designated at fair value |
219 |
|
9 |
Derivatives |
220 |
|
10 |
Financial investments |
222 |
|
11 |
Non-current assets held for sale |
225 |
|
12 |
Trading liabilities |
226 |
|
13 |
Financial liabilities designated at fair value |
226 |
|
Note |
Page |
|
|
14 |
Maturity analysis of assets and liabilities |
227 |
|
15 |
Equity |
229 |
|
16 |
Notes on the cash flow statement |
232 |
|
17 |
Contingent liabilities, contractual commitments and guarantees |
233 |
|
18 |
Segmental analysis |
233 |
|
19 |
Gains from dilution of interests in associates |
233 |
|
20 |
Goodwill impairment |
234 |
|
21 |
Litigation |
234 |
|
22 |
Events after the balance sheet date |
235 |
|
23 |
Interim Report 2008 and statutory accounts |
236 |
1 Basis of preparation
(a) Compliance with International Financial Reporting Standards
These interim consolidated financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as issued by the International Accounting Standards Board ('IASB') and as endorsed by the EU.
The consolidated financial statements of HSBC at 31 December 2007 were prepared in accordance with International Financial Reporting Standards ('IFRSs') as issued by the IASB and as endorsed by the EU. EUߛendorsed 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 30 June 2008, there were no unendorsed standards effective for the period ended 30 June 2008 affecting these 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.
(b) Comparative information
As required by IAS 34, the UK Disclosure and Transparency Rules and the Hong Kong listing rules, these interim consolidated financial statements include comparative balance sheet information at the previous financial year end, and comparative income statement information for the comparable interim periods of the immediately preceding financial year. The balance sheet at 30 June 2007 is provided voluntarily.
(c) 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 as a result of the use of estimates and assumptions about future conditions. 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 and the valuation of financial instruments. These critical accounting policies are described on page 132 of the Annual Report and Accounts 2007.
(d) 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 345 of the Annual Report and Accounts 2007.
(e) Future accounting developments
Standards and Interpretations issued by the IASB and endorsed by the EU
IFRS 8 'Operating Segments' ('IFRS 8'), which replaces IAS 14 'Segment Reporting' ('IAS 14'), was issued on 30 November 2006 and is effective for annual periods beginning on or after 1 January 2009. This standard specifies how an entity should report information about its operating segments, based on information about the components of the entity that the chief operating decision maker uses to make operating decisions. HSBC currently presents two sets of segments in accordance with IAS 14, one geographical and one based on customer groups, which reflect the way the businesses of the Group are managed. HSBC will adopt IFRS 8 with effect from 1 January 2009, and will accordingly present segmental information which reflects the operating segments used to make operating decisions at that time.
Standards and Interpretations issued by the IASB but not endorsed by the EU
At 30 June 2008, the following interpretations, effective for these consolidated financial statements, were issued by the IASB but not endorsed by the EU. These interpretations have no significant effect on the consolidated financial statements:
IFRIC 12 'Service Concession Arrangements' was issued on 30 November 2006 and is effective for annual periods beginning on or after 1 January 2008.
IFRIC 14 'IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction' was issued on 5 July 2007 and is effective for annual periods beginning on or after 1 January 2008.
The IASB issued a revised IAS 23 'Borrowing Costs' on 29 March 2007, which is applicable for annual periods beginning on or after 1 January 2009. The revised standard eliminates the option of recognising borrowing costs immediately as an expense, to the extent that they are directly attributable to the acquisition, construction or production of a qualifying asset. HSBC does not expect adoption of the revised standard to have a significant effect on the consolidated financial statements.
IFRIC 13 'Customer Loyalty Programmes' ('IFRIC 13') was issued on 28 June 2007 and is effective for annual periods beginning on or after 1 July 2008. IFRIC 13 addresses how companies that grant their customers loyalty award credits (often called 'points') when buying goods or services should account for their obligation to provide free or discounted goods and services, if and when the customers redeem the points. IFRIC 13 requires companies to allocate some of the proceeds of the initial sale to the award credits and recognise these proceeds as revenue only when they have fulfilled their obligations to provide goods or services. HSBC is currently assessing the effect of this interpretation on the consolidated financial statements.
A revised IAS 1 'Presentation of Financial Statements', which is applicable for annual periods beginning on or after 1 January 2009, was issued on 6 September 2007. The revised standard aims to improve users' ability to analyse and compare information given in financial statements. The adoption of the revised standard will have no effect on the results reported in HSBC's consolidated financial statements. It will, however, result in some presentational changes to the results and financial position of HSBC in certain respects.
The IASB issued an amendment to IFRS 2 'Share-based Payment' on 17 January 2008. The amendment, which is applicable for annual periods beginning on or after 1 January 2009, clarifies that vesting conditions comprise only service conditions and performance conditions. It also specifies the accounting treatment for a failure to meet a non-vesting condition. HSBC does not expect adoption of the amendment to have a significant effect on HSBC's consolidated financial statements.
A revised IFRS 3 'Business Combinations' and an amended IAS 27 'Consolidated and Separate Financial Statements', were issued on 10 January 2008. The revisions to the standards apply prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual financial reporting period beginning on or after 1 July 2009. The main changes under the standards are that:
acquisition-related costs are recognised as expenses in the income statement in the period they are incurred;
equity interests held prior to control being obtained are remeasured to fair value at the time control is obtained, 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 reported in equity; and
an option is available, on a transaction-by-transaction basis, to measure any non-controlling interests (previously referred to as minority interests) in the entity acquired either at fair value, or at the non-controlling interest's proportionate share of the net identifiable assets of the entity acquired.
The effect that the changes will have on the results and financial position of HSBC will depend on the incidence and timing of business combinations occurring on or after 1 January 2010.
The IASB issued amendments to IAS 32 'Financial Instruments: Presentation' and IAS 1 'Presentation of Financial Statements' - 'Puttable Financial Instruments and Obligations Arising on Liquidation', on 14 February 2008. The amendments are applicable for annual periods beginning on or after 1 January 2009. HSBC is currently assessing the effect of the amendments on the consolidated financial statements.
The IASB issued 'Improvements to IFRSs' on 22 May 2008, which comprises a collection of necessary, but not urgent, amendments to IFRSs. The amendments are primarily effective for annual periods beginning on or after 1 January 2009, with earlier application permitted. HSBC does not expect adoption of the amendments to have a significant effect on the consolidated financial statements.
The IASB issued amendments to IFRS 1 'First-time Adoption of International Financial Reporting Standards' and IAS 27 'Consolidation of Separate Financial Statements' - 'Determining the cost of an Investment in the Separate Financial Statements', on 22 May 2008. The main amendments relevant to HSBC are to remove the definition of the 'cost method' from IAS 27 and require an entity to present dividends as income in the separate financial statements of the investor. The amendment to IAS 27 will have no effect on the consolidated financial statements.
IFRIC 15 'Agreements for the Construction of Real Estate' ('IFRIC 15') was issued on 3 July 2008 and is effective for annual periods beginning on or after 1 January 2009. IFRIC 15 provides guidance on the recognition of revenue among real estate developers for sales of units. HSBC does not expect adoption of IFRIC 15 to have a significant effect on HSBC's consolidated financial statements.
IFRIC 16 'Hedges of a Net Investment in a Foreign Operation' ('IFRIC 16') was issued on 3 July 2008 and is effective for annual periods beginning on or after 1 October 2008. IFRIC 16 provides guidance on accounting for the hedge of a net investment in a foreign operation in an entity's consolidated financial statements. The main change introduced by IFRIC 16 is to eliminate the possibility of an entity applying hedge accounting for a hedge of foreign exchange differences between the functional currency of a foreign operation and the presentation currency of the parent's consolidated financial statements. The adoption of IFRIC 16 will have no effect on HSBC's consolidated financial statements.
The IASB issued an amendment to IAS 39 'Financial Instruments: Recognition and Measurement' - 'Eligible Hedged Items', which is applicable for annual periods beginning on or after 1 July 2009, on 31 July 2008. The amendment clarifies how the existing principles underlying hedge accounting should be applied. HSBC is currently assessing the effect of the amendment on the consolidated financial statements.
(f) Changes in composition of the Group
Acquisition of the assets, liabilities and operations of The Chinese Bank Co., Ltd ('The Chinese Bank')
The acquisition of assets, liabilities, and operations of The Chinese Bank in Taiwan was completed on 29 March 2008. This resulted in HSBC receiving a payment from the Taiwan Government's Central Deposit Insurance Corporation to deliver an agreed net asset position. In addition, HSBC will provide additional capital of US$400 million to ensure that its enlarged operations maintain appropriate financial ratios.
2 Accounting policies
The accounting policies adopted by HSBC for these interim consolidated financial statements are consistent with those described on page 347 of the Annual Report and Accounts 2007.
3 Dividends
Dividends to shareholders of the parent company were as follows:
|
Half-year to |
|||||||||||||||||
|
30 June 2008 |
30 June 2007 |
31 December 2007 |
|||||||||||||||
|
Per share US$ |
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 |
0.39 |
4,620 |
2,233 |
0.36 |
4,161 |
2,116 |
- |
- |
- |
||||||||
|
In respect of current year: |
|||||||||||||||||
|
- first interim dividend |
0.18 |
2,158 |
256 |
0.17 |
1,986 |
712 |
- |
- |
- |
||||||||
|
- second interim dividend |
- |
- |
- |
- |
- |
- |
0.17 |
1,997 |
912 |
||||||||
|
- third interim dividend |
- |
- |
- |
- |
- |
- |
0.17 |
2,007 |
614 |
||||||||
|
0.57 |
6,778 |
2,489 |
0.53 |
6,147 |
2,828 |
0.34 |
4,004 |
1,526 |
|||||||||
|
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 |
||||||||||||
The Directors have declared a second interim dividend in respect of the financial year ending 31 December 2008 of US$0.18 per ordinary share, a distribution of approximately US$2,161 million. The second interim dividend will be payable on 8 October 2008 to holders of ordinary shares on the Register at the close of business on 22 August 2008. Further details are contained in section 5 of Additional Information on page 249. No liability is recorded in the financial statements in respect of the second interim dividend for 2008.
On 15 July 2008, HSBC paid the first coupon on the Perpetual Subordinated Capital Securities of US$0.54 per security, a distribution of approximately US$48 million. The securities were issued on 8 April 2008 and are classified as equity. No liability is recorded in the balance sheet at 30 June 2008 in respect of the first 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 of US$7,677 million by the weighted average number of ordinary shares outstanding, excluding own shares held, of 11,737 million (first half of 2007: profit of US$10,850 million and 11,463 million shares; second half of 2007: profit of US$8,193 million and 11,626 million shares).
|
Half-year to |
|||||
|
30 June |
30 June |
31 December |
|||
|
2008 |
2007 |
2007 |
|||
|
US$m |
US$m |
US$m |
|||
|
Profit attributable to shareholders of the parent company |
7,722 |
10,895 |
8,238 |
||
|
Dividend payable on preference shares classified as equity |
(45) |
(45) |
(45) |
||
|
Profit attributable to ordinary shareholders of the parent company |
7,677 |
10,850 |
8,193 |
||
Diluted 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, plus the weighted average number of ordinary shares that would be issued on conversion of dilutive potential ordinary shares, of 11,806 million (first half of 2007: 11,518 million shares; second half of 2007: 11,802 million shares).
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 2008 |
30 June 2007 |
2005 |
31 December 2007 |
||
|
US$m |
US$m |
US$m |
|||
|
Current service cost |
404 |
403 |
423 |
||
|
Interest cost |
928 |
843 |
869 |
||
|
Expected return on plan assets |
(1,012) |
(840) |
(870) |
||
|
Past service cost |
3 |
1 |
2 |
||
|
Gains on curtailments |
(16) |
(65) |
(40) |
||
|
(Gains)/losses on settlements |
(73) |
- |
1 |
||
|
Net defined benefit cost |
234 |
342 |
385 |
||
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.
Rises in the average yields of high quality (AA rated or equivalent) debt instruments in certain countries in the first half of 2008, together with a rise in inflation above expectations in certain countries, resulted in significant changes in the valuation of the defined benefit obligations. As a result, HSBC revalued certain plan obligations where the impact was significant. This resulted in a net decrease in the defined benefit obligation for the HSBC Bank (UK) Pension Scheme of US$208 million and for other plans of US$243 million. All differences from expected changes were recognised directly in equity as actuarial gains.
The US$16 million curtailment gain reported in the above table results primarily from the reduction in the number of employees covered by three defined benefit plans as a result of restructuring.
The US$73 million settlement gain reported in the table above is as a result of HSBC entering into transactions to transfer the legal obligation of the benefits provided under two post-employment benefit plans to third parties.
The discount rates used to calculate HSBC's obligations under its defined benefit pension and post-employment healthcare plans were as follows:
|
At 30 June 2008 |
At 30 June 2007 |
2005 |
At 31 December 2007 |
||
|
% |
% |
% |
|||
|
UK |
6.60 |
5.80 |
5.80 |
||
|
Hong Kong |
3.45 |
4.78 |
3.45 |
||
|
US |
7.05 |
6.30 |
6.55 |
||
|
Jersey |
6.50 |
5.80 |
5.80 |
||
|
Mexico |
8.50 |
8.00 |
7.88 |
||
|
Brazil |
10.75 |
10.75 |
10.75 |
||
|
France |
6.25 |
5.00 |
5.50 |
||
|
Canada |
6.00 |
5.50 |
5.43 |
||
|
Switzerland |
3.30 |
3.00 |
3.30 |
||
|
Germany |
6.25 |
5.10 |
5.50 |
The inflation rate used to calculate the HSBC Bank (UK) Pension Scheme obligation at 30 June 2008 was 4.0 per cent (30 June 2007: 3.2 per cent; 31 December 2007: 3.3 per cent). Rates of pay increase were adjusted in line with this inflation assumption. There were no changes to other assumptions.
Actuarial gains and losses
|
Half-year to |
|||||
|
30 June 2008 |
30 June 2007 |
2005 |
31 December 2007 |
||
|
US$m |
US$m |
US$m |
|||
|
Experience gains/(losses) on plan liabilities |
(231) |
399 |
(802) |
||
|
Experience gains/(losses) on plan assets |
(1,361) |
(658) |
838 |
||
|
Gains from changes in actuarial assumptions |
682 |
2,300 |
132 |
||
|
Other movements1
|
- |
(13) |
(29) |
||
|
Total net actuarial gains/(losses) |
(910) |
2,028 |
139 |
||
1 Other movements include changes in the effect of the limit on plan surpluses and exchange differences recognised within actuarial gains and losses in equity.
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 result of changes in the plan assumptions, primarily discount rates and inflation rates, as previously described.
Total cumulative net actuarial losses recognised in equity at 30 June 2008 were US$362 million cumulative losses (31 December 2007: US$548 million cumulative gains; 30 June 2007: US$409 million cumulative gains).
As disclosed in 'Related party transactions' in the Annual Report and Accounts 2007, 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 2008, the swaps had a positive fair value of US$979 million to the scheme (31 December 2007: US$248 million positive to the scheme; 30 June 2007: US$774 million negative to the scheme). All swaps were executed at prevailing market rates and within standard market bid-offer spreads.
6 Tax expense
|
Half-year to |
|||||
|
30 June |
30 June |
31 December |
|||
|
2008 |
2007 |
2007 |
|||
|
US$m |
US$m |
US$m |
|||
|
Current tax |
|||||
|
UK corporation tax charge |
991 |
476 |
850 |
||
|
Overseas tax |
1,306 |
1,937 |
1,942 |
||
|
2,297 |
2,413 |
2,792 |
|||
|
Deferred tax |
|||||
|
Origination and reversal of temporary differences |
(356) |
232 |
(1,680) |
||
|
Tax expense |
1,941 |
2,645 |
1,112 |
||
|
Effective tax rate |
18.9% |
18.7% |
11.1% |
||
The UK corporation tax rate applying to HSBC changed from 30 per cent to 28 per cent with effect from 1 April 2008 (2007: 30 per cent). Overseas tax included Hong Kong profits tax of US$529 million (first half of 2007: US$495 million; second half of 2007: US$642 million). Subsidiaries in Hong Kong provided for Hong Kong profits tax at the rate of 16.5 per cent (2007: 17.5 per cent) on the profits for the period assessable in Hong Kong. Other overseas subsidiaries and overseas branches provided for taxation at the appropriate rates in the countries in which they operate. The following table reconciles the overall tax expense which would apply if all profits had been taxed at the UK corporation tax rate:
|
Half-year to |
|||||||||||
|
30 June 2008 |
30 June 2007 |
31 December 2007 |
|||||||||
|
US$m |
% |
US$m |
% |
US$m |
% |
||||||
|
Analysis of overall tax expense1
|
|||||||||||
|
Taxation at UK corporation tax rate of 28.5 per cent (2007: 30 per cent)2
|
2,920 |
28.5 |
4,248 |
30.0 |
3,016 |
30.0 |
|||||
|
Effect of taxing overseas profits in principal locations at different rates |
(560) |
(5.5) |
(459) |
(3.2) |
(1,001) |
(10.0) |
|||||
|
Tax-free gains |
(267) |
(2.6) |
(157) |
(1.1) |
(139) |
(1.4) |
|||||
|
Adjustments in respect of prior period liabilities |
2 |
- |
(152) |
(1.1) |
(157) |
(1.6) |
|||||
|
Low income housing tax credits3
|
(51) |
|
(0.5) |
(52) |
(0.4) |
(55) |
(0.5) |
||||
|
Effect of profit in associates and joint ventures |
(263) |
(2.6) |
(185) |
(1.3) |
(265) |
(2.6) |
|||||
|
Effect of previously unrecognised temporary differences4
|
(80) |
(0.8) |
(211) |
(1.5) |
(274) |
(2.7) |
|||||
|
Release of deferred tax consequent on restructuring of Group's interests |
- |
- |
- |
- |
(359) |
(3.6) |
|||||
|
Impact of gains arising from dilution of interests in associates5
|
- |
- |
(250) |
(1.8) |
(3) |
- |
|||||
|
Other items |
240 |
2.4 |
(137) |
(0.9) |
349 |
3.5 |
|||||
|
Overall tax expense |
1,941 |
18.9 |
2,645 |
18.7 |
1,112 |
11.1 |
|||||
1 Interim period income tax expense is accrued using the estimated average annual effective income tax rates that would be applicable to expected total annual earnings.
2 The change in the UK corporation tax rate from 30 per cent to 28 per cent with effect from 1 April 2008 gave rise to a blended tax rate for 2008 of 28.5 per cent.
3 Low income housing tax credits are designed to encourage the provision of rental housing for low income households in the US.
4 The effect of previously unrecognised temporary differences principally relates to the recognition of capital losses.
5 The gains arising from the dilution of HSBC's interests in associates are not subject to tax, and as such there is a reconciling item which reduces the effective tax rate. See Note 19.
For the period ended 30 June 2008, HSBC's share of associates tax on profit was US$298 million (30 June 2007: US$155 million; 31 December 2007: US$451 million), which is included within share of profit in associates and joint ventures in the income statement.
7 Trading assets
|
At 30 June 2008 |
At 30 June 2007 |
At 31 December 2007 |
|||
|
US$m |
US$m |
US$m |
|||
|
Trading assets: |
|||||
|
- not subject to repledge or resale by counterparties |
319,672 |
319,424 |
308,286 |
||
|
- which may be repledged or resold by counterparties |
153,865 |
105,221 |
137,682 |
||
|
473,537 |
424,645 |
445,968 |
|
At 30 June 2008 |
At 30 June 2007 |
At 31 December 2007 |
|||
|
US$m |
US$m |
US$m |
|||
|
Treasury and other eligible bills |
7,417 |
10,407 |
16,439 |
||
|
Debt securities |
191,482 |
176,636 |
178,834 |
||
|
Equity securities |
42,608 |
35,487 |
51,476 |
||
|
241,507 |
222,530 |
246,749 |
|||
|
Loans and advances to banks |
95,359 |
95,710 |
100,440 |
||
|
Loans and advances to customers |
136,671 |
106,405 |
98,779 |
||
|
473,537 |
424,645 |
445,968 |
Trading securities valued at fair value
|
At 30 June 2008 |
At 30 June 2007 |
At 31 December 2007 |
|||
|
US$m |
US$m |
US$m |
|||
|
US Treasury and US Government agencies |
17,851 |
17,687 |
17,335 |
||
|
UK Government |
7,620 |
8,980 |
11,607 |
||
|
Hong Kong Government |
5,001 |
5,773 |
5,517 |
||
|
Other government |
92,452 |
67,739 |
80,268 |
||
|
Asset-backed securities |
19,122 |
13,801 |
21,502 |
||
|
Corporate debt and other securities |
56,853 |
73,063 |
59,044 |
||
|
Equity securities |
42,608 |
35,487 |
51,476 |
||
|
241,507 |
222,530 |
246,749 |
Included within the above figures are debt securities issued by banks and other financial institutions of US$61,528 million (30 June 2007: US$36,012 million; 31 December 2007: US$69,818 million).
Trading securities listed on a recognised exchange and unlisted
|
Treasury and other eligible bills |
Debt securities |
Equity securities |
Total |
||||
|
US$m |
US$m |
US$m |
US$m |
||||
|
Fair value at 30 June 2008 |
|||||||
|
Listed on a recognised exchange1
|
120 |
111,143 |
41,433 |
152,696 |
|||
|
Unlisted |
7,297 |
80,339 |
1,175 |
88,811 |
|||
|
7,417 |
191,482 |
42,608 |
241,507 |
||||
|
Fair value at 30 June 2007 |
|||||||
|
Listed on a recognised exchange1
|
39 |
124,064 |
33,727 |
157,830 |
|||
|
Unlisted |
10,368 |
52,572 |
1,760 |
64,700 |
|||
|
10,407 |
176,636 |
35,487 |
222,530 |
||||
|
Fair value at 31 December 2007 |
|||||||
|
Listed on a recognised exchange1
|
34 |
115,593 |
50,092 |
165,719 |
|||
|
Unlisted |
16,405 |
63,241 |
1,384 |
81,030 |
|||
|
16,439 |
178,834 |
51,476 |
246,749 |
1 Included within listed securities are investments listed in Hong Kong of US$4,217 million (30 June 2007: US$4,375 million; 31 December 2007: US$6,977 million).
Loans and advances to banks held for trading
|
At 30 June 2008 |
At 30 June 2007 |
At 31 December 2007 |
|||
|
US$m |
US$m |
US$m |
|||
|
Reverse repos |
76,487 |
71,253 |
80,476 |
||
|
Settlement accounts |
11,547 |
12,513 |
8,227 |
||
|
Stock borrowing |
3,400 |
9,721 |
8,259 |
||
|
Other |
3,925 |
2,223 |
3,478 |
||
|
95,359 |
95,710 |
100,440 |
Loans and advances to customers held for trading
|
At 30 June 2008 |
At 30 June 2007 |
At 31 December 2007 |
|||
|
US$m |
US$m |
US$m |
|||
|
Reverse repos |
59,083 |
48,682 |
51,543 |
||
|
Settlement accounts |
36,137 |
21,429 |
6,216 |
||
|
Stock borrowing |
25,829 |
25,635 |
24,254 |
||
|
Other |
15,622 |
10,659 |
16,766 |
||
|
136,671 |
106,405 |
98,779 |
8 Financial assets designated at fair value
|
At 30 June 2008 |
At 30 June 2007 |
At 31 December 2007 |
|||
|
US$m |
US$m |
US$m |
|||
|
Treasury and other eligible bills |
240 |
206 |
181 |
||
|
Debt securities |
23,356 |
15,832 |
21,150 |
||
|
Equity securities |
16,768 |
18,319 |
20,047 |
||
|
Securities designated at fair value |
40,364 |
34,357 |
41,378 |
||
|
Loans and advances to banks |
421 |
356 |
178 |
||
|
Loans and advances to customers |
1 |
136 |
8 |
||
|
40,786 |
34,849 |
41,564 |
Securities designated at fair value
|
At 30 June 2008 |
At 30 June 2007 |
At 31 December 2007 |
|||
|
US$m |
US$m |
US$m |
|||
|
US Treasury and US Government agencies |
334 |
116 |
252 |
||
|
UK Government |
683 |
901 |
788 |
||
|
Hong Kong Government |
353 |
210 |
314 |
||
|
Other government |
4,507 |
2,910 |
4,427 |
||
|
Asset-backed securities |
7,478 |
3,486 |
8,132 |
||
|
Corporate debt and other securities |
10,241 |
8,415 |
7,418 |
||
|
Equity securities |
16,768 |
18,319 |
20,047 |
||
|
40,364 |
34,357 |
41,378 |
Included within the above figures are debt securities issued by banks and other financial institutions of US$14,255 million (30 June 2007: US$8,378 million; 31 December 2007: US$14,401 million).
|
Treasury and other eligible bills |
Debt securities |
Equity securities |
Total |
||||
|
US$m |
US$m |
US$m |
US$m |
||||
|
Fair value at 30 June 2008 |
|||||||
|
Listed on a recognised exchange1
|
85 |
4,877 |
12,492 |
17,454 |
|||
|
Unlisted |
155 |
18,479 |
4,276 |
22,910 |
|||
|
240 |
23,356 |
16,768 |
40,364 |
||||
|
Fair value at 30 June 2007 |
|||||||
|
Listed on a recognised exchange1
|
83 |
7,213 |
14,307 |
21,603 |
|||
|
Unlisted |
123 |
8,619 |
4,012 |
12,754 |
|||
|
206 |
15,832 |
18,319 |
34,357 |
||||
|
Fair value at 31 December 2007 |
|||||||
|
Listed on a recognised exchange1
|
50 |
8,659 |
15,449 |
24,158 |
|||
|
Unlisted |
131 |
12,491 |
4,598 |
17,220 |
|||
|
181 |
21,150 |
20,047 |
41,378 |
1 Included within listed investments are US$1,201 million of investments listed in Hong Kong (30 June 2007: US$1,184 million; 31 December 2007: US$1,502 million).
9 Derivatives
Fair values of derivatives by product contract type
|
Assets |
Liabilities |
||||||||||
|
Trading |
Hedging |
Total |
Trading |
Hedging |
Total |
||||||
|
US$m |
US$m |
US$m |
US$m |
US$m |
US$m |
||||||
|
At 30 June 2008 |
|||||||||||
|
Foreign exchange |
67,045 |
4,161 |
71,206 |
62,982 |
288 |
63,270 |
|||||
|
Interest rate |
117,874 |
2,466 |
120,340 |
116,985 |
2,656 |
119,641 |
|||||
|
Equities |
19,999 |
- |
19,999 |
19,385 |
- |
19,385 |
|||||
|
Credit derivatives |
46,090 |
- |
46,090 |
45,687 |
- |
45,687 |
|||||
|
Commodity and other |
3,029 |
- |
3,029 |
3,374 |
- |
3,374 |
|||||
|
Gross total fair values |
254,037 |
6,627 |
260,664 |
248,413 |
2,944 |
251,357 |
|||||
|
Netting |
- |
- |
|||||||||
|
Total |
260,664 |
251,357 |
|||||||||
|
At 30 June 2007 |
|||||||||||
|
Foreign exchange |
35,704 |
2,742 |
38,446 |
33,254 |
300 |
33,554 |
|||||
|
Interest rate |
81,689 |
1,956 |
83,645 |
81,455 |
1,254 |
82,709 |
|||||
|
Equities |
17,017 |
- |
17,017 |
16,795 |
- |
16,795 |
|||||
|
Credit derivatives |
9,902 |
- |
9,902 |
10,826 |
- |
10,826 |
|||||
|
Commodity and other |
1,028 |
- |
1,028 |
1,257 |
- |
1,257 |
|||||
|
Gross total fair values |
145,340 |
4,698 |
150,038 |
143,587 |
1,554 |
145,141 |
|||||
|
Netting |
(857) |
(857) |
|||||||||
|
Total |
149,181 |
144,284 |
|||||||||
|
At 31 December 2007 |
|||||||||||
|
Foreign exchange |
52,018 |
3,490 |
55,508 |
50,608 |
371 |
50,979 |
|||||
|
Interest rate |
83,982 |
1,759 |
85,741 |
83,374 |
2,013 |
85,387 |
|||||
|
Equities |
20,229 |
1 |
20,230 |
19,458 |
- |
19,458 |
|||||
|
Credit derivatives |
25,268 |
- |
25,268 |
26,247 |
- |
26,247 |
|||||
|
Commodity and other |
1,107 |
- |
1,107 |
1,322 |
- |
1,322 |
|||||
|
Gross total fair values |
182,604 |
5,250 |
187,854 |
181,009 |
2,384 |
183,393 |
|||||
|
Netting |
- |
- |
|||||||||
|
Total |
187,854 |
183,393 |
|||||||||
A description of HSBC's determination of the fair values of financial instruments, including derivatives, is provided on pages 129 to 134.
Trading derivatives
Notional contract amounts of derivatives held for trading purposes by product type
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.
|
At 30 June 2008 |
At 30 June 2007 |
At 31 December 2007 |
|||
|
US$m |
US$m |
US$m |
|||
|
Foreign exchange |
3,704,399 |
2,842,549 |
3,243,738 |
||
|
Interest rate |
13,143,237 |
10,528,816 |
10,672,971 |
||
|
Equities |
343,343 |
270,619 |
286,927 |
||
|
Credit derivatives |
2,075,700 |
1,473,509 |
1,893,802 |
||
|
Commodity and other |
96,985 |
35,826 |
33,188 |
||
|
19,363,664 |
15,151,319 |
16,130,626 |
Credit derivatives
The contract amount of credit derivatives of US$2,076 billion (30 June 2007: US$1,474 billion; 31 December 2007: US$1,894 billion) consisted of protection bought of US$1,020 billion (30 June 2007: US$719 billion; 31 December 2007: US$927 billion) and protection sold of US$1,056 billion (30 June 2007: US$755 billion; 31 December 2007: US$967 billion).
The difference between the notional amounts bought and sold is attributable to HSBC selling protection on large, diversified, predominantly investment-grade portfolios (including the most senior tranches) and then offsetting risk on these positions by buying protection on the more subordinated tranches of the same portfolios. In addition, HSBC uses securities to mitigate risks on certain derivative positions and credit derivative contracts to reduce counterparty exposures. Consequently, while there is a mismatch in notional amounts of credit derivatives bought and sold, this should not be interpreted as representing the open risk position. The credit derivative business operates within the market risk management framework described on page 183.
Derivatives valued using models with unobservable inputs
The difference between the fair value at initial recognition (the transaction price) and the value that would have been derived had valuation techniques used for subsequent measurement been applied at initial recognition, less subsequent releases, is as follows. This amount is yet to be recognised in the consolidated income statement.
|
At 30 June 2008 |
At 30 June 2007 |
At 31 December 2007 |
|||
|
US$m |
US$m |
US$m |
|||
|
Unamortised balance at beginning of period |
306 |
214 |
204 |
||
|
Deferral on new transactions |
239 |
119 |
265 |
||
|
Recognised in the income statement during the period: |
|||||
|
- amortisation |
(117) |
(25) |
(60) |
||
|
- subsequent to unobservable inputs becoming observable |
(85) |
(64) |
(19) |
||
|
- maturity or termination, or offsetting derivative |
(68) |
(41) |
(80) |
||
|
Exchange differences |
5 |
1 |
3 |
||
|
Risk hedged |
(2) |
- |
(7) |
||
|
Unamortised balance at end of period |
278 |
204 |
306 |
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 2008 |
At 30 June 2007 |
At 31 December 2007 |
|||
|
US$m |
US$m |
US$m |
|||
|
Cash flow hedges |
|||||
|
Foreign exchange |
16,518 |
21,034 |
21,641 |
||
|
Interest rate |
288,721 |
213,889 |
248,134 |
||
|
305,239 |
234,923 |
269,775 |
|||
|
Fair value hedges |
|||||
|
Foreign exchange |
3,190 |
2,998 |
3,116 |
||
|
Interest rate |
29,736 |
27,956 |
34,897 |
||
|
Equities |
41 |
- |
24 |
||
|
32,967 |
30,954 |
38,037 |
Fair value hedges
Fair value of derivatives designated as fair value hedges
|
At 30 June 2008 |
At 30 June 2007 |
At 31 December 2007 |
|||||||||
|
Assets |
Liabilities |
Assets |
Liabilities |
Assets |
Liabilities |
||||||
|
US$m |
US$m |
US$m |
US$m |
US$m |
US$m |
||||||
|
Foreign exchange |
274 |
53 |
12 |
158 |
163 |
65 |
|||||
|
Interest rate |
338 |
346 |
330 |
192 |
171 |
338 |
|||||
|
Equities |
- |
- |
- |
- |
1 |
- |
|||||
|
612 |
399 |
342 |
350 |
335 |
403 |
||||||
Gains or losses arising from fair value hedges
|
Half-year to |
|||||
|
30 June 2008 |
30 June 2007 |
31 December 2007 |
|||
|
US$m |
US$m |
US$m |
|||
|
Gains/(losses): |
|||||
|
- on hedging instruments |
113 |
124 |
(310) |
||
|
- on the hedged items attributable to the hedged risk |
(133) |
(103) |
308 |
||
|
(20) |
21 |
(2) |
|||
Cash flow hedges
Fair value of derivatives designated as cash flow hedges
|
At 30 June 2008 |
At 30 June 2007 |
At 31 December 2007 |
|||||||||
|
Assets |
Liabilities |
Assets |
Liabilities |
Assets |
Liabilities |
||||||
|
US$m |
US$m |
US$m |
US$m |
US$m |
US$m |
||||||
|
Foreign exchange |
3,887 |
235 |
2,730 |
142 |
3,327 |
306 |
|||||
|
Interest rate |
2,128 |
2,310 |
1,626 |
1,062 |
1,588 |
1,675 |
|||||
|
6,015 |
2,545 |
4,356 |
1,204 |
4,915 |
1,981 |
||||||
The gains and losses on ineffective portions of such derivatives are recognised immediately in 'Net trading income'. During the period to 30 June 2008, a loss of US$15 million was recognised due to hedge ineffectiveness (first half of 2007: loss of US$49 million; second half of 2007: loss of US$28 million).
Hedges of net investments in foreign operations
At 30 June 2008, the fair values of outstanding financial instruments designated as hedges of net investments in foreign operations were liabilities of US$238 million (30 June 2007: liabilities of US$306 million; 31 December 2007: liabilities of US$450 million), and contract notional values of US$238 million (30 June 2007: US$161 million; 31 December 2007: US$1,204 million).
10 Financial investments
|
At 30 June 2008 |
At 30 June 2007 |
At 31 December 2007 |
|||
|
US$m |
US$m |
US$m |
|||
|
Financial investments: |
|||||
|
- not subject to repledge or resale by counterparties |
270,098 |
223,762 |
271,126 |
||
|
- which may be repledged or resold by counterparties |
4,652 |
9,239 |
11,874 |
||
|
274,750 |
233,001 |
283,000 |
|
At 30 June 2008 |
At 30 June 2007 |
At 31 December 2007 |
|||||||||
|
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 |
|||||||||||
|
- available-for-sale |
27,928 |
27,928 |
26,077 |
26,077 |
30,104 |
30,104 |
|||||
|
Debt securities |
237,341 |
237,477 |
197,621 |
197,563 |
240,302 |
240,688 |
|||||
|
- available-for-sale |
226,318 |
226,318 |
187,929 |
187,929 |
230,534 |
230,534 |
|||||
|
- held-to-maturity |
11,023 |
11,159 |
9,692 |
9,634 |
9,768 |
10,154 |
|||||
|
Equity securities |
|||||||||||
|
- available-for-sale |
9,481 |
9,481 |
9,303 |
9,303 |
12,594 |
12,594 |
|||||
|
Total financial investments |
274,750 |
274,886 |
233,001 |
232,943 |
283,000 |
283,386 |
|||||
Financial investments at amortised cost and fair value
|
Amortised cost |
Fair value |
||
|
US$m |
US$m |
||
|
At 30 June 2008 |
|||
|
US Treasury |
7,197 |
7,195 |
|
|
US Government agencies |
6,646 |
6,630 |
|
|
US Government sponsored entities |
17,340 |
17,072 |
|
|
UK Government |
142 |
140 |
|
|
Hong Kong Government |
3,260 |
3,262 |
|
|
Other government |
60,806 |
60,485 |
|
|
Asset-backed securities |
61,321 |
52,695 |
|
|
Corporate debt and other securities |
119,355 |
117,926 |
|
|
Equities |
7,048 |
9,481 |
|
|
283,115 |
274,886 |
||
|
At 30 June 2007 |
|||
|
US Treasury |
8,204 |
8,173 |
|
|
US Government agencies |
5,635 |
5,515 |
|
|
US Government sponsored entities |
14,331 |
13,828 |
|
|
UK Government |
1,508 |
1,507 |
|
|
Hong Kong Government |
2,750 |
2,738 |
|
|
Other government |
48,241 |
48,538 |
|
|
Asset-backed securities |
31,466 |
31,458 |
|
|
Corporate debt and other securities |
112,504 |
111,883 |
|
|
Equities |
6,318 |
9,303 |
|
|
230,957 |
232,943 |
||
|
At 31 December 2007 |
|||
|
US Treasury |
6,799 |
6,831 |
|
|
US Government agencies |
5,709 |
5,732 |
|
|
US Government sponsored entities |
14,732 |
14,533 |
|
|
UK Government |
757 |
749 |
|
|
Hong Kong Government |
3,941 |
3,942 |
|
|
Other government |
60,109 |
60,320 |
|
|
Asset-backed securities |
68,316 |
68,106 |
|
|
Corporate debt and other securities |
110,825 |
110,579 |
|
|
Equities |
8,405 |
12,594 |
|
|
279,593 |
283,386 |
Included within the above figures are debt securities issued by banks and other financial institutions of US$157,272 million (30 June 2007: US$109,523 million; 31 December 2007: US$142,863 million). Their fair value at 30 June 2008 was US$135,477 million (30 June 2007: US$109,302 million; 31 December 2007: US$143,023 million).
Financial investments listed on a recognised exchange and unlisted
|
Treasury and other eligible bills available- for-sale |
Debt securities available- for-sale |
Debt securities held-to- maturity |
Equity securities |
Total |
|||||
|
US$m |
US$m |
US$m |
US$m |
US$m |
|||||
|
Carrying amount at 30 June 2008 |
|||||||||
|
Listed on a recognised exchange |
1,299 |
96,030 |
2,094 |
2,264 |
101,687 |
||||
|
Unlisted |
26,629 |
130,288 |
8,929 |
7,217 |
173,063 |
||||
|
27,928 |
226,318 |
11,023 |
9,481 |
274,750 |
|||||
|
Carrying amount at 30 June 2007 |
|||||||||
|
Listed on a recognised exchange |
1,300 |
84,646 |
3,397 |
2,457 |
91,800 |
||||
|
Unlisted |
24,777 |
103,283 |
6,295 |
6,846 |
141,201 |
||||
|
26,077 |
187,929 |
9,692 |
9,303 |
233,001 |
|||||
|
Carrying amount at 31 December 2007 |
|||||||||
|
Listed on a recognised exchange |
1,062 |
107,059 |
3,399 |
3,301 |
114,821 |
||||
|
Unlisted |
29,042 |
123,475 |
6,369 |
9,293 |
168,179 |
||||
|
30,104 |
230,534 |
9,768 |
12,594 |
283,000 |
The fair value of listed held-to-maturity debt securities at 30 June 2008 was US$4,696 million (30 June 2007: US$3,365 million; 31 December 2007: US$3,469 million).
Maturities of investment securities at carrying amount
|
At 30 June 2008 |
At 30 June 2007 |
At 31 December 2007 |
|||
|
US$m |
US$m |
US$m |
|||
|
Remaining contractual maturities of total debt securities: |
|||||
|
1 year or less |
92,110 |
72,999 |
80,979 |
||
|
5 years or less but over 1 year |
64,692 |
59,329 |
76,306 |
||
|
10 years or less but over 5 years |
20,316 |
14,400 |
34,175 |
||
|
over 10 years |
60,223 |
50,893 |
48,842 |
||
|
237,341 |
197,621 |
240,302 |
|||
|
Remaining contractual maturities of debt securities available for sale: |
|||||
|
1 year or less |
91,682 |
72,455 |
80,498 |
||
|
5 years or less but over 1 year |
62,157 |
57,561 |
74,279 |
||
|
10 years or less but over 5 years |
15,993 |
10,937 |
30,607 |
||
|
over 10 years |
56,486 |
46,976 |
45,150 |
||
|
226,318 |
187,929 |
230,534 |
|
Remaining contractual maturities of debt securities held to maturity: |
|||||
|
1 year or less |
428 |
544 |
481 |
||
|
5 years or less but over 1 year |
2,535 |
1,768 |
2,027 |
||
|
10 years or less but over 5 years |
4,323 |
3,463 |
3,568 |
||
|
over 10 years |
3,737 |
3,917 |
3,692 |
||
|
11,023 |
9,692 |
9,768 |
11 Non-current assets held for sale
|
30 June 2008 |
30 June 2007 |
31 December 2007 |
|||
|
US$m |
US$m |
US$m |
|||
|
Interest in associates |
2 |
- |
2 |
||
|
Property, plant and equipment |
2,599 |
2,278 |
2,502 |
||
|
Investment properties |
118 |
80 |
111 |
||
|
Financial assets |
11,454 |
2,079 |
185 |
||
|
Other |
990 |
5 |
4 |
||
|
Total assets classified as held for sale |
15,163 |
4,442 |
2,804 |
Disposal group
On 29 February 2008, HSBC France, a wholly owned subsidiary of HSBC, received a firm cash offer from Banque Fédérale des Banques Populaires of €2.1 billion (US$3.2 billion) for seven of its French regional banking subsidiaries, which operate in the Personal Financial Services and Commercial Banking customer groups in Europe. The sale was completed on 2 July 2008, and the Group's pre-tax profit on sale of US$2.1 billion will be recognised in the second half of 2008.
Included within the balances in the above table are the following assets in respect of the disposal group classified as held for sale:
|
30 June 2008 |
|
|
US$m |
|
|
Cash |
413 |
|
Loans and advances to banks and customers |
9,097 |
|
Other assets |
1,126 |
|
Total assets |
10,636 |
Included in Other liabilities are the following liabilities in respect of the disposal group:
|
30 June 2008 |
|
|
US$m |
|
|
Deposits by banks |
158 |
|
Customer accounts |
10,285 |
|
Other liabilities |
308 |
|
Total liabilities |
10,751 |
Property, plant and equipment
The property, plant and equipment classified as held for sale comprises two principal categories. The first is as a result of 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. Neither a gain nor a loss was recognised on reclassifying these assets as held for sale. The majority arose within the geographical segment, North America.
Secondly, as disclosed in the Annual Report and Accounts 2007, on 31 May 2007, HSBC entered into a contract for the sale and leaseback of the property and long leasehold land comprising 8 Canada Square, London to Metrovacesa, S.A. ('Metrovacesa') for £1,090 million (US$2,154 million). Under the terms of this arrangement, HSBC leased the building back from Metrovacesa for a period of 20 years at an annual rent of £43.5 million (US$87 million), with annual upward-only rent reviews linked to the RPI (all items) and subject to an annual maximum and minimum increase of 6 per cent and 2.5 per cent, respectively. In the normal course of business, HSBC provided finance to Metrovacesa in respect of the debt element of this transaction at arm's length market rates in the form of a bridging loan of £810 million (US$1,061 million), secured by a charge on the property. The bridging loan had an original maturity date of 30 November 2007 and was extended with a new facility provided by HSBC with a maturity date of 30 November 2008. The equity portion of £280 million (US$553 million) was settled in cash by Metrovacesa on 31 May 2007.
The sale has not been recognised in the financial statements at 30 June 2008 because HSBC has retained a significant interest by virtue of the loan provided to part-finance the purchase of the building. Accordingly, 8 Canada Square is presented within 'Non-current assets held for sale' with a carrying value of US$861 million. The equity portion received from Metrovacesa is presented in the balance sheet as deferred income with a value at 30 June 2008 of US$548 million.
Financial assets
Included in financial assets classified as held for sale was US$1.8 billion of performing prime and non-prime Canadian vehicle finance receivables for which an agreement for sale was entered into in May 2008. Neither a gain nor a loss was recognised on reclassifying these assets as held for sale. These assets are presented in the geographical segment, North America. The sale was completed on 29 July 2008.
12 Trading liabilities
|
At 30 June 2008 |
At 30 June 2007 |
At 31 December 2007 |
|||
|
US$m |
US$m |
US$m |
|||
|
Deposits by banks |
45,091 |
53,006 |
58,940 |
||
|
Customer accounts |
147,000 |
123,674 |
102,710 |
||
|
Other debt securities in issue |
44,363 |
40,953 |
44,684 |
||
|
Other liabilities - net short positions |
104,157 |
95,560 |
108,246 |
||
|
340,611 |
313,193 |
314,580 |
13 Financial liabilities designated at fair value
|
At 30 June 2008 |
At 30 June 2007 |
At 31 December 2007 |
|||
|
US$m |
US$m |
US$m |
|||
|
Deposits by banks and customer accounts |
7,306 |
771 |
7,724 |
||
|
Liabilities to customers under investment contracts |
15,407 |
14,521 |
16,053 |
||
|
Debt securities in issue |
39,704 |
37,498 |
38,587 |
||
|
Subordinated liabilities |
22,706 |
18,575 |
22,831 |
||
|
Preference shares |
4,635 |
4,601 |
4,744 |
||
|
89,758 |
75,966 |
89,939 |
At 30 June 2008, the cumulative amount of the change in fair value attributable to changes in credit risk was a gain of US$2,443 million (30 June 2007: loss of US$1,354 million; 31 December 2007: gain of US$1,619 million), and the carrying amount of financial liabilities designated at fair value was US$2,397 million less (30 June 2007: US$11 million less; 31 December 2007: US$648 million less) than the contractual amount at maturity.
14 Maturity analysis of assets and liabilities
The following is an analysis, by remaining contractual maturities at the balance sheet date, of asset and liability line items that represent amounts expected to be recovered or settled within one year, and after one year.
Trading assets and liabilities are excluded because they are not held for collection or settlement over the period of contractual maturity.
|
At 30 June 2008 |
|||||
|
Due within one year |
Due after one year |
Total |
|||
|
US$m |
US$m |
US$m |
|||
|
Assets |
|||||
|
Financial assets designated at fair value |
8,590 |
32,196 |
40,786 |
||
|
Loans and advances to banks1
|
245,718 |
11,263 |
256,981 |
||
|
Loans and advances to customers |
495,856 |
553,344 |
1,049,200 |
||
|
Financial investments |
99,446 |
175,304 |
274,750 |
||
|
Other financial assets |
28,723 |
6,436 |
35,159 |
||
|
878,333 |
778,543 |
1,656,876 |
|||
|
Liabilities |
|||||
|
Deposits by banks |
145,597 |
8,555 |
154,152 |
||
|
Customer accounts |
1,128,991 |
32,932 |
1,161,923 |
||
|
Financial liabilities designated at fair value |
6,350 |
83,408 |
89,758 |
||
|
Debt securities in issue |
134,198 |
96,069 |
230,267 |
||
|
Other financial liabilities |
35,301 |
5,039 |
40,340 |
||
|
Subordinated liabilities |
1,333 |
30,184 |
31,517 |
||
|
1,451,770 |
256,187 |
1,707,957 |
|||
|
At 30 June 2007 |
|||||
|
Due within one year |
Due after one year |
Total |
|||
|
US$m |
US$m |
US$m |
|||
|
Assets |
|||||
|
Financial assets designated at fair value |
4,374 |
30,475 |
34,849 |
||
|
Loans and advances to banks1
|
208,552 |
6,093 |
214,645 |
||
|
Loans and advances to customers |
411,359 |
516,742 |
928,101 |
||
|
Financial investments |
97,538 |
135,463 |
233,001 |
||
|
Other financial assets |
21,221 |
5,490 |
26,711 |
||
|
743,044 |
694,263 |
1,437,307 |
|||
|
Liabilities |
|||||
|
Deposits by banks |
117,183 |
11,590 |
128,773 |
||
|
Customer accounts |
950,665 |
30,167 |
980,832 |
||
|
Financial liabilities designated at fair value |
810 |
75,156 |
75,966 |
||
|
Debt securities in issue |
117,530 |
111,709 |
229,239 |
||
|
Other financial liabilities |
29,951 |
8,322 |
38,273 |
||
|
Subordinated liabilities |
95 |
23,409 |
23,504 |
||
|
1,216,234 |
260,353 |
1,476,587 |
|||
|
At 31 December 2007 |
|||||
|
Due within one year |
Due after one year |
Total |
|||
|
US$m |
US$m |
US$m |
|||
|
Assets |
|||||
|
Financial assets designated at fair value |
5,752 |
35,812 |
41,564 |
||
|
Loans and advances to banks1
|
222,674 |
14,692 |
237,366 |
||
|
Loans and advances to customers |
438,246 |
543,302 |
981,548 |
||
|
Financial investments |
103,492 |
179,508 |
283,000 |
||
|
Other financial assets |
24,087 |
6,390 |
30,477 |
||
|
794,251 |
779,704 |
1,573,955 |
|||
|
Liabilities |
|||||
|
Deposits by banks |
124,475 |
7,706 |
132,181 |
||
|
Customer accounts |
1,066,148 |
29,992 |
1,096,140 |
||
|
Financial liabilities designated at fair value |
6,217 |
83,722 |
89,939 |
||
|
Debt securities in issue |
143,651 |
102,928 |
246,579 |
||
|
Other financial liabilities |
33,056 |
4,352 |
37,408 |
||
|
Subordinated liabilities |
341 |
24,478 |
24,819 |
||
|
1,373,888 |
253,178 |
1,627,066 |
|||
1 'Loans and advances to banks' includes US$210,301 million (30 June 2007: US$176,594 million; 31 December 2007: US$189,081 million) which is repayable on demand or at short notice.
Related Shares:
HSBC Holdings