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Annual Financial Report - Part 9

23rd Feb 2021 16:31

RNS Number : 0683Q

HSBC Holdings PLC

23 February 2021

Fair value valuation bases

Financial instruments measured at fair value using a valuation technique with significant unobservable inputs - Level 3
	Assets					Liabilities
	Financial investments	Trading assets	Designated and otherwise mandatorily measured at fair value through profit or loss	Derivatives	Total	Trading liabilities	Designated at fair value	Derivatives	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m
Private equity including strategic investments	930	4	10,971	-	11,905	4	-	-	4
Asset-backed securities	1,286	523	25	-	1,834	-	-	-	-
Loans held for securitisation	-	-	-	-	-	-	-	-	-
Structured notes	-	-	-	-	-	29	5,301	-	5,330
Derivatives with monolines	-	-	-	68	68	-	-	-	-
Other derivatives	-	-	-	2,602	2,602	-	-	4,187	4,187
Other portfolios	1,438	1,972	481	-	3,891	129	5	1	135
At 31 Dec 2020	3,654	2,499	11,477	2,670	20,300	162	5,306	4,188	9,656

Private equity including strategic investments	716	4	8,831	-	9,551	4	-	-	4
Asset-backed securities	874	934	28	-	1,836	-	-	-	-
Loans held for securitisation	-	1	39	-	40	-	-	-	-
Structured notes	-	3	-	-	3	47	5,016	-	5,063
Derivatives with monolines	-	-	-	66	66	-	-	-	-
Other derivatives	-	-	-	2,070	2,070	-	-	2,302	2,302
Other portfolios	1,628	4,037	578	-	6,243	2	-	-	2
At 31 Dec 2019	3,218	4,979	9,476	2,136	19,809	53	5,016	2,302	7,371

Balances from 2019 have been re-presented to disclose a consistent application of the levelling methodology. This resulted in an increase of $2.9bn of assets in Level 3. 'Other portfolios' increased by $1.4bn and 'Private equity including strategic investments' increased by $1.5bn.

Level 3 instruments are present in both ongoing and legacy businesses. Loans held for securitisation, derivatives with monolines, certain 'other derivatives' and predominantly all Level 3 ABSs are legacy positions. HSBC has the capability to hold these positions.

Private equity including strategic investments

The fair value of a private equity investment (including strategic investments) is estimated on the basis of an analysis of the investee's financial position and results, risk profile, prospects and other factors; by reference to market valuations for similar entities quoted in an active market; the price at which similar companies have changed ownership; or from published net asset values ('NAVs') received. If necessary, adjustments are made to the NAV of funds to obtain the best estimate of fair value.

Asset-backed securities

While quoted market prices are generally used to determine the fair value of the asset-backed securities ('ABSs'), valuation models are used to substantiate the reliability of the limited market data available and to identify whether any adjustments to quoted market prices are required. For certain ABSs, such as residential mortgage-backed securities, the valuation uses an industry standard model with assumptions relating to prepayment speeds, default rates and loss severity based on collateral type, and performance, as appropriate. The valuations output is benchmarked for consistency against observable data for securities of a similar nature.

Structured notes

The fair value of Level 3 structured notes is derived from the fair value of the underlying debt security, and the fair value of the embedded derivative is determined as described in the paragraph below on derivatives. These structured notes comprise principally equity-linked notes issued by HSBC, which provide the counterparty with a return linked to the performance of equity securities and other portfolios.

Examples of the unobservable parameters include long-dated equity volatilities and correlations between equity prices, and interest and foreign exchange rates.

Derivatives

OTC derivative valuation models calculate the present value of expected future cash flows, based upon 'no arbitrage' principles. For many vanilla derivative products, the modelling approaches used are standard across the industry. For more complex derivative products, there may be some differences in market practice. Inputs to valuation models are determined from observable market data wherever possible, including prices available from exchanges, dealers, brokers or providers of consensus pricing. Certain inputs may not be observable in the market directly, but can be determined from observable prices via model calibration procedures or estimated from historical data or other sources.

Reconciliation of fair value measurements in Level 3 of the fair value hierarchy

Movement in Level 3 financial instruments
		Assets				Liabilities
		Financial investments	Trading assets	Designated and otherwise mandatorily measured at fair value through profit or loss	Derivatives	Trading liabilities	Designated at fair value	Derivatives
	Footnotes	$m	$m	$m	$m	$m	$m	$m
At 1 Jan 2020		3,218	4,979	9,476	2,136	53	5,016	2,302
Total gains/(losses) recognised in profit or loss		17	(6)	504	2,281	307	(59)	3,398
- net income/(losses) from financial instruments held for trading or managed on a fair value basis		-	(6)	-	2,281	307	-	3,398
- changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss		-	-	504	-	-	(59)	-
- gains less losses from financial investments at fair value through other comprehensive income		17	-	-	-	-	-	-
- expected credit loss charges and other credit risk charges		-	-	-	-	-	-	-
Total gains recognised in other comprehensive income ('OCI')	1	394	115	286	143	17	204	169
- financial investments: fair value gains		270	-	-	-	-	-	-
- exchange differences		124	115	286	143	17	204	169
Purchases		671	687	3,701	-	66	-	-
New issuances		-	-	1	-	6	1,876	-
Sales		(674)	(1,579)	(2,042)	-	(260)	-	-
Settlements		(530)	(1,122)	(435)	(1,542)	(26)	(1,531)	(1,462)
Transfers out		(101)	(1,790)	(140)	(565)	(9)	(777)	(528)
Transfers in		659	1,215	126	217	8	577	309
At 31 Dec 2020		3,654	2,499	11,477	2,670	162	5,306	4,188
Unrealised gains/(losses) recognised in profit or loss relating to assets and liabilities held at 31 Dec 2020		-	(32)	412	707	1	(91)	(1,621)
- net income/(losses) from financial instruments held for trading or managed on a fair value basis		-	(32)	-	707	1	-	(1,621)
- changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss		-	-	412	-	-	(91)	-
- loan impairment recoveries and other credit risk provisions		-	-	-	-	-	-	-

Movement in Level 3 financial instruments (continued)
		Assets				Liabilities
		Financial investments	Trading assets	Designated and otherwise mandatorily measured at fair value through profit or loss	Derivatives	Trading liabilities	Designated at fair value	Derivatives
	Footnotes	$m	$m	$m	$m	$m	$m	$m
At 1 Jan 2019		2,796	6,759	7,080	2,423	58	5,328	1,756
Total gains/(losses) recognised in profit or loss		6	(112)	587	278	(4)	195	930
- net income/(losses) from financial instruments held for trading or managed on a fair value basis		-	(112)	-	278	(4)	-	930
- changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss		-	-	587	-	-	195	-
- gains less losses from financial investments at fair value through other comprehensive income		10	-	-	-	-	-	-
- expected credit loss charges and other credit risk charges		(4)	-	-	-	-	-	-
Total gains/(losses) recognised in other comprehensive income ('OCI')	1	309	76	(4)	49	1	18	52
- financial investments: fair value gains		301	-	-	-	-	-	-
- exchange differences		8	76	(4)	49	1	18	52
Purchases		693	2,206	2,506	-	8	157	-
New issuances		-	154	-	-	6	1,601	-
Sales		(56)	(895)	(276)	-	(9)	(193)	-
Settlements		(329)	(2,107)	(434)	(100)	(7)	(1,048)	(162)
Transfers out		(488)	(1,558)	(23)	(710)	(9)	(1,079)	(473)
Transfers in		287	456	40	196	9	37	199
At 31 Dec 2019		3,218	4,979	9,476	2,136	53	5,016	2,302
Unrealised gains/(losses) recognised in profit or loss relating to assets and liabilities held at 31 Dec 2019		(4)	(22)	465	279	-	57	(407)
- net income/(losses) from financial instruments held for trading or managed on a fair value basis		-	(22)	-	279	-	-	(407)
- changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss		-	-	465	-	-	57	-
- loan impairment recoveries and other credit risk provisions		(4)	-	-	-	-	-	-

1 Included in 'financial investments: fair value gains/(losses)' in the current year and 'exchange differences' in the consolidated statement of comprehensive income.

Balances from 2019 have been re-presented to disclose a consistent application of the levelling methodology. The result of this is an increase of $2.9bn of assets in Level 3. 'Financial investments' increased by $1.2bn and 'Private equity including strategic investments financial assets designated and otherwise mandatorily measured at fair value' increased by $1.7bn.

Transfers between levels of the fair value hierarchy are deemed to occur at the end of each quarterly reporting period. Transfers into and out of levels of the fair value hierarchy are primarily attributable to observability of valuation inputs and price transparency.

Effect of changes in significant unobservable assumptions to reasonably possible alternatives

Sensitivity of fair values to reasonably possible alternative assumptions
		2020				2019
		Reflected in profit or loss		Reflected in OCI		Reflected in profit or loss		Reflected in OCI
		Favourablechanges	Un-favourablechanges	Favourablechanges	Un-favourablechanges	Favourablechanges	Un-favourablechanges	Favourablechanges	Un-favourablechanges
	Footnotes	$m	$m	$m	$m	$m	$m	$m	$m
Derivatives, trading assets and trading liabilities	1	229	(244)	-	-	255	(230)	-	-
Financial assets and liabilities designated and otherwise mandatorily measured at fair value through profit or loss		644	(643)	-	-	618	(503)	-	-
Financial investments		35	(35)	110	(110)	48	(53)	81	(81)
At 31 Dec		908	(922)	110	(110)	921	(786)	81	(81)

1 'Derivatives, trading assets and trading liabilities' are presented as one category to reflect the manner in which these instruments are risk-managed.

Balances from 2019 have been re-presented to disclose a consistent application of the levelling methodology. The result of this is an increase in 'Financial investments reflected through OCI' and 'Financial asset designated and mandatorily measured at fair value reflected in profit or loss' of $59m and $86m respectively.

The sensitivity analysis aims to measure a range of fair values consistent with the application of a 95% confidence interval. Methodologies take account of the nature of the valuation technique employed, as well as the availability and reliability of observable proxy and historical data.

When the fair value of a financial instrument is affected by more than one unobservable assumption, the above table reflects the most favourable or the most unfavourable change from varying the assumptions individually.

Key unobservable inputs to Level 3 financial instruments

The following table lists key unobservable inputs to Level 3 financial instruments and provides the range of those inputs at 31 December 2020.

Quantitative information about significant unobservable inputs in Level 3 valuations
	Fair value				2020		2019
	Assets	Liabilities	Valuationtechniques	Key unobservableinputs	Full rangeof inputs		Full rangeof inputs
	$m	$m			Lower	Higher	Lower	Higher
Private equity including strategic investments	11,905	4	See below	See below
Asset-backed securities	1,834	-
- collateralised loan/debt obligation	59	-	Market proxy	Prepayment rate	0%	9%	0%	9%
- collateralised loan/debt obligation	59	-	Market proxy	Bid quotes	0	100	0	100
- other ABSs	1,775	-	Market proxy	Bid quotes	0	101	0	101
Loans held for securitisation	-	-
Structured notes	-	5,330
- equity-linked notes	-	4,069	Model - Option model	Equity volatility	6%	115%	5%	90%
- equity-linked notes	-	4,069	Model - Option model	Equity correlation	(4)%	88%	9%	93%
- FX-linked notes	-	608	Model - Option model	FX volatility	0%	36%	1%	23%
- other	-	653
Derivatives with monolines	68	-	Model - Discounted cash flow	Credit spread	2%	2%	0%	2%
Other derivatives	2,602	4,187
- interest rate derivatives	1,300	1,414
securitisation swaps	285	707	Model - Discounted cash flow	Prepayment rate	6%	6%	6%	7%
long-dated swaptions	529	370	Model - Option model	IR volatility	6%	28%	8%	22%
other	486	337
- FX derivatives	468	466
FX options	152	194	Model - Option model	FX volatility	0%	43%	1%	25%
other	316	272
- equity derivatives	754	2,244
long-dated single stock options	583	1,091	Model - Option model	Equity volatility	0%	120%	0%	89%
other	171	1,153
- credit derivatives	80	63
other	80	63
Other portfolios	3,891	135
- structured certificates	-	-	Model - Discounted cash flow	Credit volatility	-	-	4%	4%
- repurchase agreements	872	128	Model - Discounted cash flow	IR curve	0%	5%	1%	8%
- other1	3,019	7
At 31 Dec 2020	20,300	9,656

1 'Other' includes a range of smaller asset holdings.

Private equity including strategic investments

Given the bespoke nature of the analysis in respect of each private equity holding, it is not practical to quote a range of key unobservable inputs.

Prepayment rates

Prepayment rates are a measure of the anticipated future speed at which a loan portfolio will be repaid in advance of the due date. They vary according to the nature of the loan portfolio and expectations of future market conditions, and may be estimated using a variety of evidence, such as prepayment rates implied from proxy observable security prices, current or historical prepayment rates and macroeconomic modelling.

Market proxy

Market proxy pricing may be used for an instrument when specific market pricing is not available but there is evidence from instruments with common characteristics. In some cases it might be possible to identify a specific proxy, but more generally evidence across a wider range of instruments will be used to understand the factors that influence current market pricing and the manner of that influence.

Volatility

Volatility is a measure of the anticipated future variability of a market price. It varies by underlying reference market price, and by strike and maturity of the option. Certain volatilities, typically those of a longer-dated nature, are unobservable and are estimated from observable data. The range of unobservable volatilities reflects the wide variation in volatility inputs by reference market price. The core range is significantly narrower than the full range because these examples with extreme volatilities occur relatively rarely within the HSBC portfolio.

Correlation

Correlation is a measure of the inter-relationship between two market prices and is expressed as a number between minus one and one. It is used to value more complex instruments where the payout is dependent upon more than one market price. There is a wide range of instruments for which correlation is an input, and consequently a wide range of both same-asset correlations and cross-asset correlations is used. In general, the range of same-asset correlations will be narrower than the range of cross-asset correlations.

Unobservable correlations may be estimated based upon a range of evidence, including consensus pricing services, HSBC trade prices, proxy correlations and examination of historical price relationships. The range of unobservable correlations quoted in the table reflects the wide variation in correlation inputs by market price pair.

Credit spread

Credit spread is the premium over a benchmark interest rate required by the market to accept lower credit quality. In a discounted cash flow model, the credit spread increases the discount factors applied to future cash flows, thereby reducing the value of an asset. Credit spreads may be implied from market prices and may not be observable in more illiquid markets.

Inter-relationships between key unobservable inputs

Key unobservable inputs to Level 3 financial instruments may not be independent of each other. As described above, market variables may be correlated. This correlation typically reflects the manner in which different markets tend to react to macroeconomic or other events. Furthermore, the effect of changing market variables on the HSBC portfolio will depend on HSBC's net risk position in respect of each variable.

HSBC Holdings

Basis of valuing HSBC Holdings' financial assets and liabilities measured at fair value
	2020	2019
	$m	$m
Valuation technique using observable inputs: Level 2
Assets at 31 Dec
- derivatives	4,698	2,002
- designated and otherwise mandatorily measured at fair value through profit or loss	65,253	61,964
Liabilities at 31 Dec
- designated at fair value	25,664	30,303
- derivatives	3,060	2,021

13	Fair values of financial instruments not carried at fair value

Fair values of financial instruments not carried at fair value and bases of valuation
		Fair value
	Carryingamount	Quoted marketprice Level 1	Observableinputs Level 2	Significantunobservableinputs Level 3	Total
	$m	$m	$m	$m	$m
At 31 Dec 2020
Assets
Loans and advances to banks	81,616	-	80,457	1,339	81,796
Loans and advances to customers	1,037,987	-	9,888	1,025,573	1,035,461
Reverse repurchase agreements - non-trading	230,628	-	230,330	272	230,602
Financial investments - at amortised cost	88,639	28,722	67,572	507	96,801
Liabilities
Deposits by banks	82,080	-	81,996	-	81,996
Customer accounts	1,642,780	-	1,642,988	143	1,643,131
Repurchase agreements - non-trading	111,901	3	111,898	-	111,901
Debt securities in issue	95,492	-	96,371	657	97,028
Subordinated liabilities	21,951	-	28,552	-	28,552

At 31 Dec 2019
Assets
Loans and advances to banks	69,203	-	68,508	739	69,247
Loans and advances to customers	1,036,743	-	10,365	1,027,178	1,037,543
Reverse repurchase agreements - non-trading	240,862	16	240,199	691	240,906
Financial investments - at amortised cost	85,735	26,202	62,572	287	89,061
Liabilities
Deposits by banks	59,022	-	58,951	-	58,951
Customer accounts	1,439,115	-	1,439,362	150	1,439,512
Repurchase agreements - non-trading	140,344	-	140,344	-	140,344
Debt securities in issue	104,555	-	104,936	-	104,936
Subordinated liabilities	24,600	-	28,861	385	29,246

Other financial instruments not carried at fair value are typically short term in nature and reprice to current market rates frequently. Accordingly, their carrying amount is a reasonable approximation of fair value. They include cash and balances at central banks, items in the course of collection from and transmission to other banks, Hong Kong Government certificates of indebtedness and Hong Kong currency notes in circulation, all of which are measured at amortised cost.

Valuation

Fair value is an estimate of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It does not reflect the economic benefits and costs that HSBC expects to flow from an instrument's cash flow over its expected future life. Our valuation methodologies and assumptions in determining fair values for which no observable market prices are available may differ from those of other companies.

Loans and advances to banks and customers

To determine the fair value of loans and advances to banks and customers, loans are segregated, as far as possible, into portfolios of similar characteristics. Fair values are based on observable market transactions, when available. When they are unavailable, fair values are estimated using valuation models incorporating a range of input assumptions. These assumptions may include: value estimates from third-party brokers reflecting over-the-counter trading activity; forward-looking discounted cash flow models, taking account of expected customer prepayment rates, using assumptions that HSBC believes are consistent with those that would be used by market participants in valuing such loans; new business rates estimates for similar loans; and trading inputs from other market participants including observed primary and secondary trades. From time to time, we may engage a third-party valuation specialist to measure the fair value of a pool of loans.

The fair value of loans reflects expected credit losses at the balance sheet date and estimates of market participants' expectations of credit losses over the life of the loans, and the fair value effect of repricing between origination and the balance sheet date. For credit-impaired loans, fair value is estimated by discounting the future cash flows over the time period they are expected to be recovered.

Financial investments

The fair values of listed financial investments are determined using bid market prices. The fair values of unlisted financial investments are determined using valuation techniques that incorporate the prices and future earnings streams of equivalent quoted securities.

Deposits by banks and customer accounts

The fair values of on-demand deposits are approximated by their carrying value. For deposits with longer-term maturities, fair values are estimated using discounted cash flows, applying current rates offered for deposits of similar remaining maturities.

Debt securities in issue and subordinated liabilities

Fair values in debt securities in issue and subordinated liabilities are determined using quoted market prices at the balance sheet date where available, or by reference to quoted market prices for similar instruments.

Repurchase and reverse repurchase agreements - non-trading

Fair values of repurchase and reverse repurchase agreements that are held on a non-trading basis provide approximate carrying amounts. This is due to the fact that balances are generally short dated.

HSBC Holdings

The methods used by HSBC Holdings to determine fair values of financial instruments for the purposes of measurement and disclosure are described above.

Fair values of HSBC Holdings' financial instruments not carried at fair value on the balance sheet
	2020		2019
	Carrying amount	Fair value1	Carrying amount	Fair value1
	$m	$m	$m	$m
Assets at 31 Dec
Loans and advances to HSBC undertakings	10,443	10,702	10,218	10,504
Financial investments - at amortised cost	17,485	17,521	16,106	16,121
Liabilities at 31 Dec
Amounts owed to HSBC undertakings	330	330	464	464
Debt securities in issue	64,029	67,706	56,844	59,140
Subordinated liabilities	17,916	22,431	18,361	22,536

1 Fair values (other than Level 1 financial investments) were determined using valuation techniques with observable inputs (Level 2).

14	Financial assets designated and otherwise mandatorily measured at fair value through profit or loss

	2020				2019
	Designated at fair value	Mandatorily measured at fair value	Total	Designated at fair value	Mandatorily measured at fair value	Total
	$m	$m	$m	$m	$m	$m
Securities	2,492	39,088	41,580	2,344	35,808	38,152
- treasury and other eligible bills	635	26	661	630	31	661
- debt securities	1,857	5,250	7,107	1,714	4,838	6,552
- equity securities	-	33,812	33,812	-	30,939	30,939
Loans and advances to banks and customers	-	2,988	2,988	1	4,555	4,556
Other	-	985	985	-	919	919
At 31 Dec	2,492	43,061	45,553	2,345	41,282	43,627

Securities1
		2020				2019
		Designated at fair value	Mandatorily measured at fair value	Total	Designated at fair value	Mandatorily measured at fair value	Total
	Footnotes	$m	$m	$m	$m	$m	$m
Hong Kong Government		22	-	22	4	-	4
Other governments		648	674	1,322	666	754	1,420
Asset-backed securities	2	-	235	235	-	363	363
Corporate debt and other securities		1,822	4,367	6,189	1,674	3,752	5,426
Equities		-	33,812	33,812	-	30,939	30,939
At 31 Dec		2,492	39,088	41,580	2,344	35,808	38,152

1 Included within these figures are debt securities issued by banks and other financial institutions of $1,180m (2019 re-presented: $1,244m), of which nil (2019: nil) are guaranteed by various governments.

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

15	Derivatives

Notional contract amounts and fair values of derivatives by product contract type held by HSBC
	Notional contract amount		Fair value - Assets			Fair value - Liabilities
	Trading	Hedging	Trading	Hedging	Total	Trading	Hedging	Total
	$m	$m	$m	$m	$m	$m	$m	$m
Foreign exchange	7,606,446	35,021	106,696	309	107,005	108,903	1,182	110,085
Interest rate	15,240,867	157,436	249,204	1,914	251,118	236,594	2,887	239,481
Equities	652,288	-	14,043	-	14,043	15,766	-	15,766
Credit	269,401	-	2,590	-	2,590	3,682	-	3,682
Commodity and other	120,259	-	2,073	-	2,073	3,090	-	3,090
Gross total fair values	23,889,261	192,457	374,606	2,223	376,829	368,035	4,069	372,104
Offset (Note 30)					(69,103)			(69,103)
At 31 Dec 2020	23,889,261	192,457	374,606	2,223	307,726	368,035	4,069	303,001

Foreign exchange	8,207,629	31,899	84,083	455	84,538	84,498	740	85,238
Interest rate	17,895,349	177,006	183,668	1,208	184,876	175,095	2,031	177,126
Equities	1,077,347	-	9,053	-	9,053	11,237	-	11,237
Credit	345,644	-	4,744	-	4,744	5,597	-	5,597
Commodity and other	93,245	-	1,523	-	1,523	2,038	-	2,038
Gross total fair values	27,619,214	208,905	283,071	1,663	284,734	278,465	2,771	281,236
Offset (Note 30)					(41,739)			(41,739)
At 31 Dec 2019	27,619,214	208,905	283,071	1,663	242,995	278,465	2,771	239,497

The notional contract amounts of derivatives held for trading purposes and derivatives designated in hedge accounting relationships indicate the nominal value of transactions outstanding at the balance sheet date. They do not represent amounts at risk.

Derivative assets and liabilities increased during 2020, driven by yield curve movements and changes in foreign exchange rates.

Notional contract amounts and fair values of derivatives by product contract type held by HSBC Holdings with subsidiaries
	Notional contract amount		Assets			Liabilities
	Trading	Hedging	Trading	Hedging	Total	Trading	Hedging	Total
	$m	$m	$m	$m	$m	$m	$m	$m
Foreign exchange	23,413	-	506	-	506	870	-	870
Interest rate	47,569	34,006	966	3,221	4,187	2,176	8	2,184
At 31 Dec 2020	70,982	34,006	1,472	3,221	4,693	3,046	8	3,054

Foreign exchange	24,980	-	161	-	161	766	-	766
Interest rate	48,937	36,769	435	1,406	1,841	1,072	183	1,255
At 31 Dec 2019	73,917	36,769	596	1,406	2,002	1,838	183	2,021

Use of derivatives

For details regarding the use of derivatives, see page 186 under 'Market risk'.

Trading derivatives

Most of HSBC's derivative transactions relate to sales and trading activities. Sales activities include the structuring and marketing of derivative products to customers to enable them to take, transfer, modify or reduce current or expected risks. Trading activities include market-making and risk management. Market-making entails quoting bid and offer prices to other market participants for the purpose of generating revenue based on spread and volume. Risk management activity is undertaken to manage the risk arising from client transactions, with the principal purpose of retaining client margin. Other derivatives classified as held for trading include non-qualifying hedging derivatives.

Substantially all of HSBC Holdings' derivatives entered into with subsidiaries are managed in conjunction with financial liabilities designated at fair value.

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 shown in the following table:

Unamortised balance of derivatives valued using models with significant unobservable inputs
		2020	2019
	Footnotes	$m	$m
Unamortised balance at 1 Jan		73	86
Deferral on new transactions		232	145
Recognised in the income statement during the year:		(205)	(154)
- amortisation		(116)	(80)
- subsequent to unobservable inputs becoming observable		(4)	(3)
- maturity, termination or offsetting derivative		(85)	(71)
Exchange differences		4	1
Other		-	(5)
Unamortised balance at 31 Dec	1	104	73

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

Hedge accounting derivatives

HSBC applies hedge accounting to manage the following risks: interest rate, foreign exchange and net investment in foreign operations. Further details on how these risks arise and how they are managed by the Group can be found in the 'Risk review'.

Fair value hedges

HSBC enters into fixed-for-floating-interest-rate swaps to manage the exposure to changes in fair value caused by movements in market interest rates on certain fixed-rate financial instruments that are not measured at fair value through profit or loss, including debt securities held and issued.

HSBC hedging instrument by hedged risk
	Hedging instrument
		Carrying amount
	Notional amount1	Assets	Liabilities	Balance sheet presentation	Change in fair value2
Hedged risk	$m	$m	$m		$m
Interest rate3	121,573	1,675	3,761	Derivatives	(1,894)
At 31 Dec 2020	121,573	1,675	3,761		(1,894)

Interest rate3	122,753		1,056		2,208		Derivatives	(1,531)
At 31 Dec 2019	122,753		1,056		2,208			(1,531)

1 The notional contract amounts of derivatives designated in qualifying hedge accounting relationships indicate the nominal value of transactions outstanding at the balance sheet date. They do not represent amounts at risk.

2 Used in effectiveness testing; comprising the full fair value change of the hedging instrument not excluding any component.

3 The hedged risk 'interest rate' includes inflation risk.

HSBC hedged item by hedged risk
	Hedged item						Ineffectiveness
	Carrying amount		Accumulated fair value hedge adjustments included in carrying amount2			Change in fair value1	Recognised in profit and loss
	Assets	Liabilities	Assets	Liabilities	Balance sheet presentation			Profit and loss presentation
Hedged risk	$m	$m	$m	$m		$m	$m
Interest rate3	102,260		3,392		Financial assets designated and otherwise mandatorily measured at fair value through other comprehensive income	2,456	(11)	Net income from financial instruments held for trading or managed on a fair value basis
	6		3		Loans and advances to banks	1
	2,280		56		Loans and advances to customers	21
		12,148		1,620	Debt securities in issue	(613)
		89		3	Deposits by banks	18
At 31 Dec 2020	104,546	12,237	3,451	1,623		1,883	(11)

HSBC hedged item by hedged risk (continued)
	Hedged item						Ineffectiveness
	Carrying amount		Accumulated fair value hedge adjustments included in carrying amount2			Change in fair value1	Recognised in profit and loss
	Assets	Liabilities	Assets	Liabilities	Balance sheet presentation			Profit and loss presentation
Hedged risk	$m	$m	$m	$m		$m	$m
Interest rate3	90,617		1,859		Financial assets designated and otherwise mandatorily measured at fair value through other comprehensive income	2,304	(7)	Net income from financial instruments held for trading or managed on a fair value basis
	153		4		Loans and advances to banks	5
	1,897		12		Loans and advances to customers	24
		15,206		797	Debt securities in issue	(1,011)
		3,009		39	Deposits by banks	202
At 31 Dec 2019	92,667	18,215	1,875	836		1,524	(7)

1 Used in effectiveness testing; comprising amount attributable to the designated hedged risk that can be a risk component.

2 The accumulated amount of fair value adjustments remaining in the statement of financial position for hedged items that have ceased to be adjusted for hedging gains and losses were assets of $855m for FVOCI and assets of $17m for debt issued.

3 The hedged risk 'interest rate' includes inflation risk.

HSBC Holdings hedging instrument by hedged risk
	Hedging instrument
		Carrying amount
	Notional amount1,4	Assets	Liabilities	Balance sheet presentation	Change in fair value2
Hedged risk	$m	$m	$m	Balance sheet presentation	$m
Interest rate3	34,006	3,221	8	Derivatives	1,927
At 31 Dec 2020	34,006	3,221	8		1,927

Interest rate3	36,769	1,406	183	Derivatives	1,704
At 31 Dec 2019	36,769	1,406	183		1,704

2 Used in effectiveness testing; comprising the full fair value change of the hedging instrument not excluding any component.

3 The hedged risk 'interest rate' includes foreign exchange risk.

4 The notional amount of non-dynamic fair value hedges is equal to $34,006m, of which the weighted-average maturity date is February 2028 and the weighted-average swap rate is 1.71%. The majority of these hedges are internal to the Group.

HSBC Holdings hedged item by hedged risk
	Hedged item						Ineffectiveness
	Carrying amount		Accumulated fair value hedge adjustments included in carrying amount2			Change in fair value1	Recognised inprofit and loss
	Assets	Liabilities	Assets	Liabilities	Balance sheet presentation			Profit and losspresentation
Hedged risk	$m	$m	$m	$m		$m	$m
Interest rate3		37,338		3,027	Debt securities in issue	(1,910)	17	Net income from financial instruments held for trading or managed on a fair value basis
At 31 Dec 2020	-	37,338	-	3,027		(1,910)	17

Interest rate3		38,126		1,088	Debt securitiesin issue	(1,697)	7	Net income from financial instruments held for trading or managed on a fair value basis
At 31 Dec 2019	-	38,126	-	1,088		(1,697)	7

1 Used in effectiveness testing; comprising amount attributable to the designated hedged risk that can be a risk component.

3 The hedged risk 'interest rate' includes foreign exchange risk.

Sources of hedge ineffectiveness may arise from basis risk, including but not limited to the discount rates used for calculating the fair value of derivatives, hedges using instruments with a non-zero fair value, and notional and timing differences between the hedged items and hedging instruments.

For some debt securities held, HSBC manages interest rate risk in a dynamic risk management strategy. The assets in scope of this strategy are high-quality fixed-rate debt securities, which may be sold to meet liquidity and funding requirements.

The interest rate risk of the HSBC fixed-rate debt securities issued is managed in a non-dynamic risk management strategy.

Cash flow hedges

HSBC's cash flow hedging instruments consist principally of interest rate swaps and cross-currency swaps that are used to manage the variability in future interest cash flows of non-trading financial assets and liabilities, arising due to changes in market interest rates and foreign-currency basis.

HSBC applies macro cash flow hedging for interest rate risk exposures on portfolios of replenishing current and forecasted issuances of non-trading assets and liabilities that bear interest at variable rates, including rolling such instruments. The amounts and timing of future cash flows, representing both principal and interest flows, are projected for each portfolio of financial assets and liabilities on the basis of their contractual terms and other relevant factors, including estimates of prepayments and defaults. The aggregate cash flows representing both principal balances and interest cash flows across all portfolios are used to determine the effectiveness and ineffectiveness. Macro cash flow hedges are considered to be dynamic hedges.

HSBC also hedges the variability in future cash flows on foreign-denominated financial assets and liabilities arising due to changes in foreign exchange market rates with cross-currency swaps, which are considered dynamic hedges.

Hedging instrument by hedged risk
	Hedging instrument					Hedged item	Ineffectiveness
		Carrying amount			Change in fair value2	Change in fair value3	Recognised in profit and loss	Profit and loss presentation
	Notional amount1	Assets	Liabilities	Balance sheet presentation
Hedged risk	$m	$m	$m		$m	$m	$m
Foreign currency	24,506	309	448	Derivatives	(630)	(630)	-	Net income fromfinancial instrumentsheld for trading ormanaged on a fairvalue basis
Interest rate	35,863	239	2	Derivatives	519	514	5
At 31 Dec 2020	60,369	548	450		(111)	(116)	5

Foreign currency	21,385	455	254	Derivatives	341	341	-	Net income from financial instruments held for trading or managed on a fair value basis
Interest rate	54,253	152	46	Derivatives	195	193	2
At 31 Dec 2019	75,638	607	300		536	534	2

2 Used in effectiveness testing; comprising the full fair value change of the hedging instrument not excluding any component.

3 Used in effectiveness assessment; comprising amount attributable to the designated hedged risk that can be a risk component.

Sources of hedge ineffectiveness may arise from basis risk, including but not limited to timing differences between the hedged items and hedging instruments and hedges using instruments with a non-zero fair value.

Reconciliation of equity and analysis of other comprehensive income by risk type
	Interest rate	Foreign currency
	$m	$m
Cash flow hedging reserve at 1 Jan 2020	204	(205)
Fair value gains/(losses)	514	(630)
Fair value (gains)/losses reclassified from the cash flow hedge reserve to the income statement in respect of:
Hedged items that have affected profit or loss	(107)	822
Income taxes	(79)	(23)
Others	(37)	(1)
Cash flow hedging reserve at 31 Dec 2020	495	(37)


Cash flow hedging reserve at 1 Jan 2019	(26)	(182)
Fair value gains/(losses)	193	341
Fair value (gains)/losses reclassified from the cash flow hedge reserve to the income statement in respect of:
Hedged items that has affected profit or loss	99	(371)
Income taxes	(53)	4
Others	(9)	3
Cash flow hedging reserve at 31 Dec 2019	204	(205)

Hedges of net investments in foreign operations

The Group applies hedge accounting in respect of certain consolidated net investments. Hedging is undertaken for Group structural exposure to changes in the US dollar-sterling exchange rate using forward foreign exchange contracts or by financing with foreign currency borrowings. This risk arises due to the Group investment in sterling functional currency subsidiaries and is only hedged for changes in spot exchange rates. At 31 December 2020, the fair values of outstanding financial instruments designated as hedges of net investments in foreign operations were assets of nil (2019: nil), liabilities of $733m (2019: $485m) and notional derivative contract values of $10,500m (2019: $10,500m). These values are included in 'Derivatives' presented in the balance sheet. Ineffectiveness recognised in 'Net income from financial instruments held for trading or managed on a fair value basis' in the year ended 31 December 2020 was nil (2019: nil) and the net investment hedge reserve was a negative $56m as of 31 December 2020 ($304m in 2019 and $780m in 2018). There were no amounts reclassified to the profit and loss account during the accounting periods presented.

Interest rate benchmark reform: Amendments to IFRS 9 and IAS 39 'Financial Instruments'

The first set of amendments ('Phase 1') to IFRS 9 and IAS 39, published in September 2019 and endorsed in January 2020, primarily allows the assumption that interbank offered rates ('Ibors') are to continue unaltered for the purposes of forecasting hedged cash flows until such time as the uncertainty of transitioning to near risk-free rates ('RFRs') is resolved. The second set of amendments ('Phase 2'), issued in August 2020 and endorsed in January 2021, allows the modification of hedge documentation to reflect the components of hedge relationships that have transitioned to RFRs on an economically equivalent basis as a direct result of the Ibor transition.

While the application of Phase 1 amendments is mandatory for accounting periods starting on or after 1 January 2020, the Group chose to early adopt the Phase 2 amendments from the beginning of 2020. Significant judgement will be required in determining when Ibor transition uncertainty is resolved and therefore decide when Phase 1 amendments cease to apply and when some of the Phase 2 amendments can be applied.

The notional value of the derivatives impacted by the Ibors reform but which are not used in designated hedge accounting relationships is disclosed on page 113 in the section 'Financial instruments impacted by the Ibor reform'.

The Group has cash flow and fair value hedge accounting relationships that are exposed to different Ibors, predominantly US dollar Libor, sterling Libor and Euribor, as well as overnight rates subject to the market-wide benchmarks reform such as the European Overnight Index Average rate ('Eonia'). Existing financial instruments (such as derivatives, loans and bonds) designated in relationships referencing these benchmarks are expected to transition to RFRs in different ways and at different times. External progress on the transition to RFRs is being monitored, with the objective of ensuring a smooth transition for the Group's hedge accounting relationships. The specific issues arising will vary with the details of each hedging relationship, but may arise due to the transition of existing products included in the designation, a change in expected volumes of products to be issued, a change in contractual terms of new products issued, or a combination of these factors. Some hedges may need to be de-designated and new relationships entered into, while others may survive the market-wide benchmarks reform.

The hedge accounting relationships that are affected by Phase 1 and Phase 2 amendments are presented in the balance sheet as 'Financial assets designated and otherwise mandatorily measured at fair value through other comprehensive income', 'Loans and advances to customers', 'Debt securities in issue' and 'Deposits by banks'.

The notional amounts of interest rate derivatives designated in hedge accounting relationships represent the extent of the risk exposure managed by the Group that is expected to be directly affected by market-wide Ibors reform and in scope of Phase 1 and Phase 2 amendments. The cross-currency swaps designated in hedge accounting relationships and affected by Ibor reform are not significant and have not been presented below:

Hedging instrument impacted by Ibor reform
	Hedging instrument
	Impacted by Ibor reform					Not impacted by Ibor reform	Notional amount1
	€	£	$	Other	Total	Not impacted by Ibor reform	Notional amount1
	$m	$m	$m	$m	$m	$m	$m
Fair value hedges	17,792	3,706	32,789	10,128	64,415	57,157	121,572
Cash flow hedges	8,344	2,522	8,705	6,797	26,368	9,495	35,863
At 31 Dec 2020	26,136	6,228	41,494	16,925	90,783	66,652	157,435

Fair value hedges	20,378	4,533	41,274	13,435	79,620	43,133	122,753
Cash flow hedges	5,724	6,594	15,750	15,979	44,047	10,206	54,253
At 31 Dec 2019	26,102	11,127	57,024	29,414	123,667	53,339	177,006

1 The notional contract amounts of interest rate derivatives designated in qualifying hedge accounting relationships indicate the nominal value of transactions outstanding at the balance sheet date; they do not represent amounts at risk.

During 2019, the main market event in scope of Ibor reform was the change to the calculation of Eonia to be calculated as the euro short-term rate ('€STR') plus a fixed spread of 8.5 basis points. This event had no material impact to the valuation of components of designated hedge accounting relationships and there were no discontinuations of existing designated relationships. The main market events in scope of Ibor reform during 2020 were the changes applied by central clearing counterparties to remunerating euro and US dollar collateral. While there was a minimal valuation impact to the derivatives in scope that are used for hedge accounting, these changes had no discontinuation impact to any of the designated relationships affected.

For further details of Ibor transition, see 'Areas of special interest' in the Risk review on page 116.

Hedging instrument impacted by Ibor reform held by HSBC Holdings
	Hedging instrument
	Impacted by Ibor reform					Not impacted by Ibor reform	Notional amount
	€	£	$	Other	Total	Not impacted by Ibor reform	Notional amount
	$m	$m	$m	$m	$m	$m	$m
Fair value hedges	4,290	5,393	21,081	3,242	34,006	-	34,006
At 31 Dec 2020	4,290	5,393	21,081	3,242	34,006	-	34,006

Fair value hedges	3,928	5,222	24,500	3,119	36,769	-	36,769
At 31 Dec 2019	3,928	5,222	24,500	3,119	36,769	-	36,769

16	Financial investments

Carrying amount of financial investments
	2020	2019
	$m	$m
Financial investments measured at fair value through other comprehensive income	402,054	357,577
- treasury and other eligible bills	118,163	95,043
- debt securities	281,467	260,536
- equity securities	2,337	1,913
- other instruments	87	85
Debt instruments measured at amortised cost	88,639	85,735
- treasury and other eligible bills	11,757	10,476
- debt securities	76,882	75,259
At 31 Dec	490,693	443,312

Equity instruments measured at fair value through other comprehensive income
	Fair value	Dividends recognised
Type of equity instruments	$m	$m
Investments required by central institutions	904	22
Business facilitation	1,387	22
Others	46	3
At 31 Dec 2020	2,337	47

Investments required by central institutions	738	22
Business facilitation	1,124	19
Others	51	9
At 31 Dec 2019	1,913	50

Financial investments at amortised cost and fair value
		2020		2019
		Amortised cost	Fair value1	Amortised cost	Fair value1
	Footnotes	$m	$m	$m	$m
US Treasury		75,531	78,251	79,633	80,589
US Government agencies	2	19,851	20,320	26,356	26,387
US Government-sponsored entities		10,691	11,224	8,070	8,259
UK Government		28,094	28,754	28,621	28,973
Hong Kong Government		55,483	55,507	47,824	47,820
Other governments		178,091	180,881	140,510	142,511
Asset-backed securities	3	2,708	2,536	2,954	2,889
Corporate debt and other securities		110,015	118,960	101,750	107,364
Equities		1,410	2,337	1,241	1,913
At 31 Dec		481,874	498,770	436,959	446,705

1 Included within 'fair value' figures are debt securities issued by banks and other financial institutions of $62bn (2019: $61bn), of which $10bn (2019: $11bn) 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 Government agencies and sponsored entities.

Maturities of investments in debt securities at their carrying amount
	Up to 1 year	1 to 5 years	5 to 10 years	Over 10 years	Total
	$m	$m	$m	$m	$m
Debt securities measured at fair value through other comprehensive income	72,250	131,859	42,168	35,190	281,467
Debt securities measured at amortised cost	6,135	16,499	19,437	34,811	76,882
At 31 Dec 2020	78,385	148,358	61,605	70,001	358,349

Debt securities measured at fair value through other comprehensive income	61,833	123,740	42,831	32,132	260,536
Debt securities measured at amortised cost	5,472	14,395	21,431	33,961	75,259
At 31 Dec 2019	67,305	138,135	64,262	66,093	335,795

Contractual maturities and weighted average yields of investment debt securities
	Up to 1 year		1 to 5 years		5 to 10 years		Over 10 years
	Amount	Yield	Amount	Yield	Amount	Yield	Amount	Yield
	$m	%	$m	%	$m	%	$m	%
Debt securities measured at fair value through other comprehensive income
US Treasury	6,596	1.2	22,945	1.6	15,618	1.5	4,195	2.3
US Government agencies	-	-	95	1.8	43	2.8	12,608	1.8
US Government-sponsored agencies	30	2.8	789	2.2	2,988	2.5	4,968	1.8
UK Government	2,765	1.5	5,126	0.8	6,220	0.2	4,910	2.3
Hong Kong Government	84	1.6	247	1.6	167	1.8	-	-
Other governments	51,507	1.7	62,587	2.3	8,184	1.6	2,089	4.3
Asset-backed securities	18	2.9	93	1.4	399	1.8	2,199	1.2
Corporate debt and other securities	10,831	2.1	35,615	1.4	7,169	1.8	2,583	3.4
Total amortised cost at 31 Dec 2020	71,831		127,497		40,788		33,552
Total carrying value	72,250		131,859		42,168		35,190
Debt securities measured at amortised cost
US Treasury	3,769	0.1	4,618	1.6	3,003	2.0	969	2.8
US Government agencies	-	-	9	3.8	13	4.5	7,084	2.6
US Government-sponsored agencies	110	2.5	258	2.7	436	2.2	1,112	3.3
Hong Kong Government	13	3.0	23	1.6	118	2.6	12	4.8
Other governments	179	3.4	370	4.1	426	3.8	1,011	4.2
Asset-backed securities	-	-	-	-	-	-	2	6.0
Corporate debt and other securities	2,064	3.3	11,221	3.4	15,441	3.4	24,621	3.8
Total amortised cost at 31 Dec 2020	6,135		16,499		19,437		34,811
Total carrying value	6,135		16,497		19,439		34,812

The maturity distributions of ABSs are presented in the above table on the basis of contractual maturity dates. The weighted average yield for each range of maturities is calculated by dividing the annualised interest income for the year ended 31 December 2020 by the book amount of debt securities at that date. The yields do not include the effect of related derivatives.

HSBC Holdings

HSBC Holdings carrying amount of financial investments
	2020	2019
	$m	$m
Debt instruments measured at amortised cost
- treasury and other eligible bills	10,941	10,081
- debt securities	6,544	6,025
At 31 Dec	17,485	16,106

Financial investments at amortised cost and fair value
	2020		2019
	Amortised cost	Fair value	Amortised cost	Fair value
	$m	$m	$m	$m
US Treasury	17,485	17,521	16,106	16,121
US Government agencies	-	-	-	-
US Government-sponsored entities	-	-	-	-
At 31 Dec	17,485	17,521	16,106	16,121

Maturities of investments in debt securities at their carrying amount
	Up to 1 year	1 to 5 years	5 to 10 years	Over 10 years	Total
	$m	$m	$m	$m	$m
Debt securities measured at amortised cost	3,767	2,777	-	-	6,544
At 31 Dec 2020	3,767	2,777	-	-	6,544

Debt securities measured at amortised cost	3,010	3,015	-	-	6,025
At 31 Dec 2019	3,010	3,015	-	-	6,025

Contractual maturities and weighted average yields of investment debt securities
	Up to 1 year		1 to 5 years		5 to 10 years		Over 10 years
	Amount	Yield	Amount	Yield	Amount	Yield	Amount	Yield
	$m	%	$m	%	$m	%	$m	%
Debt securities measured at amortised cost
US Treasury	3,767	1.5	2,777	0.3	-	-	-	-
US Government agencies	-	-	-	-	-	-	-	-
US Government-sponsored agencies	-	-	-	-	-	-	-	-
Total amortised cost at 31 Dec 2020	3,767		2,777		-		-
Total carrying value	3,767		2,777		-		-

The weighted average yield for each range of maturities is calculated by dividing the annualised interest income for the year ended 31 December 2020 by the book amount of debt securities at that date. The yields do not include the effect of related derivatives.

17	Assets pledged, collateral received and assets transferred

Assets pledged

Financial assets pledged as collateral
	2020	2019
	$m	$m
Treasury bills and other eligible securities	12,774	14,034
Loans and advances to banks	236	1,975
Loans and advances to customers	43,168	26,017
Debt securities	67,312	60,995
Equity securities	26,101	24,626
Other	60,810	50,231
Assets pledged at 31 Dec	210,401	177,878

Assets pledged as collateral include all assets categorised as encumbered in the disclosure on page 78 of the Pillar 3 Disclosures at 31 December 2020.

The amount of assets pledged to secure liabilities may be greater than the book value of assets utilised as collateral. For example, in the case of securitisations and covered bonds, the amount of liabilities issued plus mandatory over-collateralisation is less than the book value of the pool of assets available for use as collateral. This is also the case where assets are placed with a custodian or a settlement agent that has a floating charge over all the assets placed to secure any liabilities under settlement accounts.

These transactions are conducted under terms that are usual and customary for collateralised transactions including, where relevant, standard securities lending and borrowing, repurchase agreements and derivative margining. HSBC places both cash and non-cash collateral in relation to derivative transactions.

Hong Kong currency notes in circulation are secured by the deposit of funds in respect of which the Hong Kong Government certificates of indebtedness are held.

Financial assets pledged as collateral which the counterparty has the right to sell or repledge
	2020	2019
	$m	$m
Trading assets	64,225	63,163
Financial investments	16,915	10,782
At 31 Dec	81,140	73,945

Collateral received

The fair value of assets accepted as collateral relating primarily to standard securities lending, reverse repurchase agreements, swaps of securities and derivative margining that HSBC is permitted to sell or repledge in the absence of default was $447,101m (2019: $468,798m). The fair value of any such collateral sold or repledged was $246,520m (2019: $304,261m).

HSBC is obliged to return equivalent securities. These transactions are conducted under terms that are usual and customary to standard securities lending, reverse repurchase agreements and derivative margining.

Assets transferred

The assets pledged include transfers to third parties that do not qualify for derecognition, notably secured borrowings such as debt securities held by counterparties as collateral under repurchase agreements and equity securities lent under securities lending agreements, as well as swaps of equity and debt securities. For secured borrowings, the transferred asset collateral continues to be recognised in full while a related liability, reflecting the Group's obligation to repurchase the assets for a fixed price at a future date, is also recognised on the balance sheet. Where securities are swapped, the transferred asset continues to be recognised in full. There is no associated liability as the non-cash collateral received is not recognised on the balance sheet. The Group is unable to use, sell or pledge the transferred assets for the duration of the transaction, and remains exposed to interest rate risk and credit risk on these pledged assets. With the exception of 'Other sales' in the following table, the counterparty's recourse is not limited to the transferred assets.

Transferred financial assets not qualifying for full derecognition and associated financial liabilities
	Carrying amount of:		Fair value of:
	Transferredassets	Associatedliabilities	Transferredassets	Associatedliabilities	Netposition
	$m	$m	$m	$m	$m
At 31 Dec 2020
Repurchase agreements	52,413	51,092
Securities lending agreements	38,364	124
Other sales (recourse to transferred assets only)	3,564	3,478	3,619	3,564	55

At 31 Dec 2019
Repurchase agreements	45,831	45,671
Securities lending agreements	35,122	3,225
Other sales (recourse to transferred assets only)	2,971	2,885	2,974	2,897	77

18	Interests in associates and joint ventures

Carrying amount of HSBC's interests in associates and joint ventures
	2020	2019
	$m	$m
Interests in associates	26,594	24,384
Interests in joint ventures	90	90
Interests in associates and joint ventures	26,684	24,474

Principal associates of HSBC
	2020		2019
	Carrying amount	Fair value1	Carrying amount	Fair value1
	$m	$m	$m	$m
Bank of Communications Co., Limited	21,248	7,457	18,982	10,054
The Saudi British Bank	4,215	4,197	4,370	5,550

1 Principal associates are listed on recognised stock exchanges. The fair values are based on the quoted market prices of the shares held (Level 1 in the fair value hierarchy).

		At 31 Dec 2020
	Footnotes	Country of incorporationand principal place ofbusiness	Principalactivity	HSBC'sinterest%
Bank of Communications Co., Limited		People's Republic of China	Banking services	19.03
The Saudi British Bank	1	Saudi Arabia	Banking services	31.00

1 In December 2020, HSBC purchased additional shares and increased its shareholding in The Saudi British Bank ('SABB') from 29.2% to 31.0%. SABB will continue to be accounted for as an associate of HSBC.

A list of all associates and joint ventures is set out in Note 37.

Bank of Communications Co., Limited

The Group's investment in Bank of Communications Co., Limited ('BoCom') is classified as an associate. Significant influence in BoCom was established with consideration of all relevant factors, including representation on BoCom's Board of Directors and participation in a Resource and Experience Sharing ('RES') agreement. Under the RES, HSBC staff have been seconded to assist in the maintenance of BoCom's financial and operating policies. Investments in associates are recognised using the equity method of accounting in accordance with IAS 28, whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the Group's share of BoCom's net assets. An impairment test is required if there is any indication of impairment.

Impairment testing

At 31 December 2020, the fair value of the Group's investment in BoCom had been below the carrying amount for approximately nine years. As a result, the Group performed an impairment test on the carrying amount, which confirmed that there was no impairment at 31 December 2020 as the recoverable amount as determined by a value-in-use ('VIU') calculation was higher than the carrying value.

At 31 Dec 2020

At 31 Dec 2019

VIU

Carrying value

Fair value

VIU

Carrying value

Fair value

$bn

BoCom

21.8

21.2

7.5

21.5

19.0

10.1

Compared with 31 December 2019, the extent to which the VIU exceeds the carrying value ('headroom') decreased by $1.9bn. The reduction in headroom was principally due to the impact on the VIU from BoCom's actual performance, which was lower than earlier forecasts due to the impact of the Covid-19 outbreak and the disruption to global economic activity, downward revisions to management's best estimates of BoCom's future earnings in the short to medium term, and the net impact of revisions to certain long-term assumptions. Both the VIU and the carrying value increased due to the impact of foreign exchange movements.

In future periods, the VIU may increase or decrease depending on the effect of changes to model inputs. The main model inputs are described below and are based on factors observed at period-end. The factors that could result in a change in the VIU and an impairment include a short-term underperformance by BoCom, a change in regulatory capital requirements or an increase in uncertainty regarding the future performance of BoCom resulting in a downgrade of the forecast of future asset growth or profitability. An increase in the discount rate as a result of an increase in the risk premium or risk-free rates could also result in a reduction of VIU and an impairment. At the point where the carrying value exceeds the VIU, impairment would be recognised.

If the Group did not have significant influence in BoCom, the investment would be carried at fair value rather than the current carrying value.

Basis of recoverable amount

The impairment test was performed by comparing the recoverable amount of BoCom, determined by a VIU calculation, with its carrying amount. The VIU calculation uses discounted cash flow projections based on management's best estimates of future earnings available to ordinary shareholders prepared in accordance with IAS 36. Significant management judgement is required in arriving at the best estimate. There are two main components to the VIU calculation. The first component is management's best estimate of BoCom's earnings, which is based on explicit forecasts over the short to medium term. This results in forecast earnings growth that is lower than recent historical actual growth and also reflects the uncertainty arising from the current economic outlook. Earnings beyond the short to medium term are then extrapolated into perpetuity using a long-term growth rate to derive a terminal value, which comprises the majority of the VIU. The second component is the capital maintenance charge ('CMC'), which is management's forecast of the earnings

that need to be withheld in order for BoCom to meet regulatory capital requirements over the forecast period, meaning that CMC is deducted when arriving at management's estimate of future earnings available to ordinary shareholders. The principal inputs to the CMC calculation include estimates of asset growth, the ratio of risk-weighted assets to total assets and the expected minimum regulatory capital requirements. An increase in the CMC as a result of a change to these principal inputs would reduce VIU. Additionally, management considers other factors, including qualitative factors, to ensure that the inputs to the VIU calculation remain appropriate.

Key assumptions in value-in-use calculation

We used a number of assumptions in our VIU calculation, in accordance with the requirements of IAS 36:

• Long-term profit growth rate: 3% (2019: 3%) for periods after 2024, which does not exceed forecast GDP growth in mainland China and is consistent with forecasts by external analysts.

• Long-term asset growth rate: 3% (2019: 3%) for periods after 2024, which is the rate that assets are expected to grow to achieve long-term profit growth of 3%.

• Discount rate: 11.37% (2019: 11.24%). This is based on a capital asset pricing model ('CAPM') calculation for BoCom, using market data. Management also compares the rate derived from the CAPM with discount rates from external sources. The discount rate used is within the range of 10.3% to 15.0% (2019: 10.0% to 15.0%) indicated by external sources. The increased rate reflects the net impact of updates to certain components of CAPM due to elevated levels of risk arising from the impact of the Covid-19 outbreak and the disruption to global economic activity.

• Expected credit losses ('ECL') as a percentage of customer advances: This ranges from 0.98% to 1.22% (2019: 0.95%) in the short to medium term, reflecting increases due to the Covid-19 outbreak and BoCom's actual results. For periods after 2024, the ratio is 0.88% (2019: 0.76%), which is slightly higher than BoCom's average ECL in recent years. This ratio was increased to reflect trends in BoCom's actual results in recent years of increasing ECL and of changes to BoCom's loan portfolio.

• Risk-weighted assets as a percentage of total assets: This ranges from 61% to 62% (2019: 61%) in the short to medium term, reflecting increases that may arise from higher ECL in the short term, followed by reductions that may arise from a subsequent lowering of ECL and a continuation of the trend of strong retail loan growth. For periods after 2024, the ratio is 61% (2019: 61%). These rates are similar to BoCom's actual results in recent years and are slightly below forecasts disclosed by external analysts.

• Operating income growth rate: This ranges from 3.5% to 6.7% (2019: 4.9% to 9.4%) in the short to medium term, and is lower than BoCom's actual results in recent years and the forecasts disclosed by external analysts, reflecting economic pressures from the Covid-19 outbreak, global trade tensions and industry developments in mainland China.

• Cost-income ratio: This ranges from 36.3% to 36.8% (2019: 37.1% to 38.8%) in the short to medium term. These ratios are similar to BoCom's actual results in recent years and slightly higher than forecasts disclosed by external analysts.

• Effective tax rate: This ranges from 7.8% to 16.5% (2019: 12.0% to 17.0%) in the short to medium term, reflecting BoCom's actual results and an expected increase towards the long-term assumption through the forecast period. For periods after 2024, the rate is 16.8% (2019: 22.5%), which is higher than the recent historical average. This rate was reduced on expectations of a lower effective tax rate in the long term, reflecting BoCom's actual results in recent years and forecast financial asset composition, and forecasts disclosed by external analysts.

• Capital requirements: This was based on a capital adequacy ratio of 11.5% (2019: 11.5%) and tier 1 capital adequacy ratio of 9.5% (2019: 9.5%), based on the minimum regulatory requirements.

The following table shows the change to each key assumption in the VIU calculation that on its own would reduce the headroom to nil:

Key assumption	Changes to key assumption to reduce headroom to nil
• Long-term profit growth rate	• Decrease by 22 basis points
• Long-term asset growth rate	• Increase by 20 basis points
• Discount rate	• Increase by 26 basis points
• Expected credit losses as a percentage of customer advances	• Increase by 3 basis points
• Risk-weighted assets as a percentage of total assets	• Increase by 136 basis points
• Operating income growth rate	• Decrease by 28 basis points
• Cost-income ratio	• Increase by 77 basis points
• Long-term effective tax rate	• Increase by 216 basis points
• Capital requirements - capital adequacy ratio	• Increase by 26 basis points
• Capital requirements - tier 1 capital adequacy ratio	• Increase by 90 basis points

The following table further illustrates the impact on VIU of reasonably possible changes to key assumptions. This reflects the sensitivity of the VIU to each key assumption on its own and it is possible that more than one favourable and/or unfavourable change may occur at the same time. The selected rates of reasonably possible changes to key assumptions are largely based on external analysts' forecasts, which can change period to period.

Sensitivity of VIU to reasonably possible changes in key assumptions
	Favourable change			Unfavourable change
		Increase in VIU	VIU		Decrease in VIU	VIU
	bps	$bn	$bn	bps	$bn	$bn
At 31 Dec 2020
Long-term profit growth rate	-	-	21.8	(50)	(1.3)	20.5
Long-term asset growth rate	(50)	1.4	23.2	-	-	21.8
Discount rate	-	1.2	23.0	53	(1.2)	20.6
Expected credit losses as a percentage of customer advances	2020 to 2024: 96 2025 onwards: 76	2.3	24.1	2020 to 2024: 122 2025 onwards: 95	(2.1)	19.7
Risk-weighted assets as a percentage of total assets	(40)	0.1	21.9	166	(0.8)	21.0
Operating income growth rate	2	0.2	22.0	(69)	(1.5)	20.3
Cost-income ratio	(149)	1.3	23.1	120	(1.2)	20.6
Long-term effective tax rate	(316)	0.9	22.7	820	(2.2)	19.6
Capital requirements - capital adequacy ratio	-	-	21.8	297	(7.8)	14.0
Capital requirements - tier 1 capital adequacy ratio	-	-	21.8	263	(5.3)	16.5
At 31 Dec 2019
Long-term profit growth rate	-	-	21.5	(50)	(1.3)	20.2
Long-term asset growth rate	(50)	1.4	22.9	-	-	21.5
Discount rate	(54)	1.4	22.9	56	(1.2)	20.3
Expected credit losses as a percentage of customer advances	2019 to 2023: 90 2024 onwards: 70	1.0	22.5	2019 to 2023: 108 2024 onwards: 81	(1.2)	20.3
Risk-weighted assets as a percentage of total assets	(96)	0.4	21.9	12	-	21.5
Operating income growth rate	14	-	21.8	(102)	(1.8)	19.7
Cost-income ratio	(175)	1.0	22.5	95	(1.2)	20.3
Long-term effective tax rate	(352)	1.0	22.5	250	(0.7)	20.8
Capital requirements - capital adequacy ratio	-	-	21.5	337	(8.2)	13.3
Capital requirements - tier 1 capital adequacy ratio	-	-	21.5	322	(6.0)	15.5

Considering the interrelationship of the changes set out in the table above, management estimates that the reasonably possible range of VIU is $18.2bn to $24.2bn (2019: $18.5bn to $22.8bn). The range is based on the favourable/unfavourable change in the earnings in the short- to medium-term, and long-term expected credit losses as a percentage of customer advances as set out in the table above. All other long-term assumptions, the discount rate and the basis of the CMC have been kept unchanged when determining the reasonably possible range of the VIU.

Selected financial information of BoCom

The statutory accounting reference date of BoCom is 31 December. For the year ended 31 December 2020, HSBC included the associate's results on the basis of the financial statements for the 12 months ended 30 September 2020, taking into account changes in the subsequent period from 1 October 2020 to 31 December 2020 that would have materially affected the results.

Selected balance sheet information of BoCom
	At 30 Sep
	2020	2019
	$m	$m
Cash and balances at central banks	121,987	112,239
Loans and advances to banks and other financial institutions	107,334	108,026
Loans and advances to customers	870,728	730,510
Other financial assets	508,328	435,740
Other assets	44,622	40,101
Total assets	1,652,999	1,426,616
Deposits by banks and other financial institutions	273,708	290,492
Customer accounts	1,012,732	868,627
Other financial liabilities	207,110	131,772
Other liabilities	31,105	23,074
Total liabilities	1,524,655	1,313,965
Total equity	128,344	112,651

Reconciliation of BoCom's total shareholders' equity to the carrying amount in HSBC's consolidated financial statements
	At 30 Sep
	2020	2019
	$m	$m
HSBC's share of total shareholders' equity	20,743	18,509
Goodwill and other intangible assets	505	473
Carrying amount	21,248	18,982

Selected income statement information of BoCom
	For the 12 months ended 30 Sep
	2020	2019
	$m	$m
Net interest income	21,994	20,558
Net fee and commission income	6,398	6,411
Change in expected credit losses and other credit impairment charges	(9,698)	(7,479)
Depreciation and amortisation	(2,072)	(1,934)
Tax expense	(858)	(1,636)
Profit for the year	10,261	11,175
Other comprehensive income	(769)	315
Total comprehensive income	9,492	11,490
Dividends received from BoCom	633	613

The Saudi British Bank

The Group's investment in The Saudi British Bank ('SABB') is classified as an associate. In June 2019, the merger between SABB and

Alawwal bank ('Alawwal') became effective, which reduced HSBC's 40% interest in SABB to 29.2%. On 3 December 2020, HSBC purchased additional shares in SABB, which increased the Group's shareholding to 31%. HSBC remains the largest shareholder in SABB. Significant influence in SABB is established via representation on the Board of Directors. Investments in associates are recognised using the equity method of accounting in accordance with IAS 28, as described previously for BoCom.

Impairment testing

At 31 December 2020, the fair value of the Group's investment in SABB of $4.20bn was below the carrying amount of $4.22bn. As a result, the Group performed an impairment test on the carrying amount, which confirmed no impairment. The recoverable amount as determined by a VIU calculation is $4.74bn.

The basis of recoverable amount

The impairment test was performed by comparing the recoverable amount of SABB, determined by a VIU calculation, with its carrying amount. The VIU calculation uses discounted cash flow projections based on management's best estimates of future earnings available to ordinary shareholders prepared in accordance with IAS 36, which requires significant management judgement. A key component to the VIU calculation is management's best estimate of SABB's earnings, which is based on explicit forecasts over the short to medium term. This reflects the uncertainty arising from the current economic outlook. Earnings beyond the short to medium term are then extrapolated in perpetuity using a long-term growth rate to derive a terminal value, which comprises the majority of the VIU. Additionally, management considers other factors (including qualitative factors) to ensure that the inputs to the VIU calculation remain appropriate.

Key assumptions in value-in-use calculation

We used a number of assumptions in our VIU calculation, in accordance with the requirements of IAS 36:

• Long-term profit growth rate: 2.85% for periods after 2024. This does not exceed forecast GDP growth in Saudi Arabia.

• Long-term asset growth rate: 2.85% for periods after 2024. This is the rate that assets are expected to grow to achieve long-term profit growth of 2.85%.

• Discount rate: 10.4%. This is based on a CAPM calculation for Saudi Arabia using market data. Management also compares the rate derived from the CAPM with cost of capital rates from external sources.

• Management's judgement in estimating the cash flows of SABB: Cash flow projections have considered the scale of the entity following the merger with Alawwal, current market conditions and our macroeconomic outlook.

Sensitivity of VIU to reasonably possible changes in key assumptions

At 31 December 2020, the Group's investment in SABB was sensitive to reasonably possible adverse changes in key assumptions supporting the recoverable amount. The most sensitive inputs to the impairment test are set out in the following table. A reasonable change in a single key assumption may not result in impairment, although taken together a combination of reasonable changes in key assumptions could result in a recoverable amount that is lower than the carrying amount.

Key assumption	Reasonably possible change
• Cash flow projections	• Cash flow projections decrease by 15%. This could result in an impairment of $0.2bn.
• Discount rate	• Discount rate increases by 100 basis points. This does not result in impairment.

19	Investments in subsidiaries

Main subsidiaries of HSBC Holdings
	At 31 Dec 2020
	Place of incorporation or registration	HSBC's interest %
	Place of incorporation or registration	HSBC's interest %	Share class
Europe
HSBC Bank plc	England and Wales	100	£1 Ordinary, $0.01 Non-cumulative third Dollar Preference
HSBC UK Bank plc	England and Wales	100	£1 Ordinary
HSBC Continental Europe	France	99.99	€5 Actions
HSBC Trinkaus & Burkhardt AG1	Germany	99.33	Stückaktien no par value
Asia
Hang Seng Bank Limited	Hong Kong	62.14	HK$5 Ordinary
HSBC Bank (China) Company Limited	People's Republic of China	100	CNY1 Ordinary
HSBC Bank Malaysia Berhad	Malaysia	100	RM0.5 Ordinary
HSBC Life (International) Limited	Bermuda	100	HK$1 Ordinary
The Hongkong and Shanghai Banking Corporation Limited	Hong Kong	100	Ordinary no par value
Middle East and North Africa
HSBC Bank Middle East Limited	United Arab Emirates	100	$1 Ordinary and $1 Cumulative Redeemable Preference shares (CRP)
North America
HSBC Bank Canada	Canada	100	Common no par value and Preference no par value
HSBC Bank USA, N.A.	US	100	$100 Common and $0.01 Preference
Latin America
HSBC Mexico, S.A., Institución de Banca Múltiple,Grupo Financiero HSBC	Mexico	99.99	MXN2 Ordinary

1 The Group acquired the remaining minority equity interest in HSBC Trinkaus & Burkhardt AG on 1 February 2021. The Group now owns 100% of this subsidiary.

Details of the debt, subordinated debt and preference shares issued by the main subsidiaries to parties external to the Group are included in Note 25 'Debt securities in issue' and Note 28 'Subordinated liabilities', respectively.

A list of all related undertakings is set out in Note 37. The principal countries of operation are the same as the countries and territories of incorporation except for HSBC Life (International) Limited, which operates mainly in Hong Kong.

HSBC is structured as a network of regional banks and locally incorporated regulated banking entities. Each bank is separately capitalised in accordance with applicable prudential requirements and maintains a capital buffer consistent with the Group's risk appetite for the relevant country or region. HSBC's capital management process is incorporated in the annual operating plan, which is approved by the Board.

HSBC Holdings is the primary provider of equity capital to its subsidiaries and also provides them with non-equity capital where necessary. These investments are substantially funded by HSBC Holdings' issuance of equity and non-equity capital, and by profit retention. The net reduction in investments in subsidiaries was partly due to the impairment of HSBC Overseas Holdings (UK) Limited of $0.4bn.

As part of its capital management process, HSBC Holdings seeks to maintain a balance between the composition of its capital and its investment in subsidiaries. Subject to this, there is no current or foreseen impediment to HSBC Holdings' ability to provide funding for such investments. During 2020, consistent with the Group's capital plan, the Group's subsidiaries did not experience any significant restrictions on paying dividends or repaying loans and advances. Also, there are no foreseen restrictions envisaged with regard to planned dividends or payments. However, the ability of subsidiaries to pay dividends or advance monies to HSBC Holdings depends on, among other things, their respective local regulatory capital and banking requirements, exchange controls, statutory reserves, and financial and operating performance.

The amount of guarantees by HSBC Holdings in favour of other Group entities is set out in Note 32.

Information on structured entities consolidated by HSBC where HSBC owns less than 50% of the voting rights is included in Note 20 'Structured entities'. In each of these cases, HSBC controls and consolidates an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

Subsidiaries with significant non-controlling interests
	2020		2019
Hang Seng Bank Limited
Proportion of ownership interests and voting rights held by non-controlling interests	37.86	%	37.86%
Place of business	Hong Kong		Hong Kong
	$m		$m
Profit attributable to non-controlling interests	843		1,229
Accumulated non-controlling interests of the subsidiary	7,604		7,262
Dividends paid to non-controlling interests	625		720
Summarised financial information:
- total assets	224,483		212,485
- total liabilities	202,907		191,819
- net operating income before changes in expected credit losses and other credit impairment charges	4,568		5,558
- profit for the year	2,230		3,251
- total comprehensive income for the year	2,535		3,461

20	Structured entities

HSBC is mainly involved with both consolidated and unconsolidated structured entities through the securitisation of financial assets, conduits and investment funds, established either by HSBC or a third party.

Consolidated structured entities

Total assets of HSBC's consolidated structured entities, split by entity type
	Conduits	Securitisations	HSBCmanaged funds	Other	Total
	$bn	$bn	$bn	$bn	$bn
At 31 Dec 2020	6.9	11.7	5.3	10.8	34.7
At 31 Dec 2019	8.6	9.6	6.8	6.7	31.7

Conduits

HSBC has established and manages two types of conduits: securities investment conduits ('SICs') and multi-seller conduits.

Securities investment conduits

The SICs purchase highly rated ABSs to facilitate tailored investment opportunities.

• At 31 December 2020, Solitaire, HSBC's principal SIC, held $1.9bn of ABSs (2019: $2.1bn). It is currently funded entirely by commercial paper ('CP') issued to HSBC. At 31 December 2020, HSBC held $2.1bn of CP (2019: $3.2bn).

Multi-seller conduit

HSBC's multi-seller conduit was established to provide access to flexible market-based sources of finance for its clients. Currently, HSBC bears risk equal to the transaction-specific facility offered to the multi-seller conduit, amounting to $9.6bn at 31 December 2020 (2019: $12.4bn). First loss protection is provided by the originator of the assets, and not by HSBC, through transaction-specific credit enhancements. A layer of secondary loss protection is provided by HSBC in the form of programme-wide enhancement facilities.

Securitisations

HSBC uses structured entities to securitise customer loans and advances it originates in order to diversify its sources of funding for asset origination and capital efficiency purposes. The loans and advances are transferred by HSBC to the structured entities for cash or synthetically through credit default swaps, and the structured entities issue debt securities to investors.

HSBC managed funds

HSBC has established a number of money market and non-money market funds. Where it is deemed to be acting as principal rather than agent in its role as investment manager, HSBC controls these funds.

Other

HSBC has entered into a number of transactions in the normal course of business, which include asset and structured finance transactions where it has control of the structured entity. In addition, HSBC is deemed to control a number of third-party managed funds through its involvement as a principal in the funds.

Unconsolidated structured entities

The term 'unconsolidated structured entities' refers to all structured entities not controlled by HSBC. The Group enters into transactions with unconsolidated structured entities in the normal course of business to facilitate customer transactions and for specific investment opportunities.

Nature and risks associated with HSBC interests in unconsolidated structured entities
	Securitisations	HSBC managed funds	Non-HSBC managed funds	Other	Total
Total asset values of the entities ($m)	Securitisations	HSBC managed funds	Non-HSBC managed funds	Other	Total
0-500	86	292	1,430	47	1,855
500-2,000	9	94	733	2	838
2,000-5,000	-	32	389	-	421
5,000-25,000	-	14	311	-	325
25,000+	-	5	41	-	46
Number of entities at 31 Dec 2020	95	437	2,904	49	3,485
	$bn	$bn	$bn	$bn	$bn
Total assets in relation to HSBC's interests in the unconsolidated structured entities	4.4	9.9	17.5	2.1	33.9
- trading assets	-	0.3	3.2	-	3.5
- financial assets designated and otherwise mandatorily measured at fair value	-	8.6	13.8	-	22.4
- loans and advances to customers	4.4	-	-	1.5	5.9
- financial investments	-	1	0.5	-	1.5
- other assets	-	-	-	0.6	0.6
Total liabilities in relation to HSBC's interests in the unconsolidated structured entities	-	-	-	0.3	0.3
- other liabilities	-	-	-	0.3	0.3
Other off-balance sheet commitments	0.1	0.5	4.9	1.2	6.7
HSBC's maximum exposure at 31 Dec 2020	4.5	10.4	22.4	3.6	40.9

Total asset values of the entities ($m)
0-500	91	236	670	70	1,067
500-2,000	12	70	642	7	731
2,000-5,000	-	28	345	-	373
5,000-25,000	-	14	260	-	274
25,000+	-	3	39	2	44
Number of entities at 31 Dec 2019	103	351	1,956	79	2,489
	$bn	$bn	$bn	$bn	$bn
Total assets in relation to HSBC's interests in the unconsolidated structured entities	5.3	9.1	15.1	4.2	33.7
- trading assets	-	0.2	3.5	1.3	5
- financial assets designated and otherwise mandatorily measured at fair value	-	8.4	10.7	-	19.1
- loans and advances to customers	5.3	-	0.4	2.3	8
- financial investments	-	0.5	0.5	-	1
- other assets	-	-	-	0.6	0.6
Total liabilities in relation to HSBC's interests in the unconsolidated structured entities	-	-	-	0.3	0.3
- other liabilities	-	-	-	0.3	0.3
Other off-balance sheet commitments	0.3	0.3	3.9	0.7	5.2
HSBC's maximum exposure at 31 Dec 2019	5.6	9.4	19.0	4.6	38.6

The maximum exposure to loss from HSBC's interests in unconsolidated structured entities represents the maximum loss it could incur as a result of its involvement with these entities regardless of the probability of the loss being incurred.

• For commitments, guarantees and written credit default swaps, the maximum exposure to loss is the notional amount of potential future losses.

• For retained and purchased investments and loans to unconsolidated structured entities, the maximum exposure to loss is the carrying value of these interests at the balance sheet reporting date.

The maximum exposure to loss is stated gross of the effects of hedging and collateral arrangements that HSBC has entered into in order to mitigate the Group's exposure to loss.

Securitisations

HSBC has interests in unconsolidated securitisation vehicles through holding notes issued by these entities. In addition, HSBC has investments in ABSs issued by third-party structured entities.

HSBC managed funds

HSBC establishes and manages money market funds and non-money market investment funds to provide customers with investment opportunities. Further information on funds under management is provided on page 90.

HSBC, as fund manager, may be entitled to receive management and performance fees based on the assets under management. HSBC may also retain units in these funds.

Non-HSBC managed funds

HSBC purchases and holds units of third-party managed funds in order to facilitate business and meet customer needs.

Other

HSBC has established structured entities in the normal course of business, such as structured credit transactions for customers, to provide finance to public and private sector infrastructure projects, and for asset and structured finance transactions.

In addition to the interests disclosed above, HSBC enters into derivative contracts, reverse repos and stock borrowing transactions with structured entities. These interests arise in the normal course of business for the facilitation of third-party transactions and risk management solutions.

HSBC sponsored structured entities

The amount of assets transferred to and income received from such sponsored structured entities during 2020 and 2019 were not significant.

21	Goodwill and intangible assets

		2020	2019
	Footnotes	$m	$m
Goodwill		5,881	5,590
Present value of in-force long-term insurance business		9,435	8,945
Other intangible assets	1	5,127	5,628
At 31 Dec		20,443	20,163

1 Included within other intangible assets is internally generated software with a net carrying value of $4,452m (2019: $4,829m). During the year, capitalisation of internally generated software was $1,934m (2019: $2,086m), impairment was $1,322m (2019: $38m) and amortisation was $1,085m (2019: $947m).

Movement analysis of goodwill
	2020	2019
	$m	$m
Gross amount
At 1 Jan	22,084	22,180
Exchange differences	967	(154)
Other	84	58
At 31 Dec	23,135	22,084
Accumulated impairment losses
At 1 Jan	(16,494)	(9,194)
Impairment losses	(41)	(7,349)
Exchange differences	(719)	49
At 31 Dec	(17,254)	(16,494)
Net carrying amount at 31 Dec	5,881	5,590

Goodwill

Impairment testing

In previous years the Group's annual impairment test in respect of goodwill allocated to each CGU was performed at 1 July. Beginning in 2020 the annual impairment test will be performed as at 1 October to better align the timing of the test with cash flow projections approved by the Board. A review for indicators of impairment is undertaken at each subsequent quarter-end.

Basis of the recoverable amount

The recoverable amount of all CGUs to which goodwill has been allocated was equal to its value in use ('VIU') at each respective testing date. The VIU is calculated by discounting management's cash flow projections for the CGU. At 1 October 2020, all CGUs supporting goodwill had a VIU larger than their respective carrying amounts. The key assumptions used in the VIU calculation for each individually significant CGU that is not impaired are discussed below.

Key assumptions in VIU calculation - significant CGUs at 1 October 2020
	Goodwill at1 Oct2020	Discount rate	Growth ratebeyond initialcash flow	Goodwill at1 Jul2020	Discountrate	Nominalgrowth ratebeyond initialcash flowprojections	Goodwill at 31 Dec 2019	Discountrate	Nominalgrowth ratebeyond initialcash flowprojections
	$m	%	%	$m	%	%	$m	%	%
Cash-generating unit Europe - WPB1	3,582	9.6	1.9	3,496	8.3	3.2	3,464	8.3	1.7

1 CGU tested as Europe - RBWM at 31 December 2019. Details regarding our change in global businesses are set out in Note 10.

At 1 October 2020, aggregate goodwill of $2,059m (1 July 2019: $2,938m; 31 December 2019: $2,126m) had been allocated to CGUs that were not considered individually significant. The Group's CGUs do not carry on their balance sheets any significant intangible assets with indefinite useful lives, other than goodwill.

Management's judgement in estimating the cash flows of a CGU

The cash flow projections for each CGU are based on plans approved by the Board. The Board challenges and endorses planning assumptions in light of internal capital allocation decisions necessary to support our strategy, current market conditions and macroeconomic outlook. For the 1 October 2020 impairment test, cash flow projections until the end of the first quarter of 2025 were considered. As required by IFRSs, estimates of future cash flows exclude estimated cash inflows or outflows that are expected to arise from restructuring initiatives before an entity has a constructive obligation to carry out the plan, and would therefore have recognised a provision for restructuring costs.

Discount rate

The rate used to discount the cash flows is based on the cost of capital assigned to each CGU, which is derived using a capital asset pricing model ('CAPM'). CAPM depends on a number of inputs reflecting financial and economic variables, including the risk-free rate and a premium to reflect the inherent risk of the business being evaluated. These variables are based on the market's assessment of the economic variables and management's judgement. The discount rates for each CGU are refined to reflect the rates of inflation for the countries within which the CGU operates. In addition, for the purposes of testing goodwill for impairment, management supplements this process by comparing the discount rates derived using the internally generated CAPM, with the cost of capital rates produced by external sources for businesses operating in similar markets.

Long-term growth rate

The long-term growth rate is used to extrapolate the cash flows in perpetuity because of the long-term perspective within the Group of business units making up the CGUs. These growth rates reflect inflation for the countries within which the CGU operates or from which it derives revenue.

Sensitivities of key assumptions in calculating VIU

At 31 December 2020, Europe - WPB was sensitive to reasonably possible adverse changes in key assumptions supporting the recoverable amount. In making an estimate of reasonably possible changes to assumptions, management considers the available evidence in respect of each input to the model, such as the external range of discount rates observable, historical performance against forecast and risks attaching to the key assumptions underlying cash flow projections. A reasonable change in one or more of these assumptions could result in an impairment.


Cash-generating unit
Europe - WPB	Cash flow projections	• Level of interest rates and yield curves. • Competitors' position within the market. • Level and change in unemployment rates.	• Uncertain regulatory environment. • Customer remediation and regulatory actions.	• Cash flow projections decrease by 30%.
	Discount rate	• Discount rate used is a reasonable estimate of a suitable market rate for the profile of the business.	• External evidence suggests that the rate used is not appropriate to the business.	• Discount rate increases by 100bps. This does not result in an impairment.

Sensitivity of VIU to reasonably possible changes in key assumptions and changes to current assumptions to achieve nil headroom
	Europe - WPB
In $bn (unless otherwise stated)
At 31 December 2020
Carrying amount	11.1
VIU	16.4
Impact on VIU
100 bps increase in the discount rate - single variable	(2.3)
30% decrease in cash flow projections - single variable	(6.0)
Cumulative impact of all changes	(7.6)
Changes to key assumption to reduce headroom to nil - single variable
Discount rate - bps	271
Cash flows - %	(26.5)

30 June impairment indicators review

At 30 June 2020, we considered the pervasive macroeconomic deterioration caused by the outbreak of Covid-19, along with the impact on forecast profitability in some businesses, to be an indicator of goodwill impairment. As a result, an interim impairment test was performed by comparing the estimated recoverable amount of each CGU carrying goodwill, determined by a VIU calculation, with its carrying amount. At 30 June 2020, the goodwill allocated to Middle East and North Africa - WPB ($41m) was fully impaired. This CGU carried no further significant non-financial assets.

Other intangible assets

Impairment testing

We considered the pervasive macroeconomic deterioration caused by the outbreak of Covid-19, along with the impact of forecast profitability in some businesses, to be indicators of intangible asset impairment during the period. The impairment tests were performed by comparing the net carrying amount of CGUs containing intangible assets with their recoverable amounts. Recoverable amounts were determined by calculating an estimated VIU or fair value, as appropriate, for each CGU. Our cash flow forecasts were updated for changes in the external outlook, although economic and geopolitical risks increase the inherent estimation uncertainty.

We recognised $1.3bn of capitalised software impairment related principally to businesses within HSBC Bank plc, our non-ring-fenced bank in Europe, and to a lesser degree businesses within HSBC USA Inc. This impairment reflected underperformance and deterioration in the future forecasts of these businesses, substantially relating to prior periods in HSBC Bank plc.

Key assumptions in VIU calculation

We used a number of assumptions in our VIU calculation, in accordance with the requirements of IAS 36:

• Management's judgement in estimating future cash flows: We considered past business performance, the scale of the current impact from the Covid-19 outbreak on our operations, current market conditions and our macroeconomic outlook to estimate future earnings. As required by IFRSs, estimates of future cash flows exclude estimated cash inflows or outflows that are expected to arise from restructuring initiatives before an entity has a constructive obligation to carry out the plan, and would therefore have recognised a provision for restructuring costs. For some businesses, this means that the benefit of certain strategic actions are not included in this impairment assessment, including capital releases.

• Long-term growth rates: The long-term growth rate is used to extrapolate the cash flows in perpetuity because of the long-term perspective of the businesses within the Group.

• Discount rates: Rates are based on a CAPM calculation considering market data for the businesses and geographies in which the Group operates. Discount rates ranged from 8.5% to 9.7% for HSBC Bank plc's businesses.

Future software capitalisation

We will continue to invest in digital capabilities to meet our strategic objectives. However, software capitalisation within businesses where impairment was identified will not resume until the performance outlook for each business indicates future profits are sufficient to support capitalisation. The cost of additional software investment in these businesses will be recognised as an operating expense until such time.

Sensitivity of estimates relating to non-financial assets

As explained in Note 1.2(a), estimates of future cash flows for cash-generating units ('CGUs') are made in the review of goodwill and non-financial assets for impairment. Non-financial assets include other intangible assets shown above, and owned property, plant and equipment and right-of-use assets (see Note 22). The most significant sources of estimation uncertainty are in respect of the goodwill balances disclosed above. There are no non-financial asset balances relating to individual CGUs which involve estimation uncertainty that represents a significant risk of resulting in a material adjustment to the results and financial position of the Group within the next financial year. Non-financial assets are widely distributed across CGUs within the legal entities of the Group, including Corporate Centre assets that cannot be allocated to CGUs and are therefore tested for impairment at consolidated level, and the recoverable amounts of other intangible assets, owned property, plant and equipment, and right-of-use assets cannot be lower than individual asset fair values less costs to dispose, where relevant. At HSBC Holdings plc consolidated level, Corporate Centre assets that cannot be allocated to CGUs within the legal entities of the Group were sensitive to reasonably possible adverse changes in cash flow projections and discount rates, which could result in a recoverable amount that is lower than the carrying amount. Corporate Centre non-financial assets include owned property, plant and equipment ($2.1bn), right-of-use assets ($0.6bn) and other intangible assets ($0.5bn). A 12% decrease in cash flow projections or a 110bps increase in the discount rate (from 10.5% to 11.6%) would reduce the current CGU headroom ($27.5bn) to nil.

Present value of in-force long-term insurance business

When calculating the present value of in-force long-term ('PVIF') insurance business, expected cash flows are projected after adjusting for a variety of assumptions made by each insurance operation to reflect local market conditions, and management's judgement of future trends and uncertainty in the underlying assumptions is reflected by applying margins (as opposed to a cost of capital methodology) including valuing the cost of policyholder options and guarantees using stochastic techniques.

Actuarial Control Committees of each key insurance entity meet on a quarterly basis to review and approve PVIF assumptions. All changes to non-economic assumptions, economic assumptions that are not observable and model methodologies must be approved by the Actuarial Control Committee.

Movements in PVIF
		2020	2019
	Footnotes	$m	$m
At 1 Jan		8,945	7,149
Change in PVIF of long-term insurance business		382	1,749
- value of new business written during the year		776	1,225
- expected return	1	(1,003)	(836)
- assumption changes and experience variances (see below)		604	1,378
- other adjustments		5	(18)
Exchange differences and other movements		108	47
At 31 Dec		9,435	8,945

1 'Expected return' represents the unwinding of the discount rate and reversal of expected cash flows for the period.

Assumption changes and experience variances

Included within this line item are:

• $132m (2019: $1,126m), directly offsetting interest rate-driven changes to the valuation of liabilities under insurance contracts;

• $247m (2019: $36m), reflecting the future expected sharing of returns with policyholders on contracts with discretionary participation features ('DPF'), to the extent this sharing is not already included in liabilities under insurance contracts; and

• $225m (2019: $216m), driven by other assumptions changes and experience variances.

Key assumptions used in the computation of PVIF for main life insurance operations

Economic assumptions are set in a way that is consistent with observable market values. The valuation of PVIF is sensitive to observed market movements and the impact of such changes is included in the sensitivities presented below.

	2020		2019
	Hong Kong	France1	Hong Kong	France1
	%	%	%	%
Weighted average risk-free rate	0.71	0.34	1.84	0.44
Weighted average risk discount rate	4.96	1.34	5.44	1.27
Expense inflation	3.00	1.60	3.00	1.70

1 For 2020, the calculation of France's PVIF assumes a risk discount rate of 1.34% (2019: 1.27%) plus a risk margin of $213m (2019: $130m).

Sensitivity to changes in economic assumptions

The Group sets the risk discount rate applied to the PVIF calculation by starting from a risk-free rate curve and adding explicit allowances for risks not reflected in the best-estimate cash flow modelling. Where the insurance operations provide options and guarantees to policyholders, the cost of these options and guarantees is accounted for as a deduction from the PVIF asset, unless the cost of such guarantees is already allowed for as an explicit addition to liabilities under insurance contracts. For further details of these guarantees and the impact of changes in economic assumptions on our insurance manufacturing subsidiaries, see page 193.

Sensitivity to changes in non-economic assumptions

Policyholder liabilities and PVIF are determined by reference to non-economic assumptions, including mortality and/or morbidity, lapse rates and expense rates. For further details on the impact of changes in non-economic assumptions on our insurance manufacturing operations, see page 194.

22	Prepayments, accrued income and other assets

	2020	2019
	$m	$m
Prepayments and accrued income	8,114	9,057
Settlement accounts	17,316	14,744
Cash collateral and margin receivables	59,543	49,148
Assets held for sale	299	123
Bullion	20,151	14,830
Endorsements and acceptances	10,278	10,198
Reinsurers' share of liabilities under insurance contracts (Note 4)	3,448	3,592
Employee benefit assets (Note 5)	10,450	8,280
Right-of-use assets	4,002	4,222
Owned property, plant and equipment	10,412	10,480
Other accounts	12,399	12,006
At 31 Dec	156,412	136,680

Prepayments, accrued income and other assets include $105,469m (2019: $92,979m) of financial assets, the majority of which are measured at amortised cost.

23	Trading liabilities

		2020	2019
	Footnotes	$m	$m
Deposits by banks	1	6,689	4,187
Customer accounts	1	10,681	6,999
Other debt securities in issue (Note 25)		1,582	1,404
Other liabilities - net short positions in securities		56,314	70,580
At 31 Dec		75,266	83,170

1 'Deposits by banks' and 'Customer accounts' include repos, stock lending and other amounts.

24	Financial liabilities designated at fair value

HSBC
		2020	2019
	Footnotes	$m	$m
Deposits by banks and customer accounts	1, 2	19,176	17,660
Liabilities to customers under investment contracts		6,385	5,893
Debt securities in issue (Note 25)		121,034	130,364
Subordinated liabilities (Note 28)		10,844	10,130
Preferred securities (Note 28)		-	419
At 31 Dec		157,439	164,466

1 Structured deposits placed at HSBC Bank USA are insured by the Federal Deposit Insurance Corporation, a US government agency, up to $250,000 per depositor.

2 In 2020, cash prime brokerage balances of $3,889m have been presented as a single balance, resulting in a reclassification from customer accounts at amortised cost to provide more relevant information on the effect of these transactions on the Group's financial position. Comparatives have not been re-presented.

The carrying amount of financial liabilities designated at fair value was $9,333m more than the contractual amount at maturity (2019: $6,120m more). The cumulative amount of change in fair value attributable to changes in credit risk was a loss of $2,542m (2019: loss of $2,877m).

HSBC Holdings
	2020	2019
	$m	$m
Debt securities in issue (Note 25)	19,624	24,687
Subordinated liabilities (Note 28)	6,040	5,616
At 31 Dec	25,664	30,303

The carrying amount of financial liabilities designated at fair value was $3,019m more than the contractual amount at maturity(2019: $2,227m more). The cumulative amount of change in fair value attributable to changes in credit risk was a loss of $1,210m (2019: $1,386m).

25	Debt securities in issue

HSBC
	2020	2019
	$m	$m
Bonds and medium-term notes	176,570	180,969
Other debt securities in issue	41,538	55,354
Total debt securities in issue	218,108	236,323
Included within:
- trading liabilities (Note 23)	(1,582)	(1,404)
- financial liabilities designated at fair value (Note 24)	(121,034)	(130,364)
At 31 Dec	95,492	104,555

HSBC Holdings
	2020	2019
	$m	$m
Debt securities	83,653	81,531
Included within:
- financial liabilities designated at fair value (Note 24)	(19,624)	(24,687)
At 31 Dec	64,029	56,844

26	Accruals, deferred income and other liabilities

	2020	2019
	$m	$m
Accruals and deferred income	10,406	11,808
Settlement accounts	13,008	14,356
Cash collateral and margin payables	65,557	56,646
Endorsements and acceptances	10,293	10,127
Employee benefit liabilities (Note 5)	2,025	1,771
Lease liabilities	4,614	4,604
Other liabilities	22,721	18,844
At 31 Dec	128,624	118,156

Accruals, deferred income and other liabilities include $120,229m (2019: $111,395m) of financial liabilities, the majority of which are measured at amortised cost.

27	Provisions

	Restructuringcosts	Legal proceedingsand regulatorymatters	Customerremediation	Otherprovisions	Total
	$m	$m	$m	$m	$m
Provisions (excluding contractual commitments)
At 1 Jan 2020	356	605	1,646	280	2,887
Additions	698	347	189	222	1,456
Amounts utilised	(322)	(177)	(739)	(125)	(1,363)
Unused amounts reversed	(74)	(75)	(240)	(80)	(469)
Exchange and other movements	13	56	2	8	79
At 31 Dec 2020	671	756	858	305	2,590
Contractual commitments1
At 1 Jan 2020					511
Net change in expected credit loss provision and other movements					577
At 31 Dec 2020					1,088
Total provisions
At 31 Dec 2019					3,398
At 31 Dec 2020					3,678

Provisions (excluding contractual commitments)
At 1 Jan 2019	130	1,128	788	357	2,403
Additions	402	282	1,674	223	2,581
Amounts utilised	(203)	(660)	(837)	(81)	(1,781)
Unused amounts reversed	(34)	(158)	(49)	(108)	(349)
Exchange and other movements	61	13	70	(111)	33
At 31 Dec 2019	356	605	1,646	280	2,887
Contractual commitments1
At 1 Jan 2019					517
Net change in expected credit loss provision and other movements					(6)
At 31 Dec 2019					511
Total provisions
At 31 Dec 2018					2,920
At 31 Dec 2019					3,398

1 Contractual commitments include the provision for contingent liabilities measured under IFRS 9 'Financial Instruments' in respect of financial guarantees and the expected credit loss provision on off-balance sheet guarantees and commitments.

Further details of 'Legal proceedings and regulatory matters' are set out in Note 34. Legal proceedings include civil court, arbitration or tribunal proceedings brought against HSBC companies (whether by way of claim or counterclaim) or civil disputes that may, if not settled, result in court, arbitration or tribunal proceedings. Regulatory matters refer to investigations, reviews and other actions carried out by, or in response to the actions of, regulators or law enforcement agencies in connection with alleged wrongdoing by HSBC.

Customer remediation refers to HSBC's activities to compensate customers for losses or damages associated with a failure to comply with regulations or to treat customers fairly. Customer remediation is often initiated by HSBC in response to customer complaints and/or industry developments in sales practices and is not necessarily initiated by regulatory action. Further details of customer remediation are set out in this note.

At 31 December 2020, $0.3bn (2019: $1.1bn) of the customer remediation provision related to the estimated liability for redress in respect of the possible mis-selling of payment protection insurance ('PPI') policies in previous years. Of the $1.1bn balance at 31 December 2019, $0.6bn has been utilised during 2020 and an unused release of $0.1bn was recognised.

At 31 December 2020, a provision of $0.3bn (2019: $0.3bn) was held relating to the estimated liability for redress payable to customers following a review of historical collections and recoveries practices in the UK.

For further details of the impact of IFRS 9 on undrawn loan commitments and financial guarantees, presented in 'Contractual commitments', see Note 32. This provision results from the adoption of IFRS 9 and has no comparatives. Further analysis of the movement in the expected credit loss provision is disclosed within the 'Reconciliation of allowances for loans and advances to banks and customers including loan commitments and financial guarantees' table on page 136.

28	Subordinated liabilities

HSBC's subordinated liabilities
	2020	2019
	$m	$m
At amortised cost	21,951	24,600
- subordinated liabilities	20,095	22,775
- preferred securities	1,856	1,825
Designated at fair value (Note 24)	10,844	10,549
- subordinated liabilities	10,844	10,130
- preferred securities	-	419
At 31 Dec	32,795	35,149
Issued by HSBC subsidiaries	10,223	12,363
Issued by HSBC Holdings	22,572	22,786

Subordinated liabilities rank behind senior obligations and generally count towards the capital base of HSBC. Capital securities may be called and redeemed by HSBC subject to prior notification to the PRA and, where relevant, the consent of the local banking regulator. If not redeemed at the first call date, coupons payable may reset or become floating rate based on interbank rates. On subordinated liabilities other than floating rate notes, interest is payable at fixed rates of up to 10.176%.

The balance sheet amounts disclosed in the following table are presented on an IFRS basis and do not reflect the amount that the instruments contribute to regulatory capital, principally due to regulatory amortisation and regulatory eligibility limits.

HSBC's subsidiaries subordinated liabilities in issue
					2020	2019
		Footnotes	First call date	Maturity date	$m	$m
Additional tier 1 capital securities guaranteed by HSBC Holdings		1
$900m	10.176% non-cumulative step-up perpetual preferred securities, series 2		Jun 2030		900	900
					900	900
Additional tier 1 capital securities guaranteed by HSBC Bank plc		1
£300m	5.862% non-cumulative step-up perpetual preferred securities	2	Apr 2020		-	420
£700m	5.844% non-cumulative step-up perpetual preferred securities		Nov 2031		956	925
					956	1,345
Tier 2 securities issued by HSBC Bank plc
$750m	Undated floating rate primary capital notes		Jun 1990		750	750
$500m	Undated floating rate primary capital notes		Sep 1990		500	500
$300m	Undated floating rate primary capital notes, series 3		Jun 1992		300	300
$300m	7.65% subordinated notes		-	May 2025	300	300
					1,850	1,850

£300m	6.50% subordinated notes		-	Jul 2023	409	396
£350m	5.375% callable subordinated step-up notes	3	Nov 2025	Nov 2030	583	549
£500m	5.375% subordinated notes		-	Aug 2033	981	875
£225m	6.25% subordinated notes		-	Jan 2041	306	296
£600m	4.75% subordinated notes		-	Mar 2046	812	785
					3,091	2,901
					4,941	4,751
Tier 2 securities issued by The Hongkong and Shanghai Banking Corporation Ltd
$400m	Primary capital undated floating rate notes (third series)		Jul 1991		400	400
					400	400
Tier 2 securities issued by HSBC Bank Malaysia Berhad
MYR500m	5.05% subordinated bonds	7	Nov 2022	Nov 2027	124	122
					124	122
Tier 2 securities issued by HSBC USA Inc.		7
$750m	5.00% subordinated notes	8	-	Sep 2020	-	748
$250m	7.20% subordinated debentures		-	Jul 2097	222	221
	Other subordinated liabilities each less than $150m				200	202
					422	1,171
Tier 2 securities issued by HSBC Bank USA, N.A.
$1,250m	4.875% subordinated notes	8	-	Aug 2020	-	1,246
$1,000m	5.875% subordinated notes	5	-	Nov 2034	497	463
$750m	5.625% subordinated notes	5	-	Aug 2035	533	496
$700m	7.00% subordinated notes		-	Jan 2039	700	700
					1,730	2,905
Tier 2 securities issued by HSBC Finance Corporation
$2,939m	6.676% senior subordinated notes	6,7	-	Jan 2021	509	507

Tier 2 securities issued by HSBC Bank Canada
	Other subordinated liabilities each less than $150.00m		Oct 1996	Nov 2083	9	26
					9	26
Securities issued by other HSBC subsidiaries
Other subordinated liabilities each less than $200m		4			232	236
Subordinated liabilities issued by HSBC subsidiaries at 31 Dec					10,223	12,363

1 See paragraph below, 'Guaranteed by HSBC Holdings or HSBC Bank plc'.

2 HSBC Bank plc exercised the call option on the security in April 2020 and the security was subsequently redeemed.

3 The interest rate payable after November 2025 is the sum of the three-month sterling Libor plus 1.5 percentage points.

4 These securities are included in the capital base of HSBC, a subset of which are included in accordance with the grandfathering provisions under CRR II, with the exception of $109m in relation to securities which matured 31 December 2020, settlement expected in June 2021, which are no longer eligible for inclusion in the capital base of HSBC.

5 HSBC tendered for these securities in November 2019. The principal balance is $358m and $383m respectively. The original notional value of these securities are $1,000m and $750m respectively.

6 HSBC tendered for these securities in 2017. In January 2018, a further tender was conducted. The principal balance is $507m. The original notional of these securities is $2,939m. This instrument matured and settled in January 2021.

7 These securities are ineligible for inclusion in the capital base of HSBC.

8 These securities matured in 2020 and were redeemed.

HSBC Holdings' subordinated liabilities
	2020	2019
	$m	$m
At amortised cost	17,916	18,361
Designated at fair value (Note 24)	6,040	5,616
At 31 Dec	23,956	23,977

HSBC Holdings' subordinated liabilities in issue
			First call	Maturity	2020	2019
		Footnotes	date	date	$m	$m
Tier 2 securities issued by HSBC Holdings
Amounts owed to third parties
$2,000m	4.25% subordinated notes	2,3	-	Mar 2024	2,151	2,076
$1,500m	4.25% subordinated notes	2	-	Aug 2025	1,702	1,611
$1,500m	4.375% subordinated notes	2	-	Nov 2026	1,736	1,626
$488m	7.625% subordinated notes	1	-	May 2032	541	545
$222m	7.35% subordinated notes	1	-	Nov 2032	243	245
$2,000m	6.50% subordinated notes	1	-	May 2036	2,034	2,036
$2,500m	6.50% subordinated notes	1	-	Sep 2037	3,033	2,738
$1,500m	6.80% subordinated notes	1	-	Jun 2038	1,490	1,490
$1,500m	5.25% subordinated notes	2	-	Mar 2044	2,092	1,886

£650m	5.75% subordinated notes	2	-	Dec 2027	1,130	1,059
£650m	6.75% subordinated notes	2	-	Sep 2028	884	855
£750m	7.00% subordinated notes	2	-	Apr 2038	1,157	1,064
£900m	6.00% subordinated notes	2	-	Mar 2040	1,483	1,294

€1,500m	3.0% subordinated notes	2	-	Jun 2025	1,916	1,736
€1,000m	3.125% subordinated notes	2	-	Jun 2028	1,472	1,321
					23,064	21,582
Amounts owed to HSBC undertakings
$900m	10.176% subordinated step-up cumulative notes		Jun 2030	Jun 2040	892	892
					892	892
Other securities issued by HSBC Holdings
Amounts owed to third parties
$1,500m	5.625% contingent convertible securities	4	Nov 2019	Jan 2020	-	1,503
					-	1,503
At 31 Dec					23,956	23,977

1 Amounts owed to third parties represent securities included in the capital base of HSBC as tier 2 securities in accordance with the grandfathering provisions under CRR II. Prior period figures are included on a CRD IV basis.

2 These securities are included in the capital base of HSBC as fully CRR II-compliant tier 2 securities on an end point basis.

3 These subordinated notes are measured at amortised cost in HSBC Holdings, where the interest rate risk is hedged using a fair value hedge, while they are measured at fair value in the Group.

4 This security was called by HSBC Holdings on 22 November 2019 and was redeemed and cancelled on 17 January 2020. Between the date of exercise of the call option and the redemption, this security was considered to be a subordinated liability. Refer to Note 31 for further details on additional tier 1 securities.

Guaranteed by HSBC Holdings or HSBC Bank plc

Capital securities guaranteed by HSBC Holdings or HSBC Bank plc were issued by the Jersey limited partnerships. The proceeds of these were lent to the respective guarantors by the limited partnerships in the form of subordinated notes. They qualify as additional tier 1 capital for HSBC under CRR II by virtue of the application of grandfathering provisions. The capital security guaranteed by HSBC Bank plc also qualifies as additional tier 1 capital for HSBC Bank plc (on a solo and a consolidated basis) under CRR II by virtue of the same grandfathering process.

These preferred securities, together with the guarantee, are intended to provide investors with rights to income and capital distributions and distributions upon liquidation of the relevant issuer that are equivalent to the rights that they would have had if they had purchased non-cumulative perpetual preference shares of the relevant issuer. There are limitations on the payment of distributions if such payments are prohibited under UK banking regulations or other requirements, if a payment would cause a breach of HSBC's capital adequacy requirements, or if HSBC Holdings or HSBC Bank plc has insufficient distributable reserves (as defined).

HSBC Holdings and HSBC Bank plc have individually covenanted that, if prevented under certain circumstances from paying distributions on the preferred securities in full, they will not pay dividends or other distributions in respect of their ordinary shares, or repurchase or redeem their ordinary shares, until the distribution on the preferred securities has been paid in full.

If the consolidated total capital ratio of HSBC Holdings falls below the regulatory minimum required or if the Directors expect it to do so in the near term, provided that proceedings have not been commenced for the liquidation, dissolution or winding up of HSBC Holdings, the holders' interests in the preferred securities guaranteed by HSBC Holdings will be exchanged for interests in preference shares issued by HSBC Holdings that have economic terms which are in all material respects equivalent to the preferred securities and their guarantee.

If the preferred securities guaranteed by HSBC Bank plc are outstanding in November 2048, or if the total capital ratio of HSBC Bank plc (on a solo or consolidated basis) falls below the regulatory minimum required, or if the Directors expect it to do so in the near term, provided that proceedings have not been commenced for the liquidation, dissolution or winding up of HSBC Bank plc, the holders' interests in the preferred security guaranteed by HSBC Bank plc will be exchanged for interests in preference shares issued by HSBC Bank plc that have economic terms which are in all material respects equivalent to the preferred security and its guarantee.

Tier 2 securities

Tier 2 capital securities are either perpetual or dated subordinated securities on which there is an obligation to pay coupons. These capital securities are included within HSBC's regulatory capital base as tier 2 capital under CRR II, either as fully eligible capital or by virtue of the application of grandfathering provisions. In accordance with CRR II, the capital contribution of all tier 2 securities is amortised for regulatory purposes in their final five years before maturity.

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

The table on page 348 provides an analysis of consolidated total assets, liabilities and off-balance sheet commitments by residual contractual maturity at the balance sheet date. These balances are included in the maturity analysis as follows:

• Trading assets and liabilities (including trading derivatives but excluding reverse repos, repos and debt securities in issue) are included in the 'Due not more than 1 month' time bucket, because trading balances are typically held for short periods of time.

• Financial assets and liabilities with no contractual maturity (such as equity securities) are included in the 'Due over 5 years' time bucket. Undated or perpetual instruments are classified based on the contractual notice period, which the counterparty of the instrument is entitled to give. Where there is no contractual notice period, undated or perpetual contracts are included in the 'Due over 5 years' time bucket.

• Non-financial assets and liabilities with no contractual maturity are included in the 'Due over 5 years' time bucket.

• Financial instruments included within assets and liabilities of disposal groups held for sale are classified on the basis of the contractual maturity of the underlying instruments and not on the basis of the disposal transaction.

• Liabilities under insurance contracts are included in the 'Due over 5 years' time bucket. Liabilities under investment contracts are classified in accordance with their contractual maturity. Undated investment contracts are included in the 'Due over 5 years' time bucket, although such contracts are subject to surrender and transfer options by the policyholders.

• Loan and other credit-related commitments are classified on the basis of the earliest date they can be drawn down.

•

HSBC

Maturity analysis of assets, liabilities and off-balance sheet commitments
	Due notmore than1 month	Due over1 monthbut notmore than3 months	Due over3 monthsbut notmore than6 months	Due over6 monthsbut notmore than9 months	Due over9 monthsbut notmore than1 year	Due over1 yearbut notmore than2 years	Due over2 yearsbut notmore than5 years	Due over5 years	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m
Financial assets
Cash and balances at central banks	304,481	-	-	-	-	-	-	-	304,481
Items in the course of collection from other banks	4,094	-	-	-	-	-	-	-	4,094
Hong Kong Government certificates of indebtedness	40,420	-	-	-	-	-	-	-	40,420
Trading assets	228,434	1,778	458	135	67	644	474	-	231,990
Financial assets designated or otherwise mandatorily measured at fair value	3,061	240	466	262	454	1,424	1,992	37,654	45,553
Derivatives	306,561	15	12	14	14	441	424	245	307,726
Loans and advances to banks	51,652	11,283	5,640	3,068	2,284	4,059	3,359	271	81,616
Loans and advances to customers	172,306	70,746	65,838	44,392	38,606	112,440	206,448	327,211	1,037,987
- personal	51,711	9,645	7,918	7,270	7,033	26,318	70,447	275,736	456,078
- corporate and commercial	101,684	55,009	51,755	31,529	28,553	76,225	125,393	47,446	517,594
- financial	18,911	6,092	6,165	5,593	3,020	9,897	10,608	4,029	64,315
Reverse repurchase agreements - non-trading	157,234	44,658	16,655	5,113	1,324	3,058	2,586	-	230,628
Financial investments	47,270	77,450	44,255	14,523	24,112	48,741	100,007	134,335	490,693
Accrued income and other financial assets	93,118	5,951	2,743	475	458	267	444	2,107	105,563
Financial assets at 31 Dec 2020	1,408,631	212,121	136,067	67,982	67,319	171,074	315,734	501,823	2,880,751
Non-financial assets	-	-	-	-	-	-	-	103,413	103,413
Total assets at 31 Dec 2020	1,408,631	212,121	136,067	67,982	67,319	171,074	315,734	605,236	2,984,164
Off-balance sheet commitments received
Loan and other credit-related commitments	60,849	-	-	-	-	-	-	-	60,849
Financial liabilities
Hong Kong currency notes in circulation	40,420	-	-	-	-	-	-	-	40,420
Deposits by banks	60,973	1,396	714	695	197	718	16,757	630	82,080
Customer accounts1	1,533,595	61,376	22,568	9,375	8,418	4,467	2,859	122	1,642,780
- personal	766,631	32,429	15,511	6,276	5,825	3,591	1,976	39	832,278
- corporate and commercial	588,887	22,856	5,963	2,966	2,058	627	777	37	624,171
- financial	178,077	6,091	1,094	133	535	249	106	46	186,331
Repurchase agreements - non-trading	102,633	3,979	2,165	386	675	16	1,035	1,012	111,901
Items in the course of transmission to other banks	4,343	-	-	-	-	-	-	-	4,343
Trading liabilities	70,799	3,377	400	143	185	289	72	1	75,266
Financial liabilities designated at fair value	18,434	7,333	6,973	6,775	6,593	14,182	40,510	56,639	157,439
- debt securities in issue: covered bonds	-	-	-	-	-	1,239	2,918	-	4,157
- debt securities in issue: unsecured	10,762	4,470	5,522	5,604	5,530	10,455	31,710	42,825	116,878
- subordinated liabilities and preferred securities	-	-	-	-	-	-	3,912	6,932	10,844
- other2	7,672	2,863	1,451	1,171	1,063	2,488	1,970	6,882	25,560
Derivatives	300,902	264	198	38	55	237	726	581	303,001
Debt securities in issue	6,552	12,329	14,964	9,764	3,878	9,215	16,618	22,172	95,492
- covered bonds	-	-	28	-	750	1,275	999	-	3,052
- otherwise secured	1,094	1,585	1,001	1,000	-	274	1,640	1,590	8,184
- unsecured	5,458	10,744	13,935	8,764	3,128	7,666	13,979	20,582	84,256
Accruals and other financial liabilities	96,821	9,794	3,886	692	1,174	1,742	3,179	3,053	120,341
Subordinated liabilities	619	-	237	-	12	12	2,658	18,413	21,951
Total financial liabilities at 31 Dec 2020	2,236,091	99,848	52,105	27,868	21,187	30,878	84,414	102,623	2,655,014
Non-financial liabilities	-	-	-	-	-	-	-	124,155	124,155
Total liabilities at 31 Dec 2020	2,236,091	99,848	52,105	27,868	21,187	30,878	84,414	226,778	2,779,169
Off-balance sheet commitments given
Loan and other credit-related commitments	842,974	435	172	243	296	180	299	171	844,770
- personal	235,606	172	27	47	115	125	288	171	236,551
- corporate and commercial	471,410	250	138	194	178	37	11	-	472,218
- financial	135,958	13	7	2	3	18	-	-	136,001

Maturity analysis of assets, liabilities and off-balance sheet commitments (continued)
	Due notmore than1 month	Due over1 monthbut notmore than3 months	Due over3 monthsbut notmore than6 months	Due over6 monthsbut notmore than9 months	Due over9 monthsbut notmore than1 year	Due over1 yearbut notmore than2 years	Due over2 yearsbut notmore than5 years	Due over5 years	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m
Financial assets
Cash and balances at central banks	154,099	-	-	-	-	-	-	-	154,099
Items in the course of collection from other banks	4,956	-	-	-	-	-	-	-	4,956
Hong Kong Government certificates of indebtedness	38,380	-	-	-	-	-	-	-	38,380
Trading assets	252,009	644	412	62	452	152	540	-	254,271
Financial assets designated at fair value	4,846	74	381	200	422	780	2,356	34,568	43,627
Derivatives	241,941	150	24	27	22	112	294	425	242,995
Loans and advances to banks	41,554	7,826	4,877	2,592	2,859	6,848	2,005	642	69,203
Loans and advances to customers	190,675	82,379	61,254	36,005	36,755	106,203	227,811	295,661	1,036,743
- personal	51,893	14,547	8,562	7,245	6,931	22,923	66,761	252,275	431,137
- corporate and commercial	118,585	61,629	45,924	25,006	25,069	71,751	147,139	39,958	535,061
- financial	20,197	6,203	6,768	3,754	4,755	11,529	13,911	3,428	70,545
Reverse repurchase agreements - non-trading	164,741	38,997	17,933	8,226	6,305	2,298	2,362	-	240,862
Financial investments	36,128	64,472	35,795	17,485	18,202	48,427	90,193	132,610	443,312
Accrued income and other financial assets	80,661	5,544	2,532	915	495	432	363	2,037	92,979
Financial assets at 31 Dec 2019	1,209,990	200,086	123,208	65,512	65,512	165,252	325,924	465,943	2,621,427
Non-financial assets	-	-	-	-	-	-	-	93,725	93,725
Total assets at 31 Dec 2019	1,209,990	200,086	123,208	65,512	65,512	165,252	325,924	559,668	2,715,152
Off-balance sheet commitments received
Loan and other credit-related commitments	63,199	-	-	-	-	-	-	-	63,199
Financial liabilities
Hong Kong currency notes in circulation	38,380	-	-	-	-	-	-	-	38,380
Deposits by banks	46,397	4,167	2,773	454	844	2,455	876	1,056	59,022
Customer accounts1	1,287,358	81,038	38,343	11,530	11,342	5,275	4,075	154	1,439,115
- personal	646,843	49,405	29,320	8,484	6,852	3,631	2,646	71	747,252
- corporate and commercial	479,763	24,214	7,162	2,621	3,009	1,119	1,388	41	519,317
- financial	160,752	7,419	1,861	425	1,481	525	41	42	172,546
Repurchase agreements - non-trading	132,042	3,402	1,579	1,882	59	354	2	1,024	140,344
Items in the course of transmission to other banks	4,817	-	-	-	-	-	-	-	4,817
Trading liabilities	82,130	209	265	148	102	287	29	-	83,170
Financial liabilities designated at fair value	12,844	4,667	4,236	4,552	5,196	26,081	43,534	63,356	164,466
- debt securities in issue: covered bonds	-	-	-	-	1,139	-	2,663	1,159	4,961
- debt securities in issue: unsecured	8,884	2,046	2,946	3,757	3,030	22,950	34,753	47,036	125,402
- subordinated liabilities and preferred securities	23	-	-	-	-	-	2,131	8,396	10,550
- other	3,937	2,621	1,290	795	1,027	3,131	3,987	6,765	23,553
Derivatives	237,901	105	73	10	18	68	540	782	239,497
Debt securities in issue	8,183	17,374	12,799	13,152	11,382	14,572	20,048	7,045	104,555
- covered bonds	-	-	-	-	-	749	998	-	1,747
- otherwise secured	2,015	2	248	161	-	219	958	1,663	5,266
- unsecured	6,168	17,372	12,551	12,991	11,382	13,604	18,092	5,382	97,542
Accruals and other financial liabilities	87,796	9,078	3,914	1,244	2,058	1,592	2,823	2,890	111,395
Subordinated liabilities	1,502	-	22	1,993	100	755	424	19,804	24,600
Total financial liabilities at 31 Dec 2019	1,939,350	120,040	64,004	34,965	31,101	51,439	72,351	96,111	2,409,361
Non-financial liabilities	-	-	-	-	-	-	-	113,123	113,123
Total liabilities at 31 Dec 2019	1,939,350	120,040	64,004	34,965	31,101	51,439	72,351	209,234	2,522,484
Off-balance sheet commitments given
Loan and other credit-related commitments	794,336	600	590	313	551	442	458	318	797,608
- personal	221,952	40	39	56	167	208	392	299	223,153
- corporate and commercial	460,569	117	96	52	381	218	66	19	461,518
- financial	111,815	443	455	205	3	16	-	-	112,937

1 'Customer accounts' includes $463,524m (2019: $408,090m) insured by guarantee schemes.

HSBC Holdings

Maturity analysis of assets, liabilities and off-balance sheet commitments (continued)
	Due notmore than1 month	Due over1 monthbut notmore than3 months	Due over3 monthsbut notmore than6 months	Due over6 monthsbut notmore than9 months	Due over9 monthsbut notmore than1 year	Due over1 yearbut notmore than2 years	Due over2 yearsbut notmore than5 years	Due over5 years	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m
Financial assets
Cash at bank and in hand:
- balances with HSBC undertakings	2,913	-	-	-	-	-	-	-	2,913
Derivatives	1,473	-	5	-	-	9	1,131	2,080	4,698
Loans and advances to HSBC undertakings	-	600	120	-	-	312	6,027	3,384	10,443
Financial assets with HSBC undertakings designated and otherwise mandatorily measured at fair value	-	451	-	-	-	4,320	23,203	37,279	65,253
Financial investments	3,701	3,769	2,924	799	3,528	2,764	-	-	17,485
Accrued income and other financial assets	1,015	275	100	33	22	-	-	-	1,445
Total financial assets at 31 Dec 2020	9,102	5,095	3,149	832	3,550	7,405	30,361	42,743	102,237
Non-financial assets	-	-	-	-	-	-	-	160,936	160,936
Total assets at 31 Dec 2020	9,102	5,095	3,149	832	3,550	7,405	30,361	203,679	263,173
Financial liabilities
Amounts owed to HSBC undertakings	-	330	-	-	-	-	-	-	330
Financial liabilities designated at fair value	-	984	859	-	-	3,088	3,810	16,923	25,664
- debt securities in issue	-	984	859	-	-	3,088	2,108	12,585	19,624
- subordinated liabilities and preferred securities	-	-	-	-	-	-	1,702	4,338	6,040
Derivatives	3,052	-	-	-	-	-	-	8	3,060
Debt securities in issue	-	503	1,621	563	-	2,186	24,489	34,667	64,029
Accruals and other financial liabilities	3,769	689	301	57	12	-	1	36	4,865
Subordinated liabilities	-	-	-	-	-	-	4,067	13,849	17,916
31 Dec 2020	6,821	2,506	2,781	620	12	5,274	32,367	65,483	115,864
Non-financial liabilities	-	-	-	-	-	-	-	509	509
Total liabilities at 31 Dec 2020	6,821	2,506	2,781	620	12	5,274	32,367	65,992	116,373
Off-balance sheet commitments given
Undrawn formal standby facilities, credit lines and other commitments to lend	-	-	-	-	-	-	-	-	-

Financial assets
Cash at bank and in hand:
- balances with HSBC undertakings	2,382	-	-	-	-	-	-	-	2,382
Derivatives	596	-	-	-	-	-	230	1,176	2,002
Loans and advances to HSBC undertakings	102	672	120	25	-	600	1,909	6,790	10,218
Loans and advances to HSBC undertakings designated at fair value	-	-	-	-	-	458	24,845	36,661	61,964
Financial investments in HSBC undertakings	2,754	3,493	1,873	2,251	2,721	3,014	-	-	16,106
Accrued income and other financial assets	93	277	97	48	16	12	-	-	543
Total financial assets at 31 Dec 2019	5,927	4,442	2,090	2,324	2,737	4,084	26,984	44,627	93,215
Non-financial assets	-	-	-	-	-	-	-	162,025	162,025
Total assets at 31 Dec 2019	5,927	4,442	2,090	2,324	2,737	4,084	26,984	206,652	255,240
Financial liabilities
Amounts owed to HSBC undertakings	-	464	-	-	-	-	-	-	464
Financial liabilities designated at fair value	-	-	-	-	-	5,651	6,710	17,942	30,303
- debt securities in issue	-	-	-	-	-	5,651	6,710	12,326	24,687
- subordinated liabilities and preferred securities	-	-	-	-	-	-	-	5,616	5,616
Derivatives	1,838	-	-	-	-	20	85	78	2,021
Debt securities in issue	-	-	-	-	-	10,134	23,786	22,924	56,844
Accruals and other financial liabilities	900	574	303	55	10	-	-	35	1,877
Subordinated liabilities	1,503	-	-	-	-	-	2,076	14,782	18,361
Total financial liabilities at 31 Dec 2019	4,241	1,038	303	55	10	15,805	32,657	55,761	109,870
Non-financial liabilities	-	-	-	-	-	-	-	326	326
Total liabilities at 31 Dec 2019	4,241	1,038	303	55	10	15,805	32,657	56,087	110,196
Off-balance sheet commitments given
Undrawn formal standby facilities, credit lines and other commitments to lend	-	-	-	-	-	-	-	-	-

Contractual maturity of financial liabilities

The following table shows, on an undiscounted basis, all cash flows relating to principal and future coupon payments (except for trading liabilities and derivatives not treated as hedging derivatives). For this reason, balances in the following table do not agree directly with those in our consolidated balance sheet. Undiscounted cash flows payable in relation to hedging derivative liabilities are classified according to their contractual maturities. Trading liabilities and derivatives not treated as hedging derivatives are included in the 'Due not more than 1 month' time bucket and not by contractual maturity.

In addition, loans and other credit-related commitments and financial guarantees are generally not recognised on our balance sheet. The undiscounted cash flows potentially payable under loan and other credit-related commitments and financial guarantees are classified on the basis of the earliest date they can be called.

Cash flows payable by HSBC under financial liabilities by remaining contractual maturities
	Due not morethan 1 month	Due over1 month butnot more than3 months	Due over3 months butnot more than1 year	Due over1 year but notmore than5 years	Due over 5 years	Total
	$m	$m	$m	$m	$m	$m
Deposits by banks	61,001	1,442	1,639	17,352	632	82,066
Customer accounts	1,530,584	64,809	40,755	7,720	153	1,644,021
Repurchase agreements - non-trading	102,664	3,984	3,257	1,058	1,017	111,980
Trading liabilities	75,266	-	-	-	-	75,266
Financial liabilities designated at fair value1	18,815	7,556	19,243	59,835	55,475	160,924
Derivatives	300,158	356	579	1,830	2,128	305,051
Debt securities in issue	6,551	12,709	29,520	28,787	24,075	101,642
Subordinated liabilities	739	170	1,102	7,024	28,812	37,847
Other financial liabilities	140,094	9,120	5,113	5,030	2,887	162,244
	2,235,872	100,146	101,208	128,636	115,179	2,681,041
Loan and other credit-related commitments	842,945	434	740	480	171	844,770
Financial guarantees2	18,200	13	93	37	41	18,384
At 31 Dec 2020	3,097,017	100,593	102,041	129,153	115,391	3,544,195
Proportion of cash flows payable in period	87%	3%	3%	4%	3%

Deposits by banks	46,471	4,167	4,227	3,371	1,084	59,320
Customer accounts	1,288,577	81,037	62,105	9,900	191	1,441,810
Repurchase agreements - non-trading	132,156	3,403	3,565	368	1,036	140,528
Trading liabilities	83,170	-	-	-	-	83,170
Financial liabilities designated at fair value	13,447	4,666	14,747	76,155	68,045	177,060
Derivatives	237,897	105	522	1,076	1,691	241,291
Debt securities in issue	8,757	17,374	38,423	36,584	8,177	109,315
Subordinated liabilities	1,847	-	2,908	5,197	27,892	37,844
Other financial liabilities	127,898	9,079	6,792	5,637	2,992	152,398
	1,940,220	119,831	133,289	138,288	111,108	2,442,736
Loan and other credit-related commitments	795,243	601	561	886	317	797,608
Financial guarantees2	20,007	37	102	68	-	20,214
At 31 Dec 2019	2,755,470	120,469	133,952	139,242	111,425	3,260,558
Proportion of cash flows payable in period	85%	4%	4%	4%	3%

1 In 2020, cash prime brokerage balances of $3,889m have been presented as a single balance, resulting in a reclassification from customer accounts at amortised cost to provide more relevant information on the effect of these transactions on the Group's financial position. Comparatives have not been re-presented.

2 Excludes performance guarantee contracts to which the impairment requirements in IFRS 9 are not applied.

HSBC Holdings

HSBC Holdings' primary sources of liquidity are dividends received from subsidiaries, interest on and repayment of intra-Group loans and securities, and interest earned on its own liquid funds. HSBC Holdings also raises funds in the debt capital markets to meet the Group's minimum requirement for own funds and eligible liabilities. HSBC Holdings uses this liquidity to meet its obligations, including interest and principal repayments on external debt liabilities, operating expenses and collateral on derivative transactions.

HSBC Holdings is also subject to contingent liquidity risk by virtue of credit-related commitments and guarantees and similar contracts issued relating to its subsidiaries. Such commitments and guarantees are only issued after due consideration of HSBC Holdings' ability to finance the commitments and guarantees and the likelihood of the need arising.

HSBC Holdings actively manages the cash flows from its subsidiaries to optimise the amount of cash held at the holding company level. During 2020, consistent with the Group's capital plan, the Group's subsidiaries did not experience any significant restrictions on paying dividends or repaying loans and advances. Also, there are no foreseen restrictions envisaged with regard to planned dividends or payments. However, the ability of subsidiaries to pay dividends or advance monies to HSBC Holdings depends on, among other things, their respective local regulatory capital and banking requirements, exchange controls, statutory reserves, and financial and operating performance.

HSBC Holdings currently has sufficient liquidity to meet its present requirements.

Liquidity risk in HSBC Holdings is overseen by Holdings ALCO. This risk arises because of HSBC Holdings' obligation to make payments to debt holders as they fall due and to pay its operating expenses. The liquidity risk related to these cash flows is managed by matching external debt obligations with internal loan cash flows and by maintaining an appropriate liquidity buffer that is monitored by Holdings ALCO.

The balances in the following table are not directly comparable with those on the balance sheet of HSBC Holdings as the table incorporates, on an undiscounted basis, all cash flows relating to principal and future coupon payments (except for derivatives not treated as hedging derivatives). Undiscounted cash flows payable in relation to hedging derivative liabilities are classified according to their contractual maturities. Derivatives not treated as hedging derivatives are included in the 'On demand' time bucket.

In addition, loan commitments and financial guarantees and similar contracts are generally not recognised on our balance sheet. The undiscounted cash flows potentially payable under financial guarantees and similar contracts are classified on the basis of the earliest date on which they can be called.

Cash flows payable by HSBC Holdings under financial liabilities by remaining contractual maturities
		Due not morethan 1 month	Due over 1month but notmore than 3months	Due over 3months butnot more than1 year	Due over 1year but notmore than 5years	Due over5 years	Total
	Footnotes	$m	$m	$m	$m	$m	$m
Amounts owed to HSBC undertakings		-	330	-	-	-	330
Financial liabilities designated at fair value		70	1,109	1,412	9,110	16,104	27,805
Derivatives		3,085	-	2	-	-	3,087
Debt securities in issue		135	760	3,354	31,567	37,103	72,919
Subordinated liabilities		82	156	726	7,513	21,552	30,029
Other financial liabilities		3,769	690	370	-	36	4,865
		7,141	3,045	5,864	48,190	74,795	139,035
Loan commitments		-	-	-	-	-	-
Financial guarantees	1	13,787	-	-	-	-	13,787
At 31 Dec 2020		20,928	3,045	5,864	48,190	74,795	152,822

Amounts owed to HSBC undertakings		-	464	-	-	-	464
Financial liabilities designated at fair value		88	168	784	14,776	18,184	34,000
Derivatives		1,838	-	-	105	78	2,021
Debt securities in issue		128	244	1,137	38,690	25,310	65,509
Subordinated liabilities		1,588	154	718	5,743	21,533	29,736
Other financial liabilities		956	519	365	-	-	1,840
		4,598	1,549	3,004	59,314	65,105	133,570
Loan commitments		-	-	-	-	-	-
Financial guarantees	1	11,061	-	-	-	-	11,061
At 31 Dec 2019		15,659	1,549	3,004	59,314	65,105	144,631

1 Excludes performance guarantee contracts to which the impairment requirements in IFRS 9 are not applied.

30	Offsetting of financial assets and financial liabilities

In the following table, the 'Amounts not set off in the balance sheet' include transactions where:

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

• in the case of derivatives and reverse repurchase/repurchase, stock borrowing/lending and similar agreements, cash and non-cash collateral has been received/pledged.

For risk management purposes, the net amounts of loans and advances to customers are subject to limits, which are monitored and the relevant customer agreements are subject to review and updated, as necessary, to ensure the legal right to set off remains appropriate.

Offsetting of financial assets and financial liabilities
		Amounts subject to enforceable netting arrangements							Amounts not subject to enforceable netting arrangements5	Total
					Amounts not set off in thebalance sheet
		Grossamounts	Amountsoffset	Netamounts inthe balancesheet	Financialinstruments	Non-cashcollateral	Cashcollateral	Netamount
	Footnotes	$m	$m	$m	$m	$m	$m	$m	$m	$m
Financial assets
Derivatives (Note 15)	1	368,057	(69,103)	298,954	(230,758)	(13,766)	(48,154)	6,276	8,772	307,726
Reverse repos, stock borrowing and similar agreements classified as:	2
- trading assets		21,204	(461)	20,743	(709)	(20,030)	-	4	1,534	22,277
- non-trading assets		318,424	(115,678)	202,746	(13,936)	(188,646)	(73)	91	28,258	231,004
Loans and advances to customers	3	30,983	(10,882)	20,101	(17,031)	-	-	3,070	428	20,529
At 31 Dec 2020		738,668	(196,124)	542,544	(262,434)	(222,442)	(48,227)	9,441	38,992	581,536

Derivatives (Note 15)	1	277,261	(41,739)	235,522	(171,371)	(13,095)	(47,404)	3,652	7,473	242,995
Reverse repos, stock borrowing and similar agreements classified as:	2
- trading assets		21,465	(280)	21,185	(1,553)	(19,630)	-	2	165	21,350
- non-trading assets		348,561	(134,772)	213,789	(28,826)	(184,495)	(189)	279	27,549	241,338
Loans and advances to customers	3	33,039	(10,128)	22,911	(18,893)	-	-	4,018	735	23,646
At 31 Dec 2019		680,326	(186,919)	493,407	(220,643)	(217,220)	(47,593)	7,951	35,922	529,329

Financial liabilities
Derivatives (Note 15)	1	364,121	(69,103)	295,018	(230,758)	(21,387)	(37,343)	5,530	7,983	303,001
Repos, stock lending and similar agreements classified as:	2
- trading liabilities		16,626	(461)	16,165	(709)	(15,456)	-	-	159	16,324
- non-trading liabilities		200,999	(115,678)	85,321	(13,936)	(71,142)	(215)	28	26,580	111,901
Customer accounts	4	41,177	(10,882)	30,295	(17,031)	-	-	13,264	13	30,308
At 31 Dec 2020		622,923	(196,124)	426,799	(262,434)	(107,985)	(37,558)	18,822	34,735	461,534

Derivatives (Note 15)	1	275,286	(41,739)	233,547	(171,371)	(20,137)	(37,844)	4,195	5,950	239,497
Repos, stock lending and similar agreements classified as:	2
- trading liabilities		10,494	(280)	10,214	(1,553)	(8,656)	-	5	46	10,260
- non-trading liabilities		232,675	(134,772)	97,903	(28,826)	(68,638)	(357)	82	42,441	140,344
Customer accounts	4	36,750	(10,128)	26,622	(18,893)	-	-	7,729	31	26,653
At 31 Dec 2019		555,205	(186,919)	368,286	(220,643)	(97,431)	(38,201)	12,011	48,468	416,754

1 At 31 December 2020, the amount of cash margin received that had been offset against the gross derivatives assets was $7,899m (2019: $2,350m). The amount of cash margin paid that had been offset against the gross derivatives liabilities was $17,955m (2019: $8,303m).

2 For the amount of repos, reverse repos, stock lending, stock borrowing and similar agreements recognised on the balance sheet within 'Trading assets' $22,277m (2019: $21,350m) and 'Trading liabilities' $16,324m (2019: $10,260m), see the 'Funding sources and uses' table on page 178.

3 At 31 December 2020, the total amount of 'Loans and advances to customers' was $1,037,987m (2019: $1,036,743m), of which $20,101m (2019: $22,911m) was subject to offsetting.

4 At 31 December 2020, the total amount of 'Customer accounts' was $1,642,780m (2019: $1,439,115m), of which $30,295m (2019: $26,622m) was subject to offsetting.

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

31	Called up share capital and other equity instruments

Called up share capital and share premium

HSBC Holdings ordinary shares of $0.50 each, issued and fully paid
		2020		2019
	Footnotes	Number	$m	Number	$m
At 1 Jan		20,638,524,545	10,319	20,360,841,496	10,180
Shares issued under HSBC employee share plans		55,096,555	28	71,588,032	36
Shares issued in lieu of dividends		-	-	341,872,011	171
Less: Shares repurchased and cancelled		-	-	(135,776,994)	(68)
At 31 Dec	1	20,693,621,100	10,347	20,638,524,545	10,319

HSBC Holdings 6.2% non-cumulative US dollar preference shares, Series A
		2020		2019
	Footnotes	Number	$m	Number	$m
At 1 Jan and 31 Dec	2	1,450,000	-	1,450,000	-

HSBC Holdings share premium
	2020	2019
	$m	$m
At 31 Dec	14,277	13,959

Total called up share capital and share premium
	2020	2019
	$m	$m
At 31 Dec	24,624	24,278

1 All HSBC Holdings ordinary shares in issue, excluding 325,273,407 shares held in treasury, confer identical rights, including in respect of capital, dividends and voting.

2 In 2019 this security was included in the capital base of HSBC as additional tier 1 capital in accordance with the CRR II rules, by virtue of the application of grandfathering provisions. This security was called by HSBC Holdings on 10 December 2020 and was redeemed and cancelled on 13 January 2021. Between the date of exercise of the call option and the redemption, this security was considered as an other liability.

HSBC Holdings 6.20% non-cumulative US dollar preference shares, Series A of $0.01

The 6.20% non-cumulative US dollar preference shares, Series A of $0.01 each were redeemed on 13 January 2021.

HSBC Holdings non-cumulative preference share of £0.01

The one non-cumulative sterling preference share of £0.01 ('sterling preference share') has been in issue since 29 December 2010 and is held by a subsidiary of HSBC Holdings. Dividends are paid quarterly at the sole and absolute discretion of the Board. The sterling preference share carries no rights of conversion into ordinary shares of HSBC Holdings and no right to attend or vote at shareholder meetings of HSBC Holdings. These securities can be redeemed by HSBC Holdings at any time, subject to prior approval by the PRA.

Other equity instruments

HSBC Holdings includes three types of additional tier 1 capital securities in its tier 1 capital. Two are presented in this Note and they are the HSBC Holdings non-cumulative preference shares outlined above and the contingent convertible securities described below. These are accounted for as equity because HSBC does not have an obligation to transfer cash or a variable number of its own ordinary shares to holders under any circumstances outside its control. See Note 28 for additional tier 1 securities accounted for as liabilities.

Additional tier 1 capital - contingent convertible securities

HSBC Holdings continues to issue contingent convertible securities that are included in its capital base as fully CRR II-compliant additional tier 1 capital securities on an end point basis. These securities are marketed principally and subsequently allotted to corporate investors and fund managers. The net proceeds of the issuances are typically used for HSBC Holdings' general corporate purposes and to further strengthen its capital base to meet requirements under CRR II. These securities bear a fixed rate of interest until their initial call dates. After the initial call dates, if they are not redeemed, the securities will bear interest at rates fixed periodically in advance for five-year periods based on credit spreads, fixed at issuance, above prevailing market rates. Interest on the contingent convertible securities will be due and payable only at the sole discretion of HSBC Holdings, and HSBC Holdings has sole and absolute discretion at all times to cancel for any reason (in whole or part) any interest payment that would otherwise be payable on any payment date. Distributions will not be paid if they are prohibited under UK banking regulations or if the Group has insufficient reserves or fails to meet the solvency conditions defined in the securities' terms.

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

HSBC's additional tier 1 capital - contingent convertible securities in issue which are accounted for in equity
			First calldate	2020	2019
		Footnotes	First calldate	$m	$m
$1,500m	5.625% perpetual subordinated contingent convertible securities	1	Nov 2019	-	1,494
$2,000m	6.875% perpetual subordinated contingent convertible securities		Jun 2021	2,000	1,998
$2,250m	6.375% perpetual subordinated contingent convertible securities		Sep 2024	2,250	2,244
$2,450m	6.375% perpetual subordinated contingent convertible securities		Mar 2025	2,450	2,460
$3,000m	6.000% perpetual subordinated contingent convertible securities		May 2027	3,000	2,997
$2,350m	6.250% perpetual subordinated contingent convertible securities		Mar 2023	2,350	2,347
$1,800m	6.500% perpetual subordinated contingent convertible securities		Mar 2028	1,800	1,798
$1,500m	4.600% perpetual subordinated contingent convertible securities	2	Jun 2031	1,500	-
€1,500m	5.250% perpetual subordinated contingent convertible securities		Sep 2022	1,945	1,943
€1,000m	6.000% perpetual subordinated contingent convertible securities		Sep 2023	1,123	1,120
€1,250m	4.750% perpetual subordinated contingent convertible securities		Jul 2029	1,422	1,420
£1,000m	5.875% perpetual subordinated contingent convertible securities		Sep 2026	1,301	1,299
SGD1,000m	4.700% perpetual subordinated contingent convertible securities		Jun 2022	723	723
SGD750m	5.000% perpetual subordinated contingent convertible securities		Sep 2023	550	549
At 31 Dec				22,414	22,392

1 This security was called by HSBC Holdings on 22 November 2019 and was redeemed and cancelled on 17 January 2020. Between the date of exercise of the call option and the redemption, this security was considered to be a subordinated liability. See Note 28.

2 This security was issued by HSBC Holdings on 17 December 2020. The first call date commences six calendar months prior to the reset date of17 June 2031.

Shares under option

For details of the options outstanding to subscribe for HSBC Holdings ordinary shares under the HSBC Holdings Savings-Related Share Option Plan (UK), see Note 5.

Aggregate options outstanding under these plans
31 Dec 2020			31 Dec 2019
Number of HSBC Holdings ordinary shares	Usual period of exercise	Exercise price	Number ofHSBC Holdingsordinary shares	Usual period of exercise	Exercise price
130,952,539	2019 to 2026	£2.6270-£5.9640	65,060,681	2018 to 2025	£4.0472-£5.9640

Maximum obligation to deliver HSBC Holdings ordinary shares

At 31 December 2020, the maximum obligation to deliver HSBC Holdings ordinary shares under all of the above option arrangements and the HSBC International Employee Share Purchase Plan, together with GPSP awards, long-term incentive awards and deferred share awards granted under the HSBC Share Plan 2011, was 238,278,952 (2019: 163,567,253). The total number of shares at 31 December 2020 held by employee benefit trusts that may be used to satisfy such obligations to deliver HSBC Holdings ordinary shares was 5,179,531 (2019: 5,397,395).

32	Contingent liabilities, contractual commitments and guarantees

		HSBC		HSBC Holdings1
		2020	2019	2020	2019
	Footnotes	$m	$m	$m	$m
Guarantees and other contingent liabilities:
- financial guarantees		18,384	20,214	13,787	11,061
- performance and other guarantees		78,114	75,933	-	-
- other contingent liabilities		1,219	1,576	119	289
At 31 Dec		97,717	97,723	13,906	11,350
Commitments:	2
- documentary credits and short-term trade-related transactions		7,178	6,316	-	-
- forward asset purchases and forward deposits placed		66,506	56,326	-	-
- standby facilities, credit lines and other commitments to lend		771,086	734,966	-	-
At 31 Dec		844,770	797,608	-	-

1 Guarantees by HSBC Holdings are all in favour of other Group entities.

2 Includes $659,783m of commitments at 31 December 2020 (31 December 2019: $600,029m), to which the impairment requirements in IFRS 9 are applied where HSBC has become party to an irrevocable commitment.

The preceding table discloses the nominal principal amounts of off-balance sheet liabilities and commitments for the Group, which represent the maximum amounts at risk should the contracts be fully drawn upon and the clients default. As a significant portion of guarantees and commitments are expected to expire without being drawn upon, the total of the nominal principal amounts is not indicative of future liquidity requirements. The expected credit loss provision relating to guarantees and commitments under IFRS 9 is disclosed in Note 27.

The majority of the guarantees have a term of less than one year, while guarantees with terms of more than one year are subject to HSBC's annual credit review process.

Contingent liabilities arising from legal proceedings, regulatory and other matters against Group companies are excluded from this note but are disclosed in Notes 27 and 34.

Financial Services Compensation Scheme

The Financial Services Compensation Scheme ('FSCS') provides compensation, up to certain limits, to eligible customers of financial services firms that are unable, or likely to be unable, to pay claims against them. The FSCS may impose a further levy on the Group to the extent the industry levies imposed to date are not sufficient to cover the compensation due to customers in any future possible collapse. The ultimate FSCS levy to the industry as a result of a collapse cannot currently be estimated reliably. It is dependent on various uncertain factors including the potential recoveries of assets by the FSCS, changes in the level of protected products (including deposits and investments) and the population of FSCS members at the time.

Associates

HSBC's share of associates' contingent liabilities, contractual commitments and guarantees amounted to $53.1bn at 31 December 2020 (2019: $46.7bn). No matters arose where HSBC was severally liable.

33	Finance lease receivables

HSBC leases a variety of assets to third parties under finance leases, including transport assets (such as aircraft), property and general plant and machinery. At the end of lease terms, assets may be sold to third parties or leased for further terms. Rentals are calculated to recover the cost of assets less their residual value, and earn finance income.

	2020			2019
	Total futureminimumpayments	Unearnedfinanceincome	Presentvalue	Total future minimum payments	Unearned finance income	Present value
	$m	$m	$m	$m	$m	$m
Lease receivables:
No later than one year	3,108	(257)	2,851	1,674	(157)	1,517
One to two years	2,476	(196)	2,280	1,634	(155)	1,479
Two to three years	2,055	(143)	1,912	1,889	(151)	1,738
Three to four years	1,380	(109)	1,271	1,704	(136)	1,568
Four to five years	787	(80)	707	1,558	(132)	1,426
Later than one year and no later than five years	6,698	(528)	6,170	6,785	(574)	6,211
Later than five years	4,221	(451)	3,770	6,136	(614)	5,522
At 31 Dec	14,027	(1,236)	12,791	14,595	(1,345)	13,250

34	Legal proceedings and regulatory matters

HSBC is party to legal proceedings and regulatory matters in a number of jurisdictions arising out of its normal business operations. Apart from the matters described below, HSBC considers that none of these matters are material. The recognition of provisions is determined in accordance with the accounting policies set out in Note 1. While the outcomes of legal proceedings and regulatory matters are inherently uncertain, management believes that, based on the information available to it, appropriate provisions have been made in respect of these matters as at 31 December 2020 (see Note 27). Where an individual provision is material, the fact that a provision has been made is stated and quantified, except to the extent that doing so would be seriously prejudicial. Any provision recognised does not constitute an admission of wrongdoing or legal liability. It is not practicable to provide an aggregate estimate of potential liability for our legal proceedings and regulatory matters as a class of contingent liabilities.

Bernard L. Madoff Investment Securities LLC

Bernard L. Madoff ('Madoff') was arrested in December 2008 and later pleaded guilty to running a Ponzi scheme. His firm, Bernard L. Madoff Investment Securities LLC ('Madoff Securities'), is being liquidated in the US by a trustee (the 'Trustee').

Various non-US HSBC companies provided custodial, administration and similar services to a number of funds incorporated outside the US whose assets were invested with Madoff Securities. Based on information provided by Madoff Securities as at 30 November 2008, the purported aggregate value of these funds was $8.4bn, including fictitious profits reported by Madoff.

Based on information available to HSBC, the funds' actual transfers to Madoff Securities minus their actual withdrawals from Madoff Securities during the time HSBC serviced the funds are estimated to have totalled approximately $4bn. Various HSBC companies have been named as defendants in lawsuits arising out of Madoff Securities' fraud.

US litigation: The Trustee has brought lawsuits against various HSBC companies and others in the US Bankruptcy Court for the Southern District of New York (the 'US Bankruptcy Court'), seeking recovery of transfers from Madoff Securities to HSBC in an amount not yet pleaded or determined. HSBC and other parties to the actions have moved to dismiss the Trustee's claims. The US Bankruptcy Court granted HSBC's motion to dismiss with respect to certain of the Trustee's claims in November 2016. In February 2019, the US Court of Appeals for the Second Circuit (the 'Second Circuit Court of Appeals') reversed that dismissal. Following the US Supreme Court's denial of certiorari in June 2020, the cases were remanded to the US Bankruptcy Court, where they are now pending.

Fairfield Sentry Limited, Fairfield Sigma Limited and Fairfield Lambda Limited (together, 'Fairfield') (in liquidation since July 2009) have brought a lawsuit in the US against fund shareholders, including HSBC companies that acted as nominees for clients, seeking restitution of redemption payments. In December 2018, the US Bankruptcy Court issued an opinion, which ruled in favour of the defendants' motion to dismiss in respect of certain claims by the liquidators for Fairfield and granted a motion by the liquidators to file amended complaints. As a result of that opinion, all claims against one of the HSBC companies, and certain claims against the remaining HSBC defendants, were dismissed. In May 2019, the liquidators appealed certain issues from the US Bankruptcy Court to the US District Court for the Southern District of New York (the 'New York District Court') and, in January 2020, the liquidators filed amended complaints on the claims remaining in the US Bankruptcy Court. In March 2020, HSBC and other parties to the action moved to dismiss the amended complaints in the US Bankruptcy Court. In December 2020, the US Bankruptcy Court granted in part and denied in part the defendants' motion. This action remains pending in the US Bankruptcy Court and the New York District Court.

UK litigation: The Trustee has filed a claim against various HSBC companies in the High Court of England and Wales, seeking recovery of transfers from Madoff Securities to HSBC in an amount not yet pleaded or determined. The deadline for service of the claim has been extended to September 2021 for UK-based defendants and November 2021 for all other defendants.

Cayman Islands litigation: In February 2013, Primeo Fund ('Primeo') (in liquidation since April 2009) brought an action against HSBC Securities Services Luxembourg ('HSSL') and Bank of Bermuda (Cayman) Limited (now known as HSBC Cayman Limited), alleging breach of contract and breach of fiduciary duty and claiming damages and equitable compensation. The trial concluded in February 2017 and, in August 2017, the court dismissed all claims against the defendants. In September 2017, Primeo appealed to the Court of Appeal of the Cayman Islands and, in June 2019, the Court of Appeal of the Cayman Islands dismissed Primeo's appeal. In August 2019, Primeo filed a notice of appeal to the UK Privy Council, which has listed the first of two possible hearings for April 2021.

Luxembourg litigation: In April 2009, Herald Fund SPC ('Herald') (in liquidation since July 2013) brought an action against HSSL before the Luxembourg District Court, seeking restitution of cash and securities that Herald purportedly lost because of Madoff Securities' fraud, or money damages. The Luxembourg District Court dismissed Herald's securities restitution claim, but reserved Herald's cash restitution claim and its claim for money damages. Herald has appealed this judgment to the Luxembourg Court of Appeal, where the matter is pending. In late 2018, Herald brought additional claims against HSSL and HSBC Bank plc before the Luxembourg District Court, seeking further restitution and damages.

In October 2009, Alpha Prime Fund Limited ('Alpha Prime') brought an action against HSSL before the Luxembourg District Court, seeking the restitution of securities, or the cash equivalent, or money damages. In December 2018, Alpha Prime brought additional claims before the Luxembourg District Court seeking damages against various HSBC companies. These matters are currently pending before the Luxembourg District Court.

In December 2014, Senator Fund SPC ('Senator') brought an action against HSSL before the Luxembourg District Court, seeking restitution of securities, or the cash equivalent, or money damages. In April 2015, Senator commenced a separate action against the Luxembourg branch of HSBC Bank plc asserting identical claims before the Luxembourg District Court. In December 2018, Senator brought additional claims against HSSL and HSBC Bank plc Luxembourg branch before the Luxembourg District Court, seeking restitution of Senator's securities or money damages. These matters are currently pending before the Luxembourg District Court.

Ireland litigation: In November 2013, Defender Limited brought an action against HSBC Institutional Trust Services (Ireland) Limited ('HTIE') and others, based on allegations of breach of contract and claiming damages and indemnification for fund losses. The trial commenced in October 2018. In December 2018, the Irish High Court issued a judgment in HTIE's favour on a preliminary issue, holding that Defender Limited had no effective claim against HTIE. This judgment concluded the trial without further issues in dispute being heard. In February 2019, Defender Limited appealed the decision. In July 2020, the Irish Supreme Court ruled in part in favour of Defender Limited and returned the case to the High Court for further proceedings, which will resume in April 2021.

There are many factors that may affect the range of possible outcomes, and any resulting financial impact, of the various Madoff-related proceedings described above, including but not limited to the multiple jurisdictions in which the proceedings have been brought. Based upon the information currently available, management's estimate of the possible aggregate damages that might arise as a result of all claims in the various Madoff-related proceedings is up to or exceeding $500m, excluding costs and interest. Due to uncertainties and limitations of this estimate, any possible damages that might ultimately arise could differ significantly from this amount.

Anti-money laundering and sanctions-related matters

In December 2012, HSBC Holdings entered into a number of agreements, including an undertaking with the UK Financial Services Authority (replaced with a Direction issued by the UK Financial Conduct Authority ('FCA') in 2013 and again in 2020) as well as a cease-and-desist order with the US Federal Reserve Board ('FRB'), both of which contained certain forward-looking anti-money laundering ('AML') and sanctions-related obligations. HSBC also agreed to retain an independent compliance monitor (who was, for FCA purposes, a 'Skilled Person' under section 166 of the Financial Services and Markets Act and, for FRB purposes, an 'Independent Consultant') to produce periodic assessments of the Group's AML and sanctions compliance programme. In 2020, HSBC's engagement with the independent compliance monitor, acting in his roles as both Skilled Person and Independent Consultant, concluded. The role of FCA Skilled Person was assigned to a new individual in the second quarter of 2020. Separately, a new FRB Independent Consultant will be appointed pursuant to the cease-and-desist order. The roles of each of the FCA Skilled Person and the FRB Independent Consultant are discussed on page 188.

The FCA is conducting an investigation into HSBC Bank plc's and HSBC UK Bank plc's compliance with UK money laundering regulations and financial crime systems and controls requirements. HSBC continues to cooperate with the FCA's investigation, which is at or nearing completion.

In May 2014, a shareholder derivative action was filed by a shareholder of HSBC Holdings purportedly on behalf of HSBC Holdings, HSBC Bank USA N.A. ('HSBC Bank USA'), HSBC North America Holdings Inc. and HSBC USA Inc. (the 'Nominal Corporate Defendants') in New York state court against certain current and former directors and officers of the Nominal Corporate Defendants (the 'Individual Defendants'). The complaint alleges that the Individual Defendants breached their fiduciary duties to the Nominal Corporate Defendants and caused a waste of corporate assets by allegedly permitting and/or causing the conduct underlying the five-year deferred prosecution agreement with the US Department of Justice ('DoJ'), entered into in December 2012. In November 2015, the New York state court granted the Nominal Corporate Defendants' motion to dismiss, but the appellate court reversed the decision in November 2018 and reinstated the action. In June 2020, the parties reached an agreement to resolve this derivative action, under which HSBC has received a payment from directors and officers liability insurance providers and will continue for a period of time certain corporate governance practices. In November 2020, the court issued an order granting final settlement approval and dismissing the action. This matter is now concluded.

Since November 2014, a number of lawsuits have been filed in federal courts in the US against various HSBC companies and others on behalf of plaintiffs who are, or are related to, victims of terrorist attacks in the Middle East or of cartel violence in Mexico. In each case, it is alleged that the defendants aided and abetted the unlawful conduct of various sanctioned parties in violation of the US Anti-Terrorism Act. Currently, 10 actions remain pending in federal courts in New York or the District of Columbia. In March, September and October 2019, the courts granted HSBC's motions to dismiss in three of these cases. In October 2020, the appellate court affirmed the dismissal of one of the actions on appeal. An appeal remains pending in another case, and plaintiffs are seeking certification to appeal in the third case. HSBC filed motions to dismiss in three further cases, with two of the motions granted in June 2020, and the third granted in November 2020. These dismissals are subject to appeal. The four remaining actions are at a very early stage.

There are many factors that may affect the range of outcomes, and the resulting financial impact, of these matters, which could be significant.

London interbank offered rates, European interbank offered rates and other benchmark interest rate investigations and litigation

Euro interest rate derivatives: In December 2016, the European Commission (the 'EC') issued a decision finding that HSBC, among other banks, engaged in anti-competitive practices in connection with the pricing of euro interest rate derivatives in early 2007. The EC imposed a fine on HSBC based on a one-month infringement. HSBC appealed the decision and, in September 2019, the General Court of the European Union (the 'General Court') issued a decision largely upholding the EC's findings on liability but annulling the fine. HSBC and the EC have both appealed the General Court's decision to the European Court of Justice.

US dollar Libor: Beginning in 2011, HSBC and other panel banks have been named as defendants in a number of private lawsuits filed in the US with respect to the setting of US dollar Libor. The complaints assert claims under various US laws, including US antitrust and racketeering laws, the US Commodity Exchange Act ('US CEA') and state law. The lawsuits include individual and putative class actions, most of which have been transferred and/or consolidated for pre-trial purposes before the New York District Court.

In 2017 and 2018, HSBC reached agreements with plaintiffs to resolve putative class actions brought on behalf of the following five groups of plaintiffs: persons who purchased US dollar Libor-indexed bonds; persons who purchased US dollar Libor-indexed exchange-traded instruments; US-based lending institutions that made or purchased US dollar Libor-indexed loans; persons who purchased US dollar Libor-indexed interest rate swaps and other instruments directly from the defendant banks and their affiliates; and persons who purchased US dollar Libor-indexed interest rate swaps and other instruments from certain financial institutions that are not the defendant banks or their affiliates. The New York District Court has granted final approval of each of the five referenced settlements. Additionally, a number of other US dollar Libor-related actions remain pending against HSBC in the New York District Court and the Second Circuit Court of Appeals.

Intercontinental Exchange ('ICE') Libor: Between January and March 2019, HSBC and other panel banks were named as defendants in three putative class actions filed in the New York District Court on behalf of persons and entities who purchased instruments paying interest indexed to US dollar ICE Libor from a panel bank. The complaints allege, among other things, misconduct related to the suppression of this benchmark rate in violation of US antitrust and state law. In July 2019, the three putative class actions were consolidated, and the plaintiffs filed a consolidated amended complaint. In March 2020, the court granted the defendants' joint motion to dismiss in its entirety. This matter is on appeal.

Singapore interbank offered rate ('Sibor'), Singapore swap offer rate ('SOR') and Australia bank bill swap rate ('BBSW'):In July and August 2016, HSBC and other panel banks were named as defendants in two putative class actions filed in the New York District Court on behalf of persons who transacted in products related to the Sibor, SOR and BBSW benchmark rates. The complaints allege, among other things, misconduct related to these benchmark rates in violation of US antitrust, commodities and racketeering laws, and state law.

In the Sibor/SOR litigation, following a decision on the defendants' motion to dismiss in October 2018, the claims against a number of HSBC entities were dismissed, and The Hongkong and Shanghai Banking Corporation Limited ('HBAP') remained as the only HSBC defendant in this action. In October 2018, HBAP filed a motion for reconsideration of the decision based on the issue of personal jurisdiction. This motion was denied in April 2019. Also in October 2018, the plaintiffs filed a third amended complaint naming only the Sibor panel members, including HBAP, as defendants. The court dismissed the third amended complaint in its entirety in July 2019 against all defendants. In August 2019, the plaintiffs filed an appeal to the Second Circuit Court of Appeals, which remains pending.

In the BBSW litigation, in November 2018, the court dismissed all foreign defendants, including all the HSBC entities, on personal jurisdiction grounds. In April 2019, the plaintiffs filed an amended complaint, which the defendants moved to dismiss. In February 2020, the court again dismissed the plaintiffs' amended complaint against all the HSBC entities.

There are many factors that may affect the range of outcomes, and the resulting financial impact, of these matters, which could be significant.

Foreign exchange-related investigations and litigation

Since at least 2014, the EC has been conducting an investigation into trading activities by a number of banks, including HSBC, in the foreign exchange spot market. HSBC is cooperating with this investigation.

In January 2021, HSBC Holdings exited its three-year deferred prosecution agreement with the Criminal Division of the DoJ (the 'FX DPA'), regarding fraudulent conduct in connection with two particular transactions in 2010 and 2011. HSBC Holdings entered into the FX DPA in January 2018, following the conclusion of the DoJ's investigation into HSBC's historical foreign exchange activities. Under the terms of the FX DPA, the DoJ is expected to file a motion to dismiss the charges deferred by the FX DPA in due course.

In December 2016, Brazil's Administrative Council of Economic Defense initiated an investigation into the onshore foreign exchange market and identified a number of banks, including HSBC, as subjects of its investigation.

In June 2020, the Competition Commission of South Africa, having initially referred a complaint for proceedings before the South African Competition Tribunal in February 2017, filed a revised complaint against 28 financial institutions, including HSBC Bank plc and HSBC Bank USA, for alleged anti-competitive behaviour in the South African foreign exchange market. In August 2020, HSBC Bank plc and HSBC Bank USA filed an application to dismiss the revised complaint, which remains pending.

In late 2013 and early 2014, various HSBC companies and other banks were named as defendants in various putative class actions consolidated in the New York District Court. The consolidated complaint alleged, among other things, that the defendants conspired to manipulate the WM/Reuters foreign exchange benchmark rates. In September 2015, HSBC reached an agreement with the plaintiffs to resolve the consolidated action, and the court granted final approval of the settlement in August 2018.

A putative class action complaint making similar allegations on behalf of retail customers of foreign exchange products was filed in the US District Court for the Northern District of California in 2015, and was subsequently transferred to the New York District Court where it remains pending. In 2017, putative class action complaints making similar allegations on behalf of purported indirect purchasers of foreign exchange products were filed in New York and were subsequently consolidated in the New York District Court. In April 2020, HSBC reached an agreement with the plaintiffs to resolve the indirect purchaser action. In November 2020, the New York District Court granted final approval of the settlement.

In September 2018, various HSBC companies and other banks were named as defendants in two motions for certification of class actions filed in Israel alleging foreign exchange-related misconduct. In July 2019, the Tel Aviv Court allowed the plaintiffs to consolidate their claims and, in September 2019, the plaintiffs filed a motion for certification of the consolidated class action. In August 2020, HSBC Bank plc filed a motion to dismiss and, in January 2021, HSBC Holdings filed a motion seeking to challenge the service of the motion for certification on defendants outside Israel. These motions remain pending.

In November and December 2018, complaints alleging foreign exchange-related misconduct were filed in the New York District Court and the High Court of England and Wales against HSBC and other defendants by certain plaintiffs that opted out of the US class action settlement. In May 2020, the New York District Court granted in part and denied in part the defendants' motion to dismiss the US opt-out actions. These matters remain at an early stage. It is possible that additional civil actions will be initiated against HSBC in relation to its historical foreign exchange activities.

There are many factors that may affect the range of outcomes, and the resulting financial impact, of these matters, which could be significant.

Precious metals fix-related litigation

Gold: Beginning in March 2014, numerous putative class actions were filed in the New York District Court and the US District Courts for the District of New Jersey and the Northern District of California, naming HSBC and other members of The London Gold Market Fixing Limited as defendants. The complaints allege that, from January 2004 to June 2013, the defendants conspired to manipulate the price of gold and gold derivatives for their collective benefit in violation of US antitrust laws, the US CEA and New York state law. The actions were consolidated in the New York District Court. The defendants' motion to dismiss the consolidated action was granted in part and denied in part in October 2016. In June 2017, the court granted the plaintiffs leave to file a third amended complaint, naming a new defendant. In October 2020, HSBC reached a settlement in principle with the plaintiffs to resolve the consolidated action. The settlement remains subject to court approval.

Beginning in December 2015, numerous putative class actions under Canadian law were filed in the Ontario and Quebec Superior Courts of Justice against various HSBC companies and other financial institutions. The plaintiffs allege that, among other things, from January 2004 to March 2014, the defendants conspired to manipulate the price of gold and gold derivatives in violation of the Canadian Competition Act and common law. These actions are ongoing.

Silver: Beginning in July 2014, numerous putative class actions were filed in federal district courts in New York, naming HSBC and other members of The London Silver Market Fixing Limited as defendants. The complaints allege that, from January 2007 to December 2013, the defendants conspired to manipulate the price of silver and silver derivatives for their collective benefit in violation of US antitrust laws, the US CEA and New York state law. The actions were consolidated in the New York District Court. The defendants' motion to dismiss the consolidated action was granted in part and denied in part in October 2016. In June 2017, the court granted the plaintiffs leave to file a third amended complaint, which names several new defendants. The court has denied the pre-existing defendants' request for leave to file a joint motion to dismiss, and discovery is proceeding.

In April 2016, two putative class actions under Canadian law were filed in the Ontario and Quebec Superior Courts of Justice against various HSBC companies and other financial institutions. The plaintiffs in both actions allege that, from January 1999 to August 2014, the defendants conspired to manipulate the price of silver and silver derivatives in violation of the Canadian Competition Act and common law. These actions are ongoing.

Platinum and palladium: Between late 2014 and early 2015, numerous putative class actions were filed in the New York District Court, naming HSBC and other members of The London Platinum and Palladium Fixing Company Limited as defendants. The complaints allege that, from January 2008 to November 2014, the defendants conspired to manipulate the price of platinum group metals ('PGM') and PGM-based financial products for their collective benefit in violation of US antitrust laws and the US CEA. In March 2017, the defendants' motion to dismiss the second amended consolidated complaint was granted in part and denied in part. In June 2017, the plaintiffs filed a third amended complaint. In March 2020, the court granted the defendants' motion to dismiss the third amended complaint but granted the plaintiffs leave to re-plead certain claims. The plaintiffs have filed an appeal.

Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of these matters, including the timing or any possible impact on HSBC, which could be significant.

Film finance litigation

In July and November 2015, two actions were brought by individuals against HSBC Private Bank (UK) Limited ('PBGB') in the High Court of England and Wales seeking damages on various alleged grounds, including breach of duty to the claimants, in connection with their participation in certain Ingenious film finance schemes. These actions are ongoing.

In December 2018, a separate action was brought against PBGB in the High Court of England and Wales by multiple claimants seeking damages for alleged unlawful means conspiracy and dishonest assistance in connection with lending provided by PBGB to third parties in respect of certain Ingenious film finance schemes in which the claimants participated. In June 2019, a similar claim was issued against PBGB in the High Court of England and Wales by additional claimants. These actions are ongoing.

In June 2020, two separate claims were issued against HSBC UK Bank plc (as successor to PBGB's business) by two separate groups of investors in Eclipse film finance schemes in connection with PBGB's role in the development of such schemes. These matters are at an early stage.

In February 2020, a claim was issued against HSBC UK Bank plc (as successor to PBGB's business) by two individuals in relation to the Zeus film finance schemes. The claimants failed to serve the claim on time, and this claim has now lapsed. Separately, in June 2020, HSBC UK Bank plc received an application for disclosure of documents by a law firm acting on behalf of a number of investors in the Zeus film finance schemes. This application was dismissed by the court in November 2020.

It is possible that additional actions or investigations will be initiated against HSBC UK Bank plc as a result of PBGB's historical involvement in the provision of certain film finance-related services.

Based on the facts currently known, it is not practicable to predict the resolution of these matters, including the timing or any possible impact on HSBC, which could be significant.

Other regulatory investigations, reviews and litigation

HSBC Holdings and/or certain of its affiliates are subject to a number of other investigations and reviews by various regulators and competition and law enforcement authorities, as well as litigation, in connection with various matters relating to the firm's businesses and operations, including:

• investigations by tax administration, regulatory and law enforcement authorities in Argentina, India and elsewhere in connection with allegations of tax evasion or tax fraud, money laundering and unlawful cross-border banking solicitation;

• an investigation by the US Commodity Futures Trading Commission regarding interest rate swap transactions related to bond issuances;

• an investigation by the FCA in connection with collections and recoveries operations in the UK;

• an information request from the UK Competition and Markets Authority concerning the financial services sector;

• a putative class action brought in the New York District Court relating to the Mexican government bond market;

• two group actions pending in the US courts and a claim issued in the High Court of England and Wales in connection with HSBC Bank plc's role as a correspondent bank to Stanford International Bank Ltd from 2003 to 2009; and

• litigation brought against various HSBC companies in the US courts relating to residential mortgage-backed securities, based primarily on (a) claims brought against HSBC Bank USA in connection with its role as trustee on behalf of various securitisation trusts; and (b) claims against several HSBC companies seeking that the defendants repurchase various mortgage loans.

There are many factors that may affect the range of outcomes, and the resulting financial impact, of these matters, which could be significant.

35	Related party transactions

Related parties of the Group and HSBC Holdings include subsidiaries, associates, joint ventures, post-employment benefit plans for HSBC employees, Key Management Personnel ('KMP') as defined by IAS 24, close family members of KMP and entities that are controlled or jointly controlled by KMP or their close family members. KMP are defined as those persons having authority and responsibility for planning, directing and controlling the activities of HSBC Holdings. These individuals also constitute 'senior management' for the purposes of the Hong Kong Listing Rules. In applying IAS 24, it was determined that for this financial reporting period all KMP included Directors, former Directors and senior management listed on pages 198 to 203 and that the roles of Chief Legal Officer, Group Head of Audit, Group Chief Human Resources Officer, Group Chief Compliance Officer, Group Company Secretary and Chief Governance Officer did not meet the criteria for KMP as provided for in the standard.

Particulars of transactions with related parties are tabulated below. The disclosure of the year-end balance and the highest amounts outstanding during the year is considered to be the most meaningful information to represent the amount of the transactions and outstanding balances during the year.

Key Management Personnel

Details of Directors' remuneration and interest in shares are disclosed in the 'Directors' remuneration report' on pages 229 to 255. IAS 24 'Related party disclosures' requires the following additional information for key management compensation.

Compensation of Key Management Personnel
	2020	2019	2018
	$m	$m	$m
Short-term employee benefits	39	64	52
Other long-term employee benefits	5	8	6
Share-based payments	20	27	34
Year ended 31 Dec	64	99	92

Shareholdings, options and other securities of Key Management Personnel
	2020	2019
	(000s)	(000s)
Number of options held over HSBC Holdings ordinary shares under employee share plans	27	18
Number of HSBC Holdings ordinary shares held beneficially and non-beneficially	11,916	15,546
At 31 Dec	11,943	15,564

Advances and credits, guarantees and deposit balances during the year with Key Management Personnel
		2020		2019
		Balance at31 Dec	Highest amountsoutstandingduring year	Balance at 31 Dec	Highest amounts outstanding during year
	Footnotes	$m	$m	$m	$m
Key Management Personnel
Advances and credits	1	221	357	283	328
Guarantees		30	55	34	34
Deposits		281	874	268	659

1 Advances and credits entered into by subsidiaries of HSBC Holdings plc during 2020 with Directors and former Directors, disclosed pursuant to section 413 of the Companies Act 2006, totalled $4.7m (2019: $3m).

Some of the transactions were connected transactions as defined by the Rules Governing The Listing of Securities on The Stock Exchange of Hong Kong Limited, but were exempt from any disclosure requirements under the provisions of those rules. The above transactions were made in the ordinary course of business and on substantially the same terms, including interest rates and security, as for comparable transactions with persons of a similar standing or, where applicable, with other employees. The transactions did not involve more than the normal risk of repayment or present other unfavourable features.

Associates and joint ventures

The Group provides certain banking and financial services to associates and joint ventures including loans, overdrafts, interest and non-interest bearing deposits and current accounts. Details of the interests in associates and joint ventures are given in Note 18.

Transactions and balances during the year with associates and joint ventures
	2020		2019
	Highest balance during the year	Balance at31 Dec	Highest balanceduring the year	Balance at31 Dec
	$m	$m	$m	$m
Unsubordinated amounts due from joint ventures	147	147	132	123
Unsubordinated amounts due from associates	4,330	2,942	4,554	2,054
Amounts due to associates	5,466	2,226	2,517	516
Amounts due to joint ventures	102	102	28	28
Guarantees and commitments	433	283	647	407

The above outstanding balances arose in the ordinary course of business and on substantially the same terms, including interest rates and security, as for comparable transactions with third-party counterparties.

Post-employment benefit plans

At 31 December 2020, $3.5bn (2019: $3.9bn re-presented) of HSBC post-employment benefit plan assets were under management by HSBC companies, earning management fees of $13m in 2020 (2019: $8m). The 2019 plan assets under management by HSBC companies have been re-presented to exclude $1.5bn of assets identified to be managed by third parties. At 31 December 2020, HSBC's post-employment benefit plans had placed deposits of $452m (2019: $530m) with its banking subsidiaries, earning interest payable to the schemes of nil (2019: $0.3m). The above outstanding balances arose from the ordinary course of business and on substantially the same terms, including interest rates and security, as for comparable transactions with third-party counterparties.

The combined HSBC Bank (UK) Pension Scheme enters into swap transactions with HSBC to manage inflation and interest rate sensitivity of its liabilities and selected assets. At 31 December 2020, the gross notional value of the swaps was $7.7bn (2019: $9.9bn); these swaps had a positive fair value to the scheme of $1.0bn (2019: $1.2bn); and HSBC had delivered collateral of $1.0bn (2019: $1.2bn) to the scheme in respect of these arrangements. All swaps were executed at prevailing market rates and within standard market bid/offer spreads.

HSBC Holdings

Details of HSBC Holdings' subsidiaries are shown in Note 37.

Transactions and balances during the year with subsidiaries
	2020		2019
	Highest balance during the year	Balance at31 Dec	Highest balanceduring the year	Balance at31 Dec
	$m	$m	$m	$m
Assets
Cash and balances with HSBC undertakings	5,476	2,913	5,029	2,382
Financial assets with HSBC undertakings designated and otherwise mandatorily measured at fair value	65,253	65,253	61,964	61,964
Derivatives	5,784	4,698	3,902	2,002
Loans and advances to HSBC undertakings	10,785	10,443	43,436	10,218
Prepayments, accrued income and other assets	1,838	1,363	655	480
Investments in subsidiaries	161,546	160,660	163,258	161,473
Total related party assets at 31 Dec	250,682	245,330	278,244	238,519
Liabilities
Amounts owed to HSBC undertakings	581	330	1,553	464
Derivatives	3,376	3,060	2,183	2,021
Accruals, deferred income and other liabilities	2,737	1,936	-	-
Subordinated liabilities	892	892	892	892
Total related party liabilities at 31 Dec	7,586	6,218	4,628	3,377
Guarantees and commitments	15,661	13,787	11,541	11,061

Some employees of HSBC Holdings are members of the HSBC Bank (UK) Pension Scheme, which is sponsored by a separate Group company. HSBC Holdings incurs a charge for these employees equal to the contributions paid into the scheme on their behalf. Disclosure in relation to the scheme is made in Note 5.

36	Events after the balance sheet date

An interim dividend for 2020 of $0.15 per ordinary share (a distribution of approximately $3,055m) was declared by the Directors after31 December 2020. HSBC Holdings called $1,450m 6.20% non-cumulative US dollar preference shares on 10 December 2020. The security was redeemed and cancelled on 13 January 2021. These accounts were approved by the Board of Directors on 23 February 2021 and authorised for issue.

37	HSBC Holdings' subsidiaries, joint ventures and associates

In accordance with section 409 of the Companies Act 2006 a list of HSBC Holdings plc subsidiaries, joint ventures and associates, the registered office addresses and the effective percentages of equity owned at 31 December 2020 are disclosed below.

Unless otherwise stated, the share capital comprises ordinary or common shares that are held by Group subsidiaries. The ownership percentage is provided for each undertaking. The undertakings below are consolidated by HSBC unless otherwise indicated.

Subsidiaries

Subsidiaries	% of share class held by immediate parent company (or by the Group where this varies)		Footnotes
452 TALF Plus ABS Opportunities SPV LLC	100.00		13
452 TALF SPV LLC	100.00		13
Almacenadora Banpacifico S.A. (In Liquidation)	99.99		14
Assetfinance December (F) Limited	100.00		15
Assetfinance December (H) Limited	100.00		16
Assetfinance December (M) Limited (In Liquidation)	100.00		17
Assetfinance December (P) Limited	100.00		16
Assetfinance December (R) Limited	100.00		16
Assetfinance June (A) Limited	100.00		16
Assetfinance June (D) Limited	100.00		15
Assetfinance Limited	100.00		16
Assetfinance March (B) Limited	100.00		18
Assetfinance March (D) Limited	100.00		15
Assetfinance March (F) Limited	100.00		16
Assetfinance September (F) Limited	100.00		16
Assetfinance September (G) Limited	100.00		15
B&Q Financial Services Limited	100.00		16
Banco HSBC S.A.	100.00		19
Banco Nominees (Guernsey) Limited	100.00		20
Banco Nominees 2 (Guernsey) Limited	100.00		20
Banco Nominees Limited	100.00		21
Beau Soleil Limited Partnership	N/A		0, 22
Beijing Miyun HSBC Rural Bank Company Limited	100.00		10, 23
Billingsgate Nominees Limited (In Liquidation)	100.00		24
Canada Crescent Nominees (UK) Limited	100.00		16
Canada Square Nominees (UK) Limited	100.00		16
Capco/Cove, Inc.	100.00		25
Card-Flo #1, Inc.	100.00		13
Card-Flo #3, Inc.	100.00		13
CC&H Holdings LLC	100.00		26
CCF HOLDING (LIBAN) S.A.L. (In Liquidation)	74.99		27
Charterhouse Administrators ( D.T.) Limited	100.00	(99.99)	16
Charterhouse Management Services Limited	100.00	(99.99)	16
Charterhouse Pensions Limited	100.00		16
Chongqing Dazu HSBC Rural Bank Company Limited	100.00		10, 28
Chongqing Fengdu HSBC Rural Bank Company Limited	100.00		10, 29
Chongqing Rongchang HSBC Rural Bank Company Limited	100.00		10, 30
COIF Nominees Limited	N/A		0, 16
Cordico Management AG (In Liquidation)	100.00		31
Corsair IV Financial Services Capital Partners-B, LP	N/A		0, 185
Dalian Pulandian HSBC Rural Bank Company Limited	100.00		10, 32
Decision One Mortgage Company, LLC	N/A		0, 33
Dem 9	100.00	(99.99)	4, 34
Dempar 1	100.00	(99.99)	4, 34
Desarrollo Turistico, S.A. de C.V. (In Liquidation)	100.00	(99.99)	14
Electronic Data Process México, S.A. de C.V.	100.00		14
Equator Holdings Limited (In Liquidation)	100.00		17
Eton Corporate Services Limited	100.00		20
Far East Leasing SA (In Dissolution)	100.00		35
Flandres Contentieux S.A.	100.00	(99.99)	34
Foncière Elysées	100.00	(99.99)	34
Fujian Yongan HSBC Rural Bank Company Limited	100.00		10, 36
Fulcher Enterprises Company Limited	100.00	(62.14)	37
Fundacion HSBC, A.C.	100.00	(99.99)	9, 14
Giller Ltd.	100.00		25
GPIF Co-Investment, LLC	N/A		0, 13

Subsidiaries	% of share class held by immediate parent company (or by the Group where this varies)		Footnotes
Griffin International Limited	100.00		16
Grundstuecksgesellschaft Trinkausstrasse Kommanditgesellschaft	N/A		0, 38
Grupo Financiero HSBC, S. A. de C. V.	99.99		14
Guangdong Enping HSBC Rural Bank Company Limited	100.00		10, 39
Guangzhou HSBC Real Estate Company Ltd	100.00		40
Hang Seng (Nominee) Limited	100.00	(62.14)	37
Hang Seng Bank (China) Limited	100.00	(62.14)	41
Hang Seng Bank (Trustee) Limited	100.00	(62.14)	37
Hang Seng Bank Limited	62.14		37
Hang Seng Bullion Company Limited	100.00	(62.14)	37
Hang Seng Credit Limited	100.00	(62.14)	37
Hang Seng Data Services Limited	100.00	(62.14)	37
Hang Seng Finance Limited	100.00	(62.14)	37
Hang Seng Financial Information Limited	100.00	(62.14)	37
Hang Seng Indexes (Netherlands) B.V.	100.00	(62.14)	42
Hang Seng Indexes Company Limited	100.00	(62.14)	37
Hang Seng Insurance Company Limited	100.00	(62.14)	37
Hang Seng Investment Management Limited	100.00	(62.14)	37
Hang Seng Investment Services Limited	100.00	(62.14)	37
Hang Seng Life Limited	100.00	(62.14)	37
Hang Seng Real Estate Management Limited	100.00	(62.14)	37
Hang Seng Securities Limited	100.00	(62.14)	37
Hang Seng Security Management Limited	100.00	(62.14)	37
Haseba Investment Company Limited	100.00	(62.14)	37
HFC Bank Limited (In Liquidation)	100.00		17
High Time Investments Limited	100.00	(62.14)	37
Honey Green Enterprises Ltd.	100.00		43
Honey Grey Enterprises Limited	100.00		44
Honey Silver Enterprises Limited	100.00		44
Household International Europe Limited (In Liquidation)	100.00		17
Household Pooling Corporation	100.00		45
Housing (USA) LLP	N/A
HSBC (BGF) Investments Limited	100.00		16
HSBC (General Partner) Limited	100.00		2, 47
HSBC (Guernsey) GP PCC Limited	100.00		20
HSBC (Kuala Lumpur) Nominees Sdn Bhd	100.00		48
HSBC (Malaysia) Trustee Berhad	100.00		49
HSBC (Singapore) Nominees Pte Ltd	100.00		50
HSBC Agency (India) Private Limited	100.00		51
HSBC Alternative Credit Strategies General Partner S.a r.l.	N/A		0, 52
HSBC Alternative Investments Limited	100.00		16
HSBC Amanah Malaysia Berhad	100.00		48
HSBC Americas Corporation (Delaware)	100.00		13
HSBC Argentina Holdings S.A.	100.00		53
HSBC Asia Holdings B.V.	100.00		16
HSBC Asia Holdings Limited	100.00		2, 44
HSBC Asia Pacific Holdings (UK) Limited	100.00		16
HSBC Asset Finance (UK) Limited	100.00		16
HSBC Asset Finance M.O.G. Holdings (UK) Limited	100.00		16
HSBC Asset Management (India) Private Limited	100.00		54
HSBC Assurances Vie (France)	100.00	(99.99)	55
HSBC Australia Holdings Pty Limited	100.00		56
HSBC BANK (CHILE)	100.00		57
HSBC Bank (China) Company Limited	100.00		10, 58
HSBC Bank (General Partner) Limited	100.00		47
HSBC Bank (Mauritius) Limited	100.00		59
HSBC Bank (RR) (Limited Liability Company)	N/A		0, 11, 60
HSBC Bank (Singapore) Limited	100.00		50
HSBC Bank (Taiwan) Limited	100.00		61
HSBC Bank (Uruguay) S.A.	100.00		62
HSBC Bank (Vietnam) Ltd.	100.00		63
HSBC Bank A.S.	100.00		64
HSBC Bank Argentina S.A.	100.00		53
HSBC Bank Armenia cjsc	100.00		65
HSBC Bank Australia Limited	100.00		56
HSBC Bank Bermuda Limited	100.00		21
HSBC Bank Canada	100.00		66
HSBC Bank Capital Funding (Sterling 1) LP	N/A		0, 47
HSBC Bank Capital Funding (Sterling 2) LP	N/A		0, 47
HSBC Bank Egypt S.A.E	99.63	(94.54)	67
HSBC Bank Malaysia Berhad	100.00		48
HSBC Bank Malta p.l.c.	70.03		68
HSBC Bank Middle East Limited	100.00		5, 69
HSBC Bank Middle East Limited Representative Office Morocco SARL (In Liquidation)	100.00		70
HSBC Bank Oman S.A.O.G.	51.00		71
HSBC Bank Pension Trust (UK) Limited	100.00		16
HSBC Bank plc	100.00		16
HSBC Bank USA, National Association	100.00		3, 72
HSBC Branch Nominee (UK) Limited	100.00		15
HSBC Brasil Holding S.A.	100.00		19
HSBC Broking Forex (Asia) Limited	100.00		44
HSBC Broking Futures (Asia) Limited	100.00		44
HSBC Broking Futures (Hong Kong) Limited	100.00		44
HSBC Broking Securities (Asia) Limited	100.00		44
HSBC Broking Securities (Hong Kong) Limited	100.00		44
HSBC Broking Services (Asia) Limited	100.00		44
HSBC Canadian Covered Bond (Legislative) Guarantor Limited Partnership	N/A		0, 73
HSBC Capital (USA), Inc.	100.00		13
HSBC Capital Funding (Dollar 1) L.P.	N/A		0, 47
HSBC Capital Limited	100.00		44
HSBC Card Services Inc.	100.00		13
HSBC Casa de Bolsa, S.A. de C.V., Grupo Financiero HSBC	100.00	(99.99)	14
HSBC Cayman Limited	100.00		74
HSBC Cayman Services Limited	100.00		74
HSBC City Funding Holdings	100.00		16
HSBC Client Holdings Nominee (UK) Limited	100.00		16
HSBC Client Nominee (Jersey) Limited	100.00		75
HSBC Columbia Funding, LLC	N/A		0, 13
HSBC Continental Europe	99.99		34
HSBC Corporate Advisory (Malaysia) Sdn Bhd	100.00		48
HSBC Corporate Finance (Hong Kong) Limited	100.00		44
HSBC Corporate Trustee Company (UK) Limited	100.00		16
HSBC Custody Nominees (Australia) Limited	100.00		56
HSBC Custody Services (Guernsey) Limited	100.00		20
HSBC Daisy Investments (Mauritius) Limited	100.00		76
HSBC Diversified Loan Fund General Partner Sarl	100.00		77
HSBC Electronic Data Processing (Guangdong) Limited	100.00		10, 78
HSBC Electronic Data Processing (Malaysia) Sdn Bhd	100.00		79
HSBC Electronic Data Processing (Philippines), Inc.	99.99		80
HSBC Electronic Data Processing India Private Limited	100.00		81
HSBC Electronic Data Processing Lanka (Private) Limited	100.00		82
HSBC Electronic Data Service Delivery (Egypt) S.A.E.	100.00		83
HSBC Enterprise Investment Company (UK) Limited (In Liquidation)	100.00		17
HSBC Epargne Entreprise (France)	100.00	(99.99)	55
HSBC Equator (UK) Limited (In Liquidation)	100.00		17
HSBC Equipment Finance (UK) Limited	100.00		15
HSBC Equity (UK) Limited	100.00		16
HSBC Europe B.V.	100.00		16
HSBC Executor & Trustee Company (UK) Limited	100.00		15
HSBC Factoring (France)	100.00	(99.99)	34
HSBC Finance (Netherlands)	100.00		2, 16
HSBC Finance Corporation	100.00		13
HSBC Finance Limited	100.00		16
HSBC Finance Mortgages Inc.	100.00		84
HSBC Finance Transformation (UK) Limited	100.00		16
HSBC Financial Services (Lebanon) s.a.l.	99.65		85
HSBC Financial Services (Middle East) Limited (In Liquidation)	100.00		86
HSBC Financial Services (Uruguay) S.A. (In Liquidation)	100.00		87
HSBC FinTech Services (Shanghai) Company Limited	100.00		88
HSBC Germany Holdings GmbH	100.00		38
HSBC Global Asset Management (Bermuda) Limited	100.00		3, 21
HSBC Global Asset Management (Canada) Limited	100.00		66
HSBC Global Asset Management (Deutschland) GmbH	100.00	(99.33)	38
HSBC Global Asset Management (France)	100.00	(99.99)	55
HSBC Global Asset Management (Hong Kong) Limited	100.00		22
HSBC Global Asset Management (International) Limited (In Liquidation)	100.00		89
HSBC Global Asset Management (Japan) K. K.	100.00		90
HSBC Global Asset Management (Malta) Limited	100.00	(70.03)	91
HSBC Global Asset Management (México), S.A. de C.V., Sociedad Operadora de Fondos de Inversión, Grupo Financiero HSBC	100.00	(99.99)	14
HSBC Global Asset Management (Oesterreich) GmbH	100.00	(99.33)	6, 92
HSBC Global Asset Management (Singapore) Limited	100.00		50
HSBC Global Asset Management (Switzerland) AG	100.00	(99.66)	4, 93
HSBC Global Asset Management (Taiwan) Limited	100.00		94
HSBC Global Asset Management (UK) Limited	100.00		16
HSBC Global Asset Management (USA) Inc.	100.00		95
HSBC Global Asset Management Argentina S.A. Sociedad Gerente de Fondos Comunes de Inversión	100.00	(99.99)	96
HSBC Global Asset Management Holdings (Bahamas) Limited	100.00		97
HSBC Global Asset Management Limited	100.00		2, 16
HSBC Global Custody Nominee (UK) Limited	100.00		16
HSBC Global Custody Proprietary Nominee (UK) Limited	100.00		1, 16
HSBC Global Services (Canada) Limited	100.00		98
HSBC Global Services (China) Holdings Limited	100.00		16
HSBC Global Services (Hong Kong) Limited	100.00		44
HSBC Global Services (UK) Limited	100.00		16
HSBC Global Services Limited	100.00		2, 16
HSBC Global Shared Services (India) Private Limited (In Liquidation)	99.99		1, 51
HSBC Group Management Services Limited	100.00		16
HSBC Group Nominees UK Limited	100.00		2, 16
HSBC Holdings B.V.	100.00		16
HSBC IM Pension Trust Limited	100.00		16
HSBC Infrastructure Debt GP 1 S.à r.l.	N/A		0, 52
HSBC Infrastructure Debt GP 2 S.à r.l.	N/A		0, 52
HSBC Infrastructure Limited	100.00		16
HSBC INKA Investment-AG TGV	100.00	(99.33)	12, 99
HSBC Inmobiliaria (Mexico), S.A. de C.V.	100.00	(99.99)	14
HSBC Institutional Trust Services (Asia) Limited	100.00		44
HSBC Institutional Trust Services (Bermuda) Limited	100.00		21
HSBC Institutional Trust Services (Mauritius) Limited	100.00		59
HSBC Institutional Trust Services (Singapore) Limited	100.00		50
HSBC Insurance (Asia) Limited	100.00		100
HSBC Insurance (Asia-Pacific) Holdings Limited	100.00		101
HSBC Insurance (Bermuda) Limited	100.00		21
HSBC Insurance (Singapore) Pte. Limited	100.00		50
HSBC Insurance Agency (USA) Inc.	100.00		95
HSBC Insurance Brokers (Philippines) Inc	99.99		102
HSBC Insurance Holdings Limited	100.00		2, 16
HSBC Insurance SAC 1 (Bermuda) Limited	100.00		21
HSBC Insurance SAC 2 (Bermuda) Limited	100.00		21
HSBC Insurance Services (Lebanon) S.A.L. (In Liquidation)	99.99		103
HSBC Insurance Services Holdings Limited	100.00		16
HSBC International Finance Corporation (Delaware)	100.00		104
HSBC International Trustee (BVI) Limited	100.00		8, 105
HSBC International Trustee (Holdings) Pte. Limited	100.00		50
HSBC International Trustee Limited	100.00		106
HSBC Inversiones S.A.	99.99		57
HSBC InvestDirect (India) Limited	100.00	(99.98)	107
HSBC InvestDirect Financial Services (India) Limited	99.99	(99.98)	107
HSBC InvestDirect Sales & Marketing (India) Limited	98.99	(98.98)	51
HSBC InvestDirect Securities (India) Private Limited	99.99		107
HSBC Investment Bank Holdings B.V.	100.00		16
HSBC Investment Bank Holdings Limited	100.00		16
HSBC Investment Company (Egypt) S.A.E (In Liquidation)	100.00	(97.81)	108
HSBC Investment Company Limited	100.00		2, 16
HSBC Investment Funds (Canada) Inc.	100.00		109
HSBC Investment Funds (Hong Kong) Limited	100.00		22
HSBC Investment Funds (Luxembourg) SA	100.00		52
HSBC Invoice Finance (UK) Limited	100.00		110
HSBC Issuer Services Common Depositary Nominee (UK) Limited	100.00		16
HSBC Issuer Services Depositary Nominee (UK) Limited	100.00		16
HSBC Latin America B.V.	100.00		16
HSBC Latin America Holdings (UK) Limited	100.00		2, 16
HSBC Leasing (Asia) Limited	100.00		44
HSBC Leasing (France)	100.00	(99.99)	34
HSBC Life (Cornell Centre) Limited	100.00		100
HSBC Life (Edwick Centre) Limited	100.00		100
HSBC Life (International) Limited	100.00		21
HSBC Life (Property Investment) Limited	100.00		100
HSBC Life (Property Light) Limited	100.00		100
HSBC Life (Property) Limited	100.00		100
HSBC Life (Tsing Yi Industrial) Limited	100.00		100
HSBC Life (UK) Limited	100.00		16
HSBC Life Assurance (Malta) Limited	100.00	(70.03)	91
HSBC LU Nominees Limited	100.00		16
HSBC Management (Guernsey) Limited	100.00		20
HSBC Markets (USA) Inc.	100.00		13
HSBC Marking Name Nominee (UK) Limited	100.00		16
HSBC Master Trust Trustee Limited	100.00		16
HSBC Mexico, S.A., Institucion de Banca Multiple, Grupo Financiero HSBC	99.99		14
HSBC Middle East Finance Company Limited	100.00	(80.00)	111
HSBC Middle East Holdings B.V.	100.00		2, 112
HSBC Middle East Leasing Partnership	N/A		0, 113
HSBC Middle East Securities L.L.C	N/A		0, 114
HSBC Mortgage Corporation (Canada)	100.00		115
HSBC Mortgage Corporation (USA)	100.00		13
HSBC Nominees (Asing) Sdn Bhd	100.00		48
HSBC Nominees (Hong Kong) Limited	100.00		44
HSBC Nominees (New Zealand) Limited	100.00		116
HSBC Nominees (Tempatan) Sdn Bhd	100.00		48
HSBC North America Holdings Inc.	100.00		3, 13
HSBC Operational Services GmbH	90.10	(89.49)	117
HSBC Overseas Holdings (UK) Limited	100.00		2, 16
HSBC Overseas Investments Corporation (New York)	100.00		118
HSBC Overseas Nominee (UK) Limited	100.00		16
HSBC Participaciones (Argentina) S.A.	100.00	(99.99)	53
HSBC PB Corporate Services 1 Limited	100.00		119
HSBC PB Services (Suisse) SA	100.00		120
HSBC Pension Trust (Ireland) DAC	100.00		121
HSBC Pensiones, S.A.	100.00		14
HSBC PI Holdings (Mauritius) Limited	100.00		59
HSBC Portfoy Yonetimi A.S.	100.00		122
HSBC Preferential LP (UK)	100.00		16
HSBC Private Bank (Luxembourg) S.A.	100.00		52
HSBC Private Bank (Suisse) SA	100.00		123
HSBC Private Bank (UK) Limited	100.00		16
HSBC Private Banking Holdings (Suisse) SA	100.00		120
HSBC Private Banking Nominee 3 (Jersey) Limited	100.00		124
HSBC Private Equity Investments (UK) Limited	100.00		16
HSBC Private Trustee (Hong Kong) Limited	100.00		44
HSBC Private Wealth Services (Canada) Inc.	100.00		109
HSBC Professional Services (India) Private Limited	100.00		125
HSBC Property (UK) Limited	100.00		16
HSBC Property Funds (Holding) Limited	100.00		16
HSBC Provident Fund Trustee (Hong Kong) Limited	100.00		44
HSBC Qianhai Securities Limited	100.00	(51.00)	10, 126
HSBC Real Estate Leasing (France)	100.00	(99.99)	34
HSBC Realty Credit Corporation (USA)	100.00		13
HSBC REGIO Fund General Partner S.à r.l.	100.00		52
HSBC REIM (France)	100.00	(99.99)	55
HSBC Retirement Benefits Trustee (UK) Limited	100.00		1, 2, 16
HSBC Retirement Services Limited	100.00		1, 16
HSBC Savings Bank (Philippines) Inc.	99.99		127
HSBC Securities (Asia) Limited (In Liquidation)	100.00		44
HSBC Securities (Canada) Inc.	100.00		98
HSBC Securities (Egypt) S.A.E.	100.00	(94.65)	67
HSBC Securities (Japan) Limited	100.00		16
HSBC Securities (Singapore) Pte Limited	100.00		50
HSBC Securities (South Africa) (Pty) Limited	100.00		128
HSBC Securities (Taiwan) Corporation Limited	100.00		129
HSBC Securities (USA) Inc.	100.00		13
HSBC Securities and Capital Markets (India) Private Limited	99.99		51
HSBC Securities Asia Nominees Limited (In Liquidation)	100.00		44
HSBC Securities Brokers (Asia) Limited	100.00		44
HSBC Securities Investments (Asia) Limited	100.00		44
HSBC Securities Services (Bermuda) Limited	100.00		21
HSBC Securities Services (Guernsey) Limited	100.00		20
HSBC Securities Services (Ireland) DAC	100.00		121
HSBC Securities Services (Luxembourg) S.A.	100.00		52
HSBC Securities Services Holdings (Ireland) DAC	100.00		121
HSBC Securities Services Nominees Limited	100.00		44
HSBC Seguros de Retiro (Argentina) S.A.	100.00	(99.99)	53
HSBC Seguros de Vida (Argentina) S.A.	100.00	(99.99)	53
HSBC Seguros, S.A de C.V., Grupo Financiero HSBC	100.00	(99.99)	3, 14
HSBC Service Company Germany GmbH	100.00	(99.33)	130
HSBC Service Delivery (Polska) Sp. z o.o.	100.00		131
HSBC Services (France)	100.00	(99.99)	34
HSBC Services Japan Limited	100.00		132
HSBC Services USA Inc.	100.00		133
HSBC Servicios Financieros, S.A. de C.V	100.00	(99.99)	14
HSBC Servicios, S.A. DE C.V., Grupo Financiero HSBC	100.00	(99.99)	14
HSBC SFH (France)	100.00	(99.99)	4, 55
HSBC SFT (C.I.) Limited	100.00		20
HSBC Software Development (Guangdong) Limited	100.00		134
HSBC Software Development (India) Private Limited	100.00		135
HSBC Software Development (Malaysia) Sdn Bhd	100.00		79
HSBC Specialist Investments Limited	100.00		16
HSBC Technology & Services (China) Limited	100.00		136
HSBC Technology & Services (USA) Inc.	100.00		13
HSBC Transaction Services GmbH	100.00	(99.33)	6, 137
HSBC Trinkaus & Burkhardt (International) S.A.	100.00	(99.33)	52
HSBC Trinkaus & Burkhardt AG	99.33		38
HSBC Trinkaus & Burkhardt Gesellschaft fur Bankbeteiligungen mbH	100.00	(99.33)	38
HSBC Trinkaus Europa Immobilien-Fonds Nr. 5 GmbH	100.00	(99.33)	38
HSBC Trinkaus Family Office GmbH	100.00	(99.33)	6, 38
HSBC Trinkaus Immobilien Beteiligungs KG	100.00	(99.33)	38
HSBC Trinkaus Real Estate GmbH	100.00	(99.33)	6, 38
HSBC Trust Company (Canada)	100.00		115
HSBC Trust Company (Delaware), National Association	100.00		104
HSBC Trust Company (UK) Limited	100.00		16
HSBC Trust Company AG (In Liquidation)	100.00		31
HSBC Trustee (C.I.) Limited	100.00		124
HSBC Trustee (Cayman) Limited	100.00		138
HSBC Trustee (Guernsey) Limited	100.00		20
HSBC Trustee (Hong Kong) Limited	100.00		44
HSBC Trustee (Singapore) Limited	100.00		50
HSBC UK Bank plc	100.00		15
HSBC UK Client Nominee Limited	100.00		15
HSBC UK Holdings Limited	100.00		2, 16
HSBC USA Inc.	100.00		118
HSBC Ventures USA Inc.	100.00		13
HSBC Violet Investments (Mauritius) Limited	100.00		76
HSBC Wealth Client Nominee Limited	100.00		1, 15
HSBC Yatirim Menkul Degerler A.S.	100.00		122
HSI Asset Securitization Corporation	100.00		13
HSI International Limited	100.00	(62.14)	37
HSIL Investments Limited	100.00		16
Hubei Macheng HSBC Rural Bank Company Limited	100.00		139
Hubei Suizhou Cengdu HSBC Rural Bank Company Limited	100.00		10, 140
Hubei Tianmen HSBC Rural Bank Company Limited	100.00		141
Hunan Pingjiang HSBC Rural Bank Company Limited	100.00		10, 142
Imenson Limited	100.00	(62.14)	37
Infrared NF China Real Estate Investments LP	N/A		0, 186
INKA Internationale Kapitalanlagegesellschaft mbH	100.00	(99.33)	137
Inmobiliaria Banci, S.A. de C.V.	100.00	(99.68)	14
Inmobiliaria Bisa, S.A. de C.V.	99.98		14
Inmobiliaria Grufin, S.A. de C.V.	100.00	(99.99)	14
Inmobiliaria Guatusi, S.A. de C.V.	100.00	(99.99)	14
James Capel & Co. Limited	100.00		16
James Capel (Nominees) Limited	100.00		16
James Capel (Taiwan) Nominees Limited	100.00		16
John Lewis Financial Services Limited	100.00		16
Keyser Ullmann Limited	100.00	(99.99)	16
Lion Corporate Services Limited	100.00		44
Lion International Corporate Services Limited	100.00		1, 106
Lion International Management Limited	100.00		106
Lion Management (Hong Kong) Limited	100.00		1, 44
Lyndholme Limited	100.00		44
Marks and Spencer Financial Services plc	100.00		143
Marks and Spencer Unit Trust Management Limited	100.00		143
Maxima S.A. AFJP (In Liquidation)	99.98		53
Mexicana de Fomento, S.A. de C.V.	100.00	(99.90)	14
Midcorp Limited	100.00		16
Midland Bank (Branch Nominees) Limited	100.00		15
Midland Nominees Limited	100.00		15
MIL (Cayman) Limited	100.00		74
MW Gestion SA	100.00		53
Promocion en Bienes Raices, S.A. de C.V.	100.00	(99.99)	14
Prudential Client HSBC GIS Nominee (UK) Limited	100.00		16
PT Bank HSBC Indonesia	99.99	(98.93)	144
PT HSBC Sekuritas Indonesia	85.00		145
R/CLIP Corp.	100.00		13
Real Estate Collateral Management Company	100.00		13
Republic Nominees Limited	100.00		20
Republic Overseas Capital Corporation	100.00		95
RLUKREF Nominees (UK) One Limited	100.00		1, 16
RLUKREF Nominees (UK) Two Limited	100.00		1, 16
S.A.P.C. - Ufipro Recouvrement	99.99		34
Saf Baiyun	100.00	(99.99)	4, 34
Saf Guangzhou	100.00	(99.99)	4, 34
Saf Zhu Jiang Shi Ba	100.00	(99.99)	4, 34
Saf Zhu Jiang Shi Er	100.00	(99.99)	4, 34
Saf Zhu Jiang Shi Jiu	100.00	(99.99)	4, 34
Saf Zhu Jiang Shi Liu	100.00	(99.99)	4, 34
Saf Zhu Jiang Shi Qi	100.00	(99.99)	4, 34
Saf Zhu Jiang Shi Wu	100.00	(99.99)	4, 34
SCI HSBC Assurances Immo	100.00	(99.99)	55
Serai Limited	100.00		1, 44
Serai Technology Development (Shanghai) Limited	100.00		10, 147
SFM	100.00	(99.99)	34
SFSS Nominees (Pty) Limited	100.00		128
Shandong Rongcheng HSBC Rural Bank Company Limited	100.00		10, 148
Shenzhen HSBC Development Company Ltd	100.00		149
Sico Limited	100.00		150
SNC Dorique	99.99		1, 9, 151
SNC Les Mercuriales	100.00	(99.99)	1, 9, 34
SNC Les Oliviers D'Antibes	60.00		55
SNC Makala	100.00	(99.99)	1, 9, 34
SNCB/M6 - 2008 A	100.00	(99.99)	34
SNCB/M6-2007 A	100.00	(99.99)	4, 34
SNCB/M6-2007 B	100.00	(99.99)	4, 34
Société Française et Suisse	100.00	(99.99)	34
Somers Dublin DAC	100.00	(99.99)	121
Somers Nominees (Far East) Limited	100.00		21
Sopingest	100.00	(99.99)	34
South Yorkshire Light Rail Limited	100.00		16
St Cross Trustees Limited	100.00		15
Sun Hung Kai Development (Lujiazui III) Limited	100.00		10, 152
Swan National Limited	100.00		16
Tasfiye Halinde HSBC Odeme Sistemleri Bilgisayar Teknolojileri Basin Yayin Ve Musteri Hizmetleri (In Liquidation)	100.00		153
The Hongkong and Shanghai Banking Corporation Limited	100.00		44
The Venture Catalysts Limited	100.00		16
Tooley Street View Limited	100.00		2, 16
Tower Investment Management	100.00		154
Trinkaus Australien Immobilien Fonds Nr. 1 Brisbane GmbH & Co. KG	100.00	(99.33)	38
Trinkaus Australien Immobilien-Fonds Nr. 1 Treuhand-GmbH	100.00	(99.33)	6, 38
Trinkaus Europa Immobilien-Fonds Nr.3 Objekt Utrecht Verwaltungs-GmbH	100.00	(99.33)	38
Trinkaus Immobilien-Fonds Geschaeftsfuehrungs-GmbH	100.00	(99.33)	6, 38
Trinkaus Immobilien-Fonds Verwaltungs-GmbH	100.00	(99.33)	6, 38
Trinkaus Private Equity Management GmbH	100.00	(99.33)	38
Trinkaus Private Equity Verwaltungs GmbH	100.00	(99.33)	6, 38
Tropical Nominees Limited	100.00		74
Turnsonic (Nominees) Limited	100.00		15
Valeurs Mobilières Elysées	100.00	(99.99)	34
Wardley Limited	100.00		44
Wayfoong Nominees Limited	100.00		44
Wayhong (Bahamas) Limited	100.00		97
Westminster House, LLC	N/A		0, 13
Woodex Limited	100.00		21
Yan Nin Development Company Limited	100.00	(62.14)	37

Joint ventures

The undertakings below are joint ventures and equity accounted.

Joint ventures	% of share class held by immediate parent company (or by the Group where this varies)		Footnotes
CCF & Partners Asset Management Limited	100.00	(99.99)	16
Global Payments Technology Mexico S.A. De C.V.	50.00		14
House Network Sdn Bhd	25.00		155
HSBC Life Insurance Company Limited	50.00		156
HSBC Pollination Climate Asset Management Limited	40.00		157
ProServe Bermuda Limited	50.00		158
The London Silver Market Fixing Limited	N/A		0, 1, 159
Vaultex UK Limited	50.00		160

Associates

The undertakings below are associates and equity accounted.

Associates	% of share class held by immediate parent company (or by the Group where this varies)	Footnotes
Bank of Communications Co., Ltd.	19.03	161
Barrowgate Limited	15.31	162
BGF Group PLC	24.56	163
Bud Financial Limited	10.82	1, 164
Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited	26.00	165
CFAC Payment Scheme Limited	33.33	166
Chemi & Cotex (Rwanda) Limited	33.99	1, 167
Chemi & Cotex Kenya Limited	33.99	1, 168
Chemi and Cotex Industries Limited	33.99	169
Contour	10.80	191
Episode Six Limited	9.10	187
EPS Company (Hong Kong) Limited	38.66	44
EURO Secured Notes Issuer	16.66	170
GIE GNIFI	N/A	0, 1, 171
GZHS Research Co Ltd	20.50	172
Hang Seng Qianhai Fund Management Company Limited	43.49	1, 10, 173
HCM Holdings Limited (In Liquidation)	50.99	17
HSBC Canadian Covered Bond (Legislative) GP Inc.	100.00	73
HSBC Jintrust Fund Management Company Limited	49.00	174
HSBC Saudi Arabia, a Saudi closed Joint Stock Company	66.18	175
Icon Brickell LLC (In Liquidation)	N/A	0, 176
Jeppe Star Limited	33.99	177
Liquidity Match LLC	N/A	0, 188
London Precious Metals Clearing Limited	30.00	189
MENA Infrastructure Fund (GP) Ltd	33.33	178
Novo Star Limited	33.99	179
Quantexa Ltd	10.99	146
Services Epargne Entreprise	14.18	180
Simon Group LLC	N/A	0, 190
sino AG	24.77	181
The London Gold Market Fixing Limited	25.00	159
The Saudi British Bank	30.99	182
Trade Information Network	16.67	192
Trinkaus Europa Immobilien-Fonds Nr. 7 Frankfurt Mertonviertel KG	N/A	0, 38
Vizolution Limited	17.95	1, 183
We Trade Innovation Designated Activity Company	8.52	1, 184

Footnotes for Note 37
Description of Shares
0	Where an entity is governed by voting rights, HSBC consolidates when it holds - directly or indirectly - the necessary voting rights to pass resolutions by the governing body. In all other cases, the assessment of control is more complex and requires judgement of other factors, including having exposure to variability of returns, power to direct relevant activities, and whether power is held as an agent or principal. HSBC's consolidation policy is described in Note 1.2(a).
1	Management has determined that these undertakings are excluded from consolidation in the Group accounts as these entities do not meet the definition of subsidiaries in accordance with IFRS. HSBC's consolidation policy is described in Note 1.2(a).
2	Directly held by HSBC Holdings plc
3	Preference Shares
4	Actions
5	Redeemable Preference Shares
6	GmbH Anteil
7	Limited and Unlimited Liability Shares
8	Non-Participating Voting Shares
9	Parts
10	Registered Capital Shares
11	Russian Limited Liability Company Shares
12	Stückaktien

Registered offices
13	c/o The Corporation Trust Company 1209 Orange Street, Wilmington, Delaware, United States of America, 19801
14	Paseo de la Reforma 347 Col. Cuauhtemoc, Mexico, 06500
15	1 Centenary Square, Birmingham, United Kingdom, B1 1HQ
16	8 Canada Square, London, United Kingdom, E14 5HQ
17	Hill House 1 Little New Street, London, United Kingdom, EC4A 3TR
18	5 Donegal Square South, Northern Ireland, Belfast, United Kingdom, BT1 5JP
19	1909 Avenida Presidente Juscelino Kubitschek, 19° andar, Torre Norte, São Paulo Corporate Towers, São Paulo, Brazil, 04551-903
20	Arnold House St Julians Avenue, St Peter Port, Guernsey, GY1 3NF
21	37 Front Street, Hamilton, Bermuda, HM 11
22	HSBC Main Building 1 Queen's Road Central, Hong Kong
23	First Floor, Xinhua Bookstore Xindong Road (SE of roundabout), Miyun District, Beijing, China
24	Deloitte LLP, 1 New Street Square, London, EC4A 3HQ, United Kingdom
25	95 Washington Street Buffalo, New York, United States of America, 14203
26	Corporation Service Company 251 Little Falls Drive, Wilmington, Delaware, United States of America, 19808
27	Solidere - Rue Saad Zaghloul Immeuble - 170 Marfaa, P.O. Box 17 5476 Mar Michael, Beyrouth, Lebanon, 11042040
28	No 1, Bei Huan East Road Dazu County, Chongqing, China
29	No 107 Ping Du Avenue (E), Sanhe Town, Fengdu County, Chongqing, China
30	No. 3, 5, 7, Haitang Erzhi Road Changyuan, Rongchang, Chongqing, China, 402460
31	Bederstrasse 49, Zurich, Switzerland, CH-8002
32	First & Second Floor, No.3 Nanshan Road, Pulandian , Dalian, Liaoning, China
33	CT Corporation System 225 Hillsborough Street, Raleigh, North Carolina, United States Of America, 27603
34	38 avenue Kléber, Paris, France, 75116
35	MMG Tower, 23 floor Ave. Paseo del Mar Urbanizacion Costa del Este, Panama
36	No. 1 1211 Yanjiang Zhong Road, Yongan, Fujian, China
37	83 Des Voeux Road Central, Hong Kong
38	Königsallee 21/23, Düsseldorf, Germany, 40212
39	No.44 Xin Ping Road Central, Encheng, Enping, Guangdong, China, 529400
40	Room 1701-010 Heung Kong Building, 37 Jin Long Rd, Nansha District, Guangzhou, China
41	34/F and 36/F, Hang Seng Bank Tower 1000 Lujiazui Ring Road, Pilot Free Trade Zone, Shanghai, Shanghai, China, 200120
42	Claude Debussylaan 10 Office Suite 20, 1082MD, Amsterdam, Netherlands
43	Commerce House, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola, British Virgin Islands, VG1110
44	1 Queen's Road Central, Hong Kong
45	The Corporation Trust Company of Nevada 311 S. Division Street, Carson City, Nevada, United States of America, 89703
46	Corporation Service Company 2711 Centerville Road, Suite 400, Wilmington, Delaware, United States of America, 19808
47	HSBC House Esplanade, St. Helier, Jersey, JE4 8UB
48	10th Floor South Tower, Bangunan HSBC, No. 2, Leboh Ampang, Kuala Lumpur, Malaysia, 50100
49	13th Floor, South Tower 2 Leboh Ampang, Kuala Lumpur, Malaysia, 50100
50	10 Marina Boulevard #48-01 Marina Bay Financial Centre, Singapore, 018983
51	52/60 M G Road Fort, Mumbai, India, 400 001
52	16 Boulevard d'Avranches, Luxembourg, Luxembourg, L-1160
53	557 Bouchard Level 20, Ciudad de Buenos Aires, Capital federal, Argentina, C1106ABG
54	3rd Floor Merchantile Bank Chamber 16, Veer Nariman Road, Fort, Mumbai, India, 400001
55	Immeuble Cœur Défense 110 esplanade du Général de Gaulle, Courbevoie, France, 92400
56	Level 36 Tower 1 International Towers Sydney, 100 Barangaroo Avenue, Sydney, New South Wales, Australia, 2000
57	Isidora Goyenechea 2800 23rd floor, Las Condes, Santiago, Chile, 7550647
58	HSBC Building Shanghai ifc, 8 Century Avenue, Pudong, Shanghai, China, 200120
59	6th floor HSBC Centre 18, Cybercity, Ebene, Mauritius, 72201
60	2 Paveletskaya square building 2, Moscow, Russian Federation, 115054
61	13F-14F, 333 Keelung Road, Sec.1, Taipei, 110, Taiwan
62	25 de Mayo 471, Montevideo, Uruguay, 11000
63	The Metropolitan 235 Dong Khoi Street, District 1, Ho Chi Minh City, Viet Nam
64	Esentepe mah. Büyükdere Caddesi No.128, Istanbul, Turkey, 34394
65	66 Teryan street, Yerevan, Armenia, 0009
66	885 West Georgia Street 3rd Floor, Vancouver, British Columbia, Canada, V6C 3E9
67	306 Corniche El Nil, P.O. Box 124, Maadi, Egypt, 11728
68	116 Archbishop Street, Valletta, Malta
69	Level 1, Building No. 8, Gate Village Dubai International Financial Centre, United Arab Emirates, P.O. Box 30444
70	Majer Consulting, Office 54/44, Building A1, Residence Ryad Anfa, Boulevard Omar El Khayam, Casa Finance City (CFC), Casablanca, Morocco
71	Al Khuwair Office PO Box 1727 PC111 CPO Seeb, Muscat, Oman
72	1800 Tysons Boulevard Suite 50, Tysons, Virginia, United States of America, 22102
73	66 Wellington Street West, Suite 5300, Toronto, Ontario, Canada, M5K 1E6
74	P.O. Box 1109, Strathvale House, Ground floor, 90 North Church Street, George Town, Grand Cayman, Cayman Islands, KY1-1102
75	HSBC House Esplanade, St. Helier, Jersey, JE1 1HS
76	c/o Rogers Capital St. Louis Business Centre, Cnr Desroches & St Louis Streets, Port Louis, Mauritius
77	49 avenue J.F. Kennedy, Luxembourg, Luxembourg, 1855
78	4-17/F, Office Tower 2 TaiKoo Hui, No. 381 Tian He Road, Tian He District, Guangzhou, Guangdong, China
79	Suite 1005, 10th Floor, Wisma Hamzah Kwong, Hing No. 1, Leboh Ampang, Kuala Lumpur, Malaysia, 50100
80	HSBC, Filinvest One Bldg Northgate Cyberzone, Filinvest Corporate City, Alabang, Muntinlupa City, Philippines, 1781
81	HSBC House Plot No.8 Survey No.64 (Part), Hightec City Layout Madhapur, Hyderabad, India, 500081
82	439, Sri Jayawardenapura Mawatha Welikada, Rajagiriya, Colombo, Sri Lanka
83	Smart Village 28th Km Cairo- Alexandria Desert Road Building, Cairo, Egypt
84	Suite 300 3381 Steeles Avenue East, Toronto, Ontario, Canada, M2H 3S7
85	Centre Ville 1341 Building - 4th Floor Patriarche Howayek Street (facing Beirut Souks), PO Box Riad El Solh, Lebanon, 9597
86	3rd Floor, HSBC Bank Middle East Limited Building, Al Souq Road, P.O Box 4604, Dubai, United Arab Emirates
87	World Trade Center Montevideo Avenida Luis Alberto de Herrera 1248, Torre 1, Piso 15, Oficina 1502, Montevideo, Uruguay, CP 11300
88	Room 655, Building A, No. 888, Huan Hu West Two Road, Lin Gang New Area of Shanghai (Pilot) Free Trade Zone, China, Shanghai, Shanghai, China
89	HSBC House Esplanade, St. Helier, Jersey, JE4 8WP
90	HSBC Building 11-1, Nihonbashi 3-chome, Chuo-ku, Tokyo, Japan, 103-0027
91	80 Mill Street, Qormi, Malta, QRM 3101
92	Herrengasse 1-3, Wien, Austria, 1010
93	26 Gartenstrasse, Zurich, Switzerland, 8002
94	24th Fl. 97-99, Sec.2, Tunhwa S. Rd., Taipei, Taiwan, R.O.C., Taiwan
95	452 Fifth Avenue, New York, United States of America, NY10018
96	Bouchard 557, Piso 18°, Cdad. Autónoma de Buenos Aires, Argentina, 1106
97	Mareva House 4 George Street, Nassau, Bahamas
98	70 York Street, Toronto, Ontario, Canada, M5J 1S9
99	Breite Str. 29/31, Düsseldorf, Germany, 40213
100	18th Floor, Tower 1, HSBC Centre 1 Sham Mong Road, Kowloon, Hong Kong
101	Level 32, HSBC Main Building 1 Queen's Road Central, Hong Kong SAR, Hong Kong
102	7/F HSBC Centre 3058 Fifth Ave West, Bonifacio Global City, Taguig City, Philippines
103	HSBC Building Minet El Hosn, Riad el Solh, Beirut 1107-2080, Lebanon, P.O. Box 11-1380
104	300 Delaware Avenue Suite 1401, Wilmington, Delaware, United States Of America, 19801
105	Woodbourne Hall, Road Town, Tortola, British Virgin Islands, P.O. Box 916
106	Craigmuir Chambers, PO Box 71, Road Town, Tortola, British Virgin Islands
107	9-11 Floors, NESCO IT Park Building No. 3 Western Express Highway, Goregaon (East), Mumbai, India, 400063
108	3, Aboul Feda Street Zamalek, Cairo, Egypt
109	300-885 West Georgia Street, Vancouver, British Columbia, Canada, V6C 3E9
110	21 Farncombe Road Worthing, United Kingdom, BN11 2BW
111	Plot No.312-878 Mezzanine Floor, Bldg. of Sheikh Hamdan Bin Rashid, Dubai Creek, Dubai, United Arab Emira
112	Level 1, Building No. 8, Gate Village Dubai International Financial Centre, PO Box 30444, United Arab Emirates
113	Unit 101 Level 1, Gate Village Building No. 8 Dubai International Financial Centre (DIFC), Dubai, United Arab Emirates, PO Box 506553
114	Office No.16 Owned by HSBC Bank Middle East Limited, Dubai Branch, Bur Dubai, Burj Khalifa, Dubai, United Arab Emirates
115	885 West Georgia Street Suite 300, Vancouver, British Columbia, Canada, V6C 3E9
116	HSBC Tower, Level 21, 188 Quay Street, Auckland, New Zealand, 1010
117	21-23 Yorckstraße, Düsseldorf, Nordrhein-Westfalen, Germany, 40476
118	The Corporation Trust Incorporated, 2405 York Road, Suite 201, Lutherville Timonium, Maryland, United Sta
119	HSBC House Esplanade, St. Helier, Jersey, JE1 1GT
120	Quai des Bergues 9-17, Geneva, Switzerland, 1201
121	1 Grand Canal Square, Grand Canal Harbour, Dublin 2, Ireland, D02 P820
122	Esentepe mah. Büyükdere Caddesi No.128, Istanbul, Turkey, 34394
123	Quai des Bergues 9-17, Geneva, Switzerland, 1201
124	HSBC House Esplanade, St Helier, Jersey, JE1 1GT
125	52/60 M G Road, Fort, Mumbai, India, 400 001
126	Block 27 A&B, Qianhai Enterprise Dream Park No. 63 Qianwan Yi Road, Shenzhen-Hong Kong Cooperation Zone, Shenzhen, China, 518052
127	Unit 1 GF The Commerical Complex Madrigal Avenue, Ayala Alabang Village, Muntinlupa City, Philippines, 17
128	1 Mutual Place 107 Rivonia Road, Sandton, Sandton, Gauteng, South Africa, 2196
129	13F 333 Keelung Road, Sec.1, Taipei, Taiwan, 110
130	Hansaallee 3, Düsseldorf, Germany, 40549
131	Kapelanka 42A, Krakow, Poland, 30-347
132	MB&H Corporate Services Ltd Mareva House, 4 George Street, Nassau, Bahamas
133	C T Corporation System 820 Bear Tavern Road, West Trenton, New Jersey, United States Of America, 08628
134	L22, Office Tower 2, Taikoo Hui, 381 Tianhe Road, Tianhe District, Guangzhou, Guangdong, China
135	HSBC Centre River Side, West Avenue, 25B Raheja woods, Kalyaninagar, Pune, India, 411006
136	Level 19, HSBC Building, Shanghai ifc 8 Century Avenue Pudong, Shanghai, China
137	Yorckstraße 21 - 23, Duesseldorf, Germany, 40476
138	P.O. Box 309 Ugland House, Grand Cayman, Cayman Islands, KY1-1104
139	No. 56 Yu Rong Street, Macheng, China, 438300
140	No. 205 Lie Shan Road Suizhou, Hubei, China
141	Building 3, Yin Zuo Di Jing Wan Tianmen New City, Tianmen, Hubei Province, China
142	RM101, 102 & 106 Sunshine Fairview, Sunshine Garden, Pedestrian Walkway, Pingjiang, China
143	Kings Meadow Chester Business Park, Chester, United Kingdom, CH99 9FB
144	World Trade Center 1, Floor 8-9 Jalan Jenderal Sudirman Kavling 29 - 31, Jakarta, Indonesia, 12920
145	5th Floor, World Trade Center 1, Jl. Jend. Sudirman Kav. 29-31, Jakarta, Indonesia, 12920
146	75 Park Lane, Croydon, Surrey, United Kingdom, CR9 1XS
147	Unit B02 20/F No. 168 Yin Cheng Zhong Road, Pilot Free Trade Zone, Shanghai, China, 200120
148	No.198-2 Chengshan Avenue (E), Rongcheng, China, 264300
149	Room 1303-13062 Marine Center Main Tower, 59 Linhai Rd, Nanshan District, Shenzhen, China
150	Woodbourne Hall, Road Town, Tortola, British Virgin Islands, P.O. Box 3162
151	43 rue de Paris, Saint Denis, France, 97400
152	RM 2112, HSBC Building, Shanghai ifc No. 8 Century Road, Pudong, Shanghai, China, 200120
153	Esentepe mah. Büyükdere Caddesi No.128, Istanbul, Turkey, 34394
154	11 Dr. Roy's Drive PO Box 694GT, Grand Cayman, Cayman Islands, KY1-1107
155	Lot 6.05, Level 6, KPMG Tower 8 First Avenue, Bandar Utama, Petaling Jaya, Selangor Darul Ehsan, Malaysia
156	18/F Unit 2101, 2113, 2113A, 2115 and 2116 of 21/F, HSBC Building, 8 Century Avenue, China (Shanghai) Pilot Free Trade Zone, Shanghai, China, 200120
157	3 More London Riverside, London, United Kingdom, SE1 2AQ
158	c/o MUFG Fund Services (Bermuda) Limited The Belvedere Building, 69 Pitts Bay Road, Pembroke, Bermuda, HM
159	c/o Hackwood Secretaries Limited One Silk Street, London, United Kingdom, EC2Y 8HQ
160	All Saints Triangle Caledonian road, London, United Kingdom, N19UT
161	No.188, Yin Cheng Zhong Road China (Shanghai), Pilot Free Trade Zone, Shanghai, China
162	49/F The Lee Gardens, 33 Hysan Avenue, Hong Kong
163	13-15 York Buildings, London, United Kingdom, WC2N 6JU
164	First Floor The Bower, 207 Old Street, England, United Kingdom, EC1V 9NR
165	Unit No. 208, 2nd Floor, Kanchenjunga Building 18, Barakhamba Road, New Delhi, India, 110001
166	65 Gresham Street 6th Floor, London, United Kingdom, EC2V 7NQ
167	PO 4978, Kigali, Rwanda
168	Plot LR No. 487 Dagoretti / Ruthimitu, P.O. Box 14362, Nairobi, Kenya, 00800
169	Plot No. 89-90 Mbezi Industrial Area Box 347, Dar es Salaam City, Tanzania, United Republic of Tanzania
170	3 avenue de l'Opera, Paris, France, 75001
171	37 avenue Henri Lafleur, Nouméa, New Caledonia, BP K3 98849
172	Room 1303, 106 Feng Ze Dong Road, Nansha District, Guangzhou, Guangdong, China
173	Flat 209, Hedge Fund Centre of Qianhai Shenzhen-Hong Kong Fund Town No. 128 Guiwan Five Road, Qianhai Shenzhen-Hong Kong Cooperation Zone, Shenzhen, China
174	17F, HSBC Building, Shanghai ifc 8 Century Avenue, Pudong, Shanghai, China
175	HSBC Building 7267 Olaya - Al Murrooj, Riyadh, Saudi Arabia, 12283 - 2255
176	C T Corporation System 1200 South Pine Island Road Plantation, Florida, United States of America, 33324
177	c/o Trident Trust Company Trident Chambers, PO Box 146, Tortola, British Virgin Islands
178	Office 705, Level 8, Tower 2, Al Fattan Currency House, DIFC, P.O.Box 506553, Dubai, UAE
179	Jayla Place Wickhams Cay I, PO Box 3190, Road Town, British Virgin Islands
180	32 rue du Champ de Tir, Nantes, France, 44300
181	Ernst-Schneider-Platz 1, Duesseldorf, Germany, 40212
182	Al Amir Abdulaziz Ibn Mossaad Ibn Jalawi Street, Riyadh, Saudi Arabia
183	Office Block A, Bay Studios Business Park, Fabian Way, Swansea, Wales, United Kingdom, SA1 8QB
184	10 Earlsfort Terrace, Dublin, Ireland, D02 T380
185	c/o Walkers Corporate Services Limited, Walker House, 87 Mary Street, George Town, Grand Cayman, KY1 - 90
186	Oak House Hirzel Street, St Peter Port, Guernsey, GY1 2NP
187	9/F Amtel Bldg, 148 des Voeux Rd Central, Central, Hong Kong
188	100 Town Square Place, Suite 201, Jersey City, NJ 07310, United States of America
189	1-2 Royal Exchange Buildings, Royal Exchange, London, United Kingdom, EC3V 3LF
190	25 W 25th St. New York, NY 10001, United States of America
191	50 Raffles Place, #32-01 Singapore Land Tower, 048623, Singapore
192	3 More London Riverside, London, United Kingdom, SE1 2AQ

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