REG - HSBC Holdings PLC - Annual Financial Report - Part 11
21/02/2024 16:45
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RNS Number : 9507D HSBC Holdings PLC 21 February 2024
19 Investments in subsidiaries
Main subsidiaries of HSBC Holdings(1)
At 31 Dec 2023
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 GmbH Germany 99.99 €1 Ordinary
Asia
Hang Seng Bank Limited(2) 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, North Africa and Türkiye
HSBC Bank Middle East Limited United Arab Emirates 100 $1 Ordinary and $1 Cumulative Redeemable Preference shares
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, Mexico 99.99 MXN2 Ordinary
Grupo Financiero HSBC
1 Main subsidiaries are either held directly or indirectly via
intermediate holding companies. There has been no material percentage change
in HSBC's shareholding for its main subsidiaries since 2022.
2 In addition to the strategic holding disclosed above, the Group held
0.09% (2022: 0.07%) shareholding as part of its trading books.
Details of the debt, subordinated debt and preference shares issued by the
main subsidiaries to parties external to the Group are included in Note 26
'Debt securities in issue' and Note 29 'Subordinated liabilities',
respectively.
A list of all related undertakings is set out in Note 40. The principal
countries and territories 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 financial resource
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.
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 2023,
consistent with the Group's capital plan, the Group's material 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 from material
subsidiaries. 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 34.
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.
Impairment testing of investments in subsidiaries
At each reporting period end, HSBC Holdings reviews investments in
subsidiaries for indicators of impairment. An impairment is recognised when
the carrying amount exceeds the recoverable amount for that investment. The
recoverable amount is the higher of the investment's fair value less costs of
disposal and its VIU, in accordance with the requirements of IAS 36. The VIU
is calculated by discounting management's cash flow projections for the
investment. The cash flows represent the free cash flows based on the
subsidiary's binding capital requirements.
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: The cash
flow projections for each investment are based on the latest approved plans,
which include forecast capital available for distribution based on the capital
requirements of the subsidiary, taking into account minimum and core capital
requirements. For the impairment test as at 31 December 2023, cash flow
projections until the end of 2028 were considered in line with our internal
planning horizon. Our cash flow projections include known and observable
climate-related opportunities and costs associated with our sustainable
products and operating model.
- Long-term growth rates: The long-term growth rate is used to
extrapolate the free cash flows in perpetuity because of the long-term
perspective of the legal entity. The growth rate reflects long-term inflation
for the country or territory within which the investment operates.
- Discount rates: The rate used to discount the cash flows is based on
the cost of capital assigned to each investment, which is derived using a CAPM
and market implied cost of equity. 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 investment are refined to
reflect the rates of inflation for the countries or territories within which
the investment operates. In addition, for the purposes of testing investments
for impairment, management supplements this process by comparing the discount
rates derived using the internally generated CAPM, with cost of capital rates
produced by external sources for businesses operating in similar markets. The
impacts from climate risk are included to the extent that they are observable
in discount rates and asset prices.
As at 31 December 2023, the carrying amount of HSBC Holdings' investments in
subsidiaries was $159.5bn (2022: $167.5bn). The net year-on-year reduction was
predominantly due to the recognition of a $5.5bn impairment of HSBC Holdings'
investment in HSBC Overseas Holdings (UK) Limited, resulting in a cumulative
impairment of $10.2bn (2022: $4.7bn), and a carrying amount of $25.8bn as at
31 December 2023 (2022: $32.8bn).
The recoverable amount of HSBC Overseas Holdings (UK) Limited is assessed as
the aggregate of the recoverable amounts of its subsidiaries. During 2023, the
principal subsidiaries of HSBC Overseas Holdings (UK) Limited were HSBC North
America Holdings Limited, HSBC Bank Canada and HSBC Bank Bermuda. In October
2023, HSBC Bank Bermuda was transferred to HSBC Bank plc. As at 31 December
2023, the adjusted net asset value of HSBC Overseas Holdings (UK) Limited fell
below the carrying amount therefore management assessed that indicators of
impairment were present and an impairment test was performed. The recoverable
amount reduced owing to lower projected profits and higher projected capital
requirements for HSBC North America Holdings, the transfer of HSBC Bank
Bermuda to HSBC Bank plc at its book value which stood below its assessed
recoverable amount, and higher prevailing discount rates, as a result of which
a $5.5bn impairment was recognised.
As HSBC Overseas Holdings (UK) Limited has entered into a sales purchase
agreement with Royal Bank of Canada to dispose of our banking business in
Canada, the sales purchase agreement has been used to support the recoverable
amount of $11.0bn (2022: $10.8bn) (inclusive of the preferred shares) under a
fair value less costs of disposal basis. The fair value less costs of disposal
of HSBC Bank Canada is at a $3.7bn (2022: $3.7bn) premium to the book value
recorded in HSBC Overseas Holdings (UK) Limited. In 2024, a distribution of
the proceeds from the planned sale of our banking business in Canada to HSBC
Holdings from HSBC Overseas Holdings (UK) Limited could lead to a future
impairment. In respect of distributable reserves, an impairment would be
offset by the dividend income recognised on the distributions from sales
proceeds.
Impairment test results
Investments Recoverable Discount Long-term growth rate
amount rate
At 31 Dec 2023 $m % %
HSBC North America Holdings Limited 10.50 2.17
12,756
At 31 Dec 2022
HSBC North America Holdings Limited 10.00 2.22
18,363
Sensitivities of key assumptions in calculating VIU
At 31 December 2023, the recoverable amount of HSBC Overseas Holdings (UK)
Limited remained sensitive to reasonably possible changes in key assumptions
impacting its principal subsidiary, HSBC North America Holdings Limited.
In making an estimate of reasonably possible changes to assumptions,
management considers the available evidence in respect of each input to the
model. These include the external range of observable discount rates,
historical performance against forecast, and risks attached to the key
assumptions underlying cash flow.
The following table presents a summary of the key assumptions underlying the
most sensitive inputs to the model for HSBC North America Holdings Limited,
the key risks attached to each, and details of a reasonably possible change to
assumptions where, in the opinion of management, these could result in a
change in VIU.
Reasonably possible changes in key assumptions
Investment
HSBC North America Holdings Limited (subsidiary of HSBC Overseas Holdings (UK) Free cash flows projections - Level of interest rates and yield curves. - Strategic actions relating to revenue and costs are not achieved. - Free cash flow projections decrease by 10%.
Limited)
- Competitors' positions within the market.
Discount rate - Discount rate used is a reasonable estimate of a suitable market rate - External evidence arises to suggest that the rate used is not - Discount rate decreases by 1%.
for the profile of the business. appropriate to the business.
- Discount rate increases by 1%.
Sensitivity of VIU to reasonably possible changes in key assumptions
In $bn (unless otherwise stated) HSBC North America Holdings Limited
At 31 December 2023
VIU 12.8
Impact on VIU
100bps decrease in the discount rate - single variable(1)
1.6
100bps increase in the discount rate - single variable(1, 2)
(1.2)
10% decrease in forecast profitability - single variable(1, 2)
(1.3)
1 The recoverable amount of HSBC Overseas Holdings (UK) Limited represents
the aggregate of recoverable amounts of the underlying subsidiaries. Single
variable sensitivity analysis on a single subsidiary may therefore not be
representative of the aggregate impact of the change in the variable.
2 As at 31 December 2022, the impact on the VIU of HSBC North America
Holdings Limited of a 100bps increase in the discount rate was $(1.7)bn and a
10% decrease in forecast profitability was $(1.8)bn, respectively on a single
variable basis.
Subsidiaries with significant non-controlling interests
2023 2022¹
Hang Seng Bank Limited
Proportion of ownership interests and voting rights held by non-controlling 37.86 37.86
interests (%)(2)
Place of business Hong Kong Hong Kong
$m $m
Profit attributable to non-controlling interests 889
574
Accumulated non-controlling interests of the subsidiary 6,877
6,513
Dividends paid to non-controlling interests 490
361
Summarised financial information:
- total assets 214,321 235,630
- total liabilities 194,621 216,917
- net operating income before changes in expected credit losses and other 5,210
credit impairment charges 4,379
- profit for the year 2,356
1,518
- total comprehensive income for the year 2,723
1,428
1 From 1 January 2023, we adopted IFRS 17 'Insurance Contracts', which
replaced IFRS 4 'Insurance Contracts'. We have restated 2022 comparative data.
2 In addition to the strategic holding disclosed above, the Group held
0.09% (2022: 0.07%) shareholding as part of its trading books.
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 HSBC managed funds Other Total
$bn $bn $bn $bn $bn
At 31 Dec 2023 3.6 7.8 8.2 25.1
5.5
At 31 Dec 2022 4.2 7.2 7.5 23.7
4.8
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 2023, Solitaire, HSBC's principal SIC, held $1.0bn of
ABSs (2022: $1.3bn). It is currently funded entirely by commercial paper
('CP') issued to HSBC. At 31 December 2023, HSBC held $1.3bn of CP (2022:
$1.5bn).
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 $6.1bn at 31 December 2023 (2022: $6.2bn). First loss
protection is provided by the originator of the assets, and not by HSBC,
through transaction-specific credit enhancements. A layer of secondary loss
protection is provided by HSBC in the form of programme-wide enhancement
facilities.
Securitisations
HSBC uses structured entities to securitise customer loans and advances it
originates in order to diversify its sources of funding for asset origination
and capital efficiency purposes. The loans and advances are transferred by
HSBC to the structured entities for cash or synthetically through credit
default swaps, and the structured entities issue debt securities to investors.
HSBC managed funds
HSBC has established a number of money market and non-money market funds.
Where it is deemed to be acting as principal rather than agent in its role as
investment manager, HSBC controls these funds.
Other
HSBC has entered into a number of transactions in the normal course of
business, which include asset and structured finance transactions where it has
control of the structured entity. In addition, HSBC is deemed to control
a number of third-party managed funds through its involvement as a principal
in the funds.
Unconsolidated structured entities
The term 'unconsolidated structured entities' refers to all structured
entities not controlled by HSBC. The Group enters into transactions with
unconsolidated structured entities in the normal course of business to
facilitate customer transactions and for specific investment opportunities.
Nature and risks associated with HSBC interests in unconsolidated structured
entities
Securitisations HSBC managed funds Non-HSBC managed funds Other Total
Total asset values of the entities ($m)
0-500 120 337 1,271 42 1,770
500-2,000 4 96 1,069 3 1,172
2,000-5,000 - 39 418 - 457
5,000-25,000 - 24 217 - 241
25,000+ - 3 11 - 14
Number of entities at 31 Dec 2023 124 499 2,986 45 3,654
$bn $bn $bn $bn $bn
Total assets in relation to HSBC's interests in the unconsolidated structured 3.2 13.9 20.7 3.3 41.1
entities
- trading assets - 0.6 - - 0.6
- financial assets designated and otherwise mandatorily measured at fair - 12.6 19.7 - 32.3
value
- loans and advances to customers 3.2 - 0.6 2.5 6.3
- financial investments - 0.7 0.4 - 1.1
- other assets - - - 0.8 0.8
Total liabilities in relation to HSBC's interests in the unconsolidated - - - 0.3 0.3
structured entities
- other liabilities - - - 0.3 0.3
Other off-balance sheet commitments 0.1 1.9 5.0 1.2 8.2
HSBC's maximum exposure at 31 Dec 2023 3.3 15.8 25.7 4.2 49.0
Total asset values of the entities ($m)
0-500 85 338 1,321 41 1,785
500-2,000 8 102 929 4 1,043
2,000-5,000 - 28 388 - 416
5,000-25,000 - 18 206 - 224
25,000+ - 5 24 - 29
Number of entities at 31 Dec 2022 93 491 2,868 45 3,497
$bn $bn $bn $bn $bn
Total assets in relation to HSBC's interests in the unconsolidated structured 2.5 10.7 19.7 2.6 35.5
entities
- trading assets - 0.4 0.1 - 0.5
- financial assets designated and otherwise mandatorily measured at fair - 9.7 18.7 - 28.4
value
- loans and advances to customers 2.5 - 0.5 1.9 4.9
- financial investments - 0.6 0.4 - 1
- other assets - - - 0.7 0.7
Total liabilities in relation to HSBC's interests in the unconsolidated - - - 0.4 0.4
structured entities
- other liabilities - - - 0.4 0.4
Other off-balance sheet commitments 0.2 1.5 4.6 1.8 8.1
HSBC's maximum exposure at 31 Dec 2022 2.7 12.2 24.3 4 43.2
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 amount 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 118.
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 2023 and 2022 was not significant.
21 Goodwill and intangible assets
2023 2022¹
$m $m
Goodwill 4,323 4,156
Other intangible assets(2) 8,164 7,263
At 31 Dec 12,487 11,419
1 From 1 January 2023, we adopted IFRS 17 'Insurance Contracts', which
replaced IFRS 4 'Insurance Contracts'. Comparative data have been restated
accordingly.
2 Included within other intangible assets is internally generated
software with a net carrying amount of $6,895m (2022: $6,166m). During the
year, capitalisation of internally generated software was $2,306m (2022:
$2,663m), reversal of impairment was $285m (2022: impairment of $125m) and
amortisation was $1,877m (2022: $1,447m).
2
Movement analysis of goodwill
2023 2022
$m $m
Gross amount
At 1 Jan 18,965 22,215
Exchange differences 523 (776)
Reclassified to held for sale and additions(1) 73 (2,485)
Other (1) 11
At 31 Dec 19,560 18,965
Accumulated impairment losses
At 1 Jan (14,809) (17,182)
Exchange differences (428) 482
Reclassified to held for sale(1) - 1,891
At 31 Dec (15,237) (14,809)
Net carrying amount at 31 Dec 4,323 4,156
1 Includes goodwill allocated to disposal groups as a result of the
sales of our retail banking operations in France and branch operations in
Greece, and planned sale of our banking business in Canada, offset by goodwill
arising from the acquisition of L&T Investment Management Limited. For
further details, see Note 23.
1
Goodwill
Impairment testing
The Group's impairment test in respect of goodwill allocated to each
cash-generating unit ('CGU') is performed at 1 October each year. A review for
indicators of impairment is undertaken at each subsequent quarter-end and at
31 December 2023. No indicators of impairment were identified as part of these
reviews.
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. 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 2023
Carrying amount at 1 Oct 2023 of which goodwill Value in use at 1 Oct 2023 Discount rate Growth rate Carrying amount at 1 Oct 2022 of which goodwill Value in Discount Growth
beyond initial use at 1 Oct 2022 rate rate
cash flow beyond initial
cash flow projections
$m $m $m % % $m $m $m % %
HSBC UK Bank plc - WPB(1) 11,167 2,597 27,933 10.4 2.0 N/A N/A N/A N/A N/A
Europe - WPB(1) N/A N/A N/A N/A N/A 15,215 2,643 46,596 9.9 2.0
1 Following change in the Reporting Framework the Group's CGUs are main
legal entities subdivided by global business effective 1 January 2023.
At 1 October 2023, aggregate goodwill of $1,599m (1 October 2022: $1,464m) 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 Group does not consider there to be a significant risk of a material
adjustment to the carrying amount of goodwill in the next financial year, but
does consider this to be an area that is inherently judgemental. The cash flow
projections for each CGU are based on forecast profitability plans approved by
the Board and minimum capital levels required to support the business
operations of a CGU. 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 2023 impairment test, cash flow projections until the end of 2028 were
considered, in line with our internal planning horizon. Key assumptions
underlying cash flow projections reflect management's outlook on interest
rates and inflation, as well as business strategy, including the scale of
investment in technology and automation. Our cash flow projections include
known and observable climate-related opportunities and costs associated with
our sustainable products and operating model. As required by IFRS Accounting
Standards, 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 equity
assigned to each CGU, which is derived using a capital asset pricing model
('CAPM') and market implied cost of equity. 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 equity rates produced by external
sources for businesses operating in similar markets. The impacts of climate
risk are included to the extent that they are observable in discount rates and
asset prices.
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 1 October 2023, given the extent by which VIU exceeds carrying amount, the
HBUK WPB CGU was not 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 VIU calculation, such as the external
range of discount rates observable, historical performance against forecast
and risks attaching to the key assumptions underlying cash flow projections.
None of the remaining CGUs are individually significant.
Other intangible assets
Impairment testing
Impairment of other intangible assets is assessed in accordance with our
policy explained in Note 1.2(n) by comparing the net carrying amount of CGUs
containing intangible assets with their recoverable amounts. Recoverable
amounts are determined by calculating an estimated VIU or fair value, as
appropriate, for each CGU. No significant impairment was recognised during the
year.
Key assumptions in VIU calculation
The Group does not consider there to be a significant risk of a material
adjustment to the carrying amount of other intangible assets in the next
financial year, but does consider this to be an area that is inherently
judgemental. 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, current market conditions and our
macroeconomic outlook to estimate future earnings. As required by IFRS
Accounting Standards, 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 may not
be included in the impairment assessment, including capital releases. Our cash
flow projections include known and observable climate-related opportunities
and costs associated with our sustainable products and operating model.
- 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 combination of CAPM and
market-implied calculations considering market data for the businesses and
geographies in which the Group operates. The impacts of climate risk are
included to the extent that they are observable in discount rates and asset
prices.
Sensitivity of estimates relating to non-financial assets
As explained in Note 1.2(a), estimates of future cash flows for 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. 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 31 December 2023
none of the CGUs were 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 VIU calculation, such as the external
range of discount rates observable, historical performance against forecast
and risks attaching to the key assumptions underlying cash flow projections.
22 Prepayments, accrued income and other assets
2023 2022¹
$m $m
Prepayments and accrued income 13,854 10,279
Settlement accounts 32,853 19,565
Cash collateral and margin receivables 57,058 63,421
Bullion 13,701 15,752
Endorsements and acceptances 7,939 8,407
Insurance contract assets (Note 4) 252 136
Reinsurance contract assets 4,728 4,310
Employee benefit assets (Note 5) 7,750 7,282
Right-of-use assets 2,456 2,219
Owned property, plant and equipment 10,478 10,365
Other accounts 14,186 14,413
At 31 Dec 165,255 156,149
1 From 1 January 2023, we adopted IFRS 17 'Insurance Contracts', which
replaced IFRS 4 'Insurance Contracts'. We have restated 2022 comparative data.
Prepayments, accrued income and other assets include $122,863m (2022:
$112,464m) of financial assets, the majority of which are measured at
amortised cost.
23 Assets held for sale, liabilities of disposal groups held for sale and
business acquisitions
2023 2022
$m $m
Held for sale at 31 Dec
Disposal groups 115,836 118,055
Unallocated impairment losses(1) (1,975) (2,385)
Non-current assets held for sale 273 249
Assets held for sale 114,134 115,919
Liabilities of disposal groups held for sale 108,406 114,597
1 This represents impairment losses in excess of the carrying value of the
non-current assets, excluded from the measurement scope of IFRS 5.
Disposal groups and other planned disposals
Sale of our retail banking operations in France
On 1 January 2024, HSBC Continental Europe completed the sale of its retail
banking business in France to CCF, a subsidiary of Promontoria MMB SAS ('My
Money Group'). The sale also included HSBC Continental Europe's 100% ownership
interest in HSBC SFH (France) and its 3% ownership interest in Crédit
Logement.
In the first quarter of 2023, the sale had become less certain, as a result of
which we recognised a $2.1bn partial reversal of the impairment loss
recognised in 2022, when the disposal group was classified as held for sale.
In the fourth quarter of 2023, following the receipt of regulatory approvals
and the satisfaction of other relevant conditions, we reclassified the
disposal group as held for sale, and it was subsequently remeasured at the
lower of the carrying amount and fair value less costs to sell. This resulted
in the reinstatement of a €1.8bn ($2.0bn) pre-tax impairment loss reflecting
the final terms of the sale, giving rise to a net reversal of impairment
recognised in other operating income in the year of $0.1bn.
Upon completion and in accordance with the terms of the sale, HSBC Continental
Europe received a €0.1bn ($0.1bn) profit participation interest in the
ultimate holding company of My Money Group. The associated impacts on initial
recognition of this stake at fair value were recognised as part of the pre-tax
loss on disposal. In addition, we recognised the reversal of a €0.4bn
($0.4bn) deferred tax liability, which had arisen as a consequence of the
temporary difference in tax and accounting treatment in respect of the
provision for loss on disposal, which was deductible in the French tax return
in 2021.
In accordance with the terms of the sale, HSBC Continental Europe retained a
portfolio of €7.1bn ($7.8bn) consisting of home and certain other loans, in
respect of which it may consider on-sale opportunities at a suitable time, and
the CCF brand, which it licensed to the buyer under a long-term licence
agreement. Additionally, HSBC Continental Europe's subsidiaries, HSBC
Assurances Vie (France) and HSBC Global Asset Management (France), have
entered into distribution agreements with the buyer. Ongoing costs associated
with the retention of the home and certain other loans, net of income on
distribution agreements and the brand licence, are estimated to have an
after-tax loss impact of €0.1bn ($0.1bn) in 2024 based on expected funding
rates.
Planned sale of our banking business in Canada
On 29 November 2022, HSBC Holdings plc announced that its wholly-owned
subsidiary, HSBC Overseas Holdings (UK) Limited, had entered into an agreement
for the sale of its banking business in Canada to the Royal Bank of Canada.
Completion of the transaction is expected to occur in the first quarter of
2024 and the required governmental approvals have been obtained. The majority
of the estimated gain on sale of $5.2bn (as at 31 December 2023) will be
recognised on completion, reduced by earnings recognised by the Group in the
period to completion. There would be no tax on the gain recognised at
completion. This estimated gain would also have been reduced by $0.3bn in fair
value losses recognised on the related foreign exchange hedges in 2023. The
estimated pre-tax profit on the sale will be recognised through a combination
of the consolidation of HSBC Canada's results into the Group's financial
statements (between the 30 June 2022 net asset reference date and until
completion), and the remaining gain on sale recognised at completion. At 31
December 2023, total assets of $87.9bn and total liabilities of $81.5bn met
the criteria to be classified as held for sale in accordance with IFRS 5.
Planned sale of our business in Russia
On 30 June 2022, following a strategic review of our business in Russia, HSBC
Europe BV (a wholly-owned subsidiary of HSBC Bank plc) entered into an
agreement for the sale of its wholly-owned subsidiary HSBC Bank (RR) (Limited
Liability Company). In 2022, a $0.3bn impairment loss on the planned sale was
recognised, upon classification as held for sale in accordance with IFRS 5. As
at 31 December 2023, following US sanctions designation of the buyer, the
outcome of the planned sale became less certain. This resulted in the reversal
of $0.2bn of the previously recognised loss, as the business was no longer
classified as held for sale. However, owing to restrictions impacting the
recoverability of assets in Russia, we recognised charges of $0.2bn in other
operating income. Completion of the planned sale remains subject to regulatory
approval. On completion, accumulated foreign currency translation reserves
will be recycled to the income statement.
Our branch operations in Greece
On 24 May 2022, HSBC Continental Europe signed a sale and purchase agreement
for the sale of its branch operations in Greece to Pancreta Bank SA. In the
second quarter of 2022, we recognised a loss of $0.1bn upon reclassification
as held for sale in accordance with IFRS 5. At completion on 28 July 2023, the
disposal group included $0.3bn of loans and advances to customers and $1.1bn
of customer accounts.
Merger of our business in Oman
In November 2022, HSBC Bank Oman SAOG entered into a binding merger agreement
with Sohar International Bank SAOG, under which the two banks agreed to take
the necessary steps to implement a merger by incorporation, whereby HSBC Bank
Oman would merge into Sohar International Bank. Following regulatory and
shareholder approvals, the merger was completed on 17 August 2023 by way of
dissolution and transfer of all the assets and liabilities of HSBC Bank Oman
to Sohar International Bank, with the shareholders of HSBC Bank Oman receiving
the consideration in cash and shares in Sohar International Bank. Separately,
HSBC Bank Middle East Limited is in the process of establishing a new
wholesale banking branch in Oman subject to regulatory approvals.
Our New Zealand loan portfolio
In August 2023, the Hongkong and Shanghai Banking Corporation Limited (acting
through its New Zealand branch) entered into an agreement with Pepper New
Zealand Limited, a wholly-owned subsidiary of Pepper Money Limited, to sell
its New Zealand retail mortgage loan portfolio. The sale was classified as
held for sale in the third quarter of 2023 and was completed on 1 December
2023.
Our retail business in Mauritius
In November 2023, the Hongkong and Shanghai Banking Corporation Limited
(acting through its Mauritius branch) entered into an agreement with ABSA Bank
(Mauritius) Limited, a wholly-owned subsidiary of ABSA Bank Group Limited, to
sell its Wealth and Personal Banking business. The sale is expected to
complete in the second half of 2024 subject to regulatory approvals.
At 31 December 2023, the major classes of assets and associated liabilities of
disposal groups held for sale, excluding allocated impairment losses, were as
follows:
Canada Retail banking operations in France Other(1) Total
$m $m $m $m
Assets of disposal groups held for sale
Cash and balances at central banks(2) 5,370 - 5,596
226
Trading assets 2,465 - 2,465
-
Financial assets designated and otherwise mandatorily measured at fair value - 64
through profit or loss 15 49
Derivatives - 528
528 -
Loans and advances to banks(2) - 10,487
154 10,333
Loans and advances to customers 56,129 254 73,285
16,902
Reverse repurchase agreements - non-trading 2,723 - 2,723
-
Financial investments(3) 16,978 17,011
33
Goodwill 225
225 -
Prepayments, accrued income and other assets 3,318 2 3,452
132
Total assets at 31 Dec 2023 87,905 256 115,836
27,675
Liabilities of disposal groups held for sale
Trading liabilities 1,417 - 1,417
-
Deposits by banks - 78
78 -
Customer accounts 63,001 642 85,950
22,307
Repurchase agreements - non-trading 2,768 - 2,768
-
Financial liabilities designated at fair value - 2,370
- 2,370
Derivatives - 615
608 7
Debt securities in issue 7,707 - 9,084
1,377
Subordinated liabilities - 8
8 -
Accruals, deferred income and other liabilities 5,916 4 6,116
196
Total liabilities at 31 Dec 2023 81,503 646 108,406
26,257
Expected date of completion First quarter of 2024 1 January 2024
Operating segment All global businesses WPB
1 Includes balances classified as held for sale in respect of the planned
sale of our retail business in Mauritius and planned sale of our global hedge
fund administration business across several markets.
2 Under the financial terms of the sale of our retail banking operations
in France, HSBC Continental Europe will transfer the business with a net asset
value of €1.7bn ($1.8bn) for a consideration of €1. Any required increase
to the net asset value of the business to achieve this will be satisfied by
the inclusion of additional cash. Based upon the net liabilities of the
disposal group at 31 December 2023, HSBC would be expected to include a cash
contribution of $11bn, of which $10.5bn was reclassified as held for sale at
31 December 2023 ('Loans and advances to banks', $10.3bn, 'Cash and balances
at central bank', $0.2bn).
3 Includes financial investments measured at fair value through other
comprehensive income of $9.4bn and debt instruments measured at amortised cost
of $7.6bn.
At 31 December 2022, the major classes of assets and associated liabilities of
disposal groups held for sale, excluding allocated impairment losses, were as
follows:
Canada Retail banking Other Total
operations in France
$m $m $m $m
Assets of disposal groups held for sale
Cash and balances at central banks 4,664 1,811 6,546
71
Trading assets 3,168 8 3,176
-
Financial assets designated and otherwise mandatorily measured at fair value 1 61
through profit or loss 13 47
Derivatives - 866
866 -
Loans and advances to banks 154 253
99 -
Loans and advances to customers 55,197 350 80,576
25,029
Reverse repurchase agreements - non-trading 4,396 250 4,646
-
Financial investments(1) 17,243 106 17,349
-
Goodwill - 225
225 -
Prepayments, accrued income and other assets 4,245 26 4,357
75
Total assets at 31 Dec 2022 90,127 2,706 118,055
25,222
Liabilities of disposal groups held for sale
Trading liabilities 2,751 3 2,754
-
Deposits by banks 2 64
62 -
Customer accounts 60,606 2,320 85,274
22,348
Repurchase agreements - non-trading 3,266 - 3,266
-
Financial liabilities designated at fair value - 3,523
- 3,523
Derivatives - 813
806 7
Debt securities in issue 11,602 - 12,928
1,326
Subordinated liabilities - 8
8 -
Accruals, deferred income and other liabilities 5,727 81 5,967
159
Total liabilities at 31 Dec 2022 84,828 2,406 114,597
27,363
Expected date of completion Second half of 2023 Second half of 2023
Operating segment All global businesses WPB
1 Includes financial investments measured at fair value through other
comprehensive income of $11.2bn and debt instruments measured at amortised
cost of $6.2bn.
Business acquisitions
Acquisition of Silicon Valley Bank UK Limited
In March 2023, HSBC UK Bank plc acquired Silicon Valley Bank UK Limited ('SVB
UK'), and in June 2023 changed its legal entity name to HSBC Innovation Bank
Limited. The acquisition was funded from existing resources and brought the
staff, assets and liabilities of SVB UK into the HSBC portfolio. On
acquisition, we performed a preliminary assessment of the fair value of the
assets and liabilities purchased. We established an opening balance sheet on
13 March 2023 and applied the result of the fair value assessment, which
resulted in a reduction in net assets of $0.2bn. The provisional gain on
acquisition of $1.6bn represents the difference between the consideration paid
of £1 and the net assets acquired. Further due diligence has been performed
post-acquisition, resulting in the recognition of an additional gain of $0.1bn
at 30 September 2023, as required by IFRS 3 'Business Combinations'.
HSBC Innovation Bank Limited contributed $0.5bn of revenue and $0.2bn to the
Group profit after tax for the period from 13 March 2023 to 31 December 2023.
As per the disclosure requirements set out in IFRS 3 'Business Combinations',
if HSBC Innovation Bank Limited had been acquired on 1 January 2023,
management estimates that for the 12 months to 31 December 2023, consolidated
revenue would have been $66bn and consolidated profit after tax would have
been $25bn. In determining these amounts, management has assumed that the
previously determined fair value adjustments, which arose on acquisition would
have been the same if the acquisition had occurred on 1 January 2023.
The details of the business combination at acquisition are as follows:
At
13 Mar
2023
$m
Fair value of assets acquired 11,367
Fair value of liabilities acquired (9,776)
Fair value of net assets acquired 1,591
Provisional gain on acquisition 1,591
Consideration transferred settled in cash -
Cash and cash equivalents acquired 1,243
Net cash inflow on acquisition 1,243
Acquisition of Citibank China's wealth management portfolio
In October 2023, HSBC Bank (China) Company Limited, a wholly-owned subsidiary
of The Hongkong and Shanghai Banking Corporation Limited, entered into an
agreement to acquire Citibank China's retail wealth management portfolio in
mainland China. The portfolio comprises assets under management and deposits
and the associated wealth customers. Upon completion, the acquired business
will be integrated into HSBC Bank China's Wealth and Personal Banking
operations. The transaction is expected to complete in the first half of 2024.
Acquisition of Silkroad Property Partners Singapore
In October 2023, HSBC Global Asset Management Singapore Limited entered into
an agreement to acquire 100% of the shares of Silkroad Property Partners Pte
Ltd ('Silkroad') and for HSBC Global Asset Management Limited to acquire
Silkroad's affiliated General Partner entities. Silkroad is a Singapore
headquartered Asia-Pacific-focused, real estate investment manager. The
acquisition was completed on 31 January 2024.
24 Trading liabilities
2023 2022
$m $m
Deposits by banks(1) 6,779 9,332
Customer accounts(1) 8,955 10,724
Other debt securities in issue (Note 26) 27 978
Other liabilities - net short positions in securities 57,389 51,319
At 31 Dec 73,150 72,353
1 'Deposits by banks' and 'Customer accounts' include fair value
repos, stock lending and other amounts.
1
25 Financial liabilities designated at fair value
HSBC
2023 2022¹
$m $m
Deposits by banks and customer accounts(2) 21,043 19,171
Liabilities to customers under investment contracts 5,103 5,374
Debt securities in issue (Note 26) 103,803 93,140
Subordinated liabilities (Note 29) 11,477 9,636
At 31 Dec 141,426 127,321
1 From 1 January 2023, we adopted IFRS 17 'Insurance Contracts', which
replaced IFRS 4 'Insurance Contracts'. We have restated 2022 comparative data.
2 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.
The carrying amount of financial liabilities designated at fair value was
$4,421m less than the contractual amount at maturity (2022: $8,124m less). The
cumulative amount of change in fair value attributable to changes in credit
risk was a loss of $1,286m (2022: profit of $234m).
HSBC Holdings
2023 2022
$m $m
Debt securities in issue (Note 26) 35,189 25,423
Subordinated liabilities (Note 29) 8,449 6,700
At 31 Dec 43,638 32,123
The carrying amount of financial liabilities designated at fair value was
$246m less than the contractual amount at maturity (2022: $2,405m less). The
cumulative amount of change in fair value attributable to changes in credit
risk was a loss of $682m (2022: $516m).
26 Debt securities in issue
HSBC
2023 2022
$m $m
Bonds and medium-term notes 160,632 145,240
Other debt securities in issue 37,115 27,027
Total debt securities in issue 197,747 172,267
Included within:
- trading liabilities (Note 24) (27) (978)
- financial liabilities designated at fair value (Note 25) (103,803) (93,140)
At 31 Dec 93,917 78,149
HSBC Holdings
2023 2022
$m $m
Debt securities 100,428 92,361
Included within:
- financial liabilities designated at fair value (Note 25) (35,189) (25,423)
At 31 Dec 65,239 66,938
27 Accruals, deferred income and other liabilities
2023 2022
$m $m
Accruals and deferred income 16,814 12,605
Settlement accounts 28,423 18,178
Cash collateral and margin payables 56,832 70,298
Endorsements and acceptances 7,911 8,379
Employee benefit liabilities (Note 5) 1,160 1,096
Reinsurance contract liabilities 819 748
Lease liabilities 2,813 2,767
Other liabilities 21,834 20,242
At 31 Dec 136,606 134,313
1 Accruals, deferred income and other liabilities include $129,401m (2022:
$125,957m) of financial liabilities, the majority of which are measured at
amortised cost.
2 From 1 January 2023, we adopted IFRS 17 'Insurance Contracts', which
replaced IFRS 4 'Insurance Contracts'. Comparative data have been restated
accordingly.
28 Provisions
Restructuring Legal proceedings Customer Other Total
costs
and regulatory
remediation
provisions
matters
$m $m $m $m $m
Provisions (excluding contractual commitments)
At 1 Jan 2023 445 409 195 397 1,446
Additions 255 236 37 170 698
Amounts utilised (288) (231) (69) (68) (656)
Unused amounts reversed (149) (30) (41) (95) (315)
Exchange and other movements 21 (4) 8 16 41
At 31 Dec 2023 284 380 130 420 1,214
Contractual commitments(1)
At 1 Jan 2023 512
Net change in expected credit loss provision and other movements 15
At 31 Dec 2023 527
Total provisions
At 31 Dec 2022 1,958
At 31 Dec 2023 1,741
Provisions (excluding contractual commitments)
At 1 Jan 2022 383 619 386 558 1,946
Additions 434 271 60 206 971
Amounts utilised (288) (393) (106) (168) (955)
Unused amounts reversed (87) (82) (109) (125) (403)
Exchange and other movements 3 (6) (36) (74) (113)
At 31 Dec 2022 445 409 195 397 1,446
Contractual commitments(1)
At 1 Jan 2022 620
Net change in expected credit loss provision and other movements (108)
At 31 Dec 2022 512
Total provisions
At 31 Dec 2021 2,566
At 31 Dec 2022 1,958
1 Contractual commitments include the expected credit loss provision
in relation to off-balance sheet financial guarantee contracts and commitments
where HSBC has become party to an irrevocable commitment, as defined under
IFRS 9 'Financial Instruments'; and provisions for performance and other
guarantee contracts.
Further details of 'Legal proceedings and regulatory matters' are set out in
Note 36. 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' refers 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.
For further details of the impact of IFRS 9 on undrawn loan commitments and
financial guarantees, presented in 'Contractual commitments', see Note 34.
Further analysis of the movement in the expected credit loss provision is
disclosed within the 'Reconciliation of changes in gross carrying/nominal
amount and allowances for loans and advances to banks and customers including
loan commitments and financial guarantees' table on page 169.
Brazil PIS and COFINS tax matters
Beginning in the late 1990s, HSBC Bank Brasil S.A. - Banco Múltiplo ('HSBC
Brazil') and other financial services firms brought legal proceedings in
Brazil challenging the assessment of PIS and COFINS taxes, which are federal
taxes imposed on gross revenues earned by legal entities in Brazil. The
Supreme Court of Brazil selected three cases - one involving an insurer, in
2007, and two involving other banks, in 2011 - to set standards that would
apply to all of these proceedings. In June 2023, the court ruled against the
financial services firms in all three cases. The standards set by the court in
this ruling have not yet been applied to HSBC Brazil's legacy cases, liability
for which remained with HSBC after the sale of HSBC's operations in Brazil to
Bradesco in 2016. There are many factors that may affect the range of outcomes
and any resulting financial impact for HSBC. Based upon the information
currently available, a provision was recognised in respect of one legacy case.
The remaining additional tax liability subject to challenge on all legacy PIS
and COFINS cases is up to $0.4bn.
29 Subordinated liabilities
HSBC's subordinated liabilities
2023 2022
$m $m
At amortised cost 24,954 22,290
- subordinated liabilities 23,149 20,547
- preferred securities 1,805 1,743
Designated at fair value (Note 25) 11,477 9,636
- subordinated liabilities 11,477 9,636
- preferred securities - -
At 31 Dec 36,431 31,926
Issued by HSBC subsidiaries 4,154 6,094
Issued by HSBC Holdings 32,277 25,832
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 relevant
market 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 subordinated liabilities: subsidiaries
2023 2022
$m $m
Additional tier 1 capital securities issued by HSBC subsidiaries 1,672 1,584
Tier 2 securities issued by HSBC subsidiaries
- Tier 2 securities issued by HSBC Bank plc 764 2,427
- Tier 2 securities issued by The Hongkong and Shanghai Banking Corporation - 400
Limited
- Tier 2 securities issued by HSBC Bank USA Inc 223 223
- Tier 2 securities issued by HSBC Bank USA N.A. 1,449 1,405
- Tier 2 securities issued by HSBC Bank Canada(1) - -
Securities issued by other HSBC subsidiaries 46 55
Subordinated liabilities issued by HSBC subsidiaries at 31 Dec 4,154 6,094
1 Liability accounts for HSBC Bank Canada have been reclassified to
'Liabilities of disposal groups held for sale'.
HSBC Holdings' subordinated liabilities
2023 2022
$m $m
At amortised cost 24,439 19,727
Designated at fair value (Note 25) 8,449 6,700
At 31 Dec 32,888 26,427
HSBC Holdings' subordinated liabilities in issue
2023 2022
$m $m
Tier 2 securities issued by HSBC Holdings
Amounts owed to third parties 31,975 25,527
Amounts owed to HSBC undertakings 913 900
Subordinated liabilities issued by HSBC Holdings at 31 Dec 32,888 26,427
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 qualified as additional tier 1 capital for HSBC under CRR II until
31 December 2021 by virtue of the application of grandfathering provisions.
The capital security guaranteed by HSBC Bank plc also qualified as additional
tier 1 capital for HSBC Bank plc (on a solo and a consolidated basis) under
CRR II until 31 December 2021 by virtue of the same grandfathering process.
Since 31 December 2021, these securities have no longer qualified as
regulatory capital for HSBC or HSBC Bank plc.
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.
30 Maturity analysis of assets, liabilities and off-balance sheet commitments
The table on page 408 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 included in 'other financial
liabilities' are irrespective of contractual maturity included in the 'Due
over 5 years' time bucket in the maturity table provided below. An analysis of
the present value of expected future cash flows of insurance contract
liabilities and contractual service margin is provided on page 411.
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 not Due over Due over Due over Due over Due over Due over Due over Total
more than 1 month 3 months 6 months 9 months 1 year 2 years 5 years
1 month but not but not but not but not but not but not
more than more than more than more than more than more than
3 months 6 months 9 months 1 year 2 years 5 years
$m $m $m $m $m $m $m $m $m
Financial assets
Cash and balances at central banks 285,868 - - - - - - - 285,868
Items in the course of collection from other banks 6,342 - - - - - - - 6,342
Hong Kong Government certificates of indebtedness 42,024 - - - - - - - 42,024
Trading assets 284,865 2,010 637 363 555 165 564 - 289,159
Financial assets designated or otherwise mandatorily measured at fair value 5,530 697 821 753 581 4,839 11,917 85,505 110,643
Derivatives 227,343 138 134 71 35 383 570 1,040 229,714
Loans and advances to banks 76,524 18,662 6,487 2,689 3,281 2,756 2,328 175 112,902
Loans and advances to customers 142,803 66,425 52,218 40,135 36,323 94,206 175,381 331,044 938,535
- personal 44,105 9,558 6,960 6,422 6,127 19,606 54,365 297,512 444,655
- corporate and commercial 83,281 50,268 38,250 24,685 24,566 61,612 106,598 30,592 419,852
- financial 15,417 6,599 7,008 9,028 5,630 12,988 14,418 2,940 74,028
Reverse repurchase agreements - non-trading 164,826 43,893 23,840 6,708 5,126 6,113 1,711 - 252,217
Financial investments 48,969 69,816 44,493 16,348 18,603 46,124 106,117 92,293 442,763
Assets held for sale(2) 39,882 2,929 7,041 4,176 3,261 17,085 33,015 7,943 115,332
Accrued income and other financial assets 108,138 6,574 4,404 550 698 220 764 1,513 122,861
Financial assets at 31 Dec 2023 1,433,114 211,144 140,075 71,793 68,463 171,891 332,367 519,513 2,948,360
Non-financial assets - - - - - - - 90,317 90,317
Total assets at 31 Dec 2023 1,433,114 211,144 140,075 71,793 68,463 171,891 332,367 609,830 3,038,677
Off-balance sheet commitments received
Loan and other credit-related commitments 39,836 - - - - - - - 39,836
Financial liabilities
Hong Kong currency notes in circulation 42,024 - - - - - - - 42,024
Deposits by banks 52,747 2,758 2,324 381 94 1,458 13,064 337 73,163
Customer accounts 1,343,858 138,117 78,611 20,832 17,724 7,785 4,616 104 1,611,647
- personal 621,112 84,909 61,286 14,794 12,465 5,507 2,742 2 802,817
- corporate and commercial 545,207 43,562 14,525 4,605 3,393 2,165 1,527 92 615,076
- financial 177,539 9,646 2,800 1,433 1,866 113 347 10 193,754
Repurchase agreements - non-trading 158,882 10,311 1,759 300 847 1 - - 172,100
Items in the course of transmission to other banks 7,295 - - - - - - - 7,295
Trading liabilities 66,548 6,302 300 - - - - - 73,150
Financial liabilities designated at 22,080 8,366 7,823 7,197 6,239 16,679 39,497 33,545 141,426
fair value
- debt securities in issue: covered bonds - - - - - - - - -
- debt securities in issue: unsecured 10,383 2,760 5,748 6,225 5,390 14,090 34,757 23,898 103,251
- subordinated liabilities and preferred securities - 1,995 - - - 1,471 3,429 4,581 11,476
- other 11,697 3,611 2,075 972 849 1,118 1,311 5,066 26,699
Derivatives 233,134 113 25 9 47 73 1,223 148 234,772
Debt securities in issue 6,891 6,664 10,816 6,896 6,427 6,317 27,452 22,454 93,917
- covered bonds - - - - - - 1,273 - 1,273
- otherwise secured 447 44 62 58 55 188 861 1,679 3,394
- unsecured 6,444 6,620 10,754 6,838 6,372 6,129 25,318 20,775 89,250
Liabilities of disposal groups held for sale(3) 69,868 5,231 5,479 6,728 6,541 4,730 7,918 1,511 108,006
Accruals and other financial liabilities 104,264 11,827 6,007 1,205 1,414 1,053 1,491 2,137 129,398
Subordinated liabilities - 13 - - - 1,790 897 22,254 24,954
Total financial liabilities at 31 Dec 2023 2,107,591 189,702 113,144 43,548 39,333 39,886 96,158 82,490 2,711,852
Non-financial liabilities - - - - - - - 134,215 134,215
Total liabilities at 31 Dec 2023 2,107,591 189,702 113,144 43,548 39,333 39,886 96,158 216,705 2,846,067
Off-balance sheet commitments given
Loan and other credit-related commitments 895,140 95 126 72 171 439 807 300 897,150
- personal 256,272 21 30 46 107 279 745 192 257,692
- corporate and commercial 472,507 74 26 26 64 160 62 108 473,027
- financial 166,361 - 70 - - - - - 166,431
Maturity analysis of assets, liabilities and off-balance sheet commitments
(continued)
Due not Due over Due over Due over Due over Due over Due over Due over Total
more than 1 month 3 months 6 months 9 months 1 year 2 years 5 years
1 month but not but not but not but not but not but not
more than more than more than more than more than more than
3 months 6 months 9 months 1 year 2 years 5 years
$m $m $m $m $m $m $m $m $m
Financial assets
Cash and balances at central banks 327,002 - - - - - - - 327,002
Items in the course of collection from other banks 7,297 - - - - - - - 7,297
Hong Kong Government certificates of indebtedness 43,787 - - - - - - - 43,787
Trading assets 213,234 1,333 1,343 338 425 808 222 390 218,093
Financial assets designated at fair value 3,282 718 1,369 1,178 479 1,967 13,353 77,755 100,101
Derivatives 281,724 132 29 21 65 261 1,052 875 284,159
Loans and advances to banks 72,240 13,965 8,323 860 2,328 3,058 3,569 132 104,475
Loans and advances to customers 139,934 75,486 58,951 35,633 33,730 99,933 173,076 306,818 923,561
- personal 41,834 9,141 6,659 5,745 5,773 18,326 51,050 273,487 412,015
- corporate and commercial 84,955 60,067 45,695 24,430 22,629 68,473 108,418 30,231 444,898
- financial 13,145 6,278 6,597 5,458 5,328 13,134 13,608 3,100 66,648
Reverse repurchase agreements - non-trading 171,173 51,736 16,164 5,840 2,776 3,999 2,066 - 253,754
Financial investments 46,493 79,309 30,722 11,798 13,067 40,710 67,951 74,676 364,726
Assets held for sale(2) 33,781 3,755 3,452 3,044 3,263 15,369 40,017 14,697 117,378
Accrued income and other financial assets 99,113 6,042 3,766 620 703 543 302 1,295 112,384
Financial assets at 31 Dec 2022 1,439,060 232,476 124,119 59,332 56,836 166,648 301,608 476,638 2,856,717
Non-financial assets - - - - - - - 92,569 92,569
Total assets at 31 Dec 2022 1,439,060 232,476 124,119 59,332 56,836 166,648 301,608 569,207 2,949,286
Off-balance sheet commitments received
Loan and other credit-related commitments 27,340 - - - - - - - 27,340
Financial liabilities
Hong Kong currency notes in circulation 43,787 - - - - - - - 43,787
Deposits by banks 46,994 359 3,510 205 136 1,455 13,737 326 66,722
Customer accounts 1,388,297 93,108 47,712 14,244 17,295 4,719 4,607 321 1,570,303
- personal 657,413 55,252 35,430 10,431 12,374 2,835 2,351 2 776,088
- corporate and commercial 555,539 31,624 10,385 3,080 3,824 1,667 2,146 274 608,539
- financial 175,345 6,232 1,897 733 1,097 217 110 45 185,676
Repurchase agreements - non-trading 121,193 3,804 685 170 645 1,250 - - 127,747
Items in the course of transmission to other banks 7,864 - - - - - - - 7,864
Trading liabilities 66,027 5,668 281 113 113 116 35 - 72,353
Financial liabilities designated at fair value 16,430 7,398 6,562 4,308 5,325 19,287 34,886 33,125 127,321
- debt securities in issue: covered bonds - - - - - - - - -
- debt securities in issue: unsecured 7,056 3,620 4,793 3,157 4,288 16,234 29,941 23,510 92,599
- subordinated liabilities and preferred securities - - - - - 1,971 3,675 3,990 9,636
- other 9,374 3,778 1,769 1,151 1,037 1,082 1,270 5,625 25,086
Derivatives 284,412 73 18 46 57 171 849 136 285,762
Debt securities in issue 4,514 7,400 7,476 4,745 3,585 9,198 19,240 21,991 78,149
- covered bonds - - - - - - 601 - 601
- otherwise secured 705 28 40 38 36 124 656 1,346 2,973
- unsecured 3,809 7,372 7,436 4,707 3,549 9,074 17,983 20,645 74,575
Liabilities of disposal groups held for sale(3) 76,928 4,342 5,374 6,599 8,606 2,343 8,653 1,479 114,324
Accruals and other financial liabilities 104,295 9,576 4,776 967 1,564 1,028 2,016 1,725 125,947
Subordinated liabilities - - 11 160 - - 1,689 20,430 22,290
Total financial liabilities at 31 Dec 2022 2,160,741 131,728 76,405 31,557 37,326 39,567 85,712 79,533 2,642,569
Non-financial liabilities - - - - - - - 121,520 121,520
Total liabilities at 31 Dec 2022 2,160,741 131,728 76,405 31,557 37,326 39,567 85,712 201,053 2,764,089
Off-balance sheet commitments given
Loan and other credit-related commitments 825,781 184 75 59 210 242 975 328 827,854
- personal 242,953 2 3 - 110 199 811 300 244,378
- corporate and commercial 449,843 176 72 59 84 43 163 28 450,468
- financial 132,985 6 - - 16 - 1 - 133,008
1 From 1 January 2023, we adopted IFRS 17 'Insurance Contracts', which
replaced IFRS 4 'Insurance Contracts'. Comparative data have been restated
accordingly.
2 Unallocated impairment losses in relation to disposal groups of
$2.0bn (2022: $2.4bn) and non-financial assets of $0.9bn (2022: $1bn) that are
presented within assets held for sale on the balance sheet have been included
within non-financial assets in the table above.
3 A total of $0.4bn (2022: $0.3bn) of non-financial liabilities that
are presented within liabilities of disposal groups held for sale on the
balance sheet have been included within non-financial liabilities in the table
above.
HSBC Holdings
Maturity analysis of assets, liabilities and off-balance sheet commitments
Due not Due over Due over Due over Due over Due over Due over Due over Total
more than 1 month 3 months 6 months 9 months 1 year 2 years 5 years
1 month but not but not but not but not but not but not
more than more than more than more than more than more than
3 months 6 months 9 months 1 year 2 years 5 years
$m $m $m $m $m $m $m $m $m
Financial assets
Cash at bank and in hand:
- balances with HSBC undertakings 7,029 - - - - - - - 7,029
Financial assets with HSBC undertakings designated and otherwise mandatorily - - - - - 3,815 26,284 29,780 59,879
measured at fair value
Derivatives 2,217 - - - - 18 675 434 3,344
Loans and advances to HSBC undertakings - - 120 - - 1,016 6,783 19,435 27,354
Financial investments 10,365 6,017 898 750 757 771 - - 19,558
Accrued income and other financial assets 3,511 860 254 229 5 - - - 4,859
Total financial assets at 31 Dec 2023 23,122 6,877 1,272 979 762 5,620 33,742 49,649
122,023
Non-financial assets - - - - - - - 163,146
163,146
Total assets at 31 Dec 2023 23,122 6,877 1,272 979 762 5,620 33,742 212,795
285,169
Financial liabilities
Amounts owed to HSBC undertakings - 168 - - - - - - 168
Financial liabilities designated at fair value - - - - - 5,287 19,604 18,747 43,638
- debt securities in issue - - - - - 3,816 16,175 15,198 35,189
- subordinated liabilities and preferred securities - - - - - 1,471 3,429 3,549 8,449
Derivatives 2,452 209 7 59 75 558 1,318 1,412 6,090
Debt securities in issue - - 816 2,158 - 4,920 33,735 23,610 65,239
Accruals and other financial liabilities 1,437 1,599 1,049 127 34 - - 23 4,269
Subordinated liabilities - 1,987 - - - 1,600 880 19,972 24,439
Total financial liabilities 31 Dec 2023 3,889 3,963 1,872 2,344 109 12,365 55,537 63,764
143,843
Non-financial liabilities - - - - - - - 20 20
Total liabilities at 31 Dec 2023 3,889 3,963 1,872 2,344 109 12,365 55,537 63,784
143,863
Financial assets
Cash at bank and in hand:
- balances with HSBC undertakings 3,210 - - - - - - - 3,210
Financial assets with HSBC undertakings designated and otherwise mandatorily - - - - - 9,007 16,230 27,085 52,322
measured at fair value
Derivatives 2,889 - - - - - 796 116 3,801
Loans and advances to HSBC undertakings - 2,163 240 - - 2,035 4,414 17,913 26,765
Financial investments 1,517 2,712 8,870 1,020 2,194 3,153 - - 19,466
Accrued income and other financial assets 68 4,147 179 90 4 - 14 - 4,502
Total financial assets at 31 Dec 2022 7,684 9,022 9,289 1,110 2,198 14,195 21,454 45,114 110,066
Non-financial assets - - - - - - - 171,035 171,035
Total assets at 31 Dec 2022 7,684 9,022 9,289 1,110 2,198 14,195 21,454 216,149 281,101
Financial liabilities
Amounts owed to HSBC undertakings 48 266 - - - - - - 314
Financial liabilities designated at fair value - - - - - 1,447 16,459 14,217 32,123
- debt securities in issue - - - - - 1,447 12,784 11,192 25,423
- subordinated liabilities and preferred securities - - - - - - 3,675 3,025 6,700
Derivatives 2,540 - 35 - 102 460 1,638 2,147 6,922
Debt securities in issue - - 1,972 448 714 11,046 25,380 27,378 66,938
Accruals and other financial liabilities 722 450 648 61 35 - 14 31 1,961
Subordinated liabilities - - - - - 1,941 1,492 16,294 19,727
Total financial liabilities at 31 Dec 2022 3,310 716 2,655 509 851 14,894 44,983 60,067 127,985
Non-financial liabilities - - - - - - - 8 8
Total liabilities at 31 Dec 2022 3,310 716 2,655 509 851 14,894 44,983 60,075 127,993
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, loan 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 more Due over Due over Due over Due over Total
than 1 month 1 month but 3 months but 1 year but not 5 years
not more than not more than more than
3 months 1 year 5 years
$m $m $m $m $m $m
Deposits by banks 52,938 2,898 3,304 17,123 362 76,625
Customer accounts 1,345,006 141,348 119,660 13,423 109 1,619,546
Repurchase agreements - non-trading 159,264 10,457 2,996 1 - 172,718
Trading liabilities 73,150 - - - - 73,150
Financial liabilities designated at fair value 22,262 9,156 26,033 63,960 44,886 166,297
Derivatives 232,598 609 1,295 2,445 2,910 239,857
Debt securities in issue 6,837 7,407 24,117 43,513 27,119 108,993
Subordinated liabilities 39 135 1,465 9,020 34,920 45,579
Other financial liabilities(1) 149,904 9,752 5,943 2,555 2,109 170,263
2,041,998 181,762 184,813 152,040 112,415 2,673,028
Loan and other credit-related commitments 895,156 95 371 1,437 91 897,150
Financial guarantees(2) 16,966 4 39 - - 17,009
At 31 Dec 2023 2,954,120 181,861 185,223 153,477 112,506 3,587,187
Proportion of cash flows payable in period 83% 5% 5% 4% 3%
Deposits by banks 47,082 406 4,024 16,050 359 67,921
Customer accounts 1,387,125 96,474 80,608 9,961 346 1,574,514
Repurchase agreements - non-trading 121,328 3,852 1,535 1,268 - 127,983
Trading liabilities 72,353 - - - - 72,353
Financial liabilities designated at fair value 16,687 7,859 18,740 63,606 43,475 150,367
Derivatives 283,512 171 1,181 2,222 1,059 288,145
Debt securities in issue 4,329 8,217 17,522 34,283 26,428 90,779
Subordinated liabilities 37 168 1,395 7,321 32,946 41,867
Other financial liabilities(1) 153,597 8,670 5,994 3,230 1,704 173,195
2,086,050 125,817 130,999 137,941 106,317 2,587,124
Loan and other credit-related commitments 825,781 184 344 1,217 328 827,854
Financial guarantees(2) 18,696 25 62 - - 18,783
At 31 Dec 2022 2,930,527 126,026 131,405 139,158 106,645 3,433,761
Proportion of cash flows payable in period 85% 4% 4% 4% 3%
1 Excludes financial liabilities of disposal groups.
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 and maintain an appropriate liquidity buffer.
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 2023,
consistent with the Group's capital plan, the Group's material 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 from material
subsidiaries. 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 and
forecast requirements. Liquidity risk in HSBC Holdings is overseen by Holdings
ALCO.
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 HSBC Holdings 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, loan 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 Holdings under financial liabilities by remaining
contractual maturities
Due not more Due over 1 Due over 3 Due over 1 Due over Total
than 1 month month but not months but year but not 5 years
more than 3 not more than more than 5
months 1 year years
$m $m $m $m $m $m
Amounts owed to HSBC undertakings - 168 - - - 168
Financial liabilities designated at fair value 23 405 1,437 31,050 25,610 58,525
Derivatives 1,244 556 1,651 2,227 726 6,404
Debt securities in issue - 680 4,787 46,909 27,745 80,121
Subordinated liabilities 46 2,163 1,360 8,239 30,862 42,670
Other financial liabilities 1,436 1,620 1,210 - 23 4,289
2,749 5,592 10,445 88,425 84,966 192,177
Loan commitments - - - - - -
Financial guarantees(1) - - - - - -
At 31 Dec 2023 2,749 5,592 10,445 88,425 84,966 192,177
Amounts owed to HSBC undertakings 48 266 - - - 314
Financial liabilities designated at fair value 11 72 1,139 22,921 19,196 43,339
Derivatives 1,182 177 1,089 4,231 1,321 8,000
Debt securities in issue - 544 4,899 44,608 32,540 82,591
Subordinated liabilities 46 161 1,068 8,262 27,045 36,582
Other financial liabilities 721 458 745 14 31 1,969
2,008 1,678 8,940 80,036 80,133 172,795
Loan commitments - - - - - -
Financial guarantees(1) - - - - - -
At 31 Dec 2022 2,008 1,678 8,940 80,036 80,133 172,795
1 Excludes performance guarantee contracts to which the impairment
requirements in IFRS 9 are not applied. Prior period comparatives have been
restated. Refer to footnote 1 in Note 34.
31 Offsetting of financial assets and financial liabilities
In the offsetting of financial assets and financial liabilities, the net
amount is reported in the balance sheet when the offset criteria are met. This
is achieved when there is a legally enforceable right to offset the recognised
amounts and there is either an intention to settle on a net basis, or realise
the asset and settle the liability simultaneously.
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
- cash and non-cash collateral (debt securities and equities) has been
received/pledged for derivatives and reverse repurchase/repurchase, stock
borrowing/lending and similar agreements to cover net exposure in the event of
a default or other predetermined events.
The effect of over-collateralisation is excluded.
'Amounts not subject to enforceable netting agreements' include contracts
executed in jurisdictions where the rights of offset may not be upheld under
the local bankruptcy laws, and transactions where a legal opinion evidencing
enforceability of the right of offset may not have been sought, or may have
been unable to obtain.
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 Total
subject to
enforceable
netting
arrangements(1)
Amounts not set off in the balance sheet
Gross Amounts Net Financial instruments, including non-cash collateral Cash Net
amounts offset
collateral amount
amounts in the balance
sheet
$m $m $m $m $m $m $m $m
Financial assets
Derivatives (Note 15)(2) 341,473 (116,486) 224,987 (198,743) (22,926) 3,318 4,727 229,714
Reverse repos, stock borrowing and similar agreements classified as:(3)
- trading assets 29,152 (602) 28,550 (28,513) (34) 3 2,633 31,183
- non-trading assets 365,922 (135,210) 230,712 (230,240) (80) 392 21,653 252,365
Loans and advances to customers(4) 34,173 (15,792) 18,381 (15,613) (93) 2,675 2 18,383
At 31 Dec 2023 770,720 (268,090) 502,630 (473,109) (23,133) 6,388 29,015 531,645
Derivatives (Note 15)(2) 419,020 (140,987) 278,033 (236,372) (36,486) 5,175 6,126 284,159
Reverse repos, stock borrowing and similar agreements classified as:(3)
- trading assets 24,370 (236) 24,134 (24,105) - 1,369 25,503
(29)
- non-trading assets 335,193 (102,888) 232,305 (231,432) 424 21,689 253,994
(449)
Loans and advances to customers(4) 28,336 (12,384) 15,952 (13,166) - 2,786 267 16,219
At 31 Dec 2022(6) 806,919 (256,495) 550,424 (505,075) (36,964) 8,385 29,451 579,875
Financial liabilities
Derivatives (Note 15)(2) 344,799 (116,486) 228,313 (198,640) (23,748) 5,925 6,459 234,772
Repos, stock lending and similar agreements classified as:(3)
- trading liabilities 15,686 (172) 15,514 (15,453) - 61 6 15,520
- non-trading liabilities 270,493 (135,640) 134,853 (134,095) (669) 89 37,247 172,100
Customer accounts(6) 42,522 (15,792) 26,730 (15,613) (93) 11,024 13 26,743
At 31 Dec 2023 673,500 (268,090) 405,410 (363,801) (24,510) 17,099 43,725 449,135
Derivatives (Note 15)(2) 419,992 (140,987) 279,005 (239,234) (29,276) 10,495 6,757 285,762
Repos, stock lending and similar agreements classified as:(3)
- trading liabilities 20,026 (236) 19,790 (19,790) - - 5 19,795
- non-trading liabilities 206,827 (102,888) 103,939 (103,296) 394 23,809 127,748
(249)
Customer accounts(6) 37,164 (12,384) 24,780 (13,166) - 11,614 14 24,794
At 31 Dec 2022(6) 684,009 (256,495) 427,514 (375,486) (29,525) 22,503 30,585 458,099
1 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.
2 At 31 December 2023, the amount of cash margin received that had been
offset against the gross derivatives assets was $5,105m (2022 $8,357m). The
amount of cash margin paid that had been offset against the gross derivatives
liabilities was $7,142m (2022: $10,918m).
3 For the amount of repos, reverse repos, stock lending, stock
borrowing and similar agreements recognised on the balance sheet within
'Trading assets' of $31,183m (2022: $25,503m) and 'Trading liabilities' of
$15,520m (2022: $19,795m), see the 'Funding sources and uses' table on page
211.
4 At 31 December 2023, the total amount of 'Loans and advances to
customers' was $938,535m (2022: $923,561m), of which $18,381m (2022: $15,952m)
was subject to offsetting.
5 From 1 January 2023, we adopted IFRS 17 'Insurance Contracts', which
replaced IFRS 4 'Insurance Contracts'. We have restated 2022 comparative data.
6 At 31 December 2023, the total amount of 'Customer accounts' was
$1,611,647m (2022: $1,570,303m), of which $26,730m (2022: $24,780m) was
subject to offsetting.
32 Interest rate benchmark reform
Financial instruments yet to transition to alternative benchmarks, by main
benchmark
USD Libor GBP Libor(3) JPY Libor CDOR TIIE Others(1)
At 31 Dec 2023 $m $m $m $m $m $m
Non-derivative financial assets(2) 2,644 45 - 2,132 3,961 1,941
Non-derivative financial liabilities 905 2,054 558 181 1,323 9
Derivative notional contract amount 12,013 - - 134,636 32,836 11,821
At 31 Dec 2022
Non-derivative financial assets(2) 54,348 304 - 1,695 3,635 4,144
Non-derivative financial liabilities 25,564 1,804 1,179 176 - -
Derivative notional contract amount 2,348,412 68 - 119,832 17,698 56,759
1 Comprises financial instruments referencing other significant
benchmark rates yet to transition to alternative benchmarks (euro Libor, SOR,
THBFIX, MIFOR, Sibor and Johannesburg interbank average rate ('JIBAR')). An
announcement was made by the South African regulator during the first half of
2023 on the cessation of the JIBAR. Therefore, JIBAR is also included in
'Others' during the current period.
2 Gross carrying amount excluding allowances for expected credit
losses.
3 Non-derivative assets exposure relates to contracts for clients
requiring additional time for loan restructuring or repayment. The limited
number of remaining contracts are expected to be transitioned prior to
cessation of 'synthetic' GBP Libor from 31 March 2024. Non-derivative
financial liabilities relate to MREL instruments that include references to
GBP Libor in their contractual terms but are currently using a fixed interest
rate. HSBC remains committed to seeking to remediate and/or mitigate the risks
associated with these contracts by the relevant interest rate calculation
dates.
The amounts in the above table relate to HSBC's main operating entities where
HSBC has material exposures impacted by Ibor reform, including in the UK, Hong
Kong, France, the US, Mexico, Canada, Singapore, the UAE, Bermuda, Australia,
Qatar, Germany, Thailand, India and Japan. The amounts provide an indication
of the extent of the Group's exposure to the Ibor benchmarks that are due to
be replaced. Amounts are in respect of financial instruments that:
- contractually reference an interest rate benchmark that is planned
to transition to an alternative benchmark;
- have a contractual maturity date beyond the date by which the
reference interest rate benchmark is expected to cease; and
- are recognised on HSBC's consolidated balance sheet.
-
33 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
2023 2022
Number $m Number $m
At 1 Jan 20,293,607,410 10,147 20,631,520,439 10,316
Shares issued under HSBC employee share plans 10,778,479 5 10,226,221 5
Shares issued in lieu of dividends - - - -
Less: shares repurchased and cancelled 716,384,289 358 348,139,250 174
Less: treasury shares cancelled 325,273,407 163 - -
At 31 Dec(1) 19,262,728,193 9,631 20,293,607,410 10,147
HSBC Holdings share premium
2023 2022
$m $m
At 31 Dec 14,738 14,664
Total called up share capital and share premium
2023 2022
$m $m
At 31 Dec 24,369 24,811
1 All HSBC Holdings ordinary shares in issue confer identical rights,
including in respect of capital, dividends and voting.
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 has included two types of additional tier 1 capital securities
in its tier 1 capital, including 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 29 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, subject to anti-dilution
adjustments.
HSBC's additional tier 1 capital - contingent convertible securities in issue
which are accounted for in equity
Original nominal amount (LCY) First call 2023 2022
date
$m $m
$2,250m 6.375% perpetual subordinated contingent convertible securities Sep 2024 2,250 2,250
$2,450m 6.375% perpetual subordinated contingent convertible securities Mar 2025 2,450 2,450
$3,000m 6.000% perpetual subordinated contingent convertible securities May 2027 3,000 3,000
$2,350m 6.250% perpetual subordinated contingent convertible securities(1) Mar 2023 - 2,350
$1,800m 6.500% perpetual subordinated contingent convertible securities Mar 2028 1,800 1,800
$1,500m 4.600% perpetual subordinated contingent convertible securities(2) Dec 2030 1,500 1,500
€1,000m 4.000% perpetual subordinated contingent convertible securitiess(3) Mar 2026 1,000 1,000
$1,000m 4.700% perpetual subordinated contingent convertible securities(4) Mar 2031 1,000 1,000
$2,000m 8.000% perpetual subordinated contingent convertible securities(5) Mar 2028 1,980 -
€1,000m 6.000% perpetual subordinated contingent convertible securities(6) Sep 2023 - 1,123
€1,250m 4.750% perpetual subordinated contingent convertible securities Jul 2029 1,422 1,422
S$750m 5.000% perpetual subordinated contingent convertible securities(7) Sep 2023 - 550
€1,000m 5.875% perpetual subordinated contingent convertible securities Sep 2026 1,301 1,301
At 31 Dec 17,703 19,746
1 This security was called by HSBC Holdings on 30 January 2023 and
redeemed and cancelled on 23 March 2023.
2 This security was issued by HSBC Holdings on 17 December 2020. The first
call period commences six months prior to reset date of 17 June 2031.
3 This security was issued by HSBC Holdings on 9 March 2021. The first
call period commences six months prior to reset date of 9 September 2026.
4 This security was issued by HSBC Holdings on 9 March 2021. The first
call period commences six months prior to reset date of 9 September 2031.
5 This security was issued by HSBC Holdings on 7 March 2023. The first
call period commences six months prior to reset date of 7 September 2028. This
security has been accounted for net of directly attributable transaction
costs.
6 This security was called by HSBC Holdings on 3 August 2023 and was
redeemed and cancelled on 29 September 2023.
7 This security was called by HSBC Holdings on 3 August 2023 and was
redeemed and cancelled on 25 September 2023.
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 2023 31 Dec 2022
Number of Usual period of exercise Exercise price Number of Usual period of exercise Exercise price
HSBC Holdings HSBC Holdings
ordinary shares ordinary shares
83,993,678 2022 to 2029 £2.6270-£5.4490 115,650,723 2021 to 2028 £2.6270-5.9640
Maximum obligation to deliver HSBC Holdings ordinary shares
At 31 December 2023, 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 long-term incentive awards and
deferred share awards granted under the HSBC Share Plan 2011, was 208,539,316
(2022: 240,612,019). The total number of shares at 31 December 2023 held by
employee benefit trusts that may be used to satisfy such obligations to
deliver HSBC Holdings ordinary shares was 20,902,218 (2022: 12,315,711).
34 Contingent liabilities, contractual commitments and guarantees
HSBC HSBC Holdings(1)
2023 2022 2023 2022
$m $m $m $m
Guarantees and other contingent liabilities:
- financial guarantees 17,009 18,783 - -
- performance and other guarantees 94,277 88,240 7,723 17,707
- other contingent liabilities 636 676 - 90
At 31 Dec 111,922 107,699 7,723 17,797
Commitments:(2)
- documentary credits and short-term trade-related transactions 7,818 8,241 - -
- forward asset purchases and forward deposits placed 78,535 50,852 - -
- standby facilities, credit lines and other commitments to lend 810,797 768,761 - -
At 31 Dec 897,150 827,854 - -
1 Guarantees by HSBC Holdings are in favour of other Group entities. These
include contracts that provide protection against credit risk on a specified
exposure but do not meet the definition of financial guarantees, which have
been reclassified to 'performance and other guarantees'. Prior period
comparatives have been restated and the full balance reclassified.
2 Includes $661,015m of commitments at 31 December 2023 (31 December
2022: $618,788m), 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 28.
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 28 and 36.
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 be estimated reliably. It is dependent on various
uncertain factors including the potential recovery 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 $69.9bn at 31 December 2023 (2022: $64.8bn). No
matters arose where HSBC was severally liable.
35 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.
The table below excludes finance lease receivables reclassified on the balance
sheet to 'Assets held for sale' in accordance with IFRS 5. Net investment in
finance leases of $1,595m (2022: $1,502m) was reclassified to 'Assets held for
sale' as a result of the planned sale of our banking business in Canada.
2023 2022
Total future Unearned Present Total future Unearned Present
minimum finance value minimum finance value
payments income payments income
$m $m $m $m $m $m
Lease receivables:
No later than one year 2,355 (308) 2,047 2,159 (236) 1,923
One to two years 1,954 (249) 1,705 1,652 (201) 1,451
Two to three years 1,380 (189) 1,191 1,391 (161) 1,230
Three to four years 930 (153) 777 906 (131) 775
Four to five years 593 (132) 461 613 (112) 501
Later than one year and no later than five years 4,857 (723) 4,134 4,562 (605) 3,957
Later than five years 4,116 (838) 3,278 4,064 (736) 3,328
At 31 Dec 11,328 (1,869) 9,459 10,785 (1,577) 9,208
36 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 2023 (see Note 28). 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
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 Bernard L. Madoff Investment Securities LLC ('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 Madoff Securities Trustee has brought lawsuits against
various HSBC companies and others, seeking recovery of alleged transfers from
Madoff Securities to HSBC in the amount of $543m (plus interest), and these
lawsuits remain pending in the US Bankruptcy Court for the Southern District
of New York (the 'US Bankruptcy Court').
Certain Fairfield entities (together, 'Fairfield') (in liquidation) 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 the amount of $382m (plus interest). Fairfield's claims
against most of the HSBC companies have been dismissed by the US Bankruptcy
Court and the US District Court for the Southern District of New York, but
remain pending on appeal before the US Court of Appeals for the Second
Circuit. Fairfield's claims against HSBC Private Bank (Suisse) SA and HSBC
Securities Services Luxembourg ('HSSL') have not been dismissed and their
appeals are also pending before the US Court of Appeals for the Second
Circuit. Meanwhile, proceedings before the US Bankruptcy Court with respect to
the claims against HSBC Private Bank (Suisse) SA and HSSL are ongoing.
UK litigation: The Madoff Securities 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. The claim has not yet been served
and the amount claimed has not been specified.
Cayman Islands litigation: In February 2013, Primeo Fund ('Primeo') (in
liquidation) brought an action against 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. Following dismissal of Primeo's
action by the Grand Court and Court of Appeal of the Cayman Islands, in 2019,
Primeo appealed to the Judicial Committee of the Privy Council. In November
2023, the Privy Council issued a judgment upholding the dismissal of Primeo's
claims. This matter is now closed.
Luxembourg litigation: In 2009, Herald Fund SPC ('Herald') (in liquidation)
brought an action against HSSL before the Luxembourg District Court, seeking
restitution of cash and securities in the amount of $2.5bn (plus interest), or
damages in the amount of $2bn (plus interest). In 2018, HSBC Bank plc was
added to the claim and Herald increased the amount of the alleged damages
claim to $5.6bn (plus interest). The Luxembourg District Court has dismissed
Herald's securities restitution claim, but reserved Herald's cash restitution
and damages claims. Herald has appealed this dismissal to the Luxembourg Court
of Appeal, where the matter is pending.
Beginning in 2009, various HSBC companies have been named as defendants in a
number of actions brought by Alpha Prime Fund Limited ('Alpha Prime') in the
Luxembourg District Court seeking damages for alleged breach of contract and
negligence in the amount of $1.16bn (plus interest). These matters are
currently pending before the Luxembourg District Court.
Beginning in 2014, HSSL and the Luxembourg branch of HSBC Bank plc have been
named as defendants in a number of actions brought by Senator Fund SPC
('Senator') before the Luxembourg District Court seeking restitution of
securities in the amount of $625m (plus interest), or damages in the amount of
$188m (plus interest). These matters are currently pending before the
Luxembourg District Court.
Based on the facts currently known, it is not practicable at this time for
HSBC to predict the resolution of the pending matters, including the timing or
any possible impact on HSBC, which could be significant.
US Anti-Terrorism Act litigation
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, alleged victims of terrorist attacks in the Middle
East. 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, or provided banking services to customers alleged to have
connections to terrorism financing. Seven actions, which seek damages for
unspecified amounts, remain pending and HSBC's motions to dismiss have been
granted in three of these cases. These dismissals are subject to appeals
and/or the plaintiffs re-pleading their claims. The four other actions are at
an early stage.
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.
Interbank offered rates investigation and litigation
Euro interest rate derivatives: In December 2016, the European Commission
('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, and the EC imposed a fine on HSBC based on a one-month
infringement in 2007. The fine was annulled in 2019 and a lower fine was
imposed in 2021. In January 2023, the European Court of Justice dismissed an
appeal by HSBC and upheld the EC's findings on HSBC's liability. A separate
appeal by HSBC concerning the amount of the fine remains pending before the
General Court of the European Union.
US dollar Libor: Beginning in 2011, HSBC and other panel banks have been named
as defendants in a number of individual and putative class action lawsuits
filed in federal and state courts in the US with respect to the setting of US
dollar Libor. The complaints assert claims under various US federal and state
laws, including antitrust and racketeering laws and the Commodity Exchange Act
('US CEA'). HSBC has concluded class settlements with five groups of
plaintiffs, and several class action lawsuits brought by other groups of
plaintiffs have been voluntarily dismissed. A number of individual US dollar
Libor-related actions seeking damages for unspecified amounts remain pending.
Based on the facts currently known, it is not practicable at this time for
HSBC to predict the resolution of the pending matters, including the timing or
any possible impact on HSBC, which could be significant.
Foreign exchange-related investigations and litigation
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, which remains ongoing.
Since 2017, HSBC Bank plc, among other financial institutions, has been
defending a complaint filed by the Competition Commission of South Africa
before the South African Competition Tribunal for alleged anti-competitive
behaviour in the South African foreign exchange market. In 2020, a revised
complaint was filed which also named HSBC Bank USA N.A. ('HSBC Bank USA') as a
defendant. In January 2024, the South African Competition Appeal Court
dismissed HSBC Bank USA from the revised complaint, but denied HSBC Bank plc's
application to dismiss. The Competition Commission has appealed the dismissal
of HSBC Bank USA to the Constitutional Court of South Africa.
Since 2015, various HSBC companies and other banks have been named as
defendants in a putative class action in the US District Court for the
Southern District of New York filed by a group of retail customers who dealt
in foreign exchange products. The plaintiffs allege that the defendants
conspired to manipulate foreign exchange rates and seek damages for
unspecified amounts. This action has been dismissed but remains pending on
appeal.
In January 2023, HSBC Bank plc and HSBC Holdings reached a
settlement-in-principle with plaintiffs in Israel to resolve a class action
filed in the local courts alleging foreign exchange-related misconduct. The
settlement remains subject to court approval. Lawsuits alleging foreign
exchange-related misconduct remain pending against HSBC and other banks in
courts in Brazil.
In February 2024, HSBC Bank plc and HSBC Holdings were joined to an existing
claim brought in the UK Competition Appeals Tribunal against various other
banks alleging historical anti-competitive behaviour in the foreign exchange
market and seeking damages for unspecified amounts. This matter is 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 the pending matters, which could be
significant.
Precious metals fix-related litigation
US litigation: HSBC and other members of The London Silver Market Fixing
Limited are defending a class action pending in the US District Court for the
Southern District of New York alleging 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. In May 2023, this action, which seeks
damages for unspecified amounts, was dismissed but remains pending on appeal.
HSBC and other members of The London Platinum and Palladium Fixing Company
Limited are defending a class action pending in the US District Court for the
Southern District of New York alleging that, from January 2008 to November
2014, the defendants conspired to manipulate the price of platinum group
metals and related financial products for their collective benefit in
violation of US antitrust laws and the US CEA. In February 2023, the court
reversed an earlier dismissal of the plaintiffs' third amended complaint and
this action, which seeks damages for unspecified amounts, is proceeding.
Canada litigation: HSBC and other financial institutions are defending
putative class actions filed in the Ontario and Quebec Superior Courts of
Justice alleging that the defendants conspired to manipulate the price of
silver, gold and related derivatives in violation of the Canadian Competition
Act and common law. These actions each seek CA$1bn in damages plus CA$250m in
punitive damages. Two of the actions are proceeding and the others have been
stayed.
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.
Tax-related investigations
Various tax administration, regulatory and law enforcement authorities around
the world are conducting investigations in connection with allegations of tax
evasion or tax fraud, money laundering and unlawful cross-border banking
solicitation. HSBC continues to cooperate with these investigations.
In March 2023, the French National Financial Prosecutor announced an
investigation into a number of banks, including HSBC Continental Europe and
the Paris branch of HSBC Bank plc, in connection with alleged tax fraud
related to the dividend withholding tax treatment of certain trading
activities. HSBC Bank plc and HSBC Germany also continue to cooperate with
investigations by the German public prosecutor into numerous financial
institutions and their employees, in connection with the dividend withholding
tax treatment of certain trading activities.
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.
Gilts trading investigation and litigation
Since 2018, the UK Competition and Markets Authority ('CMA') has been
investigating HSBC and four other banks for suspected anti-competitive conduct
in relation to the historical trading of gilts and related derivatives. In May
2023, the CMA announced its case against HSBC Bank plc and HSBC Holdings; both
HSBC companies are contesting the CMA's allegations.
In June 2023, HSBC Bank plc and HSBC Securities (USA) Inc., among other banks,
were named as defendants in a putative class action filed in the US District
Court for the Southern District of New York by plaintiffs alleging
anti-competitive conduct in the gilts market and seeking damages for
unspecified amounts. In September 2023, the defendants filed a motion to
dismiss which remains pending. It is possible that additional civil actions
will be initiated against HSBC in relation to its historical gilts trading
activities.
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.
UK depositor protection arrangements investigation
In January 2022, the UK Prudential Regulation Authority ('PRA') commenced an
investigation into HSBC Bank plc's and HSBC UK Bank plc's compliance with
depositor protection arrangements under the Financial Services Compensation
Scheme in the UK. In January 2024, the PRA concluded its investigation and
imposed a £57m fine on HSBC Bank plc and HSBC UK Bank plc, which has been
paid, and this matter is now closed.
UK collections and recoveries investigation
Since 2019, the FCA has been investigating HSBC Bank plc's, HSBC UK Bank plc's
and Marks and Spencer Financial Services plc's compliance with regulatory
standards relating to collections and recoveries operations in the UK between
2017 and 2018. HSBC continues to cooperate with this investigation.
There are many factors that may affect the range of outcomes, and the
resulting financial impact, of this matter, which could be significant.
Korean short selling investigation
In December 2023, the Korean Securities and Futures Commission issued a
decision to impose a fine on The Hongkong and Shanghai Banking Corporation
Limited in connection with trades in breach of Korean short selling rules and
to refer the case to the Korean Prosecutors' Office for investigation.
There are many factors that may affect the range of outcomes, and the
resulting financial impact, of this matter, which could be significant.
Silicon Valley Bank ('SVB') litigation
In May 2023, First-Citizens Bank & Trust Company ('First Citizens')
brought a lawsuit in the US District Court for the Northern District of
California against various HSBC companies and seven US-based HSBC employees
who had previously worked for SVB. The lawsuit seeks $1bn in damages and
alleges, among other things, that the various HSBC companies conspired with
the individual defendants to solicit employees from First Citizens and that
the individual defendants took confidential information belonging to SVB
and/or First Citizens. In January 2024, the court denied the defendants'
motion to dismiss in part and granted it in part, and directed the plaintiff
to amend its complaint to specify its allegations as to each defendant. In
February 2024, First Citizens filed its amended complaint. This action is
ongoing.
Based on the facts currently known, it is not practicable at this time for
HSBC to predict the resolution of this matter, including the timing or any
possible impact on HSBC, which could be significant.
Film Finance litigation
In June 2020, two separate investor groups issued claims against HSBC UK Bank
plc (as successor to HSBC Private Bank (UK) Limited ('PBGB')) in the High
Court of England and Wales seeking damages for unspecified amounts in
connection with PBGB's role in the development of Eclipse film finance
schemes. These actions are ongoing.
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.
US mortgage securitisation litigation
Beginning in 2014, a number of lawsuits were filed in various state and
federal courts in the US against HSBC Bank USA, as a trustee of more than 280
mortgage securitisation trusts, seeking unspecified damages for losses in
collateral value allegedly sustained by the trusts. HSBC Bank USA has reached
settlements with a number of plaintiffs to resolve nearly all of these
lawsuits. The remaining two actions are pending in a New York state court.
HSBC Bank USA and certain of its affiliates continue to defend a mortgage loan
repurchase action seeking unspecified damages and specific performance brought
by the trustee of a mortgage securitisation trust in New York state court.
There are many factors that may affect the range of outcomes, and the
resulting financial impact, of the pending matters, which could be
significant.
Mexican government bond litigation
HSBC Mexico S.A. and other banks are named as defendants in a consolidated
putative class action pending in the US District Court for the Southern
District of New York alleging anti-competitive conduct in the Mexican
government bond market between 2006 and 2017 and seeking damages for
unspecified amounts. In February 2024, the US Court of Appeals for the Second
Circuit reversed an earlier dismissal of this lawsuit and this matter is
proceeding.
Based on the facts currently known, it is not practicable at this time for
HSBC to predict the resolution of this matter, including the timing or any
possible impact on HSBC, which could be significant.
Stanford litigation
Since 2009, HSBC Bank plc has been named as a defendant in numerous claims
filed in courts in the UK and the US arising from the collapse of Stanford
International Bank Ltd, for which it was a correspondent bank from 2003 to
2009. In February 2023, HSBC Bank plc reached settlements with the plaintiffs
to resolve these claims. The US settlement is subject to court approval and
the UK settlement has concluded.
Other regulatory investigations, reviews and litigation
HSBC Holdings and/or certain of its affiliates are also subject to a number of
other enquiries and examinations, requests for information, investigations and
reviews by various regulators and competition and law enforcement authorities,
as well as legal proceedings including litigation, arbitration and other
contentious proceedings, in connection with various matters arising out of
their ordinary course businesses and operations.
At the present time, HSBC does not expect the ultimate resolution of any of
these matters to be material to the Group's financial position; however, given
the uncertainties involved in legal proceedings and regulatory matters, there
can be no assurance regarding the eventual outcome of a particular matter or
matters.
37 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 239 to 246 except for the
roles of Group Chief Legal Officer, Group Head of Internal Audit, Group Chief
Human Resources Officer, Group Chief Sustainability Officer, Group Head of
Strategy, Group Chief Communications and Brand Officer, and Group Company
Secretary and Chief Governance Officer who do 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 interests in shares are disclosed in
the 'Directors' remuneration report' on pages 279 to 305. IAS 24 'Related
Party Disclosures' requires the following additional information for key
management compensation.
Compensation of Key Management Personnel
2023 2022 2021
$m $m $m
Short-term employee benefits 51 52 50
Post-employment benefits 1 1 -
Other long-term employee benefits 10 8 6
Share-based payments 29 26 27
Year ended 31 Dec 91 87 83
Shareholdings, options and other securities of Key Management Personnel
2023 2022
(000s) (000s)
Number of options held over HSBC Holdings ordinary shares under employee share 32 35
plans
Number of HSBC Holdings ordinary shares held beneficially and non-beneficially 20,409 18,185
Number of other HSBC securities held 228 228
At 31 Dec 20,669 18,448
Advances and credits, guarantees and deposit balances during the year with Key
Management Personnel
2023 2022
Balance at Highest amounts Balance at Highest amounts
31 Dec outstanding 31 Dec outstanding
during year during year
$m $m $m $m
Key Management Personnel
Advances and credits(1) 11 16 16 25
Deposits 60 130 53 123
1 Advances and credits entered into by subsidiaries of HSBC Holdings
plc during 2023 with Directors and former Directors, disclosed pursuant to
section 413 of the Companies Act 2006, totalled $2.6m (2022: $2.5m).
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
2023 2022
Highest balance Balance at Highest balance Balance at
during the year 31 Dec during the year 31 Dec
$m $m $m $m
Unsubordinated amounts due from joint ventures 98 94 140 90
Unsubordinated amounts due from associates 7,907 5,910 7,378 6,594
Amounts due to associates 3,002 1,668 2,548 1,295
Amounts due to joint ventures 95 61 57 53
Fair value of derivative assets with associates 1,514 795 1,205 841
Fair value of derivative liabilities with associates 4,388 2,962 4,319 3,648
Guarantees and commitments 503 331 513 293
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 2023, $3.1bn (2022: $2.9bn) of HSBC post-employment benefit
plan assets were under management by HSBC companies, earning management fees
of $13m in 2023 (2022: $13m). At 31 December 2023, HSBC's post-employment
benefit plans had placed deposits of $402m (2022: $369m) with its banking
subsidiaries, earning interest payable to the schemes of $2m (2022: nil). 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 2023, the gross notional value of the swaps
was $7.1bn (2022: $6.6bn). These swaps had a positive fair value to the scheme
of $0.5bn (2022: $0.5bn); and HSBC had delivered collateral of $0.6bn (2022:
$0.5bn) 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 40.
Transactions and balances during the year with subsidiaries
2023 2022
Highest balance Balance at Highest balance Balance at
during the year 31 Dec during the year 31 Dec
$m $m $m $m
Assets
Cash and balances with HSBC undertakings 8,396 7,029 7,421 3,210
Financial assets with HSBC undertakings designated and otherwise mandatorily 60,309 59,879 52,322 52,322
measured at fair value
Derivatives 4,010 3,344 5,380 3,801
Loans and advances to HSBC undertakings 28,213 27,354 26,765 26,765
Prepayments, accrued income and other assets 7,417 5,145 4,893 4,803
Investments in subsidiaries 167,542 159,478 167,542 167,542
Total related party assets at 31 Dec 275,887 262,229 264,323 258,443
Liabilities
Amounts owed to HSBC undertakings 179 168 314 314
Derivatives 9,309 6,090 8,318 6,922
Accruals, deferred income and other liabilities 505 341 1,375 429
Subordinated liabilities 927 913 900 900
Total related party liabilities at 31 Dec 10,920 7,512 10,907 8,565
Guarantees and commitments 7,723 7,723 17,707 17,707
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.
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.
38 Effects of adoption of IFRS 17
On 1 January 2023, the Group adopted IFRS 17 'Insurance Contracts', and as
required by the standard applied the requirements retrospectively, with
comparatives restated from the transition date, 1 January 2022. The tables
below provide the transition restatement impact on the Group's consolidated
balance sheet as at 1 January 2022, as well as the Group consolidated income
statement and the Group consolidated statement of comprehensive income for the
year ended 31 December 2022.
Further information about the effect of the adoption of IFRS 17 is provided in
Note 1 'Basis of preparation and material accounting policies' on page 341.
IFRS 17 transition impact on the Group consolidated balance sheet at 1 January
2022
Under IFRS 4 Removal of PVIF and IFRS 4 balances Remeasure-ment effect of IFRS 9 re-designations Recognition of IFRS 17 Recognition of IFRS 17 contractual service margin Tax effect Under IFRS 17 Total
fulfilment cash flows movements
$m $m $m $m $m $m $m $m
Assets
Financial assets designated and otherwise mandatorily measured at fair value 49,804 - 60,991 - - - 110,795 60,991
through profit or loss
Loans and advances to banks 83,136 - (569) - - - 82,567 (569)
Loans and advances to customers - (1,280) - - - 1,044,534 (1,280)
1,045,814
Financial investments 446,274 - (54,269) - - - 392,005 (54,269)
Goodwill and intangible assets 20,622 (9,453) - - - - 11,169 (9,453)
Deferred tax assets 4,624 - - - - 808 5,432 808
All other assets (4,468) - 4,198 (105) - 1,307,290 (375)
1,307,665
Total assets (13,921) 4,873 4,198 (105) 808 2,953,792 (4,147)
2,957,939
Liabilities and equity
Liabilities
Insurance contract liabilities 112,745 (112,745) - 109,393 9,914 - 119,307 6,562
Deferred tax liabilities 4,673 - - - - (1,379) 3,294 (1,379)
All other liabilities 78 - 1,102 (51) - 2,634,873 1,129
2,633,744
Total liabilities (112,667) - 110,495 9,863 (1,379) 2,757,474 6,312
2,751,162
Total shareholders' equity 198,250 92,738 4,558 (99,631) (8,847) 1,947 189,015 (9,235)
Non-controlling interests 8,527 6,008 315 (6,666) (1,121) 240 7,303 (1,224)
Total equity 206,777 98,746 4,873 (106,297) (9,968) 2,187 196,318 (10,459)
Total liabilities and equity (13,921) 4,873 4,198 (105) 808 2,953,792 (4,147)
2,957,939
Transition drivers
Removal of PVIF and IFRS 4 balances
The PVIF intangible asset of $9,453m previously reported under IFRS 4 within
'Goodwill and intangible assets' arose from the upfront recognition of future
profits associated with in-force insurance contracts. The PVIF intangible
asset is no longer reported following the transition to IFRS 17, as future
profits are deferred within the CSM. Other IFRS 4 insurance contract assets
(shown above within 'All other assets') and insurance contract liabilities are
removed on transition, to be replaced with IFRS 17 balances.
Remeasurement effect of IFRS 9 re-designations
Loans and advances of $1,849m and debt securities of $53,201m, both supporting
associated insurance liabilities, were re-designated from an amortised cost
classification to fair value through profit and loss. Debt securities
supporting the associated insurance liabilities of $1,068m were reclassified
from fair value through other comprehensive income to fair value through
profit or loss. The re-designations were made in order to more closely align
the asset accounting with the valuation of the associated insurance
liabilities. The re-designation of amortised cost assets generated a net
increase to assets of $4,873m because the fair value measurement on transition
was higher than the previous amortised cost carrying amount.
Recognition of the IFRS 17 fulfilment cash flows
The measurement of the insurance contracts liabilities under IFRS 17 is based
on groups of insurance contracts and includes a liability for fulfilling the
insurance contracts, such as premiums, directly attributable expenses,
insurance benefits and claims including policyholder returns and the cost of
guarantees. These are recorded within the fulfilment cash flow component of
the insurance contract liability, together with the risk adjustment for
non-financial risk.
Recognition of the IFRS 17 contractual service margin
The CSM is a component of the insurance contract liability and represents the
future unearned profit associated with insurance contracts that will be
released to the profit and loss over the expected coverage period.
Tax effect
The removal of deferred tax liabilities primarily results from the removal of
the associated PVIF intangible asset, and new deferred tax assets are
reported, where appropriate, on temporary differences between the new IFRS 17
accounting balances and their associated tax bases.
IFRS 17 transition impact on the reported Group consolidated income statement
for the year ended 31 December 2022
Under IFRS 4 Removal of PVIF and IFRS 4 balances Remeasure-ment effect of IFRS 9 re-designations Insurance finance income/expense Contrac- tual service margin Onerous contracts Experience variance and other Attribut- Tax effect Under IFRS 17
able expenses
$m $m $m $m $m $m $m $m $m $m
Net interest income 32,610 - (2,233) - - - - - - 30,377
Net fee income 11,451 - - - - - - 319 - 11,770
Net income from financial instruments held for trading or managed on a fair 10,469 - (191) - - - - - - 10,278
value basis
Net expense from assets and liabilities of insurance businesses, including (3,394) - (10,437) - - - - - - (13,831)
related derivatives, measured at fair value through profit or loss
Net insurance premium income 12,825 (12,825) - - - - - - - -
Insurance finance income/(expense) - - - 13,799 - - - - - 13,799
Insurance service result - - - - 965 (186) 30 - - 809
- insurance revenue - - - - 965 - 1,012 - - 1,977
- insurance service expense - - - - - (186) (982) - - (1,168)
Other operating income/(loss) (2,365) (265) - 48 - - - - - (2,582)
Total operating income 61,596 (13,090) (12,861) 13,847 965 (186) 30 319 - 50,620
Net insurance claims and benefits paid and movement in liabilities to (9,869) 9,869 - - - - - - - -
policyholders
Net operating income before change in expected credit losses and other credit 51,727 (3,221) (12,861) 13,847 965 (186) 30 319 - 50,620
impairment charges
Change in expected credit losses and other credit impairment charges (3,592) - 8 - - - - - - (3,584)
Net operating income 48,135 (3,221) (12,853) 13,847 965 (186) 30 319 - 47,036
Total operating expenses (33,330) - - - - - - 629 - (32,701)
Operating profit 14,805 (3,221) (12,853) 13,847 965 (186) 30 948 - 14,335
Share of profit in associates and joint ventures 2,723 - - - - - - - - 2,723
Profit before tax 17,528 (3,221) (12,853) 13,847 965 (186) 30 948 - 17,058
Tax expense (858) - - - - - - - 49 (809)
Profit for the period 16,670 (3,221) (12,853) 13,847 965 (186) 30 948 49 16,249
Transition drivers
Removal of IFRS 4-based revenue items
As a result of the removal of the PVIF intangible asset and IFRS 4 results,
the associated revenue of $265m for the year ended 31 December 2022 that was
previously reported within 'Other operating income/(loss)' is no longer
reported under IFRS 17. This includes the removal of the value of new business
and changes to PVIF intangible asset from valuation adjustments and experience
variances.
On the implementation of IFRS 17, new income statement line items associated
with insurance contract accounting were introduced. Consequently, the
previously reported IFRS 4 line items 'Net insurance premium income' and 'Net
insurance claims and benefits paid and movement in liabilities to
policyholders' were also removed.
Remeasurement effect of IFRS 9 re-designations
Following the re-designation of financial assets supporting associated
insurance liabilities to fair value through profit or loss classification, the
related income statement reporting also changed. Under our previous IFRS
4-based reporting convention, these assets generated interest income of
$2,233m for the year ended 31 December 2022, which is no longer reported in
'Net interest income' under IFRS 17. To the extent that this interest income
was shared with policyholders, the corresponding policyholder sharing
obligation was previously included within the 'net insurance claims and
benefits paid and movement in liabilities to policyholders' line.
Following re-designation to fair value through profit or loss, gains and
losses from changes in the fair value of underlying assets, together with
interest income earned, are both reported within 'Net expense from assets and
liabilities of insurance businesses, including related derivatives, measured
at fair value through profit or loss'. Similar to an IFRS 4 basis, IFRS 17
accounting provides for an offset. While this offset was reported within the
claims line under IFRS 4, under IFRS 17 it is reported within the 'Insurance
finance income/(expense)' line described below.
Introduction of IFRS 17 income statement
Insurance finance income/(expense)
Insurance finance income/(expense) of $13,799m for the year ended 31 December
2022 represents the change in the carrying amount of insurance contracts
arising from the effect of, and changes in, the time value of money and
financial risk. For variable fee approach contracts, which represent more than
90% of HSBC's insurance contracts, the insurance finance income/(expense)
includes the changes in the fair value of underlying items (excluding
additions and withdrawals). It therefore has an offsetting impact to
investment income earned on underlying assets supporting insurance contracts.
This includes an offsetting impact to the gains and losses on assets
re-designated on transition to fair value through profit or loss, and which is
now included in 'Net expense from assets and liabilities of insurance
businesses, including related derivatives, measured at fair value through
profit or loss'.
Contractual service margin
Revenue is recognised for the release of the CSM associated with the in-force
business, which was allocated at a rate of approximately 9% during 2022. The
CSM release is largely impacted by the constant measure allocation approach
for investment services, but may vary over time primarily due to changes in
the total amount of CSM reported on the balance sheet from factors such as new
business written, the Group's share of investment experience, or changes to
assumptions.
Onerous contracts
Losses on onerous contracts are taken to the income statement as incurred.
Experience variance and other
'Experience variance and other' represents the expected expenses, claims and
recovery of acquisition cash flows, which are reported as part of the
insurance revenue. This is offset with the actual expenses and claims incurred
in the year and amortisation of acquisition cash flows, which are reported as
part of insurance service expense.
Attributable expenses
Directly attributable expenses are the costs associated with originating and
fulfilling an identified portfolio of insurance contracts. These costs include
distribution fees paid to third parties as part of originating insurance
contracts together with appropriate allocations of fixed and variable
overheads, which are included within the fulfilment cash flows and are no
longer shown on the operating expenses line, whereas non-attributable expenses
remain in the operating expenses.
IFRS 17 transition impact on the Group comprehensive income
Year ended 31 Dec 2022
Under Under
IFRS 17 IFRS 4
$m $m
Total equity at 1 Jan 196,318 206,777
of which
- retained earnings 135,236 144,458
- financial assets at FVOCI reserve 49 (634)
- insurance finance reserve (696) -
Profit for the period 16,249 16,670
Debt instruments at fair value through other comprehensive income (7,232) (5,468)
Equity instruments designated at fair value through other comprehensive income 107 107
Insurance finance income recognised in other comprehensive income 1,775 -
Other comprehensive expense for the period, net of tax (11,892) (11,940)
Total comprehensive (expense)/income for the period (993) (631)
Other movements (10,128) (10,118)
Total equity at 31 Dec 185,197 196,028
Transition drivers
Insurance finance reserve
The insurance finance reserve reflects the impact of the adoption of the other
comprehensive income option for our insurance business in France. Underlying
assets supporting these contracts are measured at fair value through other
comprehensive income. Under this option, only the amount that matches income
or expenses recognised in profit or loss on underlying items is included in
finance income or expenses, resulting in the elimination of income statement
accounting mismatches. The remaining amount of finance income or expenses for
these insurance contracts is recognised in OCI. At the transition date an
insurance finance reserve of $696m was recognised and following transition,
gains net of tax of $1,775m were recorded in the year ended 31 December 2022.
An offsetting fair value through other comprehensive income reserve of $683m
recorded on transition represents the accumulated fair value movements on
assets supporting these insurance contract liabilities, with associated losses
net of tax of $1,898m recorded within the fair value through other
comprehensive income reserve for the year ended 31 December 2022.
Group's consolidated balance sheet at the transition date and at 31 December
2022
Under IFRS 17 Under IFRS 4
31 Dec 1 Jan 31 Dec 1 Jan
2022 2022 2022 2022
$m $m $m $m
Assets
Cash and balances at central banks 327,002 403,018 327,002 403,018
Items in the course of collection from other banks 7,297 4,136 7,299 4,136
Hong Kong Government certificates of indebtedness 43,787 42,578 43,787 42,578
Trading assets 218,093 248,842 218,093 248,842
Financial assets designated and otherwise mandatorily measured at fair value 100,101 110,795 45,063 49,804
through profit or loss
Derivatives 284,159 196,882 284,146 196,882
Loans and advances to banks 104,475 82,567 104,882 83,136
Loans and advances to customers 923,561 1,044,534 924,854 1,045,814
Reverse repurchase agreements - non-trading 253,754 241,648 253,754 241,648
Financial investments 364,726 392,005 425,563 446,274
Assets held for sale 115,919 3,411 115,919 3,411
Prepayments, accrued income and other assets 156,149 136,196 156,865 136,571
Current tax assets 1,230 970 1,230 970
Interests in associates and joint ventures 29,254 29,609 29,254 29,609
Goodwill and intangible assets 11,419 11,169 21,321 20,622
Deferred tax assets 8,360 5,432 7,498 4,624
Total assets 2,949,286 2,953,792 2,966,530 2,957,939
Liabilities and equity
Liabilities
Hong Kong currency notes in circulation 43,787 42,578 43,787 42,578
Deposits by banks 66,722 101,152 66,722 101,152
Customer accounts 1,570,303 1,710,574 1,570,303 1,710,574
Repurchase agreements - non-trading 127,747 126,670 127,747 126,670
Items in the course of transmission to other banks 7,864 5,214 7,864 5,214
Trading liabilities 72,353 84,904 72,353 84,904
Financial liabilities designated at fair value 127,321 145,503 127,327 145,502
Derivatives 285,762 191,064 285,764 191,064
Debt securities in issue 78,149 78,557 78,149 78,557
Liabilities of disposal groups held for sale 114,597 9,005 114,597 9,005
Accruals, deferred income and other liabilities 134,313 115,900 133,240 114,773
Current tax liabilities 1,135 699 1,135 698
Insurance contract liabilities 108,816 119,307 114,844 112,745
Provisions 1,958 2,566 1,958 2,566
Deferred tax liabilities 972 3,294 2,422 4,673
Subordinated liabilities 22,290 20,487 22,290 20,487
Total liabilities 2,764,089 2,757,474 2,770,502 2,751,162
Equity
Called up share capital 10,147 10,316 10,147 10,316
Share premium account 14,664 14,602 14,664 14,602
Other equity instruments 19,746 22,414 19,746 22,414
Other reserves (9,133) 6,447 (9,141) 6,460
Retained earnings 142,409 135,236 152,068 144,458
Total shareholders' equity 177,833 189,015 187,484 198,250
Non-controlling interests 7,364 7,303 8,544 8,527
Total equity 185,197 196,318 196,028 206,777
Total liabilities and equity 2,949,286 2,953,792 2,966,530 2,957,939
39 Events after the balance sheet date
On 1 January 2024, HSBC Continental Europe completed the sale of its retail
banking business in France to CCF, a subsidiary of Promontoria MMB SAS ('My
Money Group'). The sale also included HSBC Continental Europe's 100% ownership
interest in HSBC SFH (France) and its 3% ownership interest in Crédit
Logement. In the fourth quarter of 2023, a loss of $2.0bn was recognised upon
reclassification to held for sale, in accordance with IFRS 5, which net of the
$2.1bn partial reversal of impairment recognised in the first quarter of 2023,
gave rise to a net reversal of impairment recognised in the year of $0.1bn.
On 30 January 2024, the PRA concluded its investigation into HSBC Bank plc's
and HSBC UK Bank plc's compliance with depositor protection arrangements under
the Financial Services Compensation Scheme in the UK. The PRA imposed a fine
of $73m (£57m) on these entities, which was fully provided for as at 31
December 2023, and has now been paid.
On 31 January 2024, HSBC Global Asset Management Limited, through its indirect
subsidiary HSBC Global Asset Management Singapore Limited, completed the
acquisition of the Asia-Pacific-focused real estate investment manager
Silkroad Property Partners Pte Ltd. HSBC Global Asset Management Limited also
acquired Silkroad's affiliated General Partner entities as part of the
transaction.
On 6 February 2024, HSBC Europe B.V., an indirect subsidiary of HSBC Holdings
plc, signed an agreement to sell HSBC Bank Armenia CJSC, its wholly-owned
subsidiary, to Ardshinbank CJSC subject to regulatory approvals. The
transaction is expected to complete within the next 12 months.
A fourth interim dividend for 2023 of $0.31 per ordinary share (a distribution
of approximately $5,913m) was approved by the Directors after 31 December
2023. On 21 February 2024, HSBC Holdings announced a share buy-back programme
to purchase its ordinary shares up to a maximum consideration of $2.0bn, which
is expected to commence shortly and complete by our first quarter 2024 results
announcement. HSBC Holdings called $2,500m 3.803% and $500m floating rate
senior unsecured debt securities on 25 January 2024. These securities are
expected to be redeemed and cancelled on 11 March 2024. These accounts were
approved by the Board of Directors on 21 February 2024 and authorised for
issue.
40 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
2023 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 Footnotes
varies)
452 TALF SPV LLC 100.00 1, 15
AI Nominees (UK) One Limited 100.00 1, 16
AI Nominees (UK) Two Limited 100.00 116
Almacenadora Banpacifico S.A. (In Liquidation) 99.99 17
Assetfinance December (F) Limited 100.00 18
Assetfinance December (H) Limited 100.00 16
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 18
Assetfinance Limited (In Liquidation) 100.00 19
Assetfinance March (B) Limited 100.00 20
Assetfinance March (D) Limited 100.00 18
Assetfinance March (F) Limited 100.00 16
Assetfinance September (F) Limited 100.00 16
Assetfinance September (G) Limited 100.00 18
B&Q Financial Services Limited 100.00 16
Banco HSBC S.A. 100.00 21
Banco Nominees (Guernsey) Limited 100.00 22
Banco Nominees 2 (Guernsey) Limited 100.00 22
Banco Nominees Limited 100.00 23
Beau Soleil Limited Partnership N/A 0, 24
Beijing HSBC Real Estate Leasing Company Limited 100.00 1, 12, 25
Beijing Miyun HSBC Rural Bank Company Limited 100.00 12, 26
BentallGreenOak China Real Estate Investments, L.P. N/A 0, 1, 27
Canada Crescent Nominees (UK) Limited 100.00 16
Canada Square Nominees (UK) Limited 100.00 16
Canada Water Nominees (UK) Limited (In Liquidation) 100.00 19
Capco/Cove, Inc. 100.00 28
Card-Flo #1, Inc. 100.00 15
Card-Flo #3, Inc. 100.00 15
CC&H Holdings LLC 100.00 29
CCF & Partners Asset Management Limited 100.00 (99.99) 16
CCF Holding (Liban) S.A.L. (In Liquidation) 74.99 30
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 12, 31
Chongqing Fengdu HSBC Rural Bank Company Limited 100.00 12, 32
Chongqing Rongchang HSBC Rural Bank Company Limited 100.00 12, 33
COIF Nominees Limited N/A 0, 16
Corsair IV Financial Services Capital Partners - B LP N/A 0, 1, 34
Dalian Pulandian HSBC Rural Bank Company Limited 100.00 12, 35
Decision One Mortgage Company, LLC N/A 0, 36
Dempar 1 100.00 (99.99) 4, 37
Desarrollo Turistico, S.A. de C.V. (In Liquidation) 100.00 (99.99) 17
Electronic Data Process México, S.A. de C.V. 100.00 1, 38
Eton Corporate Services Limited 100.00 22
Flandres Contentieux S.A. 100.00 (99.99) 4, 37
Foncière Elysées 100.00 (99.99) 4, 37
Fujian Yongan HSBC Rural Bank Company Limited 100.00 12, 39
Fulcher Enterprises Company Limited 100.00 (62.14) 40
Fundacion HSBC, A.C. 100.00 (99.99) 11, 17
Giller Ltd. 100.00 28
Subsidiaries % of share class held by immediate parent company (or by the Group where this Footnotes
varies)
GPIF Co-Investment, LLC N/A 0, 15
Griffin International Limited 100.00 16
Grupo Financiero HSBC, S. A. de C. V. 99.99 17
Guangdong Enping HSBC Rural Bank Company Limited 100.00 12, 41
Guangzhou HSBC Real Estate Company Ltd (广州汇丰房地产有限公司) 100.00 1, 12, 42
Hang Seng (Nominee) Limited 100.00 (62.14) 40
Hang Seng Bank (China) Limited N/A 0, 12, 43
Hang Seng Bank (Trustee) Limited 100.00 (62.14) 40
Hang Seng Bank Limited 62.14 40
Hang Seng Bullion Company Limited 100.00 (62.14) 40
Hang Seng Credit Limited 100.00 (62.14) 40
Hang Seng Data Services Limited 100.00 (62.14) 40
Hang Seng Finance Limited 100.00 (62.14) 40
Hang Seng Financial Information Limited 100.00 (62.14) 40
Hang Seng Indexes (Netherlands) B.V. N/A 0, 1, 44
Hang Seng Indexes Company Limited 100.00 (62.14) 40
Hang Seng Insurance Company Limited 100.00 (62.14) 40
Hang Seng Investment Management Limited 100.00 (62.14) 40
Hang Seng Investment Services Limited 100.00 (62.14) 40
Hang Seng Qianhai Fund Management Company Limited N/A 0, 12, 45
Hang Seng Real Estate Management Limited 100.00 (62.14) 40
Hang Seng Securities Limited 100.00 (62.14) 40
Hang Seng Security Management Limited 100.00 (62.14) 40
HASE Wealth Limited 100.00 (62.14) 1, 40
Haseba Investment Company Limited 100.00 (62.14) 40
HFC Bank Limited (In Liquidation) 100.00 19
High Time Investments Limited 100.00 (62.14) 40
HLF 100.00 (99.99) 4, 37
Honey Blue Enterprises Limited (亨京企業有限公司) 100.00 1, 46
Honey Green Enterprises Ltd. 100.00 47
Honey Grey Enterprises Limited (亨穗企業有限公司) 100.00 1, 48
Honey Silver Enterprises Limited (亨深企業有限公司) 100.00 1, 48
Household International Europe Limited (In Liquidation) 100.00 5, 49
Household Pooling Corporation 100.00 50
Housing (USA) LLP N/A 0, 1, 29
HSBC (BGF) Investments Limited 100.00 16
HSBC (General Partner) Limited 100.00 2, 51
HSBC (Guernsey) GP PCC Limited 100.00 22
HSBC (Kuala Lumpur) Nominees Sdn Bhd 100.00 52
HSBC (Malaysia) Trustee Berhad 100.00 53
HSBC (Singapore) Nominees Pte Ltd 100.00 54
HSBC Agency (India) Private Limited 100.00 55
HSBC Alternative Investments Limited 100.00 16
HSBC Amanah Malaysia Berhad 100.00 52
HSBC Americas Corporation (Delaware) 100.00 15
HSBC Argentina Holdings S.A. 100.00 56
HSBC Asia Holdings B.V. 100.00 16
HSBC Asia Holdings Limited 100.00 2, 48
HSBC Asia Pacific Holdings (UK) Limited 100.00 5, 16
HSBC Asset Finance (UK) Limited 100.00 16
HSBC Asset Finance M.O.G. Holdings (UK) Limited 100.00 16
HSBC Asset Management (Fund Services UK) Limited 100.00 1, 16
HSBC Asset Management (India) Private Limited 99.99 3, 57
HSBC Asset Management (Japan) Limited 100.00 58
HSBC Assurances Vie (France) 100.00 (99.99) 4, 59
HSBC Australia Holdings Pty Limited 100.00 5, 60
HSBC BANK (CHILE) 100.00 61
HSBC Bank (China) Company Limited N/A 0, 12, 62
HSBC Bank (General Partner) Limited 100.00 51
HSBC Bank (Mauritius) Limited 100.00 63
HSBC Bank (RR) (Limited Liability Company) N/A 0, 13, 64
HSBC Bank (Singapore) Limited 100.00 54
HSBC Bank (Taiwan) Limited 100.00 65
HSBC Bank (Uruguay) S.A. 100.00 66
HSBC Bank (Vietnam) Ltd. 100.00 67
HSBC Bank A.S. 100.00 (99.99) 68
HSBC Bank Argentina S.A. 99.99 56
HSBC Bank Armenia cjsc 100.00 69
HSBC Bank Australia Limited 100.00 60
HSBC Bank Bermuda Limited 100.00 23
HSBC Bank Canada 100.00 3, 70
HSBC Bank Capital Funding (Sterling 1) LP N/A 0, 51
HSBC Bank Capital Funding (Sterling 2) LP N/A 0, 51
HSBC Bank Egypt S.A.E 99.62 (94.54) 71
HSBC Bank Malaysia Berhad 100.00 3, 52
HSBC Bank Malta p.l.c. 70.03 72
HSBC Bank Middle East Limited 100.00 3, 73
HSBC Bank Middle East Limited Representative Office Morocco SARL (In 100.00 74
Liquidation)
HSBC Bank Pension Trust (UK) Limited 100.00 16
HSBC Bank plc 100.00 2, 3, 16
HSBC Bank USA, National Association 100.00 3, 75
HSBC Branch Nominee (UK) Limited 100.00 18
HSBC Brasil Holding S.A. 100.00 21
HSBC Broking Forex (Asia) Limited 100.00 48
HSBC Broking Futures (Asia) Limited 100.00 48
HSBC Broking Futures (Hong Kong) Limited 100.00 48
HSBC Broking Securities (Asia) Limited 100.00 48
HSBC Broking Securities (Hong Kong) Limited 100.00 48
HSBC Broking Services (Asia) Limited 100.00 48
HSBC Canadian Covered Bond (Legislative) GP Inc. 100.00 76
HSBC Canadian Covered Bond (Legislative) Guarantor Limited Partnership N/A 0, 76
HSBC Capital (USA), Inc. 100.00 3, 15
HSBC Capital Funding (Dollar 1) L.P. N/A 0, 51
HSBC Card Services Inc. 100.00 15
HSBC Casa de Bolsa, S.A. de C.V., Grupo Financiero HSBC 100.00 (99.99) 17
HSBC Cayman Limited 100.00 192
HSBC Cayman Services Limited 100.00 77
HSBC City Funding Holdings (In Liquidation) 100.00 19
HSBC Client Holdings Nominee (UK) Limited 100.00 16
HSBC Client Nominee (Jersey) Limited 100.00 78
HSBC Columbia Funding, LLC N/A 0, 15
HSBC Continental Europe 99.99 4, 37
HSBC Corporate Advisory (Malaysia) Sdn Bhd 100.00 52
HSBC Corporate Finance (Hong Kong) Limited 100.00 48
HSBC Corporate Secretary (UK) Limited 100.00 1, 2, 16
HSBC Corporate Services (Shanghai) Co., Ltd N/A 0, 1, 79
HSBC Corporate Trustee Company (UK) Limited 100.00 16
HSBC Custody Nominees (Australia) Limited 100.00 60
HSBC Custody Services (Guernsey) Limited 100.00 22
HSBC Daisy Investments (Mauritius) Limited 100.00 80
HSBC Diversified Loan Fund General Partner Sarl N/A 0, 81
HSBC Electronic Data Processing (Guangdong) Limited N/A 0, 12, 82
HSBC Electronic Data Processing (Malaysia) Sdn Bhd 100.00 83
HSBC Electronic Data Processing (Philippines), Inc. 99.99 84
HSBC Electronic Data Processing India Private Limited 100.00 85
HSBC Electronic Data Processing Lanka (Private) Limited 100.00 86
HSBC Electronic Data Service Delivery (Egypt) S.A.E. 100.00 87
HSBC Epargne Entreprise (France) 100.00 (99.99) 4, 59
HSBC Equipment Finance (UK) Limited 100.00 18
HSBC Equity (UK) Limited 100.00 16
HSBC Europe B.V. 100.00 16
HSBC Executor & Trustee Company (UK) Limited 100.00 18
HSBC Factoring (France) 100.00 (99.99) 4, 37
HSBC Finance (Netherlands) 100.00 2, 16
HSBC Finance Corporation 100.00 3, 15
HSBC Finance Limited 100.00 16
HSBC Finance Mortgages Inc. 100.00 88
HSBC Finance Transformation (UK) Limited 100.00 16
HSBC Financial Advisors Singapore Pte. Ltd. 100.00 1, 54
HSBC Financial Services (Lebanon) s.a.l. 99.80 89
HSBC Financial Services (Uruguay) S.A. (In Liquidation) 100.00 90
HSBC FinTech Services (Shanghai) Company Limited N/A 0, 1, 91
HSBC Global Asset Management (Bermuda) Limited 100.00 3, 23
HSBC Global Asset Management (Canada) Limited 100.00 70
HSBC Global Asset Management (Deutschland) GmbH 100.00 (99.99) 6, 92
HSBC Global Asset Management (France) 100.00 (99.99) 4, 59
HSBC Global Asset Management (Hong Kong) Limited 100.00 24
HSBC Global Asset Management (Malta) Limited 100.00 (70.03) 93
HSBC Global Asset Management (México), S.A. de C.V., Sociedad Operadora de 100.00 (99.99) 17
Fondos de Inversión, Grupo Financiero HSBC
HSBC Global Asset Management (Singapore) Limited 100.00 54
HSBC Global Asset Management (Switzerland) AG 100.00 4, 94
HSBC Global Asset Management (Taiwan) Limited 100.00 95
HSBC Global Asset Management (UK) Limited 100.00 16
HSBC Global Asset Management (USA) Inc. 100.00 96
HSBC Global Asset Management Argentina S.A. Sociedad Gerente de Fondos Comunes 100.00 (99.99) 97
de Inversión
HSBC Global Asset Management Holdings (Bahamas) Limited 100.00 98
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 88
HSBC Global Services (China) Holdings Limited 100.00 16
HSBC Global Services (Hong Kong) Limited 100.00 99
HSBC Global Services (UK) Limited 100.00 16
HSBC Global Services Limited 100.00 2, 16
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, 1, 100
HSBC Infrastructure Debt GP 2 S.à r.l. N/A 0, 1, 100
HSBC Infrastructure Limited (In Liquidation) 100.00 19
HSBC Innovation Bank Limited 100.00 1, 101
HSBC INSN (Non Operating) Pte. Ltd. (In Liquidation) 100.00 54
HSBC Institutional Trust Services (Asia) Limited 100.00 48
HSBC Institutional Trust Services (Bermuda) Limited 100.00 23
HSBC Institutional Trust Services (Mauritius) Limited 100.00 102
HSBC Institutional Trust Services (Singapore) Limited 100.00 54
HSBC Insurance (Asia-Pacific) Holdings Limited 100.00 103
HSBC Insurance (Asia) Limited 100.00 104
HSBC Insurance (Bermuda) Limited 100.00 105
HSBC Insurance Agency (USA) Inc. 100.00 106
HSBC Insurance Brokerage Company Limited N/A 0, 1, 107
HSBC Insurance Brokers Greater China Limited 100.00 1, 108
HSBC Insurance Holdings Limited (In Liquidation) 100.00 2, 16
HSBC Insurance SAC 1 (Bermuda) Limited 100.00 23
HSBC Insurance SAC 2 (Bermuda) Limited 100.00 1, 109
HSBC Insurance Services Holdings Limited 100.00 16
HSBC International Finance Corporation (Delaware) 100.00 110
HSBC International Trustee (BVI) Limited 100.00 10, 111
HSBC International Trustee (Holdings) Pte. Limited 100.00 54
HSBC International Trustee Limited 100.00 112
HSBC Inversiones S.A. 100.00 61
HSBC InvestDirect (India) Private Limited 99.99 57
HSBC InvestDirect Financial Services (India) Limited 99.99 57
HSBC InvestDirect Sales & Marketing (India) Limited 98.99 113
HSBC InvestDirect Securities (India) Private Limited 99.99 57
HSBC Investment and Insurance Brokerage, Philippines Inc. 99.99 114
HSBC Investment Bank Holdings B.V. 100.00 16
HSBC Investment Bank Holdings Limited 100.00 16
HSBC Investment Company Limited 100.00 2, 16
HSBC Investment Funds (Canada) Inc. 100.00 5, 115
HSBC Investment Funds (Hong Kong) Limited 100.00 24
HSBC Investment Funds (Luxembourg) SA 100.00 116
HSBC Invoice Finance (UK) Limited 100.00 18
HSBC Issuer Services Common Depositary Nominee (UK) Limited 100.00 16
HSBC Issuer Services Depositary Nominee (UK) Limited (In Liquidation) 100.00 19
HSBC Latin America B.V. 100.00 16
HSBC Latin America Holdings (UK) Limited 100.00 2, 16
HSBC Leasing (Asia) Limited 100.00 48
HSBC Life (Bermuda) Limited 100.00 1, 23
HSBC Life (Cornell Centre) Limited 100.00 104
HSBC Life (Edwick Centre) Limited 100.00 104
HSBC Life (International) Limited 100.00 23
HSBC Life (Property) Limited 100.00 104
HSBC Life (Singapore) Pte. Ltd. 100.00 1, 54
HSBC Life (Tsing Yi Industrial) Limited 100.00 104
HSBC Life (UK) Limited 100.00 16
HSBC Life (Workshop) Limited 100.00 1, 104
HSBC Life Assurance (Malta) Limited 100.00 (70.03) 93
HSBC Life Insurance Company Limited N/A 0, 12, 117
HSBC LU Nominees Limited 100.00 16
HSBC Management (Guernsey) Limited 100.00 118
HSBC Markets (USA) Inc. 100.00 15
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 17
HSBC Middle East Asset CO. LLC 100.00 119
HSBC Middle East Holdings B.V. 100.00 2, 3, 73
HSBC Middle East Leasing Partnership N/A 0, 120
HSBC Middle East Securities L.L.C 100.00 121
HSBC Mortgage Corporation (Canada) 100.00 122
HSBC Mortgage Corporation (USA) 100.00 15
HSBC Nominees (Asing) Sdn Bhd 100.00 52
HSBC Nominees (Hong Kong) Limited 100.00 48
HSBC Nominees (New Zealand) Limited 100.00 123
HSBC Nominees (Tempatan) Sdn Bhd 100.00 52
HSBC North America Holdings Inc. 100.00 3, 15
HSBC Operational Services GmbH 100.00 (99.99) 6, 92
HSBC Overseas Holdings (UK) Limited 100.00 2, 3, 16
HSBC Overseas Investments Corporation (New York) 100.00 124
HSBC Overseas Nominee (UK) Limited 100.00 16
HSBC Participaciones (Argentina) S.A. 100.00 (99.99) 56
HSBC PB Corporate Services 1 Limited 100.00 125
HSBC PB Services (Suisse) SA 100.00 126
HSBC Pension Trust (Ireland) DAC 100.00 127
HSBC Pensiones, S.A. (In Liquidation) 100.00 (99.99) 17
HSBC Philanthropy Foundation Beijing N/A 0, 191
HSBC PI Holdings (Mauritius) Limited 100.00 128
HSBC Portfoy Yonetimi A.S. 100.00 129
HSBC Preferential LP (UK) 100.00 16
HSBC Private Bank (Luxembourg) S.A. 100.00 (99.99) 116
HSBC Private Bank (Suisse) SA 100.00 130
HSBC Private Bank (UK) Limited 100.00 16
HSBC Private Banking Holdings (Suisse) SA 100.00 126
HSBC Private Banking Nominee 3 (Jersey) Limited 100.00 125
HSBC Private Equity Investments (UK) Limited 100.00 16
HSBC Private Investment Counsel (Canada) Inc. 100.00 3, 115
HSBC Private Markets Management SARL N/A 0, 1, 131
HSBC Private Trustee (Hong Kong) Limited 100.00 48
HSBC Professional Services (India) Private Limited 100.00 132
HSBC Property (UK) Limited 100.00 16
HSBC Property Funds (Holding) Limited 100.00 16
HSBC Provident Fund Trustee (Hong Kong) Limited 100.00 48
HSBC Qianhai Securities Limited N/A 0, 12, 133
HSBC Real Estate Leasing (France) 100.00 (99.99) 4, 37
HSBC REGIO Fund General Partner S.à r.l. N/A 0, 1, 100
HSBC REIM (France) 100.00 (99.99) 4, 59
HSBC Retirement Benefits Trustee (UK) Limited 100.00 1, 2, 16
HSBC Retirement Services Limited 100.00 1, 16
HSBC Saudi Arabia, Closed Joint Stock Company 100.00 (66.18) 134
HSBC Savings Bank (Philippines) Inc. 99.99 135
HSBC Securities (Canada) Inc. 100.00 88
HSBC Securities (Egypt) S.A.E. (In Liquidation) 100.00 (94.65) 71
HSBC Securities (Japan) Co., Ltd. 100.00 1, 58
HSBC Securities (Japan) Limited (In Liquidation) 100.00 16
HSBC Securities (Singapore) Pte Limited 100.00 54
HSBC Securities (South Africa) (Pty) Limited 100.00 136
HSBC Securities (Taiwan) Corporation Limited 100.00 65
HSBC Securities (USA) Inc. 100.00 15
HSBC Securities and Capital Markets (India) Private Limited 99.99 5, 113
HSBC Securities Brokers (Asia) Limited 100.00 48
HSBC Securities Investments (Asia) Limited 100.00 48
HSBC Securities Services (Bermuda) Limited 100.00 23
HSBC Securities Services (Guernsey) Limited 100.00 22
HSBC Securities Services (Ireland) DAC 100.00 127
HSBC Securities Services (Luxembourg) S.A. 100.00 116
HSBC Securities Services Holdings (Ireland) DAC 100.00 127
HSBC Securities Services Nominees Limited 100.00 1, 48
HSBC Seguros de Retiro (Argentina) S.A. 100.00 (99.99) 56
HSBC Seguros de Vida (Argentina) S.A. 100.00 (99.99) 56
HSBC Seguros, S.A de C.V., Grupo Financiero HSBC 100.00 (99.99) 17
HSBC Service Company Germany GmbH 100.00 (99.99) 1, 6, 92
HSBC Service Delivery (Polska) Sp. z o.o. 100.00 137
HSBC Services (France) 100.00 (99.99) 4, 37
HSBC Services Japan Limited 100.00 138
HSBC Services USA Inc. 100.00 139
HSBC Servicios Financieros, S.A. de C.V 100.00 (99.99) 17
HSBC Servicios, S.A. DE C.V., Grupo Financiero HSBC 100.00 (99.99) 17
HSBC SFH (France) 100.00 (99.99) 59
HSBC SFT (C.I.) Limited 100.00 22
HSBC Software Development (Guangdong) Limited N/A 0, 12, 140
HSBC Software Development (India) Private Limited 100.00 (99.99) 141
HSBC Software Development (Malaysia) Sdn Bhd 100.00 83
HSBC Specialist Investments Limited 100.00 3, 16
HSBC Technology & Services (China) Limited N/A 0, 12, 142
HSBC Technology & Services (USA) Inc. 100.00 15
HSBC Transaction Services GmbH 100.00 (99.99) 6, 92
HSBC Trinkaus & Burkhardt (International) S.A. 100.00 (99.99) 143
HSBC Trinkaus & Burkhardt Gesellschaft fur Bankbeteiligungen mbH 100.00 (99.99) 92
HSBC Trinkhaus & Burkhardt GmbH 100.00 (99.99) 1, 6, 144
HSBC Trinkaus Family Office GmbH 100.00 (99.99) 6, 92
HSBC Trinkaus Real Estate GmbH 100.00 (99.99) 6, 92
HSBC Trust Company (Canada) 100.00 122
HSBC Trust Company (Delaware), National Association 100.00 110
HSBC Trust Company (UK) Limited 100.00 16
HSBC Trustee (C.I.) Limited 100.00 125
HSBC Trustee (Cayman) Limited 100.00 145
HSBC Trustee (Guernsey) Limited 100.00 22
HSBC Trustee (Hong Kong) Limited 100.00 48
HSBC Trustee (Singapore) Limited 100.00 54
HSBC UK Bank plc 100.00 2, 18
HSBC UK Client Nominee Limited 100.00 18
HSBC UK Holdings Limited (In Liquidation) 100.00 2, 3, 146
HSBC UK Societal Projects Limited N/A 0, 1, 18
HSBC USA Inc. 100.00 3, 124
HSBC Ventures USA Inc. 100.00 15
HSBC Violet Investments (Mauritius) Limited 100.00 80
HSBC Wealth Client Nominee Limited 100.00 1, 18
HSBC Yatirim Menkul Degerler A.S. 100.00 68
HSI Asset Securitization Corporation 100.00 15
HSI International Limited 100.00 (62.14) 40
HSIL Investments Limited 100.00 16
Hubei Macheng HSBC Rural Bank Company Limited N/A 0, 12, 147
Hubei Suizhou Cengdu HSBC Rural Bank Company Limited N/A 0, 12, 148
Hubei Tianmen HSBC Rural Bank Company Limited N/A 0, 12, 149
Hunan Pingjiang HSBC Rural Bank Company Limited N/A 0, 12, 150
Imenson Limited 100.00 (62.14) 40
INKA Internationale Kapitalanlagegesellschaft mbH 100.00 (99.99) 92
Inmobiliaria Bisa, S.A. de C.V. 99.98 17
Inmobiliaria Grufin, S.A. de C.V. 100.00 (99.99) 17
Inmobiliaria Guatusi, S.A. de C.V. 100.00 (99.99) 17
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 48
Lion International Corporate Services Limited 100.00 1, 151
Lion International Management Limited 100.00 151
Lion Management (Hong Kong) Limited 100.00 1, 48
Lyndholme Limited 100.00 48
Marks and Spencer Financial Services plc 100.00 152
Marks and Spencer Unit Trust Management Limited 100.00 152
Midcorp Limited 100.00 16
Midland Bank (Branch Nominees) Limited 100.00 18
Midland Nominees Limited 100.00 18
MP Payments Group Limited 100.00 1, 16
MP Payments Netherlands B.V. 100.00 1, 153
MP Payments Operations Limited 100.00 1, 16
MP Payments Singapore Pte. Ltd. 100.00 1, 154
MP Payments UK Limited 100.00 1, 16
MW Gestion SA 100.00 56
Prudential Client HSBC GIS Nominee (UK) Limited 100.00 16
PT Bank HSBC Indonesia 99.99 (98.93) 155
PT HSBC Sekuritas Indonesia 100.00 (85.00) 155
R/CLIP Corp. 100.00 15
Real Estate Collateral Management Company 100.00 15
Republic Nominees Limited 100.00 22
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 11, 37
Saf Baiyun 100.00 (99.99) 4, 37
Saf Guangzhou 100.00 (99.99) 4, 37
SCI HSBC Assurances Immo 100.00 (99.99) 11, 59
Serai Limited 100.00 48
Serai Technology Development (Shanghai) Limited (丝睿科技开发（上海）有限公司) N/A 0, 1, 12, 156
SFM 100.00 (99.99) 4, 37
SFSS Nominees (Pty) Limited 100.00 136
Shandong Rongcheng HSBC Rural Bank Company Limited N/A 0, 12, 157
Shenzhen HSBC Development Company Ltd N/A 0, 1, 12, 158
Sico Limited 100.00 159
SNC Les Oliviers D'Antibes 60.00 (59.99) 11, 59
SNCB/M6-2008 A 100.00 (99.99) 4, 37
SNCB/M6-2007 A 100.00 (99.99) 4, 37
SNCB/M6-2007 B 100.00 (99.99) 4, 37
Société Française et Suisse 100.00 (99.99) 4, 37
Somers Dublin DAC 100.00 (99.99) 127
Somers Nominees (Far East) Limited 100.00 23
Sopingest 100.00 (99.99) 4, 37
South Yorkshire Light Rail Limited 100.00 16
St Cross Trustees Limited 100.00 18
Sterling Credit Limited 100.00 183
Sun Hung Kai Development (Lujiazui III) Limited N/A 0, 12, 160
Swan National Limited (In Liquidation) 100.00 19
The Hongkong and Shanghai Banking Corporation Limited 100.00 5, 48
The Venture Catalysts Limited (In Liquidation) 100.00 19
Tooley Street View Limited 100.00 2, 16
Trinkaus Europa Immobilien-Fonds Nr.3 Objekt Utrecht Verwaltungs-GmbH 100.00 (99.99) 6, 92
Trinkaus Immobilien-Fonds Geschaeftsfuehrungs-GmbH 100.00 (99.99) 6, 92
Trinkaus Immobilien-Fonds Verwaltungs-GmbH 100.00 (99.99) 6, 92
Trinkaus Private Equity Management GmbH 100.00 (99.99) 6, 92
Trinkaus Private Equity Verwaltungs GmbH 100.00 (99.99) 6, 92
Turnsonic (Nominees) Limited 100.00 18
Valeurs Mobilières Elysées 100.00 (99.99) 4, 37
Wardley Limited 100.00 48
Wayfoong Nominees Limited 100.00 48
Westminster House, LLC N/A 0, 15
Woodex Limited 100.00 23
Yan Nin Development Company Limited 100.00 (62.14) 40
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 Footnotes
varies)
Climate Asset Management Limited 40.00 1, 161
Global Payments Technology Mexico S.A. De C.V 50.00 162
HCM Holdings Limited (In Liquidation) 50.99 19
MK HoldCo Limited 50.32 1, 163
Pentagreen Capital Pte. Ltd 50.00 1, 164
ProServe Bermuda Limited 50.00 165
The London Silver Market Fixing Limited N/A 0, 1, 166
Vaultex UK Limited 50.00 167
Associates
The undertakings below are associates and equity accounted.
Associates % of share class held by immediate parent company (or by the Group where this Footnotes
varies)
Bank of Communications Co., Ltd. 19.03 168
Barrowgate Limited 15.31 169
BGF Group plc 24.62 170
Bud Financial Limited 4.84 1, 171
Canara HSBC Life Insurance Company Limited 26.00 172
Contour Pte Ltd 9.87 1, 173
Divido Financial Services Limited 7.70 1, 174
Electronic Payment Services Company (Hong Kong) Limited 38.66 48
Episode Six Inc. 5.69 1, 175
EPS Company (Hong Kong) Limited 38.66 48
Euro Secured Notes Issuer 16.67 176
HSBC Jintrust Fund Management Company Limited N/A 0, 177
HSBC UK Covered Bonds (LM) Limited 20.00 1, 178
HSBC UK Covered Bonds LLP N/A 0, 1, 18
Liquidity Match LLC N/A 0, 1, 179
London Precious Metals Clearing Limited 30.00 1, 180
MENA Infrastructure Fund (GP) Ltd 33.33 181
Monese Ltd 5.39 1, 182
Quantexa Ltd 9.36 183
RadiantESG Global Investors LLC N/A 0, 1, 184
Saudi Awwal Bank 31.00 186
Services Epargne Entreprise 14.18 187
The London Gold Market Fixing Limited N/A 0, 188
Threadneedle Software Holdings Limited 7.10 1, 189
Trade Information Network Limited 12.76 1, 161
Trinkaus Europa Immobilien-Fonds Nr. 7 Frankfurt Mertonviertel KG N/A 0, 92
We Trade Innovation Designated Activity Company (In Liquidation) 9.88 1, 190
Footnotes for Note 40
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 Liquidating Share Class
9 Nominal Shares
10 Non-Participating Voting Shares
11 Parts
12 Registered Capital Shares
13 Russian Limited Liability Company Shares
14 Stückaktien
Registered offices
15 c/o The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware,
United States of America, 19801
16 8 Canada Square, London, United Kingdom, E14 5HQ
17 Paseo de la Reforma 347 Col. Cuauhtemoc, Mexico, 06500
18 1 Centenary Square, Birmingham, United Kingdom, B1 1HQ
19 C/O Teneo Financial Advisory Limited, The Colmore Building, 20 Colmore Circus,
Queensway, Birmingham, United Kingdom, B4 6AT
20 5 Donegal Square South , Northern Ireland, Belfast, United Kingdom, BT1 5JP
21 1909 Avenida Presidente Juscelino Kubitschek, 19° andar, Torre Norte, São
Paulo Corporate Towers, São Paulo, Brazil, 04551-903
22 Arnold House, St Julians Avenue, St Peter Port, Guernsey, GY1 3NF
23 37 Front Street, Harbourview Centre, Ground Floor, Hamilton, Pembroke,
Bermuda, HM 11
24 HSBC Main Building, 1 Queen's Road Central, Hong Kong
25 2401-55 24/F, Office Tower Two 1 Jianguomenwai Street, Chaoyang District,
Beijing, China
26 First Floor, Xinhua Bookstore Xindong Road (SE of roundabout), Miyun District,
Beijing, China
27 Oak House Hirzel Street, St Peter Port, Guernsey, GY1 2NP
28 2929 Walden Avenue, Depew, New York, United States of America, 14043
29 Corporation Service Company 251 Little Falls Drive, Wilmington, Delaware,
United States of America, 19808
30 Solidere - Rue Saad Zaghloul Immeuble - 170 Marfaa, P.O. Box 17 5476 Mar
Michael, Beyrouth, Lebanon, 11042040
31 No 1, Bei Huan East Road Dazu County, Chongqing, China
32 No 107 Ping Du Avenue (E), Sanhe Town, Fengdu County, Chongqing, China
33 No. 3, 5, 7, Haitang Erzhi Road Changyuan, Rongchang, Chongqing, China, 402460
34 c/o Walkers Corporate Services Limited Walker House, 87 Mary Street, George
Town, Grand Cayman, Cayman Islands, KY1-9005
35 First & Second Floor, No.3 Nanshan Road, Pulandian, Dalian, Liaoning,
China
36 160 Mine Lake CT, Ste 200, Raleigh, North Carolina, United States of America,
27615-6417
37 38 Avenue Kléber, Paris, France, 75116
38 Avenida de las Granjas 972, Building A, Floor 2, Colonia Santa Bárbara,
Alcaldía Azcapotzalco, Mexico City, Mexico, 02230
39 No. 1 1211 Yanjiang Zhong Road, Yongan, Fujian, China
40 83 Des Voeux Road Central, Hong Kong
41 No. 44 Xin Ping Road Central, Encheng, Enping, Guangdong, China, 529400
42 Room 311, Cheng Hui No. 2, Nan Sha Street, Nan Sha District, Guangzhou,
Guangdong, China
43 34/F, 36/F, Unit 031 of 45/F, and 46/F, Hang Seng Bank Tower 1000 Lujiazui
Ring Road, Pilot Free Trade Zone, Shanghai, China, 200120
44 Gustav Mahlerplein 2 1082 MA, Amsterdam, Netherlands
45 1001 T2 Office Building, Qianhai Kerry Business Center, Qianhai Avenue,
Nanshan Street, Qianhai Shenzhen-Hong Kong Cooperation Zone, Shenzhen,
Guangdong, China
46 1 Queen's Road Central, Hong Kong
47 Commerce House, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola, British
Virgin Islands, VG1110
48 1 Queen's Road Central, Hong Kong
49 156 C/O Teneo Financial Advisory Limited, Great Charles Street, Queensway,
West Midlands, Birmingham, United Kingdom, B3 3HN
50 701 S CARSON ST STE 200, Carson City, Nevada, United States of America, 89701
51 HSBC House Esplanade, St. Helier, Jersey, JE4 8UB
52 Level 21, Menara IQ, Lingkaran TRX, Tun Razak Exchange, Kuala Lumpur,
Malaysia, 55188
53 Level 19, Menara IQ, Lingkaran TRX, Tun Razak Exchange, Kuala Lumpur,
Malaysia, 55188
54 10 Marina Boulevard, #48-01 Marina Bay Financial Centre, Singapore, 018983
55 52/60, M G Road Fort, Mumbai, India, 400 001
56 557 Bouchard Level 20, Ciudad de Buenos Aires, Federal Capital, Argentina,
C1106ABG
57 9-11 Floors, NESCO IT Park Building No. 3 Western Express Highway, Goregaon
(East), Mumbai, India, 400063
58 HSBC Building 11-1, Nihonbashi 3-chome, Chuo-ku, Tokyo, Japan, 103-0027
59 Immeuble Cœur Défense 110 esplanade du Général de Gaulle, Courbevoie,
France, 92400
60 Level 36 Tower 1 International Towers Sydney, 100 Barangaroo Avenue, Sydney,
New South Wales, Australia, 2000
61 Isidora Goyenechea 2800 23rd floor, Las Condes, Santiago, Chile, 7550647
62 HSBC Building Shanghai ifc, 8 Century Avenue, Pudong, Shanghai, China, 200120
63 IconEbene, Level 5 Office 1 (West Wing), Rue de L'institut, Ebene, Mauritius
64 2 Paveletskaya Square Building 2, Moscow, Russia, 115054
65 54F, 7 Xinyi Road Sec. 5 Xinyi District, Taipei, Taiwan
66 1266 Dr Luis Bonativa 1266 Piso 30 (Torre IV WTC), Montevideo, Uruguay, CP
11.000
67 The Metropolitan 235 Dong Khoi Street, District 1, Ho Chi Minh City, Vietnam
68 Esentepe Mah. Büyükdere Caddesi No.128 Şişli, Istanbul, Turkiye, 34394
69 90 Area 42 Paronyan Street, Yerevan, Armenia, 0015
70 885 West Georgia Street 3rd Floor, Vancouver, British Columbia, Canada, V6C
3E9
71 306 Corniche El Nil, Maadi, Egypt, 11728
72 116 Archbishop Street, Valletta, Malta
73 Unit 401, Level 4 Gate Precinct Building 2, Dubai International Financial
Centre, P. O. Box 30444, Dubai, United Arab Emirates
74 Majer Consulting, Office 54/44, Building A1, Residence Ryad Anfa, Boulevard
Omar El Khayam, Casa Finance City (CFC), Casablanca, Morocco
75 1800 Tysons Boulevard Suite 50, Tysons, Virginia, United States of America,
22102
76 66 Wellington Street West, Suite 5300, Toronto, Ontario, Canada, M5K 1E6
77 P.O. Box 1109, Strathvale House, Ground floor, 90 North Church Street, George
Town, Grand Cayman, Cayman Islands, KY1-1102
78 HSBC House Esplanade, St. Helier, Jersey, JE1 1HS
79 RM 2113 HSBC Building, Shanghai ifc, No. 8 Century Avenue, Pudong, Shanghai,
China, 200120
80 c/o Rogers Capital St. Louis Business Centre, Cnr Desroches & St Louis
Streets, Port Louis, Mauritius
81 49 avenue J.F. Kennedy, Luxembourg, 1855
82 4-17/F, Office Tower 2 TaiKoo Hui, No. 381 Tian He Road, Tian He District,
Guangzhou, Guangdong, China
83 Suite 1005, 10th Floor, Wisma Hamzah Kwong, Hing No. 1, Leboh Ampang, Kuala
Lumpur, Malaysia, 50100
84 Building C-1 UP Ayala Technohub, Commonwealth Avenue, Diliman, Quezon City,
Metro Manila, Philippines
85 HSBC House Plot No.8 Survey No.64 (Part), Hightec City Layout Madhapur,
Hyderabad, India, 500081
86 Mireka City 324/9 Havelock Road, Colombo 05, Sri Lanka, 00500
87 Smart Village 28th Km Cairo- Alexandria Desert Road Building, Cairo, Egypt
88 16 York Street, 6th Floor, Toronto, Ontario, Canada, M5J 0E6
89 Centre Ville 1341 Building - 4th Floor Patriarche Howayek Street, PO Box Riad
El Solh, Lebanon, 9597
90 World Trade Center Montevideo Avenida Luis Alberto de Herrera 1248, Torre 1,
Piso 15, Oficina 1502, Montevideo, Uruguay, CP 11300
91 Room 655, Building A, No.888 Huan Hu West 2nd Road, Lingang New Area, China
(Shanghai) Pilot Free Trade Zone, Shanghai, China
92 Hansaallee 3, Düsseldorf, Germany, 40549
93 80 Mill Street, Qormi, Malta, QRM 3101
94 Gartenstrasse 26, Zurich, Switzerland, 8002
95 36F., No. 68 Sec. 5, Zhongxiao E. Rd., Xinyi Dist., Taipei City, Taiwan,
110419
96 452 Fifth Avenue, New York, United States of America, NY10018
97 Bouchard 557, Piso 18° , Cdad. Autónoma de Buenos Aires, Argentina, 1106
98 Mareva House 4 George Street, Nassau, Bahamas
99 1 Queen's Road Central, Hong Kong
100 4 rue Peternelchen, Howald, Luxembourg, 2370
101 Alphabeta 14-18 Finsbury Square, London, United Kingdom, EC2A 1BR
102 IConEbene Rue de L'institut, Ebene, Mauritius
103 HSBC Main Building, 1 Queen's Road Central, Hong Kong
104 18th Floor Tower 1, HSBC Centre 1 Sham Mong Road, Kowloon, Hong Kong
105 37 Front Street, Harbourview Center, Ground Floor, Hamilton, Pembroke,
Bermuda, HM 11
106 CT Corporation System 28 Liberty Street, New York, New York, United States of
America, 10005
107 Unit 201, Floor 2, Building 3 No. 12, Anxiang Street, Shunyi District,
Beijing, China
108 HSBC Main Building, 1 Queen's Road Central, Hong Kong
109 37 Front Street, Harbourview Centre, Ground Floor, Hamilton Pembroke, Bermuda,
HM 11
110 300 Delaware Avenue Suite 1401, Wilmington, Delaware, United States of
America, 19801
111 Woodbourne Hall, Road Town, Tortola, British Virgin Islands, P.O. Box 916
112 Craigmuir Chambers, Road Town Tortola, British Virgin Islands, VG1110
113 52/60 M G Road Fort, Mumbai, India, 400 001
114 5/F HSBC Centre 3058 Fifth Ave West, Bonifacio Global City, Taguig City,
Philippines
115 300-885 West Georgia Street, Vancouver, British Columbia, Canada, V6C 3E9
116 18 Boulevard de Kockelscheuer, Luxembourg, 1821
117 Unit 2002 of 20/F, Unit 2101 of 21/F HSBC Building, 8 Century Avenue, China
(Shanghai) Pilot Free Trade Zone, Shanghai, China, 200120
118 Arnold House, St Julians Avenue, St Peter Port, Guernsey, GY1 1WA
119 HSBC Tower, Downtown Dubai, P.O. Box 66. United Arab Emirates
120 Unit 401, Level 4, Gate Precinct Building 2, Dubai International Financial
Centre, P. O. Box 506553, Dubai, United Arab Emirates
121 Level 16, HSBC Tower, Downtown Dubai, P.O. Box 66, United Arab Emirates
122 885 West Georgia Street, Suite 300, Vancouver, British Columbia, Canada, V6C
3E9
123 HSBC Tower, Level 21, 188 Quay Street, Auckland, New Zealand, 1010
124 The Corporation Trust Incorporated, 2405 York Road, Suite 201, Lutherville
Timonium, Maryland, United States of America, 21093
125 HSBC House Esplanade, St. Helier, Jersey, JE1 1GT
126 Quai des Bergues 9-17 , Geneva, Switzerland, 1201
127 1 Grand Canal Square Grand Canal Harbour, Dublin 2, Ireland, D02 P820
128 6th floor HSBC Centre 18, Cybercity, Ebene, Mauritius, 72201
129 Esentepe Mah. Büyükdere Caddesi No.128, 34394, Şişli, Istanbul, Turkiye
130 Quai des Bergues 9-17, Geneva, Switzerland, 1201
131 5 rue Heienhaff, Senningerberg, Luxembourg, L-1736
132 52/60 M G Road, Fort, Mumbai, India, 400 001
133 Unit 2201, 22/F, Qianhai Chow Tai Fook Finance Tower (Phase I) No. 66 Shu Niu
Avenue, Nanshan Subdistrict, the Shenzhen Qianhai Shenzhen-Hong Kong
Cooperation Zone, the PRC, Shenzhen, China, 518054
134 HSBC Building 7267 Olaya - Al Murrooj , Riyadh, Kingdom of Saudi Arabia, 12283
- 2255
135 Unit 1 GF The Commerical Complex Madrigal Avenue, Ayala Alabang Village,
Muntinlupa City, Philippines, 1780
136 1 Mutual Place, 107 Rivonia Road, Sandton, Gauteng, South Africa, 2196
137 Kapelanka 42A , Krakow, Poland, 30-347
138 Mareva House, 4 George Street, Nassau, Bahamas
139 C T Corporation System 820 Bear Tavern Road, West Trenton, New Jersey, United
States of America, 08628
140 L22, Office Tower 2, Taikoo Hui, 381 Tianhe Road, Tianhe District, Guangzhou,
Guangdong, China
141 Business Bay, Wing 2 Tower B, Survey no 103, Hissa no. 2, Airport Road,
Yerwada, Pune, India, 411006
142 Room 3102, L31 HSBC Building, Shanghai ifc, 8 Century Avenue, China (Shanghai)
Free Trade Zone, Shanghai, China, 200120
143 16 Boulevard d'Avranches, Luxembourg, L-1160
144 3 Hansaallee, Düsseldorf, Nordrhein-Westfalen, Germany, 40549
145 P.O. Box 309 Ugland House, Grand Cayman, Cayman Islands, KY1-1104
146 c/o Teneo Financial Advisory Limited The Colmore Building, 20 Colmore Circus,
Queensway, Birmingham, United Kingdom, B4 6AT
147 No. 56 Yu Rong Street, Macheng, China, 438300
148 No. 205 Lie Shan Road, Suizhou, Hubei, China
149 Building 3, Yin Zuo Di Jing Wan Tianmen New City, Tianmen, Hubei Province,
China
150 RM101, 102 & 106 Sunshine Fairview, Sunshine Garden, Pedestrian Walkway,
Pingjiang, China
151 Craigmuir Chambers, Road Town, Tortola, British Virgin Islands, VG1110
152 Kings Meadow Chester Business Park, Chester, United Kingdom, CH99 9FB
153 De Entree, 236 , Amsterdam, Netherlands, 1101 EE
154 10 Marina Boulevard, #48-01 Marina Bay Financial Centre, Singapore, 018983
155 5th Floor, World Trade Center 1, Jl. Jend. Sudirman Kav. 29-31, Jakarta,
Indonesia, 12920
156 Room 667, 6/F, Tower A, No. 8 Century Avenue, Pudong District, Shanghai, China
157 No.198-2 Chengshan Avenue (E), Rongcheng, China, 264300
158 Room 1303-13062 Marine Center Main Tower, 59 Linhai Rd, Nanshan District,
Shenzhen, China
159 Woodbourne Hall, Road Town, Tortola, British Virgin Islands, P.O. Box 3162
160 RM 2112, HSBC Building, Shanghai ifc No. 8 Century Road, Pudong, Shanghai,
China, 200120
161 3 More London Riverside, London, United Kingdom, SE1 2AQ
162 296, Floor 18, Office A Paseo de la Reforma, Mexico City, Mexico, 06600
163 35 Ballards Lane, London, United Kingdom, N3 1XW
164 1 Raffles Quay #23-01, Singapore, 048583
165 c/o MUFG Fund Services (Bermuda) Limited, Cedar House, 4th Floor North, 41
Cedar Avenue, Hamilton, Bermuda, HM12
166 27 Old Gloucester Street, London, United Kingdom, WC1N 3AX
167 All Saints Triangle Caledonian Road, London, United Kingdom, N1 9UT
168 188 Yin Cheng Zhong Lu (Shanghai) Pilot Free Trade Zone, China
169 50/F, Lee Garden One, 33 Hysan Avenue, Hong Kong
170 13-15 York Buildings, London, United Kingdom, WC2N 6JU
171 167-169 Great Portland Street, 5th Floor, London, United Kingdom, W1W 5PF
172 Unit No. 208, 2nd Floor, Kanchenjunga Building, 18 Barakhamba Road, New Delhi,
India, 110001
173 1 Harbourfront Avenue, #14-07 Keppel Bay Tower, Singapore, 098632
174 Office 7, 35-37 Ludgate Hill, London, United Kingdom, EC4M 7JN
175 251 Little Falls Drive, New Castle, Wilmington, United States of America,
19808
176 3 Avenue de l'Opera , Paris, France, 75001
177 17F, HSBC Building, Shanghai ifc 8 Century Avenue, Pudong, Shanghai, China
178 10th Floor 5 Churchill Place, London, United Kingdom, E14 5HU
179 100 Town Square Place, Suite 201, Jersey City, New Jersey, United States of
America, 07310
180 7th Floor, 62 Threadneedle Street, London, United Kingdom, EC2R 8HP
181 Unit 705, Level 7, Currency House-Tower 2, Dubai International Financial
Centre, P.O. BOX 506553, Dubai, United Arab Emirates
182 Eagle House, 163 City Road, London, United Kingdom, EC1V 1NR
183 Hill House, 1 Little New Street, London, United Kingdom, EC4A 3TR
184 4482 Deer Ridge Road, Danville, CA, Delaware, United States of America, 94506
185 9004 Al Ulaya - Al Olaya Dis. Unit no. 1, Riyadh, Kingdom of Saudi Arabia,
12214-2652
186 7206 Prince Abdul Aziz Bin Musaid Bin Jalawi, 4065 Al Murabba District, 12613
Riyadh, Kingdom of Saudi Arabia
187 32 Rue du Champ de Tir, Nantes, France, 44300
188 c/o Hackwood Secretaries Limited, One Silk Street, London, United Kingdom,
EC2Y 8HQ
189 2nd Floor, Regis House, 45 King William Street, London, United Kingdom, EC4R
9AN
190 10 Earlsfort Terrace, Dublin, Ireland, D02 T380
191 Meeting Room 18.R005, 18/F Fortune Financial Center, No. 5 Dongsanhuan Zhong
Road, Chaoyang District, Beijing, 100020, China
192 P.O. Box, 309 Ugland House, Grand Cayman, Cayman Islands, KY1-1104
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