HSBC 2003 Annual Report Download - page 339

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The following table provides an estimated summarised balance sheet for HSBC, which incorporates the adjustments
arising from the application of US GAAP:
2003 2002
US$m US$m
Assets
Cash and balances at central banks ................................................................................................... 7,661 7,659
Items in the course of collection from other banks ........................................................................... 6,628 5,651
Treasury bills and other eligible bills ................................................................................................ 20,391 18,141
Hong Kong Government certificates of indebtedness ....................................................................... 10,987 9,445
Loans and advances to banks ............................................................................................................ 117,173 95,496
Loans and advances to customers ..................................................................................................... 505,152 352,353
Debt securities and equity shares ...................................................................................................... 220,579 185,329
Interests in associated undertakings and other participating interests ............................................... 1,973 1,975
Intangible and tangible fixed assets .................................................................................................. 47,133 32,441
Due from customers on acceptances ................................................................................................. 5,411 4,711
Other assets (including prepayments and accrued income) ............................................................... 68,935 50,364
Total assets ....................................................................................................................................... 1,012,023 763,565
Liabilities
Hong Kong currency notes in circulation ......................................................................................... 10,987 9,445
Deposits by banks ............................................................................................................................. 70,426 52,933
Customer accounts ........................................................................................................................... 573,132 495,438
Items in the course of transmission to other banks ........................................................................... 4,383 4,634
Debt securities in issue ..................................................................................................................... 127,555 34,965
Acceptances outstanding .................................................................................................................. 5,411 4,711
Other liabilities (including accruals and deferred income) ............................................................... 98,696 72,697
Provisions for liabilities and charges
– deferred taxation ........................................................................................................................ 1,368 2,013
– other provisions for liabilities and charges ................................................................................ 8,134 6,266
Subordinated liabilities ..................................................................................................................... 25,462 18,371
Minority interests ............................................................................................................................. 6,218 6,261
Shareholders’ equity ......................................................................................................................... 80,251 55,831
Total liabilities ................................................................................................................................. 1,012,023 763,565
Net assets arising due to reverse repo transactions of US$23,220 million (2002: US$18,736 million) and US$17,777
million (2002: US$12,545 million) are included in ‘Loans and advances to banks’ and ‘Loans and advances to
customers’ respectively.
Net liabilities arising due to repo transactions of US$12,226 million (2002: US$8,271 million) and US$15,201
million (2002: US$13,126 million) are included in ‘Deposits by banks’ and ‘Customer accounts’ respectively.
Average repo liabilities during the year were US$25,883 million (2002: US$21,089 million). The maximum quarter-
end repo liability outstanding during the year was US$30,938 million (2002: US$21,468 million).
HSBC enters into repo and reverse repo transactions which are accounted for as secured borrowings. Under SFAS
140, securities pledged as collateral, where the counterparty has the right to sell or repledge the collateral, would be
reclassified within ‘Debt securities and equity shares’ and ‘Treasury bills and other eligible bills’ as encumbered. As
at 31 December 2003, the impact on ‘Debt securities and equity shares’ and ‘Treasury bills and other eligible bills’
would be to reclassify securities amounting to US$22,292 million as encumbered (2002: US$20,061 million).
At 31 December 2003, collateral received under reverse repo transactions where HSBC had the right to sell or
repledge the security obtained amounted to US$45,319 million gross (2002: US$27,439 million). Approximately
US$26 billion of the collateral obtained from reverse repo transactions had been sold or pledged by HSBC in
connection with repo transactions and securities sold not yet purchased (2002: approximately US$15 billion).
HSBC also enters into stock lending and borrowing transactions by which either cash or other securities may be
received in exchange for stock. At 31 December 2003, stock lending transactions where the securities lent were
subject to sale or repledge amounted to US$7,062 million (2002: US$5,050 million). At 31 December 2003, stock
borrowing transactions where the securities borrowed were subject to sale or repledge amounted to US$11,428
million (2002: US$4,643 million).