HSBC 2004 Annual Report Download - page 311

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to market rate on a contractual basis or, if earlier, the dates on which the instruments mature. Actual reset dates
may differ from contractual dates owing to prepayments and the exercise of options. In addition, contractual
terms may not be representative of the behaviour of assets and liabilities. For these reasons, HSBC manages its
interest rate risk on a different basis from that presented below, taking into account the behavioural
characteristics of the relevant assets and liabilities.
At 31 December 2004
Not more
than
three
months
More
than
three
months
but not
more
than six
months
More
than six
months
but not
more
than one
year
More
than one
year but
not more
than five
years
More
than five
years
Non-
interest
bearing
Banking
book
total
Trading
book
total Total
US$m US$m US$m US$m US$m US$m US$m US$m US$m
Assets
Treasury bills
and other
eligible bills ........ 18,534 2,138 4,172 778 44 – 25,666 4,618 30,284
Loans and advances
to banks .............. 94,401 4,452 1,528 526 454 3,319 104,680 38,032 142,712
Loans and advances
to customers ....... 428,431 30,789 24,407 88,198 42,679 11,643 626,147 43,684 669,831
Debt securities and
equity shares ....... 62,902 10,306 14,165 42,178 19,582 4,781 153,914 106,404 260,318
Other assets ........... 1,102 – – – – 136,024 137,126 36,507 173,633
Total assets ............ 605,370 47,685 44,272 131,680 62,759 155,767 1,047,533 229,245 1,276,778
Liabilities
Deposits by banks .. (54,121
)
(4,327) (1,345) (2,618) (666) (4,686) (67,763) (15,776) (83,539)
Customer accounts . (526,220
)
(14,589) (12,228) (12,224) (1,963) (72,715) (639,939) (53,812) (693,751)
Debt securities
in issue ............... (176,179
)
(5,437) (3,028) (14,653) (1,461) (10) (200,768) (7,825) (208,593)
Other liabilities (334
)
(2) (6) (309) (44) (81,548) (82,243) (82,349) (164,592)
Loan capital
and other
subordinated
liabilities ............ (7,785
)
(612) (198) (3,894) (13,994) (3) (26,486) – (26,486)
Minority interests
and shareholders’
funds .................. – – – – – (97,942) (97,942) (1,875) (99,817)
Internal funding of
the trading book . 65,575 1,485 1,015 463 (92) (838) 67,608 (67,608) –
Total liabilities ....... (699,064
)
(23,482) (15,790) (33,235) (18,220) (257,742) (1,047,533) (229,245) (1,276,778)
Off-balance-sheet
items ................... (52,320
)
(14,739) 7,898 58,337 824 – – – –
Interest rate
sensitivity gap .... (146,014
)
9,464 36,380 156,782 45,363 (101,975) – – –
Cumulative interest
rate sensitivity
gap ..................... (146,014
)
(136,550) (100,170) 56,612 101,975 – – – –
A positive interest rate sensitivity gap exists where more assets than liabilities re-price during a given period.
Although a positive gap position tends to benefit net interest income in a rising interest rate environment, the
actual effect will depend on a number of factors, including the extent to which repayments are made earlier or
later than the contracted date and variations in interest rates within re-pricing periods and among currencies.
Similarly, a negative interest rate sensitivity gap exists where more liabilities than assets re-price during a given
period. In this case, a negative gap position tends to benefit net interest income in a declining interest rate
environment, but again the actual effect will depend on the same factors as for positive interest rate gaps, as
described above.