HSBC 2007 Annual Report Download - page 437

435
35 Foreign exchange exposures
Structural foreign exchange exposures
HSBC’s structural foreign exchange exposures are represented by the net asset value of its foreign exchange equity
and subordinated debt investments in subsidiaries, branches, joint ventures and associates. Gains or losses on
structural foreign exchange exposures are recognised directly in equity. HSBC’s management of its structural foreign
exchange exposures is discussed in the ‘Report of the Directors: The Management of Risk’ on page 256.
In its separate financial statements, HSBC Holdings recognises its foreign exchange gains and losses on structural
foreign exchange exposures in the income statement.
Net structural foreign exchange exposures
2007 2006
US$m US$m
Currency of structural exposure
Pound sterling .................................................................................................................................... 24,527 18,562
Euro .................................................................................................................................................... 23,985 21,202
Chinese renminbi ............................................................................................................................... 10,892 5,678
Mexican pesos ................................................................................................................................... 5,247 4,536
Hong Kong dollars ............................................................................................................................ 4,635 4,461
Canadian dollars ................................................................................................................................ 4,136 3,284
Brazilian reais .................................................................................................................................... 4,007 2,684
Indian rupees ...................................................................................................................................... 2,699 1,575
Swiss francs ....................................................................................................................................... 2,657 2,495
UAE dirhams ..................................................................................................................................... 2,182 1,647
Turkish lira ......................................................................................................................................... 1,796 970
Korean won ........................................................................................................................................ 1,282 769
Malaysian ringgit ............................................................................................................................... 1,044 876
Australian dollars ............................................................................................................................... 940 692
Philippine pesos ................................................................................................................................. 459 213
Singapore dollars ............................................................................................................................... 432 411
Saudi riyals1 ....................................................................................................................................... 404 286
Egyptian pounds ................................................................................................................................ 392 325
Thai baht ............................................................................................................................................ 384 305
Taiwanese dollars .............................................................................................................................. 382 299
Costa Rican colon .............................................................................................................................. 375 162
Argentine pesos ................................................................................................................................. 370 211
Vietnamese dong ............................................................................................................................... 331 57
Honduran lempira .............................................................................................................................. 325 148
Japanese yen ...................................................................................................................................... 300 338
Maltese lira ........................................................................................................................................ 270 269
Indonesia rupiah ................................................................................................................................ 221 155
Chilean pesos ..................................................................................................................................... 214 189
Colombian peso ................................................................................................................................. 202 86
Qatari rial ........................................................................................................................................... 197 150
New Zealand dollars .......................................................................................................................... 169 158
South African rand ............................................................................................................................ 148 106
Omani rial .......................................................................................................................................... 140 114
Jordanian dinar .................................................................................................................................. 116 92
Russian rouble ................................................................................................................................... 114 92
Bahraini dinar .................................................................................................................................... 106 90
Others, each less than US$100 million ............................................................................................. 686 514
Total ................................................................................................................................................... 96,766 74,201
1 After deducting sales of Saudi riyals amounting to US$750 million (2006: US$750 million) in order to manage the foreign exchange risk
of the investments.
All resulting exchange differences on consolidation of foreign operations are recognised in a separate component of
equity. Shareholders’ equity would decrease by US$2,426 million (2006: US$1,988 million) if euro and sterling
foreign currency exchange rates weakened by 5 per cent relative to the US dollar.