HSBC 2009 Annual Report Download - page 263

261
Total
Up to
1 year
1-5 years 5-10 years
More than
10 years
Non-
interest
bearing
US$m US$m US$m US$m US$m US$m
At 31 December 2008
Cash at bank and in hand:
– balances with HSBC undertakings ............ 443 443 – – – –
Derivatives .......................................................... 3,682 – – – – 3,682
Loans and advances to HSBC undertakings ...... 11,804 8,995 511 – 1,222 1,076
Financial investments ......................................... 2,629 – – 300 1,885 444
Investments in subsidiaries ................................. 81,993 1,459 1,094 – 875 78,565
Other assets ......................................................... 131 – – – – 131
Total assets .......................................................... 100,682 10,897 1,605 300 3,982 83,898
Amounts owed to HSBC undertakings .............. (4,042) (3,389) – – – (653)
Financial liabilities designated at fair values ..... (16,389) (4,210) (4,410) (5,290) (3,448) 969
Derivatives .......................................................... (1,324) – – – – (1,324)
Other liabilities ................................................... (1,816) – – – – (1,816)
Subordinated liabilities ....................................... (14,017) (1,500) (2,187) (2,962) (7,152) (216)
Total equity ......................................................... (62,587) – – – (3,650) (58,937)
Other non-interest bearing liabilities .................. (507) – – – – (507)
Total liabilities and equity .................................. (100,682) (9,099) (6,597) (8,252) (14,250) (62,484)
Off-balance sheet items attracting interest rate
sensitivity ........................................................ – (12,353) 4,410 5,046 3,760 (863)
Net interest rate risk gap ..................................... – (10,555) (582) (2,906) (6,508) 20,551
Cumulative interest rate gap ............................... – (10,555) (11,137) (14,043) (20,551) –
Value at risk
Total foreign exchange VAR arising within HSBC
Holdings in 2009 and 2008 was as follows:
HSBC Holdings – value at risk
(Audited)
Foreign exchange
2009
US$m
2008
US$m
At 31 December ............................. 83.2 55.2
Average .......................................... 76.6 40.3
Minimum ....................................... 55.2 29.2
Maximum ....................................... 190.8 56.1
The foreign exchange risk largely arises from
loans to subsidiaries of a capital nature that are not
denominated in the functional currency of either the
provider or the recipient and which are accounted
for as financial assets. Changes in the carrying
amount of these loans due to foreign exchange rate
differences are taken directly to the income
statement. These loans, and the associated foreign
exchange exposures, are eliminated on a Group
consolidated basis.
The increased maximum VAR in 2009 related to
a portion of the proceeds of the Group’s rights issue
that was held in sterling.
Residual value risk
(Unaudited)
A significant part of a lessor’s return from operating
leases is dependent upon its management of residual
value risk. This arises from operating lease
transactions to the extent that the values recovered
from disposing of leased assets or re-letting them at
the end of the lease terms (the ‘residual values’)
differ from those projected at the inception of the
leases. The business regularly monitors residual
value exposure by reviewing the recoverability of
the residual value projected at lease inception. This
entails considering the potential of re-letting of
operating lease assets and their projected disposal
proceeds at the end of their lease terms. Provision is
made to the extent that the carrying values of leased
assets are impaired through residual values not being
fully recoverable.
The net carrying amount of equipment leased to
customers on operating leases by the Group takes
into account projected residual values at the end of
current lease terms, to be recovered through
re-letting or disposal in the following periods: