HSBC 2009 Annual Report Download - page 435

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HSBC’s investment in Industrial Bank Co., Limited was equity accounted with effect from May 2004, reflecting
HSBC’s significant influence over this associate. HSBC’s significant influence was established as a result of
representation on the Board of Directors, and in accordance with the Technical Support and Assistance Agreements,
HSBC is assisting in the development of financial and operating policies.
HSBC’s investment in Ping An Insurance (Group) Company of China, Limited was equity accounted with effect
from 31 August 2005, reflecting HSBC’s significant influence over this associate. HSBC’s significant influence was
established as a result of representation on the Board of Directors.
HSBC’s significant influence in Bank of Communications Co., Limited was established as a result of representation
on the Board of Directors, and in accordance with the Technical Support and Assistance Agreements, HSBC is
assisting in the development of financial and operating policies and a number of staff have been seconded to assist in
this process.
The statutory accounting reference date of Bank of Communications Co., Limited, Ping An Insurance (Group)
Company of China, Limited and Industrial Bank Company Limited is 31 December. For the year ended 31 December
2009, these companies were included on the basis of financial statements made up for the twelve months to
30 September 2009, taking into account changes in the subsequent period from 1 October 2009 to 31 December 2009
that would have materially affected their results.
HSBC also had a 100 per cent interest in the issued preferred stock (less than US$1 million) of Wells Fargo HSBC
Trade Bank, N.A. HSBC held a 40 per cent economic interest in Wells Fargo HSBC Trade Bank, N.A. by virtue of
the joint agreement under which HSBC’s equity capital and preferred stock interests were being held. HSBC
disposed of its equity interest in Wells Fargo HSBC Trade Bank, N.A. on 12 February 2010. As at 31 December
2009, this interest in associate was classified as held for sale.
HSBC acquired 15 per cent of Vietnam Technological & Commercial Joint Stock Bank in October 2007. This
investment was equity accounted from that date due to HSBC’s representation on the Board of Directors and
involvement in the Technical Support and Assistance Agreement. In December 2007, as a result of a rights issue in
which HSBC did not participate, HSBC’s equity interest was diluted to 14.44 per cent. In September 2008, HSBC
increased its equity interest to 20 per cent. HSBC’s equity interest was diluted to 19.91 per cent in June 2009,
following an issue of shares by the associate to its own employees.
Joint ventures
Principal interests in joint ventures
At 31 December 2009
Country of
incorporation
Principal
activity
HSBC’s interest
in equity
capital
Issued
equity
capital
HSBC Saudi Arabia Limited ..................................... Saudi Arabia Investment banking 60.00% SR50m
Vaultex UK Limited .................................................. England Cash management 50.00% £10m
Hana HSBC Life Insurance Co., Ltd ......................... South Korea Insurance manufacturing 49.99% KRW60,201m
Canara HSBC Oriental Bank of Commerce
Life Insurance Company Limited .......................... India Insurance manufacturing 26.00% INR5,000m