HSBC 2012 Annual Report Download - page 201

199
Overview Operating & Financial Review Corporate Governance Financial Statements Shareholder Information
Commentary on exposures
Spain
At 31 December 2012, our total net exposure to
Spain was US$12.1bn, US$0.2bn lower than at the
end of 2011.
Our total net exposure to Spanish sovereign and
agencies was US$1.0bn, US$1.2bn lower than at the
end of 2011. The reduction was primarily due to
lower off-balance sheet positions.
Our total net exposure to Spanish banks was
US$2.8bn, US$0.7bn lower than at the end of 2011.
The reduced exposure was due to increased risk
mitigation. Our total net exposure to Spanish other
financial institutions and corporates was US$8.3bn,
an increase of US$1.7bn primarily due to higher
off-balance sheet commitments. Our exposure to
Spanish other financial institutions and corporates
mainly comprised large multinational companies
and other financial institutions with significant
operations outside Spain, which mitigated the risk.
Exposure to the commercial real estate sector in
Spain remained insignificant.
Ireland
At 31 December 2012, our total net exposure to
Ireland was US$9.9bn, US$4.1bn higher than at the
end of 2011. This increase was in respect of exposures
to other financial institutions and corporates.
Our total net exposure to Irish other financial
institutions and corporates was US$7.6bn, US$4.1bn
higher than at the end of 2011. The increase was
primarily in financial investments available for sale
for which the underlying risk is not predominantly
Irish. A significant portion of our exposure related to
foreign-owned entities incorporated in Ireland.
Italy
At 31 December 2012, our total net exposure to Italy
was US$9.6bn, US$1.2bn higher than at the end of
2011.
Our total net exposure to Italian sovereign
agencies was US$2.7bn, US$0.4bn higher than at the
end of 2011. This was due to a decrease in risk
mitigation.
Our total net exposure to Italian banks was
US$1.6bn, US$0.5bn lower than at the end of 2011.
The reduced exposure was primarily due to lower
amounts of loans and advances.
Our total net exposure to other financial
institutions and corporates at 31 December 2012 was
US$5.2bn, an increase of US$1.3bn. Our exposure to
Italian other financial institutions and corporates
mainly comprised large multinational companies
and other financial institutions with significant
operations outside Italy, which mitigated the risk.
Greece
At 31 December 2012, our total net exposure to
Greece was US$5.8bn, US$1.8bn lower than at the
end of 2011. Although there was a reduction in
exposure levels to all Greek counterparties in the
first half of 2012, the majority of the reduction was
in respect of exposures to other financial institutions
and corporates.
Our total net exposure to Greek sovereign and
agencies was US$0.1bn, US$0.3bn lower than at the
end of 2011. Our Greek sovereign exposure
decreased as a result of the debt restructuring in
March 2012 and the associated settlement of CDS
contracts.
Our total net exposure to Greek banks was
US$0.6bn, US$0.3bn lower than at the end of 2011.
The decrease was primarily due to lower off-balance
sheet positions.
Our total net exposure to Greek other financial
institutions and corporates was US$4.1bn, US$1.2bn
lower than at the end of 2011. The reduction was
primarily due to lower level of off-balance sheet
positions. At 31 December 2012, our exposure to
Greek shipping companies amounted to US$2.2bn.
We believe the industry is less sensitive to the Greek
economy as it is mainly dependent on international
trade.
Portugal
At 31 December 2012, our total net exposure to
Portugal was US$1.0bn, similar to the end of 2011.
Our total net exposure to Portuguese other
financial institutions and corporates was US$0.4bn,
US$0.3bn higher than at the end of 2011. The
increase was primarily due to higher off-balance
sheet commitments, which were in support of
internationally active corporates with significant
operations outside Portugal, which reduced the risk.
Cyprus
Our gross on-balance sheet exposure to Cyprus of
US$0.3bn (2011: US$0.2bn) consisted primarily of
loans and advances to other financial institutions and
corporates of US$0.3bn (2011: US$0.2bn). We have
also provided off-balance sheet commitments and
guarantees to other financial institutions and
corporates of US$0.1bn (2011: US$0.1bn).