HSBC 2013 Annual Report Download - page 42

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40
2012
Customers
individually
assessed
$m
Customers
collectively
assessed
$m
Provision
for credit
losses
$m Total
$m
Opening balance at the beginning of the year ............. 208 256 73 537
Movement
Loans and advances written off net of recoveries
of previously written off amounts1 .................. (91) (118) – (209)
Charge to income statement .................................. 103 99 8 210
Reclassified as held for sale .................................. – (22) – (22)
Interest recognized on impaired loans
and advances ................................................... (18) – – (18)
Other movements .................................................. – 2 (1) 1
Closing balance at the end of the year ........................ 202 217 80 499
1 Recovered $6m (2012: $4m) of loans and advances written off in prior periods.
Derivative portfolio
The credit equivalent amount of derivative exposure
comprises the current replacement cost of positions plus
an allowance for potential future fluctuation of interest
rate or foreign exchange rate derivative contracts. We
enter into derivatives primarily to support our customers’
requirements and to assist us in the management of
assets and liabilities, particularly relating to interest and
foreign exchange rate risks as noted above.
Credit equivalent amount of our derivative portfolio (Audited)
2013
$m
2012
$m
Interest rate contracts ..................................................................................................... 1,076 1,101
Foreign exchange contracts ............................................................................................ 2,811 2,080
Commodity contracts ..................................................................................................... 78 94
Net credit equivalent amount ......................................................................................... 3,965 3,275
A more detailed analysis of our derivative portfolios is presented in note 11.
Area of special interest: exposures to core and peripheral eurozone countries
Our exposure to core and peripheral eurozone remains within the bank’s overall risk appetite. Exposures to peripheral
eurozone countries increased by $134m compared with the position at 31 December 2012, of which $67m is held with
other HSBC Group affiliates.
HSBC BANK CANADA
40
Management’s Discussion and Analysis (continued)