HSBC 2014 Annual Report Download - page 180

HSBC BANK PLC
Notes on the Financial Statements (continued)
178
preference shares in issue carry no rights to conversion into ordinary shares of the bank. Holders of the preference shares
in issue will be able to attend any general meetings of shareholders of the bank and to vote on any resolution proposed to
vary or abrogate any of the rights attaching to the preference shares or any resolution proposed to reduce the paid up
capital of the preference shares. If the dividend payable on the preference shares in issue has not been paid in full for the
most recent dividend period or any resolution is proposed for the winding-up of the bank or the sale of its entire business
then, in such circumstances, holders of preference shares will be entitled to vote on all matters put to general meetings.
In the case of unpaid dividends the holders of preference shares in issue will be entitled to attend and vote at any general
meetings until such time as dividends on the preference shares have been paid in full, or a sum set aside for such payment
in full, in respect of one dividend period.
All shares in issue are fully paid.
Other equity instruments
HSBC Bank plc additional tier 1instruments
2014
£m
2013
£m
£1,096m
Undated Subordinated Additional Tier 1 Instrument issued 2014
(Callable December 2019 onwards)
1,096
–
£1,100m
Undated Subordinated Additional Tier 1 Instrument issued 2014
(Callable December 2024 onwards)
1,100
–
At 31 December
2,196
–
During 2014, the bank issued new capital instruments that are included in the group’s capital base as fully CRD IV
compliant additional tier 1 capital.
Interest on these instruments will be due and payable only at the sole discretion of the bank, and the bank has sole and
absolute discretion at all times and for any reason to cancel (in whole or in part) any interest payment that would
otherwise be payable on any date. There are limitations on the payment of principal, interest or other amounts if such
payments are prohibited under UK banking regulations, or other requirements, if the bank has insufficient distributable
items or if the bank fails to satisfy the solvency condition as defined in the instruments’ terms.
The instruments are undated and are repayable, at the option of the bank, in whole at the initial call date, or on any
Interest Payment Date after the initial call date. In addition, the instruments are repayable at the option of the bank in
whole for certain regulatory or tax reasons. Any repayments require the prior consent of the Prudential Regulation
Authority. These instruments rank pari passu with the bank’s most senior class or classes of issued preference shares and
therefore ahead of ordinary shares. These instruments will be written down in whole, together with any accrued but
unpaid interest if either the group’s solo or consolidated Common Equity Tier 1 Capital Ratio falls below 7.00%.
33 Notes on the cash flow statement
Non-cash items included in profit before tax
The group
The bank
2014
2013
2014
2013
£m
£m
£m
£m
Depreciation, amortisation and impairment
532
542
412
410
Share-based payment expense
162
147
128
119
Credit-related impairment losses
833
971
498
800
Provisions raised
1,529
1,055
1,420
665
Impairment of investments
(203)
36
(2)
7
Charge/(credit) for defined benefit plans
123
(170)
79
(191)
Accretion of discounts and amortisation of premiums
(58)
103
(8)
198
2,918
2,684
2,527
2,008
Change in operating assets
The group
The bank
2014
2013
2014
2013
£m
£m
£m
£m
Change in prepayments and accrued income
214
23
1
–
Change in net trading securities and net derivatives
(5,335)
(9,234)
(960)
(9,177)
Change in loans and advances to banks
(5,249)
(3,482)
(4,636)
(14,759)
Change in loans and advances to customers
15,543
(8,042)
15,381
31
Change in reverse repurchase agreements – non-trading
11,180
(30,837)
8,159
(28,850)
Change in financial assets designated at fair value
9,762
(1,179)
3,974
397
Change in other assets
(7,084)
(255)
(3,715)
136
19,031
(53,006)
18,204
(52,222)