HSBC 2015 Annual Report Download - page 425

HSBC HOLDINGS PLC
423
Strategic Report Financial Review Corporate Governance Financial Statements Shareholder Information
Brazilian labour, civil and fiscal claims
Brazilian labour, civil and fiscal litigation provisions were $363m (2014: $501m) as at 31 December 2015. Of these provisions,
$168m (2014: $246m) was in respect of labour and overtime litigation claims brought by past employees against HSBC
operations in Brazil following their departure from the bank. The main assumptions involved in estimating the liability are the
expected number of departing employees, individual salary levels and the facts and circumstances of each individual case.
These provisions form part of the Brazilian disposal group and were classified as ‘held for sale’ at 31 December 2015 (see
Note 23).
30 Subordinated liabilities
HSBC
2015 2014
$m $m
Subordinated liabilities
At amortised cost 22,702 26,664
–
subordinated liabilities 20,773 22,355
–
preferred securities 1,929 4,309
Designated at fair value (Note 25) 22,510 23,317
–
subordinated liabilities 21,168 21,822
–
preferred securities 1,342 1,495
At 31 December 45,212 49,981
HSBC Holdings 26,062 25,277
Other HSBC 19,150 24,704
At 31 December 45,212 49,981
HSBC’s subordinated liabilities
Subordinated liabilities rank behind senior obligations and generally count towards the capital base of HSBC. Where applicable,
capital securities may be called and redeemed by HSBC subject to prior notification to the PRA and, where relevant, the consent of
the local banking regulator. If not redeemed at the first call date, coupons payable may step-up or become floating rate based
on interbank rates.
Interest rates on the floating rate capital securities are generally related to interbank offered rates. On the remaining capital
securities, interest is payable at fixed rates of up to 10.176%.
The balance sheet amounts disclosed below are presented on an IFRSs basis and do not reflect the amount that the
instruments contribute to regulatory capital due to the inclusion of issuance costs, regulatory amortisation and regulatory
eligibility limits prescribed in the grandfathering provisions under CRD IV.
HSBC’s subordinated liabilities in issue
First call
date
Maturity
date
2015
$m
2014
$m
Additional tier 1 capital securities guaranteed by HSBC Holdings plc1
£500m 8.208% non-cumulative step-up perpetual preferred securities2Jun 2015
–
779
€750m 5.13% non-cumulative step-up perpetual preferred securities3Mar 2016 856 979
$900m 10.176% non-cumulative step-up perpetual preferred securities, series 2 Jun 2030 891 891
1,747 2,649
Additional tier 1 capital securities guaranteed by HSBC Bank plc1
£300m 5.862% non-cumulative step-up perpetual preferred securities Apr 2020 488 515
£700m 5.844% non-cumulative step-up perpetual preferred securities Nov 2031 1,038 1,091
1,526 1,606
Tier 2 securities issued by HSBC Bank plc
£500m 4.75% callable subordinated notes4 Sep 2015 Sep 2020
–
802
£350m 5.00% callable subordinated notes5 Mar 2018 Mar 2023 562 605
£300m 6.50% subordinated notes
–
Jul 2023 444 466
£350m 5.375% callable subordinated step-up notes6Nov 2025 Nov 2030 569 620
£500m 5.375% subordinated notes
–
Aug 2033 846 905
£225m 6.25% subordinated notes
–
Jan 2041 332 349
£600m 4.75% subordinated notes
–
Mar 2046 879 924
€500m Callable subordinated floating rate notes4 Sep 2015 Sep 2020
–
588
$300m 7.65% subordinated notes
–
May 2025 386 400
$750m Undated floating rate primary capital notes Jun 1990 750 750
$500m Undated floating rate primary capital notes Sep 1990 500 500
$300m Undated floating rate primary capital notes, series 3 Jun 1992 300 300
5,568 7,209