HSBC 2011 Annual Report Download - page 163

161
Overview Operating & Financial Review Corporate Governance Financial Statements Shareholder Information
Diversity of funding sources
(Audited)
Our primary sources of funding are current accounts
and savings deposits payable on demand or short
notice. As part of our liquidity and funding risk
management, we do not rely on securitisations,
covered bond issuance programmes or repurchase
agreements as an important source of funding.
Repurchase agreements entered into are generally
short-term in nature maturing in 90 days or less.
We are a net cash provider to the repo market.
Our sources and uses of funding, which provide
a consolidated view of how our balance sheet is
funded, should be read with consideration of our
risk management framework which requires our
operating entities to manage liquidity and funding
risk on a standalone basis. Notwithstanding the
above, the material difference between funding
sources and uses is an illustration of the strength
of our liquidity position.
Funding sources
At 31 December
2011 2010
US$bn US$bn
Customer accounts ................... 1,253.9 1,227.7
Deposits by banks .................... 112.8 110.6
Debt securities ......................... 131.0 145.4
Financial liabilities
designated at fair value ........ 85.7 88.1
Equity ....................................... 166.1 154.9
1,749.5 1,726.7
Funding usage
At 31 December
2011 2010
US$bn US$bn
Loans and advances to
customers ............................. 940.4 958.4
Loans and advances to banks .. 181.0 208.3
Financial investments held to
maturity ................................ 21.2 19.5
1,142.6 1,186.2
Contingent liquidity risk
(Audited)
Contingent liquidity risk is the risk associated with
the need to provide additional funds to clients. The
client-originated exposure relates to multi-seller
conduits, which were established to enable clients
to access a flexible market-based source of finance
(see page 404). HSBC-managed asset exposures are
differentiated in that they relate to consolidated SICs
which issue debt secured by ABSs (see page 403).
Other conduit exposures relate to third-party
sponsored conduits (see page 405). Single issuer
liquidity facilities are provided directly to clients
rather than via any form of conduit. These facilities
are split by the addition of the five largest specific
facilities and the single largest market sector.
The Group’s contractual exposures at 31 December monitored under the contingent liquidity risk limit structure
(Audited)
HSBC Bank HSBC Bank USA HSBC Bank Canada
The Hongkong and
Shanghai Banking
Corporation
2011 2010 2011 2010 2011 2010 2011 2010
US$bn US$bn US$bn US$bn US$bn US$bn US$bn US$bn
Conduits
Client-originated assets49
– total lines ........................... 12.8 8.4 0.9 3.9 0.7 0.2 – –
– largest individual lines ...... 0.7 0.7 0.3 0.4 0.5 0.1 – –
HSBC-managed assets50
– total lines ............................. 22.1 25.6 – – – – – –
Other conduits51
– total lines ............................. – – 1.4 1.4 – – – –
Single-issuer liquidity facilities
– five largest52 ....................... 3.4 4.2 5.7 5.3 1.8 2.0 1.9 1.4
– largest market sector53 ....... 7.5 8.4 6.5 4.9 3.8 3.8 2.5 2.4
For footnotes, see page 185.