HSBC 2012 Annual Report Download - page 120

HSBC HOLDINGS PLC
Report of the Directors: Operating and Financial Review (continued)
Geographical regions > Other information > FuM / Property / EDTF
11 8
Other information
Funds under management and assets held in
custody
Funds under management
2012 2011
US$bn US$bn
Funds under management
At 1 January ................................ 847 925
Net new money ........................... 5 2
Value change .............................. 49 (40)
Exchange and other .................... 9 (40)
At 31 December .......................... 910 847
At 31 December
2012 2011
US$bn US$bn
Funds under management by
business
Global Asset Management ......... 425 396
Global Private Banking .............. 288 259
Affiliates ..................................... 3 3
Other ........................................... 194 189
910 847
Funds under management (‘FuM’) at 31 December
2012 amounted to US$910bn, an increase of 7%
compared with 31 December 2011. Total fund
holdings increased in 2012, reflecting favourable
market movements, the inclusion of custody assets
in client assets in GPB and net new money inflows
from Global Asset Management.
Global Asset Management funds, including
emerging market funds, increased by 7% to
US$425bn compared with 31 December 2011,
driven by favourable global market movements and
net inflows of US$16bn, mainly from sales of long-
term funds, notably fixed income and multi-asset
products, in Rest of Asia-Pacific, Hong Kong and
Latin America.
GPB funds increased by 11% on 31 December
2011 to US$288bn, mainly due to the inclusion of
custody assets in client assets and favourable equity
market and foreign exchange movements. Negative
net new money was driven by net outflows in
Europe, primarily due to a programme to reposition
our client base towards higher net worth
international and domestic relationships, and a
review of certain client relationships with a view to
reducing control risk, largely offset by net inflows
originating from emerging markets.
Other FuM increased by 3% to US$194bn,
primarily due to favourable equity market
movements partly offset by the disposal of the full
service retail brokerage business in Canada.
Assets held in custody and under
administration
Custody is the safekeeping and servicing of
securities and other financial assets on behalf of
clients. At 31 December 2012, we held assets as
custodian of US$6.0 trillion, 16% higher than
the US$5.2 trillion held at 31 December 2011. This
was mainly driven by favourable market movements
together with increased new business and favourable
movements in foreign exchange.
Our assets under administration business, which
includes the provision of various support function
activities including the valuation of portfolios of
securities and other financial assets on behalf of
clients, complements the custody business. At
31 December 2012, the value of assets held
under administration by the Group amounted to
US$2.9 trillion, compared with US$2.6 trillion
in 2011.
Property
At 31 December 2012, we operated from some
8,650 operational properties worldwide, of which
approximately 2,150 were located in Europe, 2,600
in Hong Kong and Rest of Asia-Pacific, 550 in North
America, 2,950 in Latin America and 400 in the
Middle East and North Africa. These properties had
an area of approximately 59.7m square feet (2011:
65.7m square feet).
Our freehold and long leasehold properties,
together with all our leasehold land in Hong Kong,
were valued in 2012. The value of these properties
was US$9.7bn (2011: US$8.9bn) in excess of their
carrying amount in the consolidated balance sheet an
historical cost based measure. In addition, properties
with a net book value of US$1.3bn (2011:
US$1.3bn) were held for investment purposes.
Our operational properties are stated at cost,
being historical cost or fair value at the date of
transition to IFRSs (their deemed cost) less any
impairment losses, and are depreciated on a basis
calculated to write off the assets over their estimated
useful lives. Properties owned as a consequence of
an acquisition are recognised initially at fair value.
Further details are included in Note 24 on the
Financial Statements.