HSBC 2003 Annual Report Download - page 312

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
310
(b) Geographic concentration of contingent liabilities and commitments
HSBC has the following geographic concentrations of exposure to contingent liabilities and commitments.
These are allocated on the basis set out in Note 47:
Europe Hong Kong
Rest of
Asia-Pacific
North
America
South
America Total
Contract amounts US$m US$m US$m US$m US$m US$m
Contingent liabilities
2003 ........................................... 27,460 16,036 7,686 8,302 396 59,880
2002 ........................................... 23,697 12,886 6,550 7,680 442 51,255
Commitments
2003 ........................................... 133,475 58,098 40,029 192,779 4,383 428,764
2002 ........................................... 89,569 56,810 30,743 45,484 3,023 225,629
40 Market risk management
HSBC’ s market risk management process is discussed in the ‘Financial Review’ section on pages 168 to 169 from
the paragraph under the heading ‘Market risk management’ to the paragraph ended ‘impact of extreme events on the
market risk exposures of HSBC’.
(a) Trading VAR
VAR is a technique that estimates the potential losses that could occur on risk positions taken due to movements
in market rates and prices over a specified time horizon and to a given level of confidence.
Trading VAR for HSBC for 2003 was:
At
31 December
2003
Minimum
during
the year
Maximum
during
the year
Average
for the
year
US$m US$m US$m US$m
Total trading activities ................................................... 101.0 48.7 234.1 102.4
Foreign exchange trading positions ................................ 52.8 1.2 184.4 48.7
Interest rate trading positions ......................................... 64.9 43.1 124.7 70.0
Equities trading positions ............................................... 15.9 10.9 23.1 16.9
Trading VAR for HSBC for 2002 was:
At
31 December
2002
Minimum
during
the year
Maximum
during
the year
Average
for the
year
US$m US$m US$m US$m
Total trading activities ................................................... 71.6 66.7 130.0 93.9
Foreign exchange trading positions ................................ 12.9 2.4 47.0 21.0
Interest rate trading positions ......................................... 63.2 60.2 120.9 82.4
Equities trading positions ............................................... 27.1 20.4 40.6 29.0