HSBC 2006 Annual Report Download - page 374

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
Note 27, 28 and 29
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27 Financial liabilities designated at fair value
HSBC
2006 2005
US$m US$m
Deposits by banks and customer accounts ........................................................................................ 577 253
Liabilities to customers under investment contracts ......................................................................... 13,278 10,445
Debt securities in issue (Note 28) ...................................................................................................... 33,167 28,338
Subordinated liabilities (Note 32) ..................................................................................................... 18,503 18,447
Preference shares (Note 32) ............................................................................................................... 4,686 4,346
70,211 61,829
The carrying amount at 31 December 2006 of financial liabilities designated at fair value was US$1,257 million
(2005: US$1,899 million) higher than the contractual amount at maturity. At 31 December 2006, the accumulated
amount of the change in fair value attributable to changes in credit risk was US$1,535 million (2005:
US$1,144 million).
HSBC Holdings
2006 2005
US$m US$m
Subordinated liabilities (Note 32):
– owed to third parties ................................................................................................................... 9,839 9,315
– owed to HSBC undertakings ...................................................................................................... 4,231 4,055
14,070 13,370
The carrying amount at 31 December 2006 of financial liabilities designated at fair value was US$551 million (2005:
US$910 million) higher than the contractual amount at maturity. At 31 December 2006, the accumulated amount of
the change in fair value attributable to changes in credit risk was US$335 million (2005: US$398 million).
28 Debt securities in issue
2006 2005
US$m US$m
Bonds and medium term notes .......................................................................................................... 203,404 165,773
Other debt securities in issue ............................................................................................................. 94,203 77,613
297,607 243,386
Of which debt securities in issue reported as:
– trading liabilities ......................................................................................................................... (34,115) (26,976)
– financial liabilities designated at fair value (Note 27) ............................................................... (33,167) (28,338)
230,325 188,072
Certain debt securities in issue are managed on a fair value basis as part of HSBC’s interest rate risk management
policies. The hedged portion of these debt securities is presented within the balance sheet caption ‘Financial liabilities
designated at fair value’, with the remaining portion included within ‘Trading liabilities’.
The following table analyses the carrying amount of bonds and medium term notes in issue at 31 December with
original maturities greater than one year: