HSBC 2009 Annual Report Download - page 183

181
Analysis of loans and advances to customers by geographical segment
At 31 December 2009 At 31 December 2008
Carrying
amount
Fair
Value
Carrying
amount
Fair
value
US$m US$m US$m US$m
Loans and advances to customers
Europe ........................................................................................................... 439,481 431,158 426,191 417,256
Hong Kong ................................................................................................... 99,381 99,694 100,220 100,490
Rest of Asia-Pacific24 ................................................................................... 80,043 79,972 80,661 77,391
Middle East24 ................................................................................................ 22,844 22,538 27,295 27,296
North America25 ............................................................................................ 206,853 174,957 256,214 211,346
Latin America ............................................................................................... 47,629 47,461 42,287 42,460
896,231 855,780 932,868 876,239
For footnotes, see page 195.
HSBC Holdings
The methods used by HSBC Holdings to determine
fair values of financial instruments for the purpose of
measurement and disclosure are described above.
The following table provides an analysis of the
fair value of financial instruments not carried at fair
value on the balance sheet:
Fair values of HSBC Holdings’ financial instruments not carried at fair value on the balance sheet
2009 2008
Carrying
amount
Fair
value
Carrying
amount
Fair
value
US$m US$m US$m US$m
Assets
Loans and advances to HSBC undertakings ................... 23,212 23,871 11,804 12,670
Liabilities
Amounts owed to HSBC undertakings ........................... 3,711 3,827 4,042 4,218
Debt securities in issue .................................................... 2,839 3,141 – –
Subordinated liabilities .................................................... 14,406 15,666 14,017 13,940
Special purpose entities
This section contains disclosures about HSBC-
sponsored SPEs that are included in HSBC’s
consolidated balance sheet, with a particular focus
on SPEs containing exposures affected by the
turmoil in credit markets which began in mid-2007,
and those that are not consolidated by HSBC under
IFRSs. In addition to the disclosures about SPEs,
information on other off-balance sheet arrangements
has been included in this section.
HSBC enters into certain transactions with
customers in the ordinary course of business which
involve the establishment of SPEs to facilitate or
secure customer transactions.
HSBC structures that utilise SPEs are authorised
centrally when they are established to ensure
appropriate purpose and governance. The activities
of SPEs administered by HSBC are closely
monitored by senior management. HSBC’s
involvement with SPE transactions is described
below.
HSBC-sponsored SPEs
HSBC sponsors the formation of entities which are
designed to accomplish certain narrow and well-
defined objectives, such as securitising financial
assets or effecting a lease, and this requires a form of
legal structure that restricts the assets and liabilities
within the structure to the single purpose for which it
was established. HSBC consolidates these SPEs
when the substance of the relationship indicates
that HSBC controls them. In assessing control, all
relevant factors are considered, including qualitative
and quantitative aspects. For example:
Qualitative factors – in substance:
• the activities of the SPE are being conducted on
behalf of HSBC according to HSBC’s specific
business needs so that it obtains benefit from the
SPE’s operation. This might be evidenced, for
example, by HSBC providing a significant level
of support to the SPE; and
• HSBC has the decision-making powers to obtain
the majority of the benefits of the activities of
the SPE.