HSBC 2009 Annual Report Download - page 388

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
Notes 4, 5 and 6
386
4 Gains arising from dilution of interests in associates
Gains arising
from dilution
of HSBC’s
interests
HSBC’s
interests after
issue of
new shares
HSBC’s
interests before
issue of
new shares
US$m % %
2007
Industrial Bank1 ....................................................................................................... 187 12.78 15.98
Ping An Insurance ................................................................................................... 485 16.78 19.90
Bank of Communications2 ....................................................................................... 404 18.60 19.90
Financiera Independencia S.A. de C.V. .................................................................. 11 18.68 19.90
Vietnam Technological and Commercial Joint Stock Bank ................................... 5 14.44 15.00
Gains arising from dilution of interests in associates ............................................. 1,092
1 Investment held through Hang Seng Bank, a 62.14 per cent owned subsidiary of HSBC. The dilution gains therefore include a minority
interest of US$71 million.
2 Subsequent to the dilution of its interests in Bank of Communications, HSBC increased its holding from 18.60 per cent to 19.01 per cent
at 31 December 2007 (Note 21).
In 2007, certain HSBC associates issued new shares. HSBC did not subscribe and, as a result, its interests in the
associates’ equity decreased. The assets of each associate substantially increased as a result of the new share issue
and, as a consequence, HSBC’s share of the associates’ underlying net assets increased notwithstanding the reduction
in the Group’s proportionate ownership interests. This increase is a gain arising from the dilution of the Group’s
interests in the associates, and is presented in the income statement.
5 Net earned insurance premiums
Non-life
insurance
Life
insurance
(non-linked)
Life
insurance
(linked)
Investment
contracts
with DPF1 Total
US$m US$m US$m US$m US$m
2009
Gross earned premiums ........................................... 1,572 5,218 1,427 2,774 10,991
– gross written premiums .................................... 1,339 5,285 1,427 2,774 10,825
– movement in unearned premiums .................... 233 (67) – – 166
Reinsurers’ share of gross earned premiums ........... (225) (278) (17) – (520)
– gross written premiums ceded to reinsurers ..... (215) (280) (11) – (506)
– reinsurers’ share of movement in unearned
premiums .......................................................... (10) 2 (6) – (14)
1,347 4,940 1,410 2,774 10,471
2008
Gross earned premiums ........................................... 1,834 6,086 1,825 2,802 12,547
– gross written premiums .................................... 1,776 6,257 1,825 2,802 12,660
– movement in unearned premiums .................... 58 (171) – – (113)
Reinsurers’ share of gross earned premiums ........... (263) (851) (583) – (1,697)
– gross written premiums ceded to reinsurers ..... (260) (878) (564) – (1,702)
– reinsurers’ share of movement in unearned
premiums .......................................................... (3) 27 (19) – 5
1,571 5,235 1,242 2,802 10,850
2007
Gross earned premiums ........................................... 1,855 4,906 2,350 1,890 11,001
– gross written premiums .................................... 1,853 4,892 2,350 1,890 10,985
– movement in unearned premiums .................... 2 14 – – 16
Reinsurers’ share of gross earned premiums ........... (407) (357) (1,161) – (1,925)
– gross written premiums ceded to reinsurers ..... (385) (357) (1,166) – (1,908)
– reinsurers’ share of movement in unearned
premiums .......................................................... (22) – 5 – (17)
1,448 4,549 1,189 1,890 9,076
1 Discretionary participation features.