HSBC 2009 Annual Report Download - page 467

465
2008. HFC Bank Limited (‘HFC’) ceased selling single premium PPI in 2008 and sales of regular premium PPI will
reduce as HFC exits its remaining retail relationships.
Commitments
In addition to the commitments disclosed on page 463, at 31 December 2009, HSBC had US$1,359 million (2008:
US$1,541 million) of capital commitments contracted but not provided for and US$227 million (2008:
US$267 million) of capital commitments authorised but not contracted for.
Associates
HSBC’s share of associates’ contingent liabilities amounted to US$19,770 million at 31 December 2009 (2008:
US$17,943 million). No matters arose where HSBC was severally liable.
40 Lease commitments
Finance lease commitments
HSBC leases land and buildings (including branches) and equipment from third parties under finance lease
arrangements to support its operations.
2009 2008
Total future
minimum
payments
Future
interest
charges
Present value
of finance
lease
commitments
Total future
minimum
payments
Future
interest
charges
Present value
of finance
lease
commitments
US$m US$m US$m US$m US$m US$m
Lease commitments:
– no later than one year ......... 103 (29) 74 55 (28) 27
– later than one year and no
later than five years ............ 249 (116) 133 188 (130) 58
– later than five years ............ 619 (182) 437 736 (258) 478
971 (327) 644 979 (416) 563
At 31 December 2009, future minimum sublease payments of US$512 million (2008: US$458 million) are expected
to be received under non-cancellable subleases at the balance sheet date.
Operating lease commitments
At 31 December 2009, HSBC was obligated under a number of non-cancellable operating leases for properties, plant
and equipment on which the future minimum lease payments extend over a number of years.
2009 2008
Land and
buildings Equipment
Land and
buildings Equipment
US$m US$m US$m US$m
Future minimum lease payments under non-cancellable
operating leases:
– no later than one year ....................................................... 846 11 757 9
– later than one year and no later than five years ............... 2,253 11 1,791 9
– later than five years .......................................................... 2,534 – 1,573 –
5,633 22 4,121 18
In 2009, US$1,100 million (2008: US$861 million; 2007: US$849 million) was charged to ‘General and
administrative expenses’ in respect of lease and sublease agreements, of which US$833 million (2008:
US$635 million; 2007: US$838 million) related to minimum lease payments, US$16 million (2008: US$22 million;
2007: US$8 million) to contingent rents, and US$251 million (2008: US$204 million; 2007: US$3 million) to
sublease payments.
The contingent rent represents escalation payments made to landlords for operating, tax and other escalation expenses.
Finance lease receivables
HSBC leases a variety of assets to third parties under finance leases, including transport assets (such as aircraft),
property and general plant and machinery. At the end of lease terms, assets may be sold to third parties or leased for