HSBC 2010 Annual Report Download - page 333

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Overview Operating & Financial Review Governance Financial Statements Shareholder Information
Summarised aggregate financial information on associates
2010 2009
US$m US$m
HSBC’s share of:
– assets .................................................................................................................................................. 191,286 158,890
– liabilities ............................................................................................................................................ 175,812 147,501
– revenues ............................................................................................................................................. 9,274 7,514
– profit after tax .................................................................................................................................... 2,479 1,735
HSBC’s investment in Bank of Communications Co., Limited was equity accounted with effect from August 2004.
HSBC’s significant influence in Bank of Communications Co., Limited was established as a result of representation
on the Board of Directors, and in accordance with the Technical Support and Assistance Agreements, HSBC is
assisting in the development of financial and operating policies and a number of staff have been seconded to assist in
this process.
HSBC’s investment in Industrial Bank Co., Limited was equity accounted with effect from May 2004, reflecting
HSBC’s significant influence over this associate. HSBC’s significant influence was established as a result of
representation on the Board of Directors, and in accordance with the Technical Support and Assistance Agreements,
HSBC is assisting in the development of financial and operating policies.
HSBC’s investment in Ping An Insurance (Group) Company of China, Limited was equity accounted with effect
from 31 August 2005, reflecting HSBC’s significant influence over this associate. HSBC’s significant influence was
established as a result of representation on the Board of Directors. In May 2010, following the issue of shares by the
associate to a third party, HSBC’s holding was diluted to 16.13% and a dilution gain of US$188m was recognised in
‘Other operating income’.
The statutory accounting reference date of Bank of Communications Co., Limited, Ping An Insurance (Group)
Company of China, Limited and Industrial Bank Co., Limited is 31 December. For the year ended 31 December
2010, these companies were included on the basis of financial statements made up for the twelve months to
30 September 2010, taking into account changes in the subsequent period from 1 October 2010 to 31 December 2010
that would have materially affected their results.
HSBC acquired 15% of Vietnam Technological & Commercial Joint Stock Bank in October 2007. This investment
was equity accounted from that date due to HSBC’s representation on the Board of Directors and involvement in the
Technical Support and Assistance Agreement. In December 2007, as a result of a rights issue in which HSBC did not
participate, HSBC’s equity interest was diluted to 14.44%. In September 2008, HSBC increased its equity interest to
20%. HSBC’s equity interest has been subsequently diluted to below 20% due to the issue of shares by the associate
to its own employees.
Joint ventures
Principal interests in joint ventures
At 31 December 2010
Country of
incorporation
Principal
activity
HSBC’s interest
in equity
capital
Issued
equity
capital
HSBC Saudi Arabia Limited .................................... Saudi Arabia Investment banking 60.00% SR50m
Vaultex UK Limited ................................................. England Cash management 50.00% £10m
Hana HSBC Life Insurance Co., Ltd ........................ South Korea Insurance manufacturing 49.99% KRW60,201m
Canara HSBC Oriental Bank of Commerce
Life Insurance Company Limited ........................ India Insurance manufacturing 26.00% INR5,000m