HSBC 2012 Annual Report Download - page 503

501
Overview Operating & Financial Review Corporate Governance Financial Statements Shareholder Information
Approximately half of the above guarantees have a term of less than one year. Guarantees with terms of more
than one year are subject to HSBC’s annual credit review process.
Financial Services Compensation Scheme
At 31 December 2012, HSBC recognised an accrual of US$157m in respect of its share of the estimated Financial
Services Compensation Scheme (‘FSCS’) levy (31 December 2011: US$87m).
The FSCS confirmed in February 2013 that the first of three annual instalments of approximately £363m (US$587m)
will be levied in total on participating financial institutions in Scheme Year 2013/14 to repay the balance of the loan
principal that is not expected to be recovered. The accrual recognised at 31 December 2012 represents HSBC’s share
of the interest on the borrowings outstanding and also its share of the principal to be levied over each of the next
three years. The interest rate to be applied on outstanding borrowings increased from 12-month Libor plus 30 basis
points to 12-month Libor plus 100 basis points from 1 April 2012.
Commitments
In addition to the commitments disclosed on page 500, at 31 December 2012 HSBC had US$607m (2011: US$715m)
of capital commitments contracted but not provided for and US$197m (2011: US$272m) of capital commitments
authorised but not contracted for.
Associates
HSBC’s share of associates’ contingent liabilities amounted to US$46,148m at 31 December 2012 (2011:
US$34,311m). No matters arose where HSBC was severally liable.
41 Lease commitments
Finance lease commitments
HSBC leases land and buildings (including branches) and equipment from third parties under finance lease
arrangements to support its operations.
At 31 December 2012 At 31 December 2011
Total future
minimum
payments
Future
interest
charges
Present value
of finance
lease
commitments
Total future
minimum
payments
Future
interest
charges
Present value
of finance
lease
commitments
US$m US$m US$m US$m US$m US$m
Lease commitments:
– no later than one year ................ 81 (21) 60 98 (26) 72
– later than one year and no later
than five years ........................... 153 (71) 82 216 (99) 117
– later than five years ................... 196 (34) 162 362 (92) 270
430 (126) 304 676 (217) 459
At 31 December 2012, future minimum sublease payments of US$244m (2011: US$413m) are expected to be
received under non-cancellable subleases at the balance sheet date.
Operating lease commitments
At 31 December 2012, HSBC was obligated under a number of non-cancellable operating leases for properties, plant
and equipment on which the future minimum lease payments extend over a number of years.
At 31 December 2012 At 31 December 2011
Land and
buildings Equipment
Land and
buildings Equipment
US$m US$m US$m US$m
Future minimum lease payments under non-cancellable
operating leases:
– no later than one year ........................................................... 943 23 1,130 18
– later than one year and no later than five years ................... 2,495 23 2,656 18
– later than five years .............................................................. 2,246 – 2,496 –
5,684 46 6,282 36