HSBC 2013 Annual Report Download - page 47

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Cash flows payable by the bank under financial liabilities by remaining contractual maturities (Audited)
On demand
and due
within
3 months
$m
Due
between
3 and
12 months
$m
Due
between 1
and 5 years
$m
Due after
5 years
$m Total
$m
At 31 December 2013
Deposits by banks .............................. 1,209 – – – 1,209
Customer accounts ............................. 40,906 8,087 3,062 – 52,055
Trading liabilities ............................... 4,396 – – – 4,396
Financial liabilities designated
at fair value .................................. 5 14 59 429 507
Derivatives ......................................... 23 8 134 29 194
Debt securities in issue ....................... 1,791 1,831 7,109 1,404 12,135
Subordinated liabilities1 ..................... 3 8 27 256 294
Other financial liabilities .................... 4,835 69 1,722 – 6,626
53,168 10,017 12,113 2,118 77,416
Loan commitments ............................. 34,900 155 74 – 35,129
Financial guarantee contracts ............. 410 478 640 – 1,528
88,478 10,650 12,827 2,118 114,073
1 Excludes interest payable exceeding 15 years.
Certain balances in the above table will not agree
directly to the balances in the consolidated statements
of financial position as the table incorporates cash flows
for both principal and interest, on an undiscounted basis,
except for derivatives and trading liabilities.
Cash flows payable in respect of deposits are
primarily contractually repayable on demand or on
short notice. However, in practice, short-term deposit
balances remain stable as cash inflows and outflows
broadly match.
Trading derivatives and trading liabilities have been
included in the ‘On demand and due within 3 months’
time bucket, and not by contractual maturity, because
trading liabilities are typically held for short periods
of time. The undiscounted cash flows on hedging
derivative liabilities are classified according to their
contractual maturity.
Furthermore, loan commitments and financial
guarantee contracts are not recognized on the statement
of financial position. The undiscounted cash flows
potentially payable under financial guarantee contracts
are classified on the basis of the earliest date they can
be drawn down.
Encumbered assets
In the normal course of business, the bank will pledge
or otherwise encumber assets. The pledging of assets
will occur to meet the bank’s payments and settlement
system obligations, as security in a repurchase
transaction, to support secured debt instruments or as
margining requirements. Limits are in place to control
such pledging.
The bank actively monitors its pledging positions.
Encumbered assets are not counted towards the bank’s
liquid assets used for internal stress testing scenarios. We
further estimate the impact of credit rating downgrade
triggers, and exclude the estimated impact from liquid
assets within the bank’s liquidity stress testing scenarios.
Contractual obligations
As part of our normal business operations we have
contractual obligations for payment of liabilities.
Amounts included in unsecured long-term funding in
the table below are wholesale term deposits with an
original term to maturity of more than one year, based
on contractual repayment dates. Also included are
obligations related to commitments not recorded in the
consolidated statement of financial position, such as
those relating to operating leases.
45