HSBC 2015 Annual Report Download - page 111

HSBC HOLDINGS PLC
109
Strategic Report Financial Review Corporate Governance Financial Statements Shareholder Information
monetary policies, economic conditions in the eurozone
and damage from plummeting oil prices, all of which may
result in further capital outflows from emerging markets.
• Changes in foreign currency exchange rates may affect
our results.
Macro-prudential, regulatory and legal risks to our
business model
• Failure to implement and adhere to our obligations under
the deferred prosecution agreements could have a
material adverse effect on our results and operations.
• We may fail to effectively manage affiliate risk.
• Failure to comply with certain regulatory requirements
could have a material adverse effect on our results and
operations.
• We may fail to meet the requirements of regulatory
stress tests.
• We are subject to a number of legal and regulatory
actions and investigations, the outcomes of which
are inherently difficult to predict.
• We are subject to unfavourable legislative or regulatory
developments and changes in the policy of regulators or
governments.
• We may fail to comply with all applicable regulations,
particularly any changes thereto.
• We and our UK subsidiaries may become subject to
stabilisation provisions under the Banking Act 2009, as
amended, in certain significant stress situations.
• Structural separation of banking and trading activities
proposed or enacted in a number of jurisdictions could
have a material adverse effect on us.
• We are subject to tax-related risks in the countries in
which we operate.
Risks related to our business, business operations,
governance and internal control systems
• The delivery of our strategic actions is subject to
execution risk.
• We may not achieve any of the expected benefits of our
strategic initiatives.
• We may fail to increase the cross-selling and/or business
synergies required to achieve our growth strategy.
• We operate in markets that are highly competitive.
• Our risk management measures may not be successful.
• Operational risks are inherent in our business.
• Our operations are subject to the threat of fraudulent
activity.
• Our operations are subject to disruption from the
external environment.
• Our operations utilise third-party suppliers and service
providers.
• Our operations are highly dependent on our information
technology systems.
• We may not be able to meet regulatory requests for data.
• Our operations have inherent reputational risk.
• We may suffer losses due to employee misconduct.
• We rely on recruiting, retaining and developing
appropriate senior management and skilled personnel.
• Our financial statements are based in part on
judgements, estimates and assumptions which are
subject to uncertainty.
• We could incur losses or be required to hold additional
capital as a result of model limitations or failure.
• Third parties may use us as a conduit for illegal activities
without our knowledge.
• We have significant exposure to counterparty risk.
• Market fluctuations may reduce our income or the value
of our portfolios.
• Liquidity, or ready access to funds, is essential to our
businesses.
• Any reduction in the credit rating assigned to HSBC
Holdings, any subsidiaries of HSBC Holdings or any of
their respective debt securities could increase the cost
or decrease the availability of our funding and adversely
affect our liquidity position and interest margin.
• Risks concerning borrower credit quality are inherent
in our businesses.
• Our insurance businesses are subject to risks relating
to insurance claim rates and changes in insurance
customer behaviour.
• HSBC Holdings is a holding company and, as a result,
is dependent on loan payments and dividends from
its subsidiaries to meet its obligations, including
obligations with respect to its debt securities, and
to provide profits for payment of future dividends
to shareholders.
• We may be required to make substantial contributions
to our pension plans.