HSBC 2015 Annual Report Download - page 161

HSBC HOLDINGS PLC
159
Strategic Report Financial Review Corporate Governance Financial Statements Shareholder Information
Net cash inflows/(outflows) for interbank and intra-Group loans and deposits and reverse repo, repo and short positions
At 31 December 2015 At 31 December 2014
Cash flows
within 1 month
Cash flows from
1 to 3 months
Cash flows
within 1 month
Cash flows from
1 to 3 months
$m $m $m $m
Interbank and intra-Group loans and deposits
HSBC UK liquidity group19 (18,534) (3,712) (14,110) (2,846)
The Hongkong and Shanghai Banking Corporation20 3,702 6,027 (1,277) 6,862
HSBC USA21 (12,432) 937 (18,353) 1,648
Total of HSBC’s other principal entities24 2,875 6,123 (1,522) 7,310
Reverse repo, repo, stock borrowing, stock lending and outright
short positions (including intra-Group)
HSBC UK liquidity group19 (16,861) 1,313 (16,070) 11,551
The Hongkong and Shanghai Banking Corporation20 15,068 12,326 8,139 8,189
HSBC USA21 19,431
–
(4,928)
–
Total of HSBC’s other principal entities24 (22,571) 5,240 (33,235) (11,528)
For footnotes, see page 191.
Contingent liquidity risk arising from
committed lending facilities
The Group’s operating entities provide commitments
to various counterparties. The most significant liquidity
risk relates to committed lending facilities which, whilst
undrawn, give rise to contingent liquidity risk as they could
be drawn during a period of liquidity stress. Commitments
are given to customers and committed lending facilities are
provided to consolidated multi-seller conduits established
to enable clients to access flexible market-based sources of
finance (see page 442), consolidated securities investment
conduits and third-party sponsored conduits.
The consolidated securities investment conduits include
Solitaire Funding Limited (‘Solitaire’) and Mazarin Funding
Limited (‘Mazarin’). They issue asset-backed commercial
paper secured against the portfolio of securities held by
them. At 31 December 2015, the HSBC UK liquidity
group had undrawn committed lending facilities to these
conduits of $8.2bn (2014: $11bn), of which Solitaire
represented $7.7bn (2014: $9.5bn) and the remaining
$0.5bn (2014: $1.6bn) pertained to Mazarin. Although the
HSBC UK liquidity group provides a liquidity facility,
Solitaire and Mazarin have no need to draw on it so long
as HSBC purchases the commercial paper issued, which it
intends to do for the foreseeable future. At 31 December
2015, the commercial paper issued by Solitaire and Mazarin
was entirely held by the HSBC UK liquidity group. Since
HSBC controls the size of the portfolio of securities held by
these conduits, no contingent liquidity risk exposure arises
as a result of these undrawn committed lending facilities.
The table below shows the level of undrawn commitments
to customers outstanding for the five largest single facilities
and the largest market sector, and the extent to which they
are undrawn.
The Group’s contractual undrawn exposures at 31 December monitored under the contingent liquidity risk limit structure
(Audited)
HSBC UK liquidity group19 HSBC USA21 HSBC Canada22
The Hongkong and
Shanghai Banking
Corporation20
2015 2014 2015 2014 2015 2014 2015 2014
$bn $bn $bn $bn $bn $bn $bn $bn
Commitments to conduits
Consolidated multi-seller conduits
–
total lines 13.4 9.8 3.3 2.3 0.2 0.2
–
–
–
largest individual lines 0.4 0.9 0.5 0.5 0.1 0.2
–
–
Consolidated securities investment
conduits – total lines
8.2 11.1 – – – – – –
Third-party conduits
–
total lines
–
–
0.1 0.1
–
–
–
–
Commitments to customers
–
five largest26 4.9 2.6 6.4 7.1 1.4 1.7 1.7 1.5
–
largest market sector27 17.9 16.6 9.7 10.0 3.4 3.5 3.4 3.2
For footnotes, see page 191.
Sources of funding
(Audited)
Our primary sources of funding are customer current
accounts and customer savings deposits payable on
demand or at short notice. We issue wholesale securities
(secured and unsecured) to supplement our customer
deposits and change the currency mix, maturity profile
or location of our liabilities.
The ‘Funding sources and uses’ table below, which provides
a consolidated view of how our balance sheet is funded,
should be read in light of the LFRF, which requires
operating entities to manage liquidity and funding risk
on a stand-alone basis.
The table analyses our consolidated balance sheet
according to the assets that primarily arise from operating
activities and the sources of funding primarily supporting
these activities. The assets and liabilities that do not arise