HSBC 2015 Annual Report Download - page 238

Report of the Directors: Capital (continued)
Regulatory balance sheet
HSBC HOLDINGS PLC
236
Regulatory balance sheet
Regulatory and accounting consolidations
The basis of consolidation for the purpose of financial
accounting under IFRS, described in Note 1 on the Financial
Statements, differs from that used for regulatory purposes
as described in ‘Structure of the regulatory group’ on
page 12 of the Pillar 3 Disclosures 2015 report. The table
below provides a reconciliation of the financial accounting
balance sheet to the regulatory scope of consolidation.
Interests in banking associates are equity accounted in
the financial accounting consolidation, whereas their
exposures are proportionally consolidated for regulatory
purposes by including our share of assets, liabilities, profit
and loss and RWAs in accordance with the PRA’s
application of CRD IV.
Subsidiaries engaged in insurance activities are excluded
from the regulatory consolidation by excluding assets,
liabilities and post-acquisition reserves, leaving the
investment of these insurance subsidiaries to be recorded at
cost and deducted from CET1 (subject to thresholds).
The regulatory consolidation also excludes special purpose
entities (‘SPEs’) where significant risk has been transferred
to third parties. Exposures to these SPEs are risk-weighted
as securitisation positions for regulatory purposes.
Entities in respect of which the basis of consolidation
for financial accounting purposes differs from that used for
regulatory purposes can be found in table 5 of the Pillar 3
Disclosures 2015 report.
Reconciliation of balance sheets – financial accounting to regulatory scope of consolidation
Accounting
balance
sheet
Deconsolidation
of insurance/
other entities
Consolidation
of banking
associates
Regulatory
balance
sheet
Ref $m $m $m $m
Assets
Cash and balances at central banks 98,934 (2) 28,784 127,716
Items in the course of collection from other banks 5,768
–
22 5,790
Hong Kong Government certificates of indebtedness 28,410
–
–
28,410
Trading assets 224,837 340 4,390 229,567
Financial assets designated at fair value 23,852 (23,521) 2,034 2,365
Derivatives 288,476 (146) 495 288,825
Loans and advances to banks 90,401 (3,008) 16,413 103,806
Loans and advances to customers 924,454 (7,427) 120,016 1,037,043
of which:
–
impairment allowances on IRB portfolios
i
(6,291)
–
–
(6,291)
–
impairment allowances on standardised portfolios (3,263)
–
(2,780) (6,043)
Reverse repurchase agreements
–
non-trading 146,255 711 5,935 152,901
Financial investments 428,955 (51,684) 42,732 420,003
Assets held for sale 43,900 (4,107)
–
39,793
of which:
–
goodwill and intangible assets h1,680 (219)
–
1,461
–
impairment allowances of disposal groups held for sale (1,454)
–
–
(1,454)
of which:
–
IRB portfolios
i
(7)
–
–
(7)
–
standardised portfolios (1,447)
–
–
(1,447)
Capital invested in insurance and other entities
–
2,371
–
2,371
Current tax assets 1,221 (15)
–
1,206
Prepayments, accrued income and other assets 54,398 (2,539) 9,692 61,551
of which:
–
retirement benefit assets g5,272
–
–
5,272
Interests in associates and joint ventures 19,139
–
(18,571) 568
of which:
–
positive goodwill on acquisition h593
–
(579) 14
Goodwill and intangible assets h24,605 (6,068) 623 19,160
Deferred tax assets n6,051 195 518 6,764
Total assets at 31 December 2015 2,409,656 (94,900) 213,083 2,527,839
Liabilities and equity
Hong Kong currency notes in circulation 28,410
–
–
28,410
Deposits by banks 54,371 (97) 50,005 104,279
Customer accounts 1,289,586 (119) 147,522 1,436,989
Repurchase agreements
–
non-trading 80,400
–
–
80,400
Items in course of transmission to other banks 5,638
–
–
5,638
Trading liabilities 141,614 (66) 59 141,607
Financial liabilities designated at fair value 66,408 (6,046)
–
60,362
of which:
–
term subordinated debt included in tier 2 capital m21,168
–
–
21,168
–
hybrid capital securities included in tier 1 capital
j
1,342
–
–
1,342