HSBC 2005 Annual Report Download - page 294

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
292
Carrying
amount of
transferred
assets
Carrying
amount of
associated
liabilities
US$m US$m
Nature of transaction
Repurchase agreements .................................................................................................................. 92,989 75,745
Securities lending agreements ........................................................................................................ 14,607 5,858
107,596 81,603
A small proportion of financial assets that do not qualify for derecognition relate to loans, credit cards, debt
securities and trade receivables that have been securitised under arrangements by which HSBC retains a continuing
involvement in such transferred assets. Continuing involvement may entail retaining the rights to future cash flows
arising from the assets after investors have received their contractual terms (for example, interest rate strips);
providing subordinated interest; liquidity support; continuing to service the underlying asset; or entering into
derivative transactions with the securitisation vehicles. As such, HSBC continues to be exposed to risks associated
with these transactions.
The rights and obligations that HSBC retains from its continuing involvement in securitisations are initially recorded
as an allocation of the fair value of the financial asset between the part that is derecognised and the part that
continues to be recognised on the date of transfer. The following analyses the carrying amount of financial assets at
31 December 2005, to the extent of HSBC’s continuing involvement, that qualified for partial derecognition during
the year, and their associated liabilities:
Carrying
amount of
assets
(original)
Carrying
amount of
assets
(currently
recognised)
Carrying
amount of
associated
liabilities
US$m US$m US$m
Nature of transaction
Securitisations .............................................................................................. 6,731 256 256
20 Interests in associates and joint ventures
Principal associates of HSBC
At 31 December 2005
Country of
incorporation
HSBC’s
interest in
equity capital
Issued
equity
capital
Carrying
amount
Fair
value
US$m US$m
Listed
Bank of Communications Co., Limited ...
People’s
Republic of
China 19.9% RMB45,804m 2,480 4,143
Ping An Insurance (Group) Company of
China Limited.....................................
People’s
Republic of
China 19.9% RMB6,195m 1,837 2,274
The Saudi British Bank ........................... Saudi Arabia 40% SR2,500m 772 8,800
5,089 15,217
Unlisted
AEA Investors (Cayman) I LP1,6 .............
Barrowgate Limited2,7 .............................. Hong Kong 24.64% –
British Arab Commercial Bank Limited .. England 46.51%
US$81m
£32m fully paid
£5m nil paid
Erisa S.A. ................................................ France 49.99% €115m
HSBC PE European No. 2 LP3,6 ...............
Industrial Bank Company Limited7 .........
People’s
Republic of
China 15.98% RMB3,999m
Private Equity Portfolio (Investment)
LP Inc4,6 .............................................
Wells Fargo HSBC Trade Bank, N.A5...... United States 20% –