HSBC 2005 Annual Report Download - page 306

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
304
Assets held for sale
2005 2004
US$m US$m
Disposal groups and non-current assets held for sale
Interests in associates ..................................................................................................................... 162 –
Property, plant and equipment ........................................................................................................ 774 823
Receivables .................................................................................................................................... 23 165
Total assets classified as held for sale ............................................................................................ 959 988
Interests in associates
Following a review of strategic options in relation to HSBC’s interest in The Cyprus Popular Bank Limited (trading
as Laiki Group), an associate of the Group, it was decided to dispose of the holding. The sale was completed on
6 February 2006. Neither a gain nor loss was created on reclassifying this asset as held for sale. The interest is
presented within the geographical segment Europe.
Property, plant and equipment
The property, plant and equipment classified as held for sale is the result of repossession of property that had been
pledged as collateral by customers. These assets are disposed of within 12 months of acquisition. Neither a gain nor
loss was created on reclassifying these assets as held for sale. The majority arose within the geographical segment
North America.
Receivables
The receivables classified as held for sale relate to mortgage loans which HSBC no longer offers to its customers. An
agreement to sell the portfolio has been signed, and the sale is scheduled to be completed in March 2006. Neither a
gain nor loss was created on reclassifying these assets as held for sale. They are presented within the geographical
segment South America.
26 Financial liabilities designated at fair value
HSBC
2005
US$m
Deposits by banks and customer accounts ...................................................................................................................... 253
Liabilities to customers under investment contracts ........................................................................................................ 10,445
Debt securities in issue (Note 27) .................................................................................................................................... 28,338
Subordinated liabilities (Note 31) ................................................................................................................................... 18,447
Preference shares (Note 31) ............................................................................................................................................. 4,346
61,829
The carrying amount at 31 December 2005 of financial liabilities designated at fair value was US$1,899 million
higher than the contractual amount at maturity. At 31 December 2005, the accumulated amount of the change in fair
value attributable to changes in credit risk was US$664 million.
HSBC Holdings
2005
US$m
Subordinated liabilities (Note 31):
– owed to third parties ................................................................................................................................................. 9,315
– owed to HSBC undertakings .................................................................................................................................... 4,055
13,370
The carrying amount at 31 December 2005 of financial liabilities designated at fair value was US$910 million higher
than the contractual amount at maturity. At 31 December 2005, the accumulated amount of the change in fair value
attributable to changes in credit risk was US$398 million.