HSBC 2008 Annual Report Download - page 408

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
Notes 20 and 21
406
2008 2007
Carrying
amount of
transferred
assets
Carrying
amount of
associated
liabilities
Carrying
amount of
transferred
assets
Carrying
amount of
associated
liabilities
US$m US$m US$m US$m
Nature of transaction
Repurchase agreements ................................................ 94,154 91,139 126,534 126,111
Securities lending agreements ...................................... 4,497 4,096 24,087 23,304
98,651 95,235 150,621 149,415
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 to the extent
of HSBC’s continuing involvement that qualified for partial derecognition during the year, and their associated
liabilities:
Securitisations at 31 December
2008 2007
US$m US$m
Carrying amount of assets (original) ................................................................................................. 17,427 17,713
Carrying amount of assets (currently recognised) ............................................................................. 299 598
Carrying amount of associated liabilities (currently recognised) ..................................................... 149 299
21 Interests in associates and joint ventures
Principal associates of HSBC
At 31 December 2008 At 31 December 2007
Carrying
amount
Fair
value
Carrying
amount
Fair
value
US$m US$m US$m US$m
Listed
Bank of Communications Co., Limited ........................ 4,612 6,717 3,957 12,992
Financiera Independencia S.A.B. de C.V.2 .................. – – 69 206
Industrial Bank Company Limited1 .............................. 913 1,368 683 4,538
Ping An Insurance (Group) Company of
China, Limited .......................................................... 3,727 5,965 3,790 13,232
SABB Takaful Company3 ............................................ 4 29 5 101
The Saudi British Bank ................................................ 1,214 3,453 1,082 5,719
10,470 17,532 9,586 36,788
1 Listed on the Shanghai Stock Exchange on 5 February 2007.
2 Listed on the Mexican Stock Exchange on 31 October 2007. HSBC disposed of its share in Financiera Independencia on
25 November 2008.
3 Listed on the Saudi Stock Exchange on 16 June 2007.