HSBC 2008 Annual Report Download - page 442

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
Notes 39 and 40
440
Interest and dividends
HSBC HSBC Holdings
2008 2007 2006 2008 2007
US$m US$m US$m US$m US$m
Interest paid ................................................................. (60,342) (63,626) (47,794) (2,525) (2,397)
Interest received .......................................................... 107,019 103,393 85,143 1,619 1,627
Dividends received ..................................................... 1,876 1,833 1,525 10,779 9,187
40 Contingent liabilities, contractual commitments and guarantees
HSBC
HSBC Holdings
2008
2007 2008 2007
US$m US$m US$m US$m
Guarantees and contingent liabilities
Guarantees and irrevocable letters of credit
pledged as collateral security ............................... 72,895 77,885 47,341 38,457
Other contingent liabilities ....................................... 259 334 – –
73,154 78,219 47,341 38,457
Commitments
Documentary credits and short-term trade-related
transactions ........................................................... 9,789 13,510 – –
Forward asset purchases and forward forward
deposits placed ..................................................... 197 490 – –
Undrawn note issuing and revolving
underwriting facilities .......................................... – 109 – –
Undrawn formal standby facilities, credit lines
and other commitments to lend ............................ 594,036 750,348 3,241 3,638
604,022 764,457 3,241 3,638
The above table discloses the nominal principal amounts of commitments excluding capital commitments, which are
separately disclosed below, guarantees and other contingent liabilities; mainly credit-related instruments including
both financial and non-financial guarantees and commitments to extend credit. Contingent liabilities arising from
litigation against the Group are disclosed in Note 42. Nominal principal amounts represent the amounts at risk should
contracts be fully drawn upon and clients default. The amount of the loan commitments shown above reflects, where
relevant, the expected level of take-up of pre-approved loan offers made by mailshots to personal customers. As a
significant portion of guarantees and commitments is expected to expire without being drawn upon, the total of the
nominal principal amounts is not representative of future liquidity requirements.
Guarantees
HSBC provides guarantees and similar undertakings on behalf of both third-party customers and other entities within
the HSBC Group. These guarantees are generally provided in the normal course of HSBC’s banking business. The
principal types of guarantees provided, and the maximum potential amount of future payments which HSBC could be
required to make at 31 December 2008, were as follows: