HSBC 2008 Annual Report Download - page 449

447
HSBC Holdings
Details of HSBC Holdings’ principal subsidiaries are shown in Note 24. Transactions and balances during the year
with subsidiaries were as follows:
2008 2007
Highest
balance during
the year1
Balance at
31 December1
Highest
balance during
the year1
Balance at
31 December1
Subsidiaries US$m US$m US$m US$m
Assets
Cash at bank .................................................................. 443 443 729 360
Derivatives .................................................................... 3,682 3,682 2,660 2,660
Loans and advances ...................................................... 17,242 11,804 17,242 17,242
Financial investments ................................................... 2,844 2,629 3,389 2,676
Investments in subsidiaries ........................................... 86,233 81,993 69,411 69,411
Total related party assets .............................................. 110,444 100,551 93,431 92,349
Liabilities
Amounts owed to HSBC undertakings ........................ 4,042 4,042 3,191 2,969
Derivatives .................................................................... 1,324 1,324 290 44
Subordinated liabilities:
– cost ......................................................................... 4,168 3,795 4,109 4,109
– fair value ................................................................ 4,186 3,067 4,231 4,187
Total related party liabilities ......................................... 13,720 12,228 11,821 11,309
Guarantees .................................................................... 56,733 47,341 38,457 38,457
Commitments ................................................................ 3,638 3,241 3,985 3,638
1 The disclosure of the year-end balance and the highest balance during the year is considered the most meaningful information to
represent transactions during the year. The above outstanding balances arose in the ordinary course of business and are on
substantially the same terms, including interest rates and security, as for comparable transactions with third-party counterparties, with
the exception of US$476 million (2007: US$654 million) in respect of loans from HSBC subsidiaries to HSBC Holdings made at an
agreed zero per cent interest rate.
Some employees of HSBC Holdings are members of the HSBC Bank (UK) Pension Scheme, which is sponsored by a
separate Group company. HSBC Holdings incurs a charge for these employees equal to the contributions paid into
the scheme on their behalf. Disclosure in relation to the scheme is made in Note 8 to the accounts.
44 Events after the balance sheet date
A fourth interim dividend for 2008 of US$0.10 per ordinary share (US$1,214 million) (2007: US$0.39 per ordinary
share, US$4,628 million) was declared by the Directors after 31 December 2008.
In late February 2009, it was decided to discontinue all originations by the branch-based consumer lending business
of HSBC Finance. HSBC Finance will continue to service and collect the existing portfolio as it runs off. Closure
costs of approximately US$265 million are expected to be incurred, mainly relating to one-off termination and other
employee benefit costs, and charges for impairment of fixed assets associated with the consumer lending branch
network, a substantial portion of which will be recorded in the first half of 2009.
On 2 March 2009, HSBC Holdings plc announced its proposal to raise £12.5 billion (US$17.7 billion) (net of
expenses) by way of a fully underwritten rights issue of 5,060 million new ordinary shares at a price of 254 pence per
share on the basis of 5 new ordinary shares for every 12 existing ordinary shares. The proposal is subject to
authorisation by the shareholders at a general meeting on 19 March 2009.
These accounts were approved by the Board of Directors on 2 March 2009 and authorised for issue.