HSBC 2009 Annual Report Download - page 473

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HSBC International Staff Retirements Benefits Scheme entered into swap transactions with HSBC to manage the
inflation and interest rate sensitivity of the liabilities and selected assets. At 31 December 2009, the gross notional
value of the swaps was US$1.8 billion (2008: US$1.5 billion), and the swaps had a net positive fair value of
US$27 million to the scheme (2008: US$388 million).
The special contributions of US$160 million in respect of the HSBC International Staff Retirement Benefits Scheme
which were made to fund the deficit shown in the actuarial valuation report as at 31 December 2008 included a
contribution in specie of US$69 million in the form of asset-backed securities previously held within the Group.
HSBC Holdings
Details of HSBC Holdings’ principal subsidiaries are shown in Note 24. Transactions and balances during the year
with subsidiaries were as follows:
2009 2008
Highest
balance during
the year1
Balance at
31 December1
Highest
balance during
the year1
Balance at
31 December1
Subsidiaries US$m US$m US$m US$m
Assets
Cash at bank .............................................................................. 443 224 443 443
Derivatives ................................................................................ 3,682 2,981 3,682 3,682
Loans and advances .................................................................. 26,156 23,212 17,242 11,804
Financial investments ............................................................... 2,629 2,455 2,844 2,629
Investments in subsidiaries ....................................................... 90,914 86,247 86,233 81,993
Total related party assets .......................................................... 123,824 115,119 110,444 100,551
Liabilities
Amounts owed to HSBC undertakings .................................... 5,669 3,711 4,042 4,042
Derivatives ................................................................................ 1,324 362 1,324 1,324
Subordinated liabilities:
– at amortised cost ................................................................ 3,907 3,907 4,168 3,795
– designated at fair value ...................................................... 4,360 4,360 4,186 3,067
Total related party liabilities ..................................................... 15,260 12,340 13,720 12,228
Guarantees ................................................................................ 47,341 35,073 56,733 47,341
Commitments ............................................................................ 3,241 3,240 3,638 3,241
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$529 million (2008: US$476 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 2009 of US$0.10 per ordinary share (US$1,741 million) (2008: US$0.10 per ordinary
share, US$1,210 million) was declared by the Directors after 31 December 2009.
On 14 January 2010, the US Government announced its intention to propose a Financial Crisis Responsibility Fee for
a period of at least ten years to be applied to financial institutions with more than US$50 billion of consolidated
assets. It is not possible to assess the financial impact of this proposal until final legislation has been enacted.
On 31 January 2010, HSBC Bank Canada which was part of the sub-group headed by HSBC North America
Holdings Inc. was transferred to HSBC Overseas Holdings (UK) Limited (‘HOHU’) as part of an internal
reorganisation. The transfer was effected by HSBC Holdings subscribing for one new share in HOHU for a cash
consideration of US$6,093 million.
These accounts were approved by the Board of Directors on 1 March 2010 and authorised for issue.