HSBC 2012 Annual Report Download - page 2

HSBC HOLDINGS PLC
Annual Report and Accounts 2012
Contents / Highlights
Contents
Report of the Directors
Overview
Financial highlights ............................................................... 2
Group Chairman’s Statement ................................................ 4
Group Chief Executive’s Business Review .......................... 8
Our disclosure philosophy ..................................................... 12
Principal activities ................................................................. 13
HSBC Values ......................................................................... 13
Business and operating models ............................................. 14
Strategic direction .................................................................. 17
Risk ........................................................................................ 19
Key performance indicators .................................................. 22
Operating and Financial Review
Financial summary1 ............................................................... 25
Global businesses1 ................................................................. 58
Products and services ............................................................ 60
Geographical regions1 ........................................................... 79
Other information .................................................................. 118
Risk1 ....................................................................................... 123
Capital1 .................................................................................. 281
Corporate Governance1
Corporate Governance Report ............................................... 301
Biographies of Directors and senior management ................ 302
Board of Directors ................................................................. 309
Board committees .................................................................. 318
Internal control ...................................................................... 332
Going concern basis .............................................................. 334
Employees ............................................................................. 335
Directors’ Remuneration Report1 ........................ 347
Financial Statements and Other Information
Statement of Directors’ Responsibilities ............................... 368
Independent Auditor’s Report ............................................... 369
Financial Statements1
Financial statements .............................................................. 371
Notes on the financial statements .......................................... 383
Shareholder Information1
Shareholder information ........................................................ 516
Cautionary statement regarding forward-looking statements ..... 525
Abbreviations ........................................................................ 526
Glossary ................................................................................. 529
Index ...................................................................................... 537
1 Detailed contents are provided on the referenced pages.
This document comprises the Annual Report and Accounts
2012 for HSBC Holdings plc and its subsidiaries. It
contains the Report of the Directors and Financial
Statements, together with the Independent Auditor’s
Report thereon, as required by the UK Companies Act
2006. The Annual Review 2012 of HSBC Holdings plc is
p
ublished as a separate document. The Repo
r
t of the
Directors on pages 2 to 346 and the Directors’
Remuneration Report on pages 347 to 367 have each been
drawn up in accordance with the requirements of English
law, and liability in respect thereof is also governed by
English law. In particular, the liability of the Directors for
these reports is solely to HSBC Holdings plc.
Additional information, including commentary
on 2011 compared with 2010, may be found in the
Form 20-F filed with the US Securities and Exchange
Commission and available on www.hsbc.com and
www.sec.gov.
Certain defined terms
Unless the context requires otherwise, ‘HSBC Holdings’
means HSBC Holdings plc and ‘HSBC’, the ‘Group’, ‘we’,
‘us’ and ‘our’ refers to HSBC Holdings together with its
subsidiaries. Within this document the Hong Kong Special
Administrative Region of the People’s Republic of China
is referred to as ‘Hong Kong’. When used in the terms
‘shareholders’ equity’ and ‘total shareholders’ equity’,
‘shareholders’ means holders of HSBC Holdings ordinary
shares and those preference shares classified as equity.
The abbreviations ‘US$m’ and ‘US$bn’ represent millions
and billions (thousands of millions) of US dollars,
respectively.
Financial statements
The consolidated financial statements of HSBC and the
separate financial statements of HSBC Holdings have
been prepared in accordance with International Financial
Reporting Standards (‘IFRSs’) as issued by the
International Accounting Standards Board (‘IASB’) and
as endorsed by the European Union (‘EU’). EU-endorsed
IFRSs may differ from IFRSs as issued by the IASB if, at
any point in time, new or amended IFRSs have not been
endorsed by the EU. At 31 December 2012, there were
no unendorsed standards effective for the year ended
31 December 2012 affecting these consolidated and
separate financial statements, and there was no difference
between IFRSs endorsed by the EU and IFRSs issued by
the IASB in terms of their application to HSBC.
Accordingly, HSBC’s financial statements for the year
ended 31 December 2012 are prepared in accordance
with IFRSs as issued by the IASB.
We use the US dollar as our presentation currency
because the US dollar and currencies linked to it form
the major currency bloc in which we transact and fund our
business. Unless otherwise stated, the information
p
resented in this document has been prepared in
accordance with IFRSs.
When reference to ‘underlying’ is made in tables or
commentaries, comparative information has been
expressed at constant currency (see page 25), eliminating
the impact of fair value movements in respect of credit
spread changes on HSBC’s own debt and adjusting for the
effects of acquisitions and disposals as reconciled on
p
age 28. Underlying RoRWA is defined and reconciled on
p
age 52.