HSBC 2012 Annual Report Download - page 209

207
Overview Operating & Financial Review Corporate Governance Financial Statements Shareholder Information
Liquid assets of HSBC’s principal entities
Estimated liquidity value44
31 Dec 2012 30 Jun 2012 31 Dec 2011
Audited Unaudited Audited
US$m US$m US$m
HSBC UK40
Level 1 .................................................................................................................... 138,812 120,690 114,596
Level 2 .................................................................................................................... 374 475 344
Level 3 .................................................................................................................... 27,656 9,320 –
Non-government assets .......................................................................................... – – 23,007
166,842 130,485 137,947
The Hongkong and Shanghai Banking Corporation41
Level 1 .................................................................................................................... 112,167 104,943 107,056
Level 2 .................................................................................................................... 5,740 5,929
Level 3 .................................................................................................................... 3,968 4,889 –
Non-government assets .......................................................................................... – – 2,151
121,875 115,761 109,207
HSBC USA42
Level 1 .................................................................................................................... 60,981 62,966 86,060
Level 2 .................................................................................................................... 15,609 16,511 1,369
Level 3 .................................................................................................................... 5,350 8,405 –
Other ....................................................................................................................... 6,521 6,238 –
Non-government assets .......................................................................................... – – 19,093
88,461 94,120 106,522
Total of HSBC’s other principal entities43
Level 1 .................................................................................................................... 154,445 118,616 138,085
Level 2 .................................................................................................................... 18,048 36,713 2,827
Level 3 .................................................................................................................... 6,468 11,205 –
Other ....................................................................................................................... 2,447 – –
Non-government assets .......................................................................................... – – 23,584
181,408 166,534 164,496
For footnotes, see page 249.
Our liquid asset policy was refined at 1 January
2012 to apply a more granular classification of liquid
assets, as described in the Appendix to Risk on page
261. Under the previous framework, liquid assets
were classified into two categories: central
government, central bank and US agency MBS
exposures; and all other non-government exposures.
Central government, central bank and US agency
MBS exposures qualify as Level 1 or Level 2 under
the new policy and are shown as such in the
comparatives.
All assets held within the liquid asset portfolio
are unencumbered.
Liquid assets held by HSBC UK increased as a
result of a rise in customer accounts, which led to an
increase in the level of non-core deposits and,
consequently, liquid assets.
Liquid assets held by The Hongkong and
Shanghai Banking Corporation also rose as a result
of an increase in customer accounts. As the growth
in core deposits exceeded the increases in loans and
advances to customers, the difference was deployed
into liquid assets and the level of liquid assets held
grew accordingly.
Liquid assets held by HSBC USA decreased
as a result of the sale of the US Card and Retail
Services business and non-strategic branches during
2012.
Net contractual cash flows
The following table quantifies the contractual cash
flows from interbank and intergroup loans and
deposits, and reverse repo, repo (including
intergroup transactions) and short positions for the
principal entities shown. These contractual cash
inflows and outflows are reflected gross in the
numerator and denominator, respectively, of the one
and three-month stressed coverage ratios and should
be considered alongside the level of liquid assets.
Outflows included in the denominator of the
stressed coverage ratios include the principal
outflows associated with the contractual maturity
of wholesale debt securities reported in the table
headed ‘Wholesale funding cash flows payable
by HSBC under financial liabilities by remaining
contractual maturities’ on page 210.