HSBC 2013 Annual Report Download - page 120

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HSBC BANK CANADA
118
32 Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position
when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis,
or realize the asset and settle the liability simultaneously (‘the offset criteria’).
Derivatives and reverse repurchase/repurchase agreements included in the amounts not set off in the statement of
financial position column relate to transactions where:
– the counterparty has an offsetting exposure with HSBC and a master netting or similar arrangement is in place
with a right of set off only in the event of default, insolvency or bankruptcy, or the offset criteria are otherwise not
satisfied; and
– cash and non-cash collateral received/pledged in respect of the transactions described above.
The bank offsets certain loans and advances to customers and customer accounts when the offset criteria are met and
the amounts presented above represent this subset of the total amounts recognized in the balance sheet. Of this subset,
the loans and advances to customers and customer accounts included in amounts not set off in the balance sheet column
primarily relate to transactions where the counterparty has an offsetting exposure with HSBC and an agreement is in
place with the right of offset but the offset criteria are otherwise not satisfied.
Financial assets subject to offsetting, enforceable master netting arrangements and similar agreements are as follows:
Amounts not set off
in the statement of
financial position
Gross
amounts of
recognized
financial
assets
$m
Gross
amounts set
off in the
statement
of financial
position
$m
Amounts
presented
in the
statement
of financial
position
$m
Financial
instruments
$m
1
Cash
collateral
received
$m
Net amount
$m
At 31 December 2013
Derivatives2 (note 11) ..... 2,112 – 2,112 1,282 13 817
Reverse repurchase,
securities borrowing
and similar
agreements:
– Loan and advances
to banks at
amortized cost ....... 596 (263) 333 333 – –
– Loan and advances
to customers at
amortized cost ....... 6,151 (323) 5,828 5,828 – –
Loans and advances
excluding reverse
repos
– to customers at
amortized cost ....... 1,699 (1,124) 575 – – 575
10,558 (1,710) 8,848 7,443 13 1,392
Notes on the Consolidated Financial Statements (continued)