HSBC 2015 Annual Report Download - page 393

HSBC HOLDINGS PLC
391
Strategic Report Financial Review Corporate Governance Financial Statements Shareholder Information
Carrying amount and fair value of loans and advances to customers by industry sector
Carrying amount at 31 December
Not impaired Impaired Total
$m $m $m
2015
Loans and advances to customers 907,698 16,756 924,454
–
personal 361,716 9,487 371,203
–
corporate and commercial 485,933 7,145 493,078
–
financial 60,049 124 60,173
2014
Loans and advances to customers 954,710 19,950 974,660
–
personal 377,154 11,800 388,954
–
corporate and commercial 527,168 8,016 535,184
–
financial 50,388 134 50,522
Fair value at 31 December
Not impaired Impaired Total
$m $m $m
2015
Loans and advances to customers 906,696 15,773 922,469
–
personal 359,559 9,024 368,583
–
corporate and commercial 487,196 6,592 493,788
–
financial 59,941 157 60,098
2014
Loans and advances to customers 954,347 18,490 972,837
–
personal 375,615 10,721 386,336
–
corporate and commercial 528,361 7,642 536,003
–
financial 50,371 127 50,498
Loans and advances to customers are classified as not impaired or impaired in accordance with the criteria described on
page 128.
Analysis of loans and advances to customers by geographical segment
2015 2014
Carrying amount Fair value Carrying amount Fair value
$m $m $m $m
Loans and advances to customers
Europe 392,041 392,540 409,733 413,373
Asia 356,375 355,249 362,955 361,412
Middle East and North Africa 29,894 29,614 29,063 28,658
North America 128,851 127,532 129,787 126,232
Latin America 17,293 17,534 43,122 43,162
At 31 December 924,454 922,469 974,660 972,837
Valuation
The fair value measurement is HSBC’s estimate of the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date. It does not reflect the economic benefits and
costs that HSBC expects to flow from the instruments’ cash flows over their expected future lives. Other reporting entities may
use different valuation methodologies and assumptions in determining fair values for which no observable market prices are
available.
Fair values of the following assets and liabilities are estimated for the purpose of disclosure as described below:
Loans and advances to banks and customers
The fair value of loans and advances is based on observable market transactions, where available. In the absence of observable
market transactions, fair value is estimated using valuation models that incorporate a range of input assumptions. These
assumptions may include value estimates from third-party brokers which reflect over-the-counter trading activity, forward
looking discounted cash flow models using assumptions which HSBC believes are consistent with those which would be used
by market participants in valuing such loans, and trading inputs from other market participants which include observed
primary and secondary trades.