HSBC 2015 Annual Report Download - page 446

Notes on the Financial Statements (continued)
39 – Structured entities / 40 – Legal proceedings and regulatory matters
HSBC HOLDINGS PLC
444
Other
HSBC has also entered into a number of transactions in the normal course of business which include asset and structured
finance transactions where it has control of the structured entity. In addition, HSBC is deemed to control a number of
third-party managed funds through its involvement as a principal in the funds.
Unconsolidated structured entities
The term ‘unconsolidated structured entities’ refers to all structured entities that are not controlled by HSBC. The Group
enters into transactions with unconsolidated structured entities in the normal course of business to facilitate customer
transactions and for specific investment opportunities.
The table below shows the total assets of unconsolidated structured entities in which HSBC had an interest at the reporting
date and its maximum exposure to loss in relation to those interests.
Nature and risks associated with HSBC interests in unconsolidated structured entities
Securitisations
HSBC
managed
funds
Non-HSBC
managed
funds Other Total
$bn $bn $bn $bn $bn
Total assets of the entities 12.9 227.9 2,003.1 139.9 2,383.8
Total assets in relation to HSBC’s interests in the
unconsolidated structured entities 1.4 5.6 8.0 9.8 24.8
–
trading assets
–
0.1 0.2 2.6 2.9
–
financial assets designated at fair value
–
5.3 6.6
–
11.9
–
derivatives
–
–
–
3.8 3.8
–
loans and advances to banks
–
–
–
0.1 0.1
–
loans and advances to customers 1.1
–
0.1 2.9 4.1
–
financial investments 0.3 0.2 1.1 0.2 1.8
–
other assets
–
–
–
0.2 0.2
Total liabilities in relation to HSBC’s interests in the
unconsolidated structured entities
–
–
–
(0.1) (0.1)
Other liabilities
–
–
–
(0.1) (0.1)
HSBC’s maximum exposure at 31 December 2015 3.5 5.6 8.0 14.6 31.7
Total assets of the entities 11.0 308.5 2,899.9 32.8 3,252.2
Total assets in relation to HSBC’s interests in the
unconsolidated structured entities 0.8 7.8 8.3 7.7 24.6
–
trading assets
–
0.1 0.1 4.6 4.8
–
financial assets designated at fair value
–
5.2 2.3
–
7.5
–
derivatives
–
–
–
1.3 1.3
–
loans and advances to banks
–
–
–
0.1 0.1
–
loans and advances to customers 0.8
–
–
1.5 2.3
–
financial investments
–
2.5 5.9 0.1 8.5
–
other assets
–
–
–
0.1 0.1
Total liabilities in relation to HSBC’s interests in the
unconsolidated structured entities – – – 0.1 0.1
Other liabilities
–
–
–
0.1 0.1
HSBC’s maximum exposure at 31 December 2014 0.8 7.8 8.3 11.1 28.0
The maximum exposure to loss from HSBC’s interests in unconsolidated structured entities represents the maximum loss that
HSBC could incur as a result of its involvement with unconsolidated structured entities regardless of the probability of the loss
being incurred.
• For commitments, guarantees and written credit default swaps, the maximum exposure to loss is the notional amount of
potential future losses.
• For retained and purchased investments in and loans to unconsolidated structured entities, the maximum exposure to loss
is the carrying value of these interests at the balance sheet reporting date.
The maximum exposure to loss is stated gross of the effects of hedging and collateral arrangements entered into to mitigate
HSBC’s exposure to loss.
Securitisations
HSBC has interests in unconsolidated securitisation vehicles through holding notes issued by these entities. In addition, HSBC
has investments in ABSs issued by third party structured entities as set out on page 153.