HSBC 2015 Annual Report Download - page 59

HSBC HOLDINGS PLC
57
Strategic Report Financial Review Corporate Governance Financial Statements Shareholder Information
Excluding the significant items and currency translation
tabulated above, other operating income increased by
$219m compared with 2014. This was primarily from
higher favourable movements in present value of in-force
(‘PVIF’) long-term insurance business, partly offset by lower
disposal and revaluation gains on investment properties,
mainly in Asia.
The higher favourable movement in the PVIF balance was
driven by changes in interest rates and investment return
assumptions, notably in France and Hong Kong.
Net insurance claims and benefits paid and movement in liabilities to policyholders
2015
$m
2014
$m
2013
$m
Net insurance claims and benefits paid and movement in liabilities to policyholders:
–
gross 11,872 13,723 13,948
–
less reinsurers’ share (580) (378) (256)
Year ended 31 December15 11,292 13,345 13,692
For footnote, see page 99.
Reported net insurance claims and benefits paid and
movement in liabilities to policyholders were $2.1bn lower
than in 2014, in part reflecting the effect of currency
translation of $1.1bn.
Significant items and currency translation
2015 2014
$m $m
Significant items
–
–
Currency translation 1,109
Year ended 31 December
–
1,109
Excluding the effects of currency translation, net insurance
claims and benefits paid and movements in liabilities to
policyholders were $0.9bn lower.
This was primarily driven by a decrease in returns on
financial assets supporting liabilities to policyholders,
where the policyholder shares in the investment risk. This
decrease in returns reflected a weaker equity market
performance in Hong Kong in the second half of the year.
The gains or losses recognised on the financial assets
designated at fair value that are held to support these
insurance contract liabilities are reported in ‘Net income
from financial instruments designated at fair value’.
In addition, movements in liabilities to policyholders were
lower due to a decrease in premiums written in Asia, as
explained in ‘Net earned insurance premiums’.
Loan impairment charges and other credit risk provisions
2015
$m
2014
$m
2013
$m
Loan impairment charges:
–
new allowances net of allowance releases 4,400 5,010 7,344
–
recoveries of amounts previously written off (808) (955) (1,296)
3,592 4,055 6,048
Individually assessed allowances 1,505 1,780 2,320
Collectively assessed allowances 2,087 2,275 3,728
Releases of impairment on available-for-sale debt securities (17) (319) (211)
Other credit risk provisions 146 115 12
Year ended 31 December 3,721 3,851 5,849
Impairment charges on loans and advances to customers as a percentage of
average gross loans and advances to customers 0.39% 0.43% 0.67%
Reported loan impairment charges and other credit risk
provisions (‘LICs’) of $3.7bn were $0.1bn lower than in
2014, primarily due to favourable currency translation
of $683m.
Excluding the effects of currency translation, LICs were
$0.6bn higher than in 2014.
Significant items and currency translation
2015 2014
$m $m
Significant items
–
–
Currency translation 683
Year ended 31 December
–
683