HSBC 2015 Annual Report Download - page 98

Report of the Directors: Other information
FuM / Disclosure philosophy / Taxes paid / Conduct-related matters
HSBC HOLDINGS PLC
96
Other information
Funds under management and assets held in custody 96
Our disclosure philosophy 96
Taxes paid by region and country 97
Conduct-related matters 97
Carbon dioxide emissions 98
Property 98
Funds under management
and assets held in custody
Funds under management48
2015 2014
$bn $bn
Funds under management
At 1 January 954 921
Net new money (3) 38
Value change 2 40
Exchange and other (57) (45)
At 31 December 896 954
Funds under management
by business
Global Asset Management 419 445
Global Private Banking 261 275
Affiliates 4 5
Other 212 229
At 31 December 896 954
For footnote, see page 99.
Funds under management (‘FuM’) represents assets
managed, either actively or passively, on behalf of our
customers. At 31 December 2015, FuM amounted to
$896bn, a decrease of 6% primarily due to adverse foreign
exchange movements as the US dollar strengthened
against all major currencies. Excluding currency translation,
FuM was broadly unchanged compared with 31 December
2014 as a reduction in GPB and other FuM was broadly
offset by an increase in Global Asset Management FuM.
Global Asset Management FuM decreased by 6% to $419bn
compared with 31 December 2014. Excluding currency
translation, FuM increased by 2% as we attracted $8bn of
net new money, notably in fixed income products from our
customers in Asia and net inflows into liquidity funds in
North America and Europe.
GPB FuM decreased by 5% to $261bn compared with
31 December 2014. Excluding currency translation, FuM
decreased by 1%, reflecting the ongoing repositioning of
our client base. This was partly offset by favourable market
movements, principally in Europe, and from positive net
new money in areas targeted for growth.
Other FuM, of which the main element is a corporate trust
business in Asia, decreased by 7% to $212bn, primarily due
to net outflows.
Assets held in custody48 and under
administration
Custody is the safekeeping and servicing of securities and
other financial assets on behalf of clients. At 31 December
2015, we held assets as custodian of $6.2 trillion, 3%
lower than the $6.4 trillion held at 31 December 2014.
This decrease was driven by adverse foreign exchange
movements, primarily in Europe and Asia. Excluding this,
assets held as custodian increased by 2% compared with
31 December 2014, due to incremental net asset inflows
in Asia and Europe, partly offset by adverse market
movements, particularly in the second half of 2015.
Our Assets Under Administration business, which includes
the provision of bond and loan administration services and
the valuation of portfolios of securities and other financial
assets on behalf of clients, complements the Custody
business. At 31 December 2015, the value of assets
held under administration by the Group amounted to
$3.2 trillion. This was broadly unchanged compared
with 31 December 2014, which included adverse foreign
exchange movements, primarily in Europe. Excluding
the impact of currency translation, assets held under
administration increased by 4% driven by net asset inflows
in Europe and Asia.
Our disclosure philosophy
HSBC strives to maintain the highest standards of
disclosure in our reporting.
It has long been our policy to provide disclosures that help
investors and other stakeholders understand the Group’s
performance, financial position and changes thereto.
In accordance with this policy, the information provided in
the ‘Notes on the Financial Statements’ and the ‘Report of
the Directors’ goes beyond the minimum levels required by
accounting standards, statutory and regulatory requirements
and listing rules. In particular, we provide additional
disclosures having regard to the recommendations of
two Enhanced Disclosures Task Force reports. Enhancing
the Risk Disclosures of Banks, issued in October 2012, aims
to help financial institutions identify areas that investors
had highlighted as needing better and more transparent
information about banks’ risks, and how these risks relate
to performance measurement and reporting. We have
complied with all 32 recommendations in this report and in
our Pillar 3 Disclosures 2015 document. The ‘Risk’, ‘Capital’
and ‘Corporate Governance’ sections of this report and the
financial statements are accompanied by detailed tables
of contents to assist the reader to navigate through the
disclosures. Impact of Expected Credit Loss Approaches
on Bank Risk Disclosures, issued in December 2015,
provides further guidance on the application of the existing
recommendations in the context of an Expected Credit Loss
(‘ECL’) framework which we have considered in developing
the commentary under ‘Future accounting developments’
on page 347. In addition, we continue to enhance our
disclosures in line with good practice recommendations
issued by relevant regulators and standard setters and in
response to feedback received from users of our financial
statements.