5.7 DESCRIPCIÓN DE LA PROPUESTA
5.7.1 Actividades
The group
At 31 December 2012 Due within
one year
Due after more
than
one year Total
£m £m £m Assets
Financial assets designated at fair value ... 282 15,105 15,387
Loans and advances to banks ... 29,511 2,775 32,286
Loans and advances to customers ... 128,877 153,808 282,685
Financial investments ... 13,636 57,629 71,265
Other financial assets ... 4,469 2,103 6,572 176,775 231,420 408,195 Liabilities
Deposits by banks ... 33,482 6,089 39,571
Customer accounts ... 320,786 4,100 324,886
Financial liabilities designated at fair value ... 2,495 30,423 32,918
Debt securities in issue ... 31,536 8,822 40,358
Other financial liabilities ... 7,878 1,297 9,175
Subordinated liabilities ... 34 10,316 10,350 396,211 61,047 457,258
At 31 December 2011 Due within
one year
Due after more
than
one year Total
£m £m £m
Assets
Financial assets designated at fair value ... 282 15,050 15,332
Loans and advances to banks ... 42,583 2,020 44,603 Loans and advances to customers ... 137,084 150,930 288,014 Financial investments ... 19,778 73,334 93,112 Other financial assets ... 6,585 1,020 7,605
206,312 242,354 448,666
Liabilities
Deposits by banks ... 35,248 5,784 41,032 Customer accounts ... 341,886 4,243 346,129 Financial liabilities designated at fair value ... 1,163 30,829 31,992
Debt securities in issue ... 31,737 10,951 42,688 Other financial liabilities ... 4,121 1,153 5,274 Subordinated liabilities ... – 9,998 9,998 414,155 62,958 477,113
The bank
At 31 December 2012 Due within
one year
Due after more
than
one year Total
£m £m £m Assets
Financial assets designated at fair value ... – 4,373 4,373
Loans and advances to banks ... 15,854 1,353 17,207
Loans and advances to customers ... 107,183 118,384 225,567
Financial investments ... 9,471 27,132 36,603
Other financial assets ... 3,404 906 4,310 135,912 152,148 288,060 Liabilities
Deposits by banks ... 25,602 4,527 30,129
Customer accounts ... 252,409 3,932 256,341
Financial liabilities designated at fair value ... 1,112 22,401 23,513
Debt securities in issue ... 18,654 6,316 24,970
Other financial liabilities ... 6,628 370 6,998
Subordinated liabilities ... – 9,968 9,968 304,405 47,514 351,919 At 31 December 2011 Due within one year Due after more than
one year Total
£m £m £m
Assets
Financial assets designated at fair value ... 4 4,591 4,595
Loans and advances to banks ... 20,839 1,364 22,203 Loans and advances to customers ... 94,973 115,588 210,561 Financial investments ... 10,441 31,799 42,240 Other financial assets ... 3,630 734 4,364
129,887 154,076 283,963
Liabilities
Deposits by banks ... 28,495 3,829 32,324 Customer accounts ... 232,640 5,014 237,654 Financial liabilities designated at fair value ... 1,025 21,836 22,861
Debt securities in issue ... 15,579 10,126 25,705 Other financial liabilities ... 2,307 406 2,713 Subordinated liabilities ... – 9,893 9,893
Notes on the Financial Statements
(continued)35 Foreign exchange exposures
The group’s structural foreign currency exposure is represented by the net asset value of its foreign currency equity and subordinated debt investments in subsidiary undertakings, branches, joint ventures and associates.
The group’s management of structural foreign currency exposures is discussed in the risk section in the Report of Directors.
Net structural foreign currency exposures
Currency of structural exposure
2012 2011 £m £m Euro ... 11,891 11,927 US dollars ... 1,994 3,331 Swiss francs ... 162 1,553 Turkish lira ... 1,106 1,011 Russian rouble ... 186 166 Others, each less than £100 million ... 269 191 Total ... 15,608 18,179
36 Assets charged as security for liabilities and collateral accepted as security for assets Financial assets pledged to secure liabilities are as follows:
Group assets pledged at 31 December
Bank assets pledged at 31 December
2012 2011 2012 2011
£m £m £m £m
Treasury bills and other eligible securities ... 483 440 – –
Loans and advances to banks ... 12,780 11,422 7,708 7,856 Loans and advances to customers ... 39,833 39,736 21,429 23,407 Debt securities ... 97,612 102,416 59,855 60,580 Equity shares ... 3,488 3,993 3,416 3,971 Other ... 35 54 – –
154,231 158,061 92,408 95,814
The table above shows assets over which a legal charge has been granted to secure liabilities. The amount of such assets may be greater than the book value of assets utilised as collateral for funding purposes or to cover liabilities. This is the case for securitisations and covered bonds where the amount of liabilities issued, plus any mandatory over-collateralisation, is less than the book value of financial assets available for funding or collateral purposes in the relevant pool of assets. This is also the case where financial assets are placed with a custodian or settlement agent, which has a floating charge over all the financial assets placed to secure any liabilities under settlement accounts. These transactions are conducted under terms that are usual and customary to collateralised transactions, including, where relevant, standard securities lending and repurchase agreements.
Collateral accepted as security for assets
The fair value of financial assets accepted as collateral that the group is permitted to sell or repledge in the absence of default is £122,502 million (2011: £144,699 million) (the bank: 2012 £79,852 million; 2011 £85,654 million). The
37 Called up share capital and other equity instruments Issued capital
HSBC Bank plc £1.00 ordinary shares
Number £m At 1 January and 31 December 2012 ... 796,969,107 797
At 1 January and 31 December 2011 ... 796,969,107 797
HSBC Bank plc £1.00 preferred ordinary shares
Number £’000 At 1 January and 31 December 2012 ... 1 –
At 1 January and 31 December 2011 ... 1 – The preferred ordinary share ranks pari passu in all respects with the ordinary shares and with all other shares expressed to rank pari passu therewith. It carries the same rights and is subject to the same limitations as the ordinary shares but in addition the preferred ordinary share confers:
(i) on each and any distribution of profits by the bank on any class of share (other than the ordinary shares), the right to receive, in priority to any other share, the first £100 of any amount so distributed; and
(ii) on any distribution on a winding-up of the bank (but not on any redemption, reduction or purchase of any share capital), the right to receive out of the assets of the bank available for distribution, in priority to any other share, a sum equal to the nominal amount of the preferred ordinary share and any premium paid on the issue thereof. HSBC Bank plc US$0.01 non-cumulative third dollar preference shares
Number £’000 At 1 January and 31 December 2012 ... 35,000,000 172
At 1 January and 31 December 2011 ... 35,000,000 172 The bank has no obligation to redeem the preference shares but may redeem them in part or in whole at any time, subject to prior notification to the Financial Services Authority. Dividends on the preference shares in issue are paid annually at the sole and absolute discretion of the Board of Directors. The Board of Directors will not declare a dividend on the preference shares in issue if payment of the dividend would cause the bank not to meet the capital adequacy requirements of the Financial Services Authority or the profit of the bank, available for distribution as dividends, is not sufficient to enable the bank to pay in full both dividends on the preference shares in issue and dividends on any other shares that are scheduled to be paid on the same date and have an equal right to dividends or if payment of the dividend is prohibited by the rights attached to any class of shares in the capital of the bank, excluding ordinary shares. The preference shares in issue carry no rights to conversion into ordinary shares of the bank. Holders of the preference shares in issue will be able to attend any general meetings of shareholders of the bank and to vote on any resolution proposed to vary or abrogate any of the rights attaching to the preference shares or any resolution proposed to reduce the paid up capital of the preference shares. If the dividend payable on the
Notes on the Financial Statements
(continued)38 Notes on the cash flow statement
Non-cash items included in profit before tax
The group The bank
2012 2011 2012 2011
£m £m £m £m
Depreciation, amortisation and impairment ... 541 549 403 359
Share-based payment expense ... 271 328 191 213 Credit-related impairment losses ... 1,245 1,623 965 1,109 Provisions raised ... 1,616 630 1,274 522 Impairment of investments ... 26 18 687 7 Credit charge for defined benefit plans ... 148 (219) 112 (255)
Accretion of discounts and amortisation of premiums ... 141 161 120 1
3,988 3,090 3,752 1,956
Change in operating assets
The group The bank
2012 2011 2012 2011
£m £m £m £m
Change in prepayments and accrued income ... 208 631 75 308
Change in net trading securities and net derivatives ... (29,920) 17,430 (19,974) 18,628 Change in loans and advances to banks ... 5,446 6,365 8,142 6,787 Change in loans and advances to customers ... (6,503) (2,601) (11,810) (2,392)
Change in financial assets designated at fair value ... (55) 122 222 (90)
Change in other assets ... (3,205) (1,015) 3,322 (250)
(34,029) 20,932 (20,023) 22,991
Change in operating liabilities
The group The bank
2012 2011 2012 2011
£m £m £m £m
Change in accruals and deferred income ... (11) (440) (11) (186) Change in deposits by banks ... (3,908) (7,255) (2,195) (6,549) Change in customer accounts ... 27,986 2,006 18,687 7,053 Change in debt securities in issue ... (4,081) (5,418) (735) (3,712) Change in financial liabilities designated at fair value ... 1,274 4,057 1,002 4,527 Change in other liabilities ... 2,627 (1,298) 2,281 (100)
23,887 (8,348) 19,029 1,033
Cash and cash equivalents
The group The bank
2012 2011 2012 2011
£m £m £m £m
Cash and balances at central banks ... 51,613 56,460 45,262 44,967
Items in the course of collection from other banks ... 1,961 1,663 1,213 908
Loans and advances to banks of one month or less ... 42,859 47,497 30,132 27,109
Treasury bills, other bills and certificates of deposit less than
three months ... 2,742 3,974 2,388 2,818
Less: items in the course of transmission to other banks ... (1,017) (1,154) (334) (446)
39 Contingent liabilities, contractual commitments and guarantees
The group The bank
2012 2011 2012 2011
£m £m £m £m
Guarantees and other contingent liabilities
Guarantees ... 14,829 17,510 11,066 10,883 Other contingent liabilities ... 55 88 54 60
14,884 17,598 11,120 10,943
Commitments1
Documentary credits and short-term trade-related transactions ... 2,729 2,436 1,172 1,160
Forward asset purchases and forward deposits placed ... 19 21 – –
Undrawn formal standby facilities, credit lines and other
commitments to lend2 ... 112,977 118,424 76,468 80,641
115,725 120,881 77,640 81,801
1 Excluding capital commitments, which are separately disclosed below. 2 Based on original contractual maturity.
The table above discloses the nominal principal amounts of commitments, guarantees and other contingent liabilities. They are mainly credit-related instruments which include both financial and non-financial guarantees and
commitments to extend credit. Nominal principal amounts represent the amounts at risk should contracts be fully drawn upon and clients default. As a significant portion of guarantees and commitments is expected to expire without being drawn upon, the total of these nominal principal amounts is not representative of future liquidity requirements. Contingent liabilities arising from litigation against the group are disclosed in Note 41.
Financial Services Compensation Scheme
The Financial Services Compensation Scheme (‘FSCS’) has provided compensation to consumers following the collapse of a number of deposit takers. The compensation paid out to consumers is currently funded through loans from the Bank of England and HM Treasury which at 31 December 2012 stood at approximately £18 billion. The interest rate to be applied on outstanding borrowings in calculating the Management Expenses Levy increased from 12 month LIBOR plus 30 basis points to 12 month LIBOR plus 100 basis points from 1 April 2012. The FSCS confirmed in February 2013 that the first of three annual instalments of approximately £363 million will be levied in total on participating financial institutions in Scheme Year 2013/2014 to repay the balance of the loan principle that is not expected to be recovered.
The bank could be liable to pay a further proportion of the outstanding borrowings that the FSCS has borrowed from HM Treasury.
The accrual of £97 million at 31 December 2012 (2011: £56 million) reflects an estimate in respect of the expected Management Expenses Levy due in Scheme Year 2013/2014 plus the bank’s estimated share of the first instalment for loan principal non-recovery. The ultimate FSCS levy to the industry as a result of the collapses cannot currently be estimated reliably as it is dependent on various uncertain factors including the potential recoveries of assets by the FSCS and changes in the interest rate and level of protected deposits and the population of FSCS members at the