Company: HBCYF
Filing Date: 2025-10-28
Form Type: 6-K
Source: 0001089113-25-000056
Chunk: 46

Company: HSBC HOLDINGS PLC
Filing Date: 2025-10-28
Form: 6-K
Chunk 46
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 |            10 |     10 |  10 |     10 |
| Downside 2             |               5 |  5 |  5 |        5 |             5 |      5 |   5 |      5 |

Scenario weightings are calibrated to probabilities that are determined with reference to consensus forecast probability distributions. Management may then choose to vary weights if they assess that the calibration lags more recent events, or does not reflect their view of the distribution of economic and geopolitical risk. Management’s view of the scenarios and the probability distribution takes into consideration the relationship of the consensus scenario to both internal and external assessments of risk. For the third quarter of 2025, forecasts and distributional estimates were assessed to have incorporated available information around tariffs and policy uncertainties, while financial market volatility and estimates of US recession risk have declined relative to prior quarters. Consequently, there was no variation in scenario weights and they aligned to the calibrated probabilities of the scenarios. The consensus Upside and Central scenarios for all key markets were assigned a combined weighting of 85%. The remaining 15% was assigned to the two Downside scenarios, with the consensus Downside scenario being awarded a weight of 10% and 5% assigned to the Downside 2 scenario. Management judgemental adjustments In the context of IFRS 9, management judgemental adjustments are typically short-term increases or decreases to the modelled allowance for ECL at either a customer, segment or portfolio level where management believes allowances do not sufficiently reflect the credit risk/expected credit losses at the reporting date. These can relate to risks or uncertainties that are not reflected in the models and/or to any late-breaking events with significant uncertainty, subject to management review and challenge. The drivers of management judgemental adjustments continue to evolve with the economic environment and as new risks emerge. Further details can be found in the section ‘Management judgemental adjustments‘ on page 185 of the Annual Report and Accounts 2024 on Form 20-F. Management judgemental adjustments are reviewed under the governance process for IFRS 9, as detailed in the section ‘Credit risk management’ on page 169 of the Annual Report and Accounts 2024 on Form 20-F. At 30 September 2025, total management judgemental adjustments for retail and wholesale loans increased the allowance for ECL by $0.3bn (31 December 2024: $0.1bn increase). The wholesale portfolio management judgemental adjustments increased by $0.2bn