Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 580

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 580
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 from the first designation date. The designated

risk components account for a significant portion of the overall changes in fair value or cash flows of the hedged items.

HSBC uses net investment hedges to hedge the structural foreign exchange risk related to net investments in foreign operations including

subsidiaries and branches whose functional currencies are different from that of the parent. When hedging with foreign exchange forward

contracts, the spot rate component of the foreign exchange risk is designated for an amount of net assets as the hedged risk.

Sources of hedge ineffectiveness may arise from basis risk, including but not limited to the discount rates used for calculating the fair value of

derivatives, hedges using instruments with a non-zero fair value, and notional and timing differences between the hedged items and hedging

instruments.

Fair value hedges

HSBC enters into fixed-for-floating interest rate swaps to manage the exposure to changes in fair value caused by movements in market

interest rates on certain fixed-rate financial instruments that are not measured at fair value through profit or loss, including debt securities held

and issued.

| HSBC hedging instrument by hedged risk |                    |                 |             |                           |                       |
|                                        | Hedging instrument |                 |             |                           |                       |
|                                        |                    | Carrying amount |             |                           |                       |
|                                        | Notional amount1,2 |          Assets | Liabilities | Balance sheetpresentation | Change in fair value3 |
| Hedged risk                            |                 $m |              $m |          $m | $m                        |                       |
| Interest rate4                         |            190,332 |           4,180 |       4,411 | Derivatives               |                  -449 |
| At 31 Dec 2024                         |            190,332 |           4,180 |       4,411 |                           |                  -449 |

| Interest rate4 | 172,985 | 3,729 | 2,965 | Derivatives | -1,043 |
| At 31 Dec2023  | 172,985 | 3,729 | 2,965 |             | -1,043 |

1 The notional contract amounts of derivatives designated in qualifying hedge accounting relationships indicate the nominal value of transactions outstanding at

the balance sheet date. They do not represent amounts at risk.

2 The notional amount of non-dynamic fair value hedges is equal to $ 71,916m (2023: