Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 267

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 267
---
 including the CET1 ratio. We could also be required to apply new or revised standards retrospectively, resulting in our restating prior period financial statements in material amounts. This could have a material adverse effect on our business, financial condition, results of operations and capital position.

| HSBC Holdings plcAnnual Report on Form 20-F | 167 |

Our material banking risks The material risk types associated with our banking and insurance manufacturing operations are described in the following tables:

| Description of risks – banking operations                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Risks                                                                                                                                                                                                                                                                                                                                                           | Arising from                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Measurement, monitoring and management of risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Credit riskSee page169                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Credit risk is the risk of financial lossif a customer or counterparty fails tomeet an obligation under a contract.                                                                                                                                                                                                                                             | Credit risk arises principally from directlending, trade finance and leasingbusiness, but also from other productssuch as guarantees and derivatives.                                                                                                                                                                                                                                                                                                                                                                                    | Credit risk is:–measured as the amount that could be lost if a customer or counterpartyfails to make repayments;–monitored using various internal risk management measures and withinlimits approved by individuals within a framework of delegated authorities;and–managed through a risk control framework, which outlines clearand consistent policies, principles and guidance for risk managers; and bysetting limits and appetite across geographical markets, portfolios orsectors.                          |
| Treasury riskSee page230                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Treasury risk is the risk of havinginsufficient capital, liquidity or fundingresources to meet financialobligations and satisfy regulatoryrequirements, including the risk of anadverse impact on earnings or capitaldue to structural and transactionalforeign exchange exposures andchanges in market interest rates,together with pension and insurancerisk. | Treasury risk arises from changes to therespective resources and risk profilesdriven by customer behaviour,management decisions or the externalenvironment.                                                                                                                                                                                                                                                                                                                                                                              | Treasury risk is:–measured through risk appetite and more granular limits, set to provide anearly warning of increasing risk, minimum ratios of relevant regulatorymetrics, and metrics to monitor the key risk drivers impacting treasuryresources;–monitored and projected against appetites and by using operating plansbased on strategic objectives together with stress and scenario testing; and–managed through control of resources in conjunction with risk