Company: HBCYF
Filing Date: 2025-07-30
Form Type: 6-K
Source: 0001089113-25-000052
Chunk: 41

Company: HSBC HOLDINGS PLC
Filing Date: 2025-07-30
Form: 6-K
Chunk 41
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 It represents the Group’s banking revenue that is directly impacted by changes in interest rates. It is defined as Group net interest income after deducting: – the internal cost to fund trading and fair value net assets for which associated revenue is reported in ‘Net income from financial instruments held for trading or managed on a fair value basis’, also referred to as ‘trading and fair value income’. These funding costs reflect proxy overnight or term interest rates as applied by internal funds transfer pricing; – the funding cost of foreign exchange swaps in Markets Treasury, where an offsetting income or loss is recorded in trading and fair value income. These instruments are used to manage foreign currency deployment and funding in our entities; and – third-party net interest income in our insurance business. In our segmental disclosures, the funding costs of trading and fair value net assets are predominantly recorded in CIB in ‘net income from financial instruments held for trading or managed on a fair value basis’. On consolidation, this funding is eliminated in Corporate Centre, resulting in an increase in the funding cost reported in net interest income with an equivalent offsetting increase in ‘net income from financial instruments held for trading or managed on a fair value basis’ in this segment. In the consolidated Group results, the cost to fund these trading and fair value net assets is reported in net interest income. Banking NII was $21.3bn in 1H25, a reduction of $0.9bn compared with 1H24, and included an adverse impact of foreign currency translation differences of $0.4bn. The funding costs associated with generating trading and fair value income were $4.7bn , a decrease of $0.8bn compared with 1H24. The reduction in banking NII included a $1.3bn impact of business disposals in Argentina and Canada, and an adverse impact of lower market interest rates on asset re-pricing, including the fall in HIBOR during 2Q25 . These reductions were partly offset by the benefit of our structural hedge and from higher NII from Markets Treasury. Banking NII also deducts third-party NII related to our insurance business, which was $0.2bn , broadly stable compared with 1H24. The internally allocated funding to generate trading and fair value income was approximately $208bn at 30 June 2025, broadly in line with the balances at 30 June 2024. This relates to trading, fair value and associated net asset balances predominantly in CIB. To supplement banking NII,