Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 296

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 296
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,043 |
| of which:                  |           |       |       |       |       |       |
| Stage 1                    | 1,820,843 |   754 |   702 |   553 |   860 |   854 |
| Stage 2                    |   169,535 | 1,753 | 1,599 | 1,276 | 2,418 | 6,189 |

1 Allowance for ECL sensitivity includes off-balance sheet financial instruments. These are subject to significant measurement uncertainty.

2 Includes low credit-risk financial instruments such as debt instruments at FVOCI, which have high carrying amounts but low ECL under all the above scenarios.

3 Excludes defaulted obligors. For a detailed breakdown of performing and non-performing wholesale portfolio exposures, see page 200 .

4 Staging refers only to probability-weighted/reported gross carrying amount. Stage allocation of gross exposures varies by scenario, with higher allocation to stage

2 under the Downside 2 scenario.

5 Includes small portfolios that use less complex modelling approaches and are not sensitive to macroeconomic changes.

6 Classified as held for sale at 31 December 2023.

7 Includes the Argentina and Armenia businesses, which were sold in 2024.

| 188 | HSBC Holdings plcAnnual Report on Form 20-F |

Risk review

At 31 December 2024, the highest level of 100% scenario-weighted allowance for ECL was observed in the UK and Hong Kong under the Downside 2 scenario, driven primarily by a larger exposure to those geographies, namely in the real estate sector. In relation to the underlying exposure, mainland China and Mexico have the higher Downside 2 ECL coverage, mostly due to the relatively larger proportion of higher risk exposures in those geographies. Compared with 31 December 2023, the Downside 2 ECL impact reduced by $ 0.5b n mostly due to the sale of the Canada business while observing offsetting impacts driven by updates to our forward economic scenarios. In the wholesale portfolio, off-balance sheet financial instruments have a lower likelihood to be fully converted to a funded exposure at the point of default, and consequently the sensitivity of the allowance for ECL is lower in relation to its nominal amount, when compared with an on-balance sheet exposure with a similar risk profile. Retail analysis

| IFRS 9 ECL sensitivity to future economic conditions1 |                              |                          |                                          |                                         |                                           |