Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 279

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 279
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Credit exposure Maximum exposure to credit risk (Audited) This section provides information on balance sheet items and their offsets as well as loan and other credit-related commitments. Commentary on consolidated balance sheet movements in 2024 is provided on page 93.

| ‘Maximum exposure to credit risk’ tableThe following table presents our maximum exposure before takingaccount of any collateral held or other credit enhancements (unlesssuch enhancements meet accounting offsetting requirements).The table excludes trading assets, financial assets designated andotherwise mandatorily measured at fair value through profit or loss,and financial investments measured at fair value through othercomprehensive income as their carrying amount best represents thenet exposure to credit risk. Equity securities are also excluded asthey are not subject to credit risk.For the financial assets recognised on the balance sheet, themaximum exposure to credit risk equals their carrying amount and isnet of the allowance for ECL. For financial guarantees and otherguarantees granted, it is the maximum amount that we would haveto pay if the guarantees were called upon. For loan commitmentsand other credit-related commitments, it is generally the full amountof the committed facilities.The offset in the table relates to amounts where there is a legallyenforceable right of offset in the event of counterparty default andwhere, as a result, there is a net exposure for credit risk purposes.However, as there is no intention to settle these balances on a netbasis under normal circumstances, they do not qualify for netpresentation for accounting purposes. No offset has been applied tooff-balance sheet collateral. In the case of derivatives, the offsetcolumn also includes collateral received in cash and other financialassets. |

Other credit risk mitigants While not disclosed as an offset in the following ‘Maximum exposure to credit risk’ table, other arrangements are in place that reduce our maximum exposure to credit risk. These include a charge over collateral on borrowers’ specific assets, such as residential properties, collateral held in the form of financial instruments that are not held on the balance sheet and short positions in securities. In addition, for financial assets held as part of linked insurance/investment contracts the credit risk is predominantly borne by the policyholder. See page 380 and Note 31 on the financial statements for further details of collateral in respect of certain loans and advances and derivatives. Collateral available to mitigate credit risk is disclosed in the ‘Collateral’ section on page 211 .

| 178 | HSBC Holdings plcAnnual Report on Form 20-F |

Risk review

| Maximum exposure to credit risk                        |