Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 579

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 579
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 66,711 |       — |     486 |       — |   486 |       1,705 |       — | 1,705 |
| Interest rate                                                                                                             |                   33,480 |  92,268 |   1,730 |   1,128 | 2,858 |         747 |   3,638 | 4,385 |
| At 31 Dec 2023                                                                                                            |                  100,191 |  92,268 |   2,216 |   1,128 | 3,344 |       2,452 |   3,638 | 6,090 |

Use of derivatives For details regarding the use of derivatives, see page 248 under ‘Market risk’. Trading derivatives Most of HSBC’s derivative transactions relate to sales and trading activities. Sales activities include the structuring and marketing of derivative products to customers to enable them to take, transfer, modify or reduce current or expected risks. Trading activities include market-making and risk management. Market-making entails quoting bid and offer prices to other market participants for the purpose of generating revenue based on spread and volume. Risk management activity is undertaken to manage the risk arising from client transactions, with the principal purpose of retaining client margin. Other derivatives classified as held for trading include non-qualifying hedging derivatives. Substantially all of HSBC Holdings’ derivatives entered into with subsidiaries are managed in conjunction with financial liabilities.

| 418 | HSBC Holdings plcAnnual Report on Form 20-F |

Notes on the financial statements

Hedge accounting derivatives

HSBC applies hedge accounting to manage the following risks: interest rate and foreign exchange risks. Further details of how these risks arise

and how they are managed by the Group can be found in the ‘Risk review’.

Hedged risk components

HSBC designates a portion of cash flows of a financial instrument or a group of financial instruments for a specific interest rate or foreign

currency risk component in a fair value or cash flow hedge. The designated risks and portions are either contractually specified or otherwise

separately identifiable components of the financial instrument that are reliably measurable. Risk-free or benchmark interest rates generally are

regarded as being both separately identifiable and reliably measurable, except for the Interest Rate Benchmark Reform Phase 2 transition

where HSBC designates alternative benchmark rates as the hedged risk which may not have been separately identifiable upon initial

designation, provided HSBC reasonably expects it will meet the requirement within 24 months