Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 342

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 342
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 meaningful to calculate a portfolio diversification

benefit for these measures.

3 The total VaR is non-additive across risk types due to diversification effects.

The table below shows trading VaR at a 99% confidence level compared with trading VaR at a 95% confidence level at 31 December 2024 . This comparison facilitates the benchmarking of the trading VaR, which can be stated at different confidence levels, with financial institution peers. The 95% VaR is unaudited.

| Comparison of trading VaR, 99% 1 day vs trading VaR, 95% 1 day |                        |                        |
|                                                                | Trading VaR, 99% 1 day | Trading VaR, 95% 1 day |
|                                                                |                     $m |                     $m |
| Balance at 31 Dec 2024                                         |                   38.3 |                   23.4 |
| Average                                                        |                   53.1 |                   33.0 |
| Maximum                                                        |                   83.3 |                   48.9 |
| Minimum                                                        |                   37.0 |                   22.0 |
| Balance at 31 Dec 2023                                         |                   52.8 |                   35.3 |
| Average                                                        |                   59.8 |                   36.8 |
| Maximum                                                        |                   98.2 |                   53.3 |
| Minimum                                                        |                   34.4 |                   21.0 |

Market risk balance sheet linkages The following balance sheet lines in the Group’s consolidated position are subject to market risk: Trading assets and liabilities The Group’s trading assets and liabilities are in almost all cases originated by GBM. Other than a limited number of exceptions, these assets and liabilities are treated as traded risk for the purposes of market risk management. The exceptions primarily arise in Global Banking where the short-term acquisition and disposal of assets are linked to other non-trading-related activities such as loan origination.

| HSBC Holdings plcAnnual Report on Form 20-F | 249 |

Derivative assets and liabilities We undertake derivative activity for three primary purposes: to create risk management solutions for clients, to manage the portfolio risks arising from client business, and to manage and hedge our own risks. Most of our derivative exposures arise from sales and trading activities within GBM. The assets and liabilities included in trading VaR give rise to a large proportion of the income included in net income from financial instruments held for trading or managed