Company: HBCYF
Filing Date: 2025-02-25
Form Type: 424B5
Source: 0001193125-25-034819
Chunk: 39

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-25
Form: 424B5
Chunk 39
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 significant weaknesses in its risk management and governance. The PRA assesses the PRA buffer applicable to an institution annually (or more
often if a firm’s circumstances change). Where the PRA considers there is an overlap between the combined buffer (excluding systematic buffers like the G-SII buffer) and the PRA buffer, the PRA buffer
will be set as the excess capital required over and above the combined buffer. To the extent the PRA buffer is applicable, it must be met with 100% common equity Tier 1 capital, which will be in addition to the common equity Tier 1 capital used to
meet the Pillar 1 requirements, Pillar 2A requirements and combined buffer requirements.

In addition, “sectoral capital
requirements” could be imposed as a macro-prudential tool available to the Bank of England’s Financial Policy Committee as a means to temporarily increase firms’ capital requirements as a result
of exposure to specific sectors. Under the Financial Holding Companies (Approval etc.) and Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) (EU Exit) Regulations 2020 (the “UK CRD V Regulations”), the PRA
has the power to set sectoral capital requirements via a systemic risk buffer (“SRB”). In its policy statement PS26/20 (“PS26/20”) published on December 9, 2020, the PRA confirmed that it would not introduce such an SRB at
this time. However, the PRA may consult on introducing one in future should that be necessary and appropriate. If an SRB were to be imposed in the future, it would likely form part of the combined buffer.

The PRA has also imposed requirements in relation to minimum leverage ratios pursuant to which we are required to meet (i) a minimum
leverage ratio requirement set at 3.25% (calculated, in accordance with the PRA Rulebook, by dividing a firm’s Tier 1 capital by its total exposure measure) (the “PRA Leverage Ratio”), (ii) an additional leverage ratio buffer
that is calibrated at 35% of the G-SII buffer (“ALRB”) and (iii) a countercyclical leverage ratio buffer that is calibrated at 35% of the CCyB (“CCyLB”). At least 75% of the Tier 1
capital required to meet the PRA Leverage Ratio must consist of common equity Tier 1 capital (with the remaining to be met with