Company: HBCYF
Filing Date: 2025-10-28
Form Type: 6-K
Source: 0001654954-25-012267
Chunk: 21

Company: HSBC HOLDINGS PLC
Filing Date: 2025-10-28
Form: 6-K
Chunk 21
---
             8,477 |       7,705 |         2,969 |       2,846 |       2,643 |
| HSBC Bank plc                                                     |             3,780 |       3,448 |         1,351 |       1,325 |       1,152 |

Banking NII adjusts our NII, primarily for the impact of funding trading and fair value activities reported in interest expense. It represents the Group's banking revenue that is directly impacted by changes in interest rates. It is defined as Group net interest income after deducting:

- the internal cost to fund trading and fair value net assets for which associated revenue is reported in 'Net income from financial instruments held for trading or managed on a fair value basis', also referred to as 'trading and fair value income'. These funding costs reflect proxy overnight or term interest rates as applied by internal funds transfer pricing;

- the funding cost of foreign exchange swaps in Markets Treasury, where an offsetting income or loss is recorded in trading and fair value income. These instruments are used to manage foreign currency deployment and funding in our entities; and

- third-party net interest income in our insurance business.

In our segmental disclosures, the funding costs of trading and fair value net assets are predominantly recorded in CIB in 'net income from financial instruments held for trading or managed on a fair value basis'. On consolidation, this funding is eliminated in Corporate Centre, resulting in an increase in the funding cost reported in net interest income with an equivalent offsetting increase in 'net income from financial instruments held for trading or managed on a fair value basis' in this segment. In the consolidated Group results, the cost to fund these trading and fair value net assets is reported in net interest income.

Banking NII was $32.4bn in 9M25, a reduction of $0.4bn or 1% compared with 9M24, mainly due to a reduction of $1.6bn from the disposals of our business in Argentina and our banking business in Canada, and an adverse impact from foreign currency translation differences of $0.3bn. Banking NII growth was driven by the benefit of our structural hedge, deposit growth and lower costs of funding, which mitigated the impact of lower market interest rates. Banking NII also deducts third-party NII related to our Insurance business, which was $0.3bn, broadly stable compared with 9M24. The funding costs associated with generating trading and fair