Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 340

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 340
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 generally trended upward, except during the third quarter, largely driven by volatile inflation figures and shifting central bank expectations. In Europe, the yield spread between France and Germany widened amid uncertainties surrounding French fiscal policy following local legislative elections. Global equities reached multiple record highs in the US and Europe, buoyed by strong corporate earnings and positive sentiment in the technology sector. Global markets rebounded from a short period of volatility in August, triggered by the unwinding of carry trades due to rising Japanese government bond yields, US recession concerns, and equity market valuations. In foreign exchange markets, the trend of a strengthening US dollar continued against most developed and emerging market currencies. The euro approached parity with the US dollar, while the yen weakened to multi-decade lows. Credit markets performed positively throughout the year, with a more pronounced tightening of high-yield credit spreads compared with investment-grade spreads, despite a broad widening of spreads in August. We continued to manage market risk prudently during 2024. Sensitivity exposures and VaR remained within appetite as the business pursued its core market-making activity in support of our customers. Market risk was managed using a complementary set of risk measures and limits, including stress testing and scenario analysis.

Trading portfolios Value at risk of the trading portfolios Trading VaR predominantly resides within the Markets and Securities Services business. As of 31 December 2024, Trading VaR stood at $38.3m, down from $52.8m as of 31 December 2023. At the end of December 2024, Trading VaR was mainly driven by exposures to interest rate risk factors from the Global Debt Markets and Global Foreign Exchange business lines to facilitate client-driven activity. Trading VaR peaked in March 2024 due to the sensitivity of the trading book to interest rates movements, coupled with relatively large interest rate shocks captured in the VaR scenario window. VaR reduced in the second half of 2024, mainly as a result of some volatile scenarios rolling off the VaR scenario window.

| 248 | HSBC Holdings plcAnnual Report on Form 20-F |

Risk review

The daily levels of total trading VaR during 2024 are set out in the graph below.

| Daily VaR (trading portfolios), 99% 1 day ($m) |

The Group trading VaR for the year is shown in the table below.

| Trading VaR, 99% 1 day1 |                              |              |        |              |                           |        |
| (Audited)               |