TIDM57HB
RNS Number : 0788A
Hongkong & Shanghai Banking Corp Ld
21 March 2017
24 Liabilities under insurance contracts
2016 2015
------------------------------- -------------------------------
Reinsurers' Reinsurers'
Gross Share(2) Net Gross Share(2) Net
HK$m HK$m HK$m HK$m HK$m HK$m
Non-linked insurance contracts(1)
At 1 January
....................................... 298,576 (7,151) 291,425 265,743 (4,182) 261,561
Claims and benefits paid
..................... (19,099) 319 (18,780) (21,216) 318 (20,898)
Increase in liabilities
to policyholders . 63,473 (3,514) 59,959 53,950 (3,214) 50,736
Foreign exchange and other
movements (816) 269 (547) 99 (73) 26
-------- ----------- -------- -------- ----------- --------
At 31 December
................................. 342,134 (10,077) 332,057 298,576 (7,151) 291,425
Linked insurance contracts
At 1 January
....................................... 42,244 (1,392) 40,852 44,439 (1,441) 42,998
Claims and benefits paid
..................... (2,395) 80 (2,315) (3,285) 445 (2,840)
Increase in liabilities
to policyholders.. 4,472 155 4,627 1,577 118 1,695
Foreign exchange and other
movements (285) (134) (419) (487) (514) (1,001)
-------- ----------- -------- -------- ----------- --------
At 31 December
................................. 44,036 (1,291) 42,745 42,244 (1,392) 40,852
-------- ----------- -------- -------- ----------- --------
Total liabilities to policyholders
......... 386,170 (11,368) 374,802 340,820 (8,543) 332,277
-------- ----------- -------- -------- ----------- --------
1 Includes liabilities under non-life insurance contracts.
2 Amounts recoverable from reinsurance of liabilities under
insurance contracts are included in the consolidated balance sheet
in 'Prepayment, accrued income and other assets'.
25 Provisions for liabilities and charges
2016 2015
----------------------------- ----------------------------
Restructuring Restructuring
costs Others Total costs Others Total
HK$m HK$m HK$m HK$m HK$m HK$m
At 1 January
.................................... 801 402 1,203 113 1,028 1,141
New provisions/increase
in provisions
..............................................
......... 647 171 818 840 374 1,214
Provisions used
................................ (200) (68) (268) (109) (204) (313)
Amounts reversed
............................ (438) (97) (535) (30) (175) (205)
Exchange and
other movements
...... (24) (27) (51) (13) (621) (634)
------------- ------ ------ ------------- ------ -----
At 31 December
............................... 786 381 1,167 801 402 1,203
------------- ------ ------ ------------- ------ -----
26 Subordinated liabilities
Subordinated liabilities consist of undated primary capital
notes and other loan capital having an original term to maturity of
five years or more.
2016 2015
HK$m HK$m
Undated floating rate primary
US$400m capital notes(1) ........................................... 3,102 6,204
Fixed rate (4.35%) subordinated
bonds due 2022, callable from
MYR500m 2017(2) ...... 865 897
Fixed rate (5.05%) subordinated
bonds due 2027, callable from
MYR500m 2022(3) ...... 869 902
----- -----
4,836 8,003
----- -----
1 In February 2016, the group redeemed US$400m undated floating
rate primary capital notes at par.
2 The interest rate on the MYR500m 4.35% callable subordinated
bonds due 2022 will increase by 1% from June 2017.
3 The interest rate on the MYR500m 5.05% callable subordinated
bonds due 2027 will increase by 1% from November 2022.
Subordinated liabilities issued to Group entities are not
included in the above.
27 Preference shares
2016 2015
HK$m HK$m
Issued and fully paid
Redeemable preference shares
....................................................................................
............ - 8,138
Irredeemable preference shares
....................................................................................
.......... 26,879 28,415
26,879 36,553
--------------------- ------
The preference shares were issued at the then nominal value, and
may be redeemed or cancelled subject to 30 days' notice in writing
to shareholders and with the prior consent of the Hong Kong
Monetary Authority. In the event of cancellation, holders of the
shares shall be entitled to receive the issue price of US$1 per
share held together with any unpaid dividends for the period since
the annual dividend payment date immediately preceding the date of
cancellation, subject to the Bank having sufficient distributable
profits. The holders of the preference shares are entitled to one
vote per share at shareholders' meetings of the Bank.
1,050m cumulative redeemable preference shares were issued in
2009, and were fully redeemed in 2016 at the issue price of US$1
per share.
The number of issued non-cumulative irredeemable preference
shares at 31 December 2016 was 3,253m (2015: 3,253m). No
non-cumulative irredeemable preference shares were issued during
the year (2015: nil).
The number of issued cumulative irredeemable preference shares
at 31 December 2016 was 200m (2015: 400m) and 200m were cancelled
during the year. No cumulative irredeemable preference shares were
issued during the year
(2015: nil).
There was INR870m (2015: INR870m) of authorised preference share
capital, comprising 8.7m compulsorily convertible preference shares
('CCPS') of INR100 each in the share capital of a subsidiary, HSBC
InvestDirect Securities (India) Private Limited ('HSBC
InvestDirect'). The CCPS were issued and fully paid in 2009 at a
nominal value of INR100 each. These shares may be converted into
fully paid equity shares of HSBC InvestDirect at any time after one
year to ten years from the date of allotment of the CCPS by written
notice. The conversion shall be made at par or premium as may be
determined by the Board of HSBC InvestDirect at the time of the
conversion. The CCPS shall carry a fixed dividend of 0.001% of the
face value per annum. After ten years following the allotment of
the CCPS, all outstanding CCPS shall be converted at par or premium
as may be determined by the Board of HSBC InvestDirect at the time
of the conversion. HSBC InvestDirect did not convert any CCPS
during 2016 (2015: nil). The number of issued CCPS at 31 December
2016 was 8.7m (2015: 8.7m). No CCPS were issued during the year
(2015: nil).
28 Share capital
Issued and fully paid
2016 2015
HK$m HK$m
Ordinary share capital
...................................................................................
......................... 114,359 96,052
---------------------- ------
2016 2015
Number of ordinary shares
At 1 January
.................................................................................
......................................... 38,420,982,901 38,420,982,901
Issued during the
year.............................................................................
................................. 7,322,508,897 -
At 31
December.........................................................................
............................................ 45,743,491,798 38,420,982,901
--------------- ---------------
7,323m new ordinary shares were issued during 2016 (2015: nil)
at an issue price of HK$2.5 each for general corporate purposes and
to further strengthen the capital base.
The holders of the ordinary shares are entitled to receive
dividends as declared from time to time, rank equally with regard
to the Bank's residual assets and are entitled to one vote per
share at shareholder meetings of the Bank.
29 Other equity instruments
Other equity instruments comprise additional tier 1 capital
instruments in issue which are accounted for in equity.
2016 2015
HK$m HK$m
US$1,000m Floating rate perpetual
subordinated loan, callable from
Dec 2019(1) ....
............... 7,756 7,756
US$900m Floating rate perpetual
subordinated loan, callable from
Dec 2019(1) .....
.............. 6,981 6,981
------ ------
14,737 14,737
------ ------
1 Interest rate at one year US dollar LIBOR plus 3.84%.
The additional tier 1 capital instruments are perpetual
subordinated loans on which coupon payments may be cancelled at the
sole discretion of the Bank. The subordinated loans will be written
down at the point of non-viability on the occurrence of a trigger
event as defined in the Banking (Capital) Rules. They rank higher
than ordinary shares in the event of a wind-up.
This information is provided by RNS
The company news service from the London Stock Exchange
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