Reconciliation between Accounting and Regulatory Balance Sheets. These disclosures are prepared under the Banking (Disclosure) Rules

Transcription

1 Reconciliation between Accounting and Regulatory Balance Sheets These disclosures are prepared under the Banking (Disclosure) Rules 3 June 213

2 Reconciliation between Accounting and Regulatory Balance Sheets The following tables together provide a reconciliation of the group's consolidated statement of financial position, as published in the 213 Interim Report to the Transition Disclosures Template. a) The following table sets out the group's consolidated statement of financial position at 3 June 213 based on the accounting scope of consolidation and the corresponding balances based on the regulatory scope of consolidation. ASSETS At 3 June 213 Balance sheet in Under regulatory published financial scope of statements consolidation Cash and balances with banks 19,19 19,19 Placings with and advances to banks 135, ,84 Trading assets 34,59 34,59 Financial assets designated at fair value 1,15 Derivative financial instruments 4,752 4,719 Loans and advances to customers 579,75 579,382 Financial investments 263, ,416 Investment in subsidiaries 6,361 Subordinated loans to subsidiaries 315 Interest in associates 2, Investment properties 1,547 8,627 Premises, plant and equipment 2,69 2,69 Intangible assets 7, Other assets 17,59 16,482 Total assets 1,16,657 1,15,923 LIABILITIES AND EQUITY Liabilities Current, savings and other deposit accounts 779, ,872 Deposits from banks 15,79 15,471 Trading liabilities 67,749 67,749 Financial liabilities designated at fair value 466 Derivative financial instruments 4,817 4,87 Certificates of deposit and other debt securities in issue 11,22 11,22 Other liabilities 2,874 23,398 Liabilities to customers under insurance contracts 86,584 Current tax liabilities 1,928 1,774 Deferred tax liabilities 3,633 2,537 Subordinated liabilities 11,829 11,829 Total liabilities 1,4, ,459 Equity Share 9,559 9,559 Retained profits 76,633 68,34 Other reserves 13,786 13,768 Proposed dividends 2,13 2,13 Shareholders' funds 12,81 93,464 Total equity and liabilities 1,16,657 1,15,923 RESTRICTEDO:\Section\Cpm\CAR return\213\2136\disclosures\213923\with Investment Sub\Balance Sheet 3 Jun 13 (213923) (with inv in sub) 2

3 b) The following table expands the balance sheet under the regulatory scope of consolidation to show separately the components that are reported in the Transition Disclosures Template. The components in this table contain a reference which shows how these amounts are included in the Transition Disclosures Template. ASSETS At 3 June 213 Balance sheet in Under regulatory published financial scope of Cross reference statements consolidation number Cash and balances with banks 19,19 19,19 Placings with and advances to banks 135, ,84 Trading assets 34,59 34,59 of which: Valuation adjustments 7 (1) Financial assets designated at fair value 1,15 Derivative financial instruments 4,752 4,719 of which: Valuation adjustments 26 (2) Loans and advances to customers 579,75 579,382 of which: Impairment allowances eligible for inclusion in Tier (3) Financial investments 263, ,416 of which: Significant investments in financial sector entities exceeding 1% threshold 21,551 (4) Valuation adjustments 186 (5) Investment in subsidiaries 6,361 of which: Significant investments in financial sector entities exceeding 1% threshold 5,325 (6) Subordinated loans to subsidiaries 315 of which: Significant investments in financial sector entities exceeding 1% threshold 264 (7) Interest in associates 2, of which: Significant investments in financial sector entities exceeding 1% threshold 658 (8) Goodwill in associate 142 (9) Intangible assets in associate 15 (1) Investment properties 1,547 8,627 Premises, plant and equipment 2,69 2,69 Intangible assets 7, (11) Other assets 17,59 16,482 of which: Defined benefit pension fund net assets 41 (12) Total assets 1,16,657 1,15,923 LIABILITIES AND EQUITY Liabilities Current, savings and other deposit accounts 779, ,872 Deposits from banks 15,79 15,471 Trading liabilities 67,749 67,749 Financial liabilities designated at fair value 466 Derivative financial instruments 4,817 4,87 Certificates of deposit and other debt securities in issue 11,22 11,22 Other liabilities 2,874 23,398 of which: Gains due to changes in own credit risk 19 (13) Liabilities to customers under insurance contracts 86,584 Current tax liabilities 1,928 1,774 Deferred tax liabilities 3,633 2,537 of which: Deferred tax liabilities related to intangibles 41 (14) Subordinated liabilities 11,829 11,829 of which: Qualifying Tier 2 instruments 2,327 (15) Tier 2 instruments subject to phase out arrangements 9,52 (16) Total liabilities 1,4, ,459 Equity Share 9,559 9,559 (17) Retained profits 76,633 68,34 (18) of which: Revaluation gains of investment properties 5,391 (19) Regulatory reserve for general banking risks 5,213 (2) Regulatory reserve eligible for inclusion in Tier 2 1,99 (21) Other reserves 13,786 13,768 (22) of which: Cash flow hedge reserve 3 (23) Revaluation reserve of own-use properties 14,628 (24) Proposed dividends 2,13 2,13 (25) Shareholders' funds 12,81 93,464 Total equity and liabilities 1,16,657 1,15,923 RESTRICTED O:\Section\Cpm\CAR return\213\2136\disclosures\213923\with Investment Sub\Balance Sheet Reconciliation 3 Jun 13 (213923) (with inv in sub) 3

4 Transition Disclosures Template (Expressed in millions of Hong Kong dollars) Component of regulatory Amounts subject to pre- Basel III treatment Cross-referenced to Consolidated Balance Sheet CET1 : instruments and reserves 1 Directly issued qualifying CET1 instruments plus any related share premium 9,559 (17) 2 Retained earnings 7,137 (18) + (25) 3 Disclosed reserves 13,768 (22) 4 Directly issued subject to phase out from CET1 (only applicable to non-joint stock companies) Not applicable 5 Public sector injections grandfathered until 1 January 218 Minority interests arising from CET1 instruments issued by consolidated bank subsidiaries and held by third parties (amount allowed in CET1 of the consolidation group) Not applicable 6 CET1 before regulatory deductions 93,464 7 Valuation adjustments 219 (1) + (2) + (5) 8 Goodwill (net of associated deferred tax liability) 142 (9) 9 Other intangible assets (net of associated deferred tax liability) 423 (1) + (11) - (14) 1 Deferred tax assets net of deferred tax liabilities 11 Cash flow hedge reserve 3 (23) 12 Excess of total EL amount over total eligible provisions under the IRB approach 13 Gain-on-sale arising from securitization transactions 14 Gains and losses due to changes in own credit risk on fair valued liabilities 19 (13) 15 Defined benefit pension fund net assets (net of associated deferred tax liabilities) 41 (12) * % 16 Investments in own CET1 instruments (if not already netted off paid-in on reported balance sheet) 17 Reciprocal cross-holdings in CET1 instruments Insignificant investments in CET1 instruments issued by financial sector entities that are outside the scope of regulatory consolidation (amount above 1% threshold) Significant investments in CET1 instruments issued by financial sector entities that are outside the scope of regulatory consolidation (amount above 1% threshold) 2 Mortgage servicing rights (amount above 1% threshold) Not applicable 21 Deferred tax assets arising from temporary differences (amount above 1% threshold, net of related tax liability) Not applicable 22 Amount exceeding the 15% threshold Not applicable 23 of which: significant investments in the common stock of financial sector entities Not applicable 24 of which: mortgage servicing rights Not applicable 25 of which: deferred tax assets arising from temporary differences Not applicable 26 National specific regulatory adjustments applied to CET1 25,232 26a Cumulative fair value gains arising from the revaluation of land and buildings (own-use and investment properties) 27,798 ((4) + (6) + (7) + (8)) * % 2,19 (19) + (24) 26b Regulatory reserve for general banking risks 5,213 (2) 26c Securitization exposures specified in a notice given by the Monetary Authority 26d Cumulative losses below depreciated cost arising from the institution's holdings of land and buildings 26e Capital shortfall of regulated non-bank subsidiaries 26f 27 Capital investment in a connected company which is a commercial entity (amount above 15% of the reporting institution's base) Regulatory deductions applied to CET1 due to insufficient AT1 and Tier 2 to cover deductions 28 Total regulatory deductions to CET1 4,27 29 CET1 53,437 3 Qualifying AT1 instruments plus any related share premium 31 of which: classified as equity under applicable accounting standards 32 of which: classified as liabilities under applicable accounting standards 33 Capital instruments subject to phase out arrangements from AT1 34 AT1 instruments issued by consolidated bank subsidiaries and held by third parties (amount allowed in AT1 of the consolidation group) 35 of which: AT1 instruments issued by subsidiaries subject to phase out arrangements 13,899 (27) - (26) 36 AT1 before regulatory deductions (26) 37 Investments in own AT1 instruments 38 Reciprocal cross-holdings in AT1 instruments 39 4 Insignificant investments in AT1 instruments issued by financial sector entities that are outside the scope of regulatory consolidation (amount above 1% threshold) Significant investments in AT1 instruments issued by financial sector entities that are outside the scope of regulatory consolidation 41 National specific regulatory adjustments applied to AT1 13,899 41a CET1 : regulatory deductions AT1 : instruments AT1 : regulatory deductions Portion of deductions applied 5:5 to core and supplementary based on pre-basel III treatment which, during transitional period, remain subject to deduction from Tier 1 13,899 i of which: Excess of total EL amount over total eligible provisions under the IRB approach RESTRICTED 4

5 Transition Disclosures Template (Expressed in millions of Hong Kong dollars) Component of regulatory Amounts subject to pre- Basel III treatment Cross-referenced to Consolidated Balance Sheet CET1 : instruments and reserves ii of which: Capital shortfall of regulated non-bank subsidiaries iii of which: Investments in own CET1 instruments iv of which: Reciprocal cross holdings in CET1 instruments issued by financial sector entities v of which: Capital investment in a connected company which is a commercial entity (amount above 15% of the reporting institution's base) vi of which: Insignificant investments in CET1 instruments, AT1 instruments and Tier 2 instruments issued by financial sector entities that are outside the scope of regulatory consolidation vii of which: Significant investments in CET1 instruments, AT1 instruments and Tier 2 instruments issued by financial sector entities that are outside the scope of regulatory consolidation 13,899 ((4) + (6) + (7) + (8)) * 5% 42 Regulatory deductions applied to AT1 due to insufficient Tier 2 to cover deductions 43 Total regulatory deductions to AT1 13,899 (27) 44 AT1 45 Tier 1 (Tier 1 = CET1 + AT1) 53, Qualifying Tier 2 instruments plus any related share premium 2,327 (15) 47 Capital instruments subject to phase out arrangements from Tier 2 8,553 (16) * 9% 48 Tier 2 instruments issued by consolidated bank subsidiaries and held by third parties (amount allowed in Tier 2 of the consolidation group) 49 of which: instruments issued by subsidiaries subject to phase out arrangements 5 Collective impairment allowances and regulatory reserve for general banking risks eligible for inclusion in Tier 2 51 Tier 2 before regulatory deductions 13,335 2,455 (3) + (21) 52 Investments in own Tier 2 instruments 53 Reciprocal cross-holdings in Tier 2 instruments Insignificant investments in Tier 2 instruments issued by financial sector entities that are outside the scope of regulatory consolidation (amount above 1% threshold) Significant investments in Tier 2 instruments issued by financial sector entities that are outside the scope of regulatory consolidation 56 National specific regulatory adjustments applied to Tier 2 4,89 56a 56b Add back of cumulative fair value gains arising from the revaluation of land and buildings (own-use and investment properties) eligible for inclusion in Tier 2 Portion of deductions applied 5:5 to core and supplementary based on pre-basel III treatment which, during transitional period, remain subject to deduction from Tier 2 (9,9) ((19) + (24)) * 45% 13,899 i of which: Excess of total EL amount over total eligible provisions under the IRB approach ii of which: Capital shortfall of regulated non-bank subsidiaries iii of which: Investments in own CET1 instruments iv of which: Reciprocal cross holdings in CET1 instruments issued by financial sector entities v Tier 2 : instruments and provisions Tier 2 : regulatory deductions of which: Capital investment in a connected company which is a commercial entity (amount above 15% of the reporting institution's base) vi of which: Insignificant investments in CET1 instruments, AT1 instruments and Tier 2 instruments issued by financial sector entities that are outside the scope of regulatory consolidation vii of which: Significant investments in CET1 instruments, AT1 instruments and Tier 2 instruments issued by financial sector entities that are outside the scope of regulatory consolidation 13,899 ((4) + (6) + (7) + (8)) * 5% 57 Total regulatory deductions to Tier 2 4,89 58 Tier 2 8, Total (Total = Tier 1 + Tier 2) 61,882 Abbreviations: CET1: Common Equity Tier 1 AT1: Additional Tier 1 RESTRICTED 5