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 31 December 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 Annual Report to the Transition Disclosures Template. a) The following table sets out the group's consolidated statement of financial position at 31 Dec 213 based on the accounting scope of consolidation and the corresponding balances based on the regulatory scope of consolidation. At 31 December 213 Balance sheet as in Under regulatory published financial scope of statements consolidation ASSETS Cash and balances with banks 33,294 33,228 Placings with and advances to banks 131, ,69 Trading assets 31,996 31,996 Financial assets designated at fair value 6,987 Derivative financial instruments 6,646 6,643 Loans and advances to customers 586,24 585,887 Financial investments 282, ,32 Investment in subsidiaries 6,954 Subordinated loans to subsidiaries 315 Interest in associates 2,62 Investment properties 1,918 8,998 Premises, plant and equipment 21, 21, Intangible assets 7, Other assets 22,45 21,34 Total assets 1,143,73 1,54,511 LIABILITIES AND EQUITY Liabilities Current, savings and other deposit accounts 824, ,968 Deposits from banks 11,826 11,826 Trading liabilities 62,117 62,117 Financial liabilities designated at fair value 489 Derivative financial instruments 5,246 5,231 Certificates of deposit and other debt securities in issue 8,61 8,61 Other liabilities 2,467 28,585 Liabilities to customers under insurance contracts 85,844 Current tax liabilities Deferred tax liabilities 3,85 2,611 Subordinated liabilities 11,824 11,824 Total liabilities 1,35, ,443 Equity Share 9,559 9,559 Retained profits 78,679 68,989 Other reserves 15,334 15,314 Proposed dividends 4,26 4,26 Shareholders' funds 17,778 98,68 Total equity and liabilities 1,143,73 1,54,511 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 As at 31 December 213 Balance sheet as in Under regulatory published financial scope of Cross reference statements consolidation number Cash and balances with banks 33,294 33,228 Placings with and advances to banks 131, ,69 Trading assets 31,996 31,996 of which: Valuation adjustments 18 (1) Financial assets designated at fair value 6,987 Derivative financial instruments 6,646 6,643 of which: Valuation adjustments 13 (2) Loans and advances to customers 586,24 585,887 of which: Impairment allowances eligible for inclusion in Tier (3) Financial investments 282, ,32 of which: Significant investments in financial sector entities exceeding 1% threshold 27,54 (4) Valuation adjustments 149 (5) Investment in subsidiaries 6,954 of which: Significant investments in financial sector entities exceeding 1% threshold 1,163 (6) Subordinated loans to subsidiaries 315 of which: Significant investments in financial sector entities exceeding 1% threshold 315 (7) Interest in associates 2,62 Investment properties 1,918 8,998 Premises, plant and equipment 21, 21, Intangible assets 7, (8) Other assets 22,45 21,34 of which: Deferred tax assets 43 (9) Defined benefit pension fund net assets 4 (1) Total assets 1,143,73 1,54,511 LIABILITIES AND EQUITY Liabilities Current, savings and other deposit accounts 824, ,968 Deposits from banks 11,826 11,826 Trading liabilities 62,117 62,117 Financial liabilities designated at fair value 489 Derivative financial instruments 5,246 5,231 Certificates of deposit and other debt securities in issue 8,61 8,61 Other liabilities 2,467 28,585 of which: Gains due to changes in own credit risk 4 (11) Liabilities to customers under insurance contracts 85,844 Current tax liabilities Deferred tax liabilities 3,85 2,611 of which: Deferred tax liabilities related to intangible assets 45 (12) Deferred tax liabilities related to defined benefit pension fund 7 (13) Subordinated liabilities 11,824 11,824 of which: Qualifying Tier 2 instruments 2,326 (14) Portion eligible for Tier 2 instruments subject to phase out arrangements 8,546 (15) Total liabilities 1,35, ,443 Equity Share 9,559 9,559 (16) Retained profits 78,679 68,989 (17) of which: Revaluation gains of investment properties 5,577 (18) Regulatory reserve for general banking risks 5,44 (19) Regulatory reserve eligible for inclusion in Tier 2 1,945 (2) Other reserves 15,334 15,314 (21) of which: Cash flow hedge reserve 6 (22) Revaluation reserve of properties 14,94 (23) Proposed dividends 4,26 4,26 (24) Shareholders' funds 17,778 98,68 Total equity and liabilities 1,143,73 1,54,511 O:\Section\Cpm\Regulatory Disclosures\Basel III Standard Templates\21312\Main Features\Capital disclosures\balance Sheet Reconciliation 31 Dec 13 (21427)_Recon2.xlsx 3

4 Transition Disclosures Template (Expressed in millions of Hong Kong dollars) CET1 : instruments and reserves Component of regulatory Amounts subject to pre- Basel III treatment Cross-referenced to Consolidated Balance Sheet 1 Directly issued qualifying CET1 instruments plus any related share premium 9,559 (16) 2 Retained earnings 73,195 (17) + (24) 3 Disclosed reserves 15,314 (21) 4 Directly issued subject to phase out from CET1 (only applicable to non-joint stock companies) Not applicable Public sector injections grandfathered until 1 January 218 Not applicable 5 Minority interests arising from CET1 instruments issued by consolidated bank subsidiaries and held by third parties (amount allowed in CET1 of the consolidation group) 6 CET1 before regulatory deductions 98,68 CET1 : regulatory deductions 7 Valuation adjustments 18 (1) + (2) + (5) 8 Goodwill (net of associated deferred tax liability) 9 Other intangible assets (net of associated deferred tax liability) 41 (8) - (12) 1 Deferred tax assets net of deferred tax liabilities 43 (9) 11 Cash flow hedge reserve 6 (22) 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 4 (11) 15 Defined benefit pension fund net assets (net of associated deferred tax liabilities) 33 (1) - (13) 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) 5 28,482 (4) + (6) + (7) - (25) - (26) 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 25,921 26a Cumulative fair value gains arising from the revaluation of land and buildings (own-use and investment properties) 2,481 (18) + (23) 26b Regulatory reserve for general banking risks 5,44 (19) 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 Capital investment in a connected company which is a commercial entity (amount above 15% of the reporting institution's base) 27 Regulatory deductions applied to CET1 due to insufficient AT1 and Tier 2 to cover deductions 14,241 (28) - (27) 28 Total regulatory deductions to CET1 41, CET1 56,739 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 36 AT1 before regulatory deductions (27) 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 14,241 41a 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 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 4 14,241

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 iii of which: Investments in own CET1 instruments CET1 : instruments and reserves iv of which: Reciprocal cross holdings in CET1 instruments issued by financial sector entities v vi vii of which: Capital investment in a connected company which is a commercial entity (amount above 15% of the reporting institution's base) of which: Insignificant investments in CET1 instruments, AT1 instruments and Tier 2 of which: Significant investments in CET1 instruments, AT1 instruments and Tier 2 42 Regulatory deductions applied to AT1 due to insufficient Tier 2 to cover deductions 14,241 (25) 43 Total regulatory deductions to AT1 14,241 (28) 44 AT1 45 Tier 1 (Tier 1 = CET1 + AT1) 56, Qualifying Tier 2 instruments plus any related share premium 2,326 (14) 47 Capital instruments subject to phase out arrangements from Tier 2 8,546 (15) 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 13,32 2,43 (3) + (2) 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 5,25 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 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 vi vii 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) of which: Insignificant investments in CET1 instruments, AT1 instruments and Tier 2 of which: Significant investments in CET1 instruments, AT1 instruments and Tier 2 57 Total regulatory deductions to Tier 2 5,25 58 Tier 2 8, Total (Total = Tier 1 + Tier 2) 65,16 (9,216) ((18) + (23)) * 45% 14,241 14,241 (26) Abbreviations: CET1: Common Equity Tier 1 AT1: Additional Tier 1 5