a5045v
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the
month of December
HSBC Holdings plc
42nd
Floor, 8 Canada Square, London E14 5HQ, England
(Indicate
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F).
Form
20-F X Form 40-F
(Indicate
by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934).
Yes
No X
(If
"Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-
).
13 December 2021
STATEMENT ON THE BANK OF ENGLAND
2021 STRESS TEST RESULTS
HSBC Holdings plc ('HSBC' or together with its subsidiaries, the
'Group') notes the publication today of the Bank of England's 2021
Solvency Stress Test ('SST') results.
The scenario used for the 2021 SST is not a forecast. It is a
severe path for the economy in 2021-25 on top of the economic shock
associated with the Covid-19 pandemic that occurred in 2020 and
represents an intensification of the macroeconomic shocks seen in
2020.
Under this stress scenario, the Bank of England's results indicate
that the Group's common equity tier 1 ('CET1') capital ratio
on an IFRS 9 transitional basisb would
fall to a low point of 10.4%, above the Group's CET1 reference rate
of 7.7%. On an IFRS 9 non-transitional basis, the Group's CET1
capital ratio is projected to reach a low point of 9.8%, which is
above its IFRS 9 non-transitional CET1 reference rate of
7.2%.
The results incorporate strategic management actions, which have
been accepted by the Bank of England for the purposes of this
exercise. In practice, under such adverse economic circumstances,
the Group would consider a variety of management actions depending
on the prevailing circumstances at the time.
HSBC's intention, as evidenced by its past actions, is to maintain
a conservative and prudent approach to capital management. Today's
results demonstrate HSBC's continued capital strength under this
severe downside scenario.
The Bank of England's 2021 stress test results are available to
view in full at: bankofengland.co.uk/stress-testing/2021/bank-of-england-stress-testing-results
HSBC's results under the solvency stress test scenario are shown
below.
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Actual
(end-2020)(i)
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Minimum stressed ratio
(before strategic management actions)(i)
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Minimum stress ratio (after the impact of strategic management
actions)(i)
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Reference
rate
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Actual
(3Q21)(i)
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IFRS9 Transitional
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Common equity tier 1 ratio(a)(b)
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15.9%
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9.8%(g)
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10.4%
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7.7%
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15.9%
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Tier 1 capital ratio(c)
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18.7%
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12.1%(g)
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12.7%(g)
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18.7%
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Total capital ratio(d)
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21.5%
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14.6%(g)
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15.4%(g)
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21.3%
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Memo: risk weighted assets (US$
bn)
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858
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1,065(g)
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1,014(g)
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839
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Memo: CET1 (US$ bn)
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136
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105(g)
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105 (g)
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133
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Tier 1 leverage ratio(a)(e)
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6.2%
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4.9%(h)
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5.1%
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3.9%
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6.2%
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Memo: leverage exposure (US$
bn)
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2,552
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2,642(h)
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2,592(h)
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2,514
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IFRS9 non-transitional
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Common equity tier 1 ratio(f)
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15.7%
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9.2%
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9.8%
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7.2%
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15.8%
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Tier 1 leverage ratio(f)
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6.2%
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4.8%
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5.0%
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3.9%
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6.2%
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Source:
HSBC accounts and STDF data submissions, Bank of England analysis
and calculations
Notes
a)
The low points for the common equity Tier 1 (CET1) ratio and
leverage ratio shown in the table do not necessarily occur in the
same year of the stress scenario and correspond to the year where
the minimum stressed ratio is calculated after strategic management
actions. There is no conversion of banks' AT1 instruments in the
stress.
b)
The CET1 capital ratio is defined as CET1 capital expressed as a
percentage of risk-weighted assets, where these are in line with
CRR and the UK implementation of CRD V via the PRA
Rulebook.
c)
Tier 1 capital ratio is defined as Tier 1 capital expressed as a
percentage of RWAs where Tier 1 capital is defined as the sum of
CET1 capital and additional Tier 1 capital in line with the UK
implementation of CRD V.
d)
Total capital ratio is defined as total capital expressed as a
percentage of RWAs where total capital is defined as the sum of
Tier 1 capital and Tier 2 capital in line with the UK
implementation of CRD V.
e)
The Tier 1 leverage ratio is Tier 1 capital expressed as a
percentage of the leverage exposure measure excluding central bank
reserves, as defined in Rule 1.2 of the Leverage Ratio part of the
PRA Rulebook.
f)
The low point year for the non-transitional IFRS 9 may differ to
the low point year on a transitional IFRS 9
basis.
g)
Corresponds to the same year as the minimum CET1 ratio over the
stress scenario after strategic management
actions.
h)
Corresponds to the same year as the minimum leverage ratio over the
stress scenario after strategic management
actions.
i)
Treatment of software assets non-deduction: End-2020 capital
numbers include the benefit from software assets non-deduction, and
minimum stress numbers that occur in 2021 also include the benefit
from software assets non-deduction. Minimum stress numbers that
occur after 2021 exclude the benefit from software assets
non-deduction. This is in line with the PRA's Policy Statement
PS17/2.
Investor enquiries to:
Richard O'Connor (London)
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+44 (0) 207 991 6590
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richard.j.oconnor@hsbc.com
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Mark Phin (Hong Kong)
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+852 2822 4908
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mark.j.phin@hsbc.com
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Media enquiries to:
Ankit Patel
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+44
(0) 207 991 9813 |
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Note to editors:
HSBC Holdings plc
HSBC Holdings plc, the parent company of HSBC, is headquartered in
London. HSBC serves customers worldwide from offices in 64
countries and territories in its geographical regions: Europe,
Asia, North America, Latin America, and Middle East and North
Africa. With assets of US$2,969bn at 30 September 2021, HSBC is one
of the world's largest banking and financial services
organisations.
Forward-looking statements
This announcement contains certain forward-looking statements with
respect to the financial condition, results of operations, capital
position, strategy and business of HSBC and its consolidated
subsidiaries (together, the 'HSBC Group') which can be identified
by the use of forward-looking terminology such as 'may', 'plan',
'will', 'should', 'expect', 'anticipate', 'project', 'seek',
'intend' or 'estimate' (together, 'forward-looking statements').
Any such forward-looking statements are not a reliable indicator of
future performance, as they may involve significant stated or
implied assumptions and subjective judgements which may or may not
prove to be correct. There
can be no assurance that any of the matters set out in
forward-looking statements are attainable, will actually occur or
will be realised or are complete or accurate. The assumptions and
judgments may prove to be incorrect and involve known and unknown
risks, uncertainties, contingencies and other important factors,
many of which are outside the control of the HSBC Group. Actual
achievements, results, performance or other future events or
conditions may differ materially from those stated or implied
and/or reflected in any forward-looking statements due to a variety
of risks, uncertainties and other factors (including without
limitation those which are referable to general market conditions,
regulatory changes or due to the impact of the Covid-19 pandemic).
Any such forward-looking statements are based on the beliefs,
expectations and opinions of the HSBC Group at the date the
statements are made, and the HSBC Group does not assume and
disclaims, any obligation or duty to update, revise or supplement
them if circumstances or management's beliefs, expectations or
opinions should change. For these reasons, recipients should not
place reliance on, and are cautioned about relying on, any
forward-looking statements. No representations or warranties,
expressed or implied, are given by or on behalf of the HSBC Group
as to the achievement or reasonableness of any projections,
estimates or forecasts contained herein.
Additional detailed information concerning important factors that
could cause actual results to differ materially from this
announcement is available in HSBC's Annual Report and Accounts for
the fiscal year ended 31 December 2020, filed with the
Securities and Exchange Commission (the 'SEC') on Form 20-F on 24
February 2021 (the '2020 Form 20-F'), and in other reports on Form
6-K furnished to or filed with the SEC subsequent to the 2020 Form
20-F.
ends/all
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
HSBC
Holdings plc
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By:
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Name:
Aileen Taylor
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Title:
Group Company Secretary and Chief Governance Officer
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Date:
13 December 2021
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