HSBC HOLDINGS PLC Glossary Accounting term US equivalent or brief description Accounts Financial Statements Articles of Association Bylaws Associates Long-term equity investments accounted for using the equity method Attributable profit Net income Balance sheet Statement of financial position Bills Notes Called up share capital Ordinary shares, issued and fully paid Capital allowances Tax depreciation allowances Creditors Payables Debtors Receivables Deferred tax Deferred income tax Depreciation Amortisation Finance lease Capital lease Freehold Ownership with absolute rights in perpetuity Interests in associates and joint ventures Long-term equity investments accounted for using the equity method Loans and advances Lendings Loan capital Long-term debt Nominal value Par value One-off Non-recurring Ordinary shares Common stock Overdraft A line of credit, contractually repayable on demand unless a fixed-term has been agreed, established through a customer’s current account Preference shares Preferred stock Premises Real estate Provisions Liabilities Share capital Ordinary shares or common stock issued and fully paid Shareholders’ equity Stockholders’ equity Share premium account Additional paid-in capital Shares in issue Shares outstanding Write-offs Charge-offs 485 HSBC HOLDINGS PLC Glossary (continued) Abbreviation Brief description ABS1 Asset-backed security ADR American Depositary Receipt ADS American Depositary Share AIEA Average interest-earning assets ALCO Asset and Liability Management Committee ARM Adjustable-rate mortgage ASEAN Association of Southeast Asian Nations ASF Asset and Structured Finance Asscher Asscher Finance Ltd, a structured investment vehicle managed by HSBC ATM Automated teller machine Bank of Bermuda The Bank of Bermuda Limited Bank of Communications Bank of Communications Co., Limited, mainland China’s fourth largest bank by market capitalisation, in which HSBC currently has 19.01 per cent interest Bao Viet BaoViet Holdings Barion Barion Funding Limited, a term funding vehicle Basel Committee Basel Committee on Banking Supervision Basel I 1988 Basel Capital Accord Basel II1 2006 Basel Capital Accord BBA British Bankers’ Association Bps Basis points. One basis point is equal to one hundredth of a percentage point Brazilian operations HSBC Bank Brasil S.A.–Banco Múltiplo and subsidiaries, plus HSBC Serviços e Participações Limitada CD Certificate of deposit CDS1 Credit default swap CDO1 Collateralised debt obligation CGU Cash-generating unit CNAV1 Constant Net Asset Value Combined Code Combined Code on Corporate Governance issued by the Financial Reporting Council CP1 Commercial paper CPI Consumer price index CRR1 Customer risk rating Cullinan Cullinan Finance Ltd, a structured investment vehicle managed by HSBC Decision One Decision One Mortgage Company, HSBC Finance’s subsidiary which originates loans referred by mortgage brokers DPF Discretionary participation feature of insurance and investment contracts Enhanced VNAV1 Enhanced Variable Net Asset Value EPS Earnings per share EU European Union Fannie Mae Federal National Mortgage Association, US FDIC Federal Deposit Insurance Corporation (US) Financiera Independencia Financiera Independencia S.A.B. de C.V. Freddie Mac Federal Home Loan Mortgage Corporation, US FSA Financial Services Authority (UK) FTSE Financial Times - Stock Exchange index GAAP Generally Accepted Accounting Principles GCRO Group Chief Risk Officer GDP Gross domestic product Ginnie Mae Government National Mortgage Association, US Global Markets HSBC’s treasury and capital markets services in Global Banking and Markets GMB Group Management Board GMO Group Management Office Group HSBC Holdings together with its subsidiary undertakings H1N1 Influenza ‘A’ (H1N1) virus, commonly referred to as swine flu Hang Seng Bank Hang Seng Bank Limited, the third largest bank listed in Hong Kong by market capitalisation 486 Abbreviation Brief description HELoC Home equity lines of credit HFC HFC Bank Limited, the UK-based consumer finance business acquired through the acquisition by HSBC of HSBC Finance HIBOR Hong Kong Interbank Offer Rate HKMA Hong Kong Monetary Authority HKSE The Stock Exchange of Hong Kong Limited Hong Kong The Hong Kong Special Administrative Region of the People’s Republic of China HSBC HSBC Holdings together with its subsidiary undertakings HSBC Assurances HSBC Assurances, comprising Erisa S.A., the French life insurer, and Erisa I.A.R.D., the property and casualty insurer (together, formerly Erisa) HSBC Bank HSBC Bank plc, formerly Midland Bank plc HSBC Bank Argentina HSBC Bank Argentina S.A. HSBC Bank Brazil HSBC Bank Brasil S.A.–Banco Múltiplo HSBC Bank China HSBC Bank (China) Company Limited, HSBC’s banking subsidiary in mainland China which was incorporated in March 2007 HSBC Bank Malaysia HSBC Bank Malaysia Berhad HSBC Bank Middle East HSBC Bank Middle East Limited, formerly The British Bank of the Middle East HSBC Bank Panama HSBC Bank (Panama) S.A., formerly Grupo Banistmo S.A. HSBC Bank USA HSBC’s retail bank in the US. From 1 July 2004, HSBC Bank USA, N.A. (formerly HSBC Bank USA, Inc.) HSBC Direct HSBC’s online banking and savings proposition HSBC Finance HSBC Finance Corporation, the US consumer finance company (formerly Household International, Inc.) HSBC France HSBC’s French banking subsidiary, formerly CCF S.A. HSBC Holdings HSBC Holdings plc, the parent company of HSBC HSBC Mexico HSBC México S.A., the commercial banking subsidiary of Grupo Financiero HSBC, S.A. de C.V. HSBC Premier HSBC’s premium global banking service HSBC Private Bank (Suisse) HSBC Private Bank (Suisse) S.A., HSBC’s private bank in Switzerland (merged with HSBC Guyerzeller Bank in 2009) IAS International Accounting Standard IASB International Accounting Standards Board IFRSs International Financial Reporting Standards IFRIC International Financial Reporting Interpretations Committee Industrial Bank Industrial Bank Co. Limited, a national joint-stock bank in mainland China in which Hang Seng Bank currently has a 12.78 per cent interest IPO Initial public offering IRB1 Internal ratings-based KPI Key performance indicator KPMG KPMG Audit Plc and its affiliates LIBOR London Interbank Offer Rate Madoff Securities Bernard L Madoff Investment Securities LLC Mainland China People’s Republic of China excluding Hong Kong Malachite Malachite Funding Limited, a term funding vehicle MasterCard MasterCard Inc. Mazarin Mazarin Funding Limited, an asset-backed CP conduit MBS1 US mortgage-backed security Metrovacesa Metrovacesa, S.A. Monoline1 Monoline insurance company M&S Money Marks and Spencer Retail Financial Services Holdings Limited MSCI Morgan Stanley Capital International index MTN1 Medium-term note NA Nationally Chartered, a designation for certain categories of banks in the US NYSE New York Stock Exchange 487 HSBC HOLDINGS PLC Glossary (continued) Abbreviation Brief description OFT Office of Fair Trading (UK) OTC1 Over-the-counter Performance Shares Awards of HSBC Holdings ordinary shares under employee share plans that are subject to corporate performance conditions Ping An Insurance Ping An Insurance (Group) Company of China, Limited, the second-largest life insurer in the PRC, in which HSBC currently has 16.78 per cent interest PPI Payment protection insurance product Premier See HSBC Premier PVIF Present value of in-force long-term insurance business Repo Sale and repurchase transaction Restricted Shares Awards of Restricted Shares define the number of HSBC Holdings ordinary shares to which the employee will become entitled, generally between one and three years from the date of the award, and normally subject to the individual remaining in employment Reverse repo Security purchased under commitments to sell RMM Risk Management Meeting of the Group Management Board RPI Retail price index (UK) RWA1 Risk weighted asset S&P Standard and Poor’s rating agency SEC Securities and Exchange Commission (US) SIC Securities investment conduit SIP Statement of investment principles produced by trustees of defined pension plans SIV1 Structured investment vehicle SME Small and medium-sized enterprise Solitaire Solitaire Funding Limited, a special purpose entity managed by HSBC SPE1 Special purpose entity STIP Short-term income protection insurance product Techcombank Vietnam Technological and Commercial Joint Stock Bank The Chinese Bank The Chinese Bank Co., Ltd., the business in Taiwan The Hongkong and Shanghai The Hongkong and Shanghai Banking Corporation Limited, the founding member of the Banking Corporation HSBC Group TSR Total shareholder return UAE United Arab Emirates UK United Kingdom US United States VAR1 Value at risk Visa Visa Inc. VNAV Variable Net Asset Value WWF World Wide Fund for Nature 1 For full definitions see pages 489 to 494. 488 Term Definition Alt-A A US description for loans regarded as lower risk than sub-prime, but with higher risk characteristics than lending under normal criteria. Arrears Customers are said to be in arrears (or in a state of delinquency) when they are behind in fulfilling their obligations, with the result that an outstanding loan is unpaid or overdue. When a customer is in arrears, the total outstanding loans on which payments are overdue are described as delinquent. Asset-backed securities Securities that represent an interest in an underlying pool of referenced assets. The (‘ABS’s) referenced pool can comprise any assets which attract a set of associated cash flows but are commonly pools of residential or commercial mortgages. Back-testing A statistical