FORM 6

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 April

 

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- ..............).

 




30 April 2009



GRUPO FINANCIERO HSBC, S.A. DE C.V.

FIRST QUARTER 2009 FINANCIAL RESULTS - HIGHLIGHTS










HSBC Mexico S.A. (the Bank) is Grupo Financiero HSBC, S.A. de C.V.'s (HSBC) primary subsidiary company and is subject to supervision by the Mexican Banking and Securities Commission. The Bank is required to file financial information on a quarterly basis (in this case for the quarter ended 31 March 2009) and this information is publicly available. Given that this information is available in the public domain, Grupo Financiero HSBC, S.A. de C.V. has elected to file this release.


Results are prepared in accordance with Mexican GAAP (Generally Accepted Accounting Principles). 


Grupo Financiero HSBC, S.A. de C.V. is a 99.99 per cent directly owned subsidiary of HSBC Holdings plc (HSBC Group).



Overview


The first quarter of 2009 was challenging for Grupo Financiero HSBC, S.A de C.V. as the operating environment continued the deteriorating trends seen at the end of 2008.  Mexico's economy is expected to contract by 3 per cent in 2009 while annual inflation is expected to fall to 3.5 per cent in 2009, compared to 6.5 per cent reported for 2008. During the first quarter of 2009 the Mexican Central Bank reduced interbank interest rates three times, from 8.25 per cent to 6.75* per cent. Volatility in the Mexican peso against the US dollar exchange rate continued during the first quarter of the year, increasing from 13.83 at 31 December 2008 to 14.15* at 31 March 2009.


In such a turbulent environment, Grupo Financiero HSBC, S.A. de C.V. focussed on maintaining a conservative approach to risk management, bringing new efficiencies to systems and processes and improving the services offered to customers.


At 31 March 2009, Grupo Financiero HSBC's net income was MXN798 million, MXN1,409 million less than the net income of the same period in 2008 (a decrease of 63.8 per cent). This result was largely due to increased loan impairment charges, particularly on credit card and corporate loan portfolios, reflecting the weakening in the economy.


The fall in profit before tax for the first quarter was exacerbated by the recognition of MXN1,041 million in the first quarter of 2008 arising from the sale of Visa Inc. US dollar denominated securities coupled with additional regulatory credit provisions in the first quarter of 2009 of MXN618 million relating to the corporate loan portfolio. Excluding the effect of these two items, the decrease in profit before tax for the first quarter of 2009 reduces to 36.2 per cent.


Net interest income decreased by MXN874 million to MXN5,377 million at 31 March 2009, a 14 per cent decrease compared to the same period in 2008. This result was largely driven by treasury's strategy of deploying a larger portion of surplus liquidity in low yielding investments offset with increased trading income. Additionally, while interest margins improved in the first quarter compared to first quarter of 2008, a reduction in commercial and consumer loan volumes negatively impacted net interest income.


Net fee income was MXN2,543 million at 31 March 2009, which represents a 13.3 per cent decrease compared to the same period in 2008. Grupo Financiero HSBC adopted a cautious approach to consumer lending in the first quarter and fee income decreased mainly from a fall in credit card revenues, account management fees and reductions in transaction volumes from ATMs and payments and cash management services.


Trading income was MXN1,406 million at 31 March 2009, which represents an increase of MXN951 million or 209.0 per cent compared to the same period in 2008. This is mainly due to a strong performance from trading positions as a result of market volatility during the quarter, partially offset by lower net interest income.


With an uncertain outlook for revenues, Grupo Financiero HSBC, S.A. de C.V.'s management continues to focus on active cost control. As a result, administrative expenses decreased by MXN345 million, or 6.6 per cent, to MXN4,857 million during the quarter to 31 March 2009 compared to the same period in 2008. This reflects a combination of selective investment to improve productivity and expense control. Cost savings were generated from a review of servicing certain customer propositions particularly those related to credit card promotions, and personnel expenses. The cost efficiency ratio was 52.1 per cent for the first quarter of 2009, an improvement of 1.9 per cent compared to the same period in 2008.


Net other income decreased by MXN476 million or 33.1 per cent to MXN962 million compared to the same period in 2008, when non recurring income of MXN1,041 million was generated from the sale of Visa Inc. US dollar denominated securities IPO shares. Other income of MXN1,309 million in the first quarter of 2009 was primarily generated from reimbursements of regional operating expenses and income from portfolio recoveries.


Loan impairment charges during the quarter to 31 March 2009 were MXN4,751 million, an increase of MXN1,953 million or 69.8 per cent compared to the same period in 2008. This increase is primarily the result of greater delinquency rates in the consumer loan portfolio, particularly credit cards, coupled with general weakening of credit quality reflecting the current economic market conditions. Additional credit provisions were also required in accordance with regulatory requirements for the commercial portfolio, specifically corporate loans as a result of changes in credit ratings.


Grupo Financiero HSBC's allowance for loan losses as a percentage of impaired loans was 137.8 per cent at 31 March 2009, compared to 134.0  per cent in the same period of 2008. Management continues to focus its efforts on improving asset quality by maintaining a more cautious approach to origination and risk management and strengthening collections operations. In addition, we continue to proactively support our customers with the 'Plan de Solución HSBC' promotion to optimise collections by working with our customers proactively to agree on revised repayment terms.


The non-bank subsidiaries, particularly HSBC Seguros, made a contribution to the results of MXN188 million or 23.6 per cent of total net income. Performance of our insurance business has been driven by the increase in sales of life insurance products, stable claims behaviour and good expense control.


Gross loans and advances to customers decreased by 15.4 per cent to MXN170.8 billion at 31 March 2009, compared to the same period of 2008. Reductions in the loan portfolio were mainly driven by decreases in consumer lending and commercial loans as a result of the combination of lower customer demand, prepayments on government loan portfolio and lower origination.


Total deposits decreased 9.6 per cent to MXN238.0 billion at 31 March 2009, of which demand deposits were MXN122.0 billion, 2.5 per cent lower than the same period in 2008. This reduction is mainly as a consequence of intense competition to attract deposits from the public. Time deposits, which include money market at 31 March 2009, decreased by MXN22.5 billion or 16.7 per cent due to lower market funding requirements.


In the first quarter of 2009, a dividend of MXN1,647 million was declared and paid to HSBC Holdings plc. The Bank remains strongly capitalised with a total capital ratio of 12.4 per cent at 31 March 2009, down 84 basis points compared to 13.2 per cent at 31 March 2008. Tier 1 capital ratio of 9.7 per cent.


Business highlights


Personal Financial Services


During the first quarter of 2009 this business segment continued implementing different strategies to promote the use of alternative distribution channels as the most convenient option for customers for a range of transactions. This included using the Bank's extensive network of ATMs and internet and telephone banking facilities. As of January 2009, foreign currency cash transactions in branches were migrated to alternative channels. 


This business continues to actively promote the 'Plan de Solución HSBC' to its customers in order to enhance collections and provide revised repayment terms thus reducing delinquency.


There is a continuing focus on reinforcing deposit strategies through savings and investment products such as 'Cuenta Flexible HSBC' and 'Cuenta Ahorro HSBC' respectively.


As part of the worldwide launch, the HSBC Premier Family Services offer was launched in Mexico in February 2009, extending the Premier offering to family members and including additional services such as Family Financial Planning, Financial Education and Global Safety Net.


For the first quarter of 2009 the mortgage loan portfolio recorded an increase of MXN553 million or 2.9 per cent compared to same period in 2008. Consumer lending decreased by MXN8,351 million or 17.2 per cent compared to same period in 2008, in accordance with management focus on risk management and improving credit quality.



Commercial Banking


Asset quality in our commercial and corporate credit portfolios remained relatively stable. Interest income has increased and loan impairment charges have remained stable.


During the first quarter, we launched the 'Estimulo' nationwide campaign that focused on strengthening our packaged product offering aimed at small and medium sized businesses (PYMEs), achieving sales of more than 23,000 packages. In addition, HSBC launched the 'Por PYME' support programme, which offers assistance to SME customers who require extended repayment terms.


As at 31 March 2009, commercial loan portfolio has been affected by a MXN25.9 billion or 62 per cent decrease in the loans to government entities portfolio compared with the same period in 2008, as a result of several government loan prepayments.



Global Banking and Markets


The Global Banking and Markets segment showed solid performance during the first quarter of 2009. Despite lower customer volumes and reduced appetite for market risk, the volatility in the global financial markets and favourable positioning in foreign exchange have resulted in strong trading results.


Balance sheet management recorded improved results, which were partially offset by losses incurred from the sale of US dollar denominated securities.


Grupo Financiero HSBC was ranked first in the March 2009 Debt Capital Markets League Tables. This has supported the gradual reopening of the Mexican market, which had seen limited activity since late 2008. The main Debt Capital Market deals, in which our role was both joint lead manager and bookrunner, were MXN10,000 million from Petróleos Mexicanos, MXN3,500 million from Kimberly Clark de Mexico and MXN1,989 million from Coca Cola FEMSA.


The Global Banking segment continues to position its portfolio in line with market conditions and customer demand. The segment remains focused on working closely with our core relationships in order to best serve their financial situation and tailoring facilities to address difficult market conditions.



Subsequent events


At the end of April, Mexican authorities reported a swine flu outbreak in Mexico City. The impact of this is still to be determined. HSBC continues to monitor the situation closely and will take appropriate action. HSBC's primary focus is on the well being of our staff and their families.



About HSBC


Grupo Financiero HSBC, S.A. de C.V. is Mexico's fourth largest banking and financial services institution with 1,189 branches, 5,918 ATMs, approximately 7.8 million customer accounts and more than 19,500 employees. For more information, consult our website at www.hsbc.com.mx.


Grupo Financiero HSBC, S.A. de C.V. is a 99.99 per cent directly owned subsidiary of HSBC Holdings plc, and a member of the HSBC Group. With around 9,500 offices in 86 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa and assets of US$2,527 billion at 31 December 2008, HSBC is one of the world's largest banking and financial services organisations. HSBC is marketed worldwide as 'the world's local bank'.



*Source: Banxico (Banco de México) TIIE rate and FIX exchange rate



Grupo Financiero HSBC, S.A. de C.V.

Consolidated Balance Sheet


Figures in MXN millions

GROUP


BANK



31 Mar


31Mar


31 Mar


31 Mar



2009


2008


2009


2008


Assets


















Cash and deposits in banks

86,326 


53,961 


85,756


53,961



 


 






Investment in securities

118,622 


64,293 


118,211


62,971


  Trading securities

76,932 


30,874 


76,857


29,939


  Available-for-sale securities

32,681 


29,469 


32,345


29,082


  Held to maturity securities

9,009 


3,950 


9,009


3,950











Securities and derivative operations

45,305 


16,045 


45,284


16,043


  Repurchase agreements

770 


47 


749


45


  Derivative transactions

44,535 


15,998 


44,535


15,998



 


 






Performing loans

 


 






Commercial loans

77,041 


71,358 


77,041


71,358


Loans to financial intermediaries

8,690 


13,595 


8,690


13,595


Consumer loans

40,098 


48,449 


40,098


48,449


Mortgage loans

19,531 


18,978 


19,531


18,978


Loans to government entities

15,800 


41,672 


15,800


41,672


Total performing loans

161,160 


194,052 


161,160


194,052


Impaired loans

 


 






Commercial loans

2,319 


2,381 


2,319


2,381


Consumer loans

5,750 


4,294 


5,750


4,294


Mortgage loans

1,554 


1,196 


1,554


1,196


Total impaired loans

9,623 


7,871 


9,623


7,871


Gross loans and advances to customers          

 170,783 


201,923 


170,783


201,923


Allowance for loan losses

(13,258)


(10,549)


(13,258)


(10,549)


Net loans and advances to customers

157,525 


191,374 


157,525


191,374


Other receivable accounts

18,252 


21,172 


17,927


21,109


Foreclosed assets

117 


89 


117


89


Property, furniture and equipment, net

6,616 


6,402 


6,606


6,390


Long-term investments in equity









  securities

3,322 


3,037 


149


146


Deferred taxes

3,254 


1,142 


3,278


1,087


Goodwill

2,749 


2,749 


-


-


Other assets, deferred charges and









intangibles

2,374 


1,948 


2,334


1,914



Total assets

444,462 


362,212 



437,187


355,084




Figures in MXN millions

GROUP


BANK



31 Mar


31Mar


31 Mar


31 Mar



2009


2008


2009


2008


Liabilities









Deposits

237,981 


263,256 


238,153


263,393


  Demand deposits

121,758 


124,561 


121,930


124,698


  Time deposits

111,951 


134,423 


111,951


134,423


  Bonds

4,272 


4,272 


4,272


4,272



 


 






Bank deposits and other liabilities

7,658 


7,245 


7,658


7,245


  On demand

170 


-


170


-


  Short-term

5,731 


4,591 


5,731


4,591


  Long-term

1,757 


2,654 


1,757


2,654











Securities and derivative transactions

122,351 


16,004 


122,330


16,004


  Repurchase agreements

76,581 


73 


76,560


73


  Derivative transactions

45,770 


15,931 


45,770


15,931

 










Other payable accounts

33,946 


36,239 


33,541


35,142


  Income tax and employee profit









  sharing payable

1,004 


1,610 


955


1,546


  Sundry creditors and other accounts









  payable

32,942 


34,629 


32,586


33,596











Subordinated debentures outstanding

6,216 


2,211 


6,216


2,211











Deferred credits

487 


438 


487


438











Total liabilities

408,639 


325,393 


408,385


324,433











Equity









Paid in capital

21,466 


21,466 


15,883


15,883


  Capital stock

8,210 


8,210 


4,272


4,272


  Additional paid in capital

13,256 


13,256 


11,611


11,611











Other reserves

14,353 


15,351 


12,917


14,767


  Capital reserves

1,648 


1,162 


14,314


10,577


  Retained earnings

13,839 


11,863 


-


2,196


  Result from the Mark-to-Market of









  available-for-sale securities

(1,932)


-


(1,940)


256


  Cumulative effect of restatement

-


-


-


-


  Gains on non-monetary asset









   valuation

-


119 


-


-


  Adjustment in the employee pension        

-


-


-


(136)


  Net income

798 


2,207 


543


1,874


Minority interest in capital

4 


2 


2


1


Total equity

35,823 


36,819 


28,802


30,651


Total liabilities and equity

444,462 


362,212 


437,187


355,084




Figures in MXN millions

GROUP



31 Mar


31 Mar



2009


2008


Memorandum accounts










Transactions on behalf of third parties

56,554 


107,098 







Customer current accounts

(38)

 

61 


  Customer bank

-


2 


  Settlement of customer securities and documents

(38)

 

59 


Customer securities

27,719 


78,053 


  Customer securities in custody

27,716 


78,044 


  Pledged customers securities and documents

3 


9 


Transactions on behalf of customers

5,854 


2,456 


  Customer repurchase transactions

5,854 


2,456 


Other transactions on behalf of customers

23,019 


26,528 


  Investment on behalf of customers, net

23,019 


26,528 


Other memorandum accounts

571,890 


599,291 


  Investment of the SAR funds

-


3,540 


  Integrated loan portfolio

181,767 


212,720 


  Other memorandum accounts

390,123 


383,031 







Transactions for the group's own accounts

1,642,572 


1,867,574 







Accounts for the group's own registry

1,642,572 


1,867,602 


  Contingent assets and liabilities 

131 


-


  Credit commitments

10,946 


-


  Guarantees granted

38 


35 


  Irrevocable lines of credit granted

-


10,761 


  Goods in trust or mandate

190,490 


170,020 


  Goods in custody or under administration

177,672 


57,914 


  Amounts committed in transactions with





    Fobaproa

154 


141 


  Amounts contracted in derivative operations

1,263,141 


1,628,602 


  Other contingent obligations

-


129 







Repurchase/resale agreements





  Securities receivable under repos

5,846 


46,160 


  (less) Repurchase agreements

5,855 


46,199 



(9)

 

(39)







  Reverse repurchase agreements

5,855 


3,629 


  (less) Securities deliverable under repos

5,846 


3,618 



9 


11 




Figures in MXN millions

BANK



31 Mar


31Mar



2009


2008


Memorandum accounts










Guarantees granted

38


35


         Contingent assets and liabilities

131


-


        Irrevocable lines of credit granted

10,946


-


Other contingent obligations

-


129


Irrevocable lines of credit granted

-


10,761


Goods in trust or mandate

190,490


170,020


Goods in custody or under administration

173,725


53,969


Collateral received by the institution

749


-


Third party investment banking operations, net

23,019


26,528


Amounts committed in transactions with Fobaproa

154


141


Amounts contracted in derivative operations

1,263,141


1,628,602


Investments of retirement savings system funds

-


3,540


Integrated loan portfolio

181,767


212,720


Other control accounts

389,373


383,027



2,233,533


2,489,472







Securities receivable under repos

-


43,715


(less) Repurchase agreements

-


(43,743)



-


(28)







Reverse repurchase agreements

-


1,173


(less) Securities deliverable under repos

-


(1,173)



-


-









Grupo Financiero HSBC, S.A. de C.V.

Consolidated Income Statement


Figures in MXN millions

GROUP


BANK




31 Mar



31 Mar


31 Mar


31 Mar




2009



2008


2009


2008











Interest income

8,749 


9,392 


8,656


           9,389


Interest expense

(3,372

)

(3,141

)

(3,288

)

(3,143

)

Net interest income

5,377 


6,251 


5,368


6,246











Loan impairment charges

(4,751

)

(2,798

)

(4,751

)

(2,798

)

Risk-adjusted net interest income

626 


3,453 


617


3,448











Fees and commissions receivable 

2,789 


3,218 


2,604


3,011











Fees payable

(246

)

(286

)

(257

)

(280

)











Trading income

1,406 


455 


1,404


455











Total operating income

4,575 


6,840 


4,368


6,634











Administrative and personnel









  expenses

(4,857

)

(5,202

)

(4,754

)

(5,083

)










Net operating income

(282

)

1,638 


(386

)

1,551











Other income

1,309 


1,673 


1,319


1,694


Other expenses

(347

)

(235

)

(345

)

(255

)

Net other income

962


1,438


974


1,439


Net income before taxes

680 


3,076 


588


2,990











Income tax and employee profit









  sharing tax

(1,180

)

(1,694

)

(1,137

)

(1,650

)

Deferred income tax

1,096 


531 


1,083


521


Net income before subsidiaries

596 


1,913 


534


1,861











Undistributed income from









  subsidiaries

202 


294 


10


13


Income from ongoing operations

798 


2,207 


544


1,874











Minority interest

-


- 


(1

)

-











Net income

798 


2,207 


543


1,874




Grupo Financiero HSBC, S.A. de C.V.

Consolidated Statement of Changes in Shareholders' Equity



GROUP

Figures in MXN millions 

Capital
contributed

Capital
reserves

Retained 
earnings 

Result from valuation
of available-for-sale
securities 

Net 
income 

Minority
interest

Total 
equity 

















Balances at 31 December 2008

21,466 

1,442

11,582

(2,335)

4,110 

  5  

36,270

 








Movements inherent to the shareholders'
decision








   Capitalisation of
    retained earnings 

- 

206 

3,904 

  - 

(4,110)

- 

-

  Cash dividend

- 

  -

(1,647)

  - 

- 

- 

(1,647)

Total

- 

   206

2,257

  -

(4,110)

- 

 (1,647) 









Movements for the recognition of the comprehensive income
















   Net income

- 

- 

- 

- 

798

- 

  798

  Other movements

- 

- 

-

403

- 

  -

  403

   Minority interest

- 

- 

- 

-

- 

  (1)

  (1)

Total

- 

- 

 -

403

798 

(1) 

  1,200

Balances at 
31 March 2009

21,466

1,648

13,839 

(1,932)

798

4 

  35,823



BANK


Figures in MXN millions

Capital 
contributed

  Capital 
reserves 


Retained 
earnings 

Result from 
valuation of 
available-for-sale 
securities 

Net 
income 

Minority  interest 

Total 
equity 

 

Balances at 31 December 2008

15,883

  12,797

-

(2,368)

 2,519

2

  28,833

 




 




Movements inherent to
  the shareholders'
  decision








  Constitution of reserves

-

  1,517  

(1,517)

-

-

-

-

  Transfer of result of
   prior years 

-

  -

2,519  

-

(2,519)

-

-

  Cash dividend

-

  -

(1,002)

-

-

-

(1,002)

Total

-

  1,517

-

-

(2,519)

-

(1,002)

 








Movements for the
  recognition of the
  comprehensive income








  Net income 

-

-

-

-

543

-

  543

  Result from
   valuation of available-
   for-sale securities

-

-

-

428

-

-

428

   Cumulative effect of restatement

-

-

-

 -

-

-


-

 Minority interest

-

  -

-

-

-

-


  -

Total

-

  -

-

428

543

-

  971

Balances at 
31 March 2009

15,883

  14,314

-

(1,940)

543

2

  28,802



Grupo Financiero HSBC, S.A. de C.V.

Consolidated Statement of Changes in Financial Position



GROUP


Figures in MXN millions

 
31Mar. 2009
 
31Mar. 2008
 
Operating activities:
 
 
 
 
Net income
           798
 
2,207
 
Items included in operations not requiring (providing)
 funds:
 
 
 
 
Result from mark-to-market valuations
 2,725
 
(546
)
Allowances for loan losses
4,751
 
2,798
 
Depreciation and amortisation
 281
 
259
 
Deferred taxes
(1,096
)
(531
)
Undistributed income from subsidiaries, net
 (202
)
(294
)
Others
(10)
 
-
 
Total operating items not requiring funds
7,247
 
3,893
 
 
 
 
 
 
Changes in items related to operations:
 
 
 
 
(Decrease) in deposits
(27,484
)
(3,701
)
(Increase) in loan portfolio
(2,200
)
(4,690
)
Decrease / (increase) in securities and derivative transactions, net
71,408
 
(253
)
(Increase) / decrease in financial instruments
(61,577
)
12,282
 
 (Decrease) in bank deposits and other liabilities
(2,994
)
(363
)
Funds provided by operating activities
(15,600
)
7,168
 
 
 
 
 
 
Financing activities:
 
 
 
 
Subordinated debentures outstanding
267
 
3
 
Cash dividend
(1,647
)
(4,350
)
Increase in other payable accounts
(3,605
)
9,920
 
Funds provided in financing activities
(4,985
)
5,573
 
 
 
 
 
 
Investing activities:
 
 
 
 
Decrease in property, furniture and equipment, net
2,469
 
1,170
 
(Increase) / decrease in deferred charges or credits, net
(46
)
348
 
(Increase) in foreclosed assets
(22
)
(8
)
Decrease / (Increase) in other receivable accounts
30,349
 
(9,155
)
Funds used in investing activities
32,750
 
(7,645
)
Increase in cash and equivalents
12,165
 
5,096
 
Cash and equivalents at beginning of period
74,161
 
48,865
 
Cash and equivalents at end of period
86,326
 
53,961
 

 



BANK

Figures in MXN millions
31 Mar. 
2009
 
31 Mar. 
2008
 
Operating activities:
 
 
 
 
Net income
543
 
1,874
 
Items included in operations not requiring (providing) funds:
 
 
 
 
Result from mark-to-market valuations
2,725
 
(546
)
Allowances for loan losses
4,751
 
2,798
 
Depreciation and amortisation
281
 
259
 
Deferred taxes
(1,082
)
(521
)
Undistributed income from subsidiaries, net
(9
)
(13
)
Value loss estimation for foreclosed assets
2
 
2
 
Minority interest
1
 
-
 
Total operating items not requiring funds
7,212
 
3,853
 
 
 
 
 
 
Changes in items related to operations:
 
 
 
 
(Decrease) in deposits
(27,544
)
(3,632
)
(Increase) in loan portfolio
(2,200
)
(4,690
)
Decrease in securities and derivative transactions, net
68,696
 
120
 
(Increase) / decrease in financial instruments
(56,837
)
13,296
 
(Decrease) in bank deposits and other liabilities
(2,994
)
(363
)
Funds provided by operating activities
(13,667
)
8,584
 
 
 
 
 
 
Financing activities:
 
 
 
 
Subordinated debentures outstanding
267
 
3
 
Cash Dividend
(1,002
)
(3,500
)
(Decrease) / increase in other payable accounts
(3,745
)
8,978
 
Funds provided by financing activities
(4,480
)
5,481
 
 
 
 
 
 
Investing activities:
 
 
 
 
(Increase) in property, furniture and equipment, net
(266
)
(146
)
Decrease in deferred charges or credits, net
3
 
359
 
(Increase) in foreclosed assets
(22
)
(9
)
Decrease /(Increase) in other receivable accounts
30,585
 
(9,172
)
Funds used in investing activities
30,300
 
(8,968
)
Increase in cash and equivalents
12,153
 
5,097
 
Cash and equivalents at beginning of period
73,603
 
48,864
 
Cash and equivalents at end of period
85,756
 
53,961
 
 
 
 
 
 


 


Grupo Financiero HSBC, S.A. de C.V.

Differences between Mexican GAAP and International Financial Reporting Standards (IFRS)


Grupo Financiero HSBC


HSBC Holdings plc, the parent of Grupo Financiero HSBC S.A. de C.V. reports its results under International Financial Reporting Standards (IFRS). There follows a reconciliation of the results of Grupo Financiero HSBC S.A. de C.V. from Mexican GAAP to IFRS for the first quarter ended 31 March  2009 and an explanation of the key reconciling items.


 

 
 
 
31 Mar.
     Figures in MXN millions
             2009
 
 
Grupo Financiero HSBC – Net Income Under Mexican GAAP
798
 
 
Differences arising from:
 
 
 
   Valuation of pensions and post retirement healthcare benefits**
18
  Acquisition costs relating to long-term investment contracts**
(13)
   Deferral of fees received and paid on the origination of loans
20
   Recognition and provisioning for loan impairments**
327
   Purchase accounting adjustments**
(6)
   Recognition of the present value in-force of long-term insurance contracts**
2
   Tax criteria
(51)
   Other**
214
HSBC México net income under IFRS
1,309
US dollar equivalent (millions)
91
Add back tax expense
548
HSBC México profit before tax under IFRS
1,857
US dollar equivalent (millions)
129
Exchange rate used for conversion
14.4

 

 


**Net of tax at 28 per cent.



Summary of key differences between Grupo Financiero's results as reported under Mexican GAAP and IFRS


Valuation of pensions and post retirement healthcare benefits 

Mexican GAAP

Obligations are recognised in the Income Statement of each year based on actuarial computations of the present value of those obligations using the projected unit credit method and real interest rates.

Unrecognised past service costs are amortised on an estimated service life of the employees.


IFRS

Obligations are recognised in the Income Statement of each year based on actuarial computations of the present value of those obligations using the projected unit credit method.

Actuarial gains and losses are recognised in stockholders equity as they arise.

Unrecognised past service cost are recognised in the Income Statement as they arise.



Acquisition costs of long-term investment contracts

Mexican GAAP

All costs related to the acquisition of long-term investment contracts are expensed as they are incurred.


IFRS

Incremental costs relating to the acquisition of long-term investment contracts are deferred and amortised over the expected life of the contract.



Fees paid and received on origination of loans

Mexican GAAP

All fees received on loan origination are deferred and amortised over the life of the loan using straight line method. However, this policy was introduced 1 January 2007, all fees having previously been recognised up front.


IFRS

Fees and expenses received or paid on origination of a loan that are directly attributable to the origination of that loan are accounted for under the effective interest rate method over the expected life of the loan. This policy has been in effect since 1 January 2005.



Loan impairment charges

Mexican GAAP

Loan impairment charges are calculated following the rules issued by the Mexican Ministry of Finance and the National Banking and Securities Commission. Such rules establish authorised methodologies for determining the amount of provision for each type of loan.


IFRS

Loan loss provisions for collectively assessed loans are determined based on a roll-rate methodology reflecting history of losses for each category of loan, past due payments and collateral values. For individually assessed loans, loan loss provisions are calculated based on the discounted cash flow value of the collateral.



Purchase accounting adjustments

These arise from valuations made by HSBC on acquiring Grupo Financiero Bital in November 2002 on various assets and liabilities that differed from the valuation in the local Mexican GAAP books.



Recognition of present value of in-force long-term life insurance contracts

Mexican GAAP

The present value of future earnings is not recognised. Premiums are accounted for on a received basis and reserves are calculated in accordance with guidance as set out by the Insurance Regulator (Comisión Nacional de Seguros y Fianzas).


IFRS

A value is placed on insurance contracts that are classified as long-term insurance business and are in-force at the balance sheet date. The present value of in-force long-term insurance business is determined by discounting future earnings expected to emerge from business currently in force using appropriate assumptions in assessing factors such as recent experience and general economic conditions.


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

                                                                                                       By:       

                                                                                                                          Name: P A Stafford

                                                                                                                                            Title: Assistant Group Secretary

                                                                                                                                                                                                         Date:  30 April, 2009