HSBC Holdings p lc
Pillar 3 Disclosures at 31 March 2023


Contents
2
Introduction
3
Highlights
4
Key metrics
5
Capital and Leverage
5
Approach and policy
5
Impact of regulatory and other developments
6
Risk-weighted assets
6
Credit risk (including amounts below the thresholds for deduction)
6
Counterparty credit risk, including settlement risk
6
Market risk
6
Operational risk
9
Minimum requirement for own funds and eligible liabilities
11
Liquidity
13
Cautionary statement regarding forward-looking statements
15
Abbreviations
16
Contacts
Unless the context requires otherwise, ‘HSBC Holdings’ means HSBC 
Holdings plc and ‘HSBC’, the ‘Group’, ‘we’, ‘us’ and ‘our’ refer to 
HSBC Holdings together with its subsidiaries. Within this document 
the Hong Kong Special Administrative Region of the People’s 
Republic of China is referred to as ‘Hong Kong’. When used in the 
terms ‘shareholders’ equity’ and ‘total shareholders’ equity’, 
‘shareholders’ means holders of HSBC Holdings ordinary shares and 
those preference shares and capital securities issued by HSBC 
Holdings classified as equity. The abbreviations ‘$m’ and ‘$bn’ 
represent millions and billions (thousands of millions) of US dollars 
respectively.
This document should be read in conjunction with the Earnings 
Release 1Q23, which has been published on our website at 
www.hsbc.com/investors.
 
Tables
1
4
Key metrics (KM1/IFRS9-FL)
5
Own funds disclosure
6
Overview of RWAs (OV1)
7
RWAs by legal entities
7
RWA movement by legal entities by key driver
7
RWA flow statements of credit risk exposures under IRB approach 
(CR8)
8
RWA flow statements of counterparty credit risk exposures under the 
IMM (CCR7)
8
RWA flow statements of market risk exposures under the IMA (MR2-
B)
9
Key metrics of the European resolution group (KM2)
9
Key metrics of the Asian resolution group (KM2)
10
Key metrics of the US resolution group (KM2)
12
Level and components of HSBC Group consolidated liquidity coverage 
ratio (LIQ1)
1 The references in the tables identify lines prescribed in the relevant 
PRA template where applicable and where there is a value to disclose.
Pillar 3 Disclosures at 31 March 2023
 
1
HSBC Holdings plc Pillar 3 Disclosures at 31 March 2023


Introduction
 
Pillar 3 disclosures and governance
Regulatory framework for disclosure
We are supervised on a consolidated basis in the UK by the Prudential 
Regulation Authority (‘PRA’), which receives information on the capital 
and liquidity adequacy of, and sets capital and liquidity requirements 
for, the Group as a whole. Individual banking subsidiaries are directly 
regulated by their local banking supervisors, which set and monitor 
their local capital and liquidity adequacy requirements. In most 
jurisdictions, non-banking financial subsidiaries are also subject to the 
supervision and capital requirements of local regulatory authorities.
At a consolidated Group level, capital is calculated for prudential 
regulatory reporting purposes using the Basel III framework of the 
Basel Committee on Banking Supervision (‘Basel’), as implemented in 
the UK. Any references to EU regulations and directives (including 
technical standards) should, as applicable, be read as references to 
the UK’s version of such regulation and/or directive, as onshored into 
UK law under the European Union (Withdrawal) Act 2018, and as may 
be subsequently amended under UK law. 
The Basel III framework is structured around three ‘pillars’, with the 
Pillar 1 minimum capital requirements and Pillar 2 supervisory review 
process complemented by Pillar 3 market discipline. The aim of 
Pillar 3 is to produce disclosures that allow market participants to 
assess the scope of application by banks of the Basel framework and 
the rules in their jurisdiction, their capital condition, risk exposures and 
risk management processes, and hence their capital adequacy.
The regulators of the Group’s banking entities outside the UK are at 
varying stages of implementing the Basel framework, so local 
regulations may have been on the basis of Basel I, II or III.
Our Pillar 3 Disclosures at 31 March 2023 comprises both quantitative 
and qualitative information required under Pillar 3. These disclosures 
are made in accordance with part Eight of the Capital Requirements 
Regulation and Directive, as implemented (‘CRR II’) and the PRA 
Rulebook, and use the PRA’s disclosure templates and instructions. 
They are supplemented by specific additional requirements of the 
PRA and discretionary disclosures on our part.
We publish our Pillar 3 disclosures quarterly on our website 
www.hsbc.com.
Comparatives and references
To give insight into movements during the year, we provide 
comparative figures, commentary on variances and flow tables for 
capital requirements. In all tables where the term ‘capital 
requirements’ is used, this represents the minimum total capital 
charge set at 8% of risk-weighted assets (‘RWAs’) by article 92(1) of 
CRR II.
The regulatory numbers and ratios presented in this document were 
accurate as at the date of reporting. Small changes may exist 
between these numbers and ratios and those subsequently 
submitted in regulatory filings. Where differences are significant, we 
will restate comparatives. 
Where disclosures have been enhanced, or are new, we do not 
generally restate or provide comparatives. Wherever specific rows 
and columns in the tables prescribed are not applicable or immaterial 
to our activities, we omit them and follow the same approach for 
comparatives.
Pillar 3 requirements may be met by inclusion in other disclosure 
media. Where we adopt this approach, references are provided to the 
relevant pages of the 1Q23 Earnings Release or to other documents.
Governance
Our Pillar 3 disclosures are governed by the Group’s disclosure policy 
framework as approved by the Group Audit Committee. This  
document has been approved by the Group Disclosure and Controls 
Committee as delegated by the Group Audit Committee. 
Regulatory reporting processes and controls
The quality of regulatory reporting remains a key priority for 
management and regulators. We are progressing with a 
comprehensive programme to strengthen our processes, improve 
consistency, and enhance controls across our prudential regulatory 
reporting, with a focus on PRA requirements initially. We 
commissioned a number of independent external reviews, some at 
the request of our regulators, including one on our credit risk RWA 
reporting process, which concluded in December 2022. These 
reviews have so far resulted in higher RWAs and refinements to the 
liquidity coverage ratio (‘LCR’) through improvements in reporting 
accuracy, which have been reflected in our reported regulatory ratios. 
Our prudential regulatory reporting programme is being phased over a 
number of years, with a focus on RWA, capital and liquidity reporting 
in the early stages of the programme. As we implement 
recommended changes from the programme, there may be further 
impacts on some of our regulatory ratios, such as the LCR, and 
common equity tier 1 (‘CET1’) and net stable funding ratio (‘NSFR’).
 
HSBC Holdings plc Pillar 3 Disclosures at 31 March 2023
2


Highlights
CET1 ratio
At 31 March 2023, our CET1 ratio was 14.7%. Our current intention 
is to manage the CET1 ratio within our medium-term target range of 
14% to 14.5%, with a dividend payout ratio of 50% for 2023 and 
2024, excluding material notable items. Given the strength of our 
capital position, we have announced a first interim dividend of $0.10 
per share and a share buy-back of up to $2bn. Further buy-backs for 
2023 and beyond will be subject to appropriate capital levels. Our 
capital distributions are independent of both the reversal of the 
impairment of our retail banking operations in France and our 
provisional gain on the acquisition of Silicon Valley Bank UK Limited 
(‘SVB UK’).
CET1 capital and ratio
1
110.8
119.3
125.7
13.4%
14.2%
14.7%
30 Sep 22
31 Dec 22
31 Mar 23
CET1 ($bn)
____
CET1 ratio %
 
1 Capital figures and ratios are reported on a CRR II transitional basis for 
capital instruments. 
 
CET1 ratio movement, %
The CET1 ratio increased by 0.5 percentage points compared 
with 4Q22, which was driven by capital generation net of the 
dividend accrual and included an approximately 25bps impact from 
the reversal of an impairment on the planned sale of our retail banking 
operations in France. The acquisition of SVB UK had a minimal impact 
on the CET1 ratio.
CET1 ratio movement, %
14.2
1.0
(0.5)
(0.1)
0.0
0.0
0.3
(0.2)
14.7
31 Dec 
2022
Profits¹
Dividend² Change 
in 
RWA’s
FX 
translation 
differences
SVB 
UK
France 
impairment 
reversal
Others
31 Mar 
2023
1   Regulatory profits.
2   Includes ordinary dividend accrual of $3.5bn and additional tier 1 (‘AT1’) 
coupon payment of $0.4bn.
 
RWAs
RWAs increased by $14.7bn. Excluding $3.4bn of foreign currency 
translation differences, the $11.3bn increase was predominantly due 
to the acquisition of SVB UK, and RWA asset size growth in Corporate 
Centre and WPB. This was partly offset by reductions due to a 
regulatory change related to the risk weighting of residential 
mortgages in Hong Kong.
RWAs by risk type
$854.4bn (31 December 2022: $839.7bn)
81%
81%
10%
10%
5%
5%
4%
4%
Credit risk
Operational risk
Market risk
Counterparty credit risk
31 Mar 2023
31 Dec 2022
 
Liquidity
The average Group LCR was 132% or $153bn above regulatory 
requirement and the average Group LCR HQLA was $634.9bn. The 
Group NSFR was 136%. Liquidity remains stable as at 31 March 
2023. The acquisition of SVB UK had a minimal impact on liquidity.
Liquidity
31 Mar 2023
31 Dec 2022
30 Sep 2022
LCR (%)
132
132
133
NSFR (%)
136
136
137
Pillar 3 Disclosures at 31 March 2023
 
3
HSBC Holdings plc Pillar 3 Disclosures at 31 March 2023


Key metrics
Key metrics (KM1/IFRS9-FL)
At
31 Mar
31 Dec
30 Sep
30 Jun
31 Mar
Ref
2023
2022
2022
2022
2022
Available capital ($bn)1,2
1
Common equity tier 1 (‘CET1’) capital
125.7  
119.3 
110.8  
115.8  
121.4 
CET1 capital as if IFRS 9 transitional arrangements had not been applied
125.7  
119.0 
110.5  
115.4  
121.0 
2
Tier 1 capital
145.1  
139.1 
130.5  
137.5  
143.9 
Tier 1 capital as if IFRS 9 transitional arrangements had not been applied
145.1  
138.8 
130.2  
137.1  
143.5 
3
Total capital
169.6  
162.4 
149.9  
158.5  
165.6 
Total capital as if IFRS 9 transitional arrangements had not been applied
169.6  
162.1 
149.6  
158.1  
165.2 
Risk-weighted asset (‘RWAs’) ($bn)2
4
Total RWAs
854.4  
839.7 
828.3  
851.7  
862.3 
Total RWAs as if IFRS 9 transitional arrangements had not been applied
854.4  
839.4 
828.1  
851.4  
862.0 
Capital ratios (%)1,2
5
CET1
 14.7 
 14.2 
 13.4 
 13.6 
 14.1 
CET1 as if IFRS 9 transitional arrangements had not been applied
 14.7 
 14.2 
 13.3 
 13.6 
 14.0 
6
Tier 1
 17.0 
 16.6 
 15.8 
 16.1 
 16.7 
Tier 1 as if IFRS 9 transitional arrangements had not been applied
 17.0 
 16.5 
 15.7 
 16.1 
 16.6 
7
Total capital
 19.8 
 19.3 
 18.1 
 18.6 
 19.2 
Total capital as if IFRS 9 transitional arrangements had not been applied
 19.8 
 19.3 
 18.1 
 18.6 
 19.2 
Additional own funds requirements based on supervisory review and evaluation 
process (‘SREP’) as a percentage of RWAs (%)
UK-7a
Additional CET1 SREP requirements 
 1.5 
 1.5  
1.5 
1.5
1.5
UK-7b
Additional AT1 SREP requirements
 0.5 
 0.5  
0.5 
0.5
0.5
UK-7c
Additional T2 SREP requirements
 0.6 
 0.6  
0.7 
0.6
0.6
UK-7d
Total SREP own funds requirements
 10.6 
 10.6  
10.7 
10.6
10.6
Combined buffer requirement as a percentage of RWAs (%)
8
Capital conservation buffer requirement
 2.5 
 2.5  
2.5 
 2.5 
 2.5 
9
Institution-specific countercyclical capital buffer 
 0.4 
 0.4  
0.2 
 0.2 
 0.2 
10
Global systemically important institution buffer
 2.0 
 2.0  
2.0 
 2.0 
 2.0 
11
Combined buffer requirement 
 4.9 
 4.9  
4.7 
 4.7 
 4.7 
UK-11a
Overall capital requirements
 15.5 
 15.5  
15.4 
 15.4 
 15.3 
12
CET1 available after meeting the total SREP own funds requirements
 
8.7 
 8.2  
7.3 
 7.6 
 8.1 
Leverage ratio2,3
13
Total exposure measure excluding claims on central banks ($bn)
2,486.1  
2,417.2 
2,414.8
2,484.2
2,532.9
14
Leverage ratio excluding claims on central banks (%)
 5.8 
 5.8 
 5.4 
 5.5 
 5.7 
Average exposure measure excluding claims on central banks ($bn)
2,454.8  
2,416.6 
2,462.5
2,501.3  
2,555.7 
Additional leverage ratio disclosure requirements2,3
14a
Fully loaded expected credit losses (‘ECL’) accounting model leverage ratio excluding 
claims on central banks (%) 
 5.8 
 5.7 
 5.4 
5.5
5.7
14b
Leverage ratio including claims on central banks (%)
 5.0 
 4.9 
 4.7 
4.8
4.9
14c
Average leverage ratio excluding claims on central banks (%)
 5.7 
 5.6 
 5.5 
 5.6 
 5.7 
14d
Average leverage ratio including claims on central banks (%)
 4.9 
 4.8 
 4.7 
4.8
4.9
14e
Countercyclical leverage ratio buffer (%)
 0.2 
 0.1 
 0.1 
0.1
0.1
EU-14d
Leverage ratio buffer requirement (%)
 0.9 
 0.8 
 0.8 
0.8
0.8
EU-14e
Overall leverage ratio requirements (%)
 4.2 
 4.1 
 4.1 
 4.1 
 4.1 
Liquidity coverage ratio (‘LCR’)4 — average
15
Total high-quality liquid assets ($bn)
634.9
647.0
662.9
675.5
688.3
UK-16a
Cash outflows – total weighted value ($bn)
670.4  
668.1 
667.3
666.0
663.1
UK-16b
Cash inflows – total weighted value ($bn)
188.7  
177.3 
170.4
165.6
161.6
16
Total net cash outflow ($bn)
481.7
490.8
496.9
500.4
501.5
17
LCR ratio (%)
 132 
 132 
 133 
 135 
 137 
Net stable funding ratio (‘NSFR’)4
18
Total available stable funding ($bn)
1,557.4  
1,552.0 
1,538.8
1,566.5
1,596.6
19
Total required stable funding ($bn)
1,148.4  
1,138.4 
1,123.9
1,138.7
1,158.1
20
NSFR ratio (%)
136
136
137
138
138
1 Capital figures and ratios are reported on a CRR II transitional basis for capital instruments.
2 Since 30 September 2022, investments in non-financial institution subsidiaries or participations have been measured on an equity accounting basis as 
per the prudential consolidation of article 18(7) of the CRR II. Comparatives have not been restated as this change has no significant prior period 
impact on this disclosure.
3 The leverage ratio is calculated using the CRR II end point basis for capital.
4 Since 30 September 2022, the LCR and NSFR ratios presented in this table have been based on average values. The LCR is the average of the 
preceding 12 months for each quarter. The NSFR is the average of the preceding quarters. 
Unless stated otherwise, figures have been prepared on an IFRS 9 transitional basis. At 31 March 2023, the IFRS 9 add-back to CET1 capital and 
the related tax charge were immaterial. For further details of our application of IFRS 9 transitional regulatory arrangements, refer to page 30 of 
the Earnings Release 1Q23.
 
HSBC Holdings plc Pillar 3 Disclosures at 31 March 2023
4