HSBC Holdings plc
Pillar 3 Disclosures at 31 March 2021


Contents
Page
Introduction
2
Highlights
2
Regulatory framework for disclosures
2
Pillar 3 disclosures
2
Key metrics
3
Capital
4
Approach and policy
4
Risk-weighted assets
5
Minimum requirement for own funds and eligible liabilities
7
Cautionary statement regarding forward-looking statements
   8
Abbreviations
10
Contacts
11
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 1Q21, which has been published on our website 
www.hsbc.com/investors. 
Pillar 3 Disclosures at 31 March 2021
1
HSBC Holdings plc Pillar 3 1Q21


Introduction
Highlights
Common equity tier 1: $134.5bn and 15.9%1
  
133.4
136.1
134.5
15.6%
15.9%
15.9%
Sep 20
Dec 20
Mar 21
CET1 ($bn)
____
CET1%
1 Capital figures and ratios are reported on a CRR II transitional basis 
for capital instruments. 
Risk-weighted assets by risk type at 31 March 2021 ($bn)
846.8
687.0
41.4
24.7
93.7
Credit risk
Counterparty credit risk
Market risk
Operational risk
Regulatory framework for disclosures
We are supervised on a consolidated basis in the UK by the 
Prudential Regulation Authority (‘PRA’), which receives 
information on the capital adequacy of, and sets capital 
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 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 by the European Union (‘EU’) in the revisions to the 
Capital Requirements Regulation, as implemented (‘CRR II’), and in 
the PRA Rulebook for the UK banking industry. The regulators of 
Group banking entities outside the EU are at varying stages of 
implementing the Basel III framework, so the Group may have 
been subject to local regulations that were on the basis of the 
Basel I, II or III frameworks. 
The Basel 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.
Following the end of the transition period following the UK’s 
withdrawal from the EU, any reference to EU regulations and 
directives, including European Banking Authority (‘EBA’) technical 
standards, should be read as a reference to the UK’s version of 
such regulation and/or directive, onshored into UK law under the 
European Union (Withdrawal) Act 2018, as amended. EU 
regulations and directives (including EBA technical standards) will 
continue to be relevant for HSBC’s EU subsidiaries.
Pillar 3 disclosures
Our Pillar 3 Disclosures at 31 March 2021 comprises both 
quantitative and qualitative information required under Pillar 3. 
These disclosures are made in accordance with the requirements 
of CRD IV and associated European guidance. They are 
supplemented by specific additional requirements of the PRA and 
discretionary disclosures on our part.
Our Pillar 3 disclosures are governed by the Group’s disclosure 
policy framework as approved by the Group Audit Committee. 
To give insight into movements during the year, we provide 
comparative figures, commentary of 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 of 
the Capital Requirements Regulation. Table name references and 
row numbering in tables identify those prescribed in the relevant 
EBA guidelines where applicable and where there is a value.
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 by the EBA or Basel are not 
applicable or immaterial to our activities, we omit them and follow 
the same approach for comparative disclosures.
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 Earnings Release 1Q21 or to other 
locations.
We continue to engage in the work of the UK authorities and 
industry associations to improve the transparency and 
comparability of UK banks’ Pillar 3 disclosures.
Regulatory reporting developments
We highlight on page 171 of the Annual Report and Accounts 
2020 certain risks to capital and liquidity, including the UK’s 
implementation of amendments to the Capital Requirements 
Regulation, the Basel III Reforms, and the regulatory impact from 
the UK’s withdrawal from the EU, as well as other regulatory 
statements. These risks continue to be relevant at 31 March 2021.
The methodology used in the Group consolidated LCR in relation 
to the treatment of part of the Group’s high-quality liquid assets is 
currently under review. Upon implementation of this revised 
approach it is anticipated that the Group’s consolidated LCR will 
reduce, although remain within appetite.
There is also a continued focus on the quality of regulatory 
reporting by the PRA and other regulators globally. We continue to 
strengthen our processes and controls, including commissioning 
independent external reviews of various aspects of regulatory 
reporting. As a result, there may be impacts on some of our 
regulatory ratios such as the CET1 and LCR. We continue to keep 
the PRA and other relevant regulators informed of adverse findings 
from external reviews and our progress in strengthening the 
control environment.
HSBC Holdings plc Pillar 3 1Q21
2


Key metrics
Key metrics (KM1/IFRS9–FL)1
At
31 Mar
31 Dec
30 Sep
30 Jun
31 Mar
Ref*
Footnotes
2021
2020
2020
2020
2020
Available capital ($bn)
1
Common equity tier 1 (‘CET1’) capital
^
 
134.5  
136.1  
133.4  
128.4  
125.2 
2
CET1 capital as if IFRS 9 transitional arrangements had not been applied
 
133.6  
134.9  
132.2  
127.4  
124.5 
3
Tier 1 capital
^
 
160.2  
160.2  
157.4  
152.5  
149.2 
4
Tier 1 capital as if IFRS 9 transitional arrangements had not been applied
 
159.3  
159.0  
156.2  
151.4  
148.5 
5
Total capital
^
 
183.1  
184.4  
181.8  
177.2  
174.0 
6
Total capital as if IFRS 9 transitional arrangements had not been applied
 
182.2  
183.2  
180.7  
176.1  
173.3 
Risk-weighted assets (‘RWAs’) ($bn)
7
Total RWAs
 
846.8  
857.5  
857.0  
854.6  
857.1 
8
Total RWAs as if IFRS 9 transitional arrangements had not been applied
 
846.1  
856.6  
856.6  
854.1  
856.7 
Capital ratios (%)
9
CET1
^
 15.9 
 15.9 
 15.6 
 15.0 
 14.6 
10
CET1 as if IFRS 9 transitional arrangements had not been applied
 15.8 
 15.7 
 15.4 
 14.9 
 14.5 
11
Tier 1
^
 18.9 
 18.7 
 18.4 
 17.8 
 17.4 
12
Tier 1 as if IFRS 9 transitional arrangements had not been applied
 18.8 
 18.6 
 18.2 
 17.7 
 17.3 
13
Total capital
^
 21.6 
 21.5 
 21.2 
 20.7 
 20.3 
14
Total capital as if IFRS 9 transitional arrangements had not been applied
 21.5 
 21.4 
 21.1 
 20.6 
 20.2 
Additional CET1 buffer requirements as a percentage of RWAs (%)
Capital conservation buffer requirement
 2.50 
 2.50 
 2.50 
 2.50 
 2.50 
Countercyclical buffer requirement
 0.21 
 0.21 
 0.22 
0.20
 0.22 
Bank G-SIB and/or D-SIB additional requirements
 2.00 
 2.00 
 2.00 
 2.00 
 2.00 
Total bank CET1 specific buffer requirements
 4.71 
 4.71 
 4.72 
 4.70 
 4.72 
Total capital requirement (%)
2
Total capital requirement
 11.0 
 11.0 
 11.1 
 11.1 
 11.0 
CET1 available after meeting the bank’s minimum capital requirements
 9.7 
 9.7 
 9.3 
 8.8 
 8.4 
Leverage ratio
3
15
Total leverage ratio exposure measure ($bn)
^
 
2,930.2  
2,897.1  
2,857.4  
2,801.4  
2,782.7 
16
Leverage ratio (%)
^
 5.4 
 5.5 
 5.4 
 5.3 
 5.3 
17
Leverage ratio as if IFRS 9 transitional arrangements had not been applied (%)
 5.4 
 5.4 
 5.4 
 5.3 
 5.2 
Liquidity coverage ratio (‘LCR’)
4
Total high-quality liquid assets ($bn)
 
695.1  
677.9  
654.2  
654.4  
617.2 
Total net cash outflow ($bn)
 
487.0  
487.3  
446.3  
442.9  
395.0 
LCR ratio (%)
 142.7 
 139.1 
 146.6 
 147.8 
 156.3 
* The references in this table and other tables within this section identify the lines prescribed in the relevant EBA template where applicable and 
where there is a value.
^ Figures have been prepared on an IFRS 9 transitional basis.
1 Where applicable, our reporting throughout this document also reflects government relief schemes intended to mitigate the impact of the 
Covid-19 outbreak.
2 Total capital requirement is defined as the sum of Pillar 1 and Pillar 2A capital requirements set by the UK PRA. The minimum requirements 
represent the total capital requirement to be met by CET1.
3 Leverage ratio is calculated using the CRR II end point basis for capital.
4 The EU’s regulatory transitional arrangements for IFRS 9 in article 473a of the Capital Requirements Regulation do not apply to liquidity coverage 
measures. LCR is calculated as at the end of each period rather than using average values. For further details, refer to page 176 of the Annual 
Report and Accounts 2020.
We have adopted the regulatory transitional arrangements in
CRR II for IFRS 9, including paragraph four of article 473a. These 
transitional arrangements permit banks to add back to their capital 
base a proportion of the impact that IFRS 9 has upon their loan 
loss allowances during the first five years of use. The impact is 
defined as:
•
the increase in loan loss allowances on day one of IFRS 9 
adoption; and
•
any subsequent increase in expected credit losses (‘ECL’) in the 
non-credit-impaired book thereafter. 
Any add-back must be tax affected and accompanied by a 
recalculation of exposure and RWAs. The impact is calculated 
separately for portfolios using the standardised (‘STD’) and internal 
ratings-based (‘IRB’) approaches. For IRB portfolios, there is no 
add-back to capital unless loan loss allowances exceed regulatory 
12-month expected losses. 
The EU’s CRR ‘Quick Fix’ relief package enacted in June 2020 
increased from 70% to 100% the relief that banks may take for 
loan loss allowances recognised since 1 January 2020 on the 
non-credit-impaired book.
In the current period, the add-back to the capital base amounted 
to $1.2bn under the STD approach with a tax impact of $0.3bn.
Pillar 3 Disclosures at 31 March 2021
3
HSBC Holdings plc Pillar 3 1Q21


Capital
Approach and policy
Our approach to capital management is driven by our strategic 
and organisational requirements, taking into account the 
regulatory, economic and commercial environment. We aim to 
maintain a strong capital base to support the risks inherent in our 
business and invest in accordance with our strategy, meeting both 
consolidated and local regulatory capital requirements at all times.
 
A list of the main features of our capital instruments in accordance 
with Annex III of Commission Implementing Regulation 1423/2013 
is also published on our website with reference to our balance 
sheet on 31 December 2020. This is in addition to the full terms 
and conditions of our securities, also available on our website.
For further details of our approach to capital risk management, see page 169 
of the Annual Report and Accounts 2020.
Own funds disclosure
At
31 Mar
31 Dec 
2021
2020
Ref
$m
$m
6
Common equity tier 1 capital before regulatory adjustments 
 
164,393  
165,479 
28
Total regulatory adjustments to common equity tier 1 
 
(29,912)  
(29,429) 
29
Common equity tier 1 capital
 
134,481  
136,050 
36
Additional tier 1 capital before regulatory adjustments 
 
25,775  
24,183 
43
Total regulatory adjustments to additional tier 1 capital
 
(60)  
(60) 
44
Additional tier 1 capital
 
25,715  
24,123 
45
Tier 1 capital
 
160,196  
160,173 
51
Tier 2 capital before regulatory adjustments
 
24,366  
25,722 
57
Total regulatory adjustments to tier 2 capital 
 
(1,445)  
(1,472) 
58
Tier 2 capital
 
22,921  
24,250 
59
Total capital 
 
183,117  
184,423 
At 31 March 2021, our our common equity tier 1 (‘CET1’) ratio of 
15.9% was unchanged from 31 December 2020, reflecting a 
decrease in RWAs, offset by a fall in CET1 capital during the 
quarter by $1.6bn. The fall in CET1 was mainly as a result of:
•
a $1.2bn decrease in fair value through other comprehensive 
income reserves due to increasing yields;
•
a fall of $1.1bn due to foreign currency translation differences;
•
an increase of $1.0bn in deductions for significant investments 
in financial sector entities and intangible assets;
•
a $0.7bn decrease in the IFRS 9 transitional add-back and a 
$0.3bn higher deduction for excess expected loss; and
•
a $0.8bn foreseeable dividend deduction, which is a quarter of 
the 2020 dividend. This will be adjusted during the rest of 2021 
based on various factors, including regulatory guidance.
This decrease in CET1 capital was partly offset by capital 
generation of $3.5bn through profits net of dividends paid on other 
equity instruments.
In 2020, a higher prudential valuation adjustment (‘PVA’) 
diversification benefit was temporarily allowed by the regulators. 
This ended on 1 January 2021, with the benefit reverting to 50%. 
The subsequent impact was partly offset by other underlying 
changes to PVA.
HSBC Holdings plc Pillar 3 1Q21
4