Source - RNS
RNS Number : 1029L
HSBC Bank Middle East Limited
28 September 2016
 

 

SUPPLEMENTARY LISTING PARTICULARS

 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

HSBC Bank Middle East Limited

(a company limited by shares incorporated in the Dubai International Financial Centre)

as Issuer

US$7,000,000,000 DEBT ISSUANCE PROGRAMME

This supplement (the "Supplement") to the information memorandum dated 14 July 2016 relating to the US$7,000,000,000 debt issuance programme (the "Programme") of HSBC Bank Middle East Limited (the "Information Memorandum", which constitutes listing particulars for the purposes of listing on the Official List of the Irish Stock Exchange ("Listing") and trading on the Global Exchange Market of the Irish Stock Exchange and, for the avoidance of doubt, which does not constitute (i) a prospectus for the purposes of Part VI of the Financial Services and Markets Act 2000 (as amended) or (ii) a base prospectus for the purposes of Directive 2003/71/EC (as amended)) constitutes supplementary listing particulars (pursuant to rule 3.10 of the Global Exchange Market Listing and Admission to Trading - Rules) for the purposes of Listing.

Terms defined in the Information Memorandum have the same meaning when used in this Supplement.

This Supplement is supplemental to, and should be read in conjunction with, the Information Memorandum.

This Supplement has been approved by the Irish Stock Exchange for the purposes of Listing.

HSBC Bank Middle East Limited (as issuer, the "Issuer") accepts responsibility for the information contained in this Supplement. To the best of the knowledge and belief of the Issuer (having taken all reasonable care to ensure that such is the case), the information contained in this Supplement is in accordance with the facts and does not omit anything likely to affect the import of such information.

The purpose of this Supplement is to disclose that the Issuer has published its unaudited interim financial statements for the six-month period ending 30 June 2016 (the "2016 Interim Financial Statements").  A copy of the 2016 Interim Financial Statements is set out in the Annex hereto.

To the extent that there is any inconsistency between (a) any statement in this Supplement and (b) any other statement in or incorporated by reference in the Information Memorandum prior to the date of this Supplement, the statement in this Supplement will prevail.

Save as disclosed in this Supplement, there has been no significant change and no significant new matter has arisen since the publication of the Information Memorandum.

26 September 2016

ANNEX

 

2016 INTERIM FINANCIAL STATEMENTS



 

 

 

 

 


Contents

                                                                                                                                         Page

Condensed Financial Statements                                                                                                2

Notes on the Condensed Financial Statements                                                                           8

Review Report of the Auditor                                                                                                     20

 

 

 

 

 

 

 

 

 

Presentation of Information

This document comprises the Interim Financial Statements 2016 for HSBC Bank Middle East Limited ('the bank') and its subsidiary undertakings (together 'the group'). It contains Condensed Financial Statements, together with the Auditor's review report. References to 'HSBC' or 'the HSBC Group' within this document mean HSBC Holdings plc together with its subsidiaries.

 

In accordance with IAS 34 the Interim Report is intended to provide an update on the Annual Report and Accounts 2015 and therefore focusses on events during the first six months of 2016 rather than duplicating information previously reported.


 

Consolidated income statement for the half-year to 30 June 2016

 



Half-year to



       30 June

2016


30 June

 2015


Notes

US$000


 

US$000






Interest income .............................................................................................


533,544


611,641

Interest expense ...........................................................................................


(68,392)


(80,780)






Net interest income........................................................................................


465,152


530,861






Fee income ...................................................................................................


275,755


310,104

Fee expense .................................................................................................


(29,774)


(27,895)






Net fee income ..............................................................................................


245,981


282,209






Trading income excluding net interest income ..............................................


162,831


153,240

Net interest expense on trading activities ....................................................


(8,411)


(8,922)






Net trading income ........................................................................................


154,420


144,318






Net income from financial instruments designated at fair value....................


7,733


2,088

Gains less losses from financial investments ..............................................


12,689


3,775

Dividend income ................................................................................................................... …


1,482


2,189

Other operating income ................................................................................  ..


33,952


32,640






Net operating income before loan impairment charges and other credit risk provisions ..............................................................................


921,409


998,080






Loan impairment charges and other credit risk provisions ...........................

4

(33,199)


(30,471)






Net operating income ..............................................................................  .


888,210


967,609






Employee compensation and benefits ..........................................................  ...


(262,494)


(316,681)

General and administrative expenses ..........................................................  ...


(156,007)


(209,394)

Depreciation and impairment of property, plant and equipment ....................


(6,626)


(9,048)

Amortisation and impairment of intangible assets ........................................  ...


(3,005)


(5,816)






Total operating expenses .......................................................................  ...


(428,132)


(540,939)






Operating profit .........................................................................................  ...


460,078


426,670






Share of profit in associates ........................................................................


1,007


3,457






Profit before tax ........................................................................................  ...


461,085


430,127






Tax expense .................................................................................................  ...


(86,070)


(65,980)






Profit for the period .................................................................................  ...


375,015


364,147






Profit attributable to shareholders of the parent company ...........................


374,673


355,541

Profit attributable to non-controlling interests ...............................................    


342


8,606






 

The accompanying notes on pages 8 to 19 form an integral part of these condensed financial statements.

 


Consolidated statement of comprehensive income for the half-year to 30 June 2016

 



Half-year to



30 June


        30 June



2016


             2015



US$000


     US$000






Profit for the period ........................................................................................


375,015


364,147






Other comprehensive income

 





Items that will be reclassified subsequently to profit or loss when specific conditions are met





Available for sale investments:


(18,261)


(12,017)

-  fair value losses .....................................................................................


(9,860)


(11,731)

-  fair value gains transferred to income statement on disposal ...............


(9,381)


(6,136)

-  amounts transferred to the income statement in respect of

    impairment losses  ..................................................................................


1,097


5,733

-  income taxes ..........................................................................................


(117)


117






Cash flow hedges:


13,308


8,017

-  fair value gains .......................................................................................


14,786


28,711

-  fair value gains transferred to income statement ..................................



(19,882)

-  income taxes ..........................................................................................


(1,478)


(812)






Exchange differences ...................................................................................


(4,364)


(30,941)






Items that will not be reclassified subsequently to profit or loss





Remeasurement of defined benefit asset/liability:



(2,942)

-  before income taxes ..............................................................................



(2,942)

-  income taxes ..........................................................................................








Other comprehensive expense for the period, net of tax .............................


(9,317)


(37,883)






Total comprehensive income for the period .......................................


365,698


326,264











Total comprehensive income for the period attributable to:





-  shareholders of the parent company .....................................................


365,356


318,294

-  non-controlling interests .........................................................................


342


7,970








365,698


326,264

 

The accompanying notes on pages 8 to 19 form an integral part of these condensed financial statements.

 

 

 

 

                                                                                        

 

 

 

 

Consolidated statement of financial position at 30 June 2016

 



       30 June

2016



  31 December 2015


Notes

US$000



US$000

ASSETS












Cash and balances at central banks .............................................................


832,635



612,413

Items in the course of collection from other banks ........................................


46,838



90,173

Trading assets ...............................................................................................

9

220,902



129,619

Derivatives .....................................................................................................

9

1,282,710



992,515

Loans and advances to banks ......................................................................


7,178,291



6,731,114

Loans and advances to customers ...............................................................

3,4

22,885,013



23,613,992

Reverse repurchase agreements - non-trading............................................


515,141



806,928

Financial investments ....................................................................................

9

6,715,131



7,158,981

Prepayments, accrued income and other assets...........................................


928,394



1,011,966

Current tax assets..........................................................................................


2,795



-  

Interests in associates……………………………………………………………....


78,021



82,173

Intangible assets... .….……………………………………………………………


14,828



17,025

Deferred tax assets ......................................................................................


233,577



227,920







Total assets ............... …………………………………………………………...


40,934,276



41,474,819







LIABILITIES AND EQUITY












Liabilities












Deposits by banks .... …………………………………………………………....


2,928,053



2,868,248

Customer accounts ... ……………………………………………………………


24,643,816



25,252,079

Items in the course of transmission to other banks .......................................


248,704



391,431

Trading liabilities .............................................................................................

9

1,688,748



1,483,677

Financial liabilities designated at fair value ....................................................

6,9

404,424



848,237

Derivatives .....................................................................................................

9

1,388,551



1,073,970

Debt securities in issue .............................. ……………………………………………………………

7

2,821,673



2,807,977

Accruals and deferred income and other liabilities........................................


2,442,972



1,813,297

Current tax liabilities........................................................................................


156,854



165,389

Provisions .................. ……………………………………………………………


19,668



23,696

Deferred tax liabilities ……………………………………………………………


523



523







Total liabilities .................................................................................................


36,743,986



36,728,524







Equity












Called up share capital .............................. ……………………………………………………………


931,055



931,055

Other reserves ..............................................................................................


(96,902)



 (87,650)

Retained earnings ..........................................................................................


3,352,559



3,899,654

Total equity attributable to shareholders of the parent company……………....


4,186,712



 

4,743,059

Non-controlling interests……………………………………………………………


3,578



    3,236







Total equity ................ ……………………………………………………………


4,190,290



4,746,295







Total equity and liabilities ...............................................................................


40,934,276



41,474,819







The accompanying notes on pages 8 to 19 form an integral part of these condensed financial statements.

 

 

 

A M Sharaf, Director                                                                                                                                                               


Consolidated statement of cash flows for the half-year to 30 June 2016

 




Half-year to




       30 June

2016




 30 June

2015




US$000




US$000

Cash flows from operating activities








Profit before tax ...........................................................................................



              461,085




430,127









Adjustments for:








- non-cash items included in profit before tax .........................................



                31,116




21,558

- change in operating assets ...................................................................



              196,274




(1,673,757)

- change in operating liabilities .................................................................



             (857,122)




349,254

- elimination of exchange differences1.....................................................



               (14,082)




127,160

- net gain from investing activities  ..........................................................



               (13,581)




(9,873)

- net gain on disposal of businesses  .....................................................



                          -




(1,732)

- net gain on disposal of associate  ........................................................



               (13,052)




-

- share of profit in associates .................................................................



                 (1,007)




(3,457)

- dividends received from associates .....................................................



                  1,312




3,363

- contributions paid to defined benefit pension plans ..............................



                    (536)




-

- tax paid ..................................................................................................



             (130,722)




(121,982)









Net cash used in operating activities ...........................................................



             (340,315)




(879,339)









 

Cash flows from investing activities 








Purchase of financial investments  .............................................................



          (3,509,890)




(5,658,468)

Proceeds from the sale and maturity of financial investments ....................



           1,687,309




7,091,261

Purchase of property, plant and equipment ................................................



                 (7,715)




(14,336)

Proceeds from the sale of property, plant and equipment ..........................



                          -




9,991

Purchase of intangible assets .....................................................................



(828)




(1,360)

Net cash outflow from disposal of businesses...........................................



                          -




(6,993)

Net cash inflow from disposal of associate.................................................



                16,900




-









Net cash (used in)/generated from investing activities ...............................



          (1,814,224)




1,420,095









 

Cash flows from financing activities  








Dividends paid to ordinary shareholders......................................................



             (420,000)




(295,000)

Dividends paid to non-controlling interests ..................................................



                          -




(14,031)









Net cash used in financing activities ...........................................................



             (420,000)




(309,031)









 

Net (decrease)/increase in cash and cash equivalents ...................



          (2,574,539)




231,725

Cash and cash equivalents at 1 January ....................................................



           8,996,879




9,444,465

Exchange differences in respect of cash and cash equivalents ...............



                11,603




(86,779)









Cash and cash equivalents at 30 June .......................................................



           6,433,943




9,589,411

1       Adjustment to bring changes between opening and closing balance sheet amounts to average rates. This is not done on a line-by-line basis, as details cannot be determined without unreasonable expense.

The accompanying notes on pages 8 to 19 form an integral part of these condensed financial statements.


Consolidated statement of changes in equity for the half-year to 30 June 2016

 

 


Half-year to 30 June 2016

 






Other reserves







 


                                                     Called up share capital


                                                   Retained earnings


                                                  Available- for-sale fair value reserve


                                                      Cash flow hedging reserve


                                                    Foreign exchange reserve


                                                      Other reserve


                                                    Merger reserve


                                                      Total share-holders' equity


                                                       Non-controlling interests


                                                       Total equity

 


US$000


US$000


US$000


US$000


US$000


US$000


US$000


US$000


US$000


US$000

 





















 

At 1 January 2016.....

931,055


3,899,654


35,019


(8,384)


(98,964)


31


(15,352)


4,743,059


3,236


4,746,295

 

Profit for the period ..

-


374,673


-


-


-


-


-


374,673


342


375,015

 





















 

Other comprehensive income (net of tax) .

-


(30)


(18,255)


13,308


(4,340)


-


-


(9,317)


-


(9,317)


Available-for-sale investments ............

-


-


(18,261)


-


-


-


-


(18,261)


-


(18,261)

 

Cash flow hedges ....

-


-


-


13,308


-


-


-


13,308




13,308

 

Remeasurement of defined benefit asset/liability............

-


-


-


-


-


-


-


-


-


-

 

Exchange differences and other ................

-


(30)


6


-


(4,340)


-


-


(4,364)


-


(4,364)

 





















 

Total comprehensive income for the period .....................

-


374,643


(18,255)


13,308


(4,340)


-


-


365,356


342


365,698

 





















 

Dividends to shareholders ..........

-


(920,000)


-


-


-


-


-


(920,000)


-


(920,000)

 

Other movements .....

-


(1,738)


35


-


-


-


-


(1,703)


-


(1,703)

 





















 

At 30 June 2016 .......

931,055


3,352,559


16,799


4,924


(103,304)


31


(15,352)


4,186,712


3,578


4,190,290

 

 

The accompanying notes on pages 8 to 19 form an integral part of these condensed financial statements.


 


Half-year to 30 June 2015






Other reserves








                                                      Called up share capital


                                                    Retained earnings


                                                   Available- for-sale fair value reserve


                                                       Cash flow hedging reserve


                                                     Foreign exchange reserve


                                                       Other reserve


                                                      Merger reserve


                                                        Total share-holders' equity


                                                        Non-controlling interests


                                                        Total equity


US$000


US$000


US$000


US$000


US$000


US$000


US$000


US$000


US$000


US$000





















At 1 January 2015.....

931,055


4,393,142


62,333


(6,512)


(52,509)


2,930


(15,352)


5,315,087


408,410


5,723,497

Profit for the period ...

-


355,541


-


-


-


-


-


355,541


8,606


364,147





















Other comprehensive income (net of tax) .

-


(3,105)


(11,533)


8,017


(30,630)


4


-


(37,247)


(636)


(37,883)

Available-for-sale investments .............

-


-


(11,518)


-


-


-


-


(11,518)


(499)


(12,017)

Cash flow hedges ....

-


-


-


8,017


-


-


-


8,017


-


8,017

Remeasurement of defined benefit asset/liability............

-


(2,942)


-


-


-


-


-


(2,942)


-


(2,942)

Exchange differences and other ................

-


(163)


(15)


-


(30,630)


4


-


(30,804)


(137)


(30,941)





















Total comprehensive income for the period .................................

-


352,436


(11,533)


8,017


(30,630)


4


-


318,294


7,970


326,264





















Dividends to shareholders ..........

-


(295,000)


-


-


-


-


-


(295,000)


(14,031)


(309,031)

Other movements .....

-


2,096


46


-


-


(302)


-


1,840


529


2,369





















At 30 June 2015 .......

931,055


4,452,674


50,846


1,505


(83,139)


2,632


(15,352)


5,340,221


402,878


5,743,099

 

The accompanying notes on pages 8 to 19 form an integral part of these interim consolidated condensed financial statements.

 

 


1     Basis of preparation and significant accounting policies

(a)   Compliance with International Financial Reporting Standards

The interim condensed consolidated financial statements of the group have been prepared in accordance with IAS 34 'Interim Financial Reporting' ('IAS 34') as issued by the International Accounting Standards Board ('IASB') and as endorsed by the European Union ('EU').These interim consolidated financial statements should be read in conjunction with the Annual Report and Accounts 2015.

At 30 June 2016, there were no unendorsed standards effective for the half year ended 30 June 2016 affecting these interim consolidated financial statements, and there was no difference between IFRSs endorsed by the EU and IFRSs issued by the IASB in terms of their application to the group.

Standards applied during the half-year to 30 June 2016

There were no new standards applied during the half-year to 30 June 2016.

During the period ended 30 June 2016, the group applied a number of interpretations and amendments to standards which had an insignificant effect on these interim consolidated financial statements.

(b)   Use of estimates and judgements

Management believes that the group's critical accounting estimates and judgements are those which relate to the impairment of loans and advances, the valuation of financial instruments, provisions and the valuation of intangible assets recognised in business combinations. There was no change in the current period to the critical accounting estimates and judgements applied in 2015, which are stated in the Annual Report and Accounts 2015.

(c)   Composition of group

Palestinian Autonomous Area

On 31 December 2015, the bank closed its branch in the Palestinian Autonomous Area (the "PAA"). The bank continued to offer limited securities services in the PAA until 30 June 2016, following which date the bank has ceased all operations in the PAA.

Oman

On 17 September 2015 the Board approved the sale of its entire shareholding in HBON to another HSBC Group entity, HSBC Bank Middle East Holdings BV and completed the disposal on 1 October 2015. The impact of the disposal on the group's results can be seen from the segmental analysis in note 5.

 (d)                                                                                          Operating Segments

In the Annual Report and Accounts 2015, the group's segments reported under IFRS 8 Operating Segments were organised into geographical regions comprising UAE, Qatar, Oman and Rest of Middle East. The Rest of Middle East covers Algeria, Bahrain, Kuwait, Lebanon, and the Palestine Autonomous Area.

Following the disposal of HSBC Bank Oman S.A.O.G (HBON) by the group in October 2015, operating segments were reviewed for all reporting periods from 1 January 2016.

The group has revised its operating segments from a geographical view to a business view as follows:

·      Retail Banking and Wealth Management;

·      Commercial Banking;

·      Global Banking and Markets;

·      Global Private Banking; and

·      Other.

The revised segments are consistent with those reported to the Board, the identified Chief Operating Decision Maker ('CODM') under IFRS 8.



(e)  Transfer of head office to Dubai International Financial Centre ('DIFC')

On 17 September 2015, the bank had announced that, subject to regulatory and other applicable approvals, it intends to transfer its place of incorporation and head office from Jersey, Channel Islands, to Dubai International Financial Centre (DIFC), in the United Arab Emirates.

On 30 June 2016, the bank's head office and place of incorporation was moved from Jersey to the DIFC.  The bank's new registered office is Level 1, Gate Village Building 8, Dubai International Financial Centre, Dubai, United Arab Emirates.

(f)    Future accounting developments

Information on future accounting developments and their potential effect on the financial statements of the group are provided in the Annual Report and Accounts 2015.

 (g)                                                                                          Accounting policies

The accounting policies applied by the group for these interim condensed consolidated financial statements are consistent with those described in the Annual Report and Accounts 2015, as are the methods of computation.

2     Dividends

Dividends to shareholders of the parent company


Half year to

30 June 2016


Half year to

30 June 2015


US$ per share


Total US$000


US$ per share


Total US$000


 


 




                                                                                                                             

Dividends declared on ordinary shares...........

0.9881


920,000


0.3168


295,000

 

During the period a fourth interim dividend for 2015 of US$210 million was declared on 8 February 2016 (paid 22 March 2016), the first interim dividend for 2016 of US$210 million was declared on 11 May 2016 (paid 23 June 2016) and special dividend for 2016 of US$500 million was declared on 27 June 2016.

The Directors declared a second interim dividend of US$75 million in respect of the financial year ending 31 December 2016 on 26 July 2016. No liability is recognised in the financial statements in respect of this dividend.



 

3      Concentration of loans and advances

Loans and advances to banks were widely distributed across major institutions.

Gross loans and advances to customers by industry sector


Gross loans and advances to customers

 



30 June 2016


31 December 2015

 



Total


As

a % of total

gross loans


Total


As

a % of total

gross loans

 


US$000


%


US$000


%

 









 

Personal








 

Residential mortgages .......................................................

2,188,285


9.12%


2,098,996


8.45%

 

Other personal ..................................................................

2,605,799


10.86%


2,829,173


11.39%

 









 


4,794,084


19.98%


4,928,169


19.84%

 









 

Corporate and commercial








 

Commercial, industrial and international trade....................

9,104,167


37.94%


9,424,608


37.95%

 

Commercial real estate.......................................................

564,152


2.35%


636,557


2.56%

 

Other property related.......................................................

1,479,775


6.17%


1,681,565


6.77%

 

Government ......................................................................

1,608,655


6.70%


1,616,162


6.51%

 

Other commercial...............................................................

4,028,802


16.79%


4,263,839


17.17%

 









 


16,785,551


69.95%


17,622,731


70.96%

 









 

Financial








 

Non-bank financial institutions ..............................................

2,416,525


10.07%


2,284,269


9.20%

 









 

Total gross loans and advances to customers ....................

23,996,160


100.00%


24,835,169


100.00%

 








 

Impaired loans







 

- as a percentage of gross loans and advances to customers .........................................................

6.03%



 

6.04%


Total impairment allowances






- as a percentage of gross loans and advances to customers .....................................................

4.63%



 

4.92%


 

4     Loan impairment charge/(recoveries) and other credit risk provisions


Half-year to


30 June 2016


30 June 2015


US$000


US$000





Loan impairment charges on loans and advances




-  new allowances net of allowance releases.....................................................................

39,484


48,550

-  recoveries of amounts previously written off...................................................................

(11,185)


(17,029)






28,299


31,521





Impairment charges/(releases) on debt securities and other credit risk provisions.............

4,900


(1,050)


33,199


30,471

 

Movement in impairment allowances on loans and advances to customers and banks


Banks


Customers




Individually
assessed


Individually
assessed


Collectively
assessed


Total


US$000


US$000


US$000


US$000









At 1 January 2016................................................

17,994


950,079


271,098


1,239,171

Amounts written off ............................................

(16,395)


(96,293)


(57,766)


(170,454)

Recoveries of amounts previously written off ....

-


-


11,185


11,185

Charge/(release) to income statement.................

(1,599)


39,539


(9,641)


28,299

Foreign exchange and other movements.............

-


2,915


31


2,946









At 30 June 2016..................................................

-


896,240


214,907


1,111,147














Banks


Customers




Individually
assessed


Individually
assessed


Collectively
assessed


Total


US$000


US$000


US$000


US$000





At 1 January 2015 ...............................................

18,280


1,017,484


239,362


1,275,126

Amounts written off ............................................

-


(205,805)


(54,238)


(260,043)

Recoveries of amounts previously written off ....

-


1,248


15,781


17,029

Charge to income statement ................................

-


20,976


10,545


31,521

Foreign exchange and other movements.............

(28)


4,643


(563)


4,052









At 30 June 2015...................................................

18,252


838,546


210,887


1,067,685

 

 

5     Segment analysis

With effect from 1 January 2016, the group's operating segments are as described in Note 1 'Basis of Preparation' on page 8. All comparatives have been adjusted accordingly.

Profit/(loss) for the period


RBWM


CMB


GB&M


GPB


Other


Inter Segment


Total


US$000


US$000


US$000


US$000


US$000


US$000


US$000















Half year to 30 June 2016




























Net interest income ....................................

199,337


139,142


113,925


 (8)


 (112)


12,868


    465,152

Net fee income ...........................................

63,119


96,402


88,287


-


 (1,827)


-  


    245,981

Net trading income .....................................

23,250


24,310


118,551


2


1,175


 (12,868)


    154,420

Other income .............................................

15,475


3,181


17,432


 (9)


39,267


 (19,490)


      55,856















Net operating income before loan impairment (charges)/recoveries and other credit risk provisions.....

301,181


263,035


338,195


 (15)


38,503


 (19,490)


    921,409















Loan impairment (charges)/recoveries and other credit risk provisions ..............................................

 (56,328)


16,573


6,556


-


-  


-  


     (33,199)















Net operating income..................................

244,853


279,608


344,751


 (15)


38,503


 (19,490)


    888,210















Total operating expenses...........................

 (164,125)


(118,846)


 (111,182)


 (230)


 (53,239)


19,490


   (428,132)















Operating profit...........................................

80,728


160,762


233,569


 (245)


 (14,736)


-  


    460,078















Share of profit in associates......................

-  


-  


1,007


-


-  


-  


        1,007















Profit before tax..........................................

80,728


160,762


234,576


 (245)


 (14,736)


-  


    461,085





























By geographical regions:














U.A.E. .........................................................

71,745


114,369


178,861


1


 (13,782)


-  


    351,194

Oman .........................................................

-  


-  


-  


-


-  


-  


              -  

Qatar ..........................................................

4,897


21,410


32,796


-


 (341)


-  


      58,762

Rest of Middle East ....................................

4,086


24,983


22,919


 (246)


 (613)


-  


      51,129















Profit before tax..........................................

80,728


160,762


234,576


 (245)


 (14,736)


-  


    461,085















 



 


RBWM


CMB


GB&M


GPB


Other


Inter Segment


Total


US$000


US$000


US$000


US$000


US$000


US$000


US$000















Half year to 30 June 2015




























Net interest income ....................................

228,813


163,626


127,286


 (11)


 (129)


11,276


        530,861

Net fee income ...........................................

69,112


116,621


98,844


2


 (2,370)


-  


        282,209

Net trading income .....................................

29,225


30,519


95,918


1


 (69)


 (11,276)


        144,318

Other income .............................................

            11,948


12,613


15,361


200


36,797


 (36,227)


          40,692















Net operating income before loan impairment (charges)/recoveries and other credit risk provisions.....

            339,098


            323,379


             337,409


                192


            34,229


               (36,227)


        998,080















Loan impairment (charges)/recoveries and other credit risk provisions ..............................................

             (20,906)


            (28,047)


               18,482


                   -  


                    -  


                        -  


        (30,471)















Net operating income..................................

318,192


295,332


355,891


192


34,229


 (36,227)


        967,609















Total operating expenses...........................

 (228,891)


(154,811)


 (134,591)


 (882)


 (57,991)


36,227


      (540,939)















Operating profit...........................................

89,301


140,521


221,300


 (690)


 (23,762)


-  


        426,670















Share of profit in associates......................

3,016


-  


441


-  


-  


-  


            3,457















Profit before tax..........................................

92,317


140,521


221,741


 (690)


 (23,762)


-  


        430,127















 

By geographical regions:














U.A.E. .........................................................

82,674


75,737


155,253


 (609)


 (23,042)


-  


        290,013

Oman .........................................................

634


14,135


6,743


-  


 (576)


-  


          20,936

Qatar ..........................................................

3,758


14,857


35,917


-  


 (51)


-  


          54,481

Rest of Middle East ....................................

5,251


35,792


23,828


 (81)


 (93)


-  


          64,697















Profit before tax..........................................

92,317


140,521


221,741


 (690)


 (23,762)


-  


        430,127















 

Balance sheet information


RBWM


CMB


GB&M


GPB


Other


Inter Segment


Total


US$000


US$000


US$000


US$000


US$000


US$000


US$000















At 30 June 2016




























Loans and advances to customers (net).

4,492,228


9,647,717


8,742,488


-  


2,580


-  


22,885,013

Interest in associates................................

-  


-  


78,021


-  


-  


-  


78,021

Total assets..............................................

4,502,992


10,292,694


24,853,937


-  


1,284,653


-  


40,934,276

Customer accounts...................................

11,787,619


6,898,028


5,418,431


-  


539,738


-  


24,643,816

Total liabilities............................................

11,926,533


8,173,570


10,956,670


-  


5,687,213


-  


36,743,986















 

At 31 December 2015




























Loans and advances to customers (net)...................................................

4,631,864


10,492,110


8,487,623


-  


2,395


-


23,613,992

Interest in associates............................

3,848


-  


78,325


-  


-  


-


82,173

Total assets...........................................

4,650,256


11,238,516


24,248,596


-  


1,337,451


-


41,474,819

Customer accounts...............................

11,824,225


8,660,073


4,739,648


40


28,093


-  


25,252,079

Total liabilities.........................................

11,945,310


10,034,092


9,872,641


40


4,876,441


-


36,728,524

 

6     Financial liabilities designated at fair value

 


30 June 2016


        31 December 2015


US$000


US$000





Debt securities in issue..............................................................................

404,424


848,237





At 30 June 2016, the accumulated amount of change in fair value attributable to changes in credit risk was a gain of US$5.8 million (30 June 2015: US$5.8 million loss).



 

7    Debt securities in issue



30 June 2016


31 December 2015


Carrying amount


Fair value


Carrying amount


Fair value


US$000


US$000


US$000


US$000


 







Medium term notes ...................................

3,898,793


3,897,984


4,149,847


4,151,145

Non-equity preference shares .................

950,000


845,699


950,000


861,017


 








4,848,793


4,743,683


5,099,847


5,012,162

Of which debt securities in issue reported as

 







    trading liabilities.....................................

(1,622,696)


(1,622,696)


(1,443,633)


(1,443,633)

    financial liabilities designated at fair value (Note 6)........................................

(404,424)


(404,424)


(848,237)


(848,237)










2,821,673


2,716,563


2,807,977


2,720,292


 







8    Risk Management

The group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.

The interim condensed consolidated financial statements do not include all risk management information and disclosures required in the annual financial statements, they should be read in conjunction with the Annual Report and Accounts 2015.

There have been no material changes to our policies and practices regarding risk management and governance as described in the Annual Report and Accounts 2015.

9    Fair values of financial instruments

The accounting policies, control framework and the hierarchy used to determine fair values at 30 June 2016 are consistent with those applied in the Annual Report and Accounts 2015.

Financial instruments carried at fair value

 



Valuation techniques



Level 1

Quoted
market
price

Level 2

Using

observable

inputs

Level 3

With significant unobservable 
inputs

 

 





Total


US$000

US$000

US$000

US$000

At 30 June 2016










Recurring fair value measurements





Assets





Trading assets...............................................................

           -  

        220,902

            -  

        220,902

Derivatives.....................................................................

           -  

      1,272,289

      10,421

      1,282,710

Financial investments: available-for-sale.......................

           -  

      6,640,305

      74,826

      6,715,131






Liabilities





Trading liabilities.............................................................

           -  

      1,688,748

            -  

      1,688,748

Financial liabilities designated at fair value....................

           -  

        404,424

            -  

        404,424

Derivatives.....................................................................

           -  

      1,383,496

       5,055

      1,388,551

 

 







 



Valuation techniques



Level 1

Quoted
market
price

Level 2

Using

observable

inputs

Level 3

With significant unobservable 
inputs

 

 





Total


US$000

US$000

US$000

US$000






At 31 December 2015










Recurring fair value measurements





Assets





Trading assets...............................................................

-

129,619

-

129,619

Derivatives.....................................................................

-

990,293

2,222

992,515

Financial investments: available-for-sale.......................

-

7,056,357

102,624

7,158,981






Liabilities





Trading liabilities ............................................................

-

1,483,677

-

1,483,677

Financial liabilities designated at fair value....................

-

848,237

-

848,237

Derivatives ....................................................................

-

1,052,971

20,999

1,073,970






Movement in Level 3 financial instruments

The following table provides a reconciliation of the movement between opening and closing balances of Level 3 financial instruments, measured at fair value using a valuation technique with significant unobservable inputs:


Assets


Liabilities


Available-for-sale

 

Held for Trading

 

Derivatives

 

Derivatives


US$000

 

US$000

 

US$000

 

US$000


 

 

 

 

 

 

 

At 1 January 2016....................................................................................

102,624


-


2,222


20,999

Total gains or losses recognised in profit or loss:








   -..... Gains less losses from financial investments....................................................................................................... ……………………..

11,209


-  


-


-

   -..... Trading income excluding net interest income....................................................................................................... ……………………

-


-


8,199


 (15,944)

Total gains or losses recognised in other comprehensive income..........








   -..... Available-for-sale investments: fair value losses....................................................................................................... ………………….

 (17,001)


-


-


-

   -..... Exchange differences....................................................................................................... ………………………………………………..

4


-


-


-

Purchases................................................................................................

-


-


--


-

Sales........................................................................................................

 (22,010)


-


-


-









At 30 June 2016.......................................................................................

74,826


-  


10,421


5,055









Unrealised gains/(losses) recognised in profit or loss relating to assets and liabilities held on 30 June 2016








   -..... Gains less losses from financial investments....................................................................................................... ……………………..

 (1,097)


-  


-  


-  

   -..... Trading income excluding net interest income....................................................................................................... ……………………

-  


-  


10,421


 (5,055)









 

 








At 1 January 2015....................................................................................

116,348


-


           2,508


11,399

Total gains recognised in profit or loss:








   -..... Gains less losses from financial investments....................................................................................................... ……………………..

(4,283)


-


-


-

   -..... Trading income excluding net interest income....................................................................................................... ……………………

-


-


(286)


9,600

Total gains or losses recognised in other comprehensive income..........








   -..... Available-for-sale investments: fair value losses....................................................................................................... ………………….

(8,653)


-


-


-

   -..... Exchange differences....................................................................................................... ………………………………………………..

(5)


-


-


-

Purchases................................................................................................

39


-


-


-

Sales........................................................................................................

(822)


-


-


-









At 31 December 2015..............................................................................

102,624


-


2,222


20,999









Unrealised gains/(losses) recognised in profit or loss relating to assets and liabilities held on 30 June 2015








   -..... Gains less losses from financial investments....................................................................................................... ……………………..

(4,124)


-


-


-

   -..... Trading income excluding net interest income....................................................................................................... ……………………

-


-


3,597


(17,618)










 

 

 

 

 

 

 

For assets and liabilities classified as held for trading, realised and unrealised gains and losses are presented in the income statement under 'Trading income excluding net interest income'.

Realised gains and losses from available-for-sale securities are presented under 'Gains less losses from financial investments' in the income statement while unrealised gains and losses are presented in 'Fair value gains/(losses) taken to equity' within 'Available-for-sale investments' in other comprehensive income.

Effects of changes in significant unobservable assumptions to reasonably possible alternatives

The fair value of financial instruments are, in certain circumstances, measured using valuation techniques that incorporate assumptions that are not evidenced by prices from observable current market transactions in the same instrument and are not based on observable market data. The following table shows the sensitivity of fair values to reasonably possible alternative assumptions:

Sensitivity of fair values to reasonable possible alternative assumptions


Reflected in profit or loss


Reflected in other comprehensive income


Favourable
changes

 

Unfavourable
changes

 

Favourable
changes

 

Unfavourable
changes


US$000

 

US$000

 

US$000

 

US$000









At 30 June 2016








Derivatives/trading assets/trading liabilities1 .................................................................

774

 

 (774)

 

                -  

 

                            -  

Financial investments: available-for-sale ...

1,010

 

 (1,010)

 

2,731

 

 (2,731)









At 31 December 2015








Derivatives/trading assets/trading liabilities1 .................................................................

1,161


(1,161)


-  


-

Financial investments: available-for-sale ...

966


 (966)


           4,165


(4,165)

       

1       Derivatives, trading assets and trading liabilities are presented as one category to reflect the manner in which these financial instruments are risk-managed.

 

Sensitivity of fair values to reasonably possible alternative assumptions by Level 3 instrument type


Reflected in profit or loss


Reflected in other comprehensive income


Favourable
changes

 

Unfavourable
changes

 

Favourable
changes

 

Unfavourable
changes


US$000

 

US$000

 

US$000

 

US$000


 

 

 

 

 

 

 

At 30 June 2016

 

 

 

 

 

 

 

Private equity including strategic investments............................................

                       1,010

 

                  (1,010)

 

           2,731

 

                     (2,731)

Other derivatives.......................................

774

 

                     (774)

 

                -  

 

                            -  

Other portfolio............................................

                            -  

 

                          -  

 

                -  

 

                            -  

 





At 31 December 2015








Private equity including strategic investments............................................

                          966


                     (966)


           4,165


                     (4,165)

Other derivatives.......................................

1,161


 (1,161)


-


-

Other portfolio............................................

-  


-


-


-

Favourable and unfavourable changes are determined on the basis of changes in the value of the instrument as a result of varying the levels of the unobservable parameters using statistical techniques. When parameters are not amenable to statistical analysis, quantification of uncertainty is judgmental.

When the fair value of a financial instrument is affected by more than one unobservable assumption, the above table reflects the most favourable or most unfavourable change from varying the assumptions individually.

In respect of private equity investments, in many of the methodologies, the principal assumption is the valuation multiple to be applied to the main financial indicators. This may be determined with reference to multiples for comparable listed companies and includes discounts for marketability.

For other derivatives, principal assumptions concern the value to be attributed to future volatility of asset values and the future correlation between asset values.



 

10    Interest in associates

On 30 March 2016, the group completed the disposal of its 40% shareholding in Rewards Management Middle East FZ LLC, an associate of the group, and recorded a gain on disposal of US$13.1 million.

11   Credit quality of financial instruments

The five credit quality classifications set out and defined in the Annual Report and Accounts 2015 describe the credit quality of the group's lending, debt securities portfolios and derivatives. These classifications each encompass a range of more granular, internal credit rating grades assigned to wholesale and retail lending businesses, as well as the external ratings attributed by external agencies to debt securities. There is no direct correlation between internal and external ratings at granular level, except to the extent each falls within a single quality classification.

The following tables set out the group's distribution of financial instruments by measures of credit quality.


30 June 2016


Neither past due nor impaired









 


Strong


Good


Satis-factory


Sub-
standard


Past due
but not
impaired


Impaired


Impairment allowances


Total


US$000


US$000


US$000


US$000


US$000


US$000


US$000


US$000

















Cash and balances at central banks ........................................

                799,792


                    1,613


                         -  


               31,230


                                    -  


                       -  


                                        -  


                832,635

Items in the course of
collection from other
banks .............................

                         -  


                         -  


                  46,838


                       -  


                                    -  


                       -  


                                        -  


                  46,838

















Trading assets ..................

141,428


26,451


51,250


1,773


-  


-  


-  


220,902

- treasury and other
eligible bills .....................

                         -  


                         -  


                         -  


                       -  


                                    -  


                       -  


                                        -  


                         -  

- debt securities ...............

61,061


26,451


20,642


1,773


-  


-  


-  


109,927

- loans and advances to banks ........................................

                  62,364


                         -  


                       511


                       -  


                                    -  


                       -  


                                        -  


                  62,875

- loans and advances to customers ........................................

                  18,003


                         -  


                  30,097


                       -  


                                    -  


                       -  


                                        -  


                  48,100

















Derivatives ........................

269,024


256,083


742,451


15,152


-  


-  


-  


1,282,710

















Loans and advances held at amortised cost ........................................

           16,075,040


             7,112,198


             4,909,881


             797,151


                          832,823


          1,447,358


(1,111,147)


           30,063,304

- loans and advances
to banks .........................

             5,678,282


             1,109,870


                228,500


             161,639


                                    -  


                       -  


                                        -  


             7,178,291

- loans and advances to customers ........................................

           10,396,758


             6,002,328


             4,681,381


             635,512


                          832,823


          1,447,358


(1,111,147)


           22,885,013

















Reverse repurchase agreements non-trading........................................

                395,079


                120,062


                         -  


                       -  


                                    -  


                       -  


                                        -  


                515,141

















Financial investments .......

1,262,177


-  


5,377,860


-  


-  


-  


-  


6,640,037

- treasury and other similar bills ........................................

                         -  


                         -  


             1,265,870


                       -  


                                    -  


                       -  


                                        -  


             1,265,870

- debt securities ...............

1,262,177


-  


4,111,990


-  


-  


-  


-  


5,374,167

















Other assets......................

34,151


223,336


473,784


57,164


29,882


5,469


-  


823,786

- endorsements and acceptances ........................................

                  31,009


                223,276


                321,142


               57,164


                            28,455


                 5,469


                                        -  


                666,515

- accrued income and other ........................................

                    3,142


                         60


                152,642


                       -  


                              1,427


                       -  


                                        -  


                157,271

















Total financial instruments

18,976,691


7,739,743


11,602,064


902,470


862,705


1,452,827


(1,111,147)


40,425,353



 


31 December 2015


Neither past due nor impaired









 


Strong


Good


Satisfactory


Sub-
standard


Past due
but not
impaired


Impaired


Impairment allowances


Total

 


US$000


US$000


US$000


US$000


US$000


US$000


US$000


US$000

 

















 

Cash and balances at central banks ....................................

519,043


59,369


-


34,001


-


-


-


612,413

Items in the course of
collection from other
banks .........................

-


-


90,173


-


-


-


-


90,173

















Trading assets ...............

77,869


21,863


27,792


2,095


-


-


-


129,619

 - treasury and other eligible bills ....................................

-


-


-

-


-


-

-

-

 - debt securities ...........

66,386


21,863


21,830

2,095


-


-

-

112,174

 - loans and advances to banks ....................................

11,483


-


-

-


-


-

-

11,483

 - loans and advances to customers ....................................

-


-


5,962

-


-


-

-

5,962

















Derivatives .....................

176,590


222,898


585,919


7,108


-


-


-


992,515

















Loans and advances held at amortised cost ....................................

14,383,420


9,238,179


5,055,483


847,490


540,695


1,519,010


(1,239,171)


30,345,106

 - loans and advances
to banks .....................

4,774,909


1,680,948


107,622

165,636


-


19,993

(17,994)

6,731,114

 - loans and advances to customers ....................................

9,608,511


7,557,231


4,947,861

681,854


540,695


1,499,017

(1,221,177)

23,613,992

















Reverse repurchase agreements non-trading....................................

470,608


336,320


-


-


-


-


-


806,928

















Financial investments ....

2,203,968


-


4,852,121


-


-


-


-


7,056,089

 - treasury and other similar bills ....................................

1,116,602


-


1,663,893

-


-


-

-

2,780,495

 - debt securities ...........

1,087,366


-


3,188,228

-


-


-

-

4,275,594

















Other assets...................

30,493


279,643


521,225


72,918


15,609


2,226


-


922,114

 - endorsements and acceptances ....................................

28,329


279,568


387,219

72,918


14,153


2,226

-

784,413

 - accrued income and other ....................................

2,164


75


134,006

-


1,456


-

-

137,701

















Total financial instruments .

17,861,991


10,158,272


11,132,713


963,612


556,304


1,521,236


(1,239,171)


40,954,957

 

12    Contingent liabilities, contractual commitments and guarantees


                 At

       30 June
2016


                 At

31 December

             2015


US$000


US$000

Guarantees and other contingent liabilities




Guarantees ............................................................................................................

14,128,914


14,161,236





Commitments




Documentary credits and short-term trade-related transactions ..........................

481,972


592,827

Undrawn formal standby facilities, credit lines and other
commitments to lend ...........................................................................................

16,685,506


17,848,653






17,167,478


18,441,480

The above table discloses the nominal principal amounts of contingent liabilities, commitments and guarantees. They are mainly credit-related instruments which include both financial and non financial guarantees and commitments to extend credit.  Nominal principal amounts represent the amounts at risk should contracts be fully drawn upon and clients default.  As a significant proportion of guarantees and commitments is expected to expire without being drawn upon, the total of the nominal principal amounts is not representative of future liquidity requirements.



Guarantees and other commitments

The principal types of guarantees generally provided in the normal course of the group's banking business, and other contractual commitments, are consistent with those detailed in the Annual Report and Accounts 2015.

13    Legal proceedings and regulatory matters

The group is party to legal proceedings, investigations and regulatory matters in a number of jurisdictions arising out of its normal business operations. No material adverse impact on the financial position of the group is expected to arise from such proceedings arising in the jurisdictions in which the group operates.

 

Anti-money laundering and sanctions-related

(Matters relevant to HBME as a subsidiary of HSBC operating in the Middle East)

In October 2010, HSBC Bank USA entered into a consent order with the Office of the Comptroller of the Currency (the 'OCC'), and HSBC North America Holdings Inc. ('HNAH') entered into a consent order with the Federal Reserve Board (the 'FRB') (each an 'Order' and together, the 'Orders'). These Orders required improvements to establish an effective compliance risk management programme across HSBC's US businesses, including risk management related to the Bank Secrecy Act ('BSA') and anti-money laundering ('AML') compliance. HSBC Bank USA is not currently in compliance with the OCC Order. Steps are being taken to address the requirements of the Orders. 

In December 2012, HSBC Holdings, HNAH and HSBC Bank USA entered into agreements with US and UK government agencies regarding past inadequate compliance with the BSA, AML and sanctions laws. Among those agreements, HSBC Holdings and HSBC Bank USA entered into a five-year deferred prosecution agreement with, among others, the DoJ (the 'US DPA'); and HSBC Holdings consented to a cease-and-desist order, and HSBC Holdings and HNAH consented to a civil money penalty order with the FRB. HSBC Holdings also entered into an agreement with the Office of Foreign Assets Control ('OFAC') regarding historical transactions involving parties subject to OFAC sanctions, as well as an undertaking with the UK FCA to comply with certain forward-looking AML and sanctions-related obligations. In addition, HSBC Bank USA entered into civil money penalty orders with the Financial Crimes Enforcement Network of the US Treasury Department and the OCC.

Under these agreements, HSBC Holdings and HSBC Bank USA made payments totalling $1.9bn to US authorities and undertook various further obligations, including, among others, to continue to cooperate fully with the DoJ in any and all investigations, not to commit any crime under US federal law subsequent to the signing of the agreement, and to retain an independent compliance monitor (the 'Monitor'). In January 2016, the Monitor delivered his second annual follow-up review report. Through his country-level reviews, the Monitor identified potential anti-money laundering and sanctions compliance issues that the DoJ and HSBC are reviewing further. Additionally, as discussed elsewhere in this Note, HSBC is the subject of other ongoing investigations and reviews by the DoJ. The potential consequences of breaching the US DPA, as well as the role of the Monitor and his second annual review, are discussed on page 100 of the Annual Report and Accounts 2015.

HSBC Bank USA also entered into two consent orders with the OCC. These required HSBC Bank USA to correct the circumstances noted in the OCC's report and to adopt an enterprise-wide compliance programme, and imposed restrictions on acquiring control of, or holding an interest in, any new financial subsidiary, or commencing a new activity in its existing financial subsidiary, without the OCC's prior approval.

These settlements with US and UK authorities have led to private litigation, and do not preclude further private litigation related to HSBC's compliance with applicable BSA, AML and sanctions laws or other regulatory or law enforcement actions for BSA, AML, sanctions or other matters not covered by the various agreements.

In November 2014, a complaint was filed in the US District Court for the Eastern District of New York on behalf of representatives of US persons alleged to have been killed or injured in Iraq between April 2004 and November 2011. The complaint was filed against HSBC Holdings, HSBC Bank plc, HSBC Bank USA and HSBC Bank Middle East Limited, as well as other non-HSBC banks and the Islamic Republic of Iran (together, the 'Defendants'). The plaintiffs allege that Defendants violated the US Anti-Terrorism Act ('US ATA') by altering or falsifying payment messages involving Iran, Iranian parties and Iranian banks for transactions processed through the US. Defendants filed a motion to dismiss in May 2015. The Plaintiffs filed a Second Amended Complaint in July 2016, and the Defendants have indicated that they will be filing an amended Motion to Dismiss in response in due course.

In November 2015, a complaint was filed in the US District Court for the Northern District of Illinois on behalf of representatives of four US persons alleged to have been killed or injured in terrorist attacks on three hotels in Amman, Jordan in 2005. The complaint was filed against HSBC Holdings, HSBC Bank USA, HNAH, HSI, HSBC Finance, HSBC USA Inc. and HSBC Bank Middle East Limited, as well a non-HSBC bank, Al Rajhi Bank. The plaintiffs allege that the HSBC defendants violated the US ATA by failing to enforce due diligence methods to prevent its financial services from being used to support the terrorist attacks.

Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of these lawsuits, including the timing or any possible impact on HSBC, which could be significant.

14    Transactions with related parties

There were no changes in the related party transactions described in the Annual Report and Accounts 2015 that have had a material effect on the financial position or performance of HSBC in the half-year to 30 June 2016. All related party transactions that took place in the half-year to 30 June 2016 were similar in nature to those disclosed in the Annual Report and Accounts 2015.

15    Events after the balance sheet

On 26 July 2016 the Directors declared a second interim dividend of US$75 million in respect of the financial year ending 31 December 2016, as described in Note 2.

16    Interim Report 2016 and statutory accounts

The information in this Interim Report 2016 is unaudited and does not constitute statutory accounts. The Interim Report 2016 was approved by the Board of Directors on 1 August 2016. The Annual Report and Accounts for the year ended 31 December 2015 have been delivered to the Registrar of Companies in Jersey in accordance with Article 108 of the Companies (Jersey) 1991, as amended. The auditor has reported on those accounts. Its report was (i) unqualified; (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report; (iii) and did not contain a statement under Article 113B(3) of the Companies (Jersey) 1991, as amended.

 


 

Introduction

We have reviewed the accompanying condensed consolidated interim statement of financial position of HSBC Bank Middle East Limited and its subsidiaries (together referred to as the "Group") as at 30 June 2016 and the related condensed consolidated interim statements of income, comprehensive income, changes in equity and cash flows for the six-month period then ended and other explanatory notes. Management is responsible for the preparation and presentation of this condensed consolidated interim financial information in accordance with International Accounting Standard 34 - Interim Financial Reporting as adopted by the European Union ("IAS 34"). Our responsibility is to express a conclusion on this condensed consolidated interim financial information based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410, 'Review of interim financial information performed by the independent auditor of the entity'. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union.

 

 

 

 

 

 

Anthony Hugh McNaughtan

PricewaterhouseCoopers

Dubai, United Arab Emirates

2 August 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PricewaterhouseCoopers Limited, License no. CL0215

Al Fattan Currency House, Tower 1, Level 8,  Unit 801, DIFC, PO Box 11987, Dubai - United Arab Emirates

T: +971 (0)4 304 3100,  F: +971 (0)4 346 9150,  www.pwc.com/me

 

PricewaterhouseCoopers Limited is registered with the Dubai Financial Services Authority.



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HSBC BANK MIDDLE EAST LIMITED

Incorporated in the Dubai International Financial Centre - number 2199

Regulated by the Dubai Financial Services Authority.

 

 

REGISTERED OFFICE

Level 1, Building No. 8, Gate Village, Dubai International Financial Centre, Dubai, United Arab Emirates.

 

 

ã Copyright HSBC BANK MIDDLE EAST LIMITED 2016

All rights reserved

 

 

No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of HSBC BANK MIDDLE EAST LIMITED.

 



                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

 


This information is provided by RNS
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