| Project Detail |
This summary describes the proposed MIGA guarantee for the equity investments by HSBC Holdings plc (HSBC) in its subsidiary in Mexico, HSBC Mexico S.A., Institución de Banca Múltiple, Grupo Financiero HSBC (HSBC Mexico, or the Bank) relating to HSBC Mexico’s banking operations in Mexico (the Project). The proposed MIGA guarantee is expected to provide regulatory capital relief to HSBC on a consolidated level by reducing the amount of Risk Weighted Assets (RWAs). The tenor of the proposed guarantee is expected to be up to 8 years. The proposed Project remains subject to approval by both HSBC and MIGA in accordance with their respective policies and procedures and the negotiation and execution of the contract of guarantee.
UK-headquartered HSBC is one of the largest global financial institutions in the world in terms of market capitalization with retail and commercial operations in countries across Asia, Europe, Latin America, and North America. Its subsidiary banks abroad are required to maintain reserves at the central banks in their respective jurisdictions. Mandatory reserves contribute to HSBC’s overall RWA at the consolidated level, resulting in less headroom for other assets at a given level of capital. |
