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HSBC Bank Bermuda Limited’s Risk Management Framework

Effective risk management is crucial for long-term success and delivering sustainable value to shareholders. In its latest financial statements, HSBC Bank Bermuda Limited has highlighted the importance of a robust risk management framework.

Organisation and Responsibilities

The Board of Directors provides entrepreneurial leadership within a framework of prudent controls, enabling risks to be assessed and managed. The Audit and Risk Committee, a non-executive committee accountable to the Board, provides oversight and advice on financial reporting and high-level risk-related matters.

• The Executive Management Committee, led by the Chief Executive Officer, is responsible for implementing the strategy set by the Board and managing the day-to-day operations of the bank.
• Other key management committees include:
  • Risk Management Meeting
  • Compliance Risk Meeting
  • Asset Liability Management Committee

Linkage to Consolidated Financial Statements 2022

The consolidated financial statements provide a comprehensive overview of the group’s financial position and performance. The basis of consolidation is described in the statements, along with a list of entities fully consolidated within the group.

Pillar 3 Disclosures 2022

The Pillar 3 Disclosures have been prepared in accordance with regulatory capital adequacy concepts and rules, rather than International Financial Reporting Standards (IFRSs). As such, some information may not be directly comparable to the financial information in the consolidated financial statements.

Explanation of Differences between Accounting Fair Value and Regulatory Prudent Valuation

Fair value is defined as the best estimate of the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date. However, regulatory prudent valuation requires additional adjustments to reach a specified degree of confidence.

• Based on review of these adjustments, HSBC Bank Bermuda Limited has determined that the adjustment amount is immaterial for further consideration.
• The bank’s risk management framework continues to support effective internal control systems and ensure that risks are assessed and managed effectively.

For more information on HSBC Bank Bermuda Limited’s risk management framework, refer to pages 37-46 of its Consolidated Financial Statements 2022.