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HALF-YEAR REPORT 2016
Notes to the Consolidated Financial Statements
For the six months ended 30 June 2016
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31 Contingent liabilities and commitments
(continued)
(c) Bond redemption obligations
As an underwriting agent of PRC government bonds, CITIC Bank has the responsibility to buy back
those bonds sold by it should the holders decide to early redeem the bonds held. The redemption
price for the bonds at any time before their maturity dates is based on the coupon value plus any
interest unpaid and accrued up to the redemption date. Accrued interest payables to the bond
holders are calculated in accordance with relevant rules of the Ministry of Finance and the People’s
Bank of China. The redemption price may be different from the fair value of similar instruments traded
at the redemption date.
The redemption obligations below represent the nominal value of government bonds underwritten
and sold by CITIC Bank, but not yet matured as at the balance sheet date:
30 June
2016
31 December
2015
HK$ million
HK$ million
Bonds redemption obligations
15,027
15,960
As at 30 June 2016, the original maturities of these bonds vary from one to five years (31 December
2015: one to five years). Management of the Group expects the amount of redemption before
maturity dates of these bonds will not be material. The Ministry of Finance will not provide funding for
the early redemption of these bonds on a back-to-back basis, but will settle the principal and interest
upon maturity.
(d) Guarantees provided
Except for guarantees that have been recognised as liabilities, the guarantees issued by the Group as
at the balance sheet date are as follows:
30 June
2016
31 December
2015
HK$ million
HK$ million
Related parties
14,731
15,469
Third parties
7,370
7,208
22,101
22,677
As at 30 June 2016, the guarantees provided by discontinued operations to related parties of
HK$3,056 million and to third parties of HK$7,251 million were included in the above table
respectively.
The relationship of related parties is disclosed in Note 33.