HSBC 2006 Annual Report Download - page 182

HSBC HOLDINGS PLC
Report of the Directors: The Management of Risk (continued)
Credit risk > Exposure > 2006 / By industry sector
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launches in the Middle East, Sri Lanka and
Singapore and marketing and incentive campaigns
across the region. Other unsecured lending balances
rose during 2006, partly as a result of expansion of
HSBC’s consumer finance business in India,
Australia and Indonesia.
In Latin America, other personal lending
showed significant growth, rising by 49 per cent,
with cross-sales of the ‘Tu Cuenta’ product
generating strong demand for credit cards in Mexico.
Personal lending balances, excluding mortgages,
rose by 25 per cent in Brazil, with increased vehicle
finance lending benefiting from strengthened
relationships with car dealers, and higher numbers of
credit cards in issue following a number of
campaigns designed to improve retention and
utilisation.
Loans and advances to corporate and
commercial customers grew by 14 per cent to
US$343 billion. Lending was primarily in Europe,
which accounted for 57 per cent of advances, over
three quarters of which was concentrated in the UK.
In Europe, corporate and commercial advances
rose by 9 per cent, driven by lending growth in the
UK, France and Turkey. In the UK, there was firm
growth in lending to the service industry and real
estate and related construction businesses. In France,
improved retention of existing clients and
recruitment of new customers resulted in higher
lending balances, while in Turkey expansion of the
branch network, including dedicated SME centres,
contributed to growth in commercial advances.
In Hong Kong there was strong demand for
credit from larger Commercial Banking customers in
the property sector and from manufacturers with
operations in mainland China seeking to fund
expansion. New initiatives designed to increase
commercial lending included a pre-approved lending
scheme and a telesales campaign, which led to
growth in SME lending and a doubling in the
number of lending relationships in this segment. This
strong growth in Commercial Banking lending was
offset by the repayment of two large facilities by
Corporate, Investment Banking and Markets clients.
In the Rest of Asia-Pacific, strong economic
expansion in the Middle East led to greater demand
for credit and regional lending balances rose in
response to increases in regional trade flows and
increased marketing activity.
In North America, expansion into new regional
markets, higher levels of marketing and the
recruitment of additional SME relationship managers
to meet customer demand contributed to growth in
corporate and commercial lending balances.
HSBC experienced strong growth in lending
balances to SME businesses across Latin America
due to favourable economic conditions.
Additionally, in Mexico, strong demand for credit
from the rapidly growing real estate and residential
construction sectors contributed to greater levels of
lending.
The following tables analyse loans and advances
by industry sector and by the location of the
principal operations of the lending subsidiary or, in
the case of the operations of The Hongkong and
Shanghai Banking Corporation, HSBC Bank, HSBC
Bank Middle East and HSBC Bank USA, by the
location of the lending branch.