HSBC 2006 Annual Report Download - page 202

HSBC HOLDINGS PLC
Report of the Directors: The Management of Risk (continued)
Credit risk > Provisions for bad and doubtful debts > 2004 / 2003
200
Movement in provisions by industry segment and by geographical region
(Unaudited)
2004 (restated3)
Europe
Hong
Kong
Rest of
Asia-
Pacific
North
America
Latin
America
Total
US$m US$m US$m US$m US$m US$m
Provisions at 1 January ....................................... 4,435 1,055 1,181 5,665 1,379 13,715
IFRSs transition adjustment at 1 January ........... (2) (34) (21) – (1) (58)
Amounts written off
Commercial, industrial and international trade (298) (35) (164) (61) (65) (623)
Real estate ....................................................... (30) (55) (17) (3) (1) (106)
Non-bank financial institutions ...................... (14) (2) (1) (3) (20)
Other commercial ........................................... (209) (33) (42) (29) (185) (498)
Residential mortgages .................................... (10) (52) (8) (463) (28) (561)
Other personal ................................................ (770) (125) (171) (5,566) (404) (7,036)
(1,331) (302) (403) (6,125) (683) (8,844)
Recoveries of amounts written off in previous
years
Commercial, industrial and international trade 27 10 4 38 39 118
Real estate ....................................................... 3 – 10 4 – 17
Non-bank financial institutions ...................... 3 – – – – 3
Other commercial ........................................... 5 3 14 18 45 85
Residential mortgages .................................... 1 12 1 8 9 31
Other personal ................................................ 97 22 41 436 63 659
136 47 70 504 156 913
Net charge to profit and loss account1
Banks .............................................................. (7) – (1) – (2) (10)
Commercial, industrial and international trade 180 (56) 52 (9) 12 179
Real estate ....................................................... 21 (15) (28) (1) 1 (22)
Non-bank financial institutions ...................... 18 (3) (1) 1 – 15
Governments .................................................. – – – 1 – 1
Other commercial ........................................... (65) (29) (18) (21) (35) (168)
Residential mortgages .................................... 3 (14) 4 494 (5) 482
Other personal ................................................ 1,035 120 142 4,616 303 6,216
General provisions .......................................... (162) (223) (48) (63) (2) (498)
1,023 (220) 102 5,018 272 6,195
Foreign exchange and other movements ............ 551 (24) 14 150 (53) 638
Provisions at 31 December ................................. 4,812 522 943 5,212 1,070 12,559
Provisions against banks:
– specific provisions ....................................... 14 – 3 – – 17
Provisions against customers:
– specific provisions ....................................... 4,036 320 785 4,106 770 10,017
– general provisions2 ...................................... 762 202 155 1,106 300 2,525
Provisions at 31 December ................................. 4,812 522 943 5,212 1,070 12,559
: % % % % % %
Provisions against customers as a percentage
of loans and advances to customers
– specific provisions ....................................... 1.43 0.40 1.27 1.67 4.58 1.46
– general provisions ....................................... 0.27 0.25 0.25 0.45 1.79 0.37
At 31 December .................................................. 1.70 0.65 1.52 2.12 6.37 1.83
1 See table below ‘Net charge to the profit and loss account for bad and doubtful debts by geographical region’.
2 General provisions are allocated to geographical segments based on the location of the office booking the provision. Consequently, the
general provision booked in Hong Kong may cover assets booked in branches located outside Hong Kong, principally in the Rest of
Asia-Pacific, as well as those booked in Hong Kong.
3 In 2006, Mexico and Panama were reclassified from the North America segment to the Latin America segment. Comparative
information has been restated accordingly. See Note 13 on the Financial Statements.