HSBC 2009 Annual Report Download - page 223

221
HSBC Finance US mortgage lending14
(Unaudited)
At 31 December 2009 At 31 December 2008
Mortgage
Services
Consumer
Lending
Other
mortgage
lending
Total
Mortgage
Services
Consumer
Lending
Other
mortgage
lending
Total
US$m US$m US$m US$m US$m US$m US$m US$m
Fixed-rate15 ...................... 13,596 37,639 98 51,333 16,288 43,873 91 60,252
Other15 .............................. 8,168 1,867 6 10,041 11,339 2,324 35 13,698
Adjustable-rate ............ 7,070 1,867 – 8,937 9,530 2,324 33 11,887
Interest-only ................ 1,098 – 6 1,104 1,809 – 2 1,811
21,764 39,506 104 61,374 27,627 46,197 126 73,950
First lien15 ........................ 18,710 34,913 77 53,700 23,188 40,334 93 63,615
Second lien15 .................... 3,054 4,593 27 7,674 4,439 5,863 33 10,335
21,764 39,506 104 61,374 27,627 46,197 126 73,950
Stated income16 ................ 3,905 – – 3,905 5,667 – – 5,667
Impairment allowances .... 2,419 3,167 1 5,587 3,819 3,403 1 7,223
– as a percentage of total
mortgage lending ......... 11.1% 8.0% 1.0% 9.1% 13.8% 7.4% 0.8% 9.8%
For footnotes, see page 291.
US personal lending – credit quality
(Unaudited)
During 2009, challenging economic conditions in the
US continued, marked by further declines in the
housing market, rising unemployment, tight credit
conditions and reduced economic growth. Although
the economic recession continued to deepen into
the first half of 2009, signs of stabilisation and
improvement began to appear in the second half
of the year. While the ongoing financial market
disruption continued to affect credit and liquidity
throughout the year, an improvement in conditions
which began in the second quarter and continued
through the rest of the year, strengthened liquidity
and narrowed credit spreads. The recovery in market
confidence stemmed largely from various
government actions taken to restore faith in the
capital markets and stimulate consumer spending,
and success in these initiatives is bolstering
consumer and business sentiment. The pace of job
losses eased in the second half of 2009, and this
helped the housing market, though the first-time
homebuyer tax credit and the low interest rates were
the main forces driving up home sales and shrinking
inventories of unsold properties. This resulted in
some house price stabilisation in the latter half of
2009, particularly in the middle and lower price
sector.
US unemployment rates, which have been a
major factor in the deterioration of credit quality in
the country, were 10 per cent in December 2009, an
increase of 260 basis points since December 2008.
Unemployment rates in 16 states were greater than
the US national average and unemployment rates in
10 states were at or above 11 per cent, including
California and Florida, with more than 5 per cent of
HSBC Finance’s total loan balances.
HSBC Finance: geographical concentration of US lending14,17
(Unaudited)
Mortgage lending
as a percentage of:
Other personal lending
as a percentage of:
total
lending
total
mortgage
lending
total
lending
total other
personal
lending
percentage
of total
lending
% % % % %
California ............................................................................... 6 11 5 11 11
New York ............................................................................... 3 7 3 7 7
Florida .................................................................................... 3 7 3 6 6
Texas ...................................................................................... 2 4 4 8 6
Pennsylvania .......................................................................... 3 6 2 5 5
Ohio ....................................................................................... 3 5 2 5 5
For footnotes, see page 291.