HSBC 2011 Annual Report Download - page 125

123
Overview Operating & Financial Review Corporate Governance Financial Statements Shareholder Information
Loan impairment charges and delinquency
levels in our UK mortgage book remained at very
low levels, reflecting the strong credit quality of the
portfolio and the low interest rate environment
which helped to make mortgage repayments more
affordable for customers, some of whom were
actively reducing their outstanding debt levels.
In Hong Kong, mortgage lending was
US$46.8bn, an increase of 10% compared with the
end of 2010. It was supported by the low interest rate
environment and the strength of the local property
market. The strong growth in the property market led
the Hong Kong Monetary Authority (‘HKMA’)
to introduce measures in both the second half of
2010 and June 2011 such as increasing deposit
requirements, reducing the maximum LTV ratios for
new loans and capping the maximum debt-to-income
ratios. These resulted in a reduction in property
prices in the second half of the year and lower
sales volumes. The quality of our mortgage book
remained strong with an average LTV ratio of
49% on new mortgage sales and 37% on our total
mortgage books.
The following table shows the levels of
mortgage lending products in our various portfolios
in the US, the UK and the rest of the Group.
Mortgage lending products
(Unaudited)
UK
Rest of
Europe
US13
Rest of
North
America
Other
regions14 Total
US$m US$m US$m US$m US$m US$m
At 31 December 2011
Residential mortgages ................................................. 111,224 8,678 52,484 20,794 85,783 278,963
Second lien mortgages ................................................. 694 – 7,063 468 233 8,458
Total mortgage lending ................................................ 111,918 8,678 59,547 21,262 86,016 287,421
Second lien as a percentage of total mortgage lending... 0.6% – 11.9% 2.2% 0.3% 2.9%
Impairment allowances
Residential mortgages ............................................. (383) (58) (4,551) (27) (302) (5,321)
Second lien mortgages ............................................ (42) (1) (740) (9) – (792)
Total impairment allowances on mortgage lending .... (425) (59) (5,291) (36) (302) (6,113)
Interest-only (including offset) mortgages .................. 46,886 48 – 667 1,256 48,857
Affordability mortgages, including ARMs ................. 177 496 17,089 277 6,894 24,933
Other ............................................................................ 106 – – – 189 295
Total interest-only and affordability mortgages .......... 47,169 544 17,089 944 8,339 74,085
– as a percentage of total mortgage lending ........... 42.1% 6.3% 28.7% 4.4% 9.7% 25.8%
At 31 December 2010
Residential mortgages ................................................. 103,037 8,581 57,630 21,212 78,221 268,681
Second lien mortgages ................................................. 846 2 9,322 578 422 11,170
Total mortgage lending ................................................ 103,883 8,583 66,952 21,790 78,643 279,851
Second lien as a percentage of total mortgage lending... 0.8% 0.0% 13.9% 2.7% 0.5% 4.0%
Impairment allowances
Residential mortgages ............................................. (275) (58) (3,592) (25) (297) (4,247)
Second lien mortgages ............................................ (58) – (889) (19) – (966)
Total impairment allowances on mortgage lending .... (333) (58) (4,481) (44) (297) (5,213)
Interest-only (including offset) mortgages .................. 45,039 51 – 908 1,282 47,280
Affordability mortgages, including ARMs ................. 1,089 326 18,494 274 7,855 28,038
Other ............................................................................ 102 – – – 183 285
Total interest-only and affordability mortgages .......... 46,230 377 18,494 1,182 9,320 75,603
– as a percentage of total mortgage lending ........... 44.5% 4.4% 27.6% 5.4% 11.9% 27.0%
For footnotes, see page 185.