HSBC 2012 Annual Report Download - page 142

HSBC HOLDINGS PLC
Report of the Directors: Operating and Financial Review (continued)
Risk > Credit risk > Summary in 2012
140
the redeployment of liquidity in Europe to central
banks, together with maturities and repayments in
Hong Kong.
Loan and other credit-related commitments
declined from US$655bn to US$579bn. The
reduction in exposure in 2012 was largely driven by
the sale of Card and Retail Services in the US.
For a more detailed analysis of our maximum exposure
to credit risk, see page 144.
Personal lending
(Unaudited)
Europe
Hong
Kong
Rest of
Asia-
Pacific MENA
North
America
Latin
America Total
US$m US$m US$m US$m US$m US$m US$m
2012
First lien residential mortgages
Gross amount (B) .................................................. 135,172 52,296 36,906 2,144 70,133 5,211 301,862
Impairment allowances ......................................... 489 4 66 136 4,163 47 4,905
– as a percentage of B .......................................... 0.4% 0.0% 0.2% 6.3% 5.9% 0.9% 1.6%
Other personal lending1
Gross amount (C) .................................................. 51,102 18,045 12,399 4,088 14,221 13,376 113,231
Impairment allowances ......................................... 977 57 143 189 684 1,257 3,307
– as a percentage of C .......................................... 1.9% 0.3% 1.2% 4.6% 4.8% 9.4% 2.9%
Total personal lending
Gross amount (D) ................................................. 186,274 70,341 49,305 6,232 84,354 18,587 415,093
Impairment allowances ......................................... 1,466 61 209 325 4,847 1,304 8,212
– as a percentage of D ........................................... 0.8% 0.1% 0.4% 5.2% 5.7% 7.0% 2.0%
2011
First lien residential mortgages
Gross amount (E) .................................................. 119,902 46,817 32,136 1,837 73,278 4,993 278,963
Impairment allowances ......................................... 441 12 58 126 4,578 106 5,321
– as a percentage of E .......................................... 0.4% 0.0% 0.2% 6.9% 6.2% 2.1% 1.9%
Other personal lending1
Gross amount (F) .................................................. 46,245 16,364 11,445 3,432 22,058 15,118 114,662
Impairment allowances ......................................... 1,111 52 138 198 1,768 1,172 4,439
– as a percentage of F .......................................... 2.4% 0.3% 1.2% 5.8% 8.0% 7.8% 3.9%
Total personal lending
Gross amount (G) ................................................. 166,147 63,181 43,581 5,269 95,336 20,111 393,625
Impairment allowances ......................................... 1552 64 196 324 6,346 1,278 9,760
– as a percentage of G .......................................... 0.9% 0.1% 0.4% 6.1% 6.7% 6.4% 2.5%
For footnote, see page 249.
Our personal lending balances increased from
US$394bn at 31 December 2011 to US$415bn at
31 December 2012. This was primarily due to
growth in residential mortgages in Europe, Hong
Kong and Rest of Asia-Pacific. In Europe, this was
due to successful marketing campaigns and
competitive pricing in the UK. The growth in
mortgage balances in Hong Kong was driven by the
low interest rate environment, and robust residential
property market. The latter was also a factor in Rest
of Asia-Pacific, most notably in Singapore, mainland
China, Australia and Malaysia. This growth in total
personal lending balances was partly offset by a
decline in North America, in part due to the run-off
of the CML portfolio and the reclassification of non-
real estate personal loan balances to ‘Assets held for
sale’. In Latin America personal lending decreased,
mainly reflecting the transfer of balances relating
to the operations in Colombia, Peru and Paraguay to
‘Assets held for sale’ in the second quarter of 2012,
as well as lower balances in Brazil, where we
continued to manage down our exposure to non-
strategic portfolios.
Impairment allowances declined by 16%,
primarily in North America in the CML portfolio,
reflecting the reclassification of non-real estate
personal loan balances to ‘Assets held for sale’ and
the continued run-off. In Hong Kong and Rest of
Asia-Pacific, impairment allowances remained at
low levels throughout 2012. In Europe, in other
personal lending, impairment allowances as a
percentage of lending balances, declined from 2.4%
to 1.9% as we focused our lending growth on higher
quality assets.
For a more detailed analysis of our personal lending, see
page 147.