HSBC 2015 Annual Report Download - page 130

Report of the Directors: Risk (continued)
Credit risk
HSBC HOLDINGS PLC
128
Impaired loans
(Audited)
Impaired loans and advances are those that meet any of
the following criteria:
• wholesale loans and advances classified as Customer
Risk Rating (‘CRR’) 9 or CRR 10. These grades are
assigned when the bank considers that either the
customer is unlikely to pay their credit obligations in full
without recourse to security, or when the customer is
more than 90 days past due on any material credit
obligation to HSBC.
• retail loans and advances classified as Expected Loss
(‘EL’) 9 or EL 10. These grades are typically assigned to
retail loans and advances more than 90 days past due
unless individually they have been assessed as not
impaired.
• renegotiated loans and advances that have been subject
to a change in contractual cash flows as a result of a
concession which the lender would not otherwise
consider, and where it is probable that without the
concession the borrower would be unable to meet the
contractual payment obligations in full, unless the
concession is insignificant and there are no other
indicators of impairment. Renegotiated loans remain
classified as impaired until there is sufficient evidence to
demonstrate a significant reduction in the risk of non-
payment of future cash flows, and there are no other
indicators of impairment.
Movement in impaired loans by geographical region
Europe Asia MENA
North
America
Latin
America Total
$m $m $m $m $m $m
Impaired loans at 1 January 2015 10,242 2,048 1,981 11,694 3,365 29,330
–
personal 2,544 491 242 10,826 1,057 15,160
–
corporate and commercial 7,385 1,545 1,696 862 2,307 13,795
–
financial 313 12 43 6 1 375
313
Classified as impaired during the year 3,909 1,893 338 2,986 2,434 11,560
–
personal 1,257 813 178 2,245 1,502 5,995
–
corporate and commercial 2,567 1,079 159 740 924 5,469
–
financial 85 1 1 1 8 96
Transferred from impaired to unimpaired during
the year (964) (204) (107) (1,786) (245) (3,306)
–
personal (211) (169) (82) (1,699) (185) (2,346)
–
corporate and commercial (734) (35) (6) (87) (60) (922)
–
financial (19)
–
(19)
–
–
(38)
Amounts written off (870) (595) (335) (589) (1,312) (3,701)
–
personal (280) (416) (113) (493) (961) (2,263)
–
corporate and commercial (577) (179) (222) (95) (351) (1,424)
–
financial (13)
–
–
(1)
–
(14)
Net repayments and other (2,640) (767) (111) (3,375) (3,212) (10,105)
–
personal (780) (203)
–
(2,885) (1,171) (5,039)
–
corporate and commercial (1,778) (562) (110) (486) (2,033) (4,969)
–
financial (82) (2) (1) (4) (8) (97)
Impaired loans at 31 December 2015 9,677 2,375 1,766 8,930 1,030 23,778
–
personal 2,530 516 225 7,994 242 11,507
–
corporate and commercial 6,863 1,848 1,517 934 787 11,949
–
financial 284 11 24 2 1 322
%%%% % %
Impaired loans as a percentage of gross loans 2.3 0.6 4.5 6.5 4.8 2.3
–
personal 1.5 0.4 3.4 13.7 4.1 3.1
–
corporate and commercial 3.6 0.9 6.8 1.5 6.9 2.4
–
financial 0.5 0.0 0.2 0.0 0.0 0.2