HSBC 2015 Annual Report Download - page 147

HSBC HOLDINGS PLC
145
Strategic Report Financial Review Corporate Governance Financial Statements Shareholder Information
quality of our mortgage portfolio remained high, the LTV
ratio on new lending was 57.8% compared with an average
of 42.6% for the overall portfolio.
Exposure to UK interest-only mortgage loans
Interest-only mortgage products made up $40bn of total
UK mortgage lending, including $16bn of offset mortgages
in First Direct and $1.7bn of endowment mortgages.
The following information is presented for HSBC Bank plc’s
UK interest-only mortgage loans with balances of $18bn
at the end of 2015. $0.2bn of interest-only mortgages
matured during 2015. Of these, 2,636 loans with total
balances of $0.1bn were repaid in full, 164 loans with
balances of $0.03bn have agreed future repayment plans
and 550 loans with balances of $0.1bn are subject to
ongoing individual assessments.
The profile of expiring UK interest-only loans was as
follows:
UK interest-only mortgage loans
$m
2015 expired interest-only mortgage loans 266
Interest-only mortgage loans by maturity
–
2016 314
–
2017 384
–
2018 723
–
2019 801
–
2020 805
–
2021-2025 3,997
–
Post 2025 10,390
Total at 31 December 2015 17,680
Other personal lending
Reported other personal lending balances declined
by $7.5bn during the year, mainly due to adverse foreign
exchange movements of $5.8bn and the Brazilian
reclassification of $5.5bn. The reduction was offset by
the growth in other personal lending in Hong Kong.
The commentary that follows is on a constant currency
basis, while tables are presented on a reported basis.
Excluding the Brazilian reclassification, other personal
lending increased by $4bn in 2015. This was driven by
strong growth in personal loans and overdrafts in Hong
Kong ($1.5bn), other unsecured personal lending portfolio
in UK ($0.7bn) and other personal lending in France
($0.6bn). In Mexico, other unsecured personal lending
grew by $0.6bn mainly in payroll and personal loans as a
result of various sales and credit initiatives. In addition, we
reclassified a total of $1.8bn of loans in Malaysia and India,
and $0.4bn in the UAE, from residential mortgages to other
personal lending following a review of the supporting
collateral.
HSBC Finance
HSBC Finance US Consumer and Mortgage Lending –
residential mortgages16
2015 2014
$m $m
Residential mortgages:
–
first lien 17,157 21,915
Other personal lending:
–
second lien 2,089 2,509
Total (A) at 31 December 19,246 24,424
Impairment allowances 986 1,679
–
as a percentage of A 5.1% 6.9%
For footnote, see page 191.
Mortgage lending balances in HSBC Finance declined by
$5.2bn or 21% during 2015. In addition to the continued
loan sales in the CML portfolio, we transferred a further
$2.4bn to ‘Assets held for sale’ during the year, and these
loans were sold in May, August and November 2015.
There was a decrease in impairment allowances reflecting
reduced levels of delinquency, and lower levels of both
new impaired loans and loan balances outstanding as a
result of continued liquidation of the portfolio.
Among the first and second lien residential mortgages in
our CML portfolio, two months and over delinquent
balances halved to $1.2bn during 2015.
At 31 December 2015, renegotiated real estate secured
accounts in HSBC Finance represented 91% (2014: 93%)
of North America’s total renegotiated loans. $5.1bn of
renegotiated real estate secured loans was classified as
impaired (2014: $7.6bn).
HSBC Bank USA
In HSBC Bank USA, mortgage balances grew by $1.1bn
to $18bn at 31 December 2015 as we continued to
implement our strategy to grow the HSBC Premier and
Advance customer base. We continued to sell all agency-
eligible new originations in the secondary market.